Class Warfare as Farce

One of the nice things about teaching English at the fancy prep school in upstate New York all those years ago was that the students were intellectually sharp and also intellectually playful – and that led to a lot of good-natured ironic banter. And there was the running joke. You’d be in the midst of some passage from Hamlet or the Odyssey, or working through some Keats poem or something by Wallace Stevens, and someone would ask the big question. Hey, Mr. P – what’s the DIM here? That was their shorthand for Deep Inner Meaning. So you’d parry. Well, what do you think it is? And, as in fencing, they’d thrust. No, no, no – you know what it is and you can tell us. And you’d counter that. Yeah, I could tell you, but I won’t, so you work it out – and anyway, if I told you, how do you know I’m not wrong, or tricking you? No, you wouldn’t do that, would you? Maybe I might do that, and then you’d have to figure out if I was wrong, or messing with you. Oh, we’d figure that out – easy. Okay, how would you do that? Oh – you mean we’d have to read this stuff and think about it anyway. Yep, seems so. Hey – that’s not fair!

That was great fun – and then you’d get back to looking at the text at hand, and just what it said, and implied. But suddenly that was easier. They’d offer ideas and you could ask if they were kidding you, or serious. And then they’d say no, no, no – they were serious, and explain their thinking. And you’d raise an eyebrow, and then they’d laugh and defend their reasoning, pointing to the text. And then sometimes they’d actually want to write that insightful well-argued paper to prove their point.

Hey – whatever works – and this worked. It may have been a lousy teaching technique, not taught in any methods class, but there are lots of ways to get to where you all need to be that don’t have to do with formal detailed lesson plans with their quite specific daily, weekly and term objectives. As generals say, no war plan survives the first battle. All teachers know that too.

But sometimes you’d all need a break, so the text would be a classic farce – full of unlikely, extravagant, and improbable situations, and disguises and mistaken identities, and lots of clever and sophisticated word play, and a bit of sexual innuendo – and a fast-paced plot that only got faster, usually ending in some sort of elaborate chase around a parlor or bedroom. There was no deep inner meaning. You could talk about the nature of the characters, as types or something – but that was about it. It was all about the joy of language and the silliness of people.

Georges Feydeau wrote the ultimate farce – A Flea in Her Ear – but that’s best in French. The ultimate farce in English is Oscar Wilde’s The Importance of Being Earnest – old, but cool. The modern farces are too dark and nasty – like Joe Orton’s What the Butler Saw. So it was Wilde. And Algernon does get off some good lines – “And really, if the lower orders don’t set us a good example, what on earth is the use of them?”

But Wilde was onto something. Imagine a contemporary political farce where the lower orders point out that they’re in trouble – folks are losing their jobs and homes and there’s no work to be had, and since they elected those in office maybe something should be done. And imagine an aristocracy with characters who say that saying such a thing is class warfare – that that’s picking on the oppressed minority who only do good things – the rich. You can get a lot of mileage out of that. And imagine the lectures about those out of work – they’re all drug addicts (Orin Hatch) or just spoiled (Sharron Angle) or just unpleasant people who don’t know how to do a day’s work, basically people with poor work habits and poor personalities (Ben Stein). And imagine those three, and others, lecturing the lower orders about how one does not spend money one does not have – loading up the credit cards – or buy things one cannot afford – the big house with the adjustable rate mortgage you lied about to get – or make financial commitments one cannot keep when the bill comes due – especially when one is leveraged forty to one and has invested in what has no actual value. You know, like with AIG and its credit default swaps and all the investment houses buying synthetic bundled derivatives of derivatives and packages of repackaged mysterious and possibly valueless collateralized debt obligations and so on. Really, if the lower orders don’t set us a good example, what on earth is the use of them? And the lower orders might say it could be time to go back to the old tax rates and let the top two percent go back to paying what they used to pay, ten years ago, when things were humming along quite nicely. And Algernon and his friends will say, well, you see, that’s class warfare. And we’re all in this together. So why are you picking on us, your betters?

