Sunday, July 5, 2009

Soon after the end of the Cold War, I met a young Russian who had been a member of the elite, an officer in his local chapter of Komsomol, the Young Communist League.

He told me how lucky we Americans were. He said that since kindergarten, he had been taught that Karl Marx and V.I. Lenin were two of the leading thinkers of the world. Then, with the fall of the Berlin Wall, he was told to erase those thoughts, that all those hours of childhood lessons were false.

America’s meritocracy, and the upper middle class created from that meritocracy, is, at least temporarily, forced to confront disillusionment nearly as severe as that of the young Russian.

For it is the first time since its creation that America’s great meritocracy is feeling an economic recession firsthand. Previous post-World War II recessions, regardless of how deep, generally affected the steelworker or the autoworker, but not those who live amid the pristine lawns of suburban Scarsdale or Winnetka or Potomac or in the counties of Marin and Fairfax.

The latter firmly believed they were safe, that they had an irrevocable guarantee from the American dream that would shelter them from economic dislocation. Now, suddenly, they are seeing that their firms have no business, their partnerships are requesting capital contributions or their companies could be forced to close or severely downsize. In addition, their economic cushions - their 401(k) plans and their investment in their houses - have fallen 40 percent or more.

What is happening to the meritocracy’s children compounds its anxiety. These people believed that if they worked hard enough, moved to the neighborhoods with terrific public schools or sent their kids to the best private schools, their children would be accepted into the best colleges. From there, those young people would be guaranteed a position for life in the American economy.

But the Ivy League and similar institutions have lost their ability to fully shelter these children. These students are graduating with masters degrees in business administration, with law degrees or undergraduate degrees in business or liberal arts, but the job pool has shrunk dramatically. Their ability to get a start at any company, not just elite firms, has diminished greatly.

Obviously, the plight of someone who has lost 40 percent of his net worth or whose child no longer will start at Goldman Sachs or Skadden, the global law firm, or their equivalent pales in comparison to that of someone who has lost his job and home and has no discernible net worth.

But the question is not about comparison; it is about politics and the projection and perception of policies that ensure the American dream. And it is about the Republican Party.

The meritocracy and the upper middle class within it are the people who, as individuals, support the political process with their donations of $500 to $2,500.

They are the difference in suburban districts between the political parties; their world has become threatening and destabilizing. Strangely, though, the Republican Party appears to have written off these people. It has become tone-deaf to their needs, ignoring their economic and social anxieties.

Even though many of these people earn more than $250,000 a year in the good years and many might be hurt when the George W. Bush tax cuts are not renewed, this is now a minor issue for them. These people see and fear the current recession as clearly as the person whose house is being foreclosed, and they are looking anxiously for a return to an equilibrium they understand.

They perceived that President Obama, a card-carrying member of the meritocracy, understands what is happening to them. And just as Mr. Bush often spoke in almost a stealthlike language discernible only to the ears of the religious right, Mr. Obama, with his perfectly reasoned sentence structure, speaks directly to the meritocracy.

If the constant Republican call for the extension of the Bush tax cuts is almost irrelevant at this time to the majority of those who could earn or are earning more than $250,000, then for whom is the call meant? There are just not enough superrich or those who aspire to be superrich to swing an election.

An opposition party is vital to the security of a democracy. It is the ultimate check and balance. But if the Republican Party no longer can communicate and make inroads into what should be a natural constituency - a group that believes hard work and initiative define the American dream, whose burgher mentality easily could enable it to lean toward middle-of-the-road conservative, a group similar to many of Abraham Lincoln’s supporters in 1860 - then to whom are the Republicans appealing, and what is their function?

Edward Goldberg, a consultant on international trade, teaches international marketing at the Zicklin Graduate School of Business, Baruch College of the City University of New York.

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