Alejandro Alvarez/Sipa USA via AP Images
Student loan borrowers call for debt cancellation outside the Supreme Court, June 30, 2023.
Back when father was a lad, you could go to college without incurring debt. Housing was affordable, and homeownership allowed for wealth accumulation over a lifetime. Payroll jobs with careers were plentiful. Decent employers provided health insurance, and the health system had not been taken over by corporations. A third of workers were represented by unions.
I don’t mean to romanticize America of the mid-20th century. It was racist and patriarchal. It spent far too much on the military. But for most (white) people and at least some Black people, there was a path to a middle-class life.
That model has been blown to hell, except for those with inherited head starts from well-to-do parents and a relatively small number of highly paid people in tech, finance, and a few well-compensated professions. Today, the median-income earner increasingly finds decent housing out of reach, college debt onerous, career jobs scarce, and medical care a bureaucratic maze with hidden costs.
All this has political consequences. Citizens can admire all that President Biden has achieved and attempted, but also resent that the basic contours of their economic lives are not going to change much anytime soon. That accurate perception helps explain why Biden’s successes do not translate into the higher approval ratings that they deserve.
The structural changes that would fundamentally alter these realities would require sweeping reforms that for the moment are at the far edges of mainstream debate. This is one of those pivotal moments, like 1933 or 1860, when being an effective liberal requires you to be a radical.
Let’s take these in turn.
Housing. In most metro areas, the earnings required to purchase a median-priced house are far in excess of the median income. Rents have been rising far faster than incomes, and housing subsidy programs reach only a fraction of those who are eligible.
America needs large-scale programs to underwrite first-time homeownership, a massive initiative to construct social housing of all kinds, plus compensatory strategies to help Blacks who missed out on the great postwar boom in home equity because of then-legal redlining as well as the racially targeted subprime scams that devastated Black homeownership in the 2008 financial collapse. You have to look to the most left-wing members of Congress to see any such proposals. They are simply not part of mainstream debate.
College costs. The New York Times recently ran a superb guest article titled “America’s Student Loans Were Never Going to Be Repaid.” The piece, by Laura Beamer and Marshall Steinbaum, calculated the status of the $1.7 trillion in outstanding debt, and found that by 2020, more than 60 percent of debtors had more debt than they started with, because interest kept being added to debt principal. That percentage dipped slightly during Biden’s debt pause, now overturned by the Supreme Court, and is heading upward again.
How did we come to inflict this massive millstone on the life prospects of the young? The authors write:
This situation is the fruit of a tacit agreement among state legislatures, college administrators and the federal government dating back to the 1970s: defund public colleges and universities and shift them to a tuition-based revenue model, with the federal government backstopping the system with student debt so that more students can continue to obtain more expensive education.
Exactly so. We need higher taxes on the rich to make all public higher education free, as it was in my day. In return, we need controls on administrative bloat and ever-increasing college tuition. And we need to expunge much of the outstanding debt. This is of course a sweeping policy change. Without it, we keep punishing the young.
Health care. The system has become a maze of corporate profiteering, which adds to its complexity, cost, and inefficiency and burdens doctors, nurses, and patients alike. Obamacare helped only marginally while reinforcing the basics of the larger system. To be efficient, affordable, and kind, health care should be socialized.
Jobs. Restoring good wages and career tracks will require stronger unions, higher minimum wages, tougher enforcement of existing laws to discourage employers from disguising regular jobs as contract work, and more public ownership. All this will only begin to restore the middle-class society that Biden keeps invoking.
Wealth. The toughest issue of all is restoring something like the greater equality of wealth that we once had. For the upper middle class of my generation, net worth was effortlessly accumulated via appreciation of owner-occupied housing. For people under 40, that windfall will never be repeated. We need something like the Alaska Permanent Fund that gives every American a share of wealth created by the commons. And we need taxes on extreme concentrations of financial capital.
Politics. Do these ideas sound radical? Indeed they do. But their goals are merely liberal—restoring the kind of opportunity society that Americans once took for granted, with the possible exception of an Alaska-style social wealth fund, which would be something new. If we don’t begin that process in a credible way, there will be more converts to Trumpism and more disaffected young voters (who usually support Democrats) staying home.
Back in April 2022, when the pundits were counting Biden out as a failed president, I published a book titled Going Big, praising Biden’s expansive programs and insisting that he could succeed. To a surprising degree, he has succeeded. But to deliver what America needs, economically and politically, Biden and the Democrats need to go a lot bigger.
