Economic theory vs. economic reality
Reaganism was the Grinch that stole Christmases for decades. The rich got the elevator and the rest got the shaft. The chart above from Forbes is illustrative (although out of date).
George Packer reflects on several books on the era for The Atlantic. One, “Ours Was the Shining Future: The Story of the American Dream” by David Leonhardt of the New York Times I finished recently. It examines the economic and working class realignment away from Democrats since the early 1970s. Leonhardt notes the red-shift, and that Reaganism was part of it, but sees broader trends. A more technocractic turn among Democrats took their focus off the working class and neoliberal economics ascendant under Reagan undermined labor.
Leonhardt “shows that the 1965 Immigration and Nationality Act, which liberal politicians sold as nondiscriminatory but still restrictive, opened the gates to mass immigration. The result put downward pressure on wages at the lower end of the economy. Again, racial resentment partly explains hostility to large-scale immigration, but Leonhardt shows that rapid demographic change can erode the social bonds that make collective efforts for greater equality possible.” That’s a slow burn.
John B. Judis and Ruy Teixeira’s “Where Have All the Democrats Gone? The Soul of the Party in the Age of Extremes” makes a similar argument, writes Packer, but argues for more cultural centrism and less attention by the Democratic Party to its activist wing of professionals and social justice warriors.
Packer flips through a couple more books, their strengths and weaknesses, and concludes with this:
The argument over which matters more, economics or culture, may obsess the political class, but Americans living paycheck to paycheck, ill-served by decades of financial neglect and polarizing culture wars, can’t easily separate the two. All of it—wages, migrants, police, guns, classrooms, trade, the price of gas, the meaning of the flag—can be a source of chaos or of dignity. The real question is this: Can our politics, in its current state, deliver hard-pressed Americans greater stability and independence, or will it only inflict more disruption and pain? The working class isn’t a puzzle whose solution comes with a prize—it isn’t a means to the end of realignment and long-term power. It is a constituency comprising half the country, whose thriving is necessary for the good of the whole.
But are these technical and political analyses more of the same off-putting elitism the working class disdains from both liberals and conservatives?
Tressie McMillan Cottom believes the reason more people do not feel the good economy is as favorable as statistics show is because they do not speak to their lived, day-to-day realities. The vibe they feel is much more shaky.
The consumer experience sucks
Yes, Biden-sponsored legislation has helped working people more than any seen in a generation.
“But social reproduction — the caretaking of people, relationships and systems that make our society work — still had to be done,” Cottom explains. “Reallocating your spending from child care to student loan payments, for example, might be feasible, but it is not particularly enjoyable. That assumes one can find accessible child care or an in-network doctor or apartment. When stimulus funding ended, a lot of services people rely on became harder to find and afford.”
Child care, in particular, is a burden not accounted for in economic data:
People are struggling with mortgage interest rates, housing shortages and pricey grocery bills. They’re also consuming to make their lives work: on expensive, hard-to-manage child care, health care and convenience spending — things like restaurants, travel, delivery services, and on-demand help — which are necessary for balancing work and life demands. Even when those services are affordable, they are full of friction. That is a nice way of saying the consumer experience sucks. It is hard to schedule things, hard to get customer service, hard to judge the quality of what you are buying, and hard to get amends when an experience goes bad. There is a reason industry analysts have reported that customer brand loyalty is low and customer rage is high.
“As one of my colleagues recently put it, anyone who thinks he just has bad vibes hasn’t tried to find summer day care for young children,” Cottom recounts.
In short, people may have more money. But it has become harder to buy the services they need and more expensive to buy the goods that they want. The very wealthy can spend their way out of that bind, simply by paying more for housekeeping and grocery delivery and nannies. But everyone else needs some sort of partnership with the government to make the act of working not just affordable, but accessible. The Biden administration has not solved that bigger crisis (neither did the Trump administration). Whether Americans are blaming the right administration for their woes, their economic lives legitimately feel tougher even as they work more and earn more money.
As I’ve said before, humans — people — need to feel the economy serves them. What too many sense is that they serve the economy. Where’s the good vibe in that?
People need child care, and dentists, and affordable housing, and safe transportation, and accessible education. Telling them that to instead enjoy the fact that they can buy a Tesla is a fundamental misunderstanding of what economic policy is supposed to do, which is to make people’s lives better.
That’s more than an election-cycle project or new program. It’s a paradigm shift.
