10/18/2006 05:05 pm ET Updated May 25, 2011

The Democratic Unmentionable

Why don't Democratic politicians tell Americans how disappointing the economy has been for most of them? The centrist Democrats who dominate the party, through such organizations as the Democratic Leadership Council and The Third Way, keep telling us that, but for a few exceptions, people have been really doing just fine economically. The Republicans surely love it, because it helps reinforce faith in the starve-the-beast tax cutting and deregulatory spirit that began with Reagan.

But it is wrong. No doubt, Americans have generally done poorly throughout this Bush administration. Despite the strong economic expansion, the gains have largely gone to business. The typical family's income after inflation is lower today than it was in 2000. And there's no denying that economic discontent is underlying some of the rising anti-Republican sentiment as we approach the elections. It is by no means all about Iraq. The recent NY Times/CBS News poll in Ohio is a pretty vivid example. Voter worries about the economy and jobs easily trump concerns about Iraq and terrorism.

But, with the only exception the late 1990s, male workers in America have been blindsided by an economy that has not produced gains that would enable them to support a family--or their self-esteem, for that matter--for more than thirty years. Meantime, women didn't catch up. And this is a story--the hit taken by American men-- most Democrats don't tell or even understand. The rise of cultural and religious conflict is no surprise in such an undermining economic environment.

Why isn't this a major theme of the party? Despite some genuine good news late in the decade, the Clinton administration's over-optimistic spin over the 1990s--an administration chock-a-block with DLCers-- disguised how little progress men in American were making, and how far behind so many of them had fallen.

But mostly, the Democrats decided they were outflanked by the success Ronald Reagan had in blaming government, high taxes, and social programs for the frustrations of American workers. Once that sunk in, these Democrats went along with making government the villain. Some apparently even believed it. And they simply fudged their analyses of the economic plight of Americans to fit small-government prescriptions that would not rock the electoral boat.

America was badly informed, as a result. The Republicans wouldn't tell them what was really up, the Democrats abandoned their role as a true opposition, and the media, without guidance from opposing camps, were entirely incapable of filling the breach. If anything, the media bent the Republican-New Democrat way.

Even most of the progressive Democrats today don't fully understand what happened to the economy. They talk about their favorite rallying point, inequality, but the main point is something significantly different.

Male workers in particular have been doing badly for most of the last thirty three years, bearing the brunt of a weak economy and a declining wage share, and no one has truly picked up the slack. Women's wages have thankfully been rising over this period, but they remain about 80 percent of male wages. Incomes of typical black families, even as female black incomes rise, are still around 60 percent of typical white families, another travesty. All people with only a high school education have simply been clobbered, by any reasonable historical standard. Self-esteem, the ability to support a family, the faith in an ever strong economy, economic security --all these aspects of the American dream have deteriorated.

Here's the relevant data. Some analysts look at average wages of non-supervisory workers, but this leaves out about 20 percent of the best paid Americans. If we look at a data series that includes all American workers, however, the findings are nevertheless dismal for men. Hourly wages after inflation for the median worker with no more than a high school diploma--the one in the middle of the pack who makes less than 50 percent of all workers and more than the other 50 percent--are nearly 15 percent lower than they were in 1973.

Now, The Third Way acknowledges that men with only a high school diploma are in trouble. But those with a college degree, they say, are doing just fine. Really? The wage for the median male worker with a college degree earns only about 13 percent than the median worker earned in 1973, even when we include the booming years of the late 1990s.

That's virtual stagnation over thirty three years. Anyone with any knowledge of history or a true sense of how we live today could not make a claim that this is satisfactory. Such stagnation for a labor force over so long a period of time has probably never happened before since the Civil War. Typically, male median wages go up faster than 13 percent in a single decade, no less over three decades--and in the 1950s and 1960s, they went up much faster than even that.

But at least they're up, not down, we are told. The trivial gains are disappointing enough in a nation where expectations of a rising standard of living have been built into the national promise. But stagnating income means families cannot afford to keep up with the rapidly rising costs of education, healthcare, drugs, public transit, and other key services--costs that rise much faster than for other goods and services. Education and healthcare costs are up twice as fast or even faster than family incomes, not to mention men's wages.

But people can afford many of those discounted Wal-Mart products, of course, and new electronics products. Clothing and food prices have generally not risen as fast as other prices. I recently read an e-mail missive from a highly progressive Democrat warning his colleagues not to tell Americans how poorly they've done. They are happily flocking to the malls, he notes.

This is a misreading of the public. Is the ability to buy these products helping them forget how difficult it now is to pay for college tuitions, the house in the fancy neighborhood where the public schools are better and you are required to have a couple of SUVs so the kids can keep their heads held high, or for the hot new drugs.

Does it help them forget that they can't afford to send the young ones to the best daycare in the neighborhood and how hard it is to cobble together a battery of baby sitters and drivers so the working wife can get to the office and not always tell the boss she has to leave early.

They may be frequently visiting Wal-Mart to forget that their family is one pink slip away from having no healthcare insurance at all, and even if they keep the job, the company is forcing them to pay a higher weekly contribution to the health plan and higher co-pays when they go to the doctor. And they don't even know what the insurance covers anymore.

