Ted Frier

Ted Frier
April 02
Ted Frier is an author and former political reporter turned speechwriter who at one time served as communications director for the Massachusetts Republican Party, helping Bill Weld become the first Bay State Republican in a generation to be elected Governor. He was Chief Speechwriter for Republican Governor Paul Cellucci and Lt. Governor Jane Swift. Ted is also the author of the hardly-read 1992 history "Time for a Change: The Return of the Republican Party in Massachusetts." So, why the current hostility to the Republican Party and what passes for conservatism today? The Republican Party was once a national governing party that looked out for the interests of the nation as a whole. Now it is the wholly-owned subsidiary of self interest. Conservatism once sought national unity to promote social peace and harmony. Now conservatism has devolved into a right wing mutation that uses divide and conquer tactics to promote the solidarity of certain social sub-groups united against the larger society while preserving the privileges of a few.

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NOVEMBER 29, 2012 10:51AM

Conservatives Now Favor Spreading the Wealth

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When Hostess swirled its last cupcake and packed its last cream-filled Twinkie, conservatives like George F. Will were quick to scold striking workers for not swallowing a 50% wage cut and surrendering to the reality that "market forces will have their way."

And when Bain Capital bought and then outsourced to China a Freeport, Illinois auto parts factory, the 170 workers thrown onto unemployment relief became food-stamp carrying members of the 47% Mitt Romney so contemptuously disparaged as "victims" whose refusal to take responsibility for their own lives was evident from their new-found "dependence" on government.

Blaming greedy labor unions or an intrusive federal government for the failures of "free market" capitalism is an ancient and honored sport among Old School conservatives like Romney and Will who treat the marketplace and its calamities as if both were as natural and unstoppable as gravity or the weather.

But other conservatives who are more skeptical about either the naturalness or inevitability of these economic outcomes are not so sure.  More sympathetic to the circumstances of labor than either Will or Romney seem to be, these conservatives can scent in these callous apologias for survival-of-the-fittest Social Darwinism the choking stink of the sweatshop.

After all, these conservative reason, if humans can affect the rising tides and sea levels then surely our economic environment should be seen as the product of human agency and deliberate choice as well.

Bruce Bartlett, former economic adviser to Presidents Reagan and Bush 41, penned an influential op-ed in the New York Times in 2007 arguing that it was now time to retire "supply-side economics" as a school of thought.

Everything important that supply-siders had to offer, such as the benefits of lowering 75% top tax rates, had already been incorporated into mainstream economics. All that was left was the "nutty stuff," like the Laffer Curve, that argued these tax cuts paid for themselves. And so, says Bartlett, supply-siders should simply "declare victory and go home."

At the same time, while George Will was doing his best Marie Antoinette impression by telling laid-off Hostess workers they should go eat cake, Will's Washington Post colleague Michael Gerson was advising Republicans their Reagan-era economic message was "well past its 1980 expiration date."

Echoing arguments about the nature of justice familiar to readers of John Rawls, the former George W. speechwriter said it is not enough to promote economic growth if the benefits of that growth was "far from assured" for the poor or middling classes.

The traditional Republican pro-business agenda is necessary but not sufficient, Gerson said, if it does not also "adequately grapple with these human needs -- the prerequisites for personal prosperity."

The financial panic that began with the collapse of Lehman Brothers in 2008 incinerated nearly $13 trillion in total net worth according to some estimates, notes Gerson. That is a year's worth of economic activity as household wages fell back to 1995 levels.

"Yet these massive effects brought limited consequences for those who seemed at fault," said Gerson. And while the pain was distributed "broadly" it was not also distributed "fairly."

Americans, says Gerson, have grown dramatically more productive in the previous generation but they have not also become more prosperous since "technology has replaced many jobs and globalization has put downward pressure on wages."

And now that middle-class Americans must "work harder for stagnant incomes in an economy with fewer employment opportunities," Gerson believes the most pressing economic challenge before us today is "not just failed financial institutions but strained social trust; not just an economic dip but a loss of faith in upward mobility."

