With all this debt ceiling discussion I thought I’d break out a book review I did a few years back which may shed some light on the discussion of conservative tactics and tax discussions. Enjoy.
Conscience of a Liberal
(By Paul Krugman, 2007)
Conscience of a Liberal is something of a response thirty years old of the Barry Goldwater book of the similar name, Conscience of a Conservative. That book, which gave rise to what Krugman defines as the “movement conservatives” the sort of radicalized faction of the GOP which has essentially taken over their party. So, inasmuch as Krugman discusses the history and development of the liberal party from late 19th century, he sets out to deconstruct the conservative movement in that same time frame. Some of his major points that he works through the book are that the liberal party has always been outmatched as far as money. The conservative party has always had the deregulation and more self-interested aspects of the country in mind. Early on Krugman cites an example of this disparity by articulating the difference in the campaign spending of the 1896 presidential election between William McKinley and William Jennings Bryan. In that election, William Jennings Bryan was the first viable candidate of the modern day liberal movement that had a shot at winning the White House. Conservatives spent 3.35 million dollars to defeat him. Twice as much as the Republicans had spent in 1892, Krugman puts this dollar amount in a modern day context, “And bear in mind that in 1896 three million dollars was a lot of money: As a percentage of gross domestic product, it was the equivalent of more than $3 billion today, five times what the Bush campaign spent in 2004.” (23)
Krugman sets about analyzing the political parties by beginning with a historical approach. He begins by looking at the root of the great depression and the income disparity that was occurring at the time. Before the great depression the country was on what he terms a period called “first Gilded Age” (39) a time when the rich had mansions, houses and servants that would take care of their homes. As the depression occurred one of Roosevelt’s reactions to the stock market crashes was to begin taxing the wealthier part of the population. What Krugman defines as oligarch’s are those who were profiting off cheap labor and using the money to build masses of enormous wealth the likes, which had enormous influence over the country. This is summed up in FDR’s following quote: “We had to struggle with the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.” (59) At the time, extremely wealthy in the United States made their money from their estates and the businesses which yielded their profits. They did not, for the most part have an employ that garnered such a salary. So their taxation rates tended to be extremely high during the depression, moving from the 50% to the 80% by the time the depression ended. As time shifted away from the depression into the post depression times (something Krugman calls the great compression (39) this created a leveling of the American public, this transpired to allow a greater fluidity in the country and a boom in skilled, paid labor in the country. For a good amount of time, coupled with the New Deal legislation, which Krugman argues, is the centerpiece of the liberal agenda, the country was a level playing field with a healthy and vibrant middle class.
What has happened over the past 40 years in American politics is that the conservative movement has sought to deconstruct the New Deal initiatives and the liberal movement has done nothing but try to defend against these encroachments. Krugman makes sure to point out that there has been no corresponding liberal movement from the left (163) if there had been we’d have a whole new slate of ideas that liberals may take up but instead they have been in a constant defensive pattern.
The role of business in this country has also changed as time has gone on. There used to be a level playing field in this country but as tax policies were leveled out the country’s wealthy began to rise again. We have essentially begun to live in a second gilded age in this country with the rich becoming super rich and living in their own dimensions of reality, “by the late 1980’s something astonishing was happening in the upper reaches of the income distribution: The rich were pulling away from the merely affluent, and the super-rich were pulling away from the merely rich.” (129)
“Today’s rich had formed their own virtual country… [T]hey had build a self-contained world unto themselves, complete with their own health-care system (concierge doctors), travel network (Net Jets, destination clubs), separate economy. … The Rich weren’t just getting richer, they were becoming financial foreigners, creating their own country within a country, their own society within a society, and their economy within an economy. (246, Robert Frank)
This rise in wealth, the dismantling of the New Deal whose tax structures sought to take care of those in the country less fortunate, the global market patterns which left good paying jobs to be taken elsewhere in the world and the rise of the CEO millionaire complex which has led a seemingly unimaginable revenue stream to come into the top of a company and little at the bottom has created shocking results. In 1969, only 40 years ago GM was the largest private employer in this country and its CEO, Charles Johnson the highest paid executive, making 4.3 million dollars a year. Today, Wal-Mart is the largest employer, with over 800,000 employees and Lee Scott, chairman of Wal-Mart was paid 23 million dollars. The point here is two fold, 1) Wal-Mart has busted any attempt to unionize their employees and at the same time encouraged them to apply for government assistance because their salaries are so low and 2) Lee Scott’s salary is five times what Charles Johhnson’s salary was (adjusted to inflation). (139) This, personally is the saddest figure in Krugman’s book but his theory of why this country has not achieved national health care is, perhaps, even sadder.
Krugman looks at the debate on health care and compares to Western European countries that have health care systems for their population. His most shocking condemnation is that race is at the heart of why one political party wants to role back the new deal. (11) “The legacy of slavery, American’s original sin, is the reason we’re the only advanced economy that doesn’t guarantee health care to our citizens.” (11) The debate is seemingly around other countries that have only slivers of minorities in their country see a more “unified America” in their shared understanding. In sum, he argues that because western European countries are homogenous the mentality of universal health care being something that takes care of their own people that look like them.
Where he goes with this debate is that we tend to focus on the fact that other countries have socialized medicine in their countries, specifically the United Kingdom but this is an unfair comparison as we are only seeking to change the debate to a socialized insurance plan (218) and that we are spending more money per person in (2004) of $6102 and a life expectancy of 77.5 years old, compared to Germany $3043 and a life expectancy of 78.9 years of age. Interesting to this discussion is that conservatives don’t want a nationalized health insurance plan because it will undoubtedly be successful (228) what would more legitimize the liberal movement? “The most dangerous government programs, from a movement conservative’s point of view, are the ones that work the best and thereby legitimize the welfare state. (228)
Krugman, P. (2007) Conscience of a Liberal. New York, New York. Norton & Company