The income gap between the rich and everybody else is behind the growth of populism in the U.S. and Europe, according to new political analyses.
On one side are the rich and on the other is the middle class. The poor rarely are mentioned these days, either because it is disgraceful to be poor or because government wants to cut back on helping them.
Deep political divisions are likely to be about money. Many among the rich want to keep it and get more, while everybody else treads water or falls behind. Some who are losing out have become populists, seeking political power in hopes of boosting their incomes.
Here’s an example. Unemployed coal miners support President Trump’s push to revive coal mining. It’s all about recovering jobs for miners who have lost theirs to competing resources. It’s certainly not about anybody’s preference for coal.
Complicating the split is the fact that many people who say they are in the middle class aren’t. “Stop pretending You’re Not Rich” was the title of a recent commentary by Richard Reeves in the New York Times.
Reeves grew up in class-conscious Britain but discovered classes were more firmly established in the U.S. than there. In Britain, the upper economic class flaunts their status, while in the U.S., the rich are in denial.
The wealthy are not only the now-famous top one percent who own more of the economy than the bottom 90 percent. Some high-income people who consider themselves members of the middle class are rich. They may join in blaming the superrich for income inequality, but they have gained more than the much larger, true middle class.
The rich are a self-renewing group. While the American myth is that people succeed based on merit, the rich pass on their privileged opportunity to their children. There’s nothing wrong with that, but it tends to create an upper class. They can gain access to housing and the best schools. And they can benefit from special tax breaks.
Writing in London’s Financial Times, Edward Luce carries the theme further. Somewhat surprisingly, he noted, “France has done a better job at keeping its left-behinds above water than its Anglo-Saxon rivals (U.S. and Britain).”
Working age males are more likely to find jobs in France than in the U.S. And the income gap is smaller there.
Luce’s key point is that not only do the U.S. and the U.K. have a market economy, but they also have a “market society.” We may consider that system promotes “individual freedom,” but it means people must fend for themselves. Some of the wealthy, while opposing big government, have designed it to favor their pocketbooks.
This split has spurred many of the less privileged to turn to movements promising change and the kind of policies they want. For example, they believe immigrants take good jobs, not merely entry-level positions, away from them and want it stopped.
Trump’s surprise electoral victory seemed to send the message that the ignored middle-class was on the path to power and control. The simple idea that Trump would bring change was enough to help him to win.
In Britain, anti-immigration voting led to Brexit, designed to stop immigrants from Eastern Europe. In the Netherlands and France, populists threatened to win the national elections, but failed. The tough British Conservative Party position on Brexit and government spending cost it a parliamentary majority.
Populism has tapped into a belief that government overreaches. In response, the president and the GOP Congress kill Obama’s rules on the environment and consumer protection. But Trump struggles as he finds keeping political promises is much harder than making them, even with his party controlling Congress.
In the Washington Post, Ishaan Tharoor writes that “right-wing populists” are now in retreat. They have created chaos, the columnist says, which is leading to a revival of interest in government action on the economy, aimed at reducing inequality.
In the Netherlands, France, Britain and Germany, right-wing populism has been halted or pushed back. Nowhere has it brought back the middle class, economically or politically.
Meanwhile, social democrats like Bernie Sanders in the U.S. and Jeremy Corbyn in the U.K. have been expanding participation. Recently, increased support for Democratic in normally solid Republican congressional districts has raised doubts about the much-heralded populist message of the 2016 elections.
The experiment with a “market society,” with as little government as possible, is not producing the promised result of greater prosperity for all. Will the political reaction against right-wing populism taking place in Europe reach America’s shores?