Back in 2002, a young policy analyst named Heather McGhee was sounding the alarm on economic inequality, and few were listening. Why would they? The economy was OK, the housing bubble was still inflating, and Elizabeth Warren was an obscure law professor.
Today, of course, Warren is a household name, inequality is a talking point on the right and the left, and the young analyst is president of the think tank Demos. She has experienced a kind of vindication, if you can call the financial crisis a vindication. “A lot of the issues we were working on, sort of in the wilderness, became front and center,” says McGhee as she leans back on a couch in her small but sunny corner office in New York’s Flatiron District. Even in blue jeans, McGhee has a gravitas about her: Her voice is deep and her words seem carefully chosen; it’s easy to see why, at 34, she has become a favorite of the left-leaning cable news shows. Now that inequality has America’s attention, McGhee and Demos (pronounced DEE-mos) have a real opportunity to shape the conversation.
It’s a big shift from from playing Cassandra. And it’s highly unusual for a woman in her 30s to lead a think tank (in fact, it’s hard to think of another), but then, Demos is not your average policy research shop. First and foremost, it’s based outside the hub of political power, Washington, D.C. That could be a liability, argues James McGann, who directs the Think Tanks and Civil Societies Program at Wharton; he says Demos “is not on people’s radar.” The annual index of think tanks he compiles ranked Demos at 53 (out of 60 U.S. organizations) in 2014, based on criteria such as reputation among peers, research and media citations, influence on policymaking and funding.
But supporters describe Demos’ Manhattan home base as a strength — being outside the Beltway was a founding principle for the liberal intellectuals who started the shop in 1999. Amy Hanauer, vice chair of the organization’s board, says it helps them “back up and see the bigger problems” and take the long view, instead of scrambling for short-term power plays in the capital. Funding comes from a mix of foundations and individual donors, like financier and former Obama administration official Steven Rattner and Katrina vanden Heuvel, the editor of The Nation. In 2013, Demos brought in just over $8 million.
Demos does have at least one strong tie to Washington in Warren; their “intellectual connection,” as McGhee puts it, goes back to 2003, when Warren and her daughter, Amelia Warren Tyagi, published a book on credit card debt around the same time Demos put out a report on the topic. Warren Tyagi has chaired Demos’ board since 2006. (In an email to OZY, Warren called McGhee “a true leader” whose work “will shape the country in the years ahead.”) McGhee says Demos is more focused on engaging the grass roots than Washington’s power brokers, though they lobby when necessary. She was in the Rose Garden when President Obama signed the Credit CARD Act of 2009, which “had a bunch of the consumer protections that we were advocating for,” she says.
Economic policy wasn’t McGhee’s first calling. Growing up on the South Side of Chicago, she was drawn to storytelling and took up creative writing and theater. After graduating from Yale, in 2001, she tried to find work in Hollywood — but, as she relates to me with a deadpan expression, “the sort of Norman Lear school of political social justice storytelling on television was very much out of vogue.” Fortunately, her childhood had also instilled in her a passion for economic justice. McGhee felt keenly the insecurity of black middle-class families, like hers and those around her, who were “very vulnerable to big trends in the economy.” After a year in Los Angeles, she packed up and moved to New York to take a job at Demos. She left again — for a law degree and to advise John Edwards’ presidential campaign — but in 2009 returned to lead the organization’s D.C. office. When Demos’ president decided to leave a year ago, he asked McGhee to take over, much to her own shock.
McGhee’s stage presence, if we can call it that, serves her well in an advocacy world where effective messaging often trumps substance. She appears frequently on All In with Chris Hayes, the MSNBC show hosted by another talented policy analyst, talking about everything from millennials to Walmart to Ferguson with equal coolness — she is never shrill, and she doesn’t come off as an agitator. Her focus for Demos in the immediate future is ending what she calls the “debt for diploma” system in American higher education.
Then there’s race. McGhee, who is often the only person of color on panels dominated by older white men, credits President Obama with talking about the thorny subject in a way that “doesn’t embrace the myth of American innocence, but is also deeply optimistic.” She, too, is hopeful — that the country is about to exit “the denial phase” in how it thinks about race’s role and “get into the acceptance phase.” To her, diversity has to be at the core of American identity, because “that’s who we’re becoming.”
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