100 Treatises

Close, but not quite...

One of the most brilliant characterizations I have yet heard of the American economic system was given by Stephen Bannon (director of the recent documentary “Generation Zero”), on Sean Hannity’s show: “we have socialism for the very poor, and we have socialism for the wealthy; we have capitalism for the middle class.” It is brilliant because it is succinct, straightforward and spot on. (I nevertheless find the general thrust of that documentary ridiculous, but I will address that in another post.)

The unsustainable nature of the economic system, even accounting for the sorry and incomplete state of the socialist programs for the lower class, is clear. And it is becoming clearer every day, as banks continue to lavish bonuses on their star performers even as they suckle the public teat, while through corruption, waste or fraud, many able-bodied, self-sufficient individuals take advantage of public monies intended for those truly in need.

So what has caused this state of affairs? In short, liberal success combined with conservative success. In many general respects, the socioeconomic story of the US over the last 30 or 40 years has been one of the ascendance of right wing, laissez-faire policy regimes. However, at a less general level conservatives, beginning with and including Reagan, have consistently failed to significantly roll back key socialist-inspired programs like medicare or social security. In addition, important parts of the state interventionist welfare regime have remained solidly in place, enjoying broad support, to say nothing of such thorns in the libertarian side as the Department of Education. Left-wing success.

Nonetheless, with the aforementioned rightist ascendance, public handouts aren’t just for liberals anymore. One of the main ideas independents like myself believe is that both parties favor wasteful big spending, just on different things. Sure enough, Republicans and conservatives have spent liberally (pun intended) on Big Business, the rich and foreign entanglements during their time in power.

And so we have socialism for the rich and the poor, and capitalism for the middle class. That is, while the rich have enjoyed a free lunch at the public trough, and the poor have gotten by with ill-managed, but still significant, programs of their own, the middle class has been stuck with the bill on both sides. In a normal universe, progressive taxation-and-redistribution systems would mean, by definition, that it is mostly the rich that pay for the benefits of the less well-off. But with the oligarchic character of so much of American politics (on both the Democratic (think Wall Street) and the Republican sides), we have a system in which the most productive component of society—and, many argue, the most important component of a democracy—is also the least represented when it comes to policy. And as political wisdom will tell us, if you’re not at the table, you’re on the menu.