Mead, who writes a really excellent blog for The American Interest, has crystallized the changing nature of what he calls “the middle middle class” in “luxury cities,” like New York and Los Angeles where the private sector middle middle class has largely fled the high cost of living:

The angry and determined unionized cops represent what used to be the heart of the blue coalition: the stable urban middle middle class. In the old days, this group included a much bigger private sector component than it does now. The disappearance of manufacturing and the decline of skilled labor in most of New York means that the middle middle class, so far as it survives, depends largely on revenue from the state. The cops, the teachers, the firefighters, the sanitation and transit workers: these are most of what remains of the backbone of what used to be the organized working class. Many who don’t work directly for the government work for the health care industry, where government and private insurance payments have kept the blue model alive for employees. Others work for infrastructure and construction companies – much of whose business comes from government. Their ranks were once swelled by reasonably well-paid manufacturing workers and other private employees in what was once a job-rich metropolitan environment. A few private bastions of the middle middle class remain (workers in the cooperative buildings where the überrich live, for example), but these days the purely private sector middle middle class is in full scale retreat in cities like New York and public and quasi-public sector employees take the lead.
This group doesn’t get paid as well or enjoy the prestige of the goo-goos, but they have built structures and institutions that secure them a middle-middle class existence. In the public sector at least they have done surprisingly well at passing their jobs and connections down to future generations. As the urban middle middle class shifted from a largely private sector group to a group primarily dependent on public sector spending and jobs, the political balance also changed. Like the goo-goos, the urban middle middle class needs more revenue from the rest of society: people in this group want the number of jobs in their institutions to grow and naturally enough they want to be better compensated: more take-home pay, better benefits, a younger retirement age with a more generous pension.

As Mead explains, however, this desire for better compensation clashes with the interest that less affluent New Yorkers have in better public services. To even maintain the existing (low) quality of public services, taxes on affluent New Yorkers have to raise, which makes the city more dependent on a volatile financial services tax base.

Members of what Howard Dean likes to call “the Democratic wing of the Democratic Party” prefer not to think too much about Blue Wall Street and its role in the Democratic coalition, but particularly as times get tougher for the blue social model, it is Blue Wall Street that makes things work and calls the shots.
For Blue Wall Street the conflict between the interests of the private sector and the power of the government does not really exist. The symbiosis between Blue Wall Street and the state is strong and deep. The pension funds, bond issues and other financial transactions that blue city and state governments need helps nourish Blue Wall Street; Blue Wall Street helps integrate the policy agenda of other government focused interest groups with larger national priorities and movements.

And the outsized paydays that have attracted so much opprobrium flow in part from this extraordinary collusion. Mead’s post is fascinating, and I’d be curious to read a rejoinder as I find his analysis convincing. The Blue coalition is breaking apart. The problem, however, is that we haven’t developed a post-blue political coalition. The Red coalition, as I understand it, undervalues public sector efficiency, choosing instead to embrace an anti-government rhetoric that is hard to reconcile with the interests of core Red demographics, e.g., over-65s. To lead the country in the right direction, the Red coalition needs to have a better understanding of the dynamics that Mead describes — it needs to see how it can splinter the Blue coalition by offering credible pathways to high-quality public services at low, sustainable cost. This is increasingly a priority at the edges of the Red coalition, but not at its heart. That has to change.