Chicago, IL – Today, Heather McGhee, president of Demos, spoke during the Opening Session of the inaugural Obama Foundation Summit, a gathering of civic leaders in Chicago. The following are her remarks, as prepared for delivery.
The economy is not the weather. Economic news may come to us like a weather report—the stock market going up or down like the temperature—but it’s not actually unseen natural forces that dictate the way the wind will blow economically.
A better way to think about an economy is as a massive, multi-player game where the most powerful players – usually businesses executives and government officials – are constantly able to change the rules that make it easier or harder for some players and some teams to score points.
In today’s economy, the name of the game is Inequality, and there just aren’t that many players winning.
The good news is that it doesn’t have to be this way. We don’t just have to “weather this storm” of widespread economic insecurity – we can rewrite the rules of the game so that everybody wins.
Back when my parents were born, the purpose of the game was different – the goal was to create a lot more winners. Bobby Kennedy summed it up at the time: “it is the essence of responsibility to put public good ahead of private gain.”
So, the players in power wrote the rules so that one man with a high school diploma and a unionized factory job could support a wife and children, buy a home, have health care and a guaranteed retirement pension, and even save for the future. If he wanted to go to college, he could get a free government grant—not a loan. And the CEO of his company typically paid himself about 25 times what he paid his average worker.
Meanwhile, in Europe, nations were rewriting their rules to express a solidarity forged in the fires of war; and all over the post-colonial world, independence was the rallying cry.
The Cold War was beginning to pit two nuclear-armed superpowers against each other in terrifying ways, but the rivalry inspired unprecedented public investments in science and education.
In the industrialized world, the path to a secure, middle-class life was open, and government paved the way, with laws and programs to promote the public good.
But in the decades after the Civil Rights Movement, the most powerful players began to articulate a new purpose for the game. Ronald Reagan’s version supplanted Bobby Kennedy’s, when he said he wanted “an America where people can still get rich.” It became a bipartisan consensus that if there were more points on the board for some players, the rest of the players would eventually do better.
Well, it hasn’t worked out that way. My generation is proof: we make about 20 percent less than our parents did at our age, struggle with child care as a new expensive necessity, and instead of pensions, we have personal stock accounts that could disappear in a crash. We are less likely to own homes and we carry five-figure student loan debt.
Racist rules around who can own what has created a wealth divide that’s actually grown over the past generation: for every dollar of wealth owned by white families, Black and Latino families have less than 15 cents. And the advantage is not about education: a white high school dropout has the same wealth as the average college-educated person of color.
Half of American families couldn’t pay a $400 bill that arrived on their doorstep without going into debt or selling something. Meanwhile, a CEO typically pays himself not 25 but 300 times what he pays his average worker. The unions that used to help ordinary folks have a say in the rules have been under attack, and have retreated from 1 out of every 3 workers to just 1 in 13. Changes in the laws on capital and mergers have given rise to mega-corporations and national chains that dominate the marketplace, smothering competition and small businesses. And climate change is a rising cost to our economy that goes unchecked as fossil fuel companies are allowed to put next quarter’s profit ahead of the next generation.
So, what I’m saying is, inequality isn’t just a natural byproduct of megatrends like automation, globalization and demographic change. These phenomena are real, but they’re circumstances that we, in a democracy, should have the power to respond to and shape.
The problem is, what’s happened is that our democracy has become as unequal as our economy.
In the US, it’s the least wealthy Americans who are most likely to get caught up in the needless red tape around voting. And in recent years we’ve had a rash of gerrymandering and deliberate voter suppression—photo ID, cutting early voting, closing polling places, purging citizens from the rolls – all to skew the electorate even further.
And then there’s the money. Less than 1 percent of the population provides the vast majority of the funds that determine who runs for office and what issues get political attention. Maybe the donor class’ influence wouldn’t matter so much if they were a representative sample, but Demos’ research shows that wealthy donors have different policy priorities – particularly on the economy -- than the majority of Americans, even within their own parties.
We can all feel it. There’s something broken in the spirit of our system, maybe even more than in the laws… something broken in the root word of democracy: the demos; the people.
I would argue that it’s no coincidence that the rules have changed to make it harder for the average American to get by at the same time that the face of the average American has changed. Since the Civil Rights movement integrated our society and lifted racial bans from our immigration laws, we have had a deep and growing anxiety in this country about who is an American.
Why has that affected our economy?
In a way, what has happened to our entire economy is what happened across the segregated South after the courts ordered integration: white-controlled towns drained their public swimming pools rather than let black families swim, too, destroying a public good they once enjoyed.
For three generations now, a political movement has stoked white anxiety about who the “public” is—successfully linking government and unions to undeserving minorities—and gaining support for cutbacks in public spending and limits on collective action that end up generating higher, privatized costs for all of us.
Too many of us have been conditioned to look at our fellow Americans and see “other,” rather than “us.” It’s a phenomenon that’s happening all over the world as politicians cynically pit communities against each other for their own gain.
But just imagine, what a society’s economic policy would look like if our notion of “us” included everyone, everyone who calls a nation home? I think it would look like people being proud to pay taxes because that’s paying back the investment the country made in your success—and feeling like you need to help provide for our future, even though you may not recognize what that future looks like.
I think it would look like government and business and philanthropists working together to ensure that the basics of life—a great education, clean air and water, a roof over your head, an old age with dignity—they would ensure these things are not out of reach for most people but are the minimum that we can guarantee for us all. And I think it would look like the CEOs of companies seeing their responsibility as not just to create goods and profits, but to create good jobs, decent jobs, jobs with dignity, for their fellow human beings.
And why not start it here? The United States is the world’s boldest experiment in democracy, a land of ancestral strangers with ties to every community on the globe, met here with the audacious promise that we could become one people.
Today, politics is offering us two visions of why all the peoples of the world have met here: one, in which we are nothing more than competitors, and another, in which perhaps the proximity of so much difference forces us to admit our common humanity.
There are those who are holding on, white knuckled, to a tiny idea of We the People, who are doing everything to deny the beauty of what we are becoming.
They’re saying that demographic changes are the unmaking of America. No! They’re the fulfillment of it. For when a nation that was founded, as we were, on a belief in racial hierarchy truly uproots that belief, then – and only then – will we have discovered a new world.
That is our destiny. To make it manifest, it will be up to our generation to rewrite the rules so that our economy’s purpose is to generate solidarity across color, origin and class. It will be up to us to disrupt the very notion that those who have more money are worth more in our democracy and our economy.
In the 20th century, America placed a bet on its people and those public investments spurred on an economic force that changed the world. Today, the most diverse generation in American history is ready for that same commitment—a commitment to the human capacity within all of us, to the idea that out of this nation of many, we can become a demos – one people.
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