There's not a damn thing that Democrats can do between now and November to improve the lives of average Americans in any significant way. It's a little late for that. But there is something Obama could say that would demonstrates that he gets it and simultaneously validate the common sense of the vast majority of Americans while reassuring us of his.
The great conundrum and tragicomedy of American politics is the way the PhDs attempt to champion the interests of working people while well-paid faux populists serve the interests of the MBAs. Ordinary Americans must choose between being patronized or pandered to. And who wouldn't rather be looked up to than talked down at? Still, what we want and need most is a leader who will level with us.
Obama's taken a big step forward when he says America needs to get back into the business of making things. It's wonderful to see the op-ed page of the New York Times turn around 180º and begin thumping the tub for the re-industrialization of the US economy. There's just something missing, something that would make this a teaching moment, a healing moment, a moment to begin to reconcile the educated elites with the Americans they aspire to lead. A little humility is in order. It's mea culpa time.
For some 25 years there's been one consistent piece of common ground, one consensus item between the PHDs and MBAs on economic policy. In countless editorials, from the flagship op-ed pages of the Journal and the Times right through their respective media armadas, the song remained the same. Taps for American manufacturing. The future belonged to the Information Age and the service economy. America would provide the inspiration and the rest of world would do the perspiration.
Occasionally some rare economist (usually associated with organized labor) would object and be roundly dismissed as a self-interested troglodyte. The drumroll for the death march of American industry drowned out all different beats. Most ordinary Americans couldn't make any sense out of it and shook their heads in wonder and dismay as the industrial heart of America was dismantled, piece by piece and literally sold for scrap metal to China. Tens of millions of middle class families, thousands of communities, hundreds of prosperous towns, dozens of proud cities, all devastated in a frenzy of what most mainstream economists called "creative destruction."
There's a virulent strain of demagogic anti-intellectualism in American political life and always has been, as historian Richard Hoffstader and others have richly documented. But there's a disconnect, an arrogance on the part of our alleged meritocracy that inflames the infection. Harvard and the other elite universities hammer into their students' heads the assumption that the problems of the world are far too complex to be accessible to mere common sense. That only a lifetime of careful study and practice in the field can even begin to penetrate these thorny issues. Trust the experts, our very best and brightest. It doesn't take a PhD in psychology to understand just how self-validating, aggrandizing and delusional such a notion is. Or a PhD in political science to grasp how inimical such beliefs are to a functioning democracy.
Obama is the apotheosis of the American educated elite, proof positive that ours truly is an exceptional elite, based on merit, not on an accident of birth. He would be everything Bush wasn't. Like the great student that he is, Obama believed what he was taught and turned to the experts in the spring of 2009 when he addressed the financial crisis. Trouble was that it was the experts who had caused the problem in the first place. Like any other elite, they proved self-dealing and advised Obama to deal with their problem first. So he bailed out Wall Street. Once their problem was solved the bankers promptly said to hell with Main Street and Barack Obama too.
The elites betrayed Obama. Now it's time to return the favor. Obama should rain scorn on the bright ideas of PhDs and MBAs alike that wrecked the American manufacturing colossus. He doesn't do anger well, but he can be pretty scornful when the spirit moves him. He should belittle these little theories that might work fine on paper but defy common sense and fail disastrously in the real world. He can start with the "service economy" of the Information Age and then turn to a bright idea we haven't heard much from lately--trickle down or supply-side economics. There's a reason for that. It doesn't poll well anymore. The idea that cutting taxes on the rich would raise the middle class and tax revenues didn't make any common sense but it did appeal to one aspect of American exceptionalism--the conviction that we actually could get something for nothing. Trashing it yet again as snake oil is self-serving and elitist. A majority of Americans bought it twice and we really don't want to be reminded just how dumb we were or who told us so. Dismissing it as a nice little theory that didn't work in the real world is just the common touch Obama needs so desperately.
He should identify Obamanomics, not as Keynseian, Marxist, or Laissez-faire capitalist, not supply side or demand side, but as home economics, the kind average Americans do on their kitchen tables when they try to make a paycheck cover all the bills. If his economics doesn't work there it really doesn't matter how many blackboards at how many universities it adds up on. If we start making sense, the dollars will surely follow.
Then he needs to start making sense. It took a generation to dig us into this hole. It may well take a generation to dig us out. There are no quick fixes. Protectionism now would be like locking the barn door after your horses get out. And this remedy can be worse than the disease. Trade wars have an awful tendency to turn into shooting wars. The world went down that road in the 1930s.
