“Poverty, Policy, And Paul Ryan”: The Emperor In The Empty Suit Has No Clothes
If it seems every few months brings us another installment in the “Paul Ryan cares about poor people” series, it’s not your imagination. In November, the Washington Post helped get the ball rolling with a front-page article on the House Budget Committee chairman, celebrating the congressman for his efforts “fighting poverty and winning minds.”
The gist of the piece was that the far-right congressman is entirely sincere about using conservative ideas to combat poverty.
In December, BuzzFeed’s McKay Coppins ran a related piece, and today Coppins published another: Ryan is “trying to challenge the notion that his party is out of touch with poor people the old-fashioned way: by talking to some.”
The men begin filing into the Emmanuel Missionary Baptist Church in Indianapolis around 5:30 a.m. They are ex-convicts and reformed drug dealers, recovering addicts and at-risk youth: a proud brotherhood of the city’s undesirables. Some of them like to joke that if he were around today, Jesus would hang out with reprobates like them. On this cold April morning, they’re getting Paul Ryan instead.
Ryan has been here once before, about a year ago, but most of the congregants rambling in through the front door don’t appear to recognize the wiry white guy loitering in the lobby of their church. He is sporting khakis and a new-haircut coif, clutching a coffee as he chats with three besuited associates. A few parishioners come up and introduce themselves to him, but most pass by, exchanging quizzical glances and indifferent shrugs.
After several minutes, a sturdy, smiling pastor named Darryl Webster arrives and greets their guest of honor. “I appreciate you coming,” Webster says as he clasps the congressman’s hand. “You know, when you get up this early in the morning, it’s intentional.”
“Usually when I get up this early, I get up to kill something,” Ryan cracks.
It was a hunting joke.
In any case, Coppins’ lengthy article reads quite nicely: the Wisconsin Republican really has invested considerable time and energy in going to inner cities, meeting with community leaders, and talking to people who’ve struggled with poverty. If someone who’s otherwise unfamiliar with Ryan reads the 7,000-word piece and nothing else, he or she would likely come away with the sense that his interest in helping poor communities is sincere.
The trouble, however, are the parts of Ryan’s vision and policy agenda that Coppins neglected to mention.
For example, just last month, Ryan published a lengthy audit of sorts, criticizing federal efforts to combat poverty. It generated some attention, though what was largely overlooked was the fact that the Republican congressman was soon accused of misrepresenting much of the academic research he cited in his report.
Soon after, Ryan suggested low-income children who rely on the school-lunch program aren’t treasured the way wealthier children are, relying on an anecdote that wasn’t true anyway.
Then earlier this month, Ryan released a new budget blueprint that cut spending $5.1 trillion, specifically targeting public services that benefit – you guessed it – those on the lowest end of the socio-economic scale. Most notably, the Republican’s plan focused on slashing investments in health coverage, food assistance, and college affordability.
My point is not to question Paul Ryan’s sincerity. I don’t know him personally and I have no reason to question whether he means what he says about trying to combat poverty his own way.
Rather, my point is put aside his rhetoric and question the efficacy of his policy proposals. And on this, Jared Bernstein recently said of Ryan, “the emperor in the empty suit has no clothes,” adding:
Ryan Poverty Plan
1. Cut spending on the poor, cut taxes on the wealthy
2. Shred safety net through block granting federal programs
3. Encourage entrepreneurism, sprinkle around some vouchers and tax credits
4. ???
5. Poverty falls
Matt Yglesias added this morning, “I admit that this way of looking at things is a bit less colorful than following Ryan around a bunch of visits to low-income neighborhoods. But to the extent that you want to know how an increase in political power for Ryan and his allies is likely to impact the lives of American citizens, it’s worth looking at these things. His big job in politics is to write budgets. And his big budget idea is that rich people should pay lower taxes, middle class and working class people should pay more taxes, and poor people should get less food, medicine, and college tuition.”
By: Steve Benen, The Maddow Blog, April 28, 2014
“Reaganomics Killed America’s Middle Class”: The Time Is Long Past Due For Us To Roll Back The Reagan Tax Cuts
There’s nothing “normal” about having a middle class. Having a middle class is a choice that a society has to make, and it’s a choice we need to make again in this generation, if we want to stop the destruction of the remnants of the last generation’s middle class.
