This Putsch Was Decades in the Making

G.O.P. cynics have been coddling crazies for a long time.

One striking aspect of the Capitol Hill putsch was that none of the rioters’ grievances had any basis in reality.

No, the election wasn’t stolen — there is no evidence of significant electoral fraud. No, Democrats aren’t part of a satanic pedophile conspiracy. No, they aren’t radical Marxists — even the party’s progressive wing would be considered only moderately left of center in any other Western democracy.

So all the rage is based on lies. But what’s almost as striking as the fantasies of the rioters is how few leading Republicans have been willing, despite the violence and desecration, to tell the MAGA mob that their conspiracy theories are false.

Bear in mind that Kevin McCarthy, the House minority leader, and two-thirds of his colleagues voted against accepting the Electoral College results even after the riot. (McCarthy then shamelessly decried “division,” saying that “we must call on our better angels.”)

Or consider the behavior of leading Republicans who aren’t usually considered extremists. On Sunday Senator Rob Portman declared that we need to “restore confidence in the integrity of our electoral system.” Portman isn’t stupid; he has to know that the only reason so many people doubt the election results is that members of his party deliberately fomented that doubt. But he’s still keeping up the pretense.

And the cynicism and cowardice of leading Republicans is, I would argue, the most important cause of the nightmare now enveloping our nation.

Of course we need to understand the motives of our homegrown enemies of democracy. In general, political scientists find — not surprisingly, given America’s history — that racial antagonism is the best predictor of willingness to countenance political violence. Anecdotally, personal frustrations — often involving social interactions, not “economic anxiety” — also seem to drive many extremists.

But neither racism nor widespread attraction to conspiracy theories is new in our political life. The worldview described in Richard Hofstadter’s classic 1964 essay “The Paranoid Style in American Politics” is barely distinguishable from QAnon beliefs today.

So there’s only so much to be gained from interviewing red-hatted guys in diners; there have always been people like that. If there are or seem to be more such people than in the past, it probably has less to do with intensified grievances than with outside encouragement.

For the big thing that has changed since Hofstadter wrote is that one of our major political parties has become willing to tolerate and, indeed, feed right-wing political paranoia.

This coddling of the crazies was, at first, almost entirely cynical. When the G.O.P. began moving right in the 1970s its true agenda was mainly economic — what its leaders wanted, above all, were business deregulation and tax cuts for the rich. But the party needed more than plutocracy to win elections, so it began courting working-class whites with what amounted to thinly disguised racist appeals.

Not incidentally, white supremacy has always been sustained in large part through voter suppression. So it shouldn’t be surprising to see right-wingers howling about a rigged election — after all, rigging elections is what their side is accustomed to doing. And it’s not clear to what extent they actually believe that this election was rigged, as opposed to being enraged that this time the usual vote-rigging didn’t work.

But it’s not just about race. Since Ronald Reagan, the G.O.P. has been closely tied to the hard-line Christian right. Anyone shocked by the prevalence of insane conspiracy theories in 2020 should look back to “The New World Order,” published by Reagan ally Pat Robertson in 1991, which saw America menaced by an international cabal of Jewish bankers, Freemasons and occultists. Or they should check out a 1994 video promoted by Jerry Falwell Sr. called “The Clinton Chronicles,” which portrayed Bill Clinton as a drug smuggler and serial killer.

So what has changed since then? For a long time Republican elites imagined that they could exploit racism and conspiracy theorizing while remaining focused on a plutocratic agenda. But with the rise first of the Tea Party, then of Donald Trump, the cynics found that the crazies were actually in control, and that they wanted to destroy democracy, not cut tax rates on capital gains.

And Republican elites have, with few exceptions, accepted their new subservient status.

You might have hoped that a significant number of sane Republican politicians would finally say that enough is enough, and break with their extremist allies. But Trump’s party didn’t balk at his corruption and abuse of power; it stood by him when he refused to accept electoral defeat; and some of its members are responding to a violent attack on Congress by complaining about their loss of Twitter followers.

