Let Them Eat Cake: The Compassionate Conservatism of Paul Ryan and the Republican Party

    Michael Harrington’s 1962 The Other America told the story of two countries.  One was a country of affluence, where people had enough to eat, a roof over their heads, health insurance, and the prospects  of a good life.  The other was a country where a quarter of the population lived at or below poverty, often were homeless, lacked health insurance, and whose prospects for a good life were dim at best.  Both countries were the United States.  And unfortunately 50 years later, not  much has changed, with America still  a tale of two countries–rich and poor, hopeful and hopeless.  At least this is the conclusion of recent Census Bureau study on poverty in America.  But despite this news, Paul Ryan and the Republicans want to gut food stamps and defund Obama Care. Yet the great irony is that the people they hurt the most are their own constituents.

    First, lets look at the numbers.  This past week the Census Bureau released its report  Income, Poverty, and Health Insurance Coverage in the United States: 2012.  Among the major conclusions were that the numbers of individuals in poverty in the United States had not changed much in the last year and that the numbers of individuals without health insurance had approximately remained the same.  We have made little progress in terms of economic recovery for most Americans in the last few years since the crash of 2008.  No surprise here.  But what is more startling are two other points.  First, one needs to read the report since it offers some historical benchmarks about poverty in America.  Second, it provides a picture of whose is in poverty.

    Consider the people of Michael Harrington’s Other America, When that book was published in 1962, 18% of the population or 37 million Americans lived at or below the poverty level.  For children (under 18), 23% were in poverty.  Fifty years later in 2012, 15% of the population, or 46.5 million American live at or below the poverty level.  We have 21.8% of children (under 18) in poverty with a whopping 24.4% of children under the age of six living at or below poverty.

Think about it–the richest country in the world and a quarter of our children are living in poverty.  We look like a third world country.  We are condemning a quarter of our population to a bleak future, especially when we know from other studies that the rates of economic mobility in the US have literally frozen.  By that, few people in the lowest income levels ever move out and are condemned to intergenerational poverty.  We know that they live in neighborhoods with few services and bad schools and high crime.  We have written off a quarter of our population right from the start.

But look beyond the children.  Still 15% of the population below poverty and more people today who are poor than 50 years ago.  Representative Paul Ryan (and many Republicans) look to 50 fears of  social welfare post-Great Society New Deal spending and say the trillions spent has been a wasteful sinkhole that has not succeeded and therefore want to end it.  They see a glass half empty and want to throw out the water with the glass.  They ignore that poverty was cut dramatically under the Great Society programs of the 60s until Nixon cut it back and our society began a now nearly two generation reversal on helping the poor. 

At least since Reagan we have concentrated tax cuts to benefit the rich at the expense of the rest of us and the redistributive economic policies since 1980 have largely shifted money from the poor to the affluent.  This Census Bureau report as well as others, including those by the Congressional Budget Office and many other organizations point to an America today with the greatest concentration of wealth and income since the 1920s.  It has dramatically grown in the last few decades, helped by Reagan and Bush era tax cuts. 

The point?  The social welfare have failed to reduce poverty both because they have been cut themselves while at the same time under-minded by other more powerful inegalitarian tax and economic policies.  We have made little progress in 50 years not because we tried and failed to help the poor but because we either gave up or did not do enough.

Consider a few other facts found in the report.  During the 3-year period from 2009 to 2011, approximately 31.6 percent of the population had at least one spell of poverty lasting 2 or more months.  The median household income in the US was $51,017 in 2012, down from the peak of $56,080 that occurred in 1999.  Median household incomes are essentially what they were in 1989.  Few Americans have gained any ground in the last quarter century, with there being a steady slide  that begin more or less with the Bush presidency of 2000.  Finally, we have approximately 48million individuals without health insurance.

We are a poorer and less equal nation now than in 2000.  For all of this, Paul Ryan and the Republicans want to cut food stamps and funding for Obama Care.  This merits awarding them the “Marie Antoinette Let Them Eat Cake Award” for social compassion and humanity.

But less you believe that their policy choices are only hurting Democrats, think again.  In raw numbers more white Caucasians are in poverty than people of color.  The highest poverty rates in America are in the south and rural America–the heart of the GOP base. For the South, the poverty rate remained unchanged at 16.5 percent in 2012, while the number in poverty increased to 19.1 million, up from 18.4 million in 2011. In 2012, the poverty rate and the number in poverty for the Northeast (13.6 percent and 7.5 million) and the Midwest(13.3 percent and 8.9 million) were not statistically different from 2011 estimates. Inside metropolitan statistical areas, the poverty rate and the number of people in poverty were 14.5 percent, while in rural America it was 17.7 percent in 2012.  Finally, the Northeast had the lowest uninsured rate in 2012 at 10.8 percent. The uninsured rate for the Midwest was 11.9 percent; for the West, 17.0 percent; and for the South, 18.6 percent. 
Do an overlay of electoral maps showing regions where voters supported Republicans, there you will find the highest poverty and uninsured rates and the lowest household incomes.  Either Republicans are screwing over their own constituents or for some reason those who most need the help are supporting candidates and policies they are least supportive of their own interests.

Red and Blue America is a tale of two countries.  The United States, especially Red Republican America, is paradoxically much of the other America that Michael Harrington described.  Yet it is the America that fights hardest against helping itself and others.   Whatever happened to compassionate conservatism?  I guess "Let them eat cake" is their new social philosophy.

