Too little, too late

Last night’s town hall debate was a draw. President Obama certainly wasn’t as lacklustre as in the first debate and a CBS poll of undecided voters gave him a 7 per cent advantage. But no one landed a knockout blow. Had Obama spoken so forcefully two weeks ago, the race would not be as tight. But second impressions count for less than first impressions; I don’t think he has recovered much of the ground he lost.

Mitt Romney continued his tack towards the centre. Repeating the phrase “the last four years” like a mantra, he hammered the president with accusations that his policies had hurt the average American. Median wages are lower than when Obama took office and Romney promised to reverse that decline. He did not offer convincing specifics but looked self-assured, and that may be enough.

If Romney is running against the last four years, Obama is stuck focusing on his record in office. I wish he were running against the past four decades, because hard times for America’s middle class began long before January 2009. Ever since the Reagan revolution, our political and economic system has been run for the benefit of the most fortunate among us. Most Americans are working harder for less money. Job security has become a figment of our imagination. CEOs, bankers, and the super rich have done very well; the rest of us, not so much.

The night before the debate, I attended a lecture by Edward Luce, author of the much-praised Time to Start Thinking: America and the Spectre of Decline. He cited a number of frightening statistics relating to the prospects of the American middle class:

American real median household income has stagnated since the 1970s, despite the enormous increase in female participation in the workforce. Today, it takes two wage earners to match the standard of living provided by a single earner 40 years ago.

93 per cent of productivity gains in the past four years have gone to the wealthiest 1 per cent. 40 per cent of those gains have gone to the top 0.01 per cent—the richest 16,000 families. US GDP may be higher than in 2008, but the bottom 90 per cent of Americans is worse off.

During this election cycle, the wealthiest 200 families have spent more to affect its outcome than the other 314m Americans combined. No wonder the rich control the agenda.

Luce believes that these negative trends will continue regardless of who wins the election. He recommends a Marshall-style plan for the middle class, focused on improving American competitiveness. This isn’t going to happen. Short-sightedly, both parties have agreed to cut “non-discretionary domestic spending.” That covers investment in infrastructure and education, the very things that would make the country more productive in the future. When America had the richest workers it was at the very top of educational attainment rankings. It has fallen considerably since then. American workers are becoming less competitive even as investment in their future capability is decreasing.

Obama has made considerable achievements, considering the mess his predecessor left him. Yet his tragedy is that he has not transformed the debate. The cataclysm of the financial crisis gave us all an opportunity to rethink the neoliberal consensus. Obama, through his bailout of the banks and his stimulus package, managed to prevent a brutal recession from becoming a financial cataclysm. But he didn’t take on the economic orthodoxy of trickle-down, supply-side economics. He should have fought the war of ideas when he had his best chance and painted the Republicans as the party of the super rich. The country was ready for these arguments in 2009. Last night was too little, too late.