Economy

McCain Is Robin Hood in Reverse

McCain wants to be the great "re-distributor": He takes money from poor people and sends it upward.
John McCain is a firm believer in a philosophy of governance that's been responsible for the most dramatic redistribution of American income and wealth since the New Deal. For the past 30 years, the conservative movement has focused relentlessly on redistributing income, but always upward, toward the top. It's a great irony of the 2008 campaign: Nobody is more dedicated to redistributing wealth than adherents of the ideology that McCain represents.

The numbers don't lie. In 1972, the top 1 percent of Americans took in 8.7 percent of all earned income, but that figure skyrocketed to more than 20 percent in 2006. Recently, the Wall Street Journal reported the results of all this conservative redistribution: "The richest 1 percent of Americans in 2006 garnered the highest share of the nation's adjusted gross income for two decades, and possibly the highest since 1929."

Meanwhile, wages have stagnated for most of us. Economists Thomas Piketty and Emmanuel Saez sliced and diced the American economy, going back to the beginning of the last century, and they found that between 1973 and 2005, despite several periods of healthy growth, the average income of all but the top 10 percent of the economic ladder -- 9 out of 10 American families -- actually fell by 3 percent.

The Corporate Right achieved that through systematic union-busting, fighting increases in the minimum wage, drafting so-called "free trade" agreements that placed American workers in competition with working people overseas, abusing the immigration system and gaming the tax code so that more of the burden would fall on wage earners than on people who sit back and make most of their scratch from investment income.

Conservatives are often accused of being obsessed with keeping government's nose out of the free market. But Dean Baker, co-founder of the Center for Economic and Policy Research, argues that progressives are off the mark when they accuse economic conservatives of "free market fundamentalism." "When we say they're 'market fundamentalists,'" he told me in an interview, "we're acting like they're willing to accept market outcomes." In reality, he continued, "they've rigged the deck. They've made sure that certain people come out ahead, that income flows upward, and that other people are put at a disadvantage -- and these things are built into the rules of the system."

So it's an irony that, desperate to find an attack that might have some traction in the closing days of the race, the McCain camp has seized on the idea that -- gasp! -- Barack Obama is a "redistributor"; in a campaign stop in Iowa this week, McCain referred to his opponent as the potential "redistributor in chief."

This, after the McCain camp failed to move the polls by charging that Obama -- a centrist Democrat by inclination as well as experience -- is a crypto-socialist. That charge led to moments that were nothing short of bizarre, like when CNN explained to its viewers that socialism is a system in which the state controls the means of production and the private sector doesn't exist (if you missed Obama's call to do away with capitalism, you're not alone).

Of course, everyone in government is a "redistributor." The redistribution of wealth is what political scientists call a "defining function" of the state -- it's one of the reasons states exist. Every time a government spends a tax dollar to build a school, repair a road or deploy a military unit, wealth is being redistributed. If it weren't, those who could afford it would have private police forces, fire departments, schools and all the other organs of government, and the rest of us would be out of luck.
But the McCain camp is trying to paint Obama as a "radical" bent on taking money out of hardworking Americans' pockets and giving it to the lazy and indolent (there's no small amount of classism and racism implied in the charge). The reason: When Obama suggests that spreading the wealth around a little bit more equitably would be good for our entire society, he's talking about redistributing income downward.

It doesn't appear to be a debate the Obama camp is uncomfortable having. With deep structural problems in the global economy, a terrible federal balance sheet and two costly wars, the Bush years have been bad for most working people. As economist Jared Bernstein -- one of Obama's advisers -- noted, when one compares the economic peak of the past business cycle, in 2000, with the high point of the business cycle that just ended, in 2007, households in the middle actually lost ground, earning $300 inflation-adjusted dollars less than they did in 2000. The worst they had ever done in previous business cycles was during the 1970s, when median income "only" increased by about $2,000. In comparison, the income for a family in the middle rose by almost four grand during the 1990s.

It's the first time since they started keeping records of family income after World War II that the economy has gone into a recession before the middle class, those iconic "American families" that dominate our political discourse, had rebounded fully from the previous downturn. That represents an immensely painful double-dip for those in the middle and at the bottom -- only those in the top one-fifth of the economic ladder have seen any gains whatsoever since the last recession (officially) ended in 2001. And those in the top 1 percent saw their incomes increase by about half during that time (which some conservative economists have called the "Bush Boom").

Ultimately, it's this reality that has softened the impact of the McCain campaign's charges and damaged his chance to win the presidency. Americans are more pessimistic about their economic prospects than they've been at any time since they started tracking those trends, and, according to a Gallup poll released Oct. 30, 6 out of 10 of them agree that "money and wealth should be more evenly distributed among a larger percentage of the people."

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Joshua Holland is an AlterNet staff writer.