And there’s no reason to believe that the atrocities yet to come — for there will be more atrocities — will make a difference. The G.O.P. has reached the culmination of its long journey away from democracy, and it’s hard to see how it can ever be redeemed.

America’s billionaires take center stage in national politics, colliding with populist Democrats

The political and economic power wielded by the approximately 750 wealthiest people in America has become a sudden flash point in the 2020 presidential election, as the nation’s billionaires push back with increasing ferocity against calls by liberal politicians to vastly reduce their fortunes and clout.

On Thursday, Michael Bloomberg, a billionaire and former mayor of New York City, took steps to enter the presidential race, a move that would make him one of four billionaires who either plan to seek or have expressed interest in seeking the nation’s highest office in 2020. His decision came one week after Sen. Elizabeth Warren (D-Mass.) proposed vastly expanding her “wealth tax” on the nation’s biggest wealth holders and one month after Sen. Bernie Sanders (I-Vt.) said America should not have any billionaires at all.

The populist onslaught has ensnared Facebook founder Mark Zuckerberg and Microsoft co-founder Bill Gates, led to billionaire hand-wringing on cable news, and sparked a panicked discussion among wealthy Americans and their financial advisers about how to prepare for a White House controlled by populist Democrats.

Past presidential elections have involved allegations of class warfare, but rarely have those debates centered on such a small subset of people.

“For the first time ever, we are having a national political conversation about billionaires in American life. And that is because many people are noticing the vast differences in wealth and opportunity,” said Timothy Naftali, a historian at New York University.

The growing hostilities between the ascendant populist wing of the Democratic Party and the nation’s tech and financial elite have spilled repeatedly into public view over the past several months, but they reached a crescendo last week with news that Bloomberg may enter the Democratic primary. With the stock market at an all-time high, the debate about wealth accumulation and inequality has become a top issue in the 2020 campaign.

The leaders of the anti-billionaire populist surge, Warren and Sanders, have cast their plans to vastly increase taxes on the wealthy as necessary to fix several decades of widening inequality and make necessary investments in health care, child care spending and other government programs they say will help working-class Americans.

Financial disparities between the rich and everyone else have widened over the past several decades in America, with inequality returning to levels not seen since the 1920s, as the richest 400 Americans now control more wealth than the bottom 60 percent of the wealth distribution, according to research by Gabriel Zucman, a left-leaning economist at the University of California at Berkeley. The poorest 60 percent of America has seen its share of the national wealth fall from 5.7 percent in 1987 to 2.1 percent in 2014, Zucman found.

But the efforts at redistribution pushed by Warren and Sanders have elicited a fierce and sometimes personal backlash from the billionaire class who stand to lose the most. At least 16 billionaires have in recent months spoken out against what they regard as the danger posed by the populist Democrats, particularly over their proposals to enact a “wealth tax” on vast fortunes, with many expressing concern they will blow the election to Trump by veering too far left.

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Bloomberg’s potential presidential bid follows that of fellow billionaires Tom Steyer, a major Democratic donor, and former Starbucks CEO Howard Schultz, who in September suspended his independent presidential bid. Steyer has proposed his own wealth tax, but Schultz ripped the idea as “ridiculous,” while Bloomberg suggested it was not constitutional and raised the prospect of America turning into Venezuela.

Piling on against the wealth tax have been corporate celebrities from Silicon Valley and Wall Street. Zuckerberg suggested Sanders’s call to abolish billionaires could hurt philanthropies and scientific research by giving the government too much decision-making power. Microsoft co-founder Gates criticized Warren’s wealth tax and mused about its impact on “the incentive system” for making money.

David Rubenstein, the billionaire co-founder of the Carlyle Group, told CNBC that a wealth tax would not “solve all of our society’s problems” and raised questions about its practicality. Also appearing on CNBC, billionaire investor Leon Cooperman choked up while discussing the impact a wealth tax could have on his family.

Amazon founder Jeff Bezos, a multi-billionaire and the world’s richest man, asked Bloomberg months ago to consider running for president in 2020, Recode reported Saturday. A Bloomberg spokesman did not immediately return a request to confirm the call. (Bezos is the owner of The Washington Post.) An Amazon spokeswoman did not respond to a request for comment.

