After analyzing many decades of economic data, the leading economists now agree that a thriving middle class is the key to a strong economy. What economists have found is that when the middle class is strong, wealth spreads to the poor and lifts the whole country up. This stands in direct contradiction to the “Trickle Down” theory advocated by conservatives, which says that deregulation and lower taxes are good for the economy. Informed by this economic discovery, Obama’s economic strategy is taking a “Middle Out” approach to the economy, which focuses first and foremost on strengthening the middle class.
The middle class spends a much higher proportion of their income than the rich, so when the middle class does well, this has a positive effect on spending. More consumption means that businesses have more money to hire people, which boosts the economy. The middle class then benefit from the improved economy and the virtuous cycle continues. The problem with the Trickle Down theory, is that rich people tend to hoard excess wealth instead of spending it, which damages the economy. The key to a consumer economy is spending, or what economists refer to as aggregate demand. Think of money as the lifeblood of the economy and aggregate demand as the heart. Even if the country is extremely wealthy, if you don’t have enough spending then the money stops flowing and the economy dies.
Obama’s Pro Middle Class Policies
Obama’s middle class policies have put the country back on the road to recovery. The policies focus on two main areas: jobs and affordability. Specific policies include the following:
- Bolstering Our Manufacturing
- Rebuilding Our Infrastructure
- Making Education More Affordable
- Making Healthcare More Affordable
- Protecting Consumers
Sadly, minorities and single mothers often fall out of the middle class category. One of the key areas to focus on is more welfare and jobs programs that specifically target minorities in order to build a diverse middle class. In addition, single mothers often have to survive on insufficient government welfare, housing and alimony payments which don’t put them in the traditional category of the middle class. We need to bring single mothers into the middle class and start forcing patriarchal families to help support less fortunate single mothers.
Our government’s investment in the middle class has generated spectacular results for our economy, which bodes well for the future. We must however bear in mind that there are still a number of serious threats to American progress, mostly emanating from right wing think tanks funded by large corporate interests such as the Koch Brothers. We need to be vigilant and spread awareness of the catastrophic implications of Trickle Down Economics. The good thing is that the middle class are one of the most liberal groups in America who are unlikely to fall for the tricks of corporate interests. Middle class progressives need to continue to work hard to promote liberal values and support pro middle class policies so that our children can enjoy the benefits of a truly progressive liberal democracy.