Further, Gerson insists that those Republicans obsessed with defending the interests of the rich "need to show more creativity in making economic advancement a realistic prospect" for average Americans by promoting high school and college completion, increasing the rewards for work and providing practical help to families with children so that "capitalism works for everyone."

What Gerson describes, in short, sounds suspiciously to me like a different take on all that "free stuff" that sneering plutocrats like Bill O'Reilly and Mitt Romney have accused Democrats of tossing to their supporters like doubloons from a Mardi Gras float in order to win the last election.

Listen closely because that sound you hear isn't just the ice cracking beneath the feet of Republican powerbroker Grover Norquist and his No Tax Pledge. The stranglehold which supply-side economics has had on the Republican economic imagination may also be shattering.

In the more than 30 years since Ronald Reagan first bought into the lead-into-gold alchemy of the Laffer Curve, supply-side economics has been de facto American economic doctrine. And while low tax rates on capital and hostility to government regulation may have catapulted stock market values and upper-level incomes to nose-bleeding heights, it has done so at the expense of stagnant or declining wages for the vast majority of American worker bees whose purchasing power is still the fuel that makes the rest of the American and world economies go.

The temporary fix which has enabled American consumers to shop til they drop, even in the absence of regular hikes in wages, has been the asset bubbles in housing and stocks that gave middle class workers access to easy credit but which left them burdened with crippling debt in return.

The lectures conservatives are now delivering about prudence and fiscal responsibility which aim to lay blame for our current economic troubles at the feet of workers and consumers are both laughably late and utterly beside the point. We all know who these cheerleaders for financial recklessness have been and how much our debt-soaked economy depended on it. And it is the de-leveraging of this recklessness which currently stands as the major drag on the economic recovery.

There are important political reasons for applauding the redistribution of income that Bartlett and Gerson endorse here, for spread-the-wealth is what this is.

Chrystia Freeland, author of The Plutocrats, says President Obama has skilled economists around him who understand the impact of globalization and technology on the world economy and the "winner-take-all spirals" it creates. And these economic forces are so intense, says Freeland, that if we are serious about creating a healthy middle class, we're "going to need to have a more redistributive society -- at least for awhile." Maybe, she says, the broad prosperity of the 1950s were an aberration "and the way the economy naturally works is this wide difference in distribution."

Adds Charles M. Blow in the New York Times, the gap which is growing between liberals and conservatives, rich and poor, established privilege and new immigrants, patriarchy and gender equality, the expanders of liberty and the withholders of it -- these all create divisions that threaten "the very concept of a United States" and provoke that "status anxiety" which Richard Hofstadter identified more than half a century ago as the primary reason social and economic conservatives often  become progressively more extreme.

But even more important are the economic reasons for cheering on the equalizing reforms which conservatives like Gerson and Bartlett offer as antidotes to the brutality of survival-of-the-fittest laissez faire.

Equality is not just about justice or fairness but also economic efficiency, says Simon Tilford, chief economist at the London-based Center for European Reform.

Tiflord argues that economic recovery in Europe "depends on a recovery in household consumption;" and that, in turn, depends on rethinking the balance between capital and labor.

Over the last 30 years, he says, wage growth has lagged behind productivity across the industrialized world at the same time there has been a big rise in inequality as the benefits of economic growth concentrate at the top. And far from enticing wealthy "job creators" to produce the prosperity of the future, "these trends have gone hand-in-hand with a steady decline in business investment," said Tilford.

What this means is that Europe's entire austerity strategy for dealing with the euro zone crisis has been counterproductive at best, says Tilford, because it is focused mostly on lowering labor costs, shifting  tax burdens from corporations to consumers, reducing workers' bargaining power and curtailing social rights and transfers.

