Politics & Policy

Wealth Vs. Work

The president should welcome the "Two Americas" argument.

The cliché is that in choosing John Edwards as his running mate, John Kerry didn’t just acquire a potential vice president, but a message: the rhetoric of “two Americas” that Edwards relentlessly repeated during the primaries. Less appreciated is that the choice of Edwards might finally give President Bush a message too.

Kerry has long lacked a campaign theme. By saying the other day that the Edwards “two Americas” line is what the campaign is “all about,” Kerry has signaled that he is ready to adopt the Edwards message. As for Bush, he has matched Kerry almost vacuity for vacuity. Yes, he wants to persevere in Iraq and preserve his tax cuts. What else? A forward-looking second-term agenda with thematic coherence and political punch has been AWOL. The Bush campaign should take a page from Kerry–let John Edwards show the way.

The Edwards theme of “two Americas”–one characterized by “work,” the other by “wealth”–amounts to a frontal attack on capital and efforts to foster its accumulation. Edwards has complained about Bush’s income-tax cuts “on the rich,” and scored him for wanting “to eliminate the capital-gains tax, dividends tax, the estate tax, all the taxation of wealth or passive income on wealth, and shift that tax burden to people who work for a living.” Edwards, in other words, takes direct aim at Bush policies rewarding savings and investment.

The opposition Edwards tries to make between work and wealth doesn’t make sense. Why do people work? For wealth. Rewarding wealth means rewarding the fruits of work. For instance, two-thirds of the beneficiaries of Bush’s cut in the top marginal tax rate own some form of small business. In America, you work, make a business succeed, then get wealthy (and become the target of demagogic politicians–the American dream!).

Edwards is bucking an important demographic trend. The percentage of Americans owning stock increased from 19 percent to 52 percent from 1983 to 2001. When Edwards criticizes those hoping their savings and investments will produce “passive income,” he is lashing out at most of America. His vision of Wall Street as the province of barons in top hats belongs in the 1930s.

He doesn’t seem to understand that wealth, when it is saved and invested, is working. Does he really want Bill Gates to stop investing in Microsoft, which has created countless jobs and made countless investors rich? Or the next Bill Gates not to be able to raise the capital to give his venture a go, because that capital is likely to come from–gasp–the rich?

Bush can adopt an agenda for an “ownership society” that confronts this Kerry/Edwards angle of attack. Its most important element would be private Social Security accounts, allowing people to save and invest for their own retirement. Liberalized IRAs could also increase the number of savers and the amount they save, while private health and education accounts would allow people to save for their own health and educational needs. And Bush could steal a worthy Edwards proposal–tax credits to help poor people save.

The themes of all policies are ownership (you own your own wealth, which no one can take away), choice (you decide what to do with your money) and opportunity (you get a chance to enjoy the wonder of compound interest and, through stocks, to own a piece of the American economy–a chance, in short, to get rich). These themes are as winning and all-American as a John Edwards grin.

The election competition, then, would become roughly between punishing the rich and making more people rich. It’s the latter goal that accords with traditional American striving. The problem with Edwards is that he is youthful, but dated in his views. He evokes aspiration, but is unsympathetic to one of the main means of promoting it. Through embracing him and his message, Kerry gets stylistic optimism at the price of substantive gloom. Wealth vs. work? Bring it on.

Rich Lowry is author of Legacy: Paying the Price for the Clinton Years.


The Latest