Can the Democrats Own Prosperity?

And can they exorcise the ghost of Jimmy Carter?

In America, politics is usually like the weather, changing from day to day in ways that are often capricious, rarely meaningful, but always useful as fodder for unproductive conversation. Besides, everyone complains about politics, but no one does anything about it. Once in a while, however, the political climate changes. Long-standing patterns shift in ways that alter the weather for decades, not just days. Something like that may be happening now. Consider, by way of a barometer, this graph:

Not many polling questions have been asked continuously for more than five decades, and fewer still remain as revealing today as they ever were. One such rarity is this question, which the Gallup Organization has asked in most (not all) years since 1951:

"Looking ahead for the next few years, which political party do you think will do a better job of keeping the country prosperous?"

This is the granddaddy of political polling questions not just because it is venerable but because it has earned its keep. If you had to pick only one political indicator as the most fundamental of all, this would be a good choice—because, to a first approximation, the party of prosperity is the default majority party.

The chart begins in 1951, when Harry Truman was president, and it shows how decisively the Depression and New Deal had bestowed "party of prosperity" status on the Democrats. Only occasionally did the Republicans even touch them. The Democrats' prosperity advantage seemed to be their birthright, part of the natural order of things, unlikely to be challenged or changed. Even well into the 1970s, as stagflation set in, few Democrats foresaw the trouble ahead.

That trouble arrived in the person of Ronald Reagan, whose greatest political achievement was to seize prosperity for the Republicans. He knew what he was doing when he made famous the phrase, "Are you better off than you were four years ago?" By the time he was finished, Reagan had exorcised Herbert Hoover's ghost. Now it was the Democratic Party, once seemingly synonymous with modern economic management, that seemed inept and obsolete.

A recession and a bumbling Republican campaign nonetheless helped put a Democrat in the White House in 1993, and the succeeding eight years brought the Democrats news both good and bad. The good news was that a turbocharged economy lifted them back to parity. The bad news was that a turbocharged economy lifted them only to parity. Perhaps the memory of stagflation was too fresh in the public's mind; perhaps divided government muddied the picture. For whatever reason, by the time George W. Bush took office, the Democrats had not made the sale. The country had no party of prosperity.

Seeing opportunity, Bush set out to recapture and fortify Reagan's redoubt. His weapon was tax cuts—large and aggressive ones. That, plus five years of economic growth, should have pleased the public.

The results? Devastating. Crushing. Not only did Bush and his party fail to make the sale, the public slammed the door in their faces. Just why is hard to say. Worries about economic insecurity, and the failure of the median household income (adjusted for inflation) to rise during the Bush years, undoubtedly played a part. Bush's personal unpopularity and the public's displaced anger over the Iraq war may also figure.

In any case, by September 2006, Democrats had opened up a 17-point lead on prosperity. This September, the gap widened to 20 points, confirming that the change was no fluke. Democrats enjoy a lead on prosperity whose like they have not seen in a generation.

The prosperity gap is best viewed not as the jaws of oblivion for the Republicans but as a window of opportunity for the Democrats, because the public is more angry at Republicans than sold on Democrats. Anti-Republican sentiment, of course, is likely to do the Democrats some good in next year's election, but it is mere weather, likely to be transient. To change the climate, the Democrats need to own prosperity for years, not months.

Winning the presidency and keeping the economy healthy would be essential, but even that, as Bush's case shows, may be insufficient. Democrats also need a prosperity narrative: a compelling story about why the public can better trust them to make the economy flourish.

The Democrats' postwar narrative was Keynesianism: By managing demand, the government would balance the economy instead of the budget. Reagan's narrative was supply-side: He would reignite stagnating productivity by reducing tax rates, deregulating, and shrinking a bloated public sector. Bill Clinton preached fiscal responsibility and globalization, a program that succeeded economically but lacked staying power politically, partly because Al Gore seemed to repudiate it.

Bush adopted the supply-side story, but in a primitive form in which tax cuts, deregulation, and smaller government became tax cuts, tax cuts, and tax cuts. The public has responded with something between indifference and contempt, leaving Republicans without a leg to stand on.

As for the Democrats, they have an audience. For the first time since the Great Society era, the public is receptive to a Democratic prosperity narrative, even eager for one. What the party does not have, yet, is the narrative.

Various bits and pieces are in circulation. Fix health care. Improve income security. Restrict trade. Raise taxes on the rich. Democrats hope to speak to middle-class America's feelings of economic vulnerability, which is probably the right tree to bark up. But while some Democrats strike notes of class resentment, others seem to blame foreigners. No candidate has found a package and a tone that tell a story not primarily about populism or nationalism but about prosperity: raising the tide to lift all boats.

A prosperity narrative does not need to be conceptually elegant. It merely needs to be more right than wrong economically and in touch with the times politically, as Keynesianism and Reaganism were. What became known as Reaganomics was in fact a messy pastiche of Republican remedies old (tight money, fiscal restraint) and new (tax cuts, entrepreneurship) that Reagan assembled over the course of his 1980 campaign. The pieces hung together only inasmuch as they suited the candidate and his time—but that was what counted.

It may be that the Democrats will not find a prosperity story next year. Still, the potential for climate change is there. As Reagan exorcised Hoover's ghost, so the way appears open for the Democrats to exorcise Jimmy Carter's—and to haunt Republicans with the shade of George W. Bush.

© Copyright 2007 National Journal

Jonathan Rauch is a senior writer and columnist for National Journal and a frequent contributor to Reason. The article was originally published by National Journal.