Despite what you might read in the Wall Street Journal or see on Fox News, capitalism is not an economic system that produces a middle class. In fact, if left to its own devices, capitalism tends towards vast levels of inequality and monopoly. The natural and most stable state of capitalism actually looks a lot like the Victorian England depicted in Charles Dickens’ novels.
At the top there is a very small class of superrich. Below them, there is a slightly larger, but still very small, “middle” class of professionals and mercantilists – doctor, lawyers, shop-owners – who help keep things running for the superrich and supply the working poor with their needs. And at the very bottom there is the great mass of people – typically over 90 percent of the population – who make up the working poor. They have no wealth – in fact they’re typically in debt most of their lives – and can barely survive on what little money they make.
So, for average working people, there is no such thing as a middle class in “normal” capitalism. Wealth accumulates at the very top among the elites, not among everyday working people. Inequality is the default option.
You can see this trend today in America. When we had heavily regulated and taxed capitalism in the post-war era, the largest employer in America was General Motors, and they paid working people what would be, in today’s dollars, about $50 an hour with benefits. Reagan began deregulating and cutting taxes on capitalism in 1981, and today, with more classical “raw capitalism,” what we call “Reaganomics,” or “supply side economics,” our nation’s largest employer is WalMart and they pay around $10 an hour.
This is how quickly capitalism reorients itself when the brakes of regulation and taxes are removed – this huge change was done in less than 35 years.
The only ways a working-class “middle class” can come about in a capitalist society are by massive social upheaval – a middle class emerged after the Black Plague in Europe in the 14th century – or by heavily taxing the rich.
French economist Thomas Piketty has talked about this at great length in his groundbreaking new book, Capital in the Twenty-First Century. He argues that the middle class that came about in Western Europe and the United States during the mid-twentieth was the direct result of a peculiar set of historical events.
According to Piketty, the post-World War II middle class was created by two major things: the destruction of European inherited wealth during the war and higher taxes on the rich, most of which were rationalized by the war. This brought wealth and income at the top down, and raised working people up into a middle class.
Piketty is right, especially about the importance of high marginal tax rates and inheritance taxes being necessary for the creation of a middle class that includes working-class people. Progressive taxation, when done correctly, pushes wages down to working people and reduces the incentives for the very rich to pillage their companies or rip off their workers. After all, why take another billion when 91 percent of it just going to be paid in taxes?
This is the main reason why, when GM was our largest employer and our working class were also in the middle class, CEOs only took home 30 times what working people did. The top tax rate for all the time America’s middle class was created was between 74 and 91 percent. Until, of course, Reagan dropped it to 28 percent and working people moved from the middle class to becoming the working poor.
Other policies, like protective tariffs and strong labor laws also help build a middle class, but progressive taxation is the most important because it is the most direct way to transfer money from the rich to the working poor, and to create a disincentive to theft or monopoly by those at the top.
History shows how important high taxes on the rich are for creating a strong middle class.
If you compare a chart showing the historical top income tax rate over the course of the twentieth century with a chart of income inequality in the United States over roughly the same time period, you’ll see that the period with the highest taxes on the rich – the period between the Roosevelt and Reagan administrations – was also the period with the lowest levels of economic inequality.
You’ll also notice that since marginal tax rates started to plummet during the Reagan years, income inequality has skyrocketed.
Even more striking, during those same 33 years since Reagan took office and started cutting taxes on the rich, income levels for the top 1 percent have ballooned while income levels for everyone else have stayed pretty much flat.
Coincidence? I think not.
Creating a middle class is always a choice, and by embracing Reaganomics and cutting taxes on the rich, we decided back in 1980 not to have a middle class within a generation or two. George H.W. Bush saw this, and correctly called it “Voodoo Economics.” And we’re still in the era of Reaganomics – as President Obama recently pointed out, Reagan was a successful revolutionary.
