The Middle-Out Moment

By The Editors

At first blush, the claim that politicians need to take the needs of the middle class more seriously might seem like pushing on an open door. After all, every stump speech has lines about “saving the middle class” or “helping Main Street, not Wall Street.” But the actions of elected officials have seldom matched the rhetoric. Vice President Biden is fond of saying, “Show me your budget, and I’ll tell you what you value.” By those terms, not to mention the tax code, we have for decades valued corporations and the wealthy as the engines of growth, as job creators, and as most worthy of assistance. The results are familiar: moribund income growth for low- and middle-income Americans and soaring income inequality.

The point of this symposium is not merely to say that we need economic policies that help the middle class. That’s boring and obvious. The point is to make what we call “middle-out” economics the operating progressive theory of economic growth: That is, we must promote middle-out economics not just as a nice-sounding idea, but as the direct alternative to trickle-down economics. Where conservatives say investing in the top 1 percent drives growth, we say that investing in the broad middle does it. And then, having established the theory, we spell out some specific policies that put flesh on the bone.

The symposium opens with three pieces that provide the theoretical framework. First, Eric Liu and Nick Hanauer, co-authors of The Gardens of Democracy and The True Patriot, explain why trickle-down economics is still the average citizen’s idea of how the economy works, and they show how a new picture of an economy driven by a robust middle class should be presented. Neera Tanden, president and CEO of the Center for American Progress (CAP), lays out the data on trickle-down’s failure over the past 40 years. Eric Beinhocker, the executive director of the Institute for New Economic Thinking at the Oxford Martin School, argues that an economy that’s driven from the middle out represents a truer form of capitalism than one that relies on wealth trickling from the top down.

To start off the second half of the symposium, which focuses on specific policy prescriptions, Heather Boushey, the chief economist at CAP, argues that family and child care policy is central to the middle-out vision. Bruce Bartlett, former adviser to Ronald Reagan and a frequent contributor to The New York Times’s Economix blog, identifies the recent diversion of income from labor to capital as one cause of our economy’s troubles and identifies steps to reverse this trend. John Schmitt of the Center for Economic and Policy Research explains how a large minimum-wage increase would help not just the poor but also the middle class.

Mona Sutphen, former adviser to President Obama, sees middle-skill jobs as the key to a balanced economy. David Rolf of SEIU looks at what the ongoing transformation of labor and the workforce has done to the middle class, and what innovative worker organizations might look like. Ethan Pollack of the Economic Policy Institute calls for a renewed commitment to a clean economy as essential to a middle-out future. Finally, Third Way’s Ed Gerwin takes on trade policy, arguing that a combination of exports to China’s middle class plus more rigorous enforcement can yield benefits to America’s middle class.

Reversing more than three decades of top-down economic thinking won’t happen just by nominating the right candidate or winning the next election cycle. The false assumptions of trickle-down economics have burrowed too deeply into the collective consciousness for that quick a fix. But this process is absolutely necessary if America is going to return to stable, middle-out growth.

The True Origins of Prosperity

By Eric Liu Nick Hanauer


Burying Supply-Side Once and for All

By Neera Tanden


A Truer Form of Capitalism

By Eric Beinhocker


Family Policy: The Foundation of a Middle-Out Agenda

By Heather Boushey


National Income: Paying Work, Not Capital

By Bruce Bartlett


Minimum Wage: Catching up to Productivity

By John Schmitt


Job Training: Cultivating the Middle-Skill Workforce

By Mona Sutphen


Labor: Building a New Future

By David Rolf


Environment and Energy: Revitalizing the Green Jobs Agenda

By Ethan Pollack


Trade: Boosting Exports to China

By Ed Gerwin


The Editors of Democracy: A Journal of Ideas are Michael Tomasky (Editor), Jack Meserve (Managing Editor), and Delphine d'Amora (Associate Editor).

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