The politics of rich and poor

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Phillips, Kevin. The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath. New York: Random House. 1990. 261 pages. 13.95.


SUMMARY

--Mlinhart 21:26, 18 Apr 2006 (EDT)

Kevin Phillips asserts ‘since the formation of the Republican Party in the mid-1850s there have been ‘successive presidential party supremacies.’ (33) He identifies these as the ‘Civil War Republican era (1860-96), the industrial Republican era (1896-1932), the Democratic New Deal era (1932-68)’, and the ‘civil-disturbance Republican era (1968 and thereafter)’ (34) or at least until 1990 when this book was published. Phillips calls the 3 Republican eras ‘Republican heydays.’ (55) Phillips identifies 10 major characteristics of the heydays. They are: conservative politics, reduced voice for government, difficulties for labor, large scale economic and corporate restructuring, tax reductions, disinflation or deflation, two tier economy, concentration of wealth, increased debt and speculation and ultimately speculative implosion.’ (56-58)

According to Phillips, during the eighties, the rich got richer and the poor got poorer. He provides tables, analyses and statistics to support his observation of increasing disparity between those who gained and those who lost. For example, ‘millionaires were economic nobodies as mega-wealth ballooned out of sight.’ (155) In 1983, there were 600,000 millionaires. By 1989, there were 1.5 millionaires. The eighties were a time of economic reshuffling in the American economy. ‘Jobs and fortunes were lost in energy, mining, agriculture and portions of basic manufacturing industry.’ (166) New fortunes were made in ‘service industries, primarily communications, retail trade, food and drink, finance, insurance and real estate, business services and health.’ (167) Phillips also observes the rise of the suburbs and the decline of the inner cities as well as the increase in per capita income in the Atlantic and Pacific coastal regions and decline in the rest of the United States. (187, Chart 7) He finds ‘a disproportionate number of women, young people, blacks and Hispanics were among the decade’s casualties.’ (202)

The expanding national debt including substantial indebtedness to foreign countries in the eighties was a cause for concern. The Reagan administration needed to ‘borrow huge sums of money’ to ‘fund tax cuts, the defense buildup and 1981-82 recession spending.’ (120) Phillips points out that Nakasone in Japan and Thatcher in Great Britain also led conservative governments in the eighties. Japan was extremely strong economically as was Germany. Both countries benefited from post War American largess, the necessity for retooling and modernization and the American defensive might. By the eighties, one could wonder which countries won World War II. According to Phillips, Japanese leaders believed the principle source of United States decline was ‘imperial overreach,’ (133) and that ‘Washington was trying to maintain too great a military role. (133)

--Mlinhart 21:26, 18 Apr 2006 (EDT)


COMMENTARY

--Mlinhart 21:26, 18 Apr 2006 (EDT)

Phillips does not discuss foreign affairs extensively. In particular, there is no discussion of the Cold War or the growth of the military-industrial complex. Similarly, he ignores the baby boom effect on the American economy. His focus is primarily on American financial policy and its impact. Phillips tends to blame American lack of competitiveness internationally on Reaganomics and does not discuss the competitive edge of cheap foreign labor.

It is impossible for one who is not familiar with economic and financial statistics to evaluate Phillips assertions. They ring true, and seem relevant. In looking at the international scene, Phillips does not consider the possibility of a new era of international economy. He stresses foreign investments in the United States but has little to say about American investments in foreign countries.

As Phillips points out, extreme disparities between rich and poor have occurred before in American society. In fact, one is tempted to believe, after the many parallels that Phillips draws with the Gilded Age and the Twenties, that the inequities of the eighties were inevitable.

Phillips was a ‘GOP strategist’ (xii) under Richard Nixon and he, like John Ehrman (book) believes that Democratic Party liberalism had lost appeal. Phillips contends that voters who were fearful of ‘welfare, rising crime, inflation, tax-bracket creep and federal social engineering’ (40) resented the elite liberal movement away from ‘meat-and-potatoes economic issues’ to social, anti-war and environmental causes.’ (41) As a consequence, conservatives attracted voters by positioning themselves as anti-elite. Not surprisingly, by 1987, there was an ‘emergence of a new conservative elite.’ (42)

Phillips would undoubtedly claim he had predicted the Clinton election as evidence that the latest Republican heyday had ended just as prior heydays had with ‘speculative impulsion, populist turbulence, increased regulatory reform and some downward redistribution of wealth.’ (221) It would be interesting to know whether Phillips considers the subsequent Bush election as an aberration or a final gasp of the Reagan Republican heydays.

--Mlinhart 21:26, 18 Apr 2006 (EDT)

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