“I don’t need Elizabeth Warren, or the government, giving away my money,” Cooperman said. “[Warren] and Bernie Sanders are presenting a lot of ideas to the public that are morally, and socially, bankrupt.”

Then there is perhaps the most prominent wealthy person of all likely to stand in the way of populist Democrats’ proposals: President Trump. Asked about the wealth tax, a White House spokesman declined to comment directly on the proposal but said in an email, “President Trump has been very clear: America will never be a socialist country.”

But there are signs the pushback is having little impact on nixing the idea in Democrats’ minds. Rep. Brendan Boyle (D-Pa.), who has endorsed Joe Biden for the Democratic nomination, told The Washington Post he is crafting a new wealth tax proposal to introduce in the House of Representatives. Boyle’s involvement suggests the idea has broader political support among Democrats than previously thought.

Warren’s campaign has created a tax calculator that shows how much money multimillionaires would pay under her plan. The initial wealth tax raised by Warren would raise close to $3 trillion over 10 years — enough money to fund universal child care, make public colleges and universities tuition-free, and forgive a majority of the student debt held in America, according to some nonpartisan estimates.

America has long had rich people, but economists say the current scale of inequality may be without precedent. The number of billionaires in America swelled to 749 in 2018, a nearly 5 percent jump, and they now hold close to $4 trillion collectively.

“The hyper concentration of wealth within the top 0.1 percent is a mortal threat to the American economy and way of life,” Boyle said in an interview. “If you work hard and play by the rules, then you should be able to get ahead. But the recent and unprecedented shift of resources to billionaires threatens this. A wealth tax on billionaires is fair and, indeed, necessary.”

But conservatives and even many Democrats have raised a number of objections to the wealth tax, arguing it could be easily skirted and may have limited political appeal. Microsoft’s Gates, famous for his philanthropic efforts, joked to the New York Times that it could erase his entire fortune. Sen. Chris Van Hollen (D-Md.) and Rep. Don Beyer (D-Va.) this week proposed a surtax on couples earning more than $2 million a year to address what they framed as unfairness in the tax code exacerbated by the Republican tax cuts, while stopping short of the starker wealth tax.

In an email, Bloomberg adviser Howard Wolfson denied that the prospect of paying the wealth tax factors into the former mayor’s interest in running for president: “Mike’s not worried about what would happen if Elizabeth Warren won. He’s worried about what would happen if Donald Trump won.”

Still, the ultrarich have still taken notice of the threat, according to interviews with half a dozen financial planners and wealth managers.

Kathryn Wylde, president of the Partnership for New York City, whose membership includes many of the country’s biggest financial firms, said members of the business community are “agonizing” over the prospect of having to choose between Warren and Trump in the general election.

“A lot of people in the Wall Street crowd still think the world is top-down,” Wylde said. “They think the people at the top of the pecking order are still making the decisions or driving the debate, as opposed to the new reality of grass-roots mobilization. They don’t realize the way pushback to their criticism goes viral.”

Lance Drucker, president and CEO of Drucker Wealth Management, said he has recently heard alarm from many of his millionaire clients over plans like Warren’s to implement a wealth tax on fortunes worth more than $50 million.

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“Honestly, it’s only been the last month when people started getting worried,” said Drucker in an October interview. “These tax proposals are scaring the bejeezus out of people who have accumulated a lot of wealth.”

Some financial planners are urging wealthy clients to transfer millions to their offspring now, before Democrats again raise estate taxes. Attorneys have begun looking at whether a divorce could help the super-rich avoid the wealth tax. And some wealthy people are asking whether they should consider renouncing their U.S. citizenship and moving to Europe or elsewhere abroad ahead of Democrats’ potential tax hikes.

“You’re hearing it already,” said Jonathan Lachowitz, a financial planner at White Lighthouse Investment Management, who said he has heard discussions about leaving the country and renouncing citizenship or other legal tax planning moves due to Democrats’ tax plans from several multimillionaires. “As the frustration mounts and tax burdens rise, people will consider it, just the way you have New Yorkers moving to Florida.”