This, of course, is exactly what conservatives always push for. When wealth is spread more equally among all parts of society, people start to expect more from society and start demanding more rights. That leads to social instability, which is feared and hated by conservatives, even though revolutionaries and liberals like Thomas Jefferson welcome it.
And, as Kirk and Buckley predicted back in the 1950s, this is exactly what happened in the 1960s and ’70s when taxes on the rich were at their highest. The Civil Rights movement, the women’s movement, the consumer movement, the anti-war movement, and the environmental movement – social movements that grew out of the wealth and rising expectations of the post-World War II era’s middle class – these all terrified conservatives. Which is why ever since they took power in 1980, they’ve made gutting working people out of the middle class their number one goal.
We now have a choice in this country. We can either continue going down the road to oligarchy, the road we’ve been on since the Reagan years, or we can choose to go on the road to a more pluralistic society with working class people able to make it into the middle class. We can’t have both.
And if we want to go down the road to letting working people back into the middle class, it all starts with taxing the rich.
The time is long past due for us to roll back the Reagan tax cuts.
By: Thom Hartmann, AlterNet, April 19, 2014
“A Most Revealing Week For Republicans”: What Matters Most To The GOP, Protect The Rich, Injure The Poor
If you haven’t done so yet, I urge you to take three minutes here with me to reflect on this unusually revealing week. Three big developments—the Obamacare enrollment deadline, the Paul Ryan budget, and the Supreme Court’s McCutcheon decision—return us to first principles, so to speak; remind us of what our two parties (and the philosophical positions behind them) are really and truly about. And they remind me, at least, of why the Republican Party, on a very basic level, can’t ever be truthful with the American people about what matters to it most at the end of the day.
So what is it that matters most to the Republican Party? A lot of things do, and for different Republicans, the answer will be different: abhorrence of abortion, disgust at social relativism, hatred of big government. These things matter. But they don’t, in my view, matter most. What matters most, especially to elected Republicans in Washington (that is, more so than the rank-and-file), is this: Protect the well-off from redistribution of their wealth to those who don’t deserve it.
On what basis do I make this claim? Well, I’ve been watching Republicans on Capitol Hill pretty closely for many years now. There are, Lord knows, a number of topics on which they are not exactly what you’d call amenable to compromise. The climate-change denialism, the constant attempts to chop away at reproductive rights (which are constitutional rights), et cetera.
But I think it’s fair and accurate to say that, especially in the Obama era, two issues have obsessed the party more than all the others: opposition to tax increases, especially on the wealthy; and a zeal for cutting the budget, which really means cutting domestic spending programs.
In other words—protect the rich, and injure the poor. These are the points on which they’ve fought tooth and nail. After all, think about this: They could have had a major concession from Obama on entitlements (chained CPI) if they’d been willing to allow an income-tax increase on dollars earned above $250,000. But even that couldn’t reel them in. It’s true they did allow an increase on dollars earned above $450,000 (for families) in the fiscal-cliff deal, but their backs were really against the wall on that one: They relented to that small increase only because the country was hours away from a major tax increase (the expiration of the Bush tax cuts), and it was clear to everyone that the Republicans were going to shoulder most of the blame.
As for cutting the federal budget, downsizing government—and we all know doing that hurts poor and working-class families most directly—well, wasn’t that the chief impetus behind the creation of the Tea Party? Remember Rick Santelli’s creation-myth rant, about the anger at the people who took mortgages they couldn’t afford. (Classic liberal-conservative divide, rooted almost entirely in psychological outlook: Liberals tended to blame the banks that hornswoggled people, while conservatives tended to blame the people who let themselves be hornswoggled.)
That’s the game. Redistribution, as in loathing of. That’s the glue of the Washington Republican Party. And it’s wrong to think of it as just an “economic” issue. It is, to them, a moral one. Don’t believe me? Take it from Arthur Brooks, head of the American Enterprise Institute, who wrote a famous Wall Street Journal column back in April 2009 headlined “The Real Culture War Is Over Capitalism.” Reread that. Money, a cultural issue. Defenders of free enterprise, he wrote, “have to declare that it is a moral issue to confiscate more income from the minority simply because the government can.” He also charged these same defenders with the task of defining true “fairness” as “protecting merit and freedom.” I shouldn’t have to decode those two words for you, I shouldn’t think.
