Now that the Democratic victory has sunk partway in, maybe we can begin to
process another result of this remarkable election: After a quarter-century of
growing economic inequality, America decided to talk about it.
It's "the main issue that drove me to run," said James Webb at one of the
12 churches he visited a couple of Sundays before his squeaker victory over
Virginia Sen. George Allen.
In Montana, Jon Tester ran as an old-fashioned populist -- a species
long considered extinct in his part of the country. When the incumbent, Sen.
Conrad Burns, accused him of fomenting class warfare, Tester delivered one of
the more pungent putdowns of the political year. "I'm about the middle class,
Sen. Burns," he replied. "You're about your rich crony lobbyist friends on K
While few candidates talked as tough as the two underdogs who finally put
their party in charge of the Senate, the home stretch of the campaign saw
Democrats across the country picking up where John Edwards left off in early
2004 (before party strategists advised him that his "two Americas" message was
too harsh). Even a few prominent Republicans felt a need to acknowledge that,
in the words of Treasury Secretary Henry Paulson -- the Bush administration's
designated feeler of middle-class pain -- "many" had not benefited from the
economic expansion. Paulson was quick to add, of course, that inequality rose
during most of the Clinton years as well, so "it would be "neither fair nor
useful to blame any political party."
In the late 1970s and early '80s, when the inequality trend first
surfaced, the most conspicuous victims were workers in industries shaken by
competition from Asia. From then on, highly regarded authorities have continued
to present the problem as a matter of technology and trade creating a "rising
skill premium," as Federal Reserve Board Chairman Ben Bernanke put it at a
congressional hearing earlier this year. Americans have clearly taken that
analysis to heart. By and large, according to a recent Wall Street Journal/NBC
News poll (in which the widening pay gap was rated the country's No. 1 economic
problem by 24 percent of those surveyed), people don't hold Republicans
responsible. They're more inclined to blame corporate greed or the global
economy; and either way, they don't think there's much that mere humans,
regardless of party, can do about it. But that fatalistic outlook is not
supported by the facts.
If cheap imports (or, for that matter, low-wage immigrants) could explain
a long, sharp increase in inequality, France, the Netherlands and much of
Europe would be going through the same experience; they're not. If skill was
the crucial factor, the long-term winners would be the top 20 or 30 percent of
Americans. Instead, they've been the top 5, 2, or 1 percent -- the 1 percent
who now pocket almost a fifth of all personal income, roughly twice what their
share was during the 1960s and '70s.
The data suggests a story of power rather than skill -- rule-making
power. The trail of evidence leads into the arcane world of economic policy;
and if you look back over the past few decades, ignoring the catchy labels
("deregulation," "personal responsibility" and the rest), you'll find a pattern
of government action -- on taxes, trade and the minimum wage, among other
things -- favoring corporate insiders and financial manipulators over the
rest of us.
You'll also find inaction -- a wholesale abandonment of the tradition of
public investment that, in earlier periods of our history, from the Louisiana
Purchase to the G.I. Bill and the Higher Education Act of 1965, earned the
United States the right to honestly call itself a land of opportunity.
You'll find bipartisan complicity at many points along the way -- in the
spring of 1994, for example, when virtually the entire U.S. Senate, with
Democrats Joseph Lieberman, Barbara Boxer and Charles Schumer waxing especially
indignant on Corporate America's behalf, shot down a proposal to clean up the
accounting rules for stock options, thus setting the stage for the
backdated-options scandal that has so far implicated the directors and
executives of more than 120 companies.
Many of the Democrats who raised the issue on the 2006 campaign trail will
be members of the new Congress that convenes in January. Their presence could
finally mean an increase in the minimum wage (which even Wal-Mart now supports)
and some desperately needed relief for middle-class families struggling with
soaring college tuition costs. But what then? Soon thoughts will turn to 2008
and re-election, and the newcomers will be listening to old Washington hands
giving them a host of reasons to lay off the subject. Some will follow that
advice, some will resist. Maybe a few will make it their business not only to
keep the discussion going, but to move beyond easy sound bites and calculations
of what the issue can do for them, to a serious conversation about what it is
doing to the country, and what we can do in response. Those who take that
plunge could help bring two badly needed qualities back to American politics:
credibility and hope.
Jim Lardner is a senior fellow at Demos, a national, nonpartisan public policy and research center.
©2006 San Francisco Chronicle