The Economics of 2008: A Choice of Middle Classes | HughHewitt.com | 10.27.08

When it comes to visions of the middle class, the 2008 presidential campaign is not between Barack Obama and John McCain so much as between Andy Stern and Joe the Plumber. What does that means for our country and its future?

Andy Stern is head of the Service Employees International Union.  By Senator Obama’s standard of earning less than $250,000 a year, he is probably not middle class.  Labor leaders at his level typically make much more.  But he is a major spokesperson for a view of the American middle class that Senator Obama has embraced and promises to make an organizing principle of his administration.

This middle class is a sad crowd.

Its members have suffered years of declining earnings — or had in Senator Obama’s rhetoric until, apparently, someone noticed that they hadn’t, whereupon the rhetoric changed to one of stagnating earnings growth, a questionable but at least defensible proposition.

About a quarter of them lack health insurance – although the actual number of the uninsured falls to around six percent of the US population when you eliminate 1) those who are between jobs for only a few months and will have insurance once they get that new job, and 2) those who are in fact poor and eligible for Medicaid but haven’t applied, and 3) illegal aliens.

And the Stern-Obama middle class is seeing its jobs shipped overseas – although foreign investment in the US has long created substantially more jobs here than US investment abroad has created in the rest of the world.

But as Senator Obama describes it, this middle class is basically a dead-end gang.  Its members are life’s passive players. They will never be any more prosperous than they are today and will probably soon be much less so.

This middle class needs Mr. Stern’s union and others like it to protect them – even if they keep rejecting unions in organizing elections.  So Senator Obama has embraced card check, legislation effectively to eliminate the secret ballot in determining the unionization of America’s workplaces.

It also needs the kind of employer-mandated health coverage Senator Obama advocates.  The government will charge a fine (or fee, or tax, whatever you call it) of employers who opt out of providing coverage and use the money to fund insurance for the company’s workers. Presumably this fee will be subsidized, if not immediately, then after Congress got through playing with it. Soon, and particularly in states where insurance is expensive (that is, states that have loaded mandates on policies sold in the state), the government-sponsored insurance policies will push out those that aren’t sold through the government.  In other words, Senator Obama has put forward a two-step plan leading to single-payer health coverage.  This is surely why single-payer-advocate Stern hasn’t objected to it.

The members of the Stern-Obama middle class don’t own stock.  They do not intend to start or participate in the starting of businesses – and will not move up where they work today.  This stagnation applies to their children as well. So of course Senator Obama’s call for letting the Bush tax cuts expire and piling additional taxes on $250,000-a-year earners will be OK by them.

In other words, Senator Obama’s middle class – borrowed from Mr. Stern — lives without hope, except the hope that Mr. Obama himself brings to them.

Senator McCain’s middle class is very different.

Like Joe the Plumber, many are employed in small businesses — or aspire to buy a business or start one of their own someday.  In other words, one way or another they are working to move up in life. So, like Joe the Plumber, they are concerned about letting the 2003 tax cuts expire and about loading even more taxes on incomes they hope soon to have.

Active players in their own lives, they will switch jobs a number of times during their careers. So McCain’s proposal to allow them to own health insurance policies that they can carry wherever they go fits their needs – just as the Obama plan does not.

A remarkable number of small businesses sell and buy overseas – as do most larger companies — so Senator Obama’s embrace of protectionism is a threat to Senator McCain’s middle class, not an offer of help.

The point is that like Joe the Plumber these are people who make their own hope.  Such people have characterized all the employment growth in the US economy for at least three decades.  Today owners and employees of small businesses – or larger companies that were recently small — comprise by far the bulk of the US workforce.

Despite Senator McCain’s repeated resistance to Bush administration as well as Congressional run ups in spending these past eight years, Senator Obama will again charge this week (per Sunday night reports) that Senator McCain has never defined a single area in which he would act differently on the economy than has the President.

But setting aside the disingenuous rhetoric, here is this year’s real choice regarding the character of our economic future.  On one side is Senator Obama’s passive and hopeless middle class, on the other Senator McCain’s active and aspiring one.  Andy Stern v. Joe the Plumber: in a week and a day, we’ll see which vision the nation embraces.

Clark S. Judge is managing director of the White House Writers Group, Inc., a Washington-based policy and communications consulting firm.  He was a special assistant and speechwriter to President Reagan.