Tuesday, October 28, 2008

How Republicans exploit the middle class

Ed from ginandtacos has an excellent post up about Joe the Plumber:

Joe lives near Toledo, Ohio. The most charitable way I can describe that city is “post-industrial shithole.” The city’s unemployment rate is 9% as measured with the Bureau of Labor Statistics’ woefully understated methodology. There are many thousands of foreclosed homes within the city limits at this moment; Toledo is in the top ten large cities nationwide for foreclosures. Its population has fallen from 384,000 in 1970 to 285,000 today. Its violent crime rate is fully double the national average and rising. Based on nine common economic indicators, Lucas County (home of Toledo) ranks 87th out of 88 counties in Ohio for economic performance between 2001-2008. Annual bankruptcy filings have increased 23% in the same time period, while the percentage of residents in poverty has increased from 12% to a third-world-like 17%. Nearly 8000 manufacturing jobs have been eliminated in just six years (2001-2007). Toledo proper gained national attention for its unprecedented 7.5% drop in median home price in just 12 months. Real incomes are falling. In short, Toledo is in what its hometown newspaper calls a “downward spiral.” Every vital sign is flatlining and the city is entering what is likely a terminal economic torpor.

None of this matters to Joe the Plumber, of course. He lies awake at night worrying about taxes. That he lives in a picture-perfect example of the kinds of cities that right-wing economic policies have rendered moribund is irrelevant. What keeps Joe on edge and bubbling with entitled white male rage is Barack Hussein Tax-&-Spend Obama’s dastardly, amoral plan to raise taxes.

Click the link for the whole thing.

I think this is an exquisite illustration of the way Republicans get people like Joe to vote for them. While the town he lives in has been absolutely leveled by Bush's economic policies, what really pisses him off? Higher taxes for the rich. He's not rich, of course, but like many Republican voters, he's convinced that he will be someday.

Add in a healthy dose of white middle-class resentment, and a dollop of simple ignorance, and voila! Joe the Plumber, Republican figurehead, is born.

On the question of becoming rich, it is a cherished myth in the United States that such things "only happen in America". "Only in America" can a poor man succeed and become rich. All it takes is hard work and a little entrepreneurial spirit. The Republicans live and die on this sacred concept; and small business owners who dream of making it big consistently vote for the GOP by large margins.

Unfortunately, the data do not support this official propaganda.

In economics, there is a concept called intergenerational income mobility. Essentially, it is a measure of how likely the children of poor families are to end up with an improved economic status relative to their parents, and conversely, how likely the children of rich families are to end up with a worse economic status relative to their parents.

In other words, if the America that politicians talk about actually exists, we should find that intergenerational income mobility is high; that people succeed on their own merits, without much regard to whether they started off rich or poor.

This is not the case. Studies show that mobility is actually higher in several other industrialized countries, including Canada, Sweden, and Norway, while the US is roughly in the middle of the pack. Why is this? Gross income inequality is one reason. Those at the top control such a insanely large portion of the nation's wealth that they are unlikely to lose it absent redistributive tax policies.

In fact, recent government policies and tax cuts have only strengthened the position of wealthy Americans relative to everyone else. Meanwhile, the poor have little access to health care, little access to education, and they will now be hardest hit by the worsening economy. But in a country like Sweden, the rich are heavily taxed, while the poor have access to generous social transfers, free health care, and free post-secondary education. Is it any wonder that a poor Swede has a better chance of improving his or her economic status than a poor American?

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