Tax Cuts for the Wealthy Make Inequality Worse

As the rich have gotten richer, U.S. tax policy became more regressive.

Here’s a short test of your value judgments. (There’s no right answer.) If free markets start dishing out increasingly unequal pretax incomes, should the government

  • ignore it,
  • mitigate it by making the tax system more progressive, or
  • exacerbate it by making the tax system less progressive?

The question isn’t hypothetical. And you may be surprised to learn that the U.S. political system has given a clear answer: Exacerbate it.

In September, the U.S. Census Bureau released two important reports containing data on inequality. First came the annual report on poverty and income inequality, based on the Current Population Survey, which showed inequality in 2018 just a hair’s breadth below the all-time high set in 2017. This finding received little coverage.

But the media snapped to attention about two weeks later, when the bureau released different data, this time from the American Community Survey, showing that inequality in 2018 surpassed last year’s high. New records get attention.

Superficially, it sounds as if we have conflicting data: One measure of inequality points up while the other points down. But the differences between the two measures are tiny. By either measure, income inequality in America now stands at, or just a tad below, its all-time high. The essential fact is that inequality has been rising for almost 40 years. Whether the high-water mark came in 2017 or 2018 is immaterial.

What about tax progressivity? Two economists at the University of California, Berkeley, Emmanuel Saez and Gabriel Zucman, just published an important new book, “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay.” Perhaps the most stunning finding: “For the first time in the past hundred years, the working class today pays higher tax rates than billionaires.”

Chew on that for a moment. You may remember Warren Buffett bemoaning that he paid a lower average tax rate than his secretary. Apparently, he wasn’t alone.

Reaching this conclusion took a lot of number-crunching. The federal personal income tax, which gets the most attention, is certainly progressive. But Messrs. Saez and Zucman went beyond that measure in their analysis. They took great pains to evaluate all federal, state and local taxes (including the highly regressive Trump tax cuts), and to attribute to shareholders tax payments by corporations. This last adjustment is crucial because most of the ultrarich earn their money from investments, not paychecks.

Messrs. Saez and Zucman also painstakingly traced tax records as far back as possible—in some cases, all the way to 1913, when the 16th Amendment allowed a federal income tax. These efforts found that the average tax rate (taxes as a percentage of income) on the top 0.1% of income earners rose from about 19% in 1913 to an average of 53% between 1930 and 1974. An “Age of Progressivity,” you might call it. After that, however, policy reversed, and the tax rate on the upper 0.1% has now fallen to about 31%.

For the 400 highest earners, whose taxes can be traced back only to 1960, the drop was a veritable implosion: from 56% in 1960 to 23% today. As a consequence, working-class Americans now pay the tax collector a slightly larger share of their incomes (about 25%) than do the richest 400, who earn more than $450 million a year on average. Does that strike you as fair?

How did this happen? Messrs. Saez and Zucman find that the biggest driver was the collapse of the corporate tax as a source of revenue, followed by the near-death of the estate tax. Both were policy choices.

When we juxtapose the data on inequality with the data on taxes, a sad story emerges. Since about 1980, the market has been handing out increasingly unequal rewards in the form of pretax incomes. This trend toward greater inequality isn’t uniquely American—within-country inequality has risen in most advanced market economies. But instead of mitigating that trend by making the tax system more progressive, America’s political system did precisely the opposite. The present Age of Inequality is also an Age of Regressivity.

One can perhaps excuse Ronald Reagan, who couldn’t have known at the time of the 1981 tax cuts that the market would produce more inequality for decades. But by the time of the 2001 and 2003 tax cuts, George W. Bush’s team certainly knew that. And by 2017, when Donald Trump hammered the latest tax regressivity nail into the inequality coffin, virtually every sentient American knew that inequality was at or near a historic high.

Since it’s football season, we should probably call those tax changes “unnecessary roughness.” On the field, the referee would blow the whistle and penalize the culprits 15 yards. But our political system seems to impose no penalty for piling on. That’s just sad.