But here’s the thing: Brooks’s candor was and is rare. It wasn’t a risk of any kind for him to express those views to the readers of the Journal’s Op-Ed page, who would strongly agree. But most Americans don’t agree. Most Americans support redistribution to one degree or another. They support progressive taxation, they support many or even most categories of government spending, and so on. We—liberal Democrats, centrist Democrats, and moderate Republicans, to the extent that they exist—argue about how much spending, but not about the very notion of spending. Real conservatives stand outside this conversation: They believe that virtually no redistributive spending is justified. But they know that’s a highly unpopular position, so most of the time, they can’t say that. They have to say other things.
Now let’s circle back to this week. What Republicans really think about Obamacare, as E.J. Dionne put it in The Washington Post yesterday, is that “they don’t want the federal government to spend the significant sums of money needed to get everyone covered.” But they know that sounds cruel, so they can’t say that. So instead of inveighing against redistribution directly, they’ve spent months talking about its unworkability. Well, that’s been proven wrong (so far), and so now they’ll just say, as they have been this week, that they don’t believe the numbers. Then they’ll fish out more alleged horror stories that don’t check out. But they won’t say what they actually think.
In the same way, Paul Ryan puts out a budget document that makes dramatic cuts on programs for poor and working people, which makes four domestic promises in the summary—“Expand Opportunity,” “Strengthen the Safety Net,” “Secure Seniors’ Retirement,” and “Restore Fairness”—but in its numbers does the opposite. Ryan’s budgets have always been first and foremost about attacking redistribution aggressively. But he can’t say that. So he just says the opposite.
And what does the McCutcheon decision have to do with all this? Very simple. Redistribution happens because redistributionist politicians have the nasty habit of getting elected. They get elected, in part, because of campaign-finance laws that limit wealthy conservatives’ ability to influence outcomes. In this sense the campaign-finance reform laws of the 1970s are themselves redistributionist—they were explicitly designed to level the playing field, which is a hoary cliché but expresses a proper goal, i.e., not letting the wealthy own Congress lock, stock, and barrel.
McCutcheon tells us, to an extent that even Citizens United hadn’t quite, that Chief Justice John Roberts detests this electoral redistributionism, and as Jeffrey Toobin wrote this week, has as his goal “the deregulation of American political campaigns.” Roberts’s opinion says: “It is not an acceptable governmental objective to ‘level the playing field.’” You can’t ask for it to be put more plainly than that. (Roberts doesn’t face voters and has a job for life and can speak with more candor than senators.)
Savagely fighting the delivery of health care to financially struggling people; slashing the federal programs that help these people get by; rigging elections so that rich conservatives (who outnumber rich liberals substantially) have more control over who wins them. These may seem disparate battles, especially the third one, but the motivation in each case is the same: Protect the well-off from redistribution of their wealth to those who don’t deserve it.
You’ll rarely hear an elected Republican admit this. But it’s usually the motivation. And we saw it this week in starker relief than we usually do. But don’t despair too much: They may yet prevail on campaign spending, but Ryan is going to lose, and Obamacare is going to win. So maybe, even though they won’t talk about it openly, people are onto them anyway.
By: Michael Tomasky, The Daily Beast, April 4, 2014
“Wealth Over Work”: We’re On The Way Back To “Patrimonial Capitalism”, Where Birth Matters More Than Effort And Talent
It seems safe to say that “Capital in the Twenty-First Century,” the magnum opus of the French economist Thomas Piketty, will be the most important economics book of the year — and maybe of the decade. Mr. Piketty, arguably the world’s leading expert on income and wealth inequality, does more than document the growing concentration of income in the hands of a small economic elite. He also makes a powerful case that we’re on the way back to “patrimonial capitalism,” in which the commanding heights of the economy are dominated not just by wealth, but also by inherited wealth, in which birth matters more than effort and talent.
