Here’s an interesting observation from Larry Summers (as quoted in Chrystia Freeland’s Plutocrats) that may help explain why Obamanomics won an election over Reaganomics.
Reagan successfully convinced paycheck democrats that their best bet was rising tide economics. Perhaps that was correct at the time, and Clinton won an election and grew an economy on that theory too. But Summers observed that the past decade’s growth has taken a different course, and was so unequally distributed that for the middle class, “for the first time since the Great Depression, focusing on redistribution makes more sense than focusing on growth.”
It’s hard to sell the rising tide theory when the middle class can plainly see their end of the boat sinking at the same time that the elite end of the boat is rising faster than ever. Romney claimed, as did Reagan, that growing successful businesses would mean good jobs, but things have changed, and a majority now believe that more growth isn’t going to help them. Someone else was going to capture that wealth, and it wasn’t going to help them very much.
I see two ways for the rich to save themselves – one is to fix things so that at least half the electorate grows along with the rich – and plainly that isn’t happening today – the other is to endure redistribution, taxation, and political demonization – hence Obama’s reelection.
The left derided Reagonmics as trickle-down. But it actually worked. Today, however, it’s seesaw economics. The rich end goes up, and the more populous end goes down. That’s not a plan to win elections. Republicans take note.
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