Mr. Blinder is a professor of economics and public affairs at Princeton University and a former vice chairman of the Federal Reserve.

Bernie Sanders Calls for 8% Wealth Tax on Richest Americans

Plan would increase federal revenue by about 10%—all from around 180,000 households

Presidential candidate Bernie Sanders proposed an annual wealth tax topping out at 8% for the richest Americans, offering the farthest-reaching Democratic plan to pay for expanded government programs and break up concentrated fortunes.

Mr. Sanders’ plan would hit more households and raise more money than the tax proposed by Sen. Elizabeth Warren of Massachusetts, his chief rival for progressive voters. According to an analysis by economists who consulted with both campaigns, Mr. Sanders’ plan would generate $4.35 trillion over a decade, compared with Ms. Warren’s $2.75 trillion.

Mr. Sanders’ plan would increase federal revenue by about 10%, all from around 180,000 households.

“Enough is enough,” Mr. Sanders, a senator from Vermont, said Tuesday. “We are going to take on the billionaire class, substantially reduce wealth inequality in America and stop our democracy from turning into a corrupt oligarchy.”

‘Enough is enough,’ Sen. Sanders said. ‘We are going to take on the billionaire class, substantially reduce wealth inequality in America and stop our democracy from turning into a corrupt oligarchy.’ PHOTO: GERARDO BELLO/ASSOCIATED PRESS
The tax would apply to married couples with net worth of at least $32 million and individuals with net worth of at least $16 million. The rate would start at 1% per year and rise to 8% for married couples with assets of least $10 billion. That 8% rate would mean that megabillionaires who don’t earn at least an 8% return would see their fortunes shrink, and Mr. Sanders said Tuesday that there should be no billionaires.

During this election cycle, Democrats have offered more expansive proposals to tax the super-rich than they did in years past. That is in part a reaction to income and wealth disparities, and it is also an attempt to fill what they see as gaps in the income-tax system.

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Under the current tax code, gains in wealth aren’t taxed as income unless people sell assets and realize gains. Unrealized gains also escape income taxation when a person dies, though the estate tax may still apply.

But implementing a wealth tax would face challenges. Such a change would require new rules and procedures for determining wealth and additional Internal Revenue Service resources to prevent tax avoidance and tax evasion. A wealth tax would also have unknown effects on economic growth and could be declared unconstitutional because courts could declare it a direct tax that would have to be apportioned among states according to their population.

Mr. Sanders calls for imposing an exit tax of up to 60% on wealthy people who renounce their U.S. citizenship. He would also expand the IRS to audit at least 30% of people in the lowest wealth-tax bracket and audit all billionaires every year.

Analysts have questioned whether wealth taxes would actually raise as much money as the campaigns estimate, both because of tax avoidance and because of disagreements over how much wealth is concentrated at the top of the distribution.

“These wealth taxes raise a lot of money, perhaps not as much as the advocates hope,” said Janet Holtzblatt, a senior fellow at the Tax Policy Center, a Washington group run by a former Obama administration official.

Notes on Excessive Wealth Disorder

How not to repeat the mistakes of 2011.

In a couple of days I’m going to be participating in an Economic Policy Institute conference on “excessive wealth disorder” — the problems and dangers created by extreme concentration of income and wealth at the top. I’ve been asked to give a short talk at the beginning of the conference, focusing on the political and policy distortions high inequality creates, and I’ve been trying to put my thoughts in order. So I thought I might as well write up those thoughts for broader dissemination.

While popular discourse has concentrated on the “1 percent,” what’s really at issue here is the role of the 0.1 percent, or maybe the 0.01 percent — the truly wealthy, not the “$400,000 a year working Wall Street stiff” memorably ridiculed in the movie Wall Street. This is a really tiny group of people, but one that exerts huge influence over policy.

Where does this influence come from? People often talk about campaign contributions, but those are only one channel. In fact, I’d identify at least four ways in which the financial resources of the 0.1 percent distort policy priorities:

1. Raw corruption. We like to imagine that simple bribery of politicians isn’t an important factor in America, but it’s almost surely a much bigger deal than we like to think.

