This Is the Middle-Out Moment
The Pitch: Economic Update for February 23rd, 2023
Friends,
We’re bombarded all the time with messaging selling us the illusion of transformational change: This new phone, we’re told, will be life-changing. This candidate will completely upend politics as we know it. This scientific breakthrough is unlike everything that has ever come before.
But the truth is that it’s usually very hard to tell when you’re living through a true paradigm shift — when the world actually is changing around you. Those of us old enough to remember the evolution of the internet can recall that it didn’t arrive in a single bolt of lightning. It gradually insinuated itself into our routines until, one day, we realized that the internet was a necessary part of our daily lives.
I’d argue that we are right now living through a paradigm shift, a moment in which our understanding of the world is changing and a new reality is emerging. But because this change is happening in the political economy space, and because many people — including many in the media — find economics to be a daunting and overcomplicated subject, not many people have even noticed the ground shifting under their feet.
We’ve suggested several times in this newsletter that President Biden is upending the trickle-down economic narrative that has dominated politics, on both sides of the aisle, for the last 40 years, and replacing it with a new, middle-out understanding of the economy. And this month’s State of the Union speech served as Biden’s most ambitious middle-out mission statement yet — a refutation of the neoliberal economics that has dramatically widened the chasm between the haves and the have-nots since the Reagan revolution. His three trickle-down pillars of deregulation for the powerful, tax cuts for the wealthy, and wage suppression for everyone else into dogma back in the early 1980s.
In the wake of the State of the Union speech, people are starting to notice that Biden is creating transformational change. Civic Ventures founder Nick Hanauer laid out the stakes of Biden’s economic transformation in an essay for The American Prospect:
President Biden is attempting to do something that no president has done since Ronald Reagan: fundamentally transform how Americans understand the economy and the role of government in creating economic growth and broad-based prosperity. The agenda Biden is advancing is much more than a collection of policies. His accomplishments represent a reimagining of how America conceives of and executes economic policy.
“Biden’s speech set the Democratic Party and American liberalism on sounder economic and political ground than they’ve been since the New Deal,” David Dayen wrote the day after the State of the Union. That New Deal comparison is particularly apt because Biden’s Democratic forebears have largely spent the trickle-down era defending New Deal programs from ever-creeping austerity while simultaneously promoting trickle-down lite economic policies that enriched the wealthiest few at the expense of everyone else.
Though the State of the Union was Biden’s most forceful evocation of middle-out economics to date, he has been remarkably consistent in his middle-out messaging. In the speech that kicked off his 2020 presidential campaign, he said it was time to grow the economy “from the bottom up and the middle out,” and the Washington Post reports that he has repeated that same exact phrase at least 150 times since that day.
It’s not just lip service, either. Biden’s signature policies — the CHIPS act, the Bipartisan Infrastructure Bill, and the Inflation Reduction Act — all center working- and middle-class Americans, not the wealthy few, as the source of America’s economic prosperity. And he’s also rewriting the rules of government to create a more competitive economy, fighting monopolization, and making it easier for workers to get raises by eliminating noncompete agreements.
Even conservative Washington Post columnist Jennifer Rubin has to acknowledge that Biden’s investments in working Americans are paying off:
Last August, the Dallas Federal Reserve found that over calendar year 2021, “nominal earnings grew 7.7 percent [for low-earners], compared with 4.8 percent for mid-earning workers and 3.6 percent for high-earning workers.”…The available data suggests Biden actually is making good on his “bottom up, middle out” vision. According to the monthly employment survey numbers, of the 11.5 million private-sector jobs created under Biden, 9.3 million — or 81 percent — were blue-collar manufacturing jobs or nonsupervisory service jobs.
Biden is directly speaking to those blue-collar workers who have largely been left behind by the Democratic establishment’s push for corporate globalization. He addressed a significant chunk of his State of the Union speech directly to those workers: “You remember the jobs that went away. And you wonder whether a path even exists anymore for you and your children to get ahead without moving away,” Biden said.
“I get it. That’s why we’re building an economy where no one is left behind,” he continued. “Jobs are coming back, pride is coming back, because of the choices we made in the last two years. This is a blue-collar blueprint to rebuild America and make a real difference in your lives.”
Keen political observers understand, though, that it’s not just enough to win — in order to create a lasting power base, you also have to ensure that the other side loses. While more and more people have noticed President Biden’s consistent messaging about growing the economy from the middle-out, Biden has also been quick to explain why trickle-down doesn’t work. The week after his State of the Union address Biden told an audience in Tampa, “I’m so tired of trickle-down economics. Not a lot trickled down to my dad’s table when we were growing up.” Biden has even stated outright on multiple occasions that “I ran for president to put an end to trickle-down economics.”
By finally presenting an alternative to the extractive trickle-down policies that have enriched the wealthy at the expense of everyone else, Biden is telling an economic story that makes sense to millions of working American families. It’s not a story of fairness or virtue, which too many Democrats relied on in their economic storytelling throughout the trickle-down era, but rather a story of prosperity and productivity: When working Americans’ paychecks grow, they spend that money in their local economies, and employers must hire more workers to meet that demand.
Biden’s relentless middle-out messaging, his innovative and effective middle-out policy-making, and his ridicule of trickle-down’s failures have changed the conversation in political economy. Finally, there is a simple way to articulate how the economy really grows, while rejecting the trickle-down agenda that has dominated the conversation for most of our lives. No longer do progressives simply stand against austerity, or weigh down New Deal-era policies with some additional means-testing. Instead, they stand for policies that invest in the majority of people.
Just four years ago, this kind of change would have been unthinkable. For the last four decades, we inhaled neoliberalism like we inhaled the air we breathe. But in order for the middle-out moment to become an era, progressive candidates, staffers, and communicators must get in line behind Biden in time for the 2024 elections.
No one person — not even a president — can change a national conversation on their own. It’s only by people at the national, state, and local levels preaching the middle-out story, using middle-out principles like widespread investment in working Americans as a litmus test to measure the effectiveness of policy proposals, and consistently ridiculing the trickle-down alternatives that we can truly change our understanding of the economy for generations to come. And with that new understanding, we can build policy structures that reflect how the economy actually grows, and how true, lasting prosperity is built.
It’s an ambitious goal, but it’s a goal that finally feels achievable for the first time in my life. Once trickle-down is dead and buried, the American middle class can finally be unleashed to build a better, brighter, more prosperous future for us all.
Be kind. Be brave. Take good care of yourself and your loved ones.
Zach
