Here Comes the Revenge of the 1 Percent

I’d argue that it began with Jamie Dimon’s Christmas card. It showed the last remaining Too Big To Fail banker playing a gleeful game of tennis with his family in their palatial living room (as one does), oblivious to the damage that might be caused by balls crashing into the museum-quality art. But Ben White, who along with his Politico colleague Maggie Haberman, this week wrote the smart The Rich Strike Back, argues it began more recently, with billionaire Ken Langone’s whining that complaints against the rich today are similar to Hitler’s inciting of hatred against Jews in 1930s Germany. Wherever you put down the marker, it is clear the rich are sick of all this talk about inequality and higher taxes—and they aren’t going to take it anymore.

Apparently, politicians think it’s a message that may win over a wider public. White and Haberman’s piece makes an interesting argument that we’re seeing a shift in the Democratic playbook coming up to the midterm elections; inequality and complaining about the rich is too dour, apparently, and doesn’t poll well. Liberals will have to get a new election pitch, one that focuses on the politics of growth rather than “envy.”

What’s interesting to me is that, in some ways, Republicans seem to be going the other way. The speeches given by Rand Paul and Rick Santorum at CPAC were positively progressive in economic terms (well, aside from Santorum calling trickle down economics “spiritual”). They were all about the poor, and creating opportunity, and so on. Republicans have begun to realize that a lot of their base has fallen down the economic ladder and can’t get up. Simply invoking the usual lines about bootstrapping and allowing government to get out of the way so the American can-do spirit can take over don’t seem quite so convincing as we move into the third year of what is still the longest and weakest economic recovery of the post World War II period. The problem is, they don’t really have any new policy agenda to address those problems.

I think that one of the big issues for both parties in both the midterm elections and the presidential election in 2016 will be coming up with some convincing, post trickle-down economic message. We know those old ideas aren’t working—companies and the 1 % have never been richer, but they aren’t creating more jobs. Rather, they are buying more software to do the jobs humans used to do. At a Conference Board event yesterday looking at the effects of technology on the workforce, I was interested in to learn that even as the recovery grows stronger, many companies are considering cutting more jobs, rather than fewer, higher up the food chain, as technology allows them to be done by computers.

The problem is that if you are a politician, how do you message that? The idea of massive structural shifts in our economy that may put hundreds of millions of more jobs at risk globally, increasing unemployment, decreasing income, and possibly requiring a much stronger government safety-net (and probably higher taxes) isn’t nearly as attractive a message as, “Don’t worry – if the rich get richer, you will, eventually, too.” Sadly, it’s the truth–at least right now. And that means that nobody’s heart will bleed for the 1 % very soon.

For more on that, listen to the latest episode of WNYC’s Money Talking, where Ben White, Charlie Herman, and I discuss the issue.