To be sure, Mr. Piketty concedes that we aren’t there yet. So far, the rise of America’s 1 percent has mainly been driven by executive salaries and bonuses rather than income from investments, let alone inherited wealth. But six of the 10 wealthiest Americans are already heirs rather than self-made entrepreneurs, and the children of today’s economic elite start from a position of immense privilege. As Mr. Piketty notes, “the risk of a drift toward oligarchy is real and gives little reason for optimism.”
Indeed. And if you want to feel even less optimistic, consider what many U.S. politicians are up to. America’s nascent oligarchy may not yet be fully formed — but one of our two main political parties already seems committed to defending the oligarchy’s interests.
Despite the frantic efforts of some Republicans to pretend otherwise, most people realize that today’s G.O.P. favors the interests of the rich over those of ordinary families. I suspect, however, that fewer people realize the extent to which the party favors returns on wealth over wages and salaries. And the dominance of income from capital, which can be inherited, over wages — the dominance of wealth over work — is what patrimonial capitalism is all about.
To see what I’m talking about, start with actual policies and policy proposals. It’s generally understood that George W. Bush did all he could to cut taxes on the very affluent, that the middle-class cuts he included were essentially political loss leaders. It’s less well understood that the biggest breaks went not to people paid high salaries but to coupon-clippers and heirs to large estates. True, the top tax bracket on earned income fell from 39.6 to 35 percent. But the top rate on dividends fell from 39.6 percent (because they were taxed as ordinary income) to 15 percent — and the estate tax was completely eliminated.
Some of these cuts were reversed under President Obama, but the point is that the great tax-cut push of the Bush years was mainly about reducing taxes on unearned income. And when Republicans retook one house of Congress, they promptly came up with a plan — Representative Paul Ryan’s “road map” — calling for the elimination of taxes on interest, dividends, capital gains and estates. Under this plan, someone living solely off inherited wealth would have owed no federal taxes at all.
This tilt of policy toward the interests of wealth has been mirrored by a tilt in rhetoric; Republicans often seem so intent on exalting “job creators” that they forget to mention American workers. In 2012 Representative Eric Cantor, the House majority leader, famously commemorated Labor Day with a Twitter post honoring business owners. More recently, Mr. Cantor reportedly reminded colleagues at a G.O.P. retreat that most Americans work for other people, which is at least one reason attempts to make a big issue out of Mr. Obama’s supposed denigration of businesspeople fell flat. (Another reason was that Mr. Obama did no such thing.)
In fact, not only don’t most Americans own businesses, but business income, and income from capital in general, is increasingly concentrated in the hands of a few people. In 1979 the top 1 percent of households accounted for 17 percent of business income; by 2007 the same group was getting 43 percent of business income, and 75 percent of capital gains. Yet this small elite gets all of the G.O.P.’s love, and most of its policy attention.
Why is this happening? Well, bear in mind that both Koch brothers are numbered among the 10 wealthiest Americans, and so are four Walmart heirs. Great wealth buys great political influence — and not just through campaign contributions. Many conservatives live inside an intellectual bubble of think tanks and captive media that is ultimately financed by a handful of megadonors. Not surprisingly, those inside the bubble tend to assume, instinctively, that what is good for oligarchs is good for America.
As I’ve already suggested, the results can sometimes seem comical. The important point to remember, however, is that the people inside the bubble have a lot of power, which they wield on behalf of their patrons. And the drift toward oligarchy continues.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 24, 2014
“Let Them Eat Dignity”: Conservatives Assure The Poor That The Health Of Their Souls Demands They Go Hungry
A few days ago, Paul Ryan got caught repeating a little fib in his speech at the Conservative Political Action Conference. It was of a not-uncommon type, in which a vivid anecdote somebody hears from somewhere gets told and retold in a game of political telephone in which the facts get mangled and the story from elsewhere becomes something the speaker claims happened to her. We can forgive Ryan for repeating it, since the falsehood didn’t originate with him. But the real power of the story lies in its revelation of the cruelty that underlies the way contemporary American conservatives look at the poor, and the wispy veil they try to pull over that cruelty in the hopes we won’t see it for what it is.
