Rip Gop

by Stanley B Greenberg

  Under Franklin Roosevelt and the New Deal regime, the United States went much further than Europe in establishing the progressive taxation that Piketty prescribes. The top marginal tax rate fluctuated between 70 and 94 percent from the mid-1930s until 1981. But Ronald Reagan won a mandate for across-the-board tax cuts, and his tax reform cut the top tax rate to 50 percent in 1982, to 38.5 percent in 1987, and all the way down to 28 percent in 1988. The decrease in the top tax rate has proven to be “perfectly correlated” with the increase in the top earners’ proportion of the national income. Before the 1980s, there was no financial incentive for a CEO to press for higher pay; but the dramatic drop in top rates “totally transformed the way executive salaries are determined” and “executives went to considerable lengths to persuade other interested parties (as in, the compensation committees that the executive often appoints) to grant them substantial raises.”136

  The liberals argued not just that this soaring inequality was created but also that those policies were increasingly the result of the soaring campaign spending of big corporations and billionaire donors.137

  The campaigns for president and the U.S. Congress cost $6.3 billion in 2012, with a growing proportion spent by tax-exempt organizations that do not disclose their donors and by independent super PACs, now the vehicles of choice for corporations and America’s billionaires. Four fifths of that outside money went to Republican-aligned conservative groups that, in turn, have taken advantage of Supreme Court decisions giving corporations a right to free speech—in particular, the “right to devote one’s resources to whatever cause one supports.” A decade ago, the GOP supported full disclosure of contributions and opposed the “soft money” that allowed special-interest groups to influence elections; but with increasing dependence on large undisclosed donations, the Republican Party now officially opposes any contribution limits and any disclosure.

  What position will they take after grassroots resistance to President Trump put nearly every Democratic candidate at a financial advantage and the Democrats’ billionaires outspent the Koch brothers and Sheldon Adelson?

  Stiglitz concludes in The Price of Inequality: How Today’s Divided Society Endangers Our Future that the 1 percent is able to use government to “write the rules of the economy” to benefit themselves, while middle-class incomes have stagnated.138 They have stagnated because of the broken link between the rising productivity of American workers and wage gains.139 That lack of connection symbolizes almost more than any other emerging fact about the economy the centrality of government policy. Legislative and regulatory actions at the national and state levels affect how many employees belong to unions and are empowered or disempowered to affect wage levels. Governments can raise the minimum wage—and did in eighteen of the fifty states in 2018. Government can raise the amounts of earned income tax credits and child tax credits and extend credits to young children. They can expand food programs, greatly expand health care subsidies, and raise Social Security benefits, as a start. The government’s tool chest is so full.

  Conservatives universally downplayed the worry about inequality, the top 1 percent, and middle-class decline, and argued, critically, there isn’t much the country can do about them anyway. What we can do is address the most important economic problem, people pulling out of the labor force, which is produced by government policies that encourage idleness.

  Conservative writers wrote breathlessly about Richard V. Burkhauser, Jeff Larrimore, and Kosali I. Simon’s study for the National Bureau of Economic Research titled, “A ‘Second Opinion’ on the Economic Health of the American Middle Class.” Their research inspired The Washington Post editorial page to run an op-ed piece by Ron Haskins under the headline THE MYTH OF THE DISAPPEARING MIDDLE CLASS. Scott Winthrop wrote a piece in the The New Republic headlined to get a response, STOP FEELING SORRY FOR THE MIDDLE CLASS! THEY’RE DOING JUST FINE. Fox News headlined its online contribution, SORRY, MR. BIDEN, MOST MIDDLE CLASS AMERICANS ARE BETTER OFF NOW THAN THEY WERE THIRTY YEARS AGO.140

  Once the authors of the study factored in all the policies the Republicans wanted to cut—tax credits, food stamps, and health insurance—they found that the incomes of those in the middle of the income scale rose 37 percent over these three decades. That is about 1.1 percent a year and very close to the consensus calculations of progressive think tanks.

  Perhaps most egregious is their lack of curiosity about what periods produced this 37 percent gain for the middle class over three decades. Well, it turns out that half the income growth came in the period dominated by Bill Clinton’s economic and tax policies. During the Clinton period, it grew by 16.8 percent, double the average for the Republican presidents (8.3 percent).141

  Moreover, after all of their calculations to factor in tax credits and food stamps, it is only during the Clinton period that the Gini coefficient—the standard measure of inequality—improved. The top 5 percent did okay, their income going up 15.1 percent, though that was a touch less than for the middle quintile, which gained 16.8 percent. The Reagan period brought a dramatic worsening of these numbers for the middle, second, and bottom quintile, and the George W. Bush years were just terrible for everybody.142

  Had they paid attention to the political periodization, they might have at least speculated as to what policies made such a difference in mitigating the problem. Their own research showed incomes went up only under Clinton because of changes in the earned income tax credit and the value of all “public transfers,” including food stamps, welfare, Pell grants, Social Security, and other government-provided cash assistance, as well as Medicare and Medicaid. They did not want to show that government activism can raise incomes and raise people out of poverty.143