There are the makings of a farce there. At least, as Jackie Calmes reports in the New York Times, the president thinks so:

President Obama on Wednesday will make clear that he opposes any compromise that would extend the Bush-era tax cuts for the wealthy beyond this year, officials said, adding a populist twist to an election-season economic package that is otherwise designed to entice support from big businesses and their Republican allies.

Mr. Obama’s opposition to allowing the high-end tax cuts to remain in place for even another year or two would be the signal many Congressional Democrats have been awaiting as they prepare for a showdown with Republicans on the issue and ends speculation that the White House might be open to an extension. Democrats say only the president can rally wavering lawmakers who, amid the party’s weakened poll numbers, feel increasingly vulnerable to Republican attacks if they let the top rates lapse at the end of this year as scheduled.

You want a farce with absurd characters saying absurd things – well, you’ll get one. Obama seems to want to paint the Republicans as silly characters in a superbly ridiculous farce. But the details are clear enough:

It is not clear that Mr. Obama can prevail given his own diminished popularity, the tepid economic recovery and the divisions within his party. But by proposing to extend the rates for the 98 percent of households with income below $250,000 for couples and $200,000 for individuals – and insisting that federal income tax rates in 2011 go back to their pre-2001 levels for income above those cutoffs – he intends to cast the issue as a choice between supporting the middle class or giving breaks to the wealthy.

It’s the ninety-eight percent versus the two percent. Defend the two percent and you come off like the dim-witted comic foil in the farce. The idea is to turn the Republicans into Lady Bracknell – “Never speak disrespectfully of Society, Algernon. Only people who can’t get into it do that.”

And Obama had already laid a trap – a package of roughly one hundred eight billion in expanded business tax cuts and infrastructure spending, offset the cost by closing other tax breaks for multinational corporations, oil and gas companies and others. Do you really want to defend those guys when so many are worried about losing everything and ending up sleeping in the streets? Do you really want to play that part?

And now this:

The two major pieces of the package – expanding and making permanent a popular credit for businesses’ research and experimentation expenses, and allowing them to write off the full value of new equipment purchases through 2011 – have longstanding Republican and corporate support.

The administration calculated that the package had to be attractive to Republicans and business groups if it has any chance of passage in the short time Congress will be in session before lawmakers go home to campaign.

Politically, however, the president is, in effect, daring Republicans to oppose the plan, in that way proving Democrats’ contention that they will block even their own ideas to deny Mr. Obama any victories. And by proposing business tax breaks that, according to nonpartisan analyses, would do more to stimulate the economy than extending the Bush tax rates for the wealthy, Mr. Obama hopes to buttress Democrats’ opposition to extending those rates.

Well, dares are often integral to the plots in farces.

Of course not everyone will be on board:

With its tilt toward business tax cuts, the package that Mr. Obama is proposing risks discouraging liberals in his party who want more spending for projects that provide jobs, especially for a construction industry still staggered by the collapse of the housing boom.

They are not likely to be satisfied by another of the president’s proposals: to provide $50 billion immediately to build roads, air traffic control systems, waterways and more, and, for the long term, to create a national infrastructure bank. That is another bipartisan idea that would leverage federal money with state, local and private-sector investments to finance projects.

It doesn’t matter. The administration acknowledges that all this might not pass before Election Day, or pass even in the lame-duck Congress afterward. It’s just setting up the farce, where someone’s going to look foolish.

Of course the Republicans’ early reactions were hostile, especially to the proposals to close corporate tax loopholes to offset any costs – sure, the government can use the money, as things are falling apart and people are desperate, but will someone please think about the corporations – won’t someone think about the poor corporations? Have you no pity?

Oscar Wilde would get it. It’s rather delicious.

But Robert Reich, the economist and Bill Clinton’s labor secretary, argues that it’s also stupid:

President Obama reportedly will propose two big corporate tax cuts this week. One would expand and make permanent the research and experimentation tax credit, at a cost of about $100 billion over the next ten years. The other would allow companies to write off 100 percent of their new investments in plant and equipment between now and the end of 2011 at a cost next year of substantially more than $100 billion (but a ten-year cost of about $30 billion since those write-offs wouldn’t be taken over the longer-term).