2. Soft corruption. What I mean by this are the various ways short of direct bribery politicians, government officials, and people with policy influence of any kind stand to gain financially by promoting policies that serve the interests or prejudices of the wealthy. This includes the revolving door between public service and private-sector employment, think-tank fellowships, fees on the lecture circuit, and so on.

3. Campaign contributions. Yes, these matter.

4. Defining the agenda: Through a variety of channels — media ownership, think tanks, and the simple tendency to assume that being rich also means being wise — the 0.1 percent has an extraordinary ability to set the agenda for policy discussion, in ways that can be sharply at odds with both a reasonable assessment of priorities and public opinion more generally.

Of these, I want to focus on item (4), not because it’s necessarily the most important — as I said, I suspect that raw corruption is a bigger deal than most of us can imagine — but because it’s something I think I know about. In particular, I want to focus on a particular example that for me and others was a kind of radicalizing moment, a demonstration that extreme wealth really has degraded the ability of our political system to deal with real problems.

The example I have in mind was the extraordinary shift in conventional wisdom and policy priorities that took place in 2010-2011, away from placing priority on reducing the huge suffering still taking place in the aftermath of the 2008 financial crisis, and toward action to avert the supposed risk of a debt crisis. This episode is receding into the past, but it was extraordinary and shocking at the time, and could all too easily be a precursor to politics in the near future.

Let’s talk first about the underlying economic circumstances. At the beginning of 2011, the U.S. unemployment rate was still 9 percent, and long-term unemployment in particular was at extraordinary levels, with more than 6 million Americans having been out of work for 6 months or more. It was an ugly economic situation, but its causes were no mystery. The bursting of the housing bubble, and the subsequent attempts of households to reduce their debt, had let to a severe shortfall of aggregate demand. Despite very low interest rates by historical standards, businesses weren’t willing to invest enough to take up the slack created by this household pullback.

Textbook economics offered very clear advice about what to do under these circumstances. This was exactly the kind of situation in which deficit spending helps the economy, by supplying the demand the private sector wasn’t. Unfortunately, the support provided by the American Recovery and Reinvestment Act — the Obama stimulus, which was inadequate but had at least cushioned the effects of the slump — peaked in mid-2010 and was in the process of falling off sharply. So the obvious, Economics 101 move would have been to implement another significant round of stimulus. After all, the federal government was still able to borrow long-term at near-zero real interest rates.

Somehow, however, over the course of 2010 a consensus emerged in the political and media worlds that in the face of 9 percent unemployment the two most important issues were … deficit reduction and “entitlement reform,” i.e. cuts in Social Security and Medicare. And I do mean consensus. As Ezra Klein noted, “the rules of reportorial neutrality don’t apply when it comes to the deficit.” He cited, for example, Mike Allen asking Alan Simpson and Erskine Bowles “whether they believed Obama would do ‘the right thing’ on entitlements — with ‘the right thing’ clearly meaning ‘cut entitlements.’”

So where did this consensus come from? To be fair, the general public has never bought into Keynesian economics; as far as I know, most voters, if asked, will always say that the budget deficit should be reduced. In November 1936, just after FDR’s reelection, Gallup asked voters whether the new administration should balance the budget; 65 percent said yes, only 28 percent no.

But voters tend to place a relatively low priority on deficits as compared with jobs and the economy. And they overwhelmingly favor spending more on health care and Social Security.

The rich, however, are different from you and me. In 2011 the political scientists Benjamin Page, Larry Bartels, and Jason Seawright managed to survey a group of wealthy individuals in the Chicago area. They found striking differences between this group’s policy priorities and those of the public at large. Budget deficits topped the list of problems they considered “very important,” with a third considering them the “most important” problem. While the respondents also expressed concern about unemployment and education, “they ranked a distant second and third among the concerns of wealthy Americans.”

And when it came to entitlements, the policy preferences of the wealthy were clearly at odds with those of the general public. By large margins, voters at large wanted to expand spending on health care and Social Security. By almost equally large margins, the wealthy wanted to reduce spending on those same programs.

