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“Redistributing Wealth Upward”: Changing The Rules, Republicans Have Robbed The Middle To Give To The Rich

Which is the more redistributionist of our two parties? In recent decades, as Republicans have devoted themselves with laser-like intensity to redistributing America’s wealth and income upward, the evidence suggests the answer is the GOP.

The most obvious way that Republicans have robbed from the middle to give to the rich has been the changes they wrought in the tax code — reducing income taxes for the wealthy in the Reagan and George W. Bush tax cuts, and cutting the tax rate on capital gains to less than half the rate on the top income of upper-middle-class employees.

The less widely understood way that Republicans have helped redistribute wealth to the already wealthy is by changing the rules. Markets don’t function without rules, and the rules that Republican policymakers have made since Ronald Reagan became president have consistently depressed the share of the nation’s income that the middle class can claim.

Part of the intellectual sleight-of-hand that Republicans employ in discussions of redistribution is to reserve that term solely for government intervention in the market that redistributes income downward. But markets redistribute wealth continuously. In recent decades, markets have redistributed wealth from manufacturing to finance, from Main Street to Wall Street, from workers to shareholders. Rules made by “pro-market” governments (including those of “pro-market” Democrats) have enabled these epochal shifts. Free trade with China helped hollow out manufacturing; the failure to regulate finance enabled Wall Street to swell; the opposition to labor’s efforts to reestablish an even playing field during organizing campaigns has all but eliminated collective bargaining in the private sector.

The conservative counter to such liberal cavils is to assert that the market increases wealth, which will eventually descend on everyone as the gentle rains from heaven. Decrying such Keynesian notions as unions or federally established minimum wages, hedge fund guru Andy Kessler recently argued in the Wall Street Journal that “it is workers’ productivity that drives long-term wage gains, not workers’ wages that drive growth.”

But Kessler assumes — and this is the very essence of the “trickle-down” argument — that workers reap the rewards of productivity gains. Believing and asserting that requires either ignorance or willful denial of economic history. The only time in U.S. history when workers substantially benefited from productivity gains was the three decades that followed World War II, when median household income and productivity gains both increased by 102 percent. Not coincidentally, that was also the only period of genuine union power in U.S. history, and the time when the tax code was at its most progressive. During the past quarter-century, as progressivity was lessened and unions diminished, all productivity gains have gone to the wealthiest 10 percent, according to research published by the National Bureau of Economic Research. In 1955, at the height of union strength, the wealthiest 10 percent received 33 percent of the nation’s personal income. In 2007, they received 50 percent, Economic Policy Institute data show.

If that’s not redistribution, I don’t know what is.

The problem is not just that everyone but the wealthy is claiming a smaller share of the nation’s income; the absolute amount of income they’re getting is declining as well. Median household income has dropped to the levels of the mid-1990s, according to Pew analysis of census data, while the income of the 400 wealthiest Americans rose by a tidy $200 billion last year, according to data released this month by Forbes magazine.

If that’s not redistribution, I don’t know what is.

Indeed, the United States has experienced an upward redistribution so profound that it affects far more than incomes. Whole sectors of the economy and regions of the country have been decimated by these economic changes. The descent in all manner of social indexes is most apparent among poorly educated whites. Conservative commentator Charles Murray has documented in his new book the decline in marriage rates and family stability within the white working class. And now, as the New York Times’ Sabrina Tavernise has reported, that decline includes longevity as well. While other Americans’ life expectancy has advanced, the life expectancy of whites without high school diplomas has declined since 1990 — by three years among men and five years among women.

The market is not just redistributing income in the United States, then. It is redistributing life.

So, which party can claim credit for this — the real redistribution this nation has experienced over the past 30 years? Many Democrats have been complicit in this calamity by their indifference to the consequences of deregulation and trade. But the trophy for promoting the policies that have redistributed wealth, family stability and longevity upward goes to the Republicans, whose standard-bearers are championing even more radical versions of these policies today.

