This administration’s tax policy – reducing or eliminating taxes on investment income, slashing taxes on corporations (or just not collecting them) and so forth – obviously favors those with property and investments and shifts the tax burden to those who actually work. Wages are taxed as before. So, in effect, the rich get a break and everyone else doesn’t – but you can see the logic. It’s good for the economy if there is increasing investment – it primes the pump, as they say, and everyone benefits from that. But it bothers people when, for example, a hedge fund manager is taxed at fifteen percent and his secretary, earning less than one percent of what he earns, is taxed at thirty-five percent. Some think this is unfair, and with wages for most people stagnant or actually dropping over the last seven years, those who are pretty much just working and not able to invest much feel resentful. Why should they take the bullet for the general good of the economy?
But you have to face the overriding concept shared by all conservative since the Reagan years – cutting taxes in this manner actually generates more income for the government. Blame that guy from USC, Arthur Laffer and his famous Laffer Curve – all that money not paid to the government for road and bridges and such is privately invested and we all become more prosperous and the economy, flush with funds, blossoms, and tax revenues actually increase. It seems counterintuitive – the president’s father, when first running for president, called it Voodoo Economics, but when that run didn’t work out for him and he became vice president, he changed his tune, and later, as president, asked us to read his lips about no new taxes. He knew there was no fighting that idea. He actually bought into it. Voodoo is like that – zombies and all the rest.
And some odd background:
The Laffer-curve concept is central to supply side economics, and the term was reportedly coined by Jude Wanniski (a writer for The Wall Street Journal) after a 1974 afternoon meeting between Laffer, Wanniski, Dick Cheney, Donald Rumsfeld, and his deputy press secretary Grace-Marie Arnett. In this meeting, Laffer reportedly sketched the curve on a napkin to illustrate the concept, which immediately caught the imaginations of those present. Laffer himself professes no recollection of this napkin, but writes, “I used the so-called Laffer Curve all the time in my classes and with anyone else who would listen to me.” Laffer also does not claim to have invented the concept, attributing it to 14th century Islamic scholar Ibn Khaldun and, more recently, to John Maynard Keynes.
Hell, maybe it’s an Islamic terrorist thing.
In any event, we’re told that’s how the world works, even if there’s scant evidence that it does (see Jonathan Chait, The Feast of the Wingnuts, from 2007). Some call it a myth, if there’s such a thing as a macroeconomic myth.
But that’s where we are. The rich get the breaks. Those who aren’t rich get screwed – by design.
But you don’t argue with the concepts of supply side economics. You’ll be told that’s class warfare – saying that we are divided into some sort of class structure, and at odds with each other. Everyone knows America is a classless society, and only deluded Marxists want to start a class war. We’re all in this together and all that.
That doesn’t sit well these days. People aren’t dumb. They see the rich getting richer and everyone else, and themselves, barely hanging on. But you don’t say that – you’re told that your problems are you own. If you’re barely hanging on, well, that’s your fault. Become a hedge fund manager. What’s the matter with you?
On a personal note, once on a visit to USC for some sort of meeting in the eighties, when working in aerospace, I ran into Arthur Laffer in an elevator. Should I have punched his lights out? No, probably not. That would be class warfare.
But somehow one is reminded of a silly movie called Matilda, from the Roald Dahl book, and a line Danny DeVito, as the villain Harry Wormwood, utters - “I’m smart; you’re dumb. I’m big; you’re small. I’m right, you’re wrong. And there’s nothing you can do about it.”
It’s like that. One thinks of Dick Cheney, and Donald Rumsfeld. They saw the curve on that napkin. You didn’t.
But like it or not, we are now in a period of intense class warfare – except it isn’t about supply side economics, or about supply side economics directly. It’s about elitism, and Hillary Clinton is leading the charge - Barack Obama’s “bitter” comment gave Hillary Clinton an opening, and she took it. He said people are bitter about no one paying attention to how they’re getting screwed, and knowing they’ve either received decades of empty promises, or the Danny DeVito line, they decided all they can do is vote on values issues – to keep their guns and make sure their religious values are defended, and make sure immigrants and gays don’t get any breaks either. For them the economic issues were settled long ago, and they lost. What’s the point in even caring?
