Tuesday, July 10, 2007

After the Poverty of Clintonism

From the time LBJ’s “War on Poverty” fizzled out soon after it began, thanks largely to his war in Vietnam, eradicating poverty has been off the political agenda. In this urgent matter, as in so many others, Democrats have been only slightly less evil than Republicans. Republican malign neglect peaked during the Reagan administration and has remained more or less constant ever since. If “compassionate conservatism” was ever more than a campaign slogan for George W. Bush, it too long ago fizzled out, also thanks to a fateful war; one the compassionate conservative himself started four years ago for no defensible reason, and is still unwilling to end. The Democrats continued Reagan’s de facto war on the poor during the Clinton administration, fulfilling the Gipper’s dream of “ending welfare as we know it.” The difference is that Bill Clinton “felt the pain” of his victims, while Ronald Reagan was oblivious to everything. From as early as the Clinton administration’s Golden Age – the period between his election in November 1992 and his inauguration in January 1993, when Clinton dedicated himself to “putting people first” – the Clintons effectively melded the poor -- the idea, not the reality – into “the great forgotten middle class.” Thus, even before they completed “the Reagan revolution,” they hammered another nail into the coffin of the War on Poverty – by helping to make the poor invisible again.

It is because Clinton was so successful in obscuring the reality of “the other America” that John Edwards’ “two Americas” rhetoric is important. It raises the prospect that the pendulum will swing back. Of course, it could just be talk. So far, Edwards has not had much to say about programs directed specifically at lifting the poor out of poverty, though his (far too timid) health care plan would help. But he has broached the problem from the other side: proposing fiscal policies conducive to more just, or at least less inegalitarian, development strategies. This too is something Democrats have shied away from, especially since the Clintonites took over the party. Eager not to appear to want to “tax, tax, spend, spend,” they effectively ceded their taxing and spending policies to the Reaganites. The result is that the tax system under which we live exacerbates inequality to a degree that would have been unthinkable a generation ago. It is therefore to his credit that Edwards was out front among leading Democrats in proposing that most of the latest round of tax breaks for the very rich -- the ones George Bush installed, with substantial Democratic assistance, in his first summer in office -- be rescinded. Other leading Democrats have followed suit. But proposing a return to the status quo ante in these matters is a relatively safe position to take inasmuch as it is hard to give a populist tinge to lowering tax rates for the very rich. That’s just what Republican ideologues and publicists did in rounding up opposition to inheritance (“death”) taxes that only affect the very rich. But that was then. With the Bush presidency tanking in every respect, poor and middle class people just aren’t that gullible anymore, and neither are Cheney’s and Bush’s operatives that clever.

The harder issue is to move against the reckless malefactors of high finance who, in addition to exacerbating inequality to the detriment of the poor and for the benefit of the rich, also control electoral outcomes thanks to our very undemocratic system of campaign finance. [See “Money Matters,” July 2]. Needless to say, Edwards feeds at that trough too. Nevertheless, he seems on the verge of taking on the captains of high finance, Bush’s but also Clintonism’s “base.” Campaigning in New Hampshire, he took a timid first step. He proposed increasing taxes on private equity and hedge-fund managers by supporting the so-called Blackstone bill that would levy corporate taxes on publicly traded private-equity partnerships. He said he would also tax hedge-fund managers’ “carried interest” as ordinary income rather than at lower capita-gains rates. And he endorsed measures to end the ability of those managers to defer taxation by shifting their money to offshore entities. These are not major structural reforms; only simple applications of elementary and uncontroversial notions of justice. But they do threaten the interests of the Democratic Party’s paymasters. Should Edwards emerge as a serious threat to a Clintonite Restoration, or should Barack Obama follow his lead, one can therefore expect that sparks will fly. It has been many years, after all, since any major player from within the depths of the POP, the Party of Pusillanimity, has even contemplated doing anything to keep the rich from getting richer at everyone else’s expense. Can Edwards’ not so bold but nevertheless significant departure from the norm lead the party down the road to more serious reform? The short answer is Yes: but only if the electorate forces him to stay on track and only if the need to defeat Clintonism is kept steadfastly in mind. [See “Combat Clintonism!” April 27.] Otherwise, we’ll just end up with a Democratic candidate – and President, most likely – who will continue putting people first – the kind, that is, who go into private equity partnerships, invest in financial derivatives, and, deliberately or not, insure that “the poor will always be with us.”

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