A pro-life party? More like its opposite.

 

By: Harold Meyerson, Opinion Writer, The Washington Post, September 24, 2012

September 26, 2012 Posted by | Election 2012 | , , , , , , , , | 1 Comment

“A Political Pickle”: Conservative Media Tries To Save Romney’s Campaign

Mitt Romney sure is lucky that major media outlets exist to serve his interests. After a video came out on Monday afternoon in which Romney denigrates the nearly half the country that did not pay federal income taxes last year as irresponsible and entitled, it seemed he was in quite a political pickle. The comments were unlikely to endear him to swing voters who perceive Romney as an out-of-touch elitist. But since Romney got the idea that 47 percent of the country are lazy Democratic moochers from movement conservatives, he could not repudiate his own remarks.

At first, Fox News had no idea how to respond. They simply ignored the story, even as it dominated coverage on other networks, all through their primetime lineup on Monday. Finally, when Romney gave a press conference after 10 pm, in which he admitted to having made poor word choices but not a substantive error, they showed it. On Tuesday, the Fox Business network hosted Romney for a softball interview with Neil Cavuto. Fox was determined to avoid covering the story except to help Romney burnish his self-defense. Alas, Romney himself did not have much of a defense, other than to say that he had simply been acknowledging that he will not win a landslide victory.

But then, Providence struck. On Tuesday afternoon the Drudge Report released an audio recording from 1998 in which Barack Obama says, “I actually believe in redistribution.” Drudge splashed the phrase in a banner headline across his front page as if it were earth shattering news. Since then, according to Huffington Post media reporter Michael Calderone, Fox has played the audio clip twenty-two times.

The Romney campaign immediately seized on the clip as a way of shifting their defense of Romney’s unappealing rhetoric into more friendly terrain. Speaking to Cavuto, Romney said:

There is a tape that just came out today where the president is saying he likes redistribution. I disagree. I think a society based upon a government-centered nation where government plays a larger and larger role, redistributes money, that’s the wrong course for America…. The right course for America is to create growth, create wealth, not to redistribute wealth.

Romney’s campaign sent out the quote as part of a press release. They followed up shortly with another press release that lists their usual litany of depressing economic indicators as proof that “Obama’s redistribution plan…didn’t work.” What is missing is any proof, besides a fourteen-year-old quote, that Obama actually pursued a redistribution plan once in office.

By Wednesday, the Romney campaign had regained its footing. Reporters were being inundated with statements using the redistribution quote as a hook for all their usual talking points. For example, they released a statement headlined, “Obama’s Redistribution Didn’t Work For Small Businesses.” “Mitt Romney understands that opportunity and free enterprise create jobs and grow our nation’s small businesses—not government redistribution,” said Romney campaign spokesperson Andrea Saul. The campaign also worked the phrase into their stump speeches. Paul Ryan told a Virginia audience that, Obama is “going to try and distract and divide this country to win by default.” Then he asserted:

President Obama said that he believes in redistribution. Mitt Romney and I are not running to redistribute the wealth. Mitt Romney and I are running to help Americans create wealth. Efforts that promote hard work and personal responsibility over government dependency are what have made this economy the envy of the world.

As Slates Dave Weigel points out, it is ridiculous to blame Obama for distracting and dividing the country, and then attack Obama for something he said fourteen years ago.

Conservative pundits, though, are cheering on the Romney/Ryan campaign’s silliness. After Romney’s appearance on Cavuto, Fox panelist and Weekly Standard writer Stephen Hayes said of the attack on Obama’s quote, “[It’s] good, [he should] make the argument. Going back to 1998 shows the president has believed this for a long time.” That’s a specious argument. If you go back to 1998 and look at anything Mitt Romney said, it may be diametrically opposed to what he believes today. Generally, the older the quote, the less relevant it is. Certainly that’s the standard Hayes would use if it were Romney who long ago said something Hayes considers damaging.