She says this is a scandal – he was mocking the values of the real salt-of-the-earth Americans. They, like her (maybe) enjoying shooting off guns, and find comfort in their religion, and you don’t discount those things. He insulted them. He showed them no respect. He’s out of touch with the common man.
That wasn’t what he was saying, but the war was on. It was good enough.
But that war is not going well for Senator Clinton. Christopher Beam maintains the Hillary Deathwatch at Slate and on Tuesday, April 15, the anniversary of the day the Titanic sank, he says her chances of getting the Democratic nomination dropped down 1.8 points to 12.4 percent. After six days of this a new Quinnipiac poll showed Clinton’s six-point lead in Pennsylvania holding steady and not increasing at all – there was “no noticeable change” in the numbers from before her war started. But Beam notes “that was over the weekend, when Pennsylvania voters were busy venting their frustrations by shooting guns and going to church.”
Beam cites other polls. No one was that excited by this class war. And Beam points out she was shouted down when she brought up Obama’s remarks on people being bitter at a forum, and her state campaign chairaman , Pennsylvania’s governor Rendell downplayed the significance of the Obama comments – they wouldn’t cost Obama more than “a couple of points at the margin.” And Beam notes the undecided superdelegates seem indifferent to her class war.
Her campaign did release a new ad – selected citizens of Pennsylvania saying to the camera that they were insulted and hurt and whatnot. Obama didn’t respect them.
Advertising Age was not impressed:
Hillary, you’re in a fight for your political life and you’re going to feature some whiney-sounding people on the street. “Wanh-wanh-wanh, Barack hurt my feelings!” Just as Americans don’t want to be painted as bitter losers, they don’t want to be painted as helpless victims. You should have gone with barely-controlled outrage.
Beam says the ad just felt forced:
Voters have a nose for BS, and even if they found Obama’s remarks condescending, nothing reeks worse than manufactured outrage. Obama, meanwhile, has mastered the counterpunch. The last few days have given his rapid-response team a workout. Almost enough to persuade superdelegates previously concerned that Obama wouldn’t be able to weather general-election attacks.
To step back for a second: The only way the “bitter” flap could save Clinton would be if it helped her persuade superdelegates to swing her way. So far, that doesn’t seem likely. Given that Clinton needs to sway such a huge number of the remaining uncommitted superdelegates - at least 70 percent, in the most favorable scenarios - we’re willing to say that this scandal doesn’t have the necessary steam.
And Beam adds this:
And just when the dropout drumbeat was starting to soften, another Clinton supporter, Massachusetts Rep. Barney Frank, suggests that whichever candidate is “trailing” should drop out in June. “Probably sooner,” he added. (Frank also defended Obama on the “bitter” issue: He had “a very legitimate point to make,” he said, but it came out wrong.)
And so on – the war is not going well. The Los Angeles Times poll says it all – she’s losing her lead in Pennsylvania and lost it in Indiana.
If you’re going to start a class war you do need to be a better commander-in-chief. Obama doesn’t have those WMD you claim he has – in Salon see Mike Madden with Bitter as Hell in Pennsylvania. That opens with this:
Shawn Erfman lives in a trailer park, listens to Rush Limbaugh and voted for George W. Bush - twice. Over the weekend, he heard all about what Barack Obama had to say about “bitter” Pennsylvanians like himself. And he’s mad as hell.
Not at the guy you might expect, though. “It’s fucking true,” he said Monday night. “Everybody’s bitter for one reason or another. So they’re crucifying him because he spoke the truth? Cause he’s not saying something that’s going to suck up to people and kiss ass? Because, what, he slipped and accidentally spoke the truth, instead of kissing butt?”
See one of Andrew Sullivan’s readers here:
Thank God for Obama’s speech. I live in rural Kentucky and yes, many, many people here have nothing: no job, no money, and no future. Ironically, people on the coasts call him elitist for saying something that most here agree with. Maybe that’s why nobody is talking about it around here - old news.
