some economists still follow the idea that in the end the market self-regulates and that consumers always make decisions in their best self-interest. i think both of those have been proven wrong in reality many times over, but those economists that still believe in those principles should maybe take a look at the american working class. certainly a large part of this segment of the US population (mostly in the industrialized areas of the country) are card carrying unionists and democrats. but an equally large segment more in the south and mid-west, as well as south west seem to be hard hitting republicans.
it has always been a mystery to me how these people who are usually lower middle class to middle class can even entertain the thought of voting for republicans, because if they would vote on the basis of what is best for themselves democratic ideas like higher minimum pay, better healthcare for everyone, more accessible schools, higher taxing of the rich … would be directly beneficial to them. but it seems that a slew of so called “value issues” like abortion and gay marriage (and maybe just general fear of the future and change) are trumping issues that would impact their economic situation. in addition i guess that the idea of the “american dream” has so much power over this segment of the population that they think that by hard work they might very soon end up rich and at that point will not need the benefits provided by democratic policies … even though the chances of this economic ascent are fairly slim.
the recent health care debate has brought out many demonstrators against the reforms … most of them from the lower middle classes, exactly those that would benefit the most from the reforms. i thought it was so interesting to see all the tea party demonstrators here in DC last week most of them active consumers of medicare (or other government plans) demonstrating against big government that they themselves directly benefit from … and there i am on the other side, likely to have to pay more post reform and i am all in favor of it. a strange world it is. but the ny times, specifically timothy egan wrote a superb piece yesterday on his nyt blog about this paradox in US politics: working class zero
he perfectly sums up this paradox early on in his post:
Harvard economist Lawrence Katz called it “a plutocratic boom.” If anything comes close to defining the era, that would be my nomination. President Bush cut $1.3 trillion in taxes — and the biggest beneficiaries by far were the top 1 percent of earners. At the same time, Wall Street was inflated by the helium of a regulation-free economy that eventually gave us Bernie Madoff and banks begging for bailouts.
Now consider the people who showed up in a state of generalized rage in Washington over the weekend. They have no leaders, save a self-described rodeo clown — Glenn Beck of Fox News — and some well-funded Astroturf outfits from the permanent lobbying class inside the Beltway. They are loosely organized under a Tea Party movement, but these people are closer to British Tories than 18th century patriots with a love of equality.
and then he goes on to ask exactly the right question:
Where was the Tea Party movement when the tax burden was shifted from the high end to the middle? Where were the patriots when Wall Street, backed in Congress by Senator Phil Gramm of Texas, rewrote securities laws so that the wonder boys of Lehman and A.I.G. could reduce home mortgages to poker chips at a trillion-dollar table?
Where were the angry “stiffs” when the banking industry rolled the 2005 Congress into rewriting bankruptcy law, making it easier to keep people in permanent credit card hock?
Where were they when President Bush started the bailouts, with $700 billion that had to be paid on a few days’ notice — with no debate — to save global capitalism?
They were nowhere, because they were clueless, just as most journalists were.
as i was walking through DC last weekend with the tea party demonstrators making their way through a city largely alien to them i was thinking about exactly those questions — and couldn’t come up with any answers.
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