More importantly, Ryan’s statement creates two false dichotomies. Contra Ryan, redistribution can promote hard work instead of government dependency. A great example is the Earned Income Tax Credit, which is a wage subsidy for low-earning households. The purpose is to make menial jobs more financially attractive relative to being unemployed and eligible for welfare, food stamps and Medicaid. It was created with bipartisan support, and by all accounts it has worked well. It also happens to be one reason that so many low-income families do not pay any income taxes, the very state of affairs that Romney decried.

It is also wrong to assume that any wealth redistribution is the opposite of creating wealth. Reasonable people can differ on the optimal amount of redistribution to generate economic growth. But a glance at countries such as Denmark and Germany shows that high marginal tax rates, with the revenue going to strong educational and healthcare systems can develop a healthy, educated and therefore globally attractive workforce. That, in turn, can yield strong rates of economic growth.

The underlying complaint against Obama is bogus anyway. Drudge misleadingly cut the quote to create a false impression. As Jonathan Chait explains in New York magazine, if you read the full quote, you see that Obama is actually expressing a very moderate, neoliberal attitude. Obama actually said that some of the backlash against government has been deserved. To revive faith in collective action, Obama argues, government programs must be more efficient. “We do have to be innovative in thinking, what are the delivery systems that are actually effective.… because I actually believe in redistribution, at least at a certain level to make sure that everybody’s got a shot,” said Obama. This is not radical socialism. But then, neither is the Affordable Care Act, even though conservatives have labeled it as such. If Romney’s incompetent campaign did not have the conservative media to invent these myths, they would truly be lost.

By: Ben Adler, The Nation, September 19, 2012

September 22, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“Talking To Themselves”: Republicans Are Barricaded Within A Self-Reinforcing Informational Bunker

Mitt Romney and his Republican allies thought they had a way to diffuse the fallout from his now-legendary secretly-recorded fundraising video when somebody unearthed a tape of President Obama saying he favored “redistribution.” Sure, the tape is 14 years old. And sure, as Jamelle pointed out yesterday, pretty much everybody favors redistribution in some form, even Mitt Romney (if he didn’t, he’d be advocating removing all progressivity from the tax code). Romney is bringing it up whenever he can, as is Paul Ryan, and the Obama tape has been shown on Fox News approximately three million times in the last 24 hours. Are they a little desperate? Of course. But the fact that they think such a thing will have even the remotest impact on what people think of Barack Obama shows that they are existing within an ideological cocoon that makes it almost impossible for them to figure out what they’re doing wrong.

It isn’t just that the tape is 14 years old (and man, has Obama aged in that time), or that what he’s saying is pretty innocuous. It’s that they think there’s any statement of Obama’s that they can unearth that will change how voters think of him. As though some significant number of voters are going to say, “I’ve been watching this guy on television every day for the last four years, but this 14-year-old videotape that contains the word “redistribution” has finally made me realize that he’s a dangerous socialist. I was undecided before, but now you’ve got my vote, Mitt.”

A couple of years ago, bloggers had a discussion about “epistemic closure,” the tendency of many on the right to barricade themselves within a self-reinforcing informational bunker. The danger is that you wind up with a skewed view not only of the facts but of what other people believe as well. This can be deadly for a campaign, whose goal, after all, is to persuade people, some of whom don’t already see the world as they do. And it sure seems like Romney and his people are falling prey to it. The temptation is strong, because everyone who works on the campaign is a partisan who was probably getting much of their information from partisan news sources before they got there.

So when Romney comes out and says triumphantly “I don’t believe in redistribution!” he probably thinks voters will respond with, “Me neither, Mitt! Screw those freeloaders! Viva job creators!” But the more likely response among people who aren’t already committed Republicans is that once again, this rich guy who disdains everyone who isn’t as rich as him is saying, “I got mine, Jack, and the rest of you can go to hell.” In other words, he’s not countering the attacks the Democrats are making on him, he’s reinforcing them.

