Betrayal of the American Dream: How Democrats Lost FDR’s Middle Class

From FDR to Reagan to Trump: How the left lost its greatest power, and how to win it back…

The great lesson of the election of 2024 is that, to a large extent, class has replaced race as the single most potent political dividing line.

In 1933, Franklin D. Roosevelt took office and began a great experiment. Was it, he asked, really possible to create a society where more than half of a democratic and capitalist nation could enjoy a middle-class lifestyle? On the day of his inauguration the best estimate is that only about 15 percent of Americans had reached that economic milestone.

Back at the founding of our republic, several philosophers and economists suggested it was possible for a majority-middle-class society to emerge on this continent. Adam Smith (of the 1776 Wealth of Nations fame) wrote a book Theory of Moral Sentiments arguing that if a nation were to intervene in the marketplace in “moral” ways that uplifted working class people, such a society could emerge.

Thomas Paine similarly argued in Agrarian Justice for a number of progressive reforms including what today we call Social Security, a guaranteed minimum income, free public education, and the inheritance tax.

But from the beginning of America until 1933 most of these dreams were unrealized.

As Smith had intimated in Theory, unregulated capitalism would always produce the outcome Charles Dickens later wrote about in the 19th century: A top 1% that owns about 80% of the nation’s wealth, a middle 3%-5% professional class (doctors, lawyers, small business owners), and around 95% of the people representing a desperate working class living in abject poverty.

(In A Christmas Carol, Ebenezer Scrooge was the middle class; his company was so small it had only one single employee, Bob Cratchit, who represented the bottom 95%. The 1% don’t even show up in most of Dickens’ stories.)

FDR, though, with help from Francis Perkins, his wife Eleanor, and economist John Maynard Keynes thought he could tame capitalism and the capitalists themselves (he accusingly called them the “Economic Royalists”) and set out with his New Deal programs — legalizing unions, minimum wage, unemployment insurance, Social Security, government subsidies for the working poor, etc. — to create a vast American middle class.

This was the beginning of the modern Democratic Party, and the middle class was its great accomplishment; by the time Reagan took office about two-thirds of us were in that group with a single paycheck earning enough to buy a house, a car, take an annual vacation, put the kids through school, and retire with dignity.

Reagan broke with FDR’s policies that he’d once supported (in exchange for the promise of riches and a career from his second wife’s father), and took a meataxe to the New Deal. He busted unions, cut the top income tax bracket from 74% to 25%, and embraced free trade, allowing American manufacturing companies to go offshore in search of cheaper labor.

The result is that only 43% of us are in the middle class today. Adding insult to injury, it takes two full-time workers to get where a single paycheck could in 1980.

This was the beginning of the downfall of today’s Democratic Party, which has been buffeted by the twin winds of Reagan’s neoliberalism from the right and so-called “woke” identity politics on the left.

Trump and his Republican buddies cynically attacked Democrats for their embrace of Reagan’s policies, claiming that the shrinking of the middle class was because Black people and women were competing with white men for all those good jobs and Hispanics were diluting the labor market. At the same time, they argued, Democrats had gone too far in embracing marginalized minorities, particularly (in this election) the Trans community.

Ironically, Kamala Harris never once mentioned the Trans community while campaigning over the past three months, but Trump and the GOP relentlessly beat her over the head with a Willie Horton-like ad about giving free surgeries to Trans immigrants in prison. In this regard, the group using identity politics for political purposes was the Republican Party.

But the biggest lesson of this election is that class has supplanted race and other identity markers as the issue that motivated voters. Working class people in or aspiring to the middle class — including Hispanics, young white men, and to a smaller extent African American men — rejected economic policy (like Harris laid out) and racial, gender, or age cohort identity in exchange for the promise of good jobs and lower prices.

Sure, there was still a lot of identity politics at work: Trump’s anti-Trans ads are the best example, along with his relentless insistence that our nation’s immigrant population are mostly murderers, rapists, and thieves. And it may have been decisive on the margins.

But at its core, what we’re seeing in America is a realignment around class (its own form of identity politics). The middle class and its aspirants that had been supporters of the Democratic Party since the 1930s are now in the pocket of Republicans.

Part of this is the result of a massive, 40-year-long propaganda effort by billionaire-built media empires including talk radio (also in Spanish), three rightwing TV networks, Sinclair radio and TV, social media, and tending-right newspapers. Part is because in 2010 five corrupt Republicans on the Supreme Court legalized billionaires owning politicians and overwhelming elections with the “free speech” of their money.

But most substantially, as Bernie Sanders pointed out last week, it’s the result of the timeless class struggle between working people and what the GOP calls “the elites” (college-educated, upper-income professionals). The former broke big for Trump, the latter for Harris. And millions of minorities, particularly Hispanic men, rejected identity politics for the GOP’s class struggle pitch.

This dynamic is almost identical to the class struggle that brought FDR into power in 1933 and got him elected four times to the presidency, except that the party labels are now — hopefully temporarily — reversed.

The challenge for Democrats is to engage in their own class warfare, particularly since a good chunk of the Party (like the so-called “Problem Solvers Caucus”) are still on the take from big corporations and billionaires.

In this, the Congressional Progressive Caucus can be a great force to reclaim working people, rejecting both Reaganism’s hold on the Democratic Party (both Clinton and Obama embraced neoliberalism, and Biden’s rejection of it is largely unknown) and the notion that voters will always respond to race and gender rather than class.

If Democrats are to regain the working class as a solid and permanent constituency (which they owned from the 1930s to the 1990s), in other words, they must amplify Biden’s and Harris’ fights for higher taxes on billionaires and lower taxes on working people, universal healthcare and free college, reasonably priced housing, raising the federal minimum wage, protecting the right to organize, increase Social Security, and turn billionaires and greedy CEOs into an identifiable group voters can rightfully loathe. Attacking Republicans on the Supreme Court and their Citizens United decision is also vital.

As Kentucky’s Democratic Governor Andy Beshear wrote for The New York Times yesterday:

“I won re-election 12 months ago by five points in a state that Donald Trump just carried by 30 points. … The focus of the Democratic Party must return to creating better jobs, more affordable and accessible health care, safer roads and bridges, the best education for our children and communities where people aren’t just safer but also feel safer.“

This doesn’t mean Democrats have to abandon allies representing racial, religious, and gender minorities as some are suggesting; that would be both a betrayal and political suicide.

But it’s way past time for a significant recalibration, particularly at the grassroots/working class level. As Pete Davis writes in The Nation:

“Instead of funding itself primarily through membership dues, the [Democratic] party offers fancy events for the wealthy and ceaseless, disrespectful texts for the rest of us. Parasocial relationships with celebrities and famous politicians are emphasized over real relationships with fellow neighbors and local chapter leaders.

“When you go to Democrats.org, clicking ‘Take Action’ does not direct you to a page with your local Democratic committee’s meeting times and locations. The bolded call-to-action button on the party homepage is ‘DONATE,’ not ‘JOIN.’”

Thus, as Trump rolls out his cabinet and policies — which will primarily benefit the morbidly rich and giant predatory corporations — Democrats must pound on the class warfare aspect of what the GOP is really up to.

The Democratic Party has done it before and held power for half a century; they need to do it again. With gusto!

The song that was inspired by this article is here.
My reading this article as an audio podcast is here.
My newest book, The Hidden History of the American Dream, is now available.