I read a post today by James Kwak (what a horrible name for a serious economics author). In it, he looks at a book called Winner-Take-All Politics and argues that the rich have been accumulating power in Washington since the 1970s to the detriment of the middle class and the historic Democratic party. The post is worth a quick read but here’s a couple of highlights:
Hacker and Pierson cite studies showing that public opinion on issues such as inequality has not shifted over the past thirty years; most people still think society is too unequal and that taxes should be used to reduce inequality. What has shifted is that Congressmen are now much more receptive to the opinions of the rich, and there is actually a negative correlation between their positions and the preferences of their poor constituents (p. 111). Citing Martin Gilens, they write, “When well-off people strongly supported a policy change, it had almost three times the chance of becoming law as when they strongly opposed it. When median-income people strongly supported a policy change, it had hardly any greater chance of becoming law than when they strongly opposed it” (p. 112). In other words, it isn’t public opinion, or the median voter, that matters; it’s what the rich want.
That shift occurred in the 1970s because businesses and the super-rich began a process of political organization in the early 1970s that enabled them to pool their wealth and contacts to achieve dominant political influence (described in Chapter 5). To take one of the many statistics they provide, the number of companies with registered lobbyists in Washington grew from 175 in 1971 to nearly 2,500 in 1982 (p. 118). Money pouring into lobbying firms, political campaigns, and ideological think tanks created the organizational muscle that gave the Republicans a formidable institutional advantage by the 1980s. The Democrats have only reduced that advantage in the past two decades by becoming more like Republicans–more business-friendly, more anti-tax, and more dependent on money from the super-rich. And that dependency has severely limited both their ability and their desire to fight back on behalf of the middle class (let alone the poor), which has few defenders in Washington.
The culmination of these years of moneyed influence is clearly the financial fallout and Great Recession.
So what about the tea party? Related to many of their core constituency, I have the ability to put a first person perspective on the group. And what appears as a libertarian fringe group may actually be the lower middle class revolting against the culmination of this high-end power grab. A quick scan of their crowds shows an older, more uneducated cohort clearly more disenfranchised by recent economic conditions than the rich. In their ideals, we see the lower class protest. They firmly can’t stand Washington, they want economic laissez faire policies (really just a return to prosperity of a time ago), and the roots of their discontent are sown in job losses from the Great Recession.
If this is true, how did the Democrats lose this group? How have Republicans, whose leader Boehner is a well known country club congressmen who openly loves lobbyists, come to represent the lower middle class struggling for better income equality? Could it be that the rich have learned to completely manipulate this group united in its lack of education and conservative social values (think Fox News). Any party who can openly support tax relief for the top 1% while openly not supporting policies that help the middle class deserves credit for a well oiled brain washing machine. Its historical parallels are likely the yellow journalism machines of the late 19th century. How funny is it that those times were marked by immigration issues and high rates of technology growth.
Anyways, here we sit at the election of 2010 and the lower middle class is about to topple the very government working in their favor. Ironic. When will the emperor's clothes come off?
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