If Karl Marx had wanted to lay the groundwork for class uprising, he could hardly have done a better job than George W. Bush. First, take power in a disputed election, then move quickly to give the very rich a big tax cut. Raid the Social Security Trust Fund so multimillionaires can keep their trust funds. Look the other way while Enron executives make a bundle driving their company into the ground while swindling workers out of their jobs and pensions.
But a funny thing happened on the way to the class war: The rich won, and the rest of the country hardly noticed. If the masses are about to storm the gates, they forgot to tell their representatives in Congress. This month, the Senate will decide whether to make permanent the repeal of the estate tax, and Republicans are just a few votes short. The man for our times is Gatsby, not Marx. In the words of that great compassionate conservative, the Duchess of Windsor, "You can never be too rich or too thin."
Not every Republican likes the way the GOP is leaning. Back in 1969, a young Nixon strategist named Kevin Phillips wrote The Emerging Republican Majority, which presaged two decades of conservative dominance. Phillips has been trying to make Republicans class-conscious ever since. In 1990, he wrote The Politics of Rich and Poor, a populist call to arms that Democrats gleefully used to skewer the elder George Bush.
Twelve years later, Phillips still can't seem to follow the White House talking points. His new book, Wealth and Democracy, is a history of the silver spoon that predicts Republican greed will be America's downfall. When it comes to doing the greatest good for the fewest number, he writes, "The world has no other political party with anything like the same record over the last century and a half."
Phillips is a big believer in political cycles, since he made his career predicting one. He sees American history as one long cycle of boom and reform, alternating between "the avid businessman's pursuit and the populist complaint." When the economy swells, the rich grab as much as they can; when it goes south, the little guys rise up to take something back. The rich get richer, and the poor get Democrats.
History does repeat itself in interesting ways. A century ago, when Senators were chosen by legislatures owned and operated by powerful interests, there were 25 millionaires in the Senate. Thanks to the 17th Amendment, our Constitution now provides for the direct election of millionaires, and today's Senate has 20.
In 1921, and again in 2001, Republicans put outspoken, wealthy Pittsburgh industrialists in charge of the Treasury and used budget surpluses as an excuse to slash taxes for the rich. Harding's Treasury Secretary, Andrew Mellon, said the estate tax must be cut or it would end the concept of private property within a couple of generations. Paul O'Neill, his modern counterpart, believes the Bush tax cuts haven't gone far enough, and he wants to abolish the corporate income tax next.
Phillips points out that the political debate between liberals and conservatives hasn't changed much in the last 100 years. He cites William Jennings Bryan's 1896 critique of supply-side economics: "There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous, their prosperity will find its way up through every class which rests above them."
Nor is the Bush crowd the first to dress up private greed as civic virtue. Every boom produces its own cheerleaders who defend the concentration of wealth as an inevitable force of human nature. Phillips finds a Reagan-era report crediting six of the seven deadly sins for producing the modern economy--and that's not counting all the television and fast-food fortunes that have sloth to thank. Phillips's most important insight is revealing the central flaw in conservative mythology: wealth is not a value.
Phillips loses his way at times in suggesting that, like the Spanish, Dutch, and British empires before it, the United States is poised on the brink of collapse, "purple-veined with years of high living, lips curled with the insolence of great wealth." But he is right that current Republican priorities are out of whack. When a president can promise a "new war on poverty" one day and a $1.6 trillion tax cut for the wealthy the next, as Bush did last year, no wonder the rich will always be with us.
Phillips believes the United States is ripe for another historical correction. "As the 21st century gets under way, the imbalance of wealth and democracy in the U.S. is unsustainable," he writes. CEOs make 419 times as much as the average worker, and CEO pay is rising five times faster than profits. Payroll taxes mean working people don't take home much more than 20 years ago. Bill Gates's fortune is 1.4 million times larger than the median family income.
With so much wealth in so few hands, the question is: Why is Kevin Phillips the only one angry? He looks in vain for signs of a populist backlash in Ralph Nader's limp 2000 challenge and the globalization protests in Seattle. He insists that while populism became "passe" in the '90s, and scarcer still after September 11, the silent majority has always taken its time before erupting.
But the real reason most Americans don't share Phillips's seething anger is that we've long considered ourselves a classless society, in good times and bad. We don't resent the rich. We buy Powerball tickets, read Fortune, and thrill to celebrity gossip because we'd like to hit pay dirt ourselves someday. Phillips thinks the '90s were a failure because Bill Gates became a billionaire, and Bill Clinton was only able to increase the top tax bracket's rate to 39.6 percent. Most Americans wish every decade could be like the '90s because whether they were rich, middle class, or poor, their lives got better and their incomes went up.
Even in hard times, our resentments aren't really about the money. The true target of populist anger in America isn't the rich; it's any institution or individual that doesn't play by the rules or share our values. The reason the politics of resentment always backfires for Democrats is that, on those counts, Americans don't trust government any more than they trust the wealthy. Only Washington Monthly readers dream of being in government. The rest of America would rather dream of the Big Rock Candy Mountain.
That doesn't mean Democrats should join the Republican rush to make sure Anna Nicole Smith gets her tax cut. The challenge for Democrats is to put forward an egalitarian vision based not on fading class rhetoric but on values most Americans share: upward mobility, responsibility, and opportunity for all. That vision would focus less on punishing the rich and powerful, and more on making sure every American gets the same chances and plays by the same rules. Democrats support universal pensions to make work pay; Republicans support estate-tax repeal to make death pay. Democrats want to help all Americans save to build estates; Republicans want to help a few privileged families hold onto them.
For all his rich-bashing, Phillips himself understands that values matter most. After all, the last great cycle he predicted was built on resentments over values, not class. In the end, history will reward the party that best figures out how to reconcile two competing desires that only seem contradictory: Americans' fundamental determination to build a classless nation, and our equally profound dream to help our children do better. Given the choice between wealth and democracy, America has always chosen both.