January 30, 2004

Lord Rees-Mogg on the Middle Class Revolt

LRM doesn't actually use the word revolt in the article below. But I will. Bush seems to think that everyone will be happy with the tax cuts and ignore the spending boom. But spending worries people. It worries people as an abstract idea, the idea of a "national deficit." This has always baffled me that tax payers feel accountable for the government's irresponsible spending. But they seem too, at least in an ideal way. But spending worries people because they know it has to come from somewhere. And that somewhere is taxes. The more Bush spends, the more inconceivable it is to me that he'll be able to keep popular support for tax cuts. People intuitively know (even if they don't want to believe) that you can't have something for nothing. Bush is turning out to be the President who couldn't say no to anyone or anything. He hasn't vetoed a single bill or resolution from Congress. He's never met a tax cut he didn't like, or a spending increase he couldn't live with. And that's not even talking about foreign wars.... On to LRM.... Fewer Jobs For Life by William Rees-Mogg The next General Election in Britain will probably come in May or June of 2005, and we are already in a pre-election atmosphere. Though we do not have the long primary process of the United States, the political mood is similar in both countries. At this stage no-one, including the politicians, is feeling at all certain about the outcome. The precedents suggest a comfortable second term election for President Bush in November, and a relatively comfortable third term for Tony Blair in the following May, but in both countries the polls suggest that the voters have not yet made up their minds. In both countries, the decisive factors seem likely to be the economy and the social services of health and education. Even in the United States, Iraq is only seen as the most important issue by about 10 per cent of the population. I have not seen a similar poll in Britain, but I would guess that it would be even lower. What I do detect over here, and in many of the speeches of the primary campaign in the U.S., is a growing feeling that the middle class is suffering an economic squeeze, and is resenting it. I get a similar impression in the other European countries. Obviously this is bad news for incumbents, if my sense of middle class discontent is correct. By definition, the middle class is the majority, the people whose earnings come close to the average, the mass of population which comes near to the middle in any economic chart. Senator Kerry, who is at present doing very well in the primaries, with wins in Iowa and New Hampshire, makes a strong point. "In an economy that grew 8 per cent last quarter, the average American got to bring home an extra 3 cents for every hour of work. That's the slowest wage growth in 40 years." Lehman Brothers Global Economics forecast suggests that, "the unemployment rate may be stubbornly sticky in the coming months," despite increased optimism about job prospects. A subsection of the middle class seems to be affected particularly badly, the teenagers, or young graduates, looking for jobs. My youngest daughter is in her middle twenties. She finds that many of her friends, graduating with good degrees, have not yet found satisfactory jobs. Since January 1989, American teenagers have reduced participation in the work force by nearly 16 per cent. It has become notoriously more difficult for British or American students to find jobs which will help them to pay their way through College. As middle class parents worry about jobless children, this puts further pressure on the middle aged group. In conversation, many middle class people in both countries, and probably throughout the modern professional and industrial world, express similar worries. They feel that the poor get the benefits, the rich get the money, and the middle class pay the taxes. Again, this has become a standard campaign theme for Democrats in all the primaries. It is an issue which unite Kerry, Dean, Edwards and Clark. It is used to attack the top end of President George W. Bush's tax cuts. A generation of indusreorganizationsation has changed the job structure of the modern middle class. On average, middle class incomes are higher, but they are less secure. There are far fewer jobs for life. The ordinary middle class career has to be much more entrepreneurial, assuming several shifts of employment, unable to rely on the security of the company pension. These socio-economic issues present the same problems in all modern countries. There is no quick economic fix for them. The middle class squeeze means that voters are likely to feel less comfortable at any given level of national prosperity. That means that the middle class is less secure -- but it also means that politicians are less secure as well. William Rees-Mogg 30 January 2004


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