“Already, the current downturn is turning out to be less traumatic for wealthy and well-established people than it is marginalized groups and the poor.
The stock market is soaring, even though millions of people are out of a job. The Federal Reserve has really stepped up in terms of monetary policy to inject liquidity into the economy and keep markets afloat, while Congress hasn’t really kept up its end of the bargain. It passed the Coronavirus Aid, Relief, and Economic Securities Act, or the CARES Act, in March, but much of the support from it has dried up, and it’s not clear what, if anything, Capitol Hill plans to do next on the economy.
“The rich experience these recessions much differently than the rest of us,” Bharat Ramamurti, managing director of the Roosevelt Institute’s corporate power program, told me. “The pain is much more time-limited, it’s not as deep, and as a result, they recover much more quickly, and then they’re in a position to take advantage of the fact that other actors in the economy are still struggling and can use that to further consolidate their control and their power.””
“After returning from recess in September, Senate Republicans put forth a “skinny” stimulus to counter a much more ambitious package proposed by Democrats in the House in May. But even the GOP’s bill failed in the Senate — as Vox’s Li Zhou explained, in part because it was more of a messaging bill than a sincere effort at helping the American public. The economy isn’t as bad as some of the doomsday predictions, so some lawmakers seem to have decided more assistance isn’t necessary.”
“The most compelling evidence Hacker and Pierson cite for this argument comes from a study conducted by political scientists Margit Tavits and Joshua Potter, which looked at party platforms from 450 parties in 41 countries between 1945 and 2010. Tavits and Potter find that as inequality rises, conservative parties ratchet up their emphasis on religious and racial grievances — particularly in countries with deep racial and religious fractures. The pivot only works, Tavits and Potter say, when there is high “social demand” for ethnonationalist conflict.”
“If you survey the modern Republican Party, the figures most intent on turning it into a vehicle for ethnonationalist resentment are the least committed to the plutocratic agenda. Steve Bannon, Tucker Carlson, Sen. Josh Hawley, and 2016 candidate Donald Trump are all examples of the trend: They are, or were, explicit in their desire to sever the ties that yoke angry nationalism and a desire for a whiter America to Paul Ryan’s budget.
Conversely, the Republican figures most committed to plutocracy — like Ryan or the Koch brothers or the Chamber of Commerce — tend to back immigration reform and recoil from ethnonationalist rhetoric, and in 2016, they opposed Trump in favor of Jeb Bush and Chris Christie and Marco Rubio. They just lost on all those fronts.
Hacker and Pierson emphasize the fact that once in office, Trump abandoned populist pretense and gave the Chamber of Commerce everything it had ever wanted and more. But, as with so much else with Trump, it can be hard to distinguish decision-making from disinterest. Trump outsourced the staffing of his White House to the Koch-soaked Mike Pence and his agenda to congressional Republicans. The question, then, is whether the dissonance of his administration represents an inevitability of Republican Party politics or simply a lag between Trump demonstrating the base’s prioritization of ethnonationalist resentment and a politician who will both win and govern on those terms.”
“At key moments, Fox News tried to support immigration reform and deflate Trump, and it lost those fights and remade itself in Trump’s image. There are lines even conservative media can’t cross.”
“As Hacker and Pierson show, this is a point of true convergence between the identitarians and the plutocrats: Both have lost confidence that they can win elections democratically, so they have sought to rewrite the rules in their favor. What hold on power they retain comes from the way American politics amplifies the power of whiter, more rural, more conservative areas — and that’s given the conservative coalition a closing window in which to rig the system such that they can retain control.
America does not exist in a steady state of tension between majoritarian and minoritarian institutions. Those institutions can be changed, and they are being changed. A party in power can rewrite the rules in its own favor, and the Republican Party, at every level, is trying to do just that — using power won through white identity politics and geographic advantage, but deploying strategies patiently funded by plutocrats. As Hacker and Pierson write:
“Recent GOP moves in North Carolina show what’s possible in a closely balanced state. Republicans first took the statehouse in 2010. They quickly enlisted the leading Republican architect of extreme partisan gerrymanders, Thomas Hofeller. A mostly anonymous figure until his death in 2018, Hofeller liked to describe gerrymandering as “the only legalized form of vote-stealing left in the United States.” He once told an audience of state legislators, “Redistricting is like an election in reverse. It’s a great event. Usually the voters get to pick the politicians. In redistricting, the politicians get to pick the voters.” In 2018, North Carolina Republicans won their “election in reverse,” keeping hold of the statehouse even while losing the statewide popular vote. In North Carolina’s races for the US House, Republicans won half the statewide votes and 77 percent of the seats. A global elections watchdog ranked North Carolina’s “electoral integrity” alongside that of Cuba, Indonesia, and Sierra Leone.””
“History shows that democratic systems thrive amid responsible conservative parties — parties that make their peace with democracy and build agendas that can successfully compete for votes — and they collapse when conservative parties back themselves into defending constituencies and agendas so narrow that their only path to victory is to rig the system in their favor.
This is the cliff on which American democracy now teeters. The threat isn’t that Donald Trump will carve his face onto Mount Rushmore and engrave his name across the White House. It’s that the awkward coalition that nominated and sustains him will entrench itself, not their bumbling standard-bearer, by turning America into a government by the ethnonationalist minority, for the plutocratic minority.”
“On a global scale, inequality is declining. While it has increased within the United States, it has not grown nearly as much as people often claim. The American poor and middle class have been gaining ground, and the much-touted disappearance of the middle class has happened mainly because the ranks of the people above the middle class have swollen. And while substantially raising tax rates on higher-income people is often touted as a fix for inequality, it would probably hurt lower-income people as well as the wealthy. The same goes for a tax on wealth.
Most important: Not all income inequality is bad. Inequality emerges in more than one way, some of it justifiable, some of it not. Most of what is framed as a problem of inequality is better conceived as either a problem of poverty or a problem of unjustly acquired wealth.”
“The Congressional Budget Office (CBO) produced a report in November 2018 on the growth of household income in each of five quintiles. Between 1979 and 2015, average real income for people in the top fifth of the population rose by 101 percent, while it rose for people in the bottom quintile by “only” 32 percent. For the middle three quintiles, average real income increased by 32 percent as well.
Or at least those are the numbers if you ignore the effects of taxes and direct government transfers. But you really shouldn’t leave those out: If you’re debating whether to increase taxes on the rich and transfers to the poor, it seems important to take into account the taxation and safety net already in place. Once the CBO researchers subtracted taxes and added welfare, Social Security, and so on, the picture changed dramatically for the lowest quintile: Income rose by 79 percent. (For the middle three quintiles, it increased by 46 percent. For the highest quintile, it went up by 103 percent—slightly more than before, probably thanks to Ronald Reagan’s and George W. Bush’s tax cuts.)”
“That’s still an increase in income inequality, of course. But it’s not an inequality increase in which the poor and near-poor are worse off. They’re much better off. Everyone is.”