Ryan Streeter
Demographer and futurist Joel Kotkin observed Monday on ConservativeHome that the “huge, mainly suburban working, middle and upper-middle class” are politically up for grabs. He says:
These include managers, store owners, lone entrepreneurs and skilled laborers in the private sector. Neither party focuses on presenting a positive vision for growth and improvement of quality of life for this segment. So people in this group shift back and forth, making havoc of the best laid plans of both parties.
This is the shifting middle of America. And many families in this group are facing grave economic stagnation compounded by social breakdown. I have talked about this problem here and here.
The GOP does not yet have a coherent framework – rhetorically, politically, or in terms of policy – to restore middle class confidence. Or, in Kotkin’s terms, to present the middle class with a positive vision for growth.
Today, to get the discussion going, we feature a mini-symposium of some bright minds on the right, providing an answer in just a few lines apiece to the question: what should the GOP do to improve the prospects of the middle class?
The mini-symposium participants are: David Brooks, Kevin Hassett, Gary Andres, Nick Schulz, and Ross Douthat.
Columnist, New York Times
The most fundamental threat to the middle class is the stagnation of human capital. Graduation rates from college have been flat for a generation. Single parenthood is skyrocketing, among all races and ethnic groups. Social trust is breaking down.
There's no one solution. Building human capital is like nutrition. You have to do it in different ways every day. It starts with better early childhood education, the single most effective investment. It shouldn't be state run, but where applicable it should be state funded. Then there are mentorship programs to support students through college. Job training programs should be turned into voucher programs. Perhaps no job training programs work in the end, but the workers themselves should at least be in control. There should also be social entrepreneurship funds - locally-controlled pots of money to support secular and faith-based groups.
Basically, people have to grow up in dense communities, with a thousand influences pointing them in the right direction, from conception onward.
Director of Economic Studies, American Enterprise Institute
The most important thing that the GOP can do to help the middle class is cut the corporate tax rate. When Japan cuts its rate next year, we will stand out as the highest corporate tax country on earth. That encourages firms to locate plants in lower tax countries, and depresses jobs here at home. The impact of tax minimization by multinationals is so dramatic that there is a clear Laffer curve in the international corporate tax data. Higher tax rates depress revenue because it is so easy to transfer price profits into low tax jurisdictions.
This tax game has a terrible impact on blue collar workers. My colleague Aparna Mathur and I studied many years of data, and found a very strong link between corporate tax rates and wages. Low tax countries attract capital, and that capital increases the productivity of workers and their take home pay.
Earth to Washington: If you want to see higher job creation, cut what is soon to be the highest tax on earth.
The Weekly Standard & Dutko Worldwide
Middle class Americans suffer due to a federal government that can’t take its hands off the wheel of power. When Washington gets too big and demanding, it squelches creativity, burdens entrepreneurs – and disadvantages workers.
Education and training programs are a great example. Republicans could champion the middle class by providing governors more flexibility to use Pell grants for shorter-term vocational programs. Current rules are too rigid, aimed more at providing educational institutions money, not middle class job skills.
Giving states the authority to experiment with health insurance alternatives is another example. Obamacare’s one size fits all approach will ultimately hurt the middle class.
Finally, promoting pro-growth policies like lower taxes on business and more free trade agreements will create an environment where middle class job creation can flourish.
The best way to help the middle class is through a smaller, more flexible federal government – one that creates an environment for opportunity, not a Washington-based scheme to get there.
Editor-in-Chief, The American
The middle class needs two things -- rising economic growth and stable families. There is little policy can do to help the weakness of the family in the short run. How about growth? New firm formation is indispensible to economic growth. To get more of it, the GOP should make young firms exempt from payroll taxes.
We featured an interview last month with New York Times columnist Ross Douthat, in which he addressed the issue of how to strengthen the middle class. With his permission, we summarize his remarks here:
First, a reform of the health care reform that moves us in a more market-friendly direction than Obamacare, but also creates some kind of a tax credit/deduction for people who don't get insurance
through their employer and can't afford it on the individual market. This is something the Republican leadership hasn't been willing to embrace, but it's a necessity to make the health care system fair and equitable.
Second, a comprehensive tax reform along the lines that Ramesh Ponnuru and Robert Stein have proposed, which lowers rates and curbs deductions (something most conservatives favor) but also makes the tax code more family friendly, through a larger child tax credit (something some conservatives are still skeptical of).
Finally, a broad move toward greater competition in the public education system, both in the context of K-12 education, and in public colleges and universities as well. Here's there's increasingly a bipartisan consensus on the value of choice and competition: What's needed is the political will to fight a long war of attrition to reform the public-school bureaucracy.
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