To start, here’s the story Ryan told, about Eloise Anderson, who directs the Wisconsin Department of Children and Families:
She once met a young boy from a very poor family, and every day at school, he would get a free lunch from a government program. He told Eloise he didn’t want a free lunch. He wanted his own lunch, one in a brown-paper bag just like the other kids. He wanted one, he said, because he knew a kid with a brown-paper bag had someone who cared for him. This is what the left does not understand.
As the Washington Post‘s Glenn Kessler explained, though Anderson indeed told this story at a congressional hearing, it actually didn’t happen to her, but came from a book (which she later admitted). More important, she changed the story to make it more closely fit conservative ideology; in real life, the child in question wasn’t getting a lunch from the government, but from a rich lady he met; and more important, it wasn’t that he didn’t want a free lunch, he just wanted his free lunch in a paper bag so the other kids wouldn’t know he was getting help. That’s an old story about poverty and shame—a relationship, by the way, that conservatives work hard to maintain.
But here’s the part of Ryan’s speech that really matters: “The left is making a mistake here,” he said. “What they’re offering people is a full stomach and an empty soul.” And later: “People don’t just want a life of comfort. They want a life of dignity.” Ah yes, the “life of comfort” you get when you are able to eat not one, not two, but as many as three meals a day! Talk about easy street.
Whenever conservatives start throwing around ideas like “dignity” and talking about the contents of people’s souls, watch out. Because it almost always means that what they’re proposing is to make the lives of the vulnerable a little tougher and a little more deprived. This’ll hurt you more than it hurts them.
And that is indeed what Ryan proposes. The last budget plan he released, like those before it, sought to cut hundreds of billions of dollars from Medicaid, food stamps, and other programs that provide assistance to the poor—because as Ryan once said, “we don’t want to turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives.”
I suspect conservatives talk this way as much for their own benefit—for the maintenance of their souls, if you will—as for the poor people they’re ostensibly addressing. Almost all of us, with the exception of a few true-believing Ayn Rand cultists, believe that we have obligations to one another, no matter how selfish we might be on most days. If you’re literally taking food from the mouths of hungry children, you have to justify it somehow, to assure yourself that you’re still a moral person. So you tell yourself that you’re doing it to help them. You’re giving them something more valuable than food, because you care so deeply about them. When that six-year-old gets that grumble in her stomach, you can tell her what she’s feeling is the growing pains of her soul, as it swells with its newfound dignity.
The souls of the wealthy, on the other hand, are apparently so healthy and strong they can withstand the indignity of government help. Special tax treatment for investment income? The mortgage interest deduction? Cuts to upper-income tax rates? The rich are truly blessed with souls so resilient that they remain intact even in the face of such injuries of government largesse.
But that’s the way it is with everything. Conservatives are not worried that hedge-fund managers will be slowly sapped of their will to work when their income is taxed at an absurd 15 percent rate because of the carried interest loophole, leaving the rest of us to pick up their slack. When they address that question, there is no talk of dignity. Only when it comes time to cut food stamps or kick people off of the first health insurance they’ve ever had (as Ryan also wants to do, by eliminating the Affordable Care Act’s expansion of Medicaid) do conservatives turn so philosophical, casting their gaze beyond the trivialities of daily existence, like food, and toward such higher considerations.
If you were being unkind, you might say that when it comes to poor people’s dignity, the right has mostly been concerned of late in seeing that they have as little as possible, by advocating things like forcing people to take drug tests before getting welfare benefits. Perhaps they believe that a combination of hunger and humiliation will be just the encouragement those lazy poor need to take a firm hold of their bootstraps and pull. True, that expression originally meant doing something that is physically impossible—you can tug on your bootstraps all you like, but it won’t pull you out of a hole. You will be carried aloft by your soul, though, so long as it isn’t sullied by safety net programs.
This, in the end, is the essence of conservative thought on these issues. Better a child should go hungry than get a free lunch. Better a poor person should have no health insurance at all than get insurance from the government. Their suffering may multiply, but they’ll still have their dignity. If only you could eat it.
By: Paul Waldman, Contributing Editor, The American Prospect, March 10, 2014
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