Robin Hood Economics Falls Flat in Debates

capitalism-economyfrom – AEI.org – by Michael Barone

Robin Hood is dead. Or at least seriously ailing. The politics of taking from the rich and giving to the poor — the politics which philosophers from Aristotle to James Madison dreaded — just doesn’t seem to be working as it used to.

That’s not to say that the United States is about to give up on progressive taxation. With its graduated income tax, the American tax system is by some measures the most progressive in any advanced country. For a generation, the jousting between Republicans and Democrats has been waged within a pretty narrow range. The former want a top rate of 33 percent, the latter 42 percent. However, Hillary Clinton, evidently trying to win over wary Bernie Sanders fans, now says she wants to raise it to 65 percent.

What’s evident from the first presidential and the vice-presidential debates is that the arguments for this Robin Hoodism aren’t persuasive. The two gimmicky catchphrases enunciated by the two Democratic nominees seemed to land with a thud.

“Trickle-down economics all over again,” Hillary Clinton characterized Donald Trump’s tax plan. “I call it trumped-up trickle-down because that’s exactly what it would be.” A clever phrase, but not one she repeated as the debate went on.

Tim Kaine came prepared with a novel formulation. You’ll get a “‘You’re hired’ president in Hillary Clinton or a ‘you’re fired’ president in Donald Trump.” Mike Pence congratulated him on the gimmick. Viewers didn’t hear the phrase again.

Kaine’s hired/fired at least had a somewhat contemporary reference point in Trump’s trademark line in his reality TV show. Clinton’s “trickle down” is political shorthand with an ancient lineage, a phrase once triggered a more elaborate argument familiar and persuasive to many working class Democratic voters.

It would have been readily understood, for example, by the 125,000 people — mostly men, mostly white, mostly union members — who gathered in downtown Detroit’s Cadillac Square to hear Democratic presidential nominee John F. Kennedy speak on Labor Day 1960. You don’t see rallies like that in the now renamed Kennedy Square anymore.

They believed that the high tax rates imposed by Franklin Roosevelt in the 1930s (top rate 63 percent) and then by bipartisan consensus during World War II (top rate 91 percent) and left in place thereafter were a way of taking the outsized gains of a few corporate bosses and movie stars and distributing the proceeds to ordinary workingmen and their families.

As it happens, Kennedy didn’t make that argument at all. Recognizing that high tax rates encouraged tax avoidance and discouraged growth, he proposed what became the 1964 tax cuts, which were a model for former actor Ronald Reagan in the 1980s.

The problem with trickle-down and hire/fire is that they are addressed to a segment of the electorate that no longer exists — or at least is no longer a plausible target for Democratic candidates. One recent poll showed non-college-graduate white men voting only 17 percent for Hillary Clinton. Donald Trump does better than that with Hispanics.

The era of boss versus worker politics, in which the key issue has been economic redistribution, has long been over. For at least a generation, maybe two, we have been in an era of identity politics, in which cultural issues divide voters.

Democrats could squeeze a few last votes as the tribune of workers versus bosses in Midwest target states in 2012 against Mitt Romney, the son of an auto executive. That hasn’t been working against Trump.

Downscale whites don’t see Trump as a boss who will fire rather than hire them. They see him as a champion who might somehow fire the cultural elitists who look down on them as waste material in a “basket of deplorables,” vermin infected with “implicit racism.”

Trump does arouse fears among many voters — fears of impulsive foreign initiatives, trade wars, attacks on political enemies. Multiple provocative comments have provided the basis for those fears. But they don’t fear the specter that Clinton and Kaine sketched out, that his tax cuts would produce financial collapse. No serious economist, liberal or conservative, believes their preposterous theory, raised in the debate, that the 2001 and 2003 Bush tax cuts led inexorably to the 2008 financial collapse.

Clinton and Kaine seek to rally a coalition of blacks, Hispanics, young people and college-educated single women large enough to total 50 percent. Robin Hood economics, as they seemed to recognize as they dropped trickle-down and hire/fire, doesn’t get them there.

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