“Liar! Liar!” “He's lying!” That's how Wisconsin GOP Rep. Paul Ryan's constituents responded at a town hall meeting in Kenosha a week after House Republicans passed Ryan's draconian budget plan to privatize Medicare and slash taxes for the wealthy.
Ryan seemed genuinely shocked, totally unprepared for the grassroots outrage and for good reason: the gap between Washington elites and the American people seems to have reached an all-time high. While Ryan's plan was lauded as “brave” and “visionary” inside the Beltway, poll after poll showed that the American people wanted none of it.
62 percent believe the government should focus on creating jobs, even if it means increasing the deficit in the short-term, according to a Lake Research Partners poll in March, 2011.
76 percent believe cutting Medicare to help reduce the budget deficit is mostly or totally unacceptable, and 67 percent believe the same about Medicaid, according to a Wall Street Journal/NBC poll in February, 2011.
68 percent believe that phasing out the Bush tax cuts for families earning $250,000 per year is mostly or totally acceptable to help reduce the budget deficit, according to the same poll.
65 percent oppose changes to Social Security as a way to reduce the budget deficit, according to a Pew Research poll in March, 2011.
Yet, despite similar results in dozens of polls over the past few months, none of it seemed to penetrate the Beltway bubble.
The American Majority Project, a coalition of three groups, is spearheading an effort to change that, and put the American people back into the center of public debates about the future of our country. In a statement published on Huffington Post, Roger Hickey, co-director of Campaign for America's Future (CAF) announced the partnership with the Center for Economic Policy Research and the media watchdog, Fairness and Accuracy in Reporting.
Hickey wrote that CAF was “sending letters to all the major media demanding that the views of the American Majority be represented in the news programs, print articles and opinion pages, and the non-stop daily and Sunday talk shows in which the debate about America's future is being conducted as we move toward the showdown over the budget. We are demanding representation in the media proportional to the size of the American Majority.”
Hickey went on to say, “We are also supplying the media with an extensive list of economists, experts and advocates who share the majority view that deficits are not now the major threat to US prosperity, and that getting revenue back into the budget is far less damaging (and more just) than cutting spending and crippling important programs for the poor and the elderly.”
"Washington is preoccupied with draconian spending cuts because the pundits, news shows and politicians engage in group-think. And billionaire financier Peter Peterson has taught them what to think – that America has a deficit crisis,” Hickey told me later.
“But outside the beltway, the polls show the American majority cares more about high unemployment and the slow economy than the deficit. And the American majority rejects most of the budget cuts being pushed by the Washington crowd. Strong majorities would rather reduce the deficit by growing the economy, raising taxes for the wealthy and corporations, and by cutting military spending.”
The polls cited above are but a few of the many CAF collected to support this argument.
Perhaps the Beltway elites could be partially excused if these popular views had suddenly sprung out of nowhere, without rhyme or reason. Or if the growth of government recently was explosive, unprecedented or arbitrary. Or if there wasn't a centuries-long history of elites fighting the will of the people over progressive taxation and enhanced social welfare. But none of these is the case. In fact, it's taken a tremendous effort by elites to block out three well-established historical facts, which add tremendous muscle to the effort CAF, CEPR and FAIR are spearheading:
1) That government grows in size as economies mature to meet the needs of the people. This is known as "Wagner's Law," first articulated by Adolph Wagner, perhaps the leading conservative economist in Bismark's Germany.Let's look at each of these in turn.
2) That such government spending is profoundly popular in America, not just with liberals, but with self-described conservatives as well. The recent polling opposed to the Ryan Plan has decades of similar results behind it.
3) That there's a direct relationship between democracy, progressive taxation and enhanced social welfare on the one hand, and elite rule, regressive taxation and reduced social welfare on the other. This is why even today, blue states are more prosperous than red states, even though blue states tend to subsidize red states by giving more to the federal government in taxes than they get back in spending.
Wagner's Law
“Wagner's Law” says there is a long-run tendency for government expenditure to grow relative to national income. Once economic development becomes sufficiently advanced, increased government activity is required to meet society's needs that private enterprise cannot.
This has been demonstrated various different ways. A particularly clearcut demonstration comes from data collected by the Organization for Economic Cooperation and Development. In 1955, both the US and the OECD average total tax levels were about 24 percent. From then till 1970, both tax rates rose about 14.5 percent. Since then, however, the US increased just 3.7 percent compared to 30.5 percent for the OECD average.
