US election is a wake-up call for alarm clock Britain

It’s the Middle Class, Stupid!, the new zeitgeist book by grizzled Clinton-era advisers Stan Greenberg and James “Ragin’ Cajun” Carville isn’t your standard fare by former political insiders. It’s less a retrospective and more an argument about reversing the declining fortunes of middle America: not only should this be the defining issue of this year’s presidential election but the struggle of a generation. Their unsparing opening line – “We failed and that isn’t good enough” – serves as a stark warning to the political elite on both sides of the Atlantic that more of the same thinking won’t revitalise the prospects of a faltering middle class.

Their theme chimes with Barack Obama’s impassioned plea to the middle class that he is their best hope for greater economic security today as well as shared prosperity tomorrow – a pitch that will be remorselessly repeated in every stump speech, will dominate September’s Democratic convention and will be rammed home in October’s presidential debates.

Leave to one side the virtual airbrushing of the “working class” from American political discourse and accept the assumption that middle America is where this election is going to be won and lost. It’s a view that underpins the edginess of the race. Despite his narrow overall lead, polling shows Obama trails Mitt Romney among that sought-after group: households with an income of $35k to $90k.

If the Obama message is clear, the policy to back it up remains less so. Given the chosen election strategy you might have expected a detailed middle-class economic manifesto to have emerged. Which is not to make light of the relative success of the administration’s post-crisis economic management and focus on jobs. Nor is it to indulge the fantasy that there aren’t stark differences between the candidates: Romney’s Dubya-esque tax plans would give the rich jaw-dropping tax cuts (while increasing the burden on the vast majority of taxpayers); Obama favours a tax rise for “millionaires and billionaires”.

Yet there is a growing sense that more needs to be on offer from the president than a commitment to avoid the wilder lurches of his opponent. As Jared Bernstein, who formerly led the White House’s middle class taskforce, says: “Middle-class economic security is the right agenda but what’s needed now is a plain-spoken policy debate so these voters can hear not just that their vote is being courted, but that there is a plan in place to reconnect economic growth and middle class prosperity.”

Bernstein could just as easily have been talking about Britain, where the highly precarious economic position of a large chunk of the working population already hangs heavily over the next election. Typical wages have been flat or falling for nearly a decade. Home ownership has moved out of the reach of a fast-growing swath of the working population, and rents are climbing fast. Fewer than half of employees are in an employer’s pension scheme, a figure that drops to a third in the private sector. A worryingly high proportion of households are so drenched in debt they risk going underwater when interest rates eventually return to normal levels.

Of course, some things get lost in translation in any comparison with the US. There, the middle class has always had a hazier and more inclusive feel, lacking the social affectations and exclusivity that the term is freighted with in the UK. (Consequently British political leaders continually strain to find the right language, whether it be “hard-working families”, “the squeezed middle”, “strivers” and – remember this one? – “alarm clock Britain“.) Nor have low- and middle-income households – let’s sidestep the “class” word – experienced the severity of wage squeeze, or the recent collapse in house prices, that has afflicted their US counterparts. And, mercifully, the NHS removes one of the most brutal sources of American insecurity as well as alleviating the downward pressure on wages that employer-based healthcare generates.

For all these differences there will nonetheless be intense pressure here, as in the US, for a pragmatic and plausible plan for higher living standards. The risk is that limited resources – and imaginations – result in some of the favoured myths of contemporary politics being recycled as answers.

Let’s hope not. A “modern industrial policy” may well be vital for a more balanced and export-oriented economy, but it will never result in significant rises in manufacturing employment or lead us to steady wage growth in our service-dominated economy. First-time buyer schemes will bring cheer to the lucky few who benefit, but aren’t any sort of replacement for the massive housebuilding programme so desperately needed. And, yes, there’s a role for efficiency drives in government, but please let’s not pretend they will reduce the need for tax rises or spending cuts.

It’s hardly a surprise that the rhetoric of a presidential campaign – even in world-weary 2012 – soars above hum-drum policy. And make no mistake, if Obama succeeds in defying the plight of other post-crisis incumbents by winning in November, it will be a historic feat. But the cold reality is that the middle-class families he talks about so passionately have been going backwards. Should he secure a second term, it will take Rooseveltian policy ambition to re-wire US capitalism so that the middle class rises along with GDP.

As with the Clinton-Blair era, elements of whatever agenda emerges will find an echo here. For better or worse the fate of the US middle class is likely to reveal something about what is in store for Britain.

This article originally appeared in The Guardian