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“Inequality Perpetuates Inequality”: Conservatives Defend Inequality Out Of Self-Interest, Nothing More

Conservatives have justified inequality for decades, arguing that it is an inevitable byproduct of capitalism and broadly beneficial. This intellectual edifice has begun to collapse.

Supply-side economics rest on the assumption that the wealthy drive economic growth, and that by reducing taxes on them, we can unleash latent economic potential. In fact, however, investment is driven by demand, not supply (a point acknowledged by the relatively conservative Martin Feldstein). If there are viable investments, they will be made regardless of tax rates, and if there are no investments, cutting taxes is merely pushing on a string. Thomas Piketty and Emmanuel Saez, two top economists on inequality, find no correlation between marginal tax rates and economic growth.

Recently, two IMF papers confirmed what Keynesians like Joseph Stiglitz have long argued: Inequality reduces the incomes of the middle class, and therefore demand. This stunted demand means fewer opportunities for investment, stunting growth.

Add to this growing body of research the fact that a robust defense of inequality is increasingly difficult to muster when every other OECD country has far lower levels of inequality than the United States. Greg Mankiw’s defense of the 1 percent was widely decried, because a large swath of research shows that the rise of the 1 percent did not come from natural economic forces, but rather rent-seeking.

The evidence is clear: The economic benefits of inequality have been massively oversold. Inequality is, in fact, a detriment to growth. So why has the right not conceded the argument?

The answer is class interest.

“Class interest” does not mean that the wealthy are nefarious schemers. Instead, it means there are various cognitive biases that lead them to justify and perpetuate inequality. For instance, Kris-Stella Trump conducted experiments in which participants were asked to solve anagrams in a high inequality scenario (the winner received $9 and the loser $1) and a low inequality scenario (the winner got $6 and the loser $4). When asked what a fair distribution would look like, the high inequality group preferred an inequality of $5.54 ($7.77-$2.23) while the low inequality group preferred inequality of $2.30 ($6.15-$3.85). She concludes: “Public ideas of what constitutes fair income inequality are influenced by actual inequality.” Inequality perpetuates inequality.

Paul Piff finds that the wealthy feel more entitled to their earnings and are more likely to show personality traits typically associated with narcissism. Recent research by Andrew J. Oswald and Natavudh Powdthavee finds that lottery winners in the UK are more likely to switch their political affiliation to the right, and also more likely to believe that current distributions of wealth are fair. As people get richer, they think that tax policies favoring the rich are fair — not because of the macro-economic benefits, but because of how they benefit me.

These cognitive biases, rooted in class distinctions, have deep implications. As a young economist argued in 1846, “The ruling ideas are nothing more than the ideal expression of the dominant material relationships.” Benjamin I. Page, Larry M. Bartels, and Jason Seawright examined the policy preferences of the very wealthy and found that they generally fall in line with their class interests. The wealthy were far less likely than the general public to believe that “government must see that no one is without food, clothing, or shelter,” or that minimum wage must be “high enough so that no family with a full-time worker falls below official poverty line,” or that “the government in Washington ought to see to it that everyone who wants to work can find a job.”

This is not meant to demean the policy preferences of the wealthy — only to examine the motives. For too long, the wealthy have couched their economic ideas as being broadly good for the country, but in fact, de-unionization, capital market liberalization, and austerity benefit them while leaving the rest of us far worse off. It’s time that we were all honest about why we support the policies we support.

Now of course, not everyone who supports conservative economic policy is wealthy. Indeed, there is a large literature devoted to the question why the working class supports policies against their own interests. Engles calls this phenomenon “false consciousness,” writing to Franz Mehring, “the real motive forces impelling him remain unknown to him; otherwise it simply would not be an ideological process.” Thomas Frank proposes that working-class conservatives are swayed by social issues. Ian Haney Lopez argues that racial animus still plays a role. Rick Perlstein notes the power of identity politics. The American ethos of upward mobility certainly plays a role; truck drivers in Tallahassee vote for tax breaks on Wall Street believing that they may someday posses enough wealth that an estate tax might affect them. John Steinbeck noted the power of aspiration, writing, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

But when it comes to wealthy conservatives who favor economic policies that hurt many Americans: Bartels’ previous investigation of economic and political power finds, unsurprisingly, that those with a higher socioeconomic status have more influence on legislative outcomes. Martin Gilens, Dorian Warren, Jacob Hacker, Paul Pierson, and Kay Lehman Schlozman have all recorded similar findings. It seems obvious, but it is important to connect these dots: Not only do the wealthy have interests divorced from the broader interests of society, but they also have the political heft to turn those interests into policy.

It is considered rather gauche to discuss class today, and the inequality debate is therefore situated in a purely theoretical realm. Liberals are constantly confused and aggravated about why the preponderance of evidence that austerity doesn’t work (while stimulus does) and that inequality harms society is lost on a large portion of conservatives.

Well, let’s face it: Those who support austerity and inequality are not really about “trickle-down” economics or “efficiency and equity.” They are protecting the interests of the upper class.

As Jonathan Swift warned, “It is useless to attempt to reason a man out of a thing he was never reasoned into.”

