Still no plan to connect to Middle America

Theodore Roosevelt
Theodore Roosevelt
Posted: March 19, 2013

When the Philadelphia Electric Co. hired my father as an engineer in 1946, little did the freshly minted graduate of Tufts University and the Navy V-12 program realize that he had hit the jackpot.

For the next 41 years, he and his wife would prosper from a rarity today: remarkable job stability, regular salary increases, and gold-standard benefits that enabled them - on a single "family wage" - to raise five children and send them to college. Moreover, his coveted compensation package was graced with a defined-benefit pension and health-care coverage at retirement for him and my mom, including survivor's benefits after he passed away.

Granted, my father held a college degree; yet the blue-collar unionized workforce at Peco enjoyed the same employment security, wage hikes, and generous benefits. Nor was my dad's experience out of the ordinary: his counterparts at AT&T and GE enjoyed similar experiences.

Now, as his grandchildren launch careers and families, their chances of finding their path to prosperity have diminished considerably, as the American economy and labor market have suffered convulsion after convulsion for years, even before the financial meltdown of 2008.

Both political parties, of course, didn't wake up until Wall Street hit the skids, rushing almost overnight to bail out the big banks - at a tune of $900 billion. And the Federal Reserve continues to pump $85 billion a month into the too-big-to-fail financial giants without demanding government-level salaries in lieu of $1-million Jack Lew-style bonuses.

But as stocks hit record highs and median family income continues to sink, most Americans wonder exactly what's being done to restore the American way of life my parents knew.

President Obama talks a good game, but remains too preoccupied with rolling out his legacy to ride to the rescue. Indeed, his Affordable Care Act is a bureaucratic nightmare that fails to implement a utility-style regulation of routine health-care pricing. And when not obsessing over elite causes that eclipse middle-class norms, he's fast-tracking welfare expenditures that facilitate downward mobility.

Last week, the Republicans and their economic standard-bearer, U.S. Rep. Paul Ryan of Wisconsin, had a chance to offer a plan to save the middle class. Unfortunately, the House Budget Committee chairman's updated "Path to Prosperity" reprises the same old song - straight from the hymnal of conservative think tanks - that the voters tuned out in 2012.

The dreary dirge maintains that balanced budgets in distant out-years are key to restoring the American dream today, along with regulatory relief and a tax code that favors investors over wage earners. Even while devoting a chorus to domestic oil and gas production, Ryan continues to worship at the altar of a prevailing GOP myth: that freeing up "small businesses" to hire and expand will reap an economic windfall.

Historical evidence shows this is sheer fantasy. Small-business entrepreneurism is important, but the high-tech and high-wage national economy that coincided with my father's Peco career had little to do with small business. It had almost everything to do with Big Business - but Big Business tamed and toned, as Theodore Roosevelt insisted, to serve American public interests, not simply those of shareholders and clearly not those of global multinationals.

As noted by Michael Lind, formerly of the Heritage Foundation and cofounder of the New America Foundation, 20th-century "utility capitalism" targeted prudent regulation to shape and grow infrastructure sectors including energy utilities, transportation, and telecommunications. This American approach to industrial policy protected select firms from competition and antitrust laws, enabling firms like Peco to pay high wages, keep unions happy, provide universal service to poor customers, and fund research and development, an overlooked driver of rising living standards.

The R&D-funding angle, the economist argues, marks another plus of utility capitalism over bailout corporatism, observing that "most of the breakthroughs of which the modern technological revolution depends took place before the era of deregulation - and often in the labs of monopolistic corporations like IBM, AT&T, and Xerox."

In short, utility capitalism was the cradle and keeper of the American dream for the Greatest Generation. Why neither party seeks its reapplication - especially in banking, routine medical care, and utility infrastructure, including broadband - remains a mystery. Among Republicans, Presidents Theodore Roosevelt and Dwight Eisenhower championed this building block of American exceptionalism.

If Republicans could reconnect with this proven American "path to prosperity" rather than Ryan's road to retrenchment, the party might find itself back on the path to popularity with long-suffering Middle America.

Robert W. Patterson served as a welfare adviser in the Corbett administration. Follow him on Twitter @RWPatterson or e-mail him at

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