That was some whoop-de-doo speech Barack Obama gave Tuesday in Florida. It was serious campaign mode, in front of a seriously friendly crowd. And the Buffett Rule is great fire-and-brimstone stuff. I’m all for it personally. But it doesn’t amount to much as policy, and it’s not really very good politics either. On the subject of framing the economic choice in this election, the president is getting warm, but he’s not there yet.
I can see why the White House is grasping at the rule. Its namesake has a stratospheric approval rating. The key sentence—“Warren Buffett pays a lower tax rate than his secretary, and he thinks that’s wrong”—is bumper-sticker simple (no small accomplishment for liberalism!). It revs up the base. It’s the right thing to do. And the Republicans are going to vote against it en masse in the Senate next week, with I suppose the possible exception of the Warren-wary calendar boy and that vote can be a handy cudgel between now and November.
But even its passage wouldn’t accomplish that much. Despite the lazy media shorthand of “millionaire’s tax,” which makes it sound like it would hit everyone with a net worth north of $1 million, which includes a lot of people who aren’t exactly rich, it would affect only households with an adjusted gross income of more than $1 million year. In 2009, just 188,783 tax returns (of 140 million or so) stated an AGI greater than $1 million (go to this site, scroll down, find Table 1.1, click on 2009). The higher Buffett rate would bring in $4.7 billion a year. A president really shouldn’t spend a whole lot of time on something that will produce that little revenue.
More problematically, I wonder if it’s good politics. As I said, the base loves it. But beyond that, I suspect its appeal is limited. This may well be for bad reasons—that is, Americans have had it so pounded into them over the last 30 years that anything like this constitutes “class warfare” that they may just reflexively jump to that conclusion. That’s a shame, and it’s very much worth trying to alter that viewpoint in the long term. In the short term, though, Obama needs to get himself reelected, which probably means that he needs to win independent voters by something like the eight points he won them by last time—or at least by five or six. And “higher taxes for the rich” isn’t going to motivate many swing voters.
I point again to the new poll (pdf) from Third Way of 1,000 independent voters from 12 swing states. I certainly don’t agree with Third Way about everything, but here I think their general pessimism about the old-time liberal religion is warranted. They asked a few questions in this poll that I haven’t seen asked before, and it’s worth noting them.
If you open the above pdf, go look especially at questions 29, 30, 36, and 37. To me, 36B is the most telling. Would you be more likely to vote, the survey asked, for a candidate who said we should help the middle class by stressing growth and opportunity, or by making sure the rich paid their fair share of taxes. The former won by 76 to 20 percent. Other answers indicate that respondents don’t mind the rich paying higher taxes, and even generally back the idea. It’s just not very interesting to them. They’re far more interested in growth than fairness.
This is the question—and I mean, it is the question—Obama and the Democrats have to figure out by the summer. Is their core economic message fairness, or is it growth? Liberals tend to say fairness. But I think fairness really only resonates deeply with liberals. Those not already in the choir want to hear more about growth. How to do that?
Fortunately, there is an answer, and Obama himself sometimes supplies it in doses. In all of his economic speeches now, including Tuesday’s, he includes language arguing that we need to invest in the middle class not merely on fairness grounds, but because investing in the middle class is really the way to create growth. In this narrative, middle-class consumers with money in their pockets, not trickle-down 1 percenters, are the real “job creators.” From Tuesday’s speech:
“In this country, prosperity has never trickled down from the wealthy few. Prosperity has always come from the bottom up, from a strong and growing middle class. That’s how a generation who went to college on the GI Bill — including my grandfather — helped build the most prosperous economy that the world has ever known. That’s why a CEO like Henry Ford made a point to pay his workers enough money so that they could buy the cars that they were building. Because he understood, look, there’s no point in me having all this and then nobody can buy my cars. I’ve got to pay my workers enough so that they buy the cars, and that in turn creates more business and more prosperity for everybody.”
Those are the kinds of connections he needs to make. But he needs to put some policies behind them, or they’ll always play second fiddle to tax-rate stuff, which is much easier for most journalists to grasp. The Center for American Progress has proposed a list of 16 policies to promote middle-class-led growth, and Tom Harkin has a good bill. Obama needs to promote one idea that is easy to grasp, that is controversial in the right way, and that says to middle-class people: this is good not only on fairness grounds, but it will also help the economy grow.
But so far, it worries me that fairness is more the theme than growth. Thinking about fairness comes more naturally to liberals, and they/we care passionately about it. But that doesn’t mean we should assume everybody else does. And besides, middle-class growth—trickle-out economics, if you will—is the best way to defeat trickle-down. I would think liberals could get excited about that.