America Ascendant
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Rush Limbaugh, not surprisingly, was a touch more direct: “Some French socialist, Marxist, communist economist has published a book, and the left in this country is having an orgasm over it.” “He’s a wuss” who has arrived to support President Obama’s push against inequality, “as if there’s some moral sin in income inequality,” “in capitalism, and therefore there is a moral sin in the United States of America.” You knew this “inequality” gig would end with Barack Obama showing his contempt for the U.S.A.
“To the extent that there is any concentration of wealth taking place in this country,” it is not by capitalism but by government! Why are the richest counties in the nation in the suburbs of Washington, D.C., as Limbaugh points out? It’s because “wealth is being concentrated in the hands of people who are in or associated with government.” Conservatives’ preference is to see this inequality thing as a pet project of the rich liberal elites, such as George Soros, Tom Steyer, and Jeffrey Katzenberg, who are well represented among lists of America’s richest and biggest givers to the Democrats.96
The conservatives view this as a fad because they do not view inequality as problematic and certainly view other issues as much more serious. For example, when an interviewer for Business Insider asked Winship about the gap between the top 1 percent and everyone else, he said it might be growing, though quickly added, “Whether I think that’s a problem, I’m not at all sure.” He does not grant the knock-on effects of a growing gap: “I don’t think that the evidence that rising inequality has produced societal problems is very compelling.”97
Conservatives were quick to attack Piketty for not including tax benefits, social insurance, and income transfers that improve the position of the middle class—the very programs they choose to cut because of their perverse incentives to idleness and dependence. They were most shocked that Piketty ignores the “huge Obamacare subsidies” that Republicans are intent on repealing if they get the chance. Jared Bernstein calls this “the transfer defense.” He finds that Piketty’s argument still holds up after you consider taxes and transfers. As it turns out, conservatives unwittingly are making the case for the effectiveness of government: almost all middle-class income growth came over many decades from government transfers and tax policies.98
Then conservatives got into Piketty’s data and relished arguing that the top 1 percent took a bit of a hit during the economic crisis and that the rich and the poor rise and fall together. One piece in The National Review highlighted the fact that the top 1 percent saw their income fall 16.3 percent in the financial fallout from 2007 to 2012. They reference a study from the Cato Institute that urges readers not to be distracted by the abrupt changes because the “rich and poor rise together.” We should take comfort in the fact that “when the top 1 percent’s share rises, the poverty rate falls.”99
Chris Giles, the economics editor of The Financial Times, challenged some of Piketty’s data choices and showed how some of those choices produce very different results, particularly for Britain. Piketty defended his conclusions, citing newer data not available in the book. The Economist called the match for Piketty, concluding, “Nor have [Piketty’s] findings that wealth concentration is, once again, rising been fatally undermined” by Giles’s analysis.100
Above all, conservatives seek to delegitimize inequality as the central point for social critique and policy-making. “The most important problem with talking about income inequality is it focuses on relative income to the exclusion of absolute income,” writes one conservative columnist at Forbes, who then asks, “[Is] it better to live in a country with some income inequality, where those with low incomes have adequate food, shelter, and opportunity?”101
It is pretty clear that Republicans will not be working through policies to address the growing inequality in the country, leading even David Brooks to acknowledge, “This is a moment when progressives have found their worldview and their agenda.” He challenges conservatives to get into the national debate by at least acknowledging the problem and raising the inheritance tax, then offering an agenda that gets serious about improving human capital while addressing the “fraying social fabric” that contributes so critically to “low economic mobility.”102
James Pethokoukis of AEI and The National Review goes much farther into the intellectual consequences of the book. He believes Piketty makes a powerful case that “private capital accumulation inevitably leads to the concentration of wealth into ever-fewer hands,” and “now Marxism’s fundamental truth is reasserting itself with a vengeance, a reality borne out in both Piketty’s own meticulously gathered data and in business pages replete with stories of skyrocketing wealth for the 0.001 percent and decades of flat wages for everyone else.” The triumph of the left’s public intellectuals will drive “the economic agenda pushed by Washington Democrats and promoted by the mainstream media.”
John Maynard Keynes and Friedrich Hayek joined the debate in the 1930s, although Hayek retreated when Keynes published The General Theory of Employment, Interest and Money. The debate was only carried on by Milton Friedman and Anna Schwartz in the 1960s. Fearing statists have won the moment, Pethokoukis asks, “who will make the intellectual case for economic freedom today?”103
The conservative New York Times columnist Ross Douthat concedes that if the growing inequality remains unaddressed, it could prove politically disruptive, as Piketty writes about. Douthat, however, does not think America will fall into a new period of class turmoil, as during the Gilded Age, because of “the power that even a weakened 99 percent (or 90 percent, or for that matter 47 percent) can exercise through the ballot box.” America will be spared such a crisis because the public will rally to reform. The center-left is “more powerful and better-positioned” than the “radical left” to lead and to implement the “corporatist tax-and-transfer policies” that will be needed. They will “tax enough, redistribute enough, to maintain the richest nations’ social peace, and avoid violent labor-capital conflict by making even the relatively poor feel like they have too much to lose from such upheaval.”
