Fat cats and corporate jets
Why is it so unrewarding for politicians to bash the rich in America?
Jul 7th 2011 | from the print edition
THE corporate jet gets a lousy press. In the James Bond classic, “Goldfinger”, the eponymous villain is sucked out of the window of just such an aircraft. In 2008 the bosses of Detroit’s moribund car companies did themselves no favours when they flew in their gleaming jets to Washington, DC, to beg Congress for bail-outs (they drove the next time). And in his present face-off with the Republicans over the federal debt ceiling, Barack Obama is bashing the jets again, because to the man in the street the corporate jet is a perfect proxy for a fat cat. “I’ve said to Republican leaders, you go talk to your constituents and ask them, ‘Are you willing to compromise your kids’ safety so some corporate-jet owner can get a tax break?’.”
Needless to say, Mr Obama is now accused by the aircraft manufacturers of scapegoating a successful industry that employs more than a million Americans and by the Republicans of launching a populist “class war”. But this raises a question. If an authentic populist movement exists in the United States today, it is not composed of impoverished class warriors braying to squeeze the rich until their pips squeak. It is the tea-party movement, whose crusade to slash taxes and pare government to the bone far outweighs whatever distaste it might feel towards those magnificent fat cats in their flying machines.
Why is bashing the rich such an unpopular form of populism in America? The normal answer falls back on culture. Bill Galston of the Brookings Institution notes that Americans are repelled by the notion of inequality in worth or status. That men are created equal is, after all, “self-evident”. They are, however, far less perturbed by unequal wealth, a form of inequality that is the inevitable product of the free-market system in which most still profess an abiding faith. According to Tom Smith, director of the Centre for the Study of Politics and Society at the University of Chicago, surveys still show Americans to be more sympathetic than Europeans to the idea that unequal pay encourages people to work hard, for example, and less sympathetic to the idea that governments should try to smooth such inequalities out.
That said, you might think that the normal answer would no longer do in such abnormal times—after a great recession and with 18m people still looking for work. And, sure enough, every week brings a flood of complaints in the media about the rich getting richer while the incomes of the middle class stagnate or fall. A survey for the New York Times has just reported that the median pay for top executives at 200 big companies last year was little shy of $11m a year—a mouth-watering 23% rise since 2009. Joseph Stiglitz, the holder of a Nobel prize in economics, claimed in Vanity Fair that the top 1% of Americans were taking in nearly a quarter of the nation’s income and controlled 40% of its wealth, though others dispute his numbers.
As to whether such disparities should matter, that question has puzzled philosophers at least since the Enlightenment. This column proposes no definitive answer this week. The point here is only that Americans do not seem to mind about the widening inequality of income and wealth as much as you might expect them to in current circumstances. By and large, they have preferred opportunity to levelling; equality of opportunity rather than equality of outcome. The trouble with this is that America is a long way from providing equal opportunity. Children born into the bottom fifth of the income distribution are nearly five times as likely to end their lives there as those from families in the top fifth. Indeed, social scientists are no longer sure whether it is still easier to climb the ladder in the “classless” United States than it is in the supposedly class-hobbled lands of Western Europe.
What are vote-seeking politicians to make of this? That the American people appear to have kept faith in the hardest of times with the idea of leaving it mainly to markets rather than governments to allocate life’s material rewards strikes many Republicans as a marvellous thing—the glorious opposite of what happened in the 1930s, when the economically stricken turned to government for succour. In the case of the recent collapse, runs the Republican argument, misplaced government intervention—such as the egalitarian nonsense of extending credit for home-ownership to those who could not really afford it—was at least as much to blame as the excesses of the private sector. That, to judge by the eruption of the tea-party movement, is the verdict of many non-aligned Americans too. So the Grand Old Party is betting on this anti-government wave restoring it to power in 2012.
Not so exceptional, after all?
There are those on the Democratic side who urge Mr Obama to place precisely the opposite bet. His great mistake, they say, is failing to see that, beyond the din the tea-partiers make, most Americans deeply resent the bailing-out of the bankers and the rest of the undeserving rich who led the economy to the abyss, and would rally to the president if he only found the courage to mete out the punishment these villains deserve. Only thus can he summon up a populist wave for himself and ride it to re-election.
And yet Mr Obama, as is his wishy-washy wont, is not biting. He still plans to end the Bush-era tax cuts for those earning more than $250,000. But for all his occasional digs at the fat cats and their jets, this president is not and will probably never be the avenging egalitarian the left of his party dreams of. His own bet seems to be that in the matter of inequality the American people are less exceptional than they like to think they are. They might be unusually tolerant of big gaps between the rich and poor, but they expect the rich to pay their way and the state to offer a helping hand to those who cannot rise without one. This middling bet might not be the most exciting reading of America’s mood. But it may be the shrewdest path to re-election.
tea-party movement：茶党运动，茶党运动是美国公众发起的一场反对奥巴马政府的经济刺激计划和医疗改革方案，主张政府要减小规模、缩减开支、降低税收、弱化监管的自下而上形成的社会运动。之所以命名为茶党，可以追溯到1773年为了反对英国政府对北美殖民地实行的不公平税收政策而引发的波士顿倾茶事件，期间示威者打出的口号是“税收已经太多了”（Taxed Enough Al-ready），而它的首字母组合在一起正是单词“TEA”（茶）。由此茶党也就寓意着对苛捐杂税的抗争乃至对现实的不满。