I’ve long argued that the big problem with the deficit hawks is not so much their desire to reduce the size of government, although that itself is short sighted. The big problem is that these deficit hawks only want to reduce the size of government on the backs of the poor. Thus we get calls for cutting entitlement programs, unemployment insurance, and food stamps. We don’t get calls for getting rid of “too big to fail” insurance or the Social Security tax cap or the low capital gain tax rate. Actually, we get just the opposite. Remember the Simpson-Bowles deficit reduction plan? The first thing it did was lower taxes!
The brilliant Mark Thoma discusses this problem from a different perspective over at The Fiscal Times, The Real Reason for the Fight over the Debt Limit. Basically, he argues that we are all this together. He notes that the rich don’t face the same uncertainties that the rest of us do, and that this fact needs to be acknowledged. But increases in inequality have allowed the rich to wall themselves off from the rest of society and thus have a skewed view of who the supposed takers are.
I would go much further than this. Our system is set up so that the rich are simply not allowed to fail. Ever. Look at Jack Abramoff. He was convicted of the worst kinds of crimes against his clients and democracy generally. So he went to prison. But afterwards, he was not vanquished from polite society and prevented from having a decent job. Instead, he was given a multimillion dollar book contract and is widely heralded as a truth teller. That is what happens to The Chosen in this country. They take care of their own.
I don’t think that Thoma’s argument really works, however. You are never going to convince the rich that they really should support SNAP by claiming that we are all one big happy family. More compelling is my argument in The Revolution Will Be Televised: if the rich don’t allow the rest of society a reasonable lifestyle, there will be blood. And the first people on the gallows will be the rich. That is a kind of social insurance that the rich ought to be very interested in. (Of course, they aren’t; the rich are as short sighted as anyone.)
In Rage of the Privileged, Paul Krugman says that it is worse than Thoma indicates. He notes that the rich are all for the government when it is helping the rich. He is right, of course, but it is just more proof that the rich don’t care about anyone but themselves. If we had an actual democracy, we could do something about this. But we clearly don’t. So much advantage for the rich is locked in. For example, the rich don’t want to see the military budget cut because of all the great defense contracts. But it has been easy to convince the people that we must have a huge military to protect us, even though it is really all about protecting the profits of the rich.
What’s more, we now have a political system that is paid for by the rich. Only someone who can generate a billion dollars in campaign contributions is a viable candidate for president. Is it any wonder that the most liberal candidates we generate are people like Obama who are above all protectors of the rich? These people will never willingly give up power. And as long as they are in power, they will continue to do everything they can to harm the poor. And their success matters too little on who is in power in Washington.