Townhall...
Voters
Want Growth, Not Income
Redistribution
by Michael Barone
Dec 29, 2011
“A
2008 election widely regarded as
heralding a shift toward the more government-friendly public sentiment
of the
New Deal and Great Society eras seems to have yielded just the reverse.”
So
writes William Galston, Brookings
Institution scholar and deputy domestic adviser in the Clinton White
House, in
the New Republic. Galston, one of the smartest political and policy
analysts
around, has strong evidence for this conclusion.
He
cites a recent Gallup poll showing
that while 82 percent of Americans think it’s extremely or very
important to
“grow and expand the economy” and 70 percent say it’s similarly
important to
“increase equality of opportunity for people to get ahead,” only 46
percent say
it’s important to “reduce the income and wealth gap between the rich
and the
poor,” and 54 percent say this is only somewhat or not important.
In
addition, by a 52 to 45 percent
margin, Americans see the gap between the rich and the poor as an
acceptable
part of the economic system rather than a problem that needs to be
fixed. In
1998, during the high-tech economic boom, Americans took the opposite
view by
the same margin.
As
Galston notes, these findings
suggest that Obama’s much-praised speech at Osawatomie, Kan., decrying
inequality, “may well reduce his chances of prevailing in a close
race.” Class
warfare politics, as I have noted, hasn’t produced a Democratic
presidential
victory in a long, long time.
Where
Galston misses a step, I think,
is that he seems to regard the move away from redistributionist
politics in
this time of economic stagnation as an anomaly in need of explanation.
He seems
to share the Obama Democrats’ assumption that economic distress would
make
Americans more supportive of, or amenable to, big government policies.
That,
after all, is what we have all
been taught by the great and widely read New Deal historians, and that
lesson
has been absorbed by generations of politicians and political pundits.
I
believe that historians have taught
the wrong lessons about the 1930s. And I believe there is a plausible
and
probably correct reason why economic distress has apparently moved
Americans to
be less rather than more supportive of big government.
To
understand the lessons of the
1930s, you need to read the election returns. Franklin Roosevelt’s big
victory
in 1932 was a massive rejection of Republicans across the board.
Republicans
lost huge ground in urban and rural areas, in the West and Midwest and
most of
the East, even in their few redoubts in the South.
In
1936, FDR won re-election by a
slightly larger margin, but with a different coalition. The rural and
small
town North returned to its long Republican allegiance, while Democrats
made
further big gains among immigrants and blue-collar workers in big
cities and
factory towns.
The
New Deal historians attributed
these gains to Roosevelt’s economic redistribution measures: high tax
rates on
high earners, the pro-union Wagner Act, Social Security. These laws --
the
so-called Second New Deal -- were passed in 1935. They replaced the
different,
non-redistributionist policies of the First New Deal that stopped the
deflationary downward spiral underway when Roosevelt took office.
The
problem with the historians’
claims is that the shifts in the electorate apparent in 1936 also are
apparent
in the 1934 off-year elections. Democrats won big that year, but
compared to
1932, they lost ground in rural areas and small towns and gained much
ground in
big cities and factory towns.
The
1936 realignment happened in 1934.
It could not have been caused by redistributionist Second New Deal
legislation
because it hadn’t been passed before November 1934.
So
why should voters be leery of
economic redistribution in times of economic distress?
Perhaps
because they realize that they
stand to gain much more from a vibrantly growing economy than from
redistribution of a stagnant economic pie. A growing economy produces
many
unanticipated opportunities. Redistribution edges toward a zero-sum
game.
They
miss growth when it is absent.
They don’t appreciate it so much when it is happening.
Roosevelt’s
1934 and 1936 victories
were won in periods of growth. After the economy shifted into recession
in
1937, New Deal Democrats fared much worse, and Roosevelt won his third
and
fourth terms as a seasoned wartime leader, not an economic
redistributor.
Lesson:
If you want redistribution,
you’d better first produce growth. Which the Obama Democrats’ policies
have failed
to do.
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