Monday, June 05, 2017

Other people's money

Eventually, as Margaret Thatcher noted, you run out of other people's money:
"In the past," [NYT lefty blogger Thomas] Edsall writes, "Democrats could support progressive, redistributive policies knowing that the costs would fall largely on Republicans. That is no longer the case. Now supporting these policies requires the party to depend on the altruistic idealism of millions of supporters who, despite being relatively well off, often feel financially pressed themselves."
Most of the Republicans of my acquaintance aren't super wealthy -- that's Democratic Party territory and has been for a long time now. For every Donald Trump, there's a Bill Gates or a Warren Buffett. Other Republicans are the ones making money now, often in small businesses, and the Democrats have always been keen to hit those folks first -- it's why we tax income, not accumulated wealth. But now, as Michael Barone notes at the link, the money isn't always there:
Those of us who think that unduly redistributive taxation can be an impediment to growth will regard this as a feature, however. That's a conclusion to which Connecticut's Democratic Governor Daniel Malloy has uncomfortably arrived, after noticing that his previous tax increases have caused the geese who have been laying the golden eggs have been taking wing and flying off to no-state-income-tax Florida. "The reality is in Connecticut," Malloy said last month, "we get most of our money from very few people and that can produce some very wild swings."
It's a formula that doesn't work well. It can't work, actually. Out on the West Coast, Joel Kotkin has noticed, too:
The two most remarkable campaigns of 2016 — those of Trump and Bernie Sanders — were driven by different faces of populist resentment. Yet, increasingly, the Democrats’ populist pretensions conflict with their alliance with ascendant “sovereigns of cyberspace,” whose power and wealth have waxed to almost absurd heights. Other parts of their upscale coalition include the media, academia and the upper bureaucracy.
The people who control the pixels and buy the ink by the barrel. There's more:
This affluent base can embrace the progressives’ social agenda — meeting the demands of feminists, gays and minority activists. But they are less enthusiastic about the social democratic income redistribution proposed by Bernie Sanders, who is now, by some measurements, the nation’s most popular political figure. This new putative ruling class, notes author Michael Lind, sees its rise, and the decline of the rest, not as a reflection of social inequity, but rather their meritocratic virtue. Only racism, homophobia or misogyny — in other words, the sins of the “deplorables” — matter.

The Washington Post, owned by Jeff Bezos, the world’s third-richest man, reflects this socially liberal, but oligopolistic, worldview. Last spring, Bezos worked assiduously to undermine Sanders’ campaign, then promoted Clinton, and now has become a leading voice in the anti-Trump “resistance.” The gentry wing of the party, which dominates fundraising and media, as the opposition to Sanders reveals, likes its money. The tech community is famously adept at avoiding taxes.
Unfortunately, to keep the coalition together, Jerry Brown has to manage the care and feeding of a lot of people that Bezos would rather not see. And the Bernie Sanders wing of the party doesn't care about their blandishments. They want what they want -- "free" healthcare, "free" college tuition, like that. And someone has to pick up the tab. The grandees of Silicon Valley would rather not. This can't go on, and it won't.


R.A. Crankbait said...

In Connecticut, one of the plumpest geese has announced it will decamp. Aetna (or at least it's headquarters) is leaving after more than 150 years. The CEO even refused to meet with Gov. Malloy (even after a public and humiliating plea from Malloy to do so).

See, the thing about insurance companies is they have a lot of people that are really good at math and projection. They know where the balances tip, and when it's time to cut and run, even if you're the size of an army. Meanwhile, the mayor of Hartford is talking about ways of making the city more exciting in order to attract new companies. I have a hunch he will get his wish - if "exciting" describes the way your nervous system reacts if you have a flat tire late at night in Detroit.

Mr. D said...

Meanwhile, the mayor of Hartford is talking about ways of making the city more exciting in order to attract new companies. I have a hunch he will get his wish - if "exciting" describes the way your nervous system reacts if you have a flat tire late at night in Detroit.

My in-laws lived in Connecticut for about five years in the 1990s, so I have spent some time in Hartford. It was a dump 20 years ago and my understanding is things have not improved. One of the main drags in Hartford is Asylum Street, and it’s been evident for some time that the inmates are running the asylum.

Gino said...

CA has a similar issue where few pay income taxes. That's why the resort to high sales and gas taxes that cripple the lower class.

Gino said...

Not to mention an array of 'environmental' fees... $25 when you buy a TV or PC monitor, a few bucks when you change your oil, $2 when you buy a tire, 10 cents for a grocery bag.... The list goes on... And sales tax is added to the fees.