They may also want to forget that that pink slip is ever more possible to find in the office mail as industries shed workers in a global economy, and that their pensions are no longer guaranteed. They may want to forget that the house they bought on a variable mortgage will now be more costly as interest rates rise. They may want to forget that they might not be able to sell that house on today's market at the price they once thought they could as a backstop if they lose the job.

And, oh yes, some of these Wal-Mart shopper are outrageously poor. The poverty rate is high, the rate of working poor is high, the minimum wage historically low. A higher proportion of American children are raised in poverty than in any other rich nation. Britain is the only serious competitor in this regard. . Thank goodness for Medicaid and some legislation passed in recent years that specifically protects child healthcare. But let's not talk about poor kids.

The Democrats who don't want to talk about these things sometimes like to cite confused optimists who tell us that incomes may have stagnated or fallen on average, but people have so many good new products, it doesn't really matter. Their standard of living is way up, anyway. Think of cable TV, more durable cars, automatic cash machines, lower airline prices, cell phones and cheap long distance, the Internet, advances in coronary healthcare, and, as one New York Times economics writer notes, the wonders of the gas powered snow remover.

This is historical myopia at its worst, however. Few if any serious technologists believe there have been more compelling new products in the last few decades than early in American history, when incomes after inflation were also rising rapidly. The 1920s is the standout decade. The car, washing machine, record player, refrigerator, radio and telephone spread rapidly in just one decade. The cinema was born. Agricultural products were made abundant and cheap through chemistry. --fertilizers, hybrid seeds and insecticides. As for health, state and local government beginning in the early 1900s created vast sewage and sanitation systems in cities, with revolutionary results.

In the 1950s and 1960s, there was the television revolution, plastics, jet travel, air conditioning, and fast food chains. In healthcare, antibiotics became widely available. There were also extraordinary new benefits as a result of government investment and programs. The new highways were a boon to the suburbs, making it possible for millions to buy cheap houses and commute efficiently to work. College educations and home buying were subsidized by the GI bill. The government subsidized the vaccination of children against polio.

The 1800s were hardly much less remarkable. Cheap sewing machines and kerosene lamps changed the way Americans lived. Cigarettes, breakfast cereals, chewing gum, frozen meats, canned foods--all these became available and affordable to average Americans. The steam engine and railroad transformed transportation, the telegraph communications, and local government built free primary schools across the land--one of the first redistribution policies in America, because a lot of those schools were for the poor (the first redistribution policy was, of course, liberal land distribution policies).

If I am writing in too much detail about the past, it reflects my frustration at how prone we are to exaggerate the beneficial changes of the present. New products do not make up for stagnant incomes and the rising prices of so many key services. We at last reduced the environmental damage of industrialization, but we have more traffic, import a far higher proportion of oil than thirty years ago, and invest less as a proportion of GDP in the infrastructure. New products were part and parcel of the American experience from the beginning--and wages rose fast in the past, but not today.

The real kicker is you have to make money to buy these products, anyway. New cheaper products can sometimes help poor and middle-income people, but most of them help better off people much more. Poor people get a lot fewer hip replacements than the rich, take fewer vacations no matter how cheap the air travel, often don't own a PC or even a cell phone, and on.

What the Democrats seem most comfortable talking about is inequality. It's of course a vitally important issue because it's undermining a sense that the economy is fair. But when you say most Americans are doing well, even though the only serious gains in wages are among those in the top 10 percent of earners, men or women, you sound like you are raising a false claim of class difference.

And here's the last point of the economic apologists. Median income for a two- worker household is up about 20 percent since 1979. So The Third Way and others urge people to get married--that is, marry someone who also works--and you'll be fine. But more than half that 20 percent increase, which is pretty modest in the first place over twenty-six years, is due to wives' working longer than they did in the 1970s. If they hadn't, income would have been up less than 10 percent over time--again virtual stagnation. Measured family income for one-worker families are essentially not up at all.

The Democratic message should be a decent job for all and fair reward for the effort. But everyday, America becomes a less fair society, and it is increasingly divided along class lines. Health and pension coverage is divided by income levels. Getting into a good-enough college is dependent on income levels. The quality of K-12 education, as well as pre-K, is dependent on income levels. Your future in America is increasingly determined by your birth. Is there anything more un-American than that?

So why don't Democrats talk to the American people about where it hurts? Why do they, in fact, spin the facts a different way? Let's be honest, some of them are the beneficiaries of the skewed economy. But this acquiescence has been going on so long that I think most Democrats don't know the truth about the economy. They have become so afraid of the Republican shadow, they no longer know how to stand with crouching. But the good news is that the Democrats may win in November, anyway. The people are turning, with or without adequate leadership. They were not about to abandon Social Security to the privatizers, they like their Medicare, and they are rightly upset about the poor wages of an economy that they were told tax cuts would make work again.

Trouble is, if the Democrats do take the House, and perhaps even the Senate, what are they going to do in office unless they fully understand who paid the price for the economic disappointments of the last third of the twentieth century? More to come on this.