‘A 2008 election widely regarded as heralding a shift toward the more government-friendly public sentiment of the New Deal and Great Society eras seems to have yielded just the reverse.”
So writes William Galston, Brookings Institution scholar and deputy domestic adviser in the Clinton White House, in The New Republic. Galston, one of the smartest political and policy analysts around, has strong evidence for this conclusion.
He cites a recent Gallup poll showing that while 82 percent of Americans think it’s extremely or very important to “grow and expand the economy” and 70 percent say it’s similarly important to “increase equality of opportunity for people to get ahead,” only 46 percent say it’s important to “reduce the income and wealth gap between the rich and the poor,” and 54 percent say this is only somewhat or not important.
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In addition, by a 52 to 45 percent margin, Americans see the gap between the rich and the poor as an acceptable part of the economic system rather than a problem that needs to be fixed. In 1998, during the high-tech economic boom, Americans took the opposite view by the same margin.
As Galston notes, these findings suggest that Obama’s much-praised speech at Osawatomie, Kan., decrying inequality, “may well reduce his chances of prevailing in a close race.” Class-warfare politics, as I have noted, hasn’t produced a Democratic presidential victory in a long, long time.
Where Galston misses a step, I think, is that he seems to regard the move away from redistributionist politics in this time of economic stagnation as an anomaly in need of explanation. He seems to share the Obama Democrats’ assumption that economic distress would make Americans more supportive of, or amenable to, big-government policies.
That, after all, is what we have all been taught by the great and widely read New Deal historians, and that lesson has been absorbed by generations of politicians and political pundits.
I believe that historians have taught the wrong lessons about the 1930s. And I believe there is a plausible and probably correct reason why economic distress has apparently moved Americans to be less rather than more supportive of big government.
To understand the lessons of the 1930s, you need to read the election returns. Franklin Roosevelt’s big victory in 1932 was a massive rejection of Republicans across the board. Republicans lost huge ground in urban and rural areas, in the West and Midwest and most of the East, and even in their few redoubts in the South.
In 1936, FDR won reelection by a slightly larger margin, but with a different coalition. The rural and small-town North returned to its long Republican allegiance, while Democrats made further big gains among immigrants and blue-collar workers in big cities and factory towns.
The New Deal historians attributed these gains to Roosevelt’s economic-redistribution measures: high tax rates on high earners, the pro-union Wagner Act, Social Security. These laws — the so-called Second New Deal — were passed in 1935. They replaced the different, non-redistributionist policies of the First New Deal that stopped the deflationary downward spiral underway when Roosevelt took office.
The problem with the historians’ claims is that the shifts in the electorate apparent in 1936 also are apparent in the 1934 off-year elections. Democrats won big that year, but compared to 1932, they lost ground in rural areas and small towns and gained much ground in big cities and factory towns.
The 1936 realignment happened in 1934. It could not have been caused by the redistributionist Second New Deal legislation, because that legislation hadn’t been passed before November 1934.
So why should voters be leery of economic redistribution in times of economic distress?
Perhaps because they realize that they stand to gain much more from a vibrantly growing economy than from redistribution of a stagnant economic pie. A growing economy produces many unanticipated opportunities. Redistribution edges toward a zero-sum game.
They miss growth when it is absent. They don’t appreciate it so much when it is happening.
Roosevelt’s 1934 and 1936 victories were won in periods of growth. After the economy shifted into recession in 1937, New Deal Democrats fared much worse, and Roosevelt won his third and fourth terms as a seasoned wartime leader, not an economic redistributor.
Lesson: If you want redistribution, you’d better first produce growth. Which the Obama Democrats’ policies have failed to do.
Hopped the wag? Where have you been? You can't play redistribution unless you can pay. Now which candidate can deliver policies for growth, a flat tax and smaller government? Not the liberal berk in the white house or the hedge fund manager from MA.