Something that he was trying to point out was that in spite of their Arkansas roots, the Clintons did nothing for rural America. Good jobs here have been vaporized or sent abroad. Now, people can work at Wal-Mart or McDonald’s with no health insurance. And that is why they are bitter.
It is interesting (ironic?) that the only major candidate to mention the anger of the white poor is black.
It is about class, and not race. And the war Clinton started cannot be won. And no one mentions that she was on the board of directors of Arkansas-based Wal-Mart for years. She shouldn’t have jumped into this.
And one can look deeper into the real issues. At his Washington Monthly site Kevin Drum does in his item Class Warfare, where he asks the essential question:
Are working class voters really “bitter”? Does this explain why many of them tend to vote Republican based on culture-war issues even though their economic self-interest ought to push them into the Democratic column?
He then points to Ross Douthat in the Atlantic suggesting that it’s really the reverse, that it’s self-interest that pushes them into the conservative camp:
In this reading of the culture wars, middle-income voters privilege culture over economics because they perceive the breakdown of “traditional values” - manifested in everything from divorce, marriage and out-of-wedlock birth rates to what’s shown on television and taught in schools - as a greater danger to their well-being than, say, the specter of outsourcing or the spike in CEO salaries.
In a robust economy, most Americans - yes, even most blue-collar Americans - feel like they can control their own economic destiny; even now, on the cusp of a recession, huge majorities of American will say their own financial outlook is relatively rosy. Which means that their worries, not implausibly, turn to sociological and cultural questions. Are my streets safe at night, and will my neighborhood still be a good place to raise a family in ten years? What are my kids watching on TV, or being taught in school? Will my daughter’s marriage break up, and will my son do the right thing by his girlfriend if he gets her pregnant? And, more broadly - does my government reflect and promote my values, whether in marriage law or welfare policy or what-have-you?
Douthat does make this same point in his book, co-authored with Reihan Salam, Grand New Party, but Drum says this conflates two separate points:
The first is that the working class today isn’t all that badly off. This isn’t an argument against promoting policies to help them (Grand New Party, in fact, is basically an extended argument in favor of giving more attention to economic policies that help the working class), merely an observation that in a country where the median family income is $56,000, a lot of people are comfortable enough that they aren’t highly motivated to vote on purely pocketbook issues. In other words, they aren’t voting on cultural issues because they’re poor, they’re voting on cultural issues because they’re well enough off that they can afford to.
The second point is a more interesting one: namely that working class communities are more concerned about the breakdown of traditional mores because it’s working class communities that are most seriously affected by the breakdown of traditional mores.
He then points to Garance Franke-Ruta in American Prospect a few years ago:
Lower-income individuals simply live in a much more disrupted society, with higher divorce rates, more single moms, more abortions, and more interpersonal and interfamily strife, than do the middle- and upper-middle class people they want to be like. It should come as no surprise that the politics of reaction is strongest where there is most to react to. People in states like Massachusetts, for example, which has very high per capita incomes and the lowest divorce rate in the country, are relatively unconcerned about gay marriage, while those in Southern states with much higher poverty, divorce, and single-parenthood rates feel the family to be threatened because family life is, in fact, much less stable in their communities. In such environments, where there are few paths to social solidarity and a great deal of social disruption, the church frequently steps into the breach, further exacerbating the fight.
Drum’s take on this:
Middle class whites don’t care much about rising divorce rates, for example, because (a) divorce rates aren’t that high among middle class whites and (b) divorce isn’t all that catastrophic when it does happen. Working class communities, however, have higher divorce rates and are therefore naturally more sensitive to its effects. That’s especially true since the economic effects of divorce are far more dire for low-income families than they are for higher-income families.
But he says that obviously isn’t the whole story:
… there’s not much question that the Republican Party has cynically fanned the cultural flames for decades partly as a way of distracting voters from noticing that their economic policies are aimed almost entirely at promoting the fortunes of the rich and the mega-rich. Still, it’s a worthwhile observation that one of the reasons working class voters care more about the post-60s breakdown of the family is because they’re much more intimately affected by it in the first place. In a way, this is an argument that economic factors do drive cultural anxieties, but in a subtly different way than we usually think of it.
