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'Middle-out' economics trumped 'trickle-down' on Nov. 6 - Now policies should reflect that
One of the most important, but least known, outcomes of the 2012 election is that trickle-down economics was defeated by an emerging theory popularized by President Obama known as “middle-out economics,” which holds that a strong middle class is the key driver of economic growth.
We may now be at a sea-change moment as policymakers in Washington long under the supply-side spell finally have a viable alternative to the failed dogma that merely cutting taxes for the rich will lead to economic growth.
And now the public has caught up with what economists have been saying, demanding policies that grow the economy from the middle-out.
A flurry of new polls show the public is increasingly in sync with a growing chorus of economists who understand that the middle class are the consumers, inventors, citizens, workers, and entrepreneurs that make the economy work.
Consider: Exit polling by the television networks show that President Obama won handily on his middle-class message: 75 percent of voters said Obama’s policies generally favor the middle class and the poor, while 53 percent said Romney’s policies favored the rich – and not surprisingly Obama overwhelmingly won these voters.
Similarly, 59 percent of voters in exit polls said the economic system favors the rich – and seventy percent of these voters favored Obama, according to analysis by Karlyn Bowman of the American Enterprise Institute.
Especially revealing are the polls that get deeper into the middle-out versus trickle down debate.
Pre-election Democracy Corps polling found that 63 percent of registered voters agree with the statement that “Trickle-down economics … does not work” because the “middle class doesn’t have the purchasing power to keep the economy going.” Similarly, polling by Public Religion Research Institute in September found that 62 percent of the public agree that the “primary cause of America’s problems is an economic system that results in continuing inequality and poverty.”
Even more damning for trickle down: when given a choice, the public chose middle out economics.
In polling for Bloomberg, Obama’s vision of focusing policy on “the middle class” to “create demand that will produce new jobs” beat by a margin of 52 percent to 40 percent Romney’s theory of targeting “higher income earners and corporations … so they will invest and hire more workers.”
Registered voters chose middle-out economics by 56 percent to 44 percent when asked by Democracy Corps whether economic growth is driven by “rising middle class incomes” or “entrepreneurs and small businesses with the resources to invest and take risks:”
Penn Schoen Berland polling showed Obama’s was winning the “message war” in part because of highly-rated middle-out arguments, such as: “Top-down economics don’t work. … We succeed when folks at the top are doing well, but also when the middle class is doing well, and folks who are fighting to get into the middle are doing well; when more people have a chance to get ahead and live up to their God-given potential.”
And Joel Benenson, the president’s pollster, wrote in a November New York Times op-ed: “When asked what the key to growing our economy was, nearly two in three voters said it was building a strong middle class over creating a ‘healthy climate for business.’”
In short, voters know that the trickle-down recipe of tax-cuts and de-regulation isn’t working and are voicing their support for an alternative model of growth based on a strong middle class.
As Michael Tomasky in the Daily Beast recently argued, the defeat of trickle-down economics “has been largely overlooked,” but is “a very big deal.” Indeed, the rise of middle-out economics may be the most significant event of this election.
Not in a long time has an election so clarified which vision of the economy the public supported – and that clarity has the potential to transform the political and economic landscape. Trickle-down brought us decades of weak growth culminating in the Great Recession, while middle-out economics – when it has been tried – has a strong record of growth in this country and around the world.
Policymakers should listen to the public and support policy that builds the economy from the middle out.
Madland is the director of the American Worker Project at the Center for American Progress.
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