Industrial policy is also a dicey proposition. Governments have a very mixed record when it comes to picking winners and losers. In general, the federal government should leave that up to the marketplace but be much more pro-active in keeping the playing field level for American workers, to make sure that we aren't snookered anymore by aggressive competitors in international trade. Given a level playing field, Obama should exude confidence that our hard work and ingenuity will always keep us competitive. But there are a couple of commonsense exceptions.
Whatever the future brings, growth will require more energy. And it makes no sense to import almost a trillion dollars worth of energy every year, from an nonrenewable source that enriches our nation's adversaries and can only get more expensive with time, when we could be growing our own renewable energy at home. Forget climate change. Sure, climatology is a harder science than economics, but barely. There's too many variables and unknowns in the equation to provide the certainty required to completely remake an economy. All the experts are agreed, but all the experts agreed about the Information Age, too. We're betting the rent here and you can't expect folks of modest means to bet the rent on anything that doesn't make common sense, not when we just bet and lost the farm by trusting the experts. Acknowledging the validity of this skepticism will help rebuild the bond between Obama and the majority he needs to govern.
Whatever the future brings we'll need transportation to get there and roads, bridges and train tracks are something the private sector doesn't do by itself. This infrastructure is in rotten shape and we have millions of hard working Americans desperate for work. The private sector is so uncertain about where to profitably invest its capital that they are willing to lend it to the US for next to no interest. It just makes sense to put that capital and those Americans to work on something we know for certain our kids are going to need. Yes, our kids will pay for it over the next twenty years but they're the ones who will be using it the most. Nothing wrong with that. It will be much cheaper, not to mention safer, to do it now before there's more deterioration and interest rates are at historic lows. Basic home economics.
Finally, Obama must provide a convincing narrative about why the PhDs and MBAs alike got it so wrong, a story that makes more common sense to most Americans than something whacky, like the elites treasonably selling us out to the Chinese. In the telling of that narrative, Obama gets to assert his identity as one of us, giving Americans more confidence that he will serve our interests. Our elites came up with the idea of American exceptionalism and regarded themselves as an exceptional elite, unlike any the world had every known. They wouldn't be just another self-perpetuating, self-dealing ruling class, oh no. Like the floating pyramid on the dollar bill they would be history's first truly enlightened elite. They wouldn't be supported by the masses below but would float just above them, an all-seeing source of truth and light and economic dynamism. The American elite had their very own American daydream. As they became more and more separated from the lives of ordinary people they came to imagine that instead of depending on the middle class, the middle class depended on them. In short, they imagined that the pyramid actually stood on their own fat heads! For a brief moment, propped up by a couple of well timed bubbles, it did. When it all came crashing down the elites got shook up but the middle class was crushed. Obama can't demonize either the economic or intellectual elites--he's their president too. But he can put them in their place and remind them that they stand on the shoulders of the middle class and must tread lightly and with respect.
However much we speak of money as if it were water, with cash flows, liquidity and frozen assets, it will never behave like water. Money doesn't trickle down. Trickle-up economics is an iron rule that has no exceptions, as every hard working man and woman knows in their bones. Each dollar a working person gets is eventually spent on something a rich person owns, except for the few that are saved in a rich man's bank or mutual fund. Only if the middle class is strong can the upper class be secure. That's why the Bush years weren't even good for most of the rich. Of the top 10% only one in ten saw any serious growth in income. And that 1% didn't get diddly-squat compared with the top .1%. If tax policy doesn't favor middle class Americans, the gravity defying trickle-up tendency of economics will destroy them and the whole foundation of American wealth, again. Our economic and intellectual elites need to be reminded just which end is up.
Most Americans are angry because we know we've been had--by ourselves, most of all, but we have also been misled. Understandably, the latter is what we'd prefer to focus on. This is the moment demagogues live for. Anyone who reminds us how stupid we've been plays into their hands and is likely to become the designated scapegoat. Obama has got all these policy pieces in place. What he doesn't have is a broader context they fit into, a narrative frame that appeals (and brings us back) to our commonsense. Without that frame, too many Americans will swallow this tea party nonsense hook, line and sinker.
Very smart people are capable of acts of monumental stupidity that would make a village idiot blush. Look at what the quants did to the global financial system. Most Americans collect and relish anecdotes about book smart, commonsense imbeciles the same way the educated elites regale themselves with the idiocies of the great unwashed. We all know Obama is very book smart. He needs to show us his commonsense and validate our own in electing him. If he does, we'll follow him anywhere.