Bill Gross, founder and co-chief investment officer of the investment management firm Pimco, agrees. Perhaps anticipating the current partisan debate over the "fiscal cliff," Gross says debt is not the disease it is a symptom.  The actual disease, he says, is lack of aggregate consumer demand and consumption and the business investment that goes with it.  And so "Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy.  It will not."

What countries should do instead, Gross and Tilford suggest, is raise taxes on those who can afford to pay and invest those receipts on education to raise skill levels for workers so they can productively use these advances in technology, or fund stimulus programs such as improvements in basic infrastructure. Sound familiar?

Addressing real problems will require governments to "challenge firmly held assumptions" about the way economies really work, says Tilford, which means cooperating with other countries instead of working at cross-purposes against them through "beggar-thy-neighbor tax competition."

It also means adopting "a more skeptical ear when confronted with business lobbying."  In short, says Tilford, European governments need to forget fiscal austerity for the time being and boost domestic demand through expansionary macroeconomic fiscal and monetary policies.

There are also historical reasons for using government to achieve a greater distribution of benefits from economic growth and productivity than has been possible through the vagaries of the free marketplace alone.

America has always been a land of opportunity and promise, says Michael Lind, Policy Director of the Economic Growth Program at the New America Foundation. And today America's "innovation machine" is producing new technologies at a remarkable rate.

But such innovation has almost always been achieved with the participation of a federal government, says Lind, which has made those public investments in research and development during the critical early stages of emerging industries, whether it was radio and television, nuclear energy, jet engines, the Internet, fracking, and now robotics.

Yet, while the results of this innovation "will be increases in prosperity and quality of life that can hardly be imagined today," Lind wonders whether the benefits of such progress will be widely shared.

And that, says Lind, is fundamentally a political question not an economic one. It is also a question that has repeatedly been answered throughout American history by people who recognize that the middle class was made, not born -- created "by a combination of public policy and citizen movements" that were committed to the idea that widely shared prosperity does not just "trickle down."

That was true in the 19th century, said Lind, "when the exclusion of slavery from the Northern states by the Northwest Ordinances permitted the evolution of a society of middle-class farmers based on free labor, which ultimately defeated the slave plantation society of the South in the Civil War."

It was true in the 20th century when the pro-worker legislation of the New Deal, combined with widespread unionization, "turned industrial workers from underpaid serfs forced to work six or seven days a week under the thumb of company goons and spies into the suburban middle class of the 1950s and '60s."

It was also true when breaking down barriers to participation in the economy of nonwhite Americans during the Civil Rights Movement required struggles "in which many bled and some died."

Progress has been slow, brutal and bloody, says Lind, because economic elites have always "fought bitterly against every extension of wealth and political power to ordinary Americans, from the abolition of slavery to the outlawing of child labor and establishment of the minimum wage."

This is especially relevant today now that the Republican Party has become the wholly-owned subsidiary of the white conservative South with its historic legacy of hostility toward labor.  

The Solid Republican South is a region whose entire development strategy is built around preserving itself "as a low-wage, low-tax, low-regulation site in the US and world economy," able to attract foreign capital by offering investors "a local Southern workforce that is forced to work at low wages by the absence of bargaining power."

Anything that increases the bargaining power of Southern workers must therefore be opposed, says Lind, whether it is unions, federal wage and workplace regulations or a generous, national welfare state that increases the bargaining power of Southern workers and reduces their economic desperation.

The legacies of Jim Crow and white supremacy have distracted pro-labor liberals from the genuine pathologies of a Southern conservatism which is based on class, not race, since the Southern Bourbon Oligarchy "has never cared what color its serfs are," says Lind.

And neither do the plutocrats who control the Republican Party.  

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When the spectre of automation first reared its head, everyone had fears that soon all "the workers" would lose their jobs to factory robots. It didn't happen that way. The economy expanded and jobs remained available to those who educated themselves to be able to do them.

