Life of Henry

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.

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.

Time and again, Obama officials said the economy was improving. Each time, the improvement turned out to be transitory or illusory. The president’s one constant ambition, it seemed, was to increase taxes on households making more than $250,000 a year—yet in his speeches, the president emphasized that “millionaires and billionaires” could “afford to pay a little bit more.”

Henry is not a millionaire. He makes less than $250,000. But his goal is to have a successful business, and make as much money as he can to pay for his mortgage, utilities, gas bill, credit cards, loans for business and education, maintenance for the house, furnishings for the house, groceries, property and life insurance, and, if the situation is good, vacation and travel.

What’s the incentive to cross that $250,000 threshold if Obama is just going to tax more of his earnings? Why do the Democrats lump Henry’s ambition to make an extra $1,000 or more with that of millionaires and billionaires who have already made fortunes? Henry could see raising taxes on billionaires. He’s never met one. But he has plenty of friends who make a little more than $250,000 and are still by no means “rich.” What’s Obama got against them?

Moreover, if Congress does nothing, it won’t be only Charles Koch and Sheldon Adelson and Warren Buffett who see their income tax go up at the end of the year. Under current law, income taxes at every level, along with payroll taxes for which Henry is responsible, are scheduled to increase on January 1. Henry will be hit as an individual and as an employer. Many liberals, he suspects, would not really mind if taxes on all income groups increased.

Henry does not follow politics closely, but every time he sees the president on television, Obama is throwing goodies at a special interest group or fundraising in front of Hollywood celebrities. Obama’s agenda—more taxes and regulations and spending, immigration and same-sex marriage—seems either totally divorced from or inimical to Henry’s everyday reality. The president remains a powerful American symbol, and seems more likable on the stump than in giving a speech, but Henry and his wife seriously doubt that they can vote for him again. Contrary to what Obama says, the state of the country has not improved since 2008. The state of the country is worse.

Yet Henry also has misgivings about the Republican nominee. He does not know much about Mitt Romney, but what he has seen is not reassuring. Romney sometimes appears insincere, impersonal, and ill at ease. He keeps telling people he’s not a career politician, even though he’s been in national politics since 1994. Romney laughs awkwardly. His most passionate moment was when he told some hecklers, “Corporations are people.” Henry is more worried about Romney’s vagueness than about Bain Capital, but he’s not going to march to the barricades for private equity, either. He knows what will happen in a second Obama term: Government will grow, and there will be more bickering between Republicans and Democrats. What Henry would like to see is Romney talk straight to the American people about the manifold challenges facing the country and how he would fix them.

For those challenges are not confined to the unemployment rate. They include the state of the budget and debt, the rising cost of health care, and the unfunded liabilities of Medicare, Medicaid, and Social Security. They include the Swiss-cheese U.S. tax code, with its wildly uneven and inconstant rates. They include an unpredictable and unaccountable Federal Reserve that has financed U.S. deficits by creating money. And there are other urgent issues—the diminution of American manufacturing, a trade policy that has led U.S. factories to relocate overseas, the degradation of schools and other public institutions, a hollowed-out military, emboldened adversaries. Romney hardly mentions them.

What worries Henry is that the Republicans may not have changed after four years’ exile from the White House. He wants plain, even blunt speech that outlines an agenda of national renewal after a trying, even grueling decade. Such an agenda would include no tax increases, but a tax code with fewer special interest loopholes; no Obamacare, but simple fixes that would increase competition, introduce price transparency, and improve portability in the health care marketplace; no more handouts to solar companies, but lifted restrictions on oil and gas drilling and pipelines that would create jobs now. There would be no more avoiding the hole America has dug for herself, but a fresh and serious approach to entitlements that saves these programs for the long haul.

This agenda would be framed not in terms of “free enterprise” or “efficiency” but in the language and tradition of American exceptionalism, middle-class values, common sense, and national strength. These are the things that will move Henry’s heart and drive his vote. The alternative is apathy and thus a second Obama term.

After all, whether or not Henry turns out in November, Julia most certainly will.