Creative Class War: How the GOP is Ruining America's Economy

Peter Jackson as an example of American outsourcing.

Peter Jackson's power play hasn't been mentioned by any of the current candidates running for president. Yet the loss of U.S. jobs to overseas competitors is shaping up to be one of the defining issues of the 2004 campaign. And for good reason. Voters are seeing not just a decline in manufacturing jobs, but also the outsourcing of hundreds of thousands of white-collar brain jobs--everything from software coders to financial analysts for investment banks. These were supposed to be the "safe" jobs, for which high school guidance counselors steered the children of blue-collar workers into college to avoid their parents' fate.

If there is any candidate who speaks for the creative class right now, it is Howard Dean. His educated, tech-savvy supporters and grass-roots, non-hierarchal campaign structure perfectly represent the creative economy. Yet his economic message has so far focused on luring swing-state unionists--criticizing Bush, for instance, for not extending steel tariffs.

America must not only stop making dumb mistakes, like starting trade wars with Europe and China; it must also put in place new policies that enhance our creative economy. Here, too, neither party quite gets it. Most of the Democratic candidates for president have rightly sounded the alarm about rising college-tuition costs and offered ideas to expand college access. That's well and good, but we need to think far, far bigger. Our research universities are immigrant magnets, the Ellis Islands of the 21st century.

As president, Bush chose a group of senior advisors whose economic backgrounds have a century-old flavor. His vice president is an oil man. His treasury secretary, John Snow, is a railroad man. The White House's economic and fiscal policies have been similarly designed to provide life support for these aging red-state industries: $190 billion in subsidies for farmers; tariffs for steel; subsidies, tax breaks, and regulatory relief for logging, mining, coal, and natural gas. Even Bush's tax policy shows the same old-economy preference. His dividend tax cut was supported by mainstream, blue-chip companies, which stood to gain, but opposed by high-tech executives, whose company stocks seldom pay dividends.

Thanks to the GOP takeover of Washington, and the harsh realities of the Big Sort, economically lagging parts of the country now wield ultimate political power, while the creative centers--source of most of America's economic growth--have virtually none.

The challenge for the GOP, if it wants to avoid running the economy into the ground, is to stop sneering at the elites, the better to win votes in their base, and to start paying attention to economic policies that might lift all boats. The challenge for Democrats, if they want to win, is to find ways of reaching out to the rest of the country, to convince at least some of its many regions that policies which operate to the interests of the creative class are in their interests as well.