So what was the origin of the conventional-wisdom consensus that emerged in 2010-2011 — a consensus so overwhelming that leading journalists abandoned the conventions of reportorial neutrality, and described austerity policies as the self-evident “right thing” for politicians to be doing? What happened, essentially, was that the political and media establishment internalized the preferences of the extremely wealthy.

Now, 2011 was an especially dramatic example of how this happens, but it wasn’t unique. In their recent book “Billionaires and Stealth Politics,” Page, Seawright, and Matthew Lacombe point out the enduring effects of plutocratic political influence on the Social Security debate: “Despite the strong support among most Americans for protecting and expanding Social Security benefits, for example, the intense, decades-long campaign to cut or privatize Social Security that was led by billionaire Pete Peterson and his wealthy allies appears to have played a part in thwarting any possibility of expanding Social Security benefits. Instead, the United States has repeatedly come close (even under Democratic Presidents Clinton and Obama) to actually cutting benefits as part of a bipartisan ‘grand bargain’ concerning the federal budget.”

And here’s the thing: While we don’t want to romanticize the wisdom of the common man, there’s absolutely no reason to believe that the policy preferences of the wealthy are based on any superior understanding of how the world works. On the contrary, the wealthy were obsessed with debt and uninterested in mass unemployment at a time when deficits weren’t a problem — were, indeed, part of the solution — while unemployment was.

And the widespread belief among the wealthy that we should raise the retirement age is based, literally, on failure to understand how the other half lives (or, actually, doesn’t). Yes, life expectancy at age 65 has gone up, but overwhelmingly for the upper part of the income distribution. Less affluent Americans, who are precisely the people who depend most on Social Security, have seen little rise in life expectancy, so there is no justification for forcing them to work longer.

Where do the preferences of the wealthy come from? You don’t have to be a vulgar Marxist to recognize a strong element of class interest. The push for austerity was clearly linked to a desire to shrink the tax-and-transfer state, which in all advanced countries, even America, is a significant force for redistribution away from the wealthy toward citizens with lower incomes.

You can see the true goals of austerity a couple of ways. First, by comparison with other advanced countries the U.S. has low taxes and low social spending, yet almost all the energy of self-proclaimed deficit hawks was expended on demands for reduced spending rather than increased taxes. Second, it’s striking how much less deficit hysteria we’re hearing now than we did seven years ago. The full-employment budget deficit now is about as large, as a share of GDP, as it was in early 2012, when unemployment was still above 8 percent. But this deficit, although far less justified by macroeconomic considerations, was created by tax cuts — and somehow the deficit hawks are fairly quiet.

No doubt many wealthy backers of tax cuts for themselves and benefit cuts for others manage to convince themselves that this is in everyone’s interest. People are in general good at that sort of self-delusion. The fact remains that the wealthy, on average, push for policies that benefit themselves even when they often hurt the economy as a whole. And the sheer wealth of the wealthy is what empowers them to get a lot of what they want.

So what does this imply going forward? First, in the near term, both during the 2020 election and after, it’s going to be really important to ride herd on both centrist politicians and the media, and not let them pull another 2011, treating the policy preferences of the 0.1 percent as the Right Thing as opposed to, well, what a certain small class of people want. There’s a fairly long list of things progressives have recently advocated that the usual suspects will try to convince everyone are crazy ideas nobody serious would support, e.g.

  • A 70 percent top tax rate

  • A wealth tax on very large fortunes

  • Universal child care

  • Deficit-financed spending on infrastructure

You don’t have to support any or all of these policy ideas to recognize that they are anything but crazy. They are, in fact, backed by research from some of the world’s leading economic experts. Any journalist or centrist politician who treats them as self-evidently irresponsible is doing a 2011, internalizing the prejudices of the wealthy and treating them as if they were facts.

But while vigilance can mitigate the extent to which the wealthy get to define the policy agenda, in the end big money will find a way — unless there’s less big money to begin with. So reducing the extreme concentration of income and wealth isn’t just a desirable thing on social and economic grounds. It’s also a necessary step toward a healthier political system.