Inequality Thoughts

Jim Geraghty has a post up on National Review Online about the “polarization” of the public over politics. Usually what these guys mean by polarization is that the public is not buying what the media is selling them. When a non-liberal shows up on campus to give a speech and is heckled, he is polarizing. When an abortion fanatic shows up at a Catholic college and is heckled, he is courageous. Anyway, the point of his post is that people are mad and it has nothing to do with politics.  I posted this in the comments:

First off, Frank Luntz is probably a sincere person and all around great guy, but his profession is closer to witchcraft on the empiricism scale than it is to science. He makes his living telling the Sean Hannity audience what they want to hear. I don’t want to call him a charlatan as I think he believe this stuff. If he were not performing on the Hannity show, he would be watching it.

Second, income inequality is not just a leftist fad for the political season. Keep in mind that the Left has embraced the modern tools of crowd sourcing. While far from perfect, they are very useful in defining trends. Americans are increasingly aware that the folks in charge live vastly different lives than the rest of us. There’s also a growing suspicion that the interests of the ruling class are at odds with the middle class. A rich tech billionaire moaning about paying his market rate does not go unnoticed.

Third, this is not the first time America has seen this sort of problem. The new robber barons are different in that they are Davos men, cosmopolitan citizens of the world who got rich from global capitalism. Their loyalty to country and culture is nearly non-existent. That makes them seem <i>alien</i> to the hoi polloi. The robber barons of old were men who embraced country and culture.

Global capitalism is a boon to rich people in rich countries and smart people in poor countries. It is a bane to the middle class of rich countries. As a political matter, the GOP has a choice. It can be the party of the middle class and stop chasing after the favor of the plutocrats. This, I suspect, is a lost cause. Alternatively, they can go back to their historic role as accountants to the ruling class. The Left works on reorganizing society and the Right keeps the books.

The narrative says the GOP represents conservatives, by which is meant middle-class white people, but that’s a myth. The recent actions of Boehner and McConnel make that clear. The early embrace of Chris Christie as the choice for 2016 is another clear sign the party would like to be rid of the Tea Party and the other non-conformists. For half a century, the GOP was about defending the public finances and defending against the communists. Otherwise, they went along with whatever the liberal democrats wanted.

A careful reading of history shows that all ruling elites have these two factions. One side wants to charge ahead with all sorts of schemes. The other side wants to tap the breaks and steer clear of trouble.  Otherwise, they agree on most of the important stuff. In modern times, we are seeing the ruling elites move closer, as they begin to define themselves in opposition to the people over whom they rule. In Europe, this is well under way as formerly ideological opposites are now in power sharing deals. The Tories and Labor, for example

The question is whether the people on the outside will go along with this deal. In America, the slow grinding down of the middle-class is not going unnoticed. Europe has all sorts of weird social unrest. People are unlikely to go along with a new system where everyone is relatively poor compared to the ruling elite. Then there is the question of sustainability, as global capitalism rests on the belief that borrowing rates at the top can always be zero.

This can only work if the elites can control capital almost entirely and even then, it is hard to see how that can be sustained. People will first note that “both parties” fail to deliver, while the wealth gap grows ever wider. Then the people notice that voting has no effect on the process. That’s when people start looking for option, usually at the extremes. The Left will search out screamers who promise to rally the fringes against the middle-class whites, while those middle-class whites tart listening to those promising to defend their stuff.

In the end, gross inequality leads to social unrest.