Last year, one of President Obama’s campaign ads featured him saying that “the way you grow the economy is from the middle out.” It’s a good phrase, but it’s not his coinage. The term originated with Nick Hanauer and Eric Liu, the venture capitalist and civic entrepreneur, respectively, who have become well known in progressive circles as co-authors of two recent books that caught the attention of policy-makers and journalists. They used the phrase “middle-out economics” in their 2011 book, The Gardens of Democracy, and a few months later, they heard it coming out of the President’s mouth. Not bad.
Nick and Eric, we are happy to say, are also affiliated with this journal, so when they (and we) saw that the White House had adopted their slogan, we thought it would be a good idea to take it a step further. And so we present our symposium on middle-out economics.
Middle-out economics is not just a set of programs and plans to help the middle class. Instead, it is something much more specific: It’s a theory of economic growth that provides a direct answer and alternative to supply-side economics. That is, conservatives have argued for 30 years that if we invest in the top 1 percent, prosperity will flow down to everyone. It’s a hoax, and it hasn’t worked, but progressives have never really been able to stop it because we’ve never had a persuasive competing theory of how growth works.
Now we do. We think middle-out economics will be a game-changer—provided people talk about it the right way, and provided we buttress the theory with specific policies. That is exactly what we do in this issue. Liu and Hanauer lead off the symposium, explaining what middle-out economics is and how it must be framed. Neera Tanden shows how supply-side has failed us, and on how epic a scale. Eric Beinhocker argues that middle-out policies will give us a truer form of capitalism, not the rentier capitalism we’ve had under supply-side. Then the symposium includes seven more pieces with specific policy prescriptions in areas from family policy to the minimum wage to green jobs to trade and more.
Historically, of course, the American middle class was built in no small part by the labor movement. But that movement is, as we know, a shell of its former self. You’ve no doubt read many analyses of why this happened, but I’d bet you haven’t read one like Rich Yeselson’s. He zeroes in on the Taft-Hartley Act of 1947, explains why it still weighs heavily on the movement today, and tells what labor must do now (hint: launching massive organizing campaigns as it did in the 1990s is not the answer). It’s a riveting essay. Ditto Jason Bordoff’s excellent and deeply informed analysis of energy policy in the age of the oil and gas boom. Long-standing assumptions about our energy supply have been completely flipped on their head by new discoveries and technologies. How does policy need to change to reflect the new reality? Bordoff tells all.
We’re very pleased to welcome to our pages for the first time the widely respected journalist Timothy Noah, whose recent book about inequality, The Great Divergence, is one of the genuinely important nonfiction books of recent years. He responds to Jonathan Haidt’s essay in the previous issue. And the book reviews present the usual excellent smorgasbord of writers and topics: Chrystia Freeland on what’s happened to civic commitment among our corporate elite, James Mann on Hillary Clinton’s tenure at the State Department, Marc Lynch on the mysteries of the Muslim Brotherhood, and others.
Finally, I’m pleased to make three announcements. Bernard Schwartz, the generous businessman who has done so much over the years to help a range of progressive causes and who has been a dear friend of this journal from the beginning, offering much wise counsel, is now officially our Publisher. Anne-Marie Slaughter, who is soon to take the reins of the New America Foundation, rejoins our editorial committee, of which she was an original member before she went to work at the State Department. We’re very proud to call both friends. Another great friend of the journal is Theda Skocpol, the distinguished Harvard sociologist who has been on our editorial committee since the journal’s inception. Theda has more recently launched the Scholars Strategy Network (SSN), an umbrella organization of progressive social scientists doing groundbreaking research across an extensive range of policy areas. This summer, we’re proud to say that our blog will start posting SSN policy briefs on a regular basis. So please do check in on that. It’s the beginning of a beautiful friendship.