Substantial majorities of Americans now lack confidence in the president’s ability to handle the economy, retirement security and health care. Yet even some Democratic pollsters acknowledge that the president’s difficulties have not translated into gains for the Demo-crats. Perhaps that is because many working-class Americans justifiably lack confidence that Democrats will do anything to advance their interests. Nationally, the Democrats suffer from a branding problem. They have neither a distinctive nor convincing message.

Democrats once portrayed themselves as the party of the working class. If working class means the blue-collar, industrial worker, the party has long since deserted those Americans. One can debate whether President Clinton’s North American Free Trade Agreement benefited the nation as a whole. There is no doubt that it has led to massive layoffs in manufacturing. Aid for long-term unemployment and retraining and comparable jobs for displaced manufacturing workers have lagged far behind the need. Yet even after NAFTA’s problems became painfully obvious, many Democrats have continued to push new trade initiatives that benefit corporate interests while imposing their costs on workers.

In the last few months, Democrats regained some traction through steadfast and relatively united opposition to President Bush’s dangerous proposal to privatize Social Security. Nonetheless, much of this recent gain has been squandered by the party’s shameful performance on so-called bankruptcy reform.

The new bankruptcy law notoriously makes it harder to file for bankruptcy under the more lenient Chapter 7 provisions. Chapter 7 grants some forgiveness to a borrower on loans not secured by collateral. Narrowing Chapter 7’s mercy provisions has been a long-standing goal of the credit card industry and their Republican allies. More surprisingly, it gained the support of 18 Democratic senators and 73 House Democrats. (Tom Allen opposed this bill, but Michael Michaud, who portrays himself as a supporter of working-class interests, voted yes.)

Defenders of this legislation made two major arguments that indicate how disconnected they have become from ordinary working Americans. They reminded opponents that only families with incomes above the “median” level in their state would be subject to the more draconian Chapter 13 standards. They also argued that getting more money out of borrowers who unfairly game the system would lead to cheaper credit for ordinary, responsible borrowers.

Both arguments are flawed. For starters, one should revisit elementary math and economics 101. The new law chooses as its cut-off point median income rather than mean or “average” income. Consider an imaginary island republic with 11 citizens. One citizen earns $500,000 a year, the next two earn $200,000, the next two $50,000 and the bottom six all earn $10,000 a year. In this society, the median income is $10,000 a year and the average is about $100,000.

There is a reason why legislators chose the median income rather than the average. As income distribution has become increasingly concentrated in the last quarter century with very high numbers at the top, the distance between the median and the mean income has grown in both relative and absolute terms.

Here in Maine, the median income for a four-person family is about $60,000. This figure is hardly a princely sum, with mortgage, taxes and increasing health, heating and transportation costs all to be paid out of it. These are exactly the people Democrats should worry about.

The largest cause of personal bankruptcy is now the loss of health care coverage or other family emergency, not profligate spending or attempts to game the system. As Medicaid is trimmed and as private employers cut back on coverage, such bankruptcies will only grow, and more of these unfortunate families will be subject to the draconian bankruptcy terms.

Will credit card companies use their new windfall to make credit more available to the rest of us? This is not likely. The industry is a classic oligopoly, where a relatively few players have large market shares and can influence the price of credit. If their capital costs go down, it will be in their interest to pass along only some, but far from all, of these savings. Engineered shortages work just as well for credit card companies as for OPEC. It will also be in the industry’s interest to use some of their growing profits for advertising. Enhanced advertising can both increase demand and erect further barriers to entry (in the form of brand-name recognition).

Our airwaves and mailboxes are already deluged with misleading ads designed to lure more of us into risky debt. When these efforts do succeed or when consumers face unfortunate circumstances, the courts will now come to the aid of industry. Moral hazard now rests with credit industry leaders, whose most base instincts are only being validated. Worse still these instincts are aided and abetted by a Democratic Party ever less willing to defend its own brand name. Little wonder the party can’t grow even amidst tenuous economic times.

John Buell is a political economist who lives in Southwest Harbor. Readers wishing to contact him may e-mail messages to jbuell@acadia.net