PAUL KRUGMAN DOESN'T GET IT. At least, not in today's New York Times column, in which he is reduced to making wild guesses:
You might have expected the concentration of income at the top to provoke populist demands to soak the rich ... Indeed, the Republicans have moved so far to the right that ordinary voters have trouble taking it in; as I pointed out in an earlier column, focus groups literally refused to believe accurate descriptions of the stimulus bill that House Republican leaders passed on a party-line vote back in October.
Why has the response to rising inequality been a drive to reduce taxes on the rich? Good question. It's not a simple matter of rich people voting themselves a better deal: there just aren't enough of them. To understand political trends in the United States we probably need to think about campaign finance, lobbying, and the general power of money to shape political debate.
Yeah, we might think about campaign finance, lobbying, and the power of money if we were looking for a remedy for insomnia. But seriously, Krugman really doesn't get it. And I say this despite having a good deal more sympathy for Krugman's McCain-like "plain talk" sensibilities than folks like Instapundit and the rest of the right-leaning bloggista community.
Krugman is right when he makes the point -- over and over again -- that a great deal of the Bush tax plan is based on, not fuzzy math, but imaginary numbers, and that no one should buy into Republican rhetoric at face value. But are we to believe that so many American voters are such morons that (for practical, statistical purposes) fully half of them pushed the lever (or punched the chad) for Bush because they bought the lies?
Give us some credit, Paul. Most low- and middle-income people don't intend to stay that way. Most of the bottom 99% income-earners dream of one day becoming a member of that top 1%. Most of them never will achieve that dream. But surely that's what the American Dream is all about -- the right to work very hard to improve one's (or one's children's) lot in life
And when we finally get there, we want to know that it was worth the trouble. There would be far less incentive to work that hard for 40 productive years or longer if we know the fruits of our labor will only be taxed away in the end!
Granted, this somewhat oversimplifies the equation. Some people would work hard anyway because they have a strong cultural work ethic or are driven from within, and some people truly are morons who voted the straight Republican ticket because they liked the sound of Bush's feel-good promises that couldn't possibly be kept.
(And in making the counter-argument, Gore had an nigh impossible task: While Bush could promise deficit reduction, social security privatization, drug benefits for seniors, and a rainy-day slush fund all in one breath, most people's eyes would glaze over by the time Gore finished explaining why this was mathematically impossible.)
None of which is to say that the Republican tax cuts make one whit of fiscal sense. They don't. But as a percentage of our overall economy, they hardly matter -- and besides, they can always be repealed if there is sufficient political will.
But more to the point: If the Republican tax cuts were a consequence of the corrupting influence of campaign contributions, surely Enron would have gotten a far better bail-out deal than the airlines!
No, Mr. Krugman. The dynamic here -- the reason that so many low-income earners support lower taxes for high-income earners -- boils down to the power of capitalism, human nature and the corrupting influence of the American Dream.