Although Wagner's Law still applies to the U.S., the increase has slowed dramatically, and one reason isn't hard to identify: The emergence of Richard Nixon’s Southern Strategy. Given an either-or choice between clinging to symbolic racial privilege or supporting continued advancement of social spending a la Wagner's Law, Nixon bet on racial divisiveness. But it only slowed Wagner's Law. It did not abolish it or make the desire for more social spending go away.
Decades of 'Big Government' Support
Let's consider how long the American Majority views have been in place. One could go back to 1936, when the GOP thought it had a sure winner by running against Social Security. As soon as the government started taking money out of workers' paychecks, FDR and the New Deal would be doomed or so they thought. Instead, some of the earliest polling ever conducted by George Gallup showed overwhelming support, in the 80 percent range. This was reflected by FDR's landslide 1936 victory, taking 60 percent of the vote and every state except Maine and New Hampshire.
But detailed understanding did not emerge for another 30 years. During the 1964 election, Gallup fielded a comprehensive survey designed and analyzed by two close friends and pioneers of public opinion research, Lloyd Free and Hadley Cantril. Their results were published three years later as The Political Beliefs of Americans: A Study of Public Opinion . They discovered an overall ideological preference for free enterprise and limited government, with 50 percent of respondents identified as conservative based on a set of five questions, versus just 16 percent liberal.
But everything flipped when they turned to questions about specific spending items. In what they called “operational” terms, liberals outnumbered conservatives by a whopping 65-14 percent. What's more, almost half (46 percent) of ideological conservatives were operational liberals, while another 28 percent were middle of the road. Their conflicted views have played a major part in our recent history. While they represented 23 percent of the nation as a whole, Free and Cantril pointed out that they made up 41 percent of the Southern states that voted for Goldwater that year, the harbingers of what the GOP has since become.
Another three decades later, political scientist James Stimson called this divided state of mind “almost schizoid” in his book Public Opinion in America: Moods, Cycles, and Swings. Stimson analyzed hundreds of public opinion survey items, and determined that questions related to operational liberalism formed the primary issue dimension in American politics, with liberal attitudes generally prevailing, even when the electorate is in its most conservative mood.
An excellent source of such questions is the General Social Survey (GSS), fielded every year or two since 1972. There are a number of national spending items in the GSS, about which people are asked if we're spending too little, too much, or about right. Even self-identified extreme conservatives -- just three percent of all respondents -- are more inclined to say we're spending too little, rather than too much, on everything from classic New Deal/Great Society social spending items like Social Security, to older and newer “liberal” priorities, such as education and the environment, as well as infrastructure items like "highways and bridges."
In short, the Ryan Plan for extreme spending cuts isn't just cutting against the public mood of the moment, it's cutting against the views of even extreme conservative voters for at least four decades now. But when I asked Stimson about the Ryan Plan in a long-term perspective, he didn't talk about poll numbers at all. He talked about buying a car.
“Imagine that instead of taking out a loan for a new car that you had instead put away money for it on every payday, month after month, for say, 40 years,” Stimson said. “And then on the day you were finally ready to take home your purchase someone had said 'We are spending too much on cars, we need to change them in ways that will save money' and so your long-sought new car was downgraded to an economy model (and your 40-year savings no longer covered the full price).
“How would you feel? Would you think yourself greedy if you wanted the car you had actually paid for? That is the story of Social Security and Medicare. Tens of millions of people have paid in on every payday of their lives and now they want what they were promised when they paid.”
The Racist Roots Of Libertarian Tax Policy
This bring us to the third fundamental historical fact supporting the American Majority Project: The direct relationship between democracy, progressive taxation and enhanced social welfare on the one hand, and elite rule, regressive taxation and reduced social welfare on the other.
In America, overt racism in the 1960s and '70s was key to submerging the progressive, democratic forces that had advanced American social welfare so dramatically since the dark days of the Depression when the Democrats took power in 1933. But by the 1980s, things had changed. From then on, racial appeals appeared mostly in coded form. Ronald Reagan campaigned against imaginary “welfare queens,” not against blacks in general.
Yet, as the anti-black racism grew more subtle, the confederate ideology grew more bold -- “states' rights,” “personal responsibility,” “strict constructionism” -- all the excuses used to keep blacks “in their place,” first under slavery, then under segregation, only grew more prominent as overt racism receded. And the more that overt racism receded, the more legitimate these excuses so compatible with ideological conservatism appeared to become as principles in themselves.
