Unclogging the Drain of Socialism (Part 2)

The Economic Engine of America

On Wednesday, I looked at the way both social philosophers and U.S. politicians have long seen the concept of “sharing the wealth” as not only appropriate but also a moral necessity in capitalistic societies. Today, I will examine the problems that arise when society chooses to ignore the politics of decency as well as some of the myths that have sprung up transforming altruism into the pariah of socialism.

I concluded Part 1 by observing failure to care for all elements of society in the early Twentieth Century led to a Great Depression in the United States. The French philosopher Denis Diderot elaborated how such a state of affairs might evolve in 1774 for the benefit of Catherine the Great.

“In any country where talent and virtue produce no advancement, money will be the national god. Its inhabitants will either have to possess money or make others believe that they do. Wealth will be the highest virtue, poverty the greatest vice. Those who have money will display it in every imaginable way. If their ostentation does not exceed their fortune, all will be well. But if their ostentation does exceed their fortune, they will ruin themselves.

“In such a country, the greatest fortunes will vanish in the twinkling of an eye. Those who don’t have money will ruin themselves with vain efforts to conceal their poverty. That is one kind of affluence – the outward sign of wealth for a small number, the mask of poverty for the majority, and a source of corruption for all.”

Many conservatives find the first sentence in the above quote as the core problem with Obama’s proposals, arguing that income redistribution quashes the innovation and entrepreneurship that drives markets to produce highest quality products and services at lowest possible costs. While government routinely performs income redistribution in capitalistic systems just as in socialist ones, I do not think this is what Obama meant by his use of the phrase “share the wealth.”

As a fellow political observer suggested to me the other day, Republicans are guilty of overreaching by attempting to conflate this statement into an embrace of Marxism on Obama’s part. Instead, I believe Obama was referring to the idea of spreading hope and opportunity to the greatest percent of society as possible, targeting those whom he feels government has ignored most in recent decades.

Do not fall into the trap of believing “opportunity” just means being in the right place at the right time. In capitalistic societies, it means having the necessary seed money to invest in your dreams and actualize them. The middle class lost its ability to save nest eggs for such purposes long ago. More recently, it lost the ability to easily borrow money as well.

The mindset Obama seeks to counter is one chronicled by the economist John Kenneth Galbraith. Writing in the London newspaper the Guardian in 1989, Galbraith spoke of a wealthy “minority that, according to current Washington doctrine, must be protected in its affluence lest its energy and initiative be impaired. [This is] in contrast to the poor, to whom money, especially if it is from public sources, is held to be deeply damaging.”

Galbraith is hardly an enemy of wealth and it is pointless denying that U.S. economic policy in recent decades has generated wealth. We have more billionaires and multi-millionaires in this country today than at any other time in history. The problem is that more and more of the middle class has simultaneously backslid quietly into the working poor and the working poor into the chronically unemployed.

This country is now experiencing the largest wealth gap between the affluent and the majority of its population that has existed since the years immediately before the start of the Great Depression.

Joe Biden got it exactly right during the Vice Presidential debate earlier this year when he said, “The economic engine of America is the middle class . . . When it does well, America does well.”

Yet our economic policies, based on the conservative principle Galbraith outlined, concentrated all the emphasis and breaks from government toward the richest. The benefits of this did not “trickle down” as predicted. Instead of growing wealth through all aspects of society, the only growth has been in a permanently disadvantaged underclass.

The danger to the affluent from such an underclass, in place of a thriving middle class, ought to be obvious to any student of history. The middle class is the anchor of a capitalistic society because it contains a majority of citizens, living in less than affluence but content with their relative material comforts and energized by the possibility of their ascendance, or that of their children, into even greater wealth.

Remove this stability and possibility and society’s power structure faces a threat of the type chronicled in the Eleventh Annual Report of the Children’s Aid Society. Written in the aftermath of the draft riots of 1864, it addressed what many observed as particularly savage behavior by young people during violent protests. Robert Kennedy was so impressed by its wisdom and universal themes that he quoted from it a full century later during a Senate subcommittee hearing.

“[These] were the first dreadful revelations to many of our people of the existence among us of a great, ignorant, irresponsible class who were growing up here without any permanent interest in the welfare of the community or the success of the government . . . It should be remembered that there are no dangers to the value of property or to the permanency of our institutions so great as those from the existence of such a class of vagabond, ignorant, and ungoverned children.”

The report issued a dire warning for those failing to appreciate the consequences of allowing an underclass to thrive. We know that poverty, idleness, and lack of hope for a class of people are characteristics that help breed terrorism within that class. Advocates of violence, such as William Ayers and the Weather Underground, will never be anything more than small fringe groups in this country unless society provides them with a pool of converts due to our own disinterest in that class’s welfare.

“Those who were too negligent or too selfish to notice them as children, will be fully aware of them as men. They will vote. They will have the same rights as we ourselves, though they have grown up ignorant of moral principle . . . They will poison society. They will perhaps be embittered at the wealth and the luxuries they never share.”

Even the most socialist-sounding policy transforms into enlightened self-interest when viewed from this perspective. Author and child advocate Marian Edelman framed the argument both more succinctly and positively when she was quoted by Money magazine in 1995 as saying, “The future which we hold in trust for our own children will be shaped by our fairness to other people’s children.”

