This line is nothing more or less than the old Marxist mumbo-jumbo (redundancy alert!) about "False-consciousness." When the wreched of the earth and the prisoners of starvatiion failed to arise on schedule, their vanguard attributed this dereliction to the wool having been pulled over their eyes by their class-enemies. Nothing to see here, except the idea that the commie swine who now so hold seem to think that no one will recognize them for what they are.

"And yet the trend is apparent..."
Yes it is, and this is shown simply by asking the question: would anyone want to go back to the 80's or the 60's? I though not.

You can see the paradox firsthand on nearly any Main Street in Middle America, where "going out of business" signs stand side by side with placards supporting George W. Bush.

In the first place, aren't failures of small businesses on "Main Street" supposed to be blamed on Wal-Mart ?
And, even where it's true, the "working-class" is certainly the primary beneficiary of Wal-Mart's success.

Further, Thomas Frank simply displays his ignorance when he writes that businesses are failing all over America; I travel extensively in America, and over the past month I've seen new construction everywhere I went, Las Vegas to Colorado Springs to Tucumcari, NM; Salt Lake City to Wichita, KS to Phoenix.
Now, it's possible that some of that construction is speculative, and not to meet a current need, and certainly it's possible for businesses to be booming on one end of town while failing on Main Street, but the overall trend is clearly a prosperous one.

Mr. Frank is correct: treating your audience with contempt is the way to win friends and influence people.
As Dave Barry said "Power to the People means Power to Me and My Friends Who Know What's Best for the People."

(IIRC)

Unemployment 3.9% in NH. Try to find anyone with some skills or a will to do some work. They're all too busy making terrific hourly wages. Hardly saw any hunters in the woods last season. NH highways choked with traffic, both directions. Kerry's still talking about jobs. Edwards talking about mills closing. Who the hell would want to go back to the mills except the managers like Edward's father. Talk about reactionaries. They'd set the economy back to the thirties, which the "Progressives" would love to see happen, to put those hardhats back in their place of dependency. As the world turns they, along with the EU, are spinning their wheels -- in the opposite direction.

Frank is stuck on European notions of class, where 'working class' was/is a hereditary distinction. Workers, and their descendants, will always be workers, owners/managers will always be so. Americans don't think like that, an American knows that if he really wants towork hard enough, he can start a business and become rich. Though most people are content to live the middle class life, they don't want political ideologues to put any obstacles in their, or their children's, way in the event that they really want to go for it and become entrepreneurs.

The Leftist's Bauhaus vision of the "Working Class" is a total joke. They believe in a steady
state theory of class that takes no heed of
class mobility and technological innovation.

Telling people that have bigger houses, bigger
vehicles and better electronic equipment that
there lives have been materially worsened is an
uphill battle.

Now one could make an argument that the lives
of the working classes have morally worsened, but
that would probably be a more rightist argument.