The economy needs two whopping corporate tax cuts right now as much as someone with a serious heart condition needs Botox.

It seems the issue is structural:

The reason businesses aren’t investing in new plant and equipment has nothing to do with the cost of capital. It’s because they don’t need the additional capacity. There isn’t enough demand for their goods and services to justify it. Consumers aren’t buying because they’re trying to come out from under a huge debt load, including mortgage debt; they have to start saving because their nest eggs are worth substantially less; and they’ve lost or are worried about losing jobs and pay. In any event, small businesses don’t have enough profits against which to use these tax credits and deductions, and large corporations are sitting on over a trillion dollars of profits and don’t need them.

He argues that Republicans and corporate lobbyists have been demanding tax cuts on corporate investments for only one reason:

Big corporations are investing in automated equipment, robotics, numerically-controlled machine tools, and software. These investments are designed to boost profits by permanently replacing workers and cutting payrolls. The tax breaks Obama is proposing would make such investments all the more profitable.

In sum, Obama’s proposed corporate tax cuts (1) won’t generate more jobs because they don’t put any cash in worker’s pockets (as would, for example, exempting the first $20,000 of income from the payroll tax and making up the difference by applying the payroll tax to incomes over $250,000); (2) will subsidize companies to cut even more jobs; and (3) will cost $130 billion – money that could better be spent helping states and locales avoid laying off thousands of teachers, fire fighters, and police.

But Reich knows a political trap when he sees one, and this does put Republicans in a bind:

If they refuse to go along he can justifiably say they have no agenda other than obstruction. After all, the only thing they’ve been arguing for is lower taxes. On the other hand, if Republicans agree to support these corporate tax cuts, Obama can claim a legislative victory that will help Democrats neutralize their opponents in the upcoming elections.

The proposals also make it harder for Republicans to argue the Bush income tax cuts should be extended for the richest 3 percent of taxpayers because small businesses need it. Obama’s corporate tax cuts would appear to do the trick.

Reich is just worried that the Republicans might surprise everyone and agree to all this – that they might not want to take their assigned role in the farce. But of course they agree to nothing, so Reich need not worry. We’ll have our farce. It’s called the midterm elections.

And its subplots and intrigues are clear, as Kevin Drum explains:

Nobody wants to repeal George Bush’s tax cuts for the middle class. Especially in a bad economy, this is a no-brainer, both politically and economically. But what about tax cuts for high earners? This should be an easy question to answer too. On the political side, a CBS poll earlier this week found that repeal is supported by 56% and opposed by only 36%. Economically, repeal would cut $700 billion off the federal deficit over the next decade and, because consumption by the wealthy doesn’t depend very much on small changes in income, it wouldn’t noticeably affect consumer spending either. Allowing tax rates on the rich to rise back to their pre-Bush levels, therefore, should also be a no-brainer, both politically and economically.

But that’s not what’s going on, and he cites this from McClatchy:

A small but growing number of moderate Democrats are balking at boosting taxes on the rich. Many face electorates that recoil at the mention of any tax increase. Some represent areas that are loaded with wealthier taxpayers. Further, some incumbent senators who don’t face voters this fall are reluctant to increase taxes on anyone while the economy remains sluggish. Without their support, the push to raise rates on the rich probably will fail. …

Rep. Gerald Connolly, D-Va., represents the northern Virginia suburbs of Washington, one of the nation’s wealthiest districts. Median family income there in 2008 was $117,892, well above the national average of $63,211. He said that repealing the top rates would have political consequences. “Sometimes we forget how we became the majority. We did it by winning some affluent districts,” he said.

Drum says that is “a strikingly candid assessment from Connolly” – but it’s also wrong, given this research from Princeton political scientist Larry Bartels (PDF format) – as it seems “American politicians are powerfully affected by the views of the rich, and this has nothing to do with any recent electoral trends.”