  The research also did not display data or talk about the top 1 percent. Those heralded top earners do not even get a line in Burkhauser’s graphs, which pushes the problem of inequality out of sight in this Tea Party–dominated period.144 Having no line for the 1 percent and blocking out the economic data for the Clinton presidency allowed Atlantic Council senior fellow Douglas Besharov to tell a sympathetic interviewer, “No one has the slightest idea what will work. The cupboard is bare.”145

  This is disingenuous, of course. These conservative economists are fully paid-up members of the conservative policy network. The Ryan budget would have decimated food stamps, eliminated or limited refundable tax credits, capped Pell grants, repealed the Medicaid expansion under the Affordable Care Act, and converted Medicare into a voucher program. The leading GOP governors competed to abolish the state versions of the earned income tax credit (EITC), slashed food stamps, refused to expand Medicaid, cut unemployment benefits, and shifted the cost of higher education onto students. The GOP did everything possible to make life harder for the middle class and the poor.

  The truth is GOP leaders think the decline of the family and the growth of dependence on government are the real problems facing the country, not the decline of the middle class or growing inequality. Liberals grew “the welfare state” and created a growing “mass dependence on entitlements” that produced pathologies in so many areas. The answer is to provide less security and comfort, so people will become more self-reliant and seek out work. Working people and the poor benefit from a government that provides less, not more.

  So, the debate over inequality and the middle class ended in this period of Tea Party dominance with governments shredding the social safety net and slashing tax cuts for the super rich and corporations. And it welcomed the 1 percent and corporations spending increasing millions to ensure that they would keep getting a government that writes the rules of the economy to work for them.

  * * *

  The Tea Party decade was forged in the firestorm created when government took over from business the job of rescuing a crashed economy and financial system, which it took up unevenly and unfairly, but also when government took on the unfinished job of ensuring all Americans have access to health care, and the formidable task of preventing catastroph
ic global warming. The anti-government Evangelical GOP reacted with horror and great urgency to government assuming such a superordinate role, particularly one led by President Barack Obama. The fear was not just of the public’s acceptance of government activism in times of crisis, but, even greater, that this government overreach would succeed. Increased spending had slowed the loss of jobs, restored the banks’ financial stability, and rescued the auto industry; the number of citizens without any health insurance fell dramatically; President Obama’s new regulations for coal and autos and higher fuel efficiency standards put America on track to shift the trajectory on global warming. Imagine how much the GOP might be on the defensive had President Obama been willing to explain why America had to meet these challenges and why government had to play this bigger role.

  The Tea Party revolt against this Obama-led government activism gave the Tea Party control of the Congress and soon after, half the states. They immediately jammed the gears and gridlocked the federal government. They pushed a suffocating austerity where only deficits mattered. They deconstructed government with massive tax cuts for the richest, corporations, and special interests that required massive cuts in public spending, education, and the number of teachers and destruction of their unions. They stopped the Affordable Care Act in its tracks. They put abortion out of reach where they governed. They stoked fears of violent immigrants to push minority voters out of the electorate. And they just denied climate change, middle-class decline, and the 1 percent to suffocate any debate about what to do and thus what government can do. The War on Poverty failed, and people have withdrawn from the labor force because they got too much help from government.

  This GOP party’s policies were not beloved in the country, and its presidential candidates failed to win more votes than the Democratic nominee in any presidential election in this period. The country’s founders created a constitutional system that favored rural voters, but the unabashed partisan gerrymandering raised public consciousness of the growing gap between popular support and popular control: the Democratic candidates won more votes than the Republican in every election for the U.S. Senate in 2016 and the Democrats won more than the Republicans in three of the five House elections in this Tea Party period.

  Citizens United was the starter pistol in 2010 that gave the conservative billionaires and big corporations the green light to spend ever more dark money to take control of more and more states. Big money and corporate special interests turned government into a swamp of self-dealing and corruption that still hasn’t been drained.

  The Supreme Court eviscerated the Voting Rights Act in 2013 and the GOP then used photo IDs, reduced early voting and poll places, voter purges, and just legal scams to push millions of the poor, African Americans, Mexican Americans, immigrants, college students, and Native Americans out of the electorate.

  No one imagined that a Tea Party-Evangelical–dominated GOP would get a whole decade to suppress any consideration of the building problems facing the country and so much time to destroy the government’s capacity to act. But America today looks like some kind of wind-up spring toy that has been turned and turned while someone uses all their strength to hold down the coil to keep the toy from suddenly spinning wildly and flying up to the ceiling. What happens now that the man holding it is gone, swept away by the elections of 2018 and, soon, 2020?

  How long will it take Democrats to regain their innovative public spirit and willingness to use government to tackle problems that have only gotten dramatically worse?

