Beware of the New Elites
James Carville famously kept the 1992 Clinton campaign on message with the simple refrain, “It’s the economy, stupid!” That’s just as true for politicians today as it was two decades ago.
However, many politicians, particularly Republicans, tend to misunderstand all that Carville’s phrase encompasses. It’s not just about economic growth. Fairness is a big part of the equation. Most Americans see both growth and fairness as important.
Today, just 35 percent of voters believe the economy is fair to middle-class Americans. Only 41 percent believe it is fair to those who are willing to work hard.
Some politicians, particularly Democrats, are better at acknowledging the importance of fairness, but they have a pretty limited definition of what it means. They complain about income inequality but ignore the larger context.
For most Americans, the context is very important. If a CEO gets a huge paycheck after his company received a government bailout, that’s a problem. People who get rich through corporate welfare schemes are seen as suspect. On the other hand, 86 percent believe it’s fair for people who create very successful companies to get very rich.
In other words, it’s not just the income; it’s whether the reward matched the effort. People don’t think it’s a problem that Steve Jobs got rich. After all, he created Apple Computer and the iPad generation. But there was massive outrage about the bonuses paid to AIG executives after that company was propped up by the federal government.
On a more routine basis, most Americans are offended by the revolving door between Washington and Wall Street. The practice of working for the government to network and then cash in with a firm that needs your government contacts is seen as fair only by those who practice it.
The revolving door hints at the larger problem. The United States is supposed to be a land of opportunity, where everyone can pursue their dreams. Throughout our history, many have started with nothing and risen to the top. But those on top today are busy rewriting the rules to limit entry into their club.
In her recent Daily Beast column, “America’s New Mandarins,” Megan McArdle describes a new elite that rates education credentials more highly than any other skills. In this world, having a Harvard diploma means more than being willing to work hard or contributing something of value. Most Americans don’t share this view. Only 3 percent believe Ivy League schools produce better workers.
Given a choice between a worker who gets more done and someone who has a higher level of education, only 9 percent think the person with the higher level of education should be paid more. Seventy-one percent place a higher value on the person who gets more done.
In the New Mandarin world described by McArdle, the best jobs are reserved for those who attended the most prestigious schools. Entry into such schools is restricted to those with wealth and connections. The rest of us are expected to trust the elites to decide what’s fair.
A better approach is to focus on what people accomplish. That gives everyone a chance to succeed. It is one essential ingredient to creating a society that is fair to the middle class and to those who are willing to work hard.