Boiling Point: Democrats, Republicans and the Decline of Middle-Class Prosperity by Kevin Phillips, 307 pp. New York: Random House. 1993.
The 1992 federal elections and the state and city elections in 1993 proved that a middle class worried about the economy, crime, and social issues will dominate American politics for the next several years. Housing activists ignore middle-class concerns at their peril. Will the middle class support our struggle to attack the horrible housing problems that a minority (even if a growing one) of the people face? Can the middle class be mobilized to ally with the poor? Kevin Phillips has the best record of understanding the middle class’ political impact. In his latest book, Boiling Point, Phillips describes the growing potential of a populist alliance of the middle class and the poor.
Phillips is an unlikely advocate for this kind of populist alliance. He first emerged as the sage of middle-class behavior when his 1969 book, The Emerging Republican Majority, predicted a realignment of American politics based on white middle-class support for conservative Republicans. He identified the first stirrings of this resentment – focused on liberal elitism and issues like crime, taxes and race – that would change politics for a generation. President Nixon based his “Silent Majority” strategy on Phillips’ analysis.
In his 1990 book, The Politics of the Rich and Poor, Phillips took another look and found the Republicans favoring the rich at the expense of the poor and the middle class. The previous ten years of Republican policies, Phillips documented, fostered increasing social inequality and greater concentration of wealth at the top. The middle class, angrier then ever, turned its anger toward conservative elitism. Republican policies redistributed wealth upward from the middle class and poor to the rich, promoting extremes of wealth and poverty, conspicuous consumption, speculation, huge deficits and eroding middle-class wages and standard of living. Two highly visible groups symbolized the poles in American society; billionaires and the homeless.
The vision of America as a confident, striving, middle-class society was unraveling. The result, Phillips predicted, would be a populist social and political upheaval in the 1990s. George Bush beware, he warned. The broad middle class, goaded by a resentment of the rich and fearful of losing more economic ground, will take its self-interest to the voting booth.
Bush’s defeat in the 1992 campaign proved Phillips correct again. In very different ways, candidates Pat Buchanan, Jerry Brown, Bill Clinton and Ross Perot appealed to a frustrated middle class. “The rich get the gold mine and middle class gets the shaft. It’s wrong and it’s going to ruin the country,” Bill Clinton said during the campaign. In Boiling Point, Phillips reevaluates the middle-class rebellion since the 1992 election. (When Clinton took his cabinet to Camp David for a retreat in January 1993, he took Phillips’ book with him.)
With both statistics and vivid anecdotes, Phillips describes the decline in middle-class living standards. Taxes up; real incomes stagnant or falling; fewer government services delivered; layoffs soaring; pensions at risk; skyrocketing healthcare and college costs; and a worsening housing situation. Homeownership is down, homelessness is up and foreclosures are multiplying all over the country, including the affluent suburbs.
These are not simply symptoms of a downturn in the business cycle. A more profound trend is at work: the restructuring of the U.S. economy in a global order. And business adjusts. For example, Phillips recounts the blunt advice that dispassionate marketing strategists were giving their retail clients: downsize, since the market for families earning under $25,000 would get larger despite upturns in the business cycle. You can’t help notice that moderate priced restaurant chains are posting new bargain meals.
Middle-class decline also can be seen as the population increases in cheap, distant-end of the freeway homes and in poor urban neighborhoods. Phillips quotes Rutgers University demographer James Hughes: “The upscale outer-suburb lifestyle will fade. The 80s consumer would pay anything to save time. Now people will drive to outlet stores to save money.”
But the rich made out like bandits and, as Phillips shows, the gap between the rich and everyone else has grown dramatically. While speculators and corporate raiders took home huge sums, the average American family ended up fearing for its dwindling savings, insurance coverage, home values and pensions. Never has the imbalance between the rich and everyone else been greater than it is now. The collective income of the top one percent of Americans, a mere million families, is overtaking the combined income of the entire middle 20 percent of the population, about 50 million people. While the ranks of the very rich have grown slightly, the middle class – the great engine of American prosperity and social stability – is shrinking.
A typical middle-class person may not realize that in 1979 the average CEO made 29 times the income of the average manufacturing worker. And that by 1988 that outrageous disparity had more than tripled. They do recognize that the nation’s power elite – the wealthy one percent at the top – have much to do with their problems.
Not since the New Deal has there been a better opportunity to build a populist coalition of the poor and the middle class, due, Phillips suggests, to this middle-class anger and the decline in prosperity. The political future, Phillips argues, will resonate with middle-class anger correctly believing that the source of its suffering was the rich getting richer in the deregulated, free market era of the 80s.
While today’s middle-class revolt is just the latest manifestation of a populist thread that has run through American history, a hidden danger exists. Not all populist movements were inclusive. As John Judis points out in the summer 1993 issue of The American Prospect, while some populists in the late 1800s unwaveringly supported a movement of black and white, many southern populists, particularly after 1892, sought to exclude blacks. Similarly, while many populists during that era and in the 1930s identified the privileged elite as business tycoons or financiers, others identified the members of the elite as Easterners and even as Jews.
In other words, one current of populism has always sought to unite the middle with the bottom of society, including whites and blacks, small business owners and labor, tenants and homeowners – against uncaring big business and the wealthy. The other tendency pitted the people against both the top of society and the bottom including blacks and immigrants. The more inclusive populism formed the underlying rhetoric of progressive populism. The more exclusive populism underlaid the appeal of modern conservatism represented by people like George Wallace, David Duke and Pat Buchanan.
The conservative middle-class populism of the 1970s and 1980s that, according to Phillips, was a reaction against the fear of crime and social disorder, is giving way to a new middle-class populism. It’s a populism that helped elect Clinton and is directed upward at the wealthy who enriched themselves in the Reagan-Bush years. Sixty-two percent of the population rejected Bush and his country club pals. Ironically, Perot – a billionaire – tapped some of the same sentiments.
Moreover, while the populism of the 1970s was anti-government (the middle class reacting against elitist liberal social policies), the new populism, Phillips suggests, is potentially pro-government as the middle class seeks relief from the economic consequences of the financial elites and free traders.
Phillips clearly thinks a populist movement’s time has come. If he is correct, will the movement be led by some neofascist like Pat Buchanan or someone like Jesse Jackson or Ralph Nader? Housing activists in concert with other progressives can help determine its direction.