Douthat believes America will be okay because the Democrats are winning national elections, not the Republicans, reminding conservatives that Paul Ryan and his conservative approach were “on the ticket that lost the last presidential election.” The ball is in the Democrats’ court, and Douthat hopes they will get on with the job of mitigating the economic inequality problem.104
And if they make progress perhaps that will also allow the country to turn to another “inequality-related crisis”—“one that’s more about social and cultural and moral capital.” Douthat is right that the country needs radical critiques and solutions here, too, though conservatives are still blocked by their battle against the sexual revolution from leading in bringing these reforms.
It will obviously fall to the Democrats for now to tackle America’s greatest challenges and to find ways to engage the country in the mission.
10 FROM REAGAN DEMOCRATS TO THE NEW AMERICA
The American people want a politics that is relevant to their lives, that acknowledges their struggle for something better, and that produces a government that will help and mitigate some of their privations. Unlike the politicians who have tiptoed into this new century, the public is ready to rally for bold reforms and join a building wave that can transform this era.
You can see this readiness in Democracy Corps’ major national survey conducted at the outset of the 2016 presidential cycle. A large majority of the country embraces a bold reform narrative that demands leaders confront the special interests’ hold on government and puts the problems of the middle class center stage. People get excited by leaders who understand their lives. The new American majority is hungry for leaders who know how hard it is for people to piece together multiple jobs to make ends meet—and so is calling for drastic improvements in wages and employment rights. Voters want leaders who appreciate the horrific cost of college and will make college more affordable, and they want leaders who und
erstand how bewildering and difficult it is to balance work and have a family, and will therefore offer adequate social supports. They are ready to see deep investments to rebuild American infrastructure and modernize the country—if it is serious in scale, long-term, and independent of a Congress dominated by special interests and self-seeking politicians. And they understand that this is one way that government can produce good-paying jobs.
And the American people are ready to tax the richest and disrupt their special deal with government. They bring to this period a special disdain for the overpaid CEOs and the crony capitalism that makes government work for big business and special interests. The rich paying their fair share in taxes is nearly a first principle of economic reform and getting to a good society.
They are ready for government to help—if the stables can be cleansed. They know government today is bought and sold to the biggest donors and that it wastes hundreds of billions of dollars at the behest of special-interest lobbyists. The American public is excited when leaders begin with reforms that restore democracy and get government to work for the middle class again.
So the public really is ready for an era of government activism beginning with reform. The Republicans are so consumed with fighting off their own demons that they are barely relevant for America’s growing majority. But are the Democrats ready to lead?
A NARRATIVE FOR THESE TIMES
The new American majority at the heart of the ascendant trends, swaths of working people, and the broader American public are waiting for leaders who understand the principles of the new economy. Democratic leaders will win their strong support, this section shows, when they commit first to take their broom to the corruption and special-interest waste in government. Support will be stronger still when the narrative and agenda they advance asks the CEOs of big businesses and the top 1 percent to pay their fair share of taxes so government can work for the middle class. And finally, the narrative gains special standing when it includes an economic agenda for working women and working men, replete with bold reforms that finally address the unaddressed economic challenges facing people and the country.
At the outset of the 2016 presidential election cycle, I tested such a middle-class economic narrative. The narrative begins with the recognition that people are drowning, jobs don’t pay enough, and people are struggling to pay the bills despite all their hard work. At the heart of the narrative is an intention to use government to help. That includes help with making college and child care affordable and ensuring equal pay for working women. It also includes tax credits for low-wage workers and the middle class and a promise to protect Medicare and Social Security. It ends with a call for an economy that works for working people and the middle class again.
When we tested the narrative in January 2015 in a poll conducted for Democracy Corps and Women’s Voices Women Vote Action Fund, more than 70 percent of presidential-year voters said they found it convincing, and almost 40 percent responded with intense support. More important in the context of the national elections, that narrative tested about 20 points more convincing than a conservative economic narrative that faulted Democrats for leaving so many people struggling and offered a small-government route to growth as well as a conservative narrative that pushed back against government overreach.1
The Democratic economic narrative speaks to the new American majority, what we have called the rising American electorate. Fully 78 percent of the growing coalition of young people, unmarried women, and minorities said the narrative was convincing, dramatically higher than the share of the vote they gave Democrats in the best years. Unmarried women were moved in particular. A stunning eight in ten found it convincing, and nearly half chose “very convincing.” The narrative got its strongest generational support from the Millennials, but it was nearly matched by the enthusiasm of the baby boomers.
