Atlantic Sentinel

Tag: New Deal for the Middle Class

Neither poor enough to qualify for welfare nor wealthy enough to live comfortably, the West’s middle classes need a new deal.

  • What Biden Should Prioritize in His First Term

    Joe Biden
    Former American vice president Joe Biden gives a speech in Des Moines, Iowa, January 4, 2020 (Phil Roeder)

    Joe Biden’s priority as president will be alleviating the COVID-19 pandemic, which the outgoing president, Donald Trump, has mismanaged. 350,000 Americans are dead. Nearly 11 million are unemployed. Republicans were slow to approve the latest stimulus, which Trump, seemingly without consulting lawmakers of his own party, threatened to veto and then signed anyway.

    But the Democrat’s first-term goal must be to revitalize the American Dream, which is out of reach for most.

    In the 47 years Biden has been in Washington, first as a senator, then as vice president, social mobility has declined to the point where Europeans are now more likely to grow out of poverty than Americans. Real incomes have been stagnant for everyone but the wealthy. Traditional middle-income jobs have been outsourced or made redundant by automation. Most job growth comes from established businesses, not startups, suggesting a decline in entrepreneurship. Housing is unaffordable in the very metro areas where those jobs are. There are fewer opportunities for workers without a college degree, and the cost of higher education has outpaced income growth. So have the costs of child care and health care, making it harder for families to combine childrearing and work.

    America could learn from Nordic countries and the Netherlands, which combine competitive, free-market economies with generous social protections for the middle and working class.

    Many of Biden’s policies would move America in that direction.

    Here’s where I would start. (more…)

  • Britain Is Once Again the Sick Man of Europe

    London England
    View of the City of London, England from The Shard at night, June 13, 2018 (Unsplash/Tim Arterbury)

    During the 1960s and 70s, Britain, economically stagnant and losing its empire, was known as the sick man of Europe. With COVID-19, the sickness has returned — and this time it may be even harder to heal.

    More than 300,000 cases of coronavirus have been confirmed in the United Kingdom. 41,000 Britons have died of the disease, giving the country the second-highest per capita death rate among major countries. British economic output fell 20 percent in April, the worst rate by far among industrial nations.

    This comes after a decade of austerity and on top of the economic fallout of Brexit.

    It was the tough medicine of Thatcherism that allowed the United Kingdom to recover from its previous bout of ill health and find a new faith in itself — “Cool Britannia” — under New Labour.

    But the seeds of the current malaise were planted in the same era. (more…)

  • New Social Contract for the World After COVID

    Miami Florida
    Skyline of Miami, Florida (Unsplash/Ryan Parker)

    The American economy wasn’t healthy before COVID-19. A middle-class life — the American Dream — was out of reach for most.

    Social-democratic Canada and Europe prevented more people from falling through the cracks, but even there millions felt economically and culturally left behind.

    A sense that the system wasn’t working for them contributed to the election of Donald Trump, the popularity of far-right nationalist parties and Brexit.

    The economic impact of the pandemic can only exacerbate the divide between the well-educated and relatively well-off, who populate the major cities of Europe and North America, and the undereducated and underemployed, who live paycheck-to-paycheck in smaller cities and towns.

    We need a better deal. A new social contract. (more…)

  • The American Dream Could Use Some European Inspiration

    Copenhagen Denmark
    Cyclists in Copenhagen, Denmark (iStock/Leo Patrizi)

    One can tell two very different stories about the American economy.

    In one, growth is robust, unemployment is at its lowest in half a century and the stock market is booming. This is the story President Donald Trump likes to tell.

    In the other, two in five Americans would struggle (PDF) to come up with $400 in an emergency. One in three households are classified as “financially fragile“. Annie Lowrey writes in The Atlantic that American families are being “bled dry by landlords, hospital administrators, university bursars and child-care centers.” This is the story Bernie Sanders and the Democrats tell: for millions of Americans on seemingly decent middle incomes, life has become too hard.

    Sanders’ solution is to bring “democratic socialism” to America. He cites European countries like Denmark and Sweden as inspiration. They’re not bad places to imitate — but they have actually moved away from socialism and toward a mix of free markets and the welfare state. It is why they rank among the freest and most competitive (PDF) economies in the world.

    Americans can learn from the Scandinavian experience, if they get the balance right. (more…)

  • The Sources of Populist Rage — And What To Do About It

    Paris France
    Aerial view of the Arc de Triomphe in Paris, France (Unsplash/Rodrigo Kugnharski)

    Add France to populism’s list of victims.

    A year ago, Emmanuel Macron’s election victory was hailed as a setback for the transatlantic reactionary movement that began with Brexit and has since led to Donald Trump in America, Jair Bolsonaro in Brazil and an anti-EU government in Italy.

    The outbreak of nationwide anti-tax protests, which quickly morphed into an anti-government movement, makes clear the same forces that gave us Brexit and Trump live in France.

    The consequences could be calamitous.

    In the United Kingdom, Brexiteers are willing to shrink their economy and deny a younger generation the opportunity to study, live and work in Europe for the sake of regaining “control”.

    In the United States, democracy itself is at stake. Republicans only won an election in Georgia by making it impossible for hundreds of thousands of African Americans to vote. In three of the states where they did lose the midterm election, they are trying to nullify the outcome. Their leader broke campaign finance laws and was willing to accept help from Russia to get elected (and has since tried to cover up his crimes in broad daylight); lies on an almost daily basis and disparages every institution that does not bend over backwards for him.

