It's like we're watching an old sitcom in syndication.
A Democratic president is promising to restore the middle class, alleviate income inequality, and, generally speaking, correct the fiscal mismanagement resulting from Republican tax policies.
Rhetorically, we're exactly where we were at the beginning of the Clinton administration.
Mickey Kaus wrote in a 1995 preface to his landmark liberal-realist study The End of Equality:
As candidate and president, Clinton has been unusually explicit in his embrace of money egalitarianism. During one campaign debate he asserted bluntly that "what we want is more income equality." The text of Clinton's original 1993 economic plan, which was accompanied by elaborate distributional charts, not only railed against the 1980s ("the richer you were, the better you did"), but also pledged to "redress" the "alarming rise in inequality."
President Clinton famously got his wish on increasing taxes on the wealthy. Median income for families saw modest gains, but the overall picture of widening inequality didn't change much. Otherwise, we would not be framing the issue as a 30-year trend (1979-2009, as the recent CBO report has it).
And, just as important, if inequality were strictly the fault of supply-side economics, we wouldn't be talking about a global phenomenon.
The driver of increasing inequality in developed nations is the same as it's ever been. Kaus again:
The inequality trend, as is now widely recognized, was not produced by Republican tax polices in the 1980s. It's the product of deep, long-term changes in the economy, changes that result in skilled workers being paid more and unskilled workers being paid relatively less. The big winners have been college-educated brainworkers—lawyers, investment bankers, and other "symbolic analysts," to use Robert Reich's term. But even among highly skilled workers with graduate credentials, inequality has grown, as the very best performers take home superstar salaries (the "Hollywood effect").
Nine years of Clinton-era tax rates did little to blunt this reality—and neither will the reestablishment of those rates in 2013, as conservative critics of President Obama's Kansas speech, such as David Frum and Ross Douthat, who are otherwise receptive to the "diagnosis" of inequality, have written.
This isn't to say tax rates on the wealthy shouldn't go up; higher rates after 1990 and 1993 helped produce annual budget surpluses, and the same policy would no doubt go a significant way toward mitigating medium-term deficits today.
But it seems to me that, in calling for higher taxes on the wealthy, President Obama can only make one of two promises—paying down debt or putting more money in the pockets of the middle-class. Not both. Not simultaneously.
I appreciate the liberal argument, posited by Heather Boushey of the Center for American Progress as well as Robert Reich, that a "top-heavy" economy can lead to stagnation and high rates of middle- and working-class debt. (The gist of the argument is that the super-rich can't power a consumer-driven economy on their own, and those in lower income strata fill in the breach by borrowing.)
But my nonprofessional hunch is that there simply isn't enough money to go around.
- Read 10 things you didn't know about the Bush tax cuts.
- Read Rick Newman on why raising taxes on the rich is so hard.
- See 7 groups with reason to protest.