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US midterms: The economy

Richard Walker, WashingtonOctober 21, 2014

The US economy is failing to improve the lives of ordinary Americans, says political scientist William Galston. What are the implications for the midterm elections and beyond - and does anyone have the solution?

Protest against Wal-Mart
Image: DW/R. Walker

DW: The figures point to a strengthening economy, but many Americans don't feel it. Who is worst affected by this sense of failing to keep up?

William A. Galston: Regrettably that group is very large in the United States. It includes not only low-wage workers who might be affected by an increase in the minimum wage, but also by substantial portions of the middle class, who have seen no wage increases for a very long time.

How is that factoring into voters' decision-making?

It certainly affects the mood of the country and of the electorate. In recent surveys, 70 percent of Americans think that the recession is still continuing, despite the fact that economists technically declared an end to the great recession in 2009. So it's a key part of the political backdrop.

This would usually be the Democratic Party's territory. How much is the Obama administration suffering from the fact that this is happening on its watch?

The failure of the economy to improve the lives of ordinary Americans has turned out to be a fundamental problem for the Obama administration. It has made it very difficult for them to trumpet their successes, which they would like to do. Because if they talk about growth and job creation without talking about incomes and living standards, they just sound as though they're out of touch.

Obama has been advocating an increase in the federal minimum wage, but he can't get it through Congress. Doesn't that fact make his position hollow?

The gridlock in Congress makes everybody's position seem hollow. Because people can only talk about all the great things they're going to do. According to a recent survey, political gridlock and dysfunction is now tied for first place in the electoral concerns of ordinary Americans. If you ask them, "What will be the principal problem that will determine your vote?" political gridlock is now tied with economic growth and jobs.

Protest against Wal-Mart
William Galston spoke to DW on the sidelines of a protest for higher wages at the supermarket giant, Wal-MartImage: DW/S. Czimmek

The trouble with that is that there's no clear vote they can cast to end the gridlock…

Of course not. Which is why there is an urgent need for leadership that can finally make a deal about the things that really matter.

Do you feel that that leadership is lacking in Barack Obama?

I think that President Obama, from time to time, has tried to reach an accommodation with the Republican opposition. But the question isn't failures in the past. The question is whether the next two years will be squandered in political posturing until the 2016 presidential election - or whether people on both sides in Washington will say, "Enough is enough, we have to get to work on the people's agenda."

Returning to the economy - what is the bottom-line effect it will have on the midterms?

The economy and discontent about the economy are going to work to the disadvantage of the president's party. That is the way it works in midterm elections in the United States - particularly midterm elections in the sixth year of a president's administration. Those historically have been very bad for the president's party. And it does not look as though 2014 will be an exception to that.

Protest against Wal-Mart
Wal-Mart recently promised to lift its lowest-paid workers out of the federal minimum wage of $7.25 per hourImage: DW/R. Walker

Turning to the Republicans, some of the younger generation such Paul Ryan have been taking up the issue of stagnant incomes. What do you make of their efforts?

Thoughtful Republicans understand that the 2016 campaign must be about much more than saying "No" to Democrats. Republicans have been saying "No" without an agenda of their own for a very long time. And especially the ones who are thinking about running for president understand that that is no longer enough.

The "gouging out"of the middle class is being seen as a threat across the developed economies - partly driven by technology. Do you see big answers emerging anywhere?

Regrettably not. I think that the global economy, and particularly the economies of the highly developed countries, are all in the grips of much larger forces than the political systems had even acknowledged or grappled with up to now. We dared to hope that globalization and technology would work for working people in the developed world as well as in the developing world. That has turned out not to be true - and no government has figured out what to do about that yet.

Protesters against low wages in the US are hailing a modest success after Wal-Mart promised to bring its lowest-earning employees above the minimum wage. Is that a sign that protest works better than politics in today's America?

I wouldn't say protest rather than politics. Because there's a political backdrop to this - namely that solid majorities of Democrats, Independents, and, yes, Republicans - now all support an increase in the minimum wage. So these protests are pushing on an open door.

Does this point to a new lease of life for the labor movement?

I think it will be very difficult for the labor movement to recreate itself and regain its former stature in the American economy. But certainly it has turned out to be a focal point for a very effective mobilization. But I think we're talking less about unions in the traditional sense and more about networks of social movements that come together in cities like Seattle [where the minimum wage is set to rise to $15, or nearly 12 euros] to have an effect on actual local political decision-making.

William A. Galston holds the Ezra K. Zilkha Chair in the Brookings Institution's Governance Studies Program. A former policy advisor to President Clinton, his current research focuses on designing a new social contract and the implications of political polarization.