Class Warfare and the American Dream

Note: This piece appeared in Politics in Minnesota, Capitol Report, September 29, 2011.

America is the land of dreams. The United States is lauded as the land of opportunity, the place where anyone can go from humble beginnings and become a millionaire. It is the tale of rags to riches, of the Horatio Alger story, of a nation where we can rise as far as our talent takes us. Yet dreams die hard. The reality is that America is a nation of increasing poverty, economic inequality, and decreased social mobility; at least according to a series of recent studies and reports documenting the economic woes of the United States.

The first study is from the United States Census Bureau in 2010 describing poverty and income in America. In 2010 the richest five percent of the population accounted for 21% of the income, with the top 20% receiving over 50% of the total income in the country. This compares to the bottom quintile accounting for about 3% of the total income.

A second study by the Center on Budget and Policy Priorities in 2010, drawing upon Congressional Budget Office research, found that income gap between the top one-percent of the population and everyone else more than tripled since 1973. After-tax income for the top one-percent increased by 281% between 1973 and 2007, while for middle class or middle quintile it increased by 25%, for the bottom quintile it was merely 16%. Looking beyond income to wealth, the maldistribution has not been this bad since the 1920s. According to the Institute for Policy Studies, in 2007 the top one-percent controls almost 34% of the wealth in the country, with half of the population possessing less than 3%. The racial disparities for wealth mirror those of income. Since 2007 the wealth gap has increased as the value of American homes–the single largest source of wealth for most Americans– has eroded. Studies such as the Survey of Consumer Finances by the Federal Reserve Board have similarly concluded that the wealth gap has increased since the 1980s.

But Americans dream and believe they can rise to the top–get lucky, be the Horatio Alger rags to riches story; thus our fascination with buying lottery tickets. Yet social mobility in America has ground to a halt. A 2010 Organization for Economic Cooperation and Development study found that social mobility in the United States ranked far below that of many other developed countries. Nearly half of the economic advantage parents have in the United States is transmitted to their children; a number nearly two-and-one-half times that of Australia and Canada. The biggest cause of social immobility according to the report is declining educational opportunities for many students. Other studies, including those in 2005 and 2010 in the Economist similarly point to declining social mobility in the United States that makes it difficult for individuals to rise from one social economic status to a better one. In fact, there is better than a 95% chance that children will not improve their social economic status in comparison to their parents. Few really can move on up.

Conversely poverty in America has increased. In FDR’s second inaugural speech in 1936 he spoke of a nation that was one-third ill-clothed, ill-housed, ill-fed. In the 1950s due in part to the New Deal anti-poverty programs, the poverty rate fell to 22%, with over 39 million poor persons living at or below poverty level. By 1969 Great Society programs reduced the poverty rate to 12.1%, with a further decline to in 1973 where the poverty rate was 11.1%, representing 23 million.

Yet after that, and especially beginning with the Reagan era’s retrenchment on social welfare programs, the poverty rate has continued to climb. In 1983, the poverty rate was 15.2%, in 1992, the rate was 14.5%, representing 36.8 million, and in 2003, 12.5%, representing 35.9 million. Moreover, in 1992, the poverty rate for female-headed families with children was 48.3%, and 21.9% under the age of 18 were in poverty (14.6 million children). In 2009, 14.3%, or nearly 40 million in poverty, and now the latest Census figures point to a poverty rate in 2010 of 15.1%, representing a record 46 million in poverty. The numbers are equally grim when one looks at women, children, and people of color in poverty–all record or near record numbers.

One could recount in even more detail the picture of an America with growing class differences that are fixed. We live in a world where there are clear rich and poor, with the income and wealth differences played out in terms of racial and gender disparities. We live in a nation where the privileged few go to better schools, live in safer neighborhoods, have better access to medical care, and therefore are healthier and live longer. As F. Scott Fitzgerald once stated in his play The Rich Boy: "Let me tell you about the very rich. They are different from you and me.” Yes they are–they are privileged.

Many reasons explain the growing gap between the rich and poor and America. But at the core one can point to the emasculation of the New Deal and Great Society programs that once provided income transfers to the poor. There is the dramatic cuts on effective tax rates in America that prior to the 1980s were 70% but now are less than half that such that the poor and middle class, as Warren Buffet pointed out, pay a greater percentage of their income in taxes than he does. Similar tax cuts have been gifted to corporations. As a result, the rich are asked o contribute less to society and economic inequalities that exist are not offset by tax policies and income transfers.

Moreover the war on organized labor has had its toll. Unions from the 1930s until the 1980s had a significant impact on increasing wages, benefits, and the quality of life for America. But first beginning with Reagan’s firing of the PATCO air controllers in 1981 and continuing to Wisconsin governor Scott Walker’s assault on public employees this year, unions have come to be depicted as the new welfare queens in America, blamed for declining American competitiveness and budget deficits. Never mind that successful nations such as Germany pay higher wages and benefits, many believe that the only way to future prosperity in this country lies with immiserizating the American worker.

A couple of weeks ago Republicans lambasted President Obama’s call for tax increases on the wealthy as class warfare. The Republicans deserve credit–at least they recognize that there are class differences in America and that a war exists. However, only one class is fighting–the corporate rich–while the rest society sits idly by immobilized.