They're calling it bold, audacious and risky, a political milestone and the most important speech on American race relations since Martin Luther King, Jr. dreamed that his children might be judged by the contents of their character, rather than the colour of their skin. But according to the pundits, the power of Barack Obama's epochal "race address" will be gauged by "white males, especially working-class males".

"Will it win over the blue-collar white males who have been trending toward his opponent, or drive them away?" wondered Newsweek. New York Times columnist Maureen Dowd quoted "a top pol" who felt that the controversy over Reverend Wright's sermon had transformed Obama "in the minds of some working-class and crossover white voters from 'a Harvard law graduate into a South Side Black Panther'". It sounds like the set-up to a joke, but it's all too serious. Question: what is the difference between a Harvard Law grad and a South Side militant? Answer: class.

Everywhere Obama is praised for "telling the truth about race" – but the success of his "race speech" is incessantly measured along class lines, because Obama actually charted a course through the crisscrossing lines of race and class, a complex social web that he described with great delicacy, but never came out and named.

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What was most remarkable about this speech to my mind was not that Obama confronted race "head-on" (although that has certainly become uncommon in recent years) but that he repeatedly, and correctly, called race "a distraction," on both sides of the colour line, from class issues: "Just as black anger often proved counter-productive, so have these white resentments distracted attention from the real culprits of the middle-class squeeze – a corporate culture rife with inside dealing, questionable accounting practices, and short-term greed; a Washington dominated by lobbyists and special interests; economic policies that favour the few over the many. And yet, to wish away the resentments of white Americans, to label them as misguided or even racist, without recognising they are grounded in legitimate concerns – this too widens the racial divide."

In one sense, Obama's point couldn't be clearer: race is a distraction from class-based inequities. And if we dismiss working-class resentment as camouflaged racism, we will continue to be distracted by the spectre of race. So why has no one noticed that the much-vaunted "race speech" is also a class speech? The answer to that is very complicated, but its roots may be traced in large part to what Obama referred to as the nation's "original sin" of slavery. In order to tell the truth about race in America, we need to tell the truth about slavery: which is that slavery was not racially motivated – it was economically motivated, and justified by means of race.

Race was invented in order to rationalise slavery: if black people are inferior, they deserve enslavement (or so went the logic). Racism is an effect of slavery, not the other way around. Once slavery was abolished, not only did racism not disappear, neither did the economic system it upheld. Slavery was simply replaced by a new feudal system known as sharecropping, which Jim Crow helped sustain. The legacy of slavery comes from the sustained political, legal and economic effort to link permanently an entire group of people to poverty – and to mystify that systematic disenfranchisement by making up something called race, which could serve as a distraction.

Black people in America remain, to a large extent, an underclass. But they are not co-extensive with the underclass. There are rich, powerful black people (take a bow, Condoleezza). And we have a significant white underclass, too, one which has been given different names, in different colours – white trash, rednecks, blue-collar. What they all share is the experience of economic deprivation, which is why 10 years ago Toni Morrison could call Bill Clinton "the first black president," because, she said, he showed all the signs: "single-parent household, born poor, working-class, saxophone-playing, McDonald's-and-junk-food-loving boy from Arkansas". The only sign he doesn't show is colour: because race in America is overwhelmingly defined by economic conditions.

To be absolutely clear: I am not saying that race per se doesn't exist, or isn't a problem in America. On the contrary. But we will never solve the problem of race in America until we do exactly what Obama suggests: see it for the distraction it is. It was invented to deflect attention away from economic, legal and political inequalities. And the longer that the Democrats ponder the complexities of identity politics, the more distracted they will become from the issues that are actually driving voters – including their utter disillusionment with the current administration and its catastrophic policies.

Democrats need to keep their eyes on the prize – beating McCain in November. The irony is that Obama's speech urging us not to be distracted by race has so far had quite the opposite effect. Obama now needs to confront with equal candour the lesson we were taught by that "first black president": it's the economy, stupid.

Sarah Churchwell is a senior lecturer in American literature and culture at the University of East Anglia