It Just Might Work This Time
A study of real income growth over time recently appeared in the prestigious Journal of Economic Literature. It found that the richest Americans, the “one percent” so frequently criticized by Occupy Wall Street (OWS) protestors, garnered an impressive fifty-eight percent of all income growth experienced over the past thirty-five years. During the Clinton Administration years, noted for an economic boom as well as attempts at federal government fiscal discipline, the top earners only captured forty-five percent of income growth. During the years of the George W. Bush Administration, their share skyrocketed to sixty-five percent of all growth.
This study is rather like the climate change studies I wrote about last time. It documents a trend with factual certainty. Exactly what the numbers indicate/portend and what to do in response is a little less clear.
|A sign left behind by Occupy|
Wall Street protestors in New
York City's Zuccotti Park
President Obama traveled to Osawatomie Kansas where he gave a major policy address that even his own supporters concede was also a major partisan political speech in his re-election campaign. In it, Obama laid heavy responsibility for the nation’s current economic distress, as well as our seeming inability to recover from it, on the wealthy, both individuals and businesses, for failing to play by the rules and pay a larger share as justified by their larger rewards.
Obama maintained, “This is not class warfare. It’s math . . . I will not support any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare . . . We are not going to have a one-sided deal that hurts the folks who are most vulnerable.”
The Republican response was swift and unanimous – the President was indeed waging class warfare in an irresponsible, dangerous manner. Conservative pundits joined the chorus. “This is populism so crude that it channels not Teddy Roosevelt so much as Hugo Chavez,” sniped Washington Post columnist Charles Krauthammer in a savage deconstruction of Obama’s speech. “According to Obama, anyone who opposes his common sense solution for banks is just evil,” fumed Dan Gainor, Boone Pickens Fellow, on FOX News.
Their response was unsurprising. Thomas Frank, author of What’s The Matter With Kansas, expounds on the ability of conservatives to counter complaints against Wall Street and big business by branding critics as elitists, out of touch with the traditional values of mainstream Americans. It is an argument that “resonated powerfully among white swing voters crucial to the ascendance of the Republican Party over the last four decades,” adds Thomas Edsall in the New York Times.
Unfortunately for them, this argument has lost appeal in recent years, contends Michael Kinsley, writing at Bloomberg View. “Because of the financial crisis of 2008, the scandals that went with it, and growing income inequality, financial class war arguments are gaining more traction and the cultural class war has almost disappeared.” Likewise, exhortations by Republican GOP hopefuls that Americans just need an opportunity to pull themselves up by their own bootstraps fall flat because they “fail to address the anxiety and anger of those millions of Americans who suddenly find themselves with no job, no health insurance and no money to pay the mortgage,” Edsall rues.
No matter how you may feel about the practice, poll after poll suggests that the rhetoric labeled “class warfare” by conservatives is finally shifting political fortunes back toward Obama and the Democrats. It comes after a long drought of good news following the 2010 midterm elections. A November Wall Street Journal/NBC poll found respondents favored Democratic policies (i.e. elimination of tax breaks for the wealthy and tougher regulation of banks and corporations) over Republican policies (i.e. spending cuts, minimize regulations, and reject all tax increases) by a two to one margin.
An ABC/Washington Post poll found more than three fifths of respondents said the wealth gap had grown larger. Respondents favored the federal government “pursue policies that try to reduce the gap between wealthy and less well-off Americans,” again by a two to one margin.
An October CBS/New York Times poll found only twelve percent of respondents believed Obama Administration policies favor the rich, while sixty-nine percent believed Republican policies did. A more recent Washington Post poll found forty-seven percent of respondents agreed the GOP represents the interests of the nation’s rich – lower but still larger than those who said the same about Democrats.
A recent Gallup Poll found sixty-six percent of respondents favor increasing taxes on individuals earning over $200,000 per year. Seventy percent want to end corporate tax deductions to pay for Obama’s proposed American Jobs Act.
Perhaps most disturbing for conservatives, apparently Obama achieved this increase in populist sentiment without voters viewing him as a divisive figure. A FOX News poll found fifty-six percent of respondents believed Obama was pursuing his campaign strategy to bring Americans together. This included fifty-three percent of Independents and sixty-eight percent of moderates. It also included fifty-eight percent of individuals who earn over $50,000 annually.
Republican pollster Frank Luntz recently addressed the Republican Governor’s Association, where he told them he is “scared of this anti-Wall Street effort. I’m frightened to death.” He warned the group that OWS and other populist movements are “having an impact on what the American people think of capitalism.” He suggested conservatives carefully spin their arguments, taking care to avoid certain buzzwords that are currently harmful to them (i.e. “pay for performance” versus “bonus”).
However, some of Luntz’s suggestions hold chilling reminders for conservatives as to how badly the tone of the debate has shifted against them. He recommended using the phrase “taking from the rich” over “taxing the rich” because “Americans actually do want to tax the rich.” He also recommended they assert their desire to defend “hardworking taxpayers” rather than “the middle class” because “Americans don’t trust Republicans to defend [the middle class].”
Luntz even recommended avoiding the term “capitalism” because “The public . . . still prefers capitalism to socialism but they think capitalism is immoral.” It comes back to an admonition I offered anti-government conservatives in June 2010. Even if they realized complete success in the mid-term elections, I warned, they were “in for a shock by how little confidence this same public has in their own panacea to all problems – free market capitalism,” whose “luster has dimmed considerably for most Americans in recent years.”
Conservatives have long claimed that private enterprise, even at its worst, is always more effective and efficient at running anything than government is. It became almost cliché because people accepted it as obvious. Nowadays, such claims carry far less credibility. I believe this is the principal reason why Obama is having such success without the usual elitist backlash often suffered by Democrats.
During his Osawatomie speech, Obama assured, “Now, unless you’re a financial institution whose business model is built on breaking the law, cheating consumers, or making risky bets that could damage the entire economy, you have nothing to fear from these new rules.” Conservatives counter this does not mean the President is against banks that do not play by the rules; they assure it means Obama and Democrats are against all banks and capitalism. This has been effective strategy for them in the past. So far this campaign, not so much.
As the OWS camps are slowly giving way to local ordinances and winter cold, both supporters and critics have been asking, “Now what?” of a movement whose goals were never especially clear. At least one Republican pollster seems to think they have already exerted political impact. Personally, I doubt they were the catalyst for Obama’s new boldness but it is likely they provide supporting comfort for him in its execution. The signs of things to come are there to read in the detritus left behind from their occupation stage – Class War Ahead.