Death of Reaganomics, rise of middle-out economics

I believe you grow the economy from the middle out. — Barack Obama, 2012 election ad

***

Michael Tomasky with The Daily Beast argues that supply-side economics, as well as its ugly stepsister, Reaganomics, died on Election Day when Americans largely rejected the general economic platform of Mitt Romney in favor of a “middle-out” philosophy trumpeted by Barack Obama.

Tomasky makes a good case, but I would suggest that Americans began pulling the curtain on Reaganomics earlier in 2008. There was no secret at the time that the McCain/Palin ticket supported a policy of tax cuts for the rich and deregulation, while Obama wanted to go in a different direction. Even during the Clinton years, I don’t think Americans were completely convinced that Reaganomics was indeed suffering slow entropy. While the Gore/Bush race in 2000 was close — remember that Gore actually won the popular vote — a general ideological shift had yet to occur, as Bush was still commanding a lead in key states like Virginia, Ohio and Illinois. Judging by the votes Bush got in those states between 2000 and 2008, plenty of people still bought into the old guard strain of economic thought.

Here are the last four Electoral College maps from 2000-2012

Election 2000

Election 2004

Election 2008

 

Election 2012

By 2008, the shift had seemingly already begun, and the Democratic Party’s renewed influence in pockets of the nation that previously went for Bush two elections prior was built on three foundations: disdain and weariness about the Bush years, enthusiasm surrounding Obama himself and, most importantly, a collective realization that America’s focus should no longer be on propping up the wealthy, but bolstering the middle class, indeed, that economic growth flourished alongside middle class success. While the shift may have come full circle this election year, a case can be made that it definitely found its impetus in the 2008 election.

I call this growing up. Understanding that many pockets of America are still clinging to the former ideology, the majority of the nation has come of age and, at least in some measure, has recognized that Reaganomics was not tenable in the 1980s — Tomasky calls it “at best half a success” — and it’s certainly not tenable now.

Tomasky sums it up this way:

Supply side was rejected. And in its place, voters went for an economic vision that says: don’t invest in the wealthy in the hope that they’ll decide to spread the wealth around; invest in the middle class, because it’s demand from a prosperous middle class that ultimately creates more jobs, and because doing that makes for a healthier society all the way around.

Bill Maher and Chris Matthews make a related point in this video, that the election was not necessarily about Obama for a lot of people but about continuing on the path that we have been on that will put the middle class and civil rights in the forefront (See 3:45-5:00):

Enhanced by Zemanta