BUT..... automation has advanced. While it was doing so, off-shoring of labour intensive manufacturing took away millions of jobs. Those companies that are coming back to first world countries are NOT going to re-build a labour intensive economy; they're going to build automated manufacturing facilities. They'd be fools if they didn't - and they're certainly not that; greedy maybe, but not fools.

The "jobs" are gone. And, for the most part, they're not coming back. The transition from human labour to automation will not be denied. It may be slowed, here and there, but it won't now ever be stopped.

Our problem is that we've built a socio-economic system based on a "human labour" economic model. It is time for that to be updated to match the current reality. The FIRST thing that must be updated is the connection between jobs and income. I grow weary of hearing over and over that "jobs" must be "created" so that people can have an income which they will spend so as to be "consumers" and thus fulfil their role in the production/consumption of goods and services. This simply IS NOT true. It is NOT jobs that people need - it is income.

As it stands at present, only those who own the means of production stand to profit from the inevitable automation of everything that can possibly be automated. We have, until now, assumed that those not of that ownership class will find employment "elsewhere" when their jobs are automated. They won't. There is no elsewhere.

So..... it's time to cut ALL the people of our society in on a share of the profits that are earned by the corporations that take huge profits from our society; that can only operate safely and securely in the society we have all contributed to. It's time for every citizen to have a "birthright" of shares in successful corporations. It's time everybody got what only the owners get now - a share of the wealth that everybody helps to create.

In the end, only a fair and just society will survive into the future. Do we really want to leave any other kind to our children?


The other "forgotten segment" studies have recently shown is corporate middle management, whose incomes have dropped sharply as the very top echelon has increased exponentially.

These are the guys who are often the most conservative, who do the corporations dirty work--such as keeping the unionists in line, and taking the production functions outside the US.

I've known some of them in the financial services sector. Nothing is going to convince them they're barking up the wrong tree. They want those desk jobs, alas, they know they're still a lot safer than the poor union boys.

It's a case where status trumps income, or sanity for that matter, but don't tell them that--in case they start to think for themselves and their universe collapses.
The other "forgotten segment" studies have recently shown is corporate middle management, whose incomes have dropped sharply as the very top echelon has increased exponentially.

These are the guys who are often the most conservative, who do the corporations dirty work--such as keeping the unionists in line, and taking the production functions outside the US.

I've known some of them in the financial services sector. Nothing is going to convince them they're barking up the wrong tree. They want those desk jobs, alas, they know they're still a lot safer than the poor union boys.

It's a case where status trumps income, or sanity for that matter, but don't tell them that--in case they start to think for themselves and their universe collapses.
Interesting blog. I used to be a conservative Republican. I'm still a fiscal conservative, but I have never supported the Republicans' eagerness to embrace social conservatism. I'm a member of the NZ Green Party, which is an ironic combination of fiscal conservatism (we want to end trade imbalances and balance the books so we know longer borrow money overseas) and social liberalism (we lobbied aggressively for a bill to legalize prostitution in this country). There are also a lot of us who want to end the fractional reserve banking system and get private banks out of the business of creating money (like President Andrew Jackson), but this isn't official part policy yet. I find it really interesting that some prominent IMF economists have also signed on to this idea with their recent Chicago Plan revisited: http://www.telegraph.co.uk/finance/comment/9623863/IMFs-epic-plan-to-conjure-away-debt-and-dethrone-bankers.html

I tend to agree with Michael Parenti's view on the Republican Party - they're not really conservatives (people like me are still the real fiscal conservatives). They are radical reactionaries seeking to return to 19th century when the whole country was run by robber barons.
Well, that’s going to be unfair to folks working with high salary brackets. Instead, should enter business for them to earn competent amount. The government should take action to the arguments or else the earning that they promised to people might be gone. I have care about the government but as business man here in the state of California, I don’t mind several changes they made. For me, if you want to achieve success then you should do it on your own. Never wait for your salvation to the government. The best way still is to own your own business. If you have no idea where to start then there are ebook download sites where you can have an efficient guide to startup on your own.