When the financial crisis broke, McCain and Palin attacked corporate greed and called for restoring values on Wall Street. But their critique seemed merely a faint echo of the outrage of the left’s economic populists.
Then came Obama’s conversation with Joe the Plumber, possibly the decisive moment in the election. His blunt, blue-collar criticism of Obama’s proposal to “spread the wealth around” found immediate resonance among social populists. Where economic populists want to take from the undeserving, overfed rich and give to the needy poor, social populists decry taking from hardworking, thrifty citizens and giving to illegal immigrants and the self-indulgent lazy.
At last, the McCain camp has something to say. Finally, it has, in McCain’s phrase, “nailed Jell-O to the wall” and found a way to attack Obama’s tax plans and support for social engineering and income redistribution.
It is true that the richest Americans are getting richer a lot faster than the rest of the country. The top 10 percent experienced a real (after inflation) income growth of almost 50 percent in this decade. The rest of America saw its income rise, but by less than 5 percent after inflation.
But it wasn’t Bush tax cuts that fueled the growing inequality. The top 1 percent of American taxpayers now pay 40 percent of the taxes (compared with 33 percent in 2003 and 24 percent in 1986).
Obama’s proposed increase in taxes on the rich will kill the economy and send us into a deeper depression.
But Clintonian policies like expanding the earned income tax credit, stretching out eligibility for food stamps and Medicaid, and funding college scholarships can make a huge difference. How will we pay for them? By keeping taxes on the rich at their current levels and using growing tax revenues to pay to promote downward irrigation of wealth.
Politically, the unalloyed triumph of economic populism is at an end. Social populism is back in play. And may the best populism win.