Jun. 10, 2002
New Book Faults Campaign Costs for Wealth Disparity
By J. Barlow Herget
RALEIGH - When I visited my local bookstore to buy a copy of "Wealth and Democracy," a new treatise by Republican strategist Kevin Phillips, I found none. It seems that more people than the publisher expected want to read Phillips’ history about how the rich are getting richer while the rest of us are just getting along, if that.
The fact that Phillips is the book’s author prompts some of the interest. He is the fellow who outlined how Richard Nixon could win the presidency in 1968 with a "Southern strategy" that brought mostly white, disgruntled Southerners to the Republican Party.
Over time, Phillips has migrated away from some of his party’s doctrines about tax cuts and unfettered free markets. In a recent interview with Public Television’s Bill Moyers, Phillips confessed that he has even changed his registration from Republican to Independent although he sees Abraham Lincoln and Theodore Roosevelt as heroes and admires Sen. John McCain (R-AZ).
It now appears that Phillips is as disgusted with today’s campaign financing and its consequences as is Moyers. How did such a political insider become a political maverick?
Phillips finds that government and great wealth throughout history have made close company. He points to America’s early fortunes and how Vanderbilt, Rockefeller and J.P. Morgan heirs all benefited from government policies favorable to their forebears’ enterprises. He finds some modern examples of this symbiosis in the rise of electrical power, aviation, computers, Internet technology, and biomedical advances.
In the Gilded Age, the 1870s period when "Robber Baron" industrialists controlled the country, the purchase of government favors was more direct; literally a purchase of a legislator’s votes or an official’s rules and regulations. Today, Phillips believes that such buying and beneficiaries are achieved through our campaign financing system.
He quotes former presidential speechwriter Richard N. Goodwin’s description of politics today: "The principal power in Washington is no longer the government or the people it represents. It is the Money Power. Under the deceptive cloak of campaign contributions, access and influence, votes and amendments are bought and sold. Money establishes priorities of action, holds down federal revenues, revises federal legislation, shifts income from the middle class to the very rich."
To drive home that last point, Phillips tastelessly drags up some embarrassing figures for those among you already shouting "Class warfare! Class warfare!" Pay close attention.
* In 1977 income, the bottom fifth of us earned $10,000 annually on average after taxes. In 1999, the bottom one fifth earned $8,800 annually in constant dollars.
* In 1977, the middle fifth earned $32,400; in 1999, they earned $31,400.
* In 1977, the top fifth earned $74,000; in 1999, they earned $102,300.
* Catch your breath. The top one percent in wealth in 1977 earned on average $234,700; in 1999, they took home $515,600.
Phillips says this widening division is not social Darwinism. Much of it has to do with government policies and favors that tend to enrich the big contributors. Again, he embarrasses us with facts. The timber industry, for example, spent about $8 million in the 2000 Election and for its trouble, continued receiving a logging road subsidy valued at about $458 million. The tobacco people spent $30 million for a tax break worth about $50 billion. Of course, we all now know about Ken Lay’s contributions and the lax government oversight it bought for years.
And the contributors with incomes over $100,000 are still counting the blessings of the 2001 tax cuts. Salt-in- the-wound-fact: Between 1988 and 1999, their income tax audits fell from 11.4 percent to 1.15 percent!
Phillips, like his hero Mr. Lincoln, sees no good for democracy in such disparities of treatment and wealth. Amazingly prescient, Honest Abe wrote in 1864:
"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before."
So should we all.
J. Barlow Herget is a businessman and former member of the Raleigh City Council.
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