Democrats, Tyranny, and Income Inequality

Bruce Thornton,
How progressives mask their envy and lust for power.
The Democrat presidential primary frontrunners are in a heated bidding war for voters, proposing policies with price-tags in the trillions of dollars. Elizabeth Warren wants to spend $49 trillion over the next decade on “Medicare for All” and wholly subsidize college tuition, among other government transfers. Bernie Sanders doubles-down by pledging $97.5 trillion. And let’s not forget the “Green New Deal” fantasy, estimated to cost anywhere from $51 to $93 trillion over ten years.

On the one hand, these promises are typical of the bribes politicians promise voters. But in the past, these promises by progressives have led to many costly, budget-busting programs put in place with the help of establishment Republicans who accepted the assumptions of big-government technocracy. As a result, we are looking at the accelerating approach of fiscal shipwreck when debt, deficits, and entitlement spending collide with the demographic iceberg.

Since simple math, prudence, and common sense are ignored by these latest schemes to “rob selected Peter to pay collective Paul,” we have to excavate the underlying, ancient ideas that have driven the progressive program for nearly a century. We can start with the shibboleth of “income inequality,” which is the “crisis” that serves a much more sinister notion: radical egalitarianism, a favorite instrument of the tyrant.

First, we should point out that “income inequality” is a statistical artifact that doesn’t capture the reality of America’s economic condition. A recent Wall Street Journal column by Phil Gramm and John F. Early marshals the data refuting this popular progressive canard. According to census data for 2017, the top 20% of earners have 17 times more income than the bottom quintile. But as Gramm and Early write, “The measure fails to account for the one-third of all household income paid in federal, state and local taxes. Since households in the top income quintile pay almost two-thirds of all taxes, ignoring the earned income lost to taxes substantially overstates inequality.”

The census data also fail to include the annual $1.9 trillion redistributed to American households, mostly to the bottom quintile, 89% of whose resources come from 95 federal programs that transfer wealth. And 80% of this wealth comes from the top 10% of taxpayers. Even after taking into account the state and payroll taxes the bottom quintile pays, when these transfers are added to household income it jumps from the official $4,908 to $50,901. As Gramm and Early conclude, “America already redistributes enough income to compress the income difference between the top and bottom quintiles from 60 to 1 in earned income down to 3.8 to 1 in income received.”

Clearly, “income inequality” is about something else: radical egalitarianism, the bane of representative democracy for 2500 years. The Greeks changed the world when they invented constitutional government, in which the people are citizens ruled by law rather than subjects ruled by force. Even more transformational was ancient Athens, the first state to empower the masses, including the poor, and give them political equality. Yet it soon became clear that there was a pernicious consequence to this development: radical egalitarianism.

Aristotle said this tendency to radicalize equality arises “out of the notion that those who are equal in any respect are equal in all respects; because men are equally free, they claim to be absolutely equal.” Since, however, talent, virtue, and industry are not equally distributed, man’s innate envy and resentment will demand that power be used to force equality. And the greatest, most visible sign of inequality is that of property: “From the protection of different and unequal faculties for acquiring property, the possession of different degrees and kinds of property immediately results,” which leads to “a division of the society into different interests and parties,” as James Madison wrote in Federalist 10. Our Constitutional structure of divided and balanced government was created to minimize the factional strife that always ends in concentrated, tyrannical power.

The use of government power to create economic equality has been at the heart of the progressive movement for over a century. Theodore Roosevelt’s breakaway Bull Moose Party in 1912, though unsuccessful at the ballot-box, nonetheless laid out the aims progressives still pursue today––taking federal control over what TR called the “malefactors of great wealth.” At the party’s convention, Indiana Senator Albert Beveridge mixed TR’s class-warfare rhetoric with utopian goals, a rhetorical mixture we are still hearing today from the Democrats. Beveridge contrasted “social brotherhood” with “savage individualism,” and demonized “reckless competition.” The the cure was the Progressive motto, “Pass the prosperity around”–– rhetoric echoed in Barack Obama’s “you didn’t built that,” “I do think at a certain point you’ve made enough money,” and “I think when you spread the wealth around, it’s good for everybody.”

This utopian goal was explicit in Beveridge’s speech: “There ought not to be in this Republic a single day of bad business, a single unemployed workman, a single unfed child,” or a “day of low wages, idleness, and want.” Equally prophetic was his means for achieving these aims: “We aim to put new business laws on our statute books which will tell American businesses what they can do and what they cannot do,” expressing a sentiment earlier expressed by Theodore Roosevelt in his 1911 New Nationalism speech. In it he proposed that the right to property could be limited according to the values of the “advocate of human welfare, who rightly maintains that every man holds his property subject to the general right of the community to regulate its use to whatever degree the public welfare may require it.” This means a “policy of a far more active government interference with social and economic conditions.” And the government he had in mind was the “national government,” which “belongs to the whole American people. . . . The betterment which we seek must be accomplished, I believe, mainly through the nation government.”

Over the subsequent century this ambition for increased concentration and expansion of federal power has been realized. FDR’s New Deal and Second New Deal, armed with “new instruments of public power” housed in new government agencies and funded by the federal income tax, increased entitlement spending and government regulation to improve “social and economic conditions.” As a result, today the federal government spends nearly 70% of its annual $4 trillion budget on entitlement and social welfare spending, and on interest payments on the $22 trillion national debt. The Democrats ignore this ill omen, as it does the recent record of the Obama presidency. Obama multiplied government regulations, entitlement programs, and the debt, and the economy averaged a bit more than 2%, and growth was historically low for a post-recession economic recovery.

Yet the Dems today are preparing to field a presidential candidate who promises not to revert to Obama’s failed policies, but to double- and triple down on them. Nor is there an economic crisis that could, as the Great Depression did for FDR, give cover for such dirigiste policies. On the contrary, since Inauguration Day of 2016, Trump’s economic policies have unleashed our economy, setting records for stocks, employment levels, and wage growth, with GDP averaging a full point higher than during the Obama years. The United States is a global economic powerhouse, even as the progs’ economic model, the European Union, is struggling. Whatever vigor the EU economies do have is the result of backing off intrusive regulations––as have the Scandinavian countries held up as exemplars by the Dems––and counterproductive policies like Elizabeth Warren’s “wealth tax,” abandoned by 8 of the 12 countries that had one in 1990. And the Democrats seldom note that the EU’s average per capita GDP is $38,500, compared to the US’s $59,531, and that Europeans pay an average 21.3% regressive consumption tax.

Perhaps the progressives are economic illiterates, or just bad at math. Maybe they have forgotten even recent history, like Ronald Reagan’s economic miracle. Maybe they’re starry-eyed “idealists” who actually believe in utopia, the road to which is lined with mountains of corpses. But 2500 years of political history suggest a simpler answer: the eternal lust for power and human vices like envy, which the Greeks, de Tocqueville, and the American Founders identified as the engines of civil strife and dissolution.

We need to be familiar with the long history of tyrannical power even when it is masked by prosperity, which fools people into thinking they can afford pie-in-the-sky policies that have serially failed to deliver the goods. And we should pay close attention to the willful deceptions of progressive rhetoric like “income inequality.” Lies are the instruments of tyranny, truth the oxygen of democracy. We will not always be as rich as we are today, and the reckoning of our feckless fiscal policies is going to be here much quicker than we think. Then may come the conditions in which a tyrannical regime flourishes. And there’s no guarantee that when the despot comes, he or she will be a “soft” one.

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