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Life of Henry

Jul 23, 2012, Vol. 17, No. 42 • By MATTHEW CONTINETTI
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In May, the Obama campaign unveiled its “Life of Julia,” a website detailing “how President Obama’s policies help one woman over her lifetime​—​and how Mitt Romney would change her story.” Julia is a composite character, the invention of one of the several hundred minions toiling away at Obama headquarters in Chicago. She is intended to illustrate, in a literal and rather vulgar way, the benefits of the entitlement state, from Head Start to student loans to Obamacare.

Life of Henry

Life of Henry

But Julia and people like her are not the sole residents of the United States. Nor is America divided simply between superrich plutocrats who make up 1 percent of the country and desperate beneficiaries of government largesse who make up the other 99. One can slice and dice our huge population in innumerable ways, isolating and identifying countless groups, many of which are in positions vastly different from Julia’s. Consider Henry. For Henry, President Obama has been no help at all.

H.E.N.R.Y. is marketing slang, first used in Fortune in 2003, for High Earners who are Not Rich Yet. Henrys run households with annual incomes between $100,000 and $250,000. There are about 21 million of them. Henrys make up the overwhelming majority of affluent consumers, who account for 40 percent of consumer spending​—​which in turn is 70 percent of economic activity. It’s no exaggeration to say that without the Henrys’ getting and spending, the U.S. economy would be much poorer.

One can find Henry and his family in the affluent suburbs and exurbs surrounding cities like Washington, D.C., New York, and Los Angeles, or in the counties of suburban Dallas-Fort Worth, Houston, Raleigh, and Philadelphia. He is often a small businessman. He owns his house. He plans to send his children to college. He shops at Target, Saks, Coach, Restoration Hardware, Banana Republic, and, on special occasions, Tiffany.

Henry and his wife voted for Barack Obama in 2008 because he promised to end the war in Iraq and change the tone in Washington. He seemed calm and in control during the financial crisis. After eight years of Bush, Henry thought it was time to try something new.

But the Obama years have not been kind. Henry’s economic fortunes have bobbed up and down. He’s never been flush, but he’s never been broke, either. So much to him seems dependent on forces outside his control​—​whether the Fed engages in another round of quantitative easing, whether the eurozone survives for another week, whether neighbors feel confident enough in their finances to buy things at his shop.

Henry’s business survived the recession, but revenue is down. It’s been hard for him to secure a loan. His net worth fell drastically between 2007 and 2010, according to the Federal Reserve. The house has lost value. His father has started receiving Social Security and Medicare and sometimes needs help with expenses. Health care premiums continue to rise.

Henry noticed a change in Obama sometime in 2009. The president seemed less interested in the economy than in overhauling the nation’s health care system. He was dismissive of polls showing that the public opposed his plan, and derisive of Republican proposals to reform medical malpractice law and sell health insurance plans across state lines. Even after the Democrats lost control of the House of Representatives in 2010, Obama remained fixed on defending his unpopular and unworkable health law and increasing taxes on the “rich.”

Henry watched the news. He wondered why well-connected companies that proved to be poor credit risks, such as Solyndra and Abound Solar, could find financing, but his business could not. He shook his head in bewilderment when he heard economists say that Washington’s bailout of banks had provided them an implicit guarantee that lowers their borrowing costs​—​amounting to an annual subsidy of $120 billion. He could not believe how public employee unions colluded with politicians to obtain high salaries and lavish benefits for their members, and then vociferously fought the slightest attempt at reform. He got a headache thinking of the magnitude of the federal deficit and debt.

Henry supported repealing Obama’s health law not because of ideological commitment, but because he dreaded the forthcoming regulations and tax increases. He knew that the Medicare payroll tax hike and investment income surtax, along with the employer health insurance mandate, would raise the cost of labor and weaken his ability to hire. Nor could he afford lobbyists to petition the Department of Health and Human Services for a waiver. The largest corporations and wealthiest donors could buy access to Obama’s government. Henry could not.

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