Monday, June 27, 2016

The Politics of Share the Wealth

This is a follow up post to my previous one.  Here is a very quick summary so readers don't have to go back to that if they'd prefer not to.

1.  In the kid's game, Life, there was something called a Share The Wealth Card.  I used that as a metaphor for programmatic wealth redistribution activities.

2.   Mean household income in the U.S. is around $650K. Median household income in the U.S. is around $81K.  Sharing the wealth here implies raising the median so it is closer to the mean, via some sort of Robin Hood approach.

3.  Brexit and the Trump candidacy have made evident some rather frightening nativism and anti-immigration sentiment.  Would well to do people who are concerned by these developments now be willing to share their own wealth, to some degree, as a way to quell the more vitriolic elements of the nativism and racism?

In this piece I want to take up the politics about how such redistribution might be accomplished and actually be sustained.  Let us recall a little history.  Wealth was also highly concentrated in the roaring twenties.  The New Deal and policies after WW II (for example, The GI bill and federally insured home mortgages) helped to build a middle class and compress wealth.  That trend started to reverse in the late 1970s.  But there is no doubt that the "Reagan Revolution"  accelerated it.  The previous post took on the argument that globalization and structural issues totally explain the recent hollowing out of the middle class.  That Denmark got some mention during the Democratic primaries indicates that a big part of the issue is a willfulness to redistribute wealth.

This piece from 18 months ago, in other words from before it was obvious that Trump would be the Republican nominee, is quite instructive to read on when redistribution will occur politically.  Among the voting population, wealthier voters have greater participation rates.  Poorer voters tend not to participate.  The more that modest income voters do participate, the more likely it is for government policy to have aspects of wealth redistribution towards those of modest means.

The syllogism should be very clear.  If we went to a system of universal (mandatory) voting, Wikipedia calls it compulsory voting, that would be an effective way to ensure sharing the wealth.  Politicians now can ignore the welfare of the poor, the near poor, and much of the working class, because that doesn't matter to the politicians in getting reelected.  As a consequence, our recent politics has strongly redistributed wealth upward.

To my knowledge, no candidate in this election has even mentioned mandatory voting.  Indeed, the Republicans have pushed for Voter ID Laws, clearly a big step in the opposite direction.    One might guess, therefor, that if either party were to push for mandatory voting it would be much more likely to be the Democrats.  But would they do this?

Let us consider the matter from a purely selfish view.  There are many professional types and well to do people who now are Democrats.   Mandatory voting would probably mean that these people would take a hit economically, albeit for the good of the order.  Are enough of them now willing to do that out of fear of where the logic of Trumpism will lead the country?  Or would a push for mandatory voting actually dry up campaign contributions from this group and encourage many of these people to vote Republican?

This issue probably will not come up at all during the current campaign.  It would be a distraction now and especially if the Clinton campaign feels it has a commanding lead it would violate the bird in the hand principle.  But it should begin to receive attention immediately thereafter.

It is my view that Chuck Schumer will be the prime player on this matter.  He is on record in the not too distant past for saying the party should embrace policies for the middle class, but not go overboard to help the poor, as they mainly don't vote. And, of course, he will be the Senate leader of the Democrats, taking over for Harry Reid.  At issue then is whether he will recalibrate his own views as a consequence of the Trump candidacy, Brexit, and related developments.

If the Democrats could hold onto the bulk of their more well to do supporters, a move toward mandatory voting would be an enormous political boon for them and would help them both at the national and the state levels.  Further, in watching the contortions of Republican political leaders talk about the Trump candidacy, the line that's been repeated over and over again is - we need to respect the will of the American people, note that it will be quite hard to argue against mandatory voting.  Elected officials don't want to go on record saying that they prefer for some eligible voters not to exercise the franchise.

So if the issue does come up it has a good chance of passing.  And the view of Trump supporters (that the elites have ignored them) really offers a good argument for why it should come up.  Still, it will take courage to play this card.  I wonder if we have it in us to do that.

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