National survey of 950 likely 2016 voters conducted for Democracy Corps and Women’s Voice Women Vote Action Fund and The Voter Participation Center, January 7–11, 2015.
The middle-class economic narrative also got the attention of white working-class voters. They have not been great fans of government activism in recent decades, and they have only been giving Democrats about a third of their votes. Yet an impressive 71 percent of white non-college-educated women embrace this narrative, 41 percent strongly. Moreover, the white working-class women find the Democrats’ middle-class economic narrative slightly more convincing than the Republicans’ conservative, small-government economic narrative.
While white working-class men respond less intensely to middle-class economics, 62 percent still find the middle-class economic narrative convincing—and that is only 5 points below their support for the competing, small-government conservative economic narrative.
Independents gave a slight edge (60 to 55 percent) to the Democrats’ middle-class economic narrative that has government activism on behalf of the working and middle classes at its core.
What really empowers the Democratic economic narrative, however, is a commitment to reforming politics and government. That may seem ironic or contradictory, since the narrative is calling for a period of government activism. But of course it makes sense. Why would you expect today’s government to act on behalf of the ordinary citizen? And why would you expect people who are financially on the edge, their wages flat or falling, and paying a fair amount of taxes and fees, to not be upset about tax money being wasted or channeled to special interests?
During the 2014 election cycle, we watched concern about big money in politics grow. Democracy Corps tested a middle-class narrative that explicitly called out leaders who listen more to “the richest who show up with big money” and called for an “economy here that works for working people and the middle class again, not just those with the big money.” The middle-class economic narrative got more voter support when it included that critique of big money.2
We have arrived at a tipping point at the outset of the 2016 election cycle, however, where the demand to reform government is equal to or stronger than the demand to reform the economy. More accurately, reform makes it possible to use government to help the middle class. Reform must come first.
In a straight test, the presidential electorate is as enthusiastic about a reform narrative as the Democrats’ middle-class economic one.
National survey of 950 likely 2016 voters conducted for Democracy Corps and Women’s Voice Women Vote Action Fund and The Voter Participation Center, January 7-11, 2015.
The first part of the reform narrative focuses on big business and big interests that give big money to politicians and use lobbyists to win special laws and tax breaks that cost the country billions. The second part emphasizes how special interests and bureaucracy protect out-of-date programs that don’t work. The bottom line of the narrative is that reform frees up money so government can work for middle-class and working families, not the big donors.
Most important, when voters hear the reform narrative first, they are dramatically more open to the middle-class economic narrative that calls for government activism in response to America’s problems.
National survey of 950 likely 2016 voters conducted for Democracy Corps and Women’s Voice Women Vote Action Fund and The Voter Participation Center, January 7-11, 2015.
Among voters who heard the reform message first, 43 percent described the middle-class economic narrative as very convincing—11 points higher than when they heard the economy message first. Among white working-class voters in particular, the order effect produced a 13-point jump in intensity for the Democrats’ middle-class economic message (from 27 to 40 percent).
ECONOMIC REFORM AGENDA FOR WORKING WOMEN AND WORKING MEN
A large majority in the country supports big changes in economic and social policy to address the building challenges facing the country, people, and families. Support is particularly strong with the rising American electorate and unmarried women who face these problems most acutely, though support is high and intense with i
ndependents and the white working class, too. The country really is ready for a bold reform agenda.
The economic reform agenda is gaining support because of the public’s deep understanding of the new economy, their changing families and communities, and their astute perception of who government really works for. These policies are becoming more and more politically relevant and are increasingly on the public agenda because voters are insistent that America’s disruptive changes be met by disruptive new policies.
At the top of the agenda are protecting Medicare and Social Security, the existing social safety net that so many people depend on. Voters know it is at risk and being frayed, and protecting it from elite meddling is front and center. There is also support now for a whole new regime for protecting and helping working families and working mothers. With women fully in the labor force though earning less for many reasons, equal pay matters. So does help making college affordable—the key block to upward mobility in their view. The public is ready for a long-term government plan to modernize America by investing in infrastructure, building schools, and broadband to create good jobs. And finally, the voters put reform of government itself at the very top. That includes limiting the role of money, though equally, making sure government is spending in the interests of the people.
National survey of 950 likely 2016 voters conducted for Democracy Corps and Women’s Voice Women Vote Action Fund and The Voter Participation Center, January 7-11, 2015.