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Why are most Americans rejecting the programs of the Obama Democrats? That question hovers over Jacob S. Hacker and Paul Pierson’s “Winner-Take-All Politics.” In the book’s view, most Americans should be cheering for the stimulus package, the health-care bill and the financial-regulation law–and should be calling for more of that ilk. Yet plainly they’re not, as the authors–political scientists at Yale and Berkeley–ruefully admit.
What Americans should be angry about, Messrs. Hacker and Pierson argue with some vehemence, is that since the 1970s people who are already well off have enjoyed a rising percentage of overall income growth. “Why, after a generation following World War II in which prosperity was broadly distributed up and down the income ladder,” the authors ask, “did the gains of economic growth start going mostly to the top?” They focus angrily on increases in the incomes of the top 1% of the population, even of the top tenth of 1%. The broadsides against “income inequality” sound a lot like those of 2004 Democratic vice-presidential nominee John Edwards, though he is not mentioned in “Winner-Take-All Politics.”
Like Mr. Edwards, Messrs. Hacker and Pierson don’t really explain how the high earnings of, say, Steve Jobs leave the rest of us worse off. Indeed, they admit that after-tax income, including government transfers and fringe benefits, is better for every part of the population than it was 30 years ago. Ordinary Americans are worse off, the authors say, because of decreased job security, less health insurance coverage and increases in personal debt. But these assertions are made in passing and presented with little evidence; in any case, their place in a broad argument about growing inequality would require more careful analysis than is offered here.
The best part of “Winner-Take-All Politics” is its treatment of the 1970s, describing how “the unexpected liberalism of Nixonland turned into the unexpected conservatism of Carterland.” They authors remind us that Jimmy Carter’s first Congress, with a 2-1 Democrat advantage in the House, rejected a big-labor bill to increase unions’ power, refused to create a proposed consumer- protection agency and cut the capital-gains tax rate.
The House’s stubbornness, the authors argue, resulted from the growing influence of pro-business lobbyists and think tanks–but we’re not told how this lobbying campaign was carried out. Yet something pernicious had to be afoot: There was no logical reason why “increased concern among homeowners whose property values had climbed or middle class Americans thrust into higher tax brackets due to inflation” should have sparked “a frenzy of tax-cutting for corporations and the wealthy.”
But couldn’t these middle-class Americans have simply feared that government was gobbling up the private-sector economy, and couldn’t their representatives in Washington have acted on that concern? The possibility evidently doesn’t occur to Messrs. Hacker and Pierson, who seem to assume that all big-government policies are by definition good for ordinary people.
A similar assumption permeates the book’s potted political history of the 30 years that follow the Carter era. In this telling, business interests, especially small businesses, lobby furiously and influence increasingly conservative Republicans and Democrats, ever hungry for campaign cash. The authors don’t explain why there is something inherently illegitimate about businesses lobbying the government when it is threatening to take away large amounts of their money. Or why anyone would expect government redistribution of income to result in the increased productivity that the well- rewarded creativity of a Steve Jobs has produced.
Keynesian economists like to identify cases of market failure, which in their view require government intervention. Messrs. Hacker and Pierson, though they don’t put it this way, are trying to outline what they see as a political market failure. The intervention needed: redistributing the wealth of the top 1% of the population to the great, suffering majority. The authors’ claim that voters agree with this assessment, though, is thin–based on the responses to a few polling questions that may have been misleadingly phrased.
Messrs. Hacker and Pierson politely applaud the Obama Democrats’ health-care overhaul, regretting only that it wasn’t more far-reaching. They note the tea-party movement and concede that “the immediate political wave might well be on the side of the party of No.” They call for increased voter turnout and the elimination of the Senate filibuster (a move the Democrats are unlikely to favor as their ranks fall well below 60). Labor unions, we’re told, are “the main political players pushing leaders to address middle class economic concerns and resisting policy changes that promote inequality.” But the authors admit that attempts to increase unions’ membership failed in this Congress and are unlikely to succeed any time soon. The book would have done well to note a Gallup poll showing that unions are more unpopular in the U.S. than at any time in the past 70 years.
So the promised land for Messrs. Hacker and Pierson lies far in the past, in that “generation after World War II in which prosperity was broadly distributed up and down the income ladder.” The key words here are not “broadly distributed” or “up and down” but “World War II.” That war was won by massive cooperation between big government, big business and big labor, with 16 million men in the military. Americans became productive as small cogs in large organizations. But the era of conformism and organization men lasted for just a generation, until baby boomers started doing their thing. Trust in big institutions has lagged ever since. Messrs. Hacker and Pierson argue that Americans are ignorant of or easily fooled about their real interests. John Edwards said that, too. Not a winning political platform.
Michael Barone is a resident fellow at AEI.
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