What do you think he was doing at Bain- posing for President? His retirement deal from Bain qualifies for the 15% capital gains tax rate given to hedge fund and private equity managers. Ask him to release his tax returns.
Bain Capital LLC is a Boston-based private equity firm founded in 1984 by partners from the consulting firm Bain & Company. Originally conceived as an early-stage, growth-oriented investment fund, Bain Capital today manages approximately $65 billion in assets, and its strategies include private equity, venture capital, public equity, high-yield assets and mezzanine capital funds.
Wayfaring money redistributes its favor continuously; sometimes within pools, sometimes into streams. At present, money drips from the topped-off free cash tank of American corporations. Some is shunted to increased dividend, but the tap on employee pay is kept tight. Henry Ford knew this was a good way for companies to die of thirst. Though he was no friend of the working man, he understood liquidity. Pay the workers; pay them even more than might seem reasonable. Take heed, corporate executives, cast thy firm’ bread upon the cash flow, for thou shalt find it after many quarters. Or wait for the red feds to come a-redistributing.
Excellent point on the growth aspect. When the pie does not grow (GDP) it gets smaller each time it goes around the table. Each social welfare program takes a piece and without growth the economy cannot continue the same level of assistance for those that desperatly and really need it.
Same as always. Less regulation. More productivity through innovation, which is created by allowing people to profit from their innovations. Letting the market rather than gov't bureaucrats decide what people want, and then letting the market supply it. Encouraging investment rather than demonizing investors. The age of the population has little or nothing to do with implementing policies to achieve economic growth.
"Same as always. Less regulation. More productivity through innovation, which is created by allowing people to profit from their innovations. Letting the market rather than gov't bureaucrats decide what people want, and then letting the market supply it."
Too many people who had no business getting home mortgages wanted them and the market supplied it. The result? That was almost the end of banking and capitalism as we know it (if every major bank in the country went the way of Lehman Brothers.) 2008 would have been the year that socialists might have been proven right.
And even today, there really hasn't been any significant regulations put in place that could prevent the same giant "mortgage welching" from happening again. How is less regulation going to help here?
Certain times, less regulation was a good thing. The airline industry de-regulated under that great "regulator" by the name of Jimmy Carter in 1978. The CAB was disbanded and federal employees (regulators) lost their civil service "jobs." That was good. In doing so, everyone (rich, middle class, and poor alike) could now afford to fly. But look what happened in the mortgage industry? The loss of equity in real estate value almost bankrupted the entire free world. How is less regulation here a good thing?
You see Dave, I don't think your stock answer is a good one anymore. I am as conservative as anyone, but the answer you gave me (which is essentially the same answer every GOP candidate for President is giving) is not specific enough. It is not a critical thinking answer that addresses the realities of human nature in the real world. We have an aging population. You can't "grow" the economy with older people and less children.
The argument about regulation is lacking the truth about the mortgage bubble. The truth be known is that the government pressured the banks to lend to people not qualified to purchase a house. Which gave boost to supply and raised prices. This created a bubble as we all know it burst and will take years to correct. When say say less government less regulations we do not mean none.
Wasn't the housing bubble created by Fannie and Freddie adhering to their mission statement "to democratize home ownership" (direct quote)? Blaming bankers for making bad loans when encouraged by these government enterprises is misdirected. The bankers would not have risked depositers' money but for the interference of the redistributive politicians such as Dodd and Frank. This is Barrone's lesson about the error in concentrating on how wealth in distributed instead of how to create more of it. As many have said, get the government, regulators and all, out of the way.
iimmigration? And yes, it should be under controls to assure we get those who will contribute to the wealth of the nation, but not controlled as a limit on numbers or to favor a specific ethnicity or national origin.
Immigration cannot replace the natural birthrate of a nation, not without destroying the culture of the host country. What good is the United States of America if its culture reflects that of Mexico?
Besides, there aren't enough immigrants to help support the lifestyles of 300 million people.
