Hi – it’s Nick Hanauer, Civic Action’s founder. I’m reaching out because I want to tell you a few important things about President Biden’s groundbreaking approach to growing our economy and why it’s a momentous shift.

You might have heard President Biden say during the State of the Union address that he wants to build the economy from the “middle out, not the top down.” If that sounds familiar, that’s because it’s been Civic Action’s mission statement for years.

But it’s much more than a phrase – it represents a fundamental shift away from the policies of the last 40 years that have resulted in me and my wealthy friends getting richer at the expense of other Americans, and our economy. Middle-out policies have been a cornerstone of President Biden’s economic approach since the early days of his 2020 presidential campaign, and a rejection of the trickle-down policies – cutting taxes for the rich, easing regulations for the powerful, and suppressing wages for the 99% – that have plagued American politics on both sides of the aisle since the Reagan administration

I just co-wrote an article with Professor Eric Beinhocker of the University of Oxford in Democracy Journal about middle-out economics, and I want to share the most important points in the article with you:

1. The Rise and Fall of Trickle-Down Economics

From the 1930s to the mid-1970s, the United States government made major investments in strengthening the social safety net, regulating powerful interests, and promoting full employment and rising wages. All of that changed, however, when Ronald Reagan took office. His administration ushered in a major shift in U.S. economic policy to neoliberal ideas – grounded in the belief that there is always a “Big Tradeoff” between growth and equity – that we can have a big economic pie or a more equal pie, but not both. And with that came the promise that wealth concentrated at the top of the economic ladder would “trickle down.” As you could have guessed, that wealth never trickled down – instead, it accumulated at the top and income inequality has exploded over the past four decades.

Four decades of politicians have more or less stuck to the trickle-down game plan since Reagan – and it’s taken a toll on working Americans. Over the past 45 years, $50 trillion was redistributed upward from the paychecks of 90% of all Americans up to the top 1%.

2. Prosperity Grows from the Middle Out

Just like President Biden said in his address, economic growth doesn’t happen from the top down. History shows that neoliberal policies lead to low wages and a weak middle class that doesn’t have enough disposable income to stimulate local economies.

The truth is, prosperity grows from the middle out. When we create policies that allow the middle class to thrive – like raising wages and protecting the right to unionize – more people have wealth that they can use to stimulate their own economies, which is a win-win for everyone.

3. From Theory to Policy Reality 

President Biden has already enacted some middle-out policies: the $1.9 trillion COVID-19 recovery bill, the $1 trillion infrastructure bill, the America COMPETES Act, and a raft of executive orders and actions all show that the Biden administration is trying to reinvigorate the middle class. And as he called out in his SOTU, we need the Senate to pass the Build Back Better Act to keep our middle-out recovery growing and inject billions in investments into communities across America. 

As President Biden calls on Congress to build a more inclusive economy, we have an opportunity to make even more progress toward a middle-out economic revolution. That’s why Civic Action is calling on the Senate to act on President Biden’s middle-out economic plan, and we need your help.

Will you share my Democracy Journal piece with your senators and ask them to commit to advancing middle-out economic policies?

Thank you for your advocacy. 

Nick Hanauer
Team Civic Action

P.S. If you’d like to read the full version of my Democracy Journal piece, you can do so here.