  Democratic state governments acted on raising the minimum wage, increasing early childhood education, expanding health care, and addressing climate change, so they will likely rush into a debate that has been repressed in this Tea Party period. Democrats know how to grow an economy that creates better paying jobs, how to make health care universal and dramatically reduce climate risk. They know greatly increased investment in education and infrastructure must no longer be stalled. They know very different trade agreements can set back the outsourcing of American jobs. They know higher taxes on the rich and CEOs, tax credits, social supports, empowered unions, regulations, and changes in corporate governance can raise middle-class incomes and reduce inequality. Just discussing the agenda and embracing government activism as a precondition for progress sounds like a country that may be liberated from the Tea Party decade.

  Are people really ready to clean the swamp that this Tea Party period took to shameless levels?

  Are people ready to restore democracy?

  Do elites understand how desperate the country has been to address these collective problems? Are Democrats ready to use government after this decade of anti-government tyranny?

  5   PRESIDENT TRUMP’S GOP IN BATTLE

  AT THE BEGINNING OF EACH FOCUS GROUP, I ask people to finish this sentence: “I feel _____ about the way things are going in the country.” Within months of Donald Trump becoming president, both Clinton and Trump voters began filling in words that almost united them: “terrified,” “nervous,” “depressed,” and “distraught.”

  After Trump’s inauguration, I went to listen to Trump voters in Macomb County, the Detroit suburb that I had helped make famous as the home of Reagan Democrats who Bill Clinton and Barack Obama had won back but who, in 2016, had given Trump his margin of victory in Michigan. They were shocked by how the country had reacted to Donald Trump’s election.

  I held these discussions with independents, Democrats, and Obama voters who had voted for Trump, and they had not regretted doing so. There was no “buyer’s remorse.” None of the thirty-five participants over the course of the focus group discussion or in their private post-group postcards to President Trump had pulled back from their vote, which is an impressive indication of the strength of Trump’s support. They are were clear about why they voted for him and prayed he keeps his promises and succeeds.

  They accepted Trump’s version of the news and facts, and their reactions to videos of his press conferences and interviews reinforced that point. They said they “want to believe” him and described his demeanor as “very sincere. Like you could feel it from watching him. You know it makes a difference to him.” They felt hopeful watching their new president: “It’s amazing to see him up there and go, wow, that’s my president now, and those things are gonna happen. And he’s gonna make things better.”

  They believed his opponents marching in the streets were “not satisfied with the results” of the election and “now they’re trying [by] every means necessary … to change the outcome which is not going to happen.” With tensions so heightened, some feared growing unrest and some even worried, “we’re going to end up in a civil war.” “If a Democrat won,” they argued, “I wouldn’t be sitting here doing a million man march because Hillary Clinton was in office, I’d have to deal with it because she’s my president and move on.” They hoped the protestors and the family members giving them a hard time would chill because if “he gets a chance, if they give him a minute here,” they insisted, “he’ll start doing some good things.”

  More than half the people haven’t come to terms with it. And they’re still opposing it. We can’t move on. And it seems like he tries to do things. They oppose it. Then everybody’s out there protesting it.

  —NON-COLLEGE-EDUCATED WHITE WOMAN, AKRON

  Stop “being a bunch of pussies” and “being so sensitive and let’s get some stuff done.”

  My focus groups became group therapy sessions in today’s polarized America where both sides speak about a virtual “civil war” in the country and within their own families. Trump and Clinton voters couldn’t be placed in the same room, if you really wanted to learn something. The discussion became animated and revealing the moment when people realized they were together with only Trump or only Clinton voters. Ordinary people in focus groups now insisted on talking about politics, national issues, and the state of the country; they would not be distracted by our moderators, who attempted to open conversations with topi
cs like popular culture and entertainment. They rushed to politics. Trump sucked all the oxygen out of the room.

  My Trump focus groups were all white and working class; each group included only participants of the same sex and of a similar age. They were so relieved to discover they could express themselves freely without fear of being attacked. Nobody criticized them when they said something unflattering about immigrants, blacks, or Muslims.

  They felt under attack at home—not only from younger generations in their own families but also from those in their communities. Some had been ostracized by close family members who criticized them for their vote, others confessed they had been “called racist, a xenophobe, homophobe, whatever phobe they could come up with.” One woman’s son was bullied after his first-grade class held a mock election: “My son hears us and he says, ‘I’m going to vote for Trump,’ and two of the kids in his class started yelling. Like, ‘You’re going to vote Trump? Are you crazy?’ And just started yelling at him.” This was personal.

  A year into the Trump presidency, many Trump supporters found they had paid a high price for their vote choice in their own families. One white working-class man shared that he “lost contact with [his] own daughter because of the election.” Others complained that their children and millennial friends challenged their views and suggested the media manipulates them.

  A lot of the young kids—I call them young, they’re in their twenties, you know, late twenties—I see them as Democrats, they don’t support the President on [bringing change], so they’re latching on to everything in the fake news, about what he’s done, what he’s said, you know? What he’s ruined, you know? What Obama did that was great, you know?