 

By: Paul Waldman, Contributing Editor, The American Prospect, September 20, 2012

September 21, 2012 Posted by | Election 2012 | , , , , , , , | 1 Comment

“Atop The Class Structure”: Does Boca Raton Mitt Romney Dislike America?

The most incisive reaction to Mitt Romney’s disparaging comments about 47 percent of us came from a conservative friend who e-mailed: “If I were you, I’d wonder why Romney hates America so much.”

A bit strong, perhaps. But the more you think about what Romney said, the more you wonder how he really feels about the country he wants to lead.

What kind of nation are we if nearly half of us are lazy, self-indulgent moochers who will never be persuaded to mend our ways? “I’ll never convince them they should take personal responsibility and care for their lives,” Romney said, thus writing off a huge share of our citizenry.

From his perch high atop the class structure, Romney offered an analysis of political motivations that even Marxists would regard as excessively materialistic. He speaks as if hardworking parents who seek government help to provide health care for their kids are irresponsible, that students who get government aid to attend community colleges are not trying to “care for their lives.” Has he never spoken with busboys and waitresses, hospital workers and janitors who make too little to pay income taxes but work their hearts out to “take personal responsibility”?

In defending himself on Fox News on Tuesday, Romney only deepened his difficulty. “I think a society based upon a government-centered nation where government plays a larger and larger role, redistributes money, that’s the wrong course for America,” he said.

Put aside that if President Obama wanted a “government-centered nation,” the stock market wouldn’t have doubled, making many in Romney’s Boca Raton, Fla., audience richer. In his impatience with those he accuses of casting themselves as “victims,” Romney misses the real story of government in the lives of most Americans. So often, we combine our own exertions with a little assistance along the way — the GI Bill, student loans, Social Security survivors’ benefits, public education — to become self-sufficient and independent.

And Romney said not a word about all the redistribution upward in a tax code that favors investment over labor income. That’s why Romney pays federal taxes at a much lower rate than do many in middle class — and why, given his stress on the importance of paying income taxes, he might usefully release a few more of his own tax returns.

Romney’s comments, which were caught in a video obtained and published online by Mother Jones magazine, have been widely compared to Obama’s private 2008 comment about working-class people who “cling to guns or religion.” I disliked that line, and as a churchgoing supporter of gun control, I always bristle at the too-easy conflation some liberals make of “God” and “guns.” But Obama’s defenders have been correct in noting that he got a big thing right that Romney got wrong: Most of Obama’s observations were empathetic toward blue-collar Americans who “feel so betrayed by government.” His whole point was the need to reach out to, not write off, a constituency that had not embraced him.

Many have already written wisely about how Romney’s original statement got the facts wrong, notably about how many Americans actually pay federal taxes and how a large share of those who don’t are retired.

But here’s the most important point Romney got wrong: Among the wealthy nations, it’s difficult to find one where people work harder than the United States. In a 2005 New Yorker article (written before the downturn), James Surowiecki noted that, compared with Europeans, “more people work in America, and since they work so many more hours, Americans create more wealth.” Yes, the riches enjoyed by the folks at that Boca Raton fundraiser were made possible in significant part by the strenuous efforts of proud, self-sufficient people, including many in the 47 percent.

Romney misses something else about America: We do believe in a certain amount of “redistribution” toward those in need. We have always rejected what one of our leaders called a “destructive mind-set,” which he defined as “the idea that if government would only get out of our way, all our problems would be solved,” an approach with “no nobler purpose than ‘Leave us alone.’ ”

That would be George W. Bush in 1999, as my colleague Michael Gerson reminded us the other day. Bush added: “Yet this is not who we are as Americans. We have always found our better selves in sympathy and generosity, both in our lives and in our laws. . . . Our national character shines in our compassion.”

Yes, it does, even if the Boca Raton Mitt Romney seems not to appreciate that about us, either.

 

By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, September 19, 2012

September 21, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

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