Adlai Stevenson, who had reason to be skeptical of voters, said the contest between agreeable fancy and disagreeable fact was so unequal that the truth was apt to be unpopular, especially in economic matters.
Americans in 2008 would prove the thinking person’s politician from the 1950s wrong. Most people get it, and every week it seems that the only people who don’t are the men who line the stage at the Republican presidential debates and that party’s congressional leaders. They believe that salvation in all things lies in tax cuts for business and the wealthy.
That has been at the top of the agenda for all the candidates for a year, and it was their solution when Democrats and President Bush said something had to be done to rescue a crashing economy. Make the Bush tax cuts permanent, the GOP candidates chimed in unison. Only Mike Huckabee had a different wrinkle. He would rescue the economy by handing defense contractors another $200 billion a year.
It is hard to imagine politicians being more out of touch with reality. The marginal tax rates of the Walton heirs and Exxon Mobil do not show up on any list of the top concerns of American voters. Republican voters are turning to John McCain, the only candidate who opposed the Bush tax cuts because he said they would run up huge deficits. McCain defers unconvincingly to extending the tax cuts when they expire in two years.
Even Bush may glimpse the truth. He yielded to advisers who said it would be pointless to demand the extension of the tax cuts and big new tax breaks as part of a desperate stimulus package, so he proposed only temporary business tax cuts along with a big rebate check to everyone but low-income workers. Democrats, meanwhile, want to provide more direct relief to working families, but they will have to fend off the gathering vultures at the tax-writing committees seeking tax bonanzas for this or that commercial interest.
Starting this week, we will no longer hear the refrain about the economic miracle from the Bush tax cuts – the new jobs, the growth in the gross domestic product, the torrid productivity increase, the shrinking budget deficit.
By Jan. 1, after seven years and three rounds of tax cuts, the Bush economy had produced 5.9 million new jobs, a fourth of Bill Clinton’s eight-year record. The Bush economy also added $3 trillion to the national debt. Personal income tax collections were a hair more than $1 trillion in Clinton’s last year, before the first round of Bush tax cuts.
It is true that GDP, corporate profits and, yes, productivity grew briskly for three years, but it is a bonanza only for those who look at it from the top, where all the wealth accumulated. Data released in January by the Congressional Budget Office showed that income inequality had reached its highest level since the statistics were gathered in 1979. While real wages have been declining, real after-tax incomes for the top 1 percent of households increased by an average of $180,000 in 2005 alone.
Increased productivity and a robust GDP look magnificent from up there, but at the middle and the bottom it feels like a lot of pain. People sense the truth, that there are now two economies in the United States, one for the rich and one for everyone else. They don’t buy “agreeable fancy” anymore.
An earlier version of this article ran in the Arkansas Timesnews@orlandoweekly.com