Before the ink was dry on our new tax bill, outraged blue states were screaming about the cap on the deductibility of state and local taxes. Their governments were also frantically seekingways around it, and small wonder. For decades, high-tax states with a lot of wealthy residents enjoyed a hefty subsidy from the rest of America.
.. Over the past few decades, the United States has undergone “the Big Sort,” the clumping of the electorate into demographically, professionally and politically homogenous neighborhoods. Clinton voters have their Zip codes, and Trump voters theirs, and ever more rarely do the twain meet.
.. No, the money for American-style social democracy is all supposed to come from the rich. “I’ve been frustrated with liberals,” says Len Burman of the Tax Policy Center. “They really do just want to raise all the revenue from rich people, and they don’t understand that that really constrains what they can do in terms of financing the safety net.”
.. Sen. Bernie Sanders (I-Vt.) will keep promising big new programs with laughably inadequate financing mechanisms.. Blue-state professionals have enjoyed a disproportionate share of the prosperity gains over the past few decades; if they want a bigger government, they’ll have to give up those gains to fund it.
What’s Been Stopping the Left?
If progressive political parties had pursued a bolder agenda in the face of widening inequality and deepening economic anxiety, perhaps the rise of right-wing, nativist political movements might have been averted. So why didn’t they? Why were democratic political systems not responsive early enough to the grievances that autocratic populists have successfully exploited – inequality and economic anxiety, decline of perceived social status, the chasm between elites and ordinary citizens? Had political parties, particularly of the center left, pursued a bolder agenda, perhaps the rise of right-wing, nativist political movements might have been averted.
.. Part of the reason for this, at least in the US, is that the Democratic Party’s embrace of identity politics (highlighting inclusiveness along lines of gender, race, and sexual orientation) and other socially liberal causes came at the expense of the bread-and-butter issues of incomes and jobs. As Robert Kuttner writes in a new book, the only thing missing from Hillary Clinton’s platform during the 2016 presidential election was social class.
.. One explanation is that the Democrats (and center-left parties in Western Europe) became too cozy with big finance and large corporations. Kuttner describes how Democratic Party leaders made an explicit decision to reach out to the financial sector following President Ronald Reagan’s electoral victories in the 1980s. Big banks became particularly influential not just through their financial clout, but also through their control of key policymaking positions in Democratic administrations. The economic policies of the 1990s might have taken a different path if Bill Clinton had listened more to his labor secretary, Robert Reich, an academic and progressive policy advocate, and less to his Treasury secretary, Robert Rubin, a former Goldman Sachs executive.
.. Until the late 1960s, the poor generally voted for parties of the left, while the wealthy voted for the right. Since then, left-wing parties have been increasingly captured by the well-educated elite, whom Piketty calls the “Brahmin Left,” to distinguish them from the “Merchant” class whose members still vote for right-wing parties. Piketty argues that this bifurcation of the elite has insulated the political system from redistributive demands.
The Brahmin Left is not friendly to redistribution, because it believes in meritocracy – a world in which effort gets rewarded and low incomes are more likely to be the result of insufficient effort than poor luck.
.. Ideas about how the world works have played a role among the non-elite as well, by dampening the demand for redistribution. Contrary to the implications of the Meltzer-Richard framework, ordinary American voters do not seem to be very interested in raising top marginal tax rates or in greater social transfers.
What explains this apparent paradox is these voters’ very low levels of trust in government’s ability to address inequality. One team of economists has found that respondents “primed” by references to lobbyists or the Wall Street bailout display significantly lower levels of support for anti-poverty policies.
.. Trust in government has generally been declining in the US since the 1960s
.. But a progressive left that is able to stand up to nativist politics will have to deliver a good story, in addition to good policies.
The Trumpist Gets Trumped
Bannon thinks he created Trump, and Trump thinks he created Bannon. They had a fundamental disagreement about who was using whom, and in any such conflict, the president of the United States is going to win.
.. The Trump statement on Bannon is — of course — exaggerated and overly harsh. It nonetheless nails important things about the former White House official. He was an inveterate leaker and poisonous infighter. Some of Bannon’s energy was devoted to trying to destroy Trump’s notably noncorrupt and nonkooky national security adviser, H.R. McMaster. Most of it, though, was directed at Trump’s children and son-in-law.
.. Bannon also is a flagrant self-promoter. By any reasonable standard, it’s quite a comedown to go from working a few paces from the Oval Office to running a shoddy website devoid of true journalistic interest.
.. his fundraising just got much harder. Part of Bannon’s appeal to candidates was bringing the imprimatur of Trump, and that, too, has been dented.
.. At the beginning of 2016, it seemed that Steve Bannon could be a figure like Karl Rove or David Axelrod, a political strategist with outsize influence over policy who existed at the very top of our national politics for years. Instead, he’s been kicked to the curb more brutally than any presidential aide in modern history.
.. This, obviously, has much to do with Trump himself, who is volatile, jealous of media attention, and insistent that loyalty runs only one way, up to him.
.. He had no idea how to effect his dream of a protectionist, isolationist administration spending massively on infrastructure and raising taxes on the rich. His vision lacked support within the administration and in Washington more broadly.
.. Trump’s base is Trump’s. No one ever voted for Steve Bannon, and now he is on the wrong side of the president in whose name he has presumed to speak.