WASHINGTON – Rep. Paul Ryan values his reputation as a serious policy analyst and a genial soul. But he’s not above name-calling, and he insists that President Barack Obama’s budget proposal is the product of “envy economics.”
Ryan’s label invites a comparable description of his own approach, which would slash taxes on the rich while cutting programs for the poor and many middle-income Americans. If Ryan wants to play the branding game, is it unfair to ask him why “greed economics” isn’t an appropriate tag for his own approach?
Ryan’s opening rhetorical bid is unfortunate because there are signs that at least some conservatives (including, sometimes, Ryan himself) seem open to policies that would redistribute income to Americans who have too little of it.
Yes, conservatives and just about everybody else – except, perhaps, for truly austere libertarians – are for redistribution. But almost everyone on the right and many of the more timid Democrats want to deny it. This form of intellectual dishonesty hampers a candid debate about solving the interlocking problems of stagnating wages, rising inequality and declining social mobility.
Let’s first examine Ryan’s envy claim. “Look,” he said on “Meet the Press” last Sunday, “the president has done two big rounds of tax increases. It’s one of the reasons why we have this stagnant economy we do. He’s practicing yet again envy economics, and it doesn’t work. We are an aspirational people. We are an optimistic people, and our policies should reflect that in our country, and that is not the kind of economic policy or politics the president practices.”
Well. Regiments of Republicans claimed that Obama’s policies, and especially Obamacare, would be “job killers.” In the face of 58 straight months of private-sector job growth, will they ever admit their claims were absolutely wrong? Will anyone even ask them? And like them or not, aren’t Obama’s proposals on higher education, child care and pre-kindergarten programs all about aspiration and optimism?
At least some conservatives, such as Michael Strain at the American Enterprise Institute, are coming around to the perfectly sensible view that a few percentage points up or down in the top income tax rate for the rich don’t make much difference after all. As Bob Davis reported in The Wall Street Journal, many conservatives, including Strain, are supporting various policies (along the lines of the Earned Income Tax Credit) to lift the incomes of the working poor. Does anyone notice that this is redistribution?
In fact, we need to pay far more attention to “pre-distribution,” the wages and benefits people get before government taxes or transfers money. It’s why we should increase the minimum wage, strengthen unions and find other ways of enhancing workers’ bargaining power. Funnily enough, progressives are more insistent than conservatives on increasing the market rewards for work so government doesn’t have to redistribute so much. In the meantime, the tax code and the various credits ought to be tilted toward those who have been lagging behind.
As it is, we engage in all sorts of redistribution in favor of those already doing well. Consider: In 2014, the Department of Housing and Urban Development, which focuses on lower-income Americans, spent $42 billion. The numerous tax benefits for homeowners totaled $154 billion, a lot of which went to the affluent. I’ll be the first to admit that these tax breaks help me. But who is redistributing to whom?
And then there’s a little item in Obama’s budget reported by Politico that would take away tax subsidies for the owners of pro sports teams that help them build new stadiums. Oddly enough, Wisconsin Gov. Scott Walker, who is busily trying to cut the budget of the University of Wisconsin, has endorsed $220 million in state-backed debt to build a new arena for the Milwaukee Bucks. Bucks over Badgers? Really? Who benefits from this particular redistribution?
We should just admit it: Government inevitably redistributes all the time. Won’t bigger defense budgets help large defense companies? At a time of rising inequality, we need to pay closer attention to whether this ongoing government redistribution aggravates the problem or instead tries to make life better for those at the wrong end of economic change.
In a moment memorialized across the Web, Elizabeth Warren once suggested there was nothing wrong with asking entrepreneurs doing very well to “pay forward” for the government that protects their property, educates their workforce and builds the infrastructure to transport their goods.
That’s not about “envy.” The words that come to mind are social justice.