Your humble blogger would have appreciated an invitation to this year’s World Economic Forum (WEF). Unfortunately, no such letter landed in my mailbox. No matter, I probably couldn’t have accepted anyhow.
The entry-level $71,000 price tag, it turns out, – travel, room, board and entertainment excluded – is a smidgen out of my league. Good thing that the WEF publication Global Risks 2011 calls attention to economic disparity (aka income and wealth inequality), both within and between countries, as the most pressing risk out there today. Are the plutocrats beginning to feel the heat?
In America, home to the highest economic inequality in the developed world today, the winds of change may have started to blow.
The American Right has for the past 30 years effectively existed as an alliance of convenience between middle-class social conservatives from the American heartland on the one hand, and members of the corporate and financial elite intent on hoarding cash on the other. The informal arrangement has proved remarkably durable, at least up until the Great Recession.*
The social conservatives got politicians who extolled the virtues of American family values, promoted constitutional bans on gay marriage and abortion, and never missed an occasion to exalt America’s exceptionalism. The corporate and financial elite got ‘Benjamins’, lots of them. To make the economics attractive, the corporate and financial elite promised what George H W Bush in 1980 mocked as ‘voodoo economics:’ tax cuts, tax cuts and just when you though there couldn’t be any more, tax cuts. This all coincided nicely with America’s unipolar moment in the post-Cold War period.
The perception was that tax cuts would pay for themselves and would only work to make everyone wealthier. In the short term they did, but over time they led to the bifurcation of American society. Legislators with the help of lobbyist disproportionately targeted the tax cuts to benefit the top income brackets, and massively so. The socially conservative wing, blinded by its reactionary ideals, got duped. Its followers have effectively voted time and again against their own economic interests.
Enter the Tea Party. They say they are mad as hell. They say it’s time to take their country back. They say it’s time to reduce spending, rein in the debt and return government to its ‘limited’ role in American society. The reality is that the Tea Party, which basically happens to be comprised of white, middle-class social conservatives from the American heartland, doesn’t really have a clue about what it wants or how it will go about getting it. The lowest common denominator of Tea Partiers, however, is that all have concluded that their long-term economic security is in peril and that the time for reform has come.
The Tea Party is so ill-informed and disorganized that its members have completely missed out on exploiting and driving home to their political advantage the biggest bailout of all – the $3.3 trillion the US Federal Reserve loaned out against largely dubious collateral almost overnight at the height of the panic by way of the emergency discount window. The official, congressionally approved $700 billion financial sector bailout (which bankers today can and do claim has largely been repaid) and President Obama’s 2009 $819 billion stimulus pale in comparison. This is not to argue that at the time the Fed shouldn’t have thrown open the gates – it had no other choice – but the Tea Party would do itself an enormous favor by getting its facts straight.
Self-appointed representatives’ superficial arguments for reducing the national deficit and debt (the Tea Party maintains that it has no leadership) further illustrate the movement’s ignorance. Cutting spending is all well and good, but where exactly? What Tea Partiers will discover once they take a hard look at the US fiscal position is that there simply isn’t that much waste, fraud and abuse around to cut. The defense budget will inevitably have to shrink. So will Medicare expenditures. But choices regarding these areas are exceedingly difficult to make, as the debate over Obamacare exemplified. The former also cuts into the US’s ability to project overwhelming force wherever, whenever it wants, a psychological as much as a geostrategic blow.
Alas, we should empathize. The social conservatives have outsourced the framing and development of their economic talking points to the conservative, corporate-funded think tanks in Washington DC for the past three decades, and have permitted these groups to in effect brainwash them. As such, they’re a bit rusty.
Tax reform combined with spending cuts – in particular shifting the balance of taxation from income to consumption and making the pinnacle of the corporate and financial elite who got away with and continue to get away with the economic equivalent of murder for the past three decades pay much more in taxes (middle-class taxes will also have to rise, but proportionately far less so) – is the only real fix. The recent extension of all 2001 and 2003 Bush tax cuts, however, doesn’t inspire confidence.
Last week, CNN exclusively aired the Tea Party’s first-ever rebuttal to President Obama’s State of the Union address, presented by none other than oft-nonsensical US Congresswoman Michele Bachmann, a Republican from Minnesota. Representative Bachmann carried herself as a classic demagogue. Her aim was to exploit the festering economic malaise prevalent throughout the US today to further her own political career; she offered few to no viable policy prescriptions. But make no mistake about it, her and the Tea Party’s burgeoning popularity stand as a testament to many Americans’ desire for a fundamental change of course.
Maybe, once mindful of how they’ve been taken for a ride, Tea Partiers will consolidate their thoughts, vote for their economic interests, jettison the demagogues and become competitive among independent voters at the ballot box (times are bad but not that bad), call out the infidelities of their alliance partners and file for divorce.
* There is, in addition, an important libertarian streak that pervades the discourse and policy preferences of the American Right, and for that matter American political culture in general. It articulates the arguments ad extremum of the Right and currently informs a great deal of Tea Party activism. Its actual impact on US economic policy-making since President Reagan, however, has been more limited; if anything, it has favored the interests of the corporate and financial elite by lending legitimacy to the neoliberal economic paradigm.