If 90% Acknowledged Their Belief that the Middle Class Are the Job Creators….

by Joanne Ivancic (Advanced Biofuels USA) At the conclusion of the Center for American Progress’s special presentation on “Competing Visions for the U.S. Economy and Implications for the 2012 Elections,” featured presenter, Nick Hanauer summed up the gist of the program. Currently, he said, economic orthodoxy as stated by both major parties holds that “Businesses are job creators.” He and panelist Tom Perriello, President and CEO of the Center for American Progress Action Fund and former Congressman from Virginia, reject that statement. They believe, however, that 90% of the general public would agree with it, would treat it as common knowledge.

As the previous hour’s discussion explored, a truer statement would recognize that the middle class are the job creators. Without customers, businesses fail. Demand from the middle class feeds our economy. A person in the middle class spends a greater percentage of their income and wealth than someone in the “1%.” For example, as Hanauer said and elaborated on in The Gardens of Democracy, co-authored with Erick Liu, although his income is 3000 times that of a basic middle class person, he doesn’t spend 3000 times as much. He saves, invests, and even locates much of that wealth outside of the US.

A middle class person, one of the 99%, spends a much greater percentage of his or her income and wealth, generating more circulation of currency, more economic activity and, thus more jobs. The greater ratio of spending by someone in the middle class nourishes a healthy economy; gives businesses reasons for being and sustainability.

The conclusion, then, from this presentation is that we should recalibrate our perspective on job creation and support the growth and health of a middle class as essential to the growth and health of a capitalist economy. That is, we should stop focusing on helping businesses, on adopting policies that cater to the perceived interests of businesses as if they were in a vacuum unrelated to the general population; or as if the health of businesses always coincided with the desires of the 1%. Instead, our policy focus should be on growing and sustaining a healthy middle class, recognizing that the middle class’s greater ratio of economic activity to income and wealth is the real driver of job creation and business success.

To some, this conclusion may sound radical; however, it remains based on the firm belief and faith that growth remains essential for business, economic and societal success.

As former Congressman Perriello repeated, this country needs to “build, make and grow” things in the US again. However, Hanauer admitted, that as a capitalist, he will not hire people to build, make or grow things if no one will buy them at the price he can afford to make them.

And therein lies the subject that I’d suggest for many more hours of thought, discussion and action. What is the role of government in this regard?

If we value products that are safe, effective, and energy efficient, for example; must we somehow compensate those who build, make and grow them if the middle class cannot or will not pay the price necessary to make those available?

Advanced biofuels certainly provides a framework for this discussion. If we value sustainable, renewable transportation fuels, should we compensate those who research, grow, produce and use them if it cannot be done at a price the middle class public can/will pay? And, on the other hand, should we continue to compensate those who produce and use nonrenewable, unsustainable, environmentally harmful, unhealthy fossil fuels or should we turn that back to the free market?

“Finding new ways to privatize the commons and to profit from disaster are what our current system is built to do. The process is already well under way.

The only wild card is whether some countervailing popular movement will step up to provide a viable alternative to this grim future. That means not just an alternative set of policy proposals but an alternative worldview to rival the one at the heart of the ecological crisis—this time, embedded in interdependence rather than hyper-individualism, reciprocity rather than dominance and cooperation rather than hierarchy.”

Although the Center for American Progress panel may not have agreed with Klein's further questioning of the sustainability of "growth," CAP's parallel recognition of the vital importance of the need for a perspective shift regarding the need to nurture and raise up the 99% may move thinkers in the same direction. The seeds of the popular movement envisioned by Klein may be sown in the minds of those who have power and influence. And, perhaps, they will have the gumption to incorporate these ideas into the policies and practices which are their logical conclusion. And maybe we will have to figure out how to sustain without growth for a while.

That is, if the shift happens and 90% believe that the middle class should be at the top of the pyramid, that the middle class are the job creators; then the desire of the middle class for safe, efficient, effective, sustainable, renewable affordable home-grown products would be reflected in policies and practices, with the trickle down benefit to businesses from the strength of their customers.