There is a single chart — three colored lines on a grid — that shapes the political reality of this country. During the 2012 campaign, one of President Obama’s senior strategists called it “the North Star” and started his internal PowerPoint presentations with it. When Republican majority leader Eric Cantor speaks on Tuesday about his vision for the future of the Republican Party, the chart’s central message will bind together his words.
The chart tracks three economic trends in the U.S. over the last two decades, between 1992 and 2009. The first two lines — productivity and per capita gross domestic product — are rising. This is the unmistakable American success story, the one reflected in record corporate profits, growing wealth accumulation and the unmatched efficiency of this country’s economy. The third line tracks median household income, as measured by the U.S. Census. It shows the story of frustration and stagnation that so many Americans long ago accepted as a reality.
Shortly after 2000, the lines diverged. The economy hummed along, but many Americans, the ones politicians typically refer to as the middle class, stopped feeling the benefits. There are many reasons for the change, and some of them are open to economic debate. (The Congressional Research Service issued a paper [PDF] on the divergence in 2006 so that politicians could make sense of it.) Part of the shift can be attributed to increased income inequality owing to globalization and new technology — the wealthy becoming much wealthier, while the rest stayed the same. Part of it can be attributed to increased corporate profits, as new markets opened overseas and new technology lowered costs. Some of it has to do with how the figures are calculated. But the most important political takeaway of the chart is that at the turn of a new century, much of the U.S. stopped feeling the benefits of a growing national economy.
The chart (above) was originally created by NDN and the New Policy Institute, and it helped Democrats change the way they talked about the frustration of the American people. Shortly after the 2010 election, Simon Rosenberg, who runs those left-leaning think tanks, showed the chart to David Axelrod and David Simas, two of Obama’s top political advisers. The point of his presentation was that the emergency of the first two years of the Obama presidency — the Great Recession, brought on by financial collapse — did not explain the economic suffering and resulting anger felt by so many voters. Instead it was a more recent manifestation of a trend that had begun nearly a decade earlier.
“The reason this is happening is because of rising global competition, the defining new economic challenge of our time,” Rosenberg said in a recent interview with TIME. “In the actual experience of the American economy, there has become an enormous gap between the upper one-third and everyone else.”
Simas led the opinion-research effort for the 2012 Obama campaign, and he told me after the election that the chart hung in his Chicago office, along with a caption he derived from a focus-group participant: “I’m working harder and falling behind.” (That same line became a fixture of the President’s stump speech.) The Obama campaign built its strategy to attack Mitt Romney by focusing on the flat red line of median household income. Romney struggled to focus the country’s attention on the suffering and was never able to escape the Obama campaign’s characterization of him as the candidate who didn’t understand. By the end of the campaign, Romney became the candidate who understood GDP and productivity, a corporate turnaround artist out of touch with reality. As polls showed, Obama was the one who better understood the struggles of the middle class.
This is why Cantor’s speech on Tuesday is worth watching. It will be a full-throated effort to reclaim the median-household-income line for the Republican Party. He will mention the stagnation. He will describe Republican solutions aimed at addressing decade-old frustrations: new federal help for paying for school, tax code simplification and a renewed focus on R&D investment. His rhetoric will strongly echo Obama’s campaign stump speech. “Lately it has become all too common in our country to hear parents fear whether their children will indeed have it better than they,” Cantor will say, according to early excerpts of his speech. “Our goal: to ensure every American has a fair shot at earning their success and achieving their dreams.”
For much of the 2012 campaign, Republicans contented themselves with a message focused on decreased federal spending and debt, two policies that addressed the aftermath of the Great Recession but offered no solutions to the economic struggles that had begun a decade earlier. With Cantor’s speech, there is the beginnings of a shift. Like Obama after the 2010 election, Republicans are now directly addressing the fears and frustrations that have been at the heart of each federal election since 2006, a feeling of the country in decline as manifested by stagnant take-home pay. If the 2012 election has any lasting import, it is that fiscally conservative austerity politics alone will not win the day. It must be paired with a broader message. The most important chart in American politics can no longer be ignored.