I agree with you about not subverrting our culture to Mexico's. That's one reason to encourage immigration of those who can contribute to our culture. As it has been for centurys, ours is non monolithic and thereby richer. Read Jindahl's book "Crises and Leadership" in which he tells of his parents coming from India. He also notes the #2 man at Google, a respected engineer and businessman, lives not in California but in Toronto because he can't get a green card. As to the quantity of immigrants needed to support an aging population, what other solution have you? Best that the younger generation of which we both speak be educated, hard-working and productive.
Good points, but like Tom's comment below, we need to have more skilled immigrants - we DO NOT need more low-skilled, low wage immigrants. That approach has already killed the introductory job market for youth and especially the urban young. Plus, facts indicate this just isnt' working. Details of CA's fruitless and tragic experience are sobering.
There are lots of potential high skilled people in the Far East, Europe, and India who would and should immigrate to this country. Nothing against Mexicans, they have added their own uniqueness to that diversity in this country. But, after a 25 year open bridge and 20 - 30 million people later, their turn is over - time to pass along to someone else.
Doing so will / should raise wage rates in the lower third of the labor pool, something far better for the economy and future growth than extra $ million bonuses for hedge funders and tech zippos. You want to spread the wealth?. You want to break down class barriers? You want to undo the politically crass, corrupt ,and destructive philosophy of "class warfare" - then just add a whole lot of new, educated, ambitious folks to the bottom third and watch them claw and work their way to the top - not stopping or allowing such utterly delusional and suicidal policies to take hold as it would deprive THEM of their goals.
That said, we are, as of Jan. 1, 2012 at 3:30 EST, a nation of approximately 313 million people (according to the U.S. population clock). We DO need to be cognizant of that fact. While Malthus' prediction might have been held at bay in the short term or at least in the myopic polemics of of his disciples like Rachel Carson (Limits of Growth) and and Paul Ehrlich (The Population Bomb) - THERE are limits.
And though God has commanded us to "go forth and multiply (Genesis, Book 1) - I do think he meant to use our minds as well as other parts of our anatomy in so doing. Perhaps a slow arithmetic progression - not a geometric one?
People live longer, live better, and - hopefully at some point start to live healthier. In their older age they have more money than the young, therefore, more disposable dollars to spend.
The balancing act will be between however, the "haves and have-nots". If more old folks have money to spend than those who need money from the government to survive, then we can grow. IF we need to consume - through taxes - all of the money of wealthier seniors to give to others, then we have major issues.
Lastly, the easiest way is to be very efficient and export - export great things. We need to refocus our skill sets and appetites to the rewards of being an export driven society. Look, Germans have 1/4 th the population we do, but until a year or so ago when overtaken by China, THEY were the largest exporters in the world. It's NOT just because they like bratwurst and ale. THEY are doing something right. We are not.
If Americans know that growth of the economy is needed, why are so many prone to support politicians that want to take from other Americans and redistribute it?
Because the country is so much OLDER now. We have had too few children and too many of us are too old for working. And too many of us haven't saved a dime for our golden years so we are determined to vote in politicians that give us entitlement checks to make us "whole" at the expense of the "other." What difference does it make how much it hurts the children, since we didn't have any (or had so few.)
If the electorate believes their lot is improving or is likely to do so in the future, it distrusts redistributionist policies. The problem is that potentiality does not seem to pertain today. In the 1930's, America, for all the hardship, still was, on average wealthier than most of the rest of the world.
Today, people see other nations sprinting past us while seeing their own incomes and employment prospects shrivel. In the Great Depression, folk still believed their children would be better off than they, but now that situation is reversed. This makes us highly susceptible to left wing demogogues making political hay by playing up our differences.
Which is precisely what is happening.
And, despite a good deal of empirical evidence, the population still is not convinced that the policy prescriptions of the right are likely to be any more effective than the stale nostrums of the left.
It is not enough that conservative policies are right - we need someone who can get that point across to the electorate and convince them that morning in America is not a description of the past.
