The “Hood Robin” Economy
No one can agree on the causes of inequality, but its effects are indisputable: more policies that benefit the already rich.
It was around that time, after all, that the business community really began to get politically organized. In 1971, future Supreme Court Justice Lewis Powell wrote his famous memo saying that “the American economic system is under broad attack” and “business must learn the lesson…that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination—without embarrassment and without the reluctance which has been so characteristic of American business.”
The next year, the National Association of Manufacturers moved its headquarters from New York to Washington, D.C. “We have been in New York since before the turn of the century, because we regarded this city as the center of business and industry,” the organization said. “But the thing that affects business most today is government….In the last several years, that has become very apparent to us.” That same year, the Business Roundtable was formed, and within five years, had signed up the majority of the Fortune 200.
And so business, which felt battered by the swell of new regulations and rules associated with the Great Society, began fighting. And winning. One of its first, and arguably most consequential, victories was to kill a revamp of the nation’s labor laws that would’ve made it much easier to organize new workers. Unions, which had begun going into decline, were denied their chance to get up off the mat. Then came Ronald Reagan and that was pretty much that for organized labor.
As far as Hacker and Pierson are concerned, that was pretty much that for the American middle class, too. “It is surely no coincidence,” they write, “that almost all the advanced industrial democracies that have seen little or no shift toward the top 1 percent have much stronger unions than does the United States.”
Of course, “surely no coincidence” is not the same as evidence. But Hacker and Pierson have more than an interesting data point: They have a theory. When an economist looks at the decline of unions, she typically looks at the decline in worker bargaining power. But when a political scientist looks at the decline of unions, he sees a change in the distribution of political power. “[O]rganized labor’s role is not limited to union participation in the determination of wages,” write Hacker and Pierson. “Much more fundamental is the potential for unions to offer an organizational counterweight to the power of those at the top.”
Unions call it “solidarity.” Republicans call it “liberalism.” But whatever you call it, the fact is that unions do not spend the bulk of their political capital fighting for laws that would make it easier to organize. Most of it goes toward a more broadly defined agenda of economic and social uplift. Organized labor—arguably to its detriment—acts as the world’s largest advocacy group on behalf of people who aren’t rich. And there’s really no one else who does that.
As unions weakened, the nonrich lost their loudest voice in Washington. And that meant they became quiet indeed.
Winner-Take-All Politics is sold, somewhat campily, as a “crime drama.” Various pieces of data are referred to as “DNA evidence.” Luckily, the cute doesn’t get in the way of the content: The writing is crisp and clear, and the graphs and tables are used well, clarifying rather than complicating the proceedings.
But the book’s greatest strength is its easy command of political science data, which sets it apart from most of the other studies of inequality that have been released. Perhaps the most shocking study the authors cite comes from Martin Gilens, a political scientist at Princeton University. Gilens has been collecting the results of nearly 2,000 survey questions reaching back to the 1980s, looking for evidence that when opinions change, so too does policy. And he found it—but only for the rich. “Most policy changes with majority support didn’t become law,” Hacker and Pierson write. The exception was “when they were supported by those at the top. When the opinions of the poor diverged from those of the well-off, the opinions of the poor ceased to have any apparent influence: If 90 percent of poor Americans supported a policy change, it was no more likely to happen than if 10 percent did. By contrast, when more of the well-off supported a change, it was substantially more likely to happen.”
In part, this is because politicians began to need money more than they had before, as the costs of campaigns started skyrocketing. The predictable outcome? Both parties have been relying more on wealthy donors and less on labor unions. Where unions had substantial support among the Republican Party in the middle of the twentieth century—then-Senator Ted Stevens, we learn, ended up backing the labor law reforms that the business community eventually killed—today the Club for Growth primaries anyone in the GOP who forgets to refer to union presidents as “bosses.” Meanwhile, the Democrats have had to embrace the business community to remain financially competitive. As Hacker and Pierson show, Democrats were at a massive funding disadvantage in the 1960s and ’70s. In 1981, the Democratic National Committee was still paying down debt incurred during the 1968 election. There was only one place to turn to close the gap: corporate America, and the (mostly) men who ran it, or lobbied for it. And so they turned there, which meant turning away from the middle class, at least somewhat. As Hacker and Pierson say, today’s Republican and Democratic parties are not black and white. They’re “black and gray.”
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