How could such an uncaring underclass develop in Twenty-First Century America? Urie Bronfenbrenner , a psychologist and co-founder of the Head Start program, offers a ready answer. His 1979 book, The Ecology of Human Development, includes the following insightful reflection.

“In the United States, it is now possible for a person eighteen years of age, female as well as male, to graduate from high school, college, or university without ever having cared for . . . comforted or assisted another human being who really needed help . . . No society can long sustain itself unless its members have learned the sensitivities, motivations, and skills involved in assisting and caring for other human beings.”

It all comes back to the practical politics of decency and what happens when we choose to ignore them.

Conservatives offer many reasons why spending on societal good must be a secondary priority for government or even avoided by it altogether as evil. The first of these is the myth of the self-sufficient family. This myth suggests that all families, whether affluent, middle-class, or poor, inherently know best how to conduct themselves and are largely successful at doing so. It is an argument aimed more at our egos than our common sense.

Joseph Featherstone was editor at the New Republic for many years. However, he also taught at Harvard and Brown Universities and served as the principal of the Commonwealth School in Boston. In a 1979 article, entitled “Family Matters,” that appeared in the Harvard Educational Review, Featherstone attacked this invention of jingoistic national pride.

“The ideal of the self-sufficient American family is a myth, dangerous because most families, especially affluent families, do in fact make use of a range of services to survive. Families needing one or another kind of help are not morally deficient; most families do need assistance at one time or another.”

The second myth is that attention to social problems is too costly and detracts from the primary role of government, which is national defense.

FDR was a President unafraid of social spending. However, he also led the charge to involve America in a global conflict that represented our costliest war to date in economic terms and second costliest in terms of human life. Although FDR undoubtedly viewed U.S. involvement in World War II as unavoidable and morally correct, he steadfastly held that defense spending was the most consistent cause of national deficits and the underlying major expense in the national debt.

In a 1933 message to Congress, FDR advised, “The way to disarm is to disarm . . . for the improvement of social conditions, for the preservation of individual human rights, and for the furtherance of social justice.”

The third and final myth is the most persistent, perhaps because it always prompts a popular public response. It holds that social improvement comes with a price tag of increased taxes that is always too high. It counters that tax cuts are the most effective way to stimulate the economy in such a way that all will enjoy the benefits.

John Gardner was Secretary of the old Health, Education, and Welfare Department during the Lyndon Johnson Administration. In his 1970 book, The Recovery of Confidence, he outlines the fundamental flaw with this seductive line of reasoning.

“Tax reduction has an almost irresistible appeal to the politician and it is no doubt also gratifying to the citizen. It means more dollars in his pocket, dollars that he can spend if inflation doesn’t consume them first. But dollars in his pocket won’t buy him clean streets or an adequate police force or good schools or clean air and water. Handing money back to the private sector in tax cuts and starving the public sector is a formula for producing richer and richer consumers in filthier and filthier communities. If we stick to that formula, we shall end up in affluent misery.”

Galbraith notes conservative inconsistencies on the subject of taxation and not only those limited to the already discussed subject of defense spending. In another uncanny presage of our present situation, he wrote the following in the Guardian in 1992.

“The contented and economically comfortable have a very discriminating view of government. Nobody is ever indignant about bailing out failed banks and failed savings and loans associations . . . But when taxes must be paid for the lower middle class and poor, the government assumes an aspect of wickedness.”

Former Secretary of State Colin Powell had the same reaction this past Sunday when asked about McCain’s charges of socialism against Obama on NBC’s Meet the Press.

“Taxes are always a redistribution of money. Most of the taxes that are redistributed go back to those who pay it, in roads, and airports and hospitals and schools. Taxes are necessary for the common good.”

That brings us back full circle to our starting point. Yet there is one more politician to hear from – one who sympathizes with Obama’s tax policies and his goals in proposing them.

This politician also heard from a disgruntled voter on the campaign trail. In this case, it was a woman whose father was a prominent surgeon. The woman testified that her father toiled hard for long hours and did important work saving human life. Why should he be taxed at a higher rate than anyone else, “isn’t that socialism?” she angrily demanded.

Here is that politician’s reply.

“I think you’re questioning the fundamentals of a progressive tax system where people who make more money pay more in taxes than a flat, across-the-board percentage. I think it's to some degree because we feel, obviously, that wealthy people can afford more . . . But I believe that when you really look at the tax code today, the very wealthy, because they can afford tax lawyers and all kinds of loopholes, really don't pay nearly as much as you think they do when you just look at the percentages. And I think middle-income Americans, working Americans . . . all of the taxes that working Americans pay, I think they . . . also deserve significant relief, in my view.

“So, look, here's what I really believe, that when you reach a certain level of comfort, there's nothing wrong with paying somewhat more . . . But I think the debate in this country is more about tax cuts rather than anything else. And frankly, I think the first people who deserve a tax cut are working Americans with children that need to educate their children and they're the ones that I would support tax cuts for first.”

The politician in question is John McCain, appearing on the MSNBC program Hardball, the evening of October 12, 2000. The McCain of 2000 understood the charges leveled against Obama by the McCain of 2008 are unfair and silly.

Unclogging the drain of socialism does not mean getting rid of Obama’s tax policies but rather removing the disingenuous opposition to them, so the necessary dollars of hope and stimulation can flow freely to the engine that powers this great nation. This is one drain I would be only too happy to watch the American middle class go down.