Further thoughts on the liberal rich

I should have separated out immigration amnesty as a sixth policy. Unchecked immigration helps keep wages down for the lower classes, thus further impeding their ability to rise on the economic scale.

Also, the decoupling of work and welfare and the expanded provision of “benefits” such as unemployment insurance and food stamps help to diminish motivation at the bottom. That makes seven.

Finally (for now), the inattention to the national debt—remember, Obama admitted on the Letterman show that he doesn’t even know what the national debt is—and, a fortiori, the failure to deal with the fiscal gap will further diminish prospects for all those not already rich.

The “fiscal gap” is the difference between the present value of the expected cost of future government obligations—pensions, Social Security, Medicare, Medicaid, &c. Lawrence Kotlikoff of Boston University estimates that the Federal fiscal gap is $222,000,000,000,000, or about $707,000 per capita. Add to that the state gaps (nearly all states have ridiculously underfunded pensions), and you can easily get to three hundred trillion dollars, which is nearly one million dollars for every man, woman, child, and illegal alien in the United States.

Why do the rich vote for Democrats?

The news is that 8 of the 10 richest counties in America voted for Obama over Romney. Since everyone knows that rich people are selfish criminal bastards who don’t want to pay any taxes, this would seem to be counterintuitive. Why would they do that?

One theory is that rich people tend to be well educated and therefore can be expected to have an enlightened view of their responsibilities and of the role of government in society.

Yeah, right.

Thomas Frank, in What’s the Matter with Kansas, make the liberal—or Marxist—argument that the only criterion one should use to decide how to vote is economic. Since, he argues, Kansas’s economy is actively harmed by Republican policies, it makes no sense that they consistently vote for more of the same.

So, using Frank’s approach, we should look for economic reasons for the rich to vote for Democrats.

Once one is in the top 5% of incomes, additional movement upward becomes very difficult, so one will be more interested in ensuring that one maintains one’s status than in striving to advance it. Throughout history, old money has always looked down upon the nouveau riche. One doesn’t, after all, want hoi polloi moving into one’s nice neighborhood.

Democratic economic policies could well have been expressly designed to keep the rich comfortable.

1. We have an income tax, not a wealth tax (except for the relatively minor property tax). Thus, once one’s income is no longer derived from wages and is larger than the Social-Security cutoff (currently $110,100), income tax is not a great concern. However, for those trying to become rich, the marginal tax rate (federal, state, and sometimes local income tax, as well as payroll taxes [entrepeneurs are quite aware of both the employee and the employer “contributions” to Social Security]) can easily reach 50%, making the task far, far more difficult.
2. Our suburbs sprawl throughout the landscape, and most lower- and middle-class families desire bigger houses with bigger yards. These desires, if fulfilled, would naturally diminish the quality of life currently enjoyed by the rich in their suburban enclaves. This explains the long campaign against suburban sprawl. By aggressively promoting policies designed to keep people—especially minorities—cooped up in the urban core, the suburbs are kept safe for the rich.
3. The rich also need to deal with other countries, who might get wealthy and either compete with them for resources or actually move here. (Illegal immigration of the poor is fine, of course: they need someone to tend their lawns.) Hence the concern with global warming: the policies desired to prevent global warming will also prevent third-world economies from becoming a threat.
4. Unfortunately, given the structure of the American Constitution, anyone can, in theory, start a business and become rich. However, we can create regulations that will make it prohibitively expensive for all but those who are already rich to do so. Established companies owned by those who are already rich can either be grandfathered out of the regulations, lobby the government for an exception, or simply absorb the costs, relying upon economies of scale. None of these strategies are open to the small businessman.
5. Most effectively of all, the rich can ally themselves with the government, ensuring that government money is spent on them and on their friends. This is called crony capitalism, and adds further obstacles to upstart competitors. If your competition has a guaranteed permanent contract with the government, they will always have a substantial income advantage over you.

Thus, if you are rich, you would be foolish to vote for policies that would further the economic freedom of those who wish to be rich like you. Such policies would inevitably diminish your relative status and are to be discouraged.

Given the Constitution, there is no conceivable set of polices other than these—higher income taxes, sprawl prevention, anti–global warming, more regulations, crony capitalism—that would be more effective in maintaining those who are now rich at the top of the economic heap. So, really, Frank’s question should be, “What’s the matter with rich Republicans?”