 

By: Sean McElwee, The Week, March 18, 2014

March 19, 2014 Posted by | Conservatives, Economic Inequality | , , , , , , , , | Leave a comment

“The Days Of Our Lives”: Race And Conservative Nostalgia

Reihan Salam says that cranky old white conservative nostalgics aren’t racists they’re just white people who are nostalgic for a whiter, more racist America:

One thing that is undeniably true is that American conservatives are overwhelmingly white in a country that is increasingly less so. As the number of Latinos and Asian-Americans has increased in coastal states like California, New York and New Jersey, many white Americans from these regions have moved inland or to the South. For at least some whites, particularly those over the age of 50, there is a sense that the country they grew up in is fading away, and that Americans with ancestors from Mexico or, as in my case, Bangladesh don’t share their religious, cultural and economic values. These white voters are looking for champions, for people who are unafraid to fight for the America they remember and love. It’s unfair to call this sentiment racist. But it does help explain at least some of our political divide.

This puts me in a mind of House Speaker John Boehner’s explicitly expressed view that the problem with President Obama is was that he and the 111th Congress were “snuffing out the America that I grew up in”.

As I said at the time, on its face it’s difficult to make sense of that. John Boehner was born in 1949. Does he feel nostalgic for the higher marginal tax rates of the America he grew up in? For the much larger labor union share of the workforce? The threat of global nuclear war? It’s difficult for me to evade the conclusion that on an emotional level, conservative nostalgics like Boehner are primarily driven by regret at the loss of social privilege by white men. In Boehner’s defense, I often hear white male progressives express nostalgia for the lost America of the 1950s and 1960s and think to myself “a black person or a woman wouldn’t put it like that.” But progressive nostalgics do at least have the high-tax, union-dominated economy and egalitarian income distribution as the things they like. But from a non-bigoted conservative point of view, what is there really to miss about the America John Boehner grew up it? The tax rates were high, but at least they didn’t let Jews into the country club?

 

By: Matthew Yglesias, ThinkProgress, August 19, 2011

August 19, 2011 Posted by | Bigotry, Birthers, Class Warfare, Conservatives, Democracy, Democrats, Elections, Equal Rights, GOP, Human Rights, Ideologues, Ideology, Immigrants, Jobs, Labor, Politics, Racism, Religion, Republicans, Right Wing, Taxes, Teaparty, Unions, Voters | , , , , , , , , , , , , , , , | Leave a comment

The Dangers Of Repealing Birthright Citizenship

People born on American soil are guaranteed automatic citizenship by a provision found in the 14th Amendment to the U.S. Constitution. This provision, often referred to as “birthright citizenship,” has recently come under intense attack by conservative politicians. Conservative lawmakers in state legislatures throughout the country have introduced bills aimed at blocking children born in the state to undocumented immigrants—as well as professional workers and other noncitizens with long-term visas—from claiming a right to citizenship. House Judiciary Committee Chair Lamar Smith (R-TX) has declared his intention to hold hearings on the subject.

Opportunistic politics helps explain the reasoning behind this attack on the citizenship clause of the Constitution. A broken national immigration system coupled with a slow economic recovery characterized by sluggish job growth creates an opening for certain politicians to create short-term electoral gains by demonizing immigrants. Nonetheless, numerous conservative scholars and politicians such as Linda Chavez and James Ho voice grave concerns about the political and policy ramifications of this trend.

A CAP report released this month from CAP Senior Fellow Sam Fulwood III and Director for Immigration Policy Marshall Fitz explains the cascading effect of unforeseen, unintended, and unwanted consequences a retreat on birthright citizenship would set in motion, among them:

  • “Big Brother” in every hospital delivery room, a profoundly costly and intrusive process of checking and verifying documents for every baby born in the United States
  • A new underclass of less-than-citizens who are marginalized from society and detract from our future economic competitiveness
  • Women burdened with childbearing decisions depending on citizenship parentage, endangering the newly born and their mothers in our country
  • An America that is suddenly and deeply anti-immigrant—contrary to our historical heritage and core national values and undermining our cherished democratic system, built by and for immigrants

Nevertheless, the matter is not dead in the eyes of some politicians. On January 25, 2011, Sens. Rand Paul (R-KY) and David Vitter (R-LA) introduced legislation to amend the Constitution and restrict citizenship to those newborns who can prove that one of their parents is a U.S. citizen, a legal immigrant, or an active member of the Armed Forces at the moment of the child’s birth.

The Center for American Progress and the American Constitution Society jointly hosted an event earlier this month featuring leading civil rights thinkers who discussed what our nation would look like should the birthright citizenship provision in the 14th Amendment be repealed, as well as its effect on all Americans.

“It’s important to look at the arguments that people are making to repeal the 14th Amendment,” said Fulwood at the event. “It goes to the core of what it means to be an American.”

Margaret Stock, a professor at the University of Alaska, noted that “The 14th Amendment [was the] crowning achievement of the Republican Party after the civil war. … it’s appalling Republicans have proposed this amendment.”

As President Barack Obama said in his speech in El Paso on May 10:

It doesn’t matter where you come from; it doesn’t matter what you look like; it doesn’t matter what faith you worship. What matters is that you believe in the ideals on which we were founded; that you believe that all of us are created equal, endowed by our Creator with certain inalienable rights. All of us deserve our freedoms and our pursuit of happiness. In embracing America, you can become American. That is what makes this country great. That enriches all of us.

Amending the 14th Amendment to end birthright citizenship would create a very different America, one characterized by dual classes of residents born here—citizens and less-than-citizens.

By: Philippe Nassif, Center for American Progress, May 17, 2011

May 18, 2011 Posted by | Congress, Conservatives, Constitution, Democracy, Elections, Equal Rights, Freedom, GOP, Human Rights, Ideologues, Ideology, Immigrants, Immigration, Lawmakers, Politics, Populism, Republicans, Right Wing, State Legislatures, States, Women | , , , , , , , , , , , | Leave a comment

   

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