Winner-Take-All Politics

Why do the rich get richer? These authors blame the Republicans.

Winner-Take-All Politics: How Washington Made the Rich Richer – And Turned Its Back on the Middle Class By Jacob Hacker and Paul Pierson Simon & Schuster 309 pp., $27

Ever wonder how it came to this: Republicans and Democrats behaving like Sunnis and Shiites in Iraq, ever more gridlocked and unable to address national problems in a rational, bipartisan way? Or why the middle class is treading water, at best, while the super-rich wax inexorably richer? Here’s another poser: Why would the Republican Party, which lost the last two elections in dramatic fashion, react by continuing to grow, as it has for decades, ever more conservative and obstructionist, rather than giving moderation a chance?

In their bicoastal narrative, Winner-Take-All Politics: How Washington Made the Rich Richer – And Turned Its Back on the Middle Class, Jacob S. Hacker, Yale professor of political science, and Paul Pierson, the same at the University of California, Berkeley, tackle these and other questions in a well-researched, albeit occasionally repetitive, analysis. They build their ideological edifice brick by brick, pointing out things that most Americans, including this reviewer, may not fully grasp – at least at the level of historical and economic detail that the two authors provide.

The numbers they cite are arresting. Take 2009, for example. It was a simply awful year for almost all Americans – “almost” being a key qualifier. It was, in fact, a very good year on Wall Street, where the 38 top firms earned a total of $140 billion. Goldman Sachs had its best year since 1869, the authors write, paying its minions an average of $600,000 per person. Rather than melting down, GS somehow melted up, with some help from Uncle Sam.

The authors continue to pound away with economic data to prove the old saw that the rich get richer, with a nuanced twist that it is the über rich who are doing surreally well: “The share of [national] income earned by the top 1 percent of Americans has increased from around 8 percent in 1974 to more than 18 percent in 2007.... The only time since 1913 ... that this share has been higher was 1928.” That, of course, was the year before the Great Depression commenced.

Now there is rich, and then there’s filthy rich. The top 1/10th of 1 percent of Americans has done even better: In constant 2007 dollars, the 15,000 American families in this rarified bracket enjoyed an average income in 1974 of about a $1 million – and $7.1 million in 2007. Want richer? The top .01 percent of us, or one in 10,000 households, soared in annual income from $4 million in 1974 to $35 million on average in 2007.

All of the above raises the questions: Did these unfathomably wealthy people earn all that additional income and are they satisfied with where they are, plutocratically speaking? No and no, insist the authors. The wealthy, whether their assets derive from inheritance, big business accomplishments, or working in the financial sector, have allied enthusiastically with the Republicans since the late 1970s to reduce their levies dramatically (whether on income, estate, or capital gains). They have also worked together to suppress the labor movement and to decimate government attempts to regulate the environment and fancy financial transactions like those subprime mortgage derivatives that brought the world to the brink of economic collapse.

The Republicans, according to Hacker and Pierson, by marrying populist rhetoric to elite action, have been able to stitch together a constituency that includes moderate income supporters – Christian conservatives, tea partyers, and elite-wary blue-collar workers – while pursuing policies catering almost exclusively to business and moneyed elites. If the middle class, and below, is getting the short end of the economic stick from Washington, the Republicans blame it on the “tax and spend” Democrats, whose policies are actually more in tune with Middle America.

If there currently is gridlock in the Capitol because a super-majority of 60 senators in the Senate is needed to move reform legislation, the voters, the polls show, seem to be blaming the current Democratic majority rather than the obstructionist Republican minority. How can this be? Because, according to the authors, the GOP, in league with the wealthy and big business, has mastered the art of political organization and fundraising since this “30 Years War” began in earnest circa 1980. “Banks are organized; their customers are not,” they write, citing one example of the uneven political playing field.

America, they insist, is turning into “Richistan.” A nation that threw off the tyranny of hereditary aristocracy in 1776 is in danger of falling prey to a new economic aristocracy that dictates laws, regulations, and tax rates from on high while insisting it is all being done in the interest of the nation.

Hacker and Pierson make a compelling case. If Marie Antoinette were alive, she might aver of today’s great economically challenged masses, “Let them nibble on passbook-savings-account interest” – if they can manage to save anything, that is.

David Holahan is a freelance writer living in East Haddam, Conn.

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