None of this extinguished support for more government spending. But it did severely cripple the political ability of Democrats to deliver what people wanted. This further empowered Republicans to bring other issues to the fore, particularly wedge issues focused on fragmenting those who most supported the Democrats.
Both Clinton in 1993 and Obama in 2009 tried to act in the spirit of Wagner's Law: expanding the government role in health care to increase efficiency and reduce overall costs. Their proposals stopped well short of the optimal universal programs found in Europe, Canada and Australia, but their potential success threatened the GOP's virtual strangulation of Wagner's Law. So tremendous efforts were made to defeat both proposals, and mobilize broader opposition which brought Republicans sweeping national and state-level gains in the following midterm elections.
The GOP's most recent effort has featured the emergence of the “Tea Party” narrative, identifying opposition to Obama and Wagner's Law with the Boston Tea Party. But this narrative is profoundly false, as explained in Robin Einhorn's 2006 book, American Taxation, American Slavery.
“Americans are right to think that our antitax and antigovernment attitudes have deep historical roots,” Einhorn wrote in an online essay discussing her findings. "Their mistake is to dig for them in Boston. We should be digging in Virginia and South Carolina rather than in Massachusetts or Pennsylvania, because the origins of these attitudes have more to do with the history of American slavery than the history of American freedom. They have more to do with protections for entrenched wealth than with promises of opportunity, and more to do with the demands of privileged elites than with the strivings of the common man. Instead of reflecting a heritage that valued liberty over all other concerns, they are part of the poisonous legacy we have inherited from the slaveholders who forged much of our political tradition.
In the book, Einhorn first sets the backdrop for understanding colonial American taxation by briefly examining Britain and France, both dependent on schemes that primarily taxed the poor. In contrast, Virginia, the leading Southern colony, had a deeply corrupt and primitive tax system compared to Massachusetts, so much so that it was completely unprepared to finance its part in the Revolutionary War. Thus, not only was the Boston Tea Party a rebellion against taxation without representation, rather than a rebellion against taxes per se, it was a rebellion by people who already paid much more taxes and more progressive taxes than their counterparts in the South. Indeed, the South was much more similar to Britain and France in terms of having a corrupt and regressive tax system, dominated by an unproductive elite, actively hostile to the very idea of the general welfare, much less spending tax money on it.
'States Rights' Means Taxing the Poor
Today, Tea Party rhetoric also echoes the “states' rights” rhetoric of Southern elites from time immemorial. But this, too, turns out to be deeply regressive. The illusion is that the states, being closer to the people, are more responsive to the people's needs and desires. In some ways this is certainly true. But it's also true that the people have a more level playing field nationally, through broad institutions, such as unions, defending their interests against powerful elites. Nothing shows this more clearly than the distribution of tax burdens.
While federal income taxes, which are generally progressive, tend to dominate the national dialogue on taxes, state taxes tend to be sharply regressive, as laid out in detail in "Who Pays?" a 50-state survey of state and local tax rates from the Institute on Taxation and Economic Policy, released in 2009. The introduction stated in bold: "The study’s main finding is that nearly every state and local tax system takes a much greater share of income from middle- and low-income families than from the wealthy."
Specifically, the average for all states was an 11 percent tax rate for the lowest-income quintile (20 percent) of the population, declining steadily to 8.5 percent for the fourth quintile, and just over 5 percent for the top 1 percent of taxpayers. So, those who could least afford to pay taxes paid more than twice the share of those who could most easily afford it. Some states were much worse, such as Washington State, which lacks an individual income tax. Its ratio was six-to-one, rather than two-to-one.
Forward, To the Past
By cutting benefits and cutting taxes on the wealthy and corporations, the Ryan Plan and similar state-level efforts are seeking to take us back to a past that Americans have struggled against for centuries. Most people probably don't realize this, of course. It's enough that they feel like Stimson's anecdotal car-buyer: “Would you think yourself greedy if you wanted the car you had actually paid for? That is the story of Social Security and Medicare. Tens of millions of people have paid in on every payday of their lives and now they want what they were promised when they paid.”
But those in the media have a responsibility to know more, to tell the difference between history and myth, to make it possible for the rest of us to make informed decisions, and to have our voices heard and taken account of. That is the role of media in a democracy. It is why freedom of the press is so vital for us. And it's why the American Majority project is so vital for the American majority.
“Watch the media and see if your views are represented,” Hickey said, in conclusion. “If not, demand that the media cover the views of the majority.”
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