By BRUCE BARTLETT
Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul. He is the author of the forthcoming book “The Benefit and the Burden: Tax Reform – Why We Need It and What It Will Take.”
There is an apocryphal story about the origins of neoconservatism in the 1960s. Some liberal professors at Harvard were sympathetic to the New Left and such radical groups as Students for a Democratic Society. But one day one of these professors heard the radicals suggest burning down the Harvard library as an act of protest, and the professor suddenly realized that he had nothing in common with them at all. He organized some other professors into a vigil to protect the library at all cost.
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Today, the problem isn’t the New Left, but the radical right, which has dominated American politics at least since the rise of the Tea Party movement in 2009 following the election of Barack Obama. It’s too soon to say for sure, but recent events suggest that some of those previously supporting the Tea Party have had their Harvard library moment. There are signs of a pushback among the wealthy, conservative elites and the business community that may see the political pendulum begin to swing back toward the middle.
No one particular event seems to have created this moment. The government shutdown is one, the impending Republican loss in the Virginia governor’s race is another, and so is the dawning recognition that the right-wing war on the poor and glorification of profits and wealth may have gone too far.
One sign is the widely discussed essay published on Nov. 1 by the managing director of Pimco, William H. Gross, on “Scrooge McDucks.” McDuck, the cartoon character noted for his vast fortune and miserly ways, was ranked first by Forbes among the fictional wealthy, with a fortune estimated at $65 billion.
Mr. Gross, ranked 252nd on the Forbes 400 list of wealthiest Americans, said in his essay that having become wealthy in part because of the tax cuts carried out by Ronald Reagan and George W. Bush, as well as the low interest rate policies of the Federal Reserve that facilitated leveraged borrowing, he had become concerned about the plight of labor. That is, the declining share of national income going to workers and the rising share going to capital, which is a growing topic of concern among economists.
He calls this era the “gilded age of credit.” The Gilded Age was a period of American history in the 1870s and 1880s not dissimilar to today, when wealth was glorified and such intellectuals as the Yale economist William Graham Sumner and the philosopher Herbert Spencer justified the pursuit of riches and rising income inequality on grounds that have come to be called “social Darwinism.” That is, survival of the fittest.
Mr. Gross now thinks that labor has suffered too much from excessive gains by the wealthy. “Those who borrowed money or charged fees on expanding financial assets had a much better chance of making it to the big tent than those who used their hands for a living,” he laments.
He thinks the wealthy ought to support higher taxes on themselves. Mr. Gross favors higher statutory tax rates, taxing capital gains as ordinary income – they are now taxed about half – and abolition of the “carried interest” loophole that allows hedge fund managers to pay capital gains rates on their ordinary income.
Another growing concern of the wealthy and business groups is the recognition that they lack any control over the Tea Party. A major problem is that Tea Party people are only interested in nominating Republicans based on their rigid adherence to right-wing principles, even if they make such candidates unelectable in the general election.
A number of Senate elections have been lost in recent years because Tea Party insurgents upset in primaries or party conventions some mainstream candidates who probably would have won their races. This appears to be happening again in the Virginia governor’s race, where Republicans nominated for governor and lieutenant governor two candidates who are very far to the right in a state that is trending left.
The business community is especially upset by having the Tea Party repeatedly throw away winnable races and is trying to inject more political realism into the nominating process. Some business groups are even reaching out to Democrats. The Fairfax Chamber of Commerce in Virginia, for example, endorsed the Democratic candidate for governor this year for the first time in recent memory.
It isn’t only rich people feeling guilt over their riches and pragmatic business groups that are dissenting from the Tea Party orthodoxy. Some Republicans and conservative intellectuals are now saying that cuts to the welfare state have gone too far as well.
On Oct. 28, the Republican governor of Ohio, John R. Kasich, blasted his party for its “war on the poor.” He said that the G.O.P. implicitly believed that “if you’re poor, somehow you are shiftless and lazy.” Against Tea Party opposition, Governor Kasich recently expanded Medicaid in his state under the Affordable Care Act – an act of virtual treason against Tea Party dogma.
On Oct. 31, Arthur Brooks, president of the American Enterprise Institute, a prominent think tank in Washington, said the conservative war against the social safety net was “just insane.” He urged his fellow conservatives to “declare peace on the safety net.”
James Pethokoukis, a scholar at the institute, seconded that olive branch to the poor, saying the social safety net had performed well during the economic crisis, contrary to the Tea Party view that programs like food stamps and unemployment insurance only subsidize idleness. He says conservatives should work to mend the welfare state, not end it.
It is ironic that that A.E.I. should be leading the charge toward a more sympathetic approach to the poor; another of its scholars, Nicholas Eberstadt, wrote a book last year, “A Nation of Takers,” which blasted growth of the welfare population and was widely credited with inspiring Mitt Romney’s attack on the 47 percent of the population who are “dependent on government.”
I have long believed that the Tea Party is a populist movement with no staying power. When it was at its peak, conservatives and Republicans sought to harness its energy to achieve long-held ideological, electoral and legislative goals. But the Tea Party has proved to be a double-edged sword that now threatens those goals more than it aids them. A pushback has clearly begun.
Republican hopes in 2016 may depend on how well it succeeds.