    How did we get here? And, more importantly, how do we get out? (more…)

  • Thoughts on Class, Meritocracy and Civic Consciousness

    Seattle Washington
    Homes in Seattle, Washington, April 21, 2011 (Harold Hollingsworth)

    This post is going to be a little less structured than usual. Please bear with me as I try to connect the dots between three recent stories. (more…)

  • Seven Reasons to Worry About the American Middle Class

    Seattle Washington
    Homes in Seattle, Washington, April 21, 2011 (Harold Hollingsworth)

    The Brookings Institutions’ Eleanor Krause and Isabel V. Sawhill give seven reason to worry about the American middle class: (more…)

  • The Rent Is Too High, Partisanship Versus Democracy

    Will Wilkinson of the libertarian Niskanen Center tells The Washington Post that expanding affordable housing in America’s major cities is the key to reducing inequality.

    Wages have barely budged in decades, yet housing costs have soared due to restrictive zoning and land-use policies. Young and working Americans are now unable to save. Homeowners are getting richer.

    Kevin D. Williamson, a conservative columnist who was recently hired and then fired by The Atlantic for his right-wing views (more on that here), has similarly argued in National Review that working-class Americans left behind in the Rust Belt need to move to the coasts. He partly blames them for staying put, but recognizes that policy plays a role.

    Consider California, where so many of the jobs in the new economy are. Its housing crisis (you can buy a private island or a castle in Europe for the price of a San Francisco apartment) is entirely man-made, “a result of extraordinarily restrictive zoning and environmental codes and epic NIMBYism of a uniquely Californian variety.”

    A Republican Party wishing to renew its prospects in California (which it once dominated) or in American cities could — and should — make affordable housing the centerpiece of its agenda for the cities.

    More on why Republicans ought to compete in American cities here. Handelsblatt reports that Berlin fears San Francisco-style housing problems. (more…)

  • New Social Compact: Deregulation and Universal Basic Income

    Madison Square Park New York
    View of Madison Square Park in Manhattan, New York (Unsplash/Daryan Shamkhali)

    I believe that to shrink the culture gap in Western democracies — between generally well-educated “globalists” and those who feel left behind — we need a new social compact.

    The twentieth century’s was built on strong trade unions, lifetime employment and health and pension benefits tied to salaried jobs. The economy, and people’s expectations, have changed in such a way that this is no longer sustainable. But we haven’t come up with a replacement yet.

    The American Enterprise Institute’s Dalibor Rohac may be onto something. He calls for a “grand bargain”: serious deregulation coupled with the introduction of a universal basic income. (more…)

  • Merkel’s Answer to Populist Challenge: Shift to the Left

    Angela Merkel
    German chancellor Angela Merkel arrives in Kiev, Ukraine, February 5, 2015 (Bundesregierung/Steffen Kugler)

    Angela Merkel’s answer to the defection of right-wing voters is — counterintuitively — to shift further to the left.

    Der Spiegel reports that the German chancellor recently told members of her Christian Democratic party (CDU) they need to do better on pay, pensions and housing.

    They were expecting a harder line on immigration, which is the issue that galvanized the Alternative for Germany’s voters.

    This new far-right party placed third in last month’s election with nearly 13 percent support.

    Merkel’s Christian Democrats still won, but with only 33 percent support — their lowest vote share in over half a century. (more…)

  • Conservatives Need to Make Capitalism Work for Everyone

    It is not inequality that bothers Brits, argues Ruth Davidson, the Scottish Conservative Party leader, in the new online magazine UnHerd. It’s injustice.

    People expect that the CEO of a corporation will be the highest paid person on the payroll. What they don’t accept is that FTSE 100 bosses are paid 174 times the average worker’s wage in this decade — compared to 13 to 44 times in 1980.

    Especially when many of their companies have received either big fraud-related fines or bailouts from the state.

    The distinction matters, because it goes to a broader point. (more…)

  • Smart Policies, Wrong Vision from Germany’s Social Democrats

    Germany’s Social Democrats have unveiled a platform of sensible policies that should appeal to the broad middle of the country’s electorate.

    The trouble is the proposals lack a convincing theme and could easily be supported by Angela Merkel’s Christian Democrats as well.

    Among the measures in the draft manifesto, which has yet to be approved by a party congress, are:

    • Higher taxes on the rich and lower rates for middle and low incomes;
    • Abolishing kindergarten charges and investing more in schools;
    • Making it easier for parents to take unpaid (!) family leave;
    • Preventing employers from imposing temporary contracts on workers; and
    • Allowing unemployed Germans the continue drawing benefits if they are in skills training.

    Much of this makes sense to help the squeezed middle and meet the challenges of the gig economy.

    But for some reason, the Social Democrats are selling this not as a contract with Middle Germany but as an agenda for “social justice”. Which is… not how you win over hard-working, small-town voters. (more…)

  • Middle-Income Suburbanites Decided the Election — Again

    Austin Texas suburb
    Suburb of Austin, Texas (Shutterstock/Roschetzky Photography)

    On election night, when it was starting to become clear Donald Trump would win, I wrote it had been a mistake to think Hillary Clinton could make up for losing white working-class voters in the “Rust Belt” by drawing more minority and young voters to the polls, particularly in the “Sun Belt” states.

    Clinton didn’t win Florida. She didn’t win North Carolina. She didn’t make Arizona and Texas more competitive for Democrats. And she was so unpopular with white voters, especially those without a college degree, that one-time Democratic strongholds in the Northeast — Michigan and Pennsylvania — changed sides.

    Looking more closely at what happened on Tuesday, though, I’m not sure this is what doomed her. (more…)