See Drum’s simple bar chart and this:

Rather, as the chart on the right shows, things have been this way for a long time. Using data from voting records in the early 90s, it shows that the responsiveness of senators to the views of the poor and working class is… zero. Or maybe even negative. And that’s true for both parties. The middle class does better – again, with both parties – and high earners do better still. In fact, they do spectacularly better among Republican senators. And this disparity has almost certainly gotten even worse over the past two decades.

This is the shape of American politics. If your income is low – and probably a fair number of the 56% who want Bush’s tax cuts for the rich repealed are low-income voters – politicians simply don’t care. If you’re middle class they care a little more. But if you’re rich, then they really, really care. And it’s safe to say that most high earners are opposed to repealing tax cuts on high earners. That goes for all Republicans and a growing number of Democrats too. So what seems like a no-brainer isn’t as simple as it looks. Economically it makes sense to repeal Bush’s tax cuts for the rich, and a majority of American citizens are in favor of it. Unfortunately for them, they belong to the wrong majority. They’re not rich themselves, and increasingly in America, that means their votes just don’t count.

And Digby comments:

This is one reason why the plutocrats are financing a bunch of far-right freaks and zealots right now. It plays to fools and morons, of course. But it also forces normal people into a defensive crouch having to defend against theocrats, authoritarians and crackpots thus diverting their attention from this problem. It’s very clever.

Or it’s a farce.

And the underlying issue is broad. Timothy Noah at Slate has begun a two week long analysis of income inequality in the United States – starting off by noting that the earliest study of the phenomenon was done in 1915, a period of social and political tumult – that First World War and the communist revolution in Russia and whatnot. And 1915 was when the richest one percent accounted for eighteen percent of the nation’s income, while today, the richest one percent accounts for twenty-four percent of the nation’s income:

What caused this to happen? Over the next two weeks, I’ll try to answer that question by looking at all potential explanations – race, gender, the computer revolution, immigration, trade, government policies, the decline of labor, compensation policies on Wall Street and in executive suites, and education. Then I’ll explain why people who say we don’t need to worry about income inequality (there aren’t many of them) are wrong.

That should be interesting:

Income inequality in the United States has not worsened steadily since 1915. It dropped a bit in the late teens, then started climbing again in the 1920s, reaching its peak just before the 1929 crash. The trend then reversed itself. Incomes started to become more equal in the 1930s and then became dramatically more equal in the 1940s. Income distribution remained roughly stable through the postwar economic boom of the 1950s and 1960s. Economic historians Claudia Goldin and Robert Margo have termed this midcentury era the “Great Compression.” The deep nostalgia for that period felt by the World War II generation – the era of Life magazine and the bowling league – reflects something more than mere sentimentality. Assuming you were white, not of draft age, and Christian, there probably was no better time to belong to America’s middle class.

The Great Compression ended in the 1970s. Wages stagnated, inflation raged, and by the decade’s end, income inequality had started to rise. Income inequality grew through the 1980s, slackened briefly at the end of the 1990s, and then resumed with a vengeance in the aughts. In his 2007 book The Conscience of a Liberal, the Nobel laureate, Princeton economist and New York Times columnist Paul Krugman labeled the post-1979 epoch the “Great Divergence.”

It’s generally understood that we live in a time of growing income inequality, but “the ordinary person is not really aware of how big it is,” Krugman told me. During the late 1980s and the late 1990s, the United States experienced two unprecedentedly long periods of sustained economic growth – the “seven fat years” and the “long boom.” Yet from 1980 to 2005, more than 80 percent of total increase in Americans’ income went to the top 1 percent. Economic growth was more sluggish in the aughts, but the decade saw productivity increase by about 20 percent. Yet virtually none of the increase translated into wage growth at middle and lower incomes, an outcome that left many economists scratching their heads.

Digby is following this now:

That’s banana republic time, and it’s at the heart of everything that ails us. Without a strong and thriving middle class, we have an unstable society, one where very bad things can happen.

Yes, this may be at the heart of everything that ails us, but it remains to be seen whether this is just a farce, or whether there really is some deep inner meaning. But you know how English teachers think. There always is some deeper inner meaning. That’s why you hated English class way back when – you knew it was true.

About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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