At the opposite extreme from this heroic account of political change is the almost mechanistic view that growing economic inequality is the root cause of movement conservativism’s rise. As I explained in chapter 1, I began working on this book with that view, which goes something like this: Money buys influence, and as the richest few percent of Americans have grown richer thanks to unequalizing forces like technical change, they have become rich enough to buy themselves a party. In this view, the rise of movement conservatism is a by-product of rising inequality.
It’s certainly more plausible to think that the drastic rise in income inequality since the 1970s transformed American politics than to attribute it all to the brilliance of a few intellectuals. But the hypothesis that the rising concentration of income empowered the economic elite, driving the rightward shift of the GOP, runs up against a problem of timing. The sharp rightward shift of the Republican Party began before there was any visible increase in income inequality. Ronald Reagan was nominated in 1980, a year in which the rich were no richer, relative to the average American, than they had been during the Eisenhower years. In Congress the political shift began with the 1976 and 1978 elections. As Edsall points out, “the hard core of junior, ideologically committed Republican senators” grew from four in 1975 to eleven in 1979, with a corresponding shift also taking place in the House.[17] The takeover of the College Republicans by movement conservatives took place even earlier: Karl Rove was elected chairman in 1972. And the key institutions of movement conservatism were created at about the same time. For example, the Heritage Foundation was created in 1971. The Business Roundtable, which merged several loosely organized groups into a powerful lobby on behalf of procorporate politics—eventually forming the basis of Santorum’s K Street meetings—was formed in 1972, and the U.S. Chamber of Commerce was reborn as a significant lobbying force shortly after.
Add to this the evidence I laid out in chapter 7, that changes in institutions and norms lay behind much of the rise in inequality and that political change is what led to those changes in institutions and norms, and the mechanistic view that inequality moved the Republicans to the right loses most of its plausibility. It’s likely that rising income concentration reinforced the rightward trend of the GOP, as the number and wealth of donors able to lavish funds on suitably hard-line politicians grew. But something else must have gotten the process going.
That something, I believe, is the constellation of forces described in chapters 6 and 7. To recapitulate the story: In the late 1950s and early 1960s, the “new conservatives,” the narrow, elitist group centered around the National Review, grew into a serious movement by merging with other factions unhappy with the moderate, middle-class America of the postwar years. Fervent anticommunists found in movement conservatism kindred spirits who shared their fears. People outraged by the idea of other people receiving welfare found a movement that could make their resentment politically respectable. Businessmen furious at having to deal with unions found a movement that could turn their anger into effective political action.
This convergence of forces was strong enough to nominate Barry Goldwater, but only because the Republican establishment was caught by surprise. And Goldwater lost the election by a landslide. Nonetheless the movement went on, and learned. Reagan taught the movement how to clothe elitist economic ideas in populist rhetoric. Nixon, though not a movement conservative, showed how the dark side of America—cultural and social resentments, anxieties over security at home and abroad, and, above all, race—could be exploited to win elections.
That last part was crucial. The ability to turn hard-right positions into a winning strategy, not a futile protest, brought in the large-scale funding that created the movement conservative institutions—the “vast right-wing conspiracy” we know today.
That, however, brings us to the second puzzle I identified early in this chapter: Why have advocates of a smaller welfare state and regressive tax policies been able to win elections, even as growing income inequality should have made the welfare state more popular? That’s the subject of the next chapter.
9 WEAPONS OF MASS DISTRACTION
Voters don’t vote solely in their own self-interest—in fact a completely self-interested citizen wouldn’t bother voting at all, since the cost of going to the polling place outweighs the likely effect of any individual’s vote on his or her own well-being. Some people may vote against “big government” on principle, even though they’re likely to be net beneficiaries of government programs, while others may support generous social programs they themselves aren’t likely to need. Yet we would expect the preferences of voters to reflect their self-interest to some extent. And they do: Voters in the bottom third of the income distribution are considerably more likely to favor higher government spending, government job programs, and so on than are voters in the top third.[1] For “big government”—the welfare state—does two things. First, it’s a form of insurance: It protects people from some of the risks of life, assuring them that whatever happens they won’t starve in their later years or, if they’re over sixty-five, be unable to afford an operation. Second, it broadly redistributes income downward.
Consider, for example, the effects of Medicare. Medicare is a very effective form of social insurance. It provides peace of mind even to those who end up paying more into the system, in taxes and premiums, than they receive in benefits. Quite a few Americans in their late fifties or early sixties think of themselves as trying to hang on until they reach Medicare—paying health insurance premiums they can’t afford, or living anxiously without insurance hoping not to get seriously ill, until they finally reach the magical sixty-fifth birthday.
But there’s another reason Medicare is popular. Although it’s rarely advertised as such, it’s a redistributive program that takes from an affluent minority and gives to the less affluent majority. The benefits guaranteed by Medicare are the same for everyone, but most of the taxes that support the program—which are more or less proportional to income[2]—are paid by no more than 25 percent of the population. Remember, in terms of income the United States is Lake Wobegon in reverse: Most of the people are below average. So a government program that taxes everyone while providing benefits to everyone is bound to look like a good deal to most Americans.
The redistributive aspect of Medicare is characteristic of the welfare state as a whole. Means-tested programs like Medicaid and food stamps obviously redistribute income, but so do middle-class entitlements. Americans in the bottom 60 percent of earners can expect to receive significantly more in Social Security benefits than they paid in FICA taxes, while those in the top 20 percent can expect to receive less than they paid.[3]
Given this, we should expect public opinion to move left as income inequality increases—that is, voters should become more supportive of programs that tax the rich and provide benefits to the population at large. This is to some extent borne out by polling: Even as the Republican Party was moving far to the right, public opinion surveys suggest that the public, if anything, moved slightly to the left.
The main source of information on long-term trends in U.S. public opinion is American National Election Studies, an organization that has been asking consistent questions in public polls going back, in some cases, to the 1950s. The most revealing are three questions that bear more or less directly on the size of government and the generosity of the welfare state.
2.
As with almost everything involving government finance, it’s a bit more complicated than that. Medicare Part A, which provides hospital care, is financed by a proportional tax on all earned income (but not on capital income such as dividends and capital gains.) The rest of Medicare is paid for out of general revenue, which mostly means the personal income tax, a strongly progressive tax that is mainly paid by the richest 10 percent of households.
3.
See Karen Smith and Eric Toder, “Lifetime Distributional Effects of Social Security Retirement Benefits,” paper prepared for the Third Annual Joint Conference for the Retirement Research Consortium, “Making Hard Choices About Retirement,” May 17–18, 2001, Washington, D.C.