Middle-Class Issues

It's great news that Obama is doing as well as projections like this one suggest (where he wins with almost 350 electoral votes). But he has campaigned as a moderate, appealing to the economic majority with a combination of tax cuts and cheap, low-cost reforms in areas like health-care. If the economy hadn't gone into crisis mode, we would be taking more skeptical views of Obama's political genius right now.

How should the mass middle-class decide how to vote? A clear choice was laid out by John McCain and Michael Moore.

On October 26th, John McCain said this at a rally:

We’re going to double the child deduction for every family. We’ll cut the capital gains tax. We’ll cut business taxes to help create jobs and keep American businesses in America. You know, as Joe the Plumber and small business owners across the country have now reminded us all, America didn’t become the greatest nation on earth by giving our money to the government to spread the wealth around.

This reflects the core Republican position throughout the 20th century: cut taxes and justify it by larding large cuts for the top brackets (capital gains) with apparently middle-class cuts (child deduction). Denounce redistribution, and make this seem like something other than plutocracy by equating redistribution with socialism and poverty.

In reality, public services create wealth, and they built the mass middle-class. Governments built middle classes with high-quality common systems - schools, roads, mass communication infrastructure, bus and train systems, health care, etc. - that market forces always undervalue and underinvest in (this comes from 1950s neoclassical innovation economics - Kenneth Arrow, Richard Nelson - and not only from the left). America did "become the greatest nation on earth by giving money to the government" to build things companies never build - Microsoft, Exxon, Cindy Hensley McCain's beer distributor Hensley & Co.

Hopefully Obama knows this, though he won't say it out loud. Sounds like "taxes." But later a big education campaign will be needed to get the middle class to see where its origins really lie.

Why don't they know this already? Alaska has socialism, in the form of Sen Ted Stevens's federal pork train. Sarah Palin increased the windfall profit tax to double the annual state handout to every man, woman and child to about $3300 a year, or $13,000 for a family of four. The red states who vote against big government get more from big government than the blue states that like it. Nothing wrong with this- they're mostly more backward and more poor than the blue states. But they are pretty dumb to have never figured out where roads and sewers in Alaska actually come from.

On the Obama side, it was Michael Moore who raised the mass middle-class issue of who runs the economy.

AMY GOODMAN: How did it happen that they didn’t change, that you have now in Michigan the highest unemployment rate in the country?
MICHAEL MOORE: It happened because the workers don’t control the means of production. Oops, I guess I can’t be president now that I said that. No, but seriously, I think that if the autoworkers, years and years ago, could have had a say in the cars that were being built, the Big Three would have built cars that people wanted to drive, instead of the kind of crappy-mobiles that they continue to build, the gas-guzzlers they continue to build. And people wanted something different, and nobody listened, because the auto companies were arrogant.

Moore starts with a classical marxist formulation, then Americanizes it by saying it's common sense to put worker knowledge into the production process, and Detroit's massive failure proves the stupidity of not doing this. He's right: unilateral executive control - the watchword of US "free market" capitalism - is not only unfair and undemocratic, but inefficient as well.

In fact "markets" have made the economy more oligarchic than it was 30 years ago - unionized workers and white-collar professionals have generally speaking less governing power than ever, in the midst of what is supposed to be a knowledge economy. This is no accident, and a turnaround toward democratic economics is the core stake of this election.

Republicans are right about what the first practical outcome of a turnaround like that: a major stimulus plan for the states, where most public systems need to be rebuilt and upgraded for the twenty-first century.