BrinkLindsey.com – The Age of Abundance

In her Wall Street Journal column today, Kimberly Strassel reports on opposition within the congressional Democratic ranks to various “soak the rich” tax hikes. Here’s an excerpt:

Class warrior Sander Levin from Michigan introduced House legislation levying higher taxes on hedge fund and private equity managers’ earnings back in June. It took until the end of July for Senate Democrats to start publicly trouncing the idea. Washington’s Maria Cantwell worried the tax would hurt returns for her state’s public pension fund, which makes a pretty penny off the back of private equity funds. Others fretted it would drive their private equity companies offshore. As for the almighty Chuck Schumer, patron senator of Wall Street, he declared his opposition to any tax that wasn’t also levied on non-finance industries. And since Mr. Schumer is the one doling out money for next year’s Senate re-election races, that may well be the end of that tax idea….

Madame Speaker, meanwhile, spent what was by all accounts an unfriendly hour last week trying to coax Democrats from oil-patch states to sign on to her oil-company tax hike. As of yesterday, she hadn’t had much luck; Texas’s Gene Green and about two dozen other oil-state dissidents were holding firm against the $16 billion tax package leveled directly at their home-state economies. It was unclear whether Ms. Pelosi could even risk bringing her vaunted energy legislation for a vote before August recess. Chief tax writer Charlie Rangel has faced so much in-party blowback to his idea of heavily taxing “the rich” in order to finance an alternative minimum tax fix, he has yet to introduce legislation.

It’s too early to know how any of this will turn out, but these little flareups of tax resistance illustrate the political constraints that serve so often to keep economic populism in check.

Economic populism — bash the rich, bash corporations, and bash foreigners — cashes in on economic anxiety, and consequently it usually resonates with a goodly chunk of the electorate. For a variety of reasons, it’s resonating especially well these days.

But here’s the catch: populism works much better as diagnosis than prescription. Rail against obscenely paid CEOs and hedge fund managers, greedy oil and pharmaceutical companies, and dastardly job-stealing Chinese imports, and you’re sure to convince certain constituencies that you’ve correctly identified the problem. No suprise there — people are feeling pain or feeling worried, and you’re offering up a primal scream on their behalf.

But now comes the hard part. Now that you’ve tapped into economic anxiety for political gain, what are you going to do to alleviate it?  If your answer is tax increases or protectionist policies or other measures that throw sand in the economic gears, good luck — because those proposals, if enacted, will end up increasing the number of people suffering from economic anxiety.

Because of this dynamic, the politically optimal solution is often some version of bait and switch: stir up political support with market-bashing demagoguery, then avoid a huge backlash by sticking to small-bore or symbolic policy changes. Consequently, populism’s bark usually ends up being much worse than its bite.

The great outsourcing scare of 2004 was a case in point. It was a political season, and the “jobless recovery” made playing to employment anxieties a political winner. John Kerry dutifully cashed in with a populist diagnosis of “Benedict Arnold CEOs”; his prescription, though, was penny-ante tinkering with the tax code. Yawn…. Before too long, job creation recovered, the election season ended, and concern over outsourcing was relegated to the back burner.

I’m not saying we should be complacent in the face of market-hostile political sentiment. Rather, I’m saying that supporters of pro-growth policies shouldn’t get demoralized by the current wave of economic populism. Yes, we’re forced to play defense for the time being, but being temporarily on the defensive and actually losing are two different things.

Ezra Klein, commenting on my recent WSJ piece about the cultural roots of economic inequality, criticizes my call for increased competition in schooling as “an astonishingly narrow and inadequate solution.” I agree!

The point of my op-ed was to identify a problem: the culture of economic underperformance. I did feel obliged to say something about what ought to be done, but I didn’t offer much. First, I said upfront that there’s no silver bullet. Then I said:

But the public institutions most directly responsible for human capital formation are the nation’s schools, and it seems beyond serious dispute that in many cases they are failing to discharge their responsibilities adequately. Those interested in reducing meaningful economic inequality would thus be well advised to focus on education reform. And forget about adding new layers of bureaucracy and top-down controls. Real improvements will come from challenging the moribund state-school monopoly with greater competition.

I stand by all that, unsurprisingly, but I’ll readily concede that even the best possible (by my lights) educational reform would have only a modest impact.

Ezra writes that “all evidence suggests [school reform] will be far less effective than more serious interventions like universal preschool.” And I think that, in theory at least, Ezra has a valid point: if you’re trying to counteract the effects of a dysfunctional or at least maladapted culture in the home, you’ll have much more leverage if you reach kids in the first years of life.

It’s the dicey little trip from theory to practice that I have problems with. To put the matter plainly: how can anyone seriously believe that the people who brought us the D.C. public schools are going to do better if we give them preschools as well?

Meanwhile, Ezra is too quick to write off K-12 as irrelevant. After all, the public schools have long been touted as the centerpiece of government efforts to provide something like equality of opportunity — i.e., to offer some compensation for the kids who didn’t win the parent lottery. If, in fact, schools don’t matter, why do we spend so much tax money paying for them? If, on the other hand, government support for K-12 does do something to mitigate the inequality in investment in childrens’ human capital, shouldn’t we ensure that the public investment being made is as effective as possible?

Today is the 38th anniversary of the Apollo 11 moon landing. The space program was the great enthusiasm of my boyhood, and it was watching the events of July 20, 1969 that awakened that enthusiasm. Back then the meaning of the first moon landing seemed obvious: it was an early victory in humanity’s conquest of space. Perhaps that conquest will eventually resume, and Apollo’s promise will be redeemed.

Now, however, the meaning of Apollo looks different: from our current vantage point, it looks like the high water mark of technocracy. Over the course of the twentieth century, the dream of space travel waxed together with the dream of central planning and social engineering. An early visionary of the final frontier was the Fabian socialist H. G. Wells; another was the Russian rocket pioneer Konstantin Tsiolkovsky, who ended his life as a committed communist. Rocketry advanced first under the Nazis, then under the Soviets. Krushchev pushed forward after Sputnik with an ambitious space program in the belief that the Space Age would herald the transition to true communism. Which, in turn, provoked a response from the New Frontier/Great Society technocracy of the “best and brightest,” culminating in the landing at Tranquility Base.

By the time of Apollo’s triumph, however, the tide had already turned. Krushchev had been ousted five years earlier, his fantasies of the communist millennium replaced by Brezhnev’s disillusioned corruption. The New Frontier had ended in horror; the Great Society, in tragic failure. A few weeks after Apollo 11, the counterculture’s rebellion against technocracy peaked at Woodstock.

As Cold War rivalry cooled and the technocratic vision lost its hold on the imagination, the Space Age fizzled. The gleaming future gave way to rust and ruin, as evidenced in the photo at the top of this post. The picture is of Launch Pad 34 at the Kennedy Space Center, site of the Apollo 1 fire and the launch of the first successful Apollo mission, Apollo 7. The picture was taken 10 years ago, on the 30th anniversary of the Apollo 1 fire.

But the dream of space has survived the demise of its technocratic host. A new era of private spaceflight may now be starting, funded primarily by fortunes created by the Internet revolution. And what a wonderful twist that is. Spaceflight’s founding era rose and fell with the vision of technology as an instrument of top-down control. How wonderful if its rebirth can be midwifed by the vision of technology as an instrument of personal liberation.

Here is a video clip of the moon landing:

Please excuse the past couple weeks of silence — I’ve been away on vacation.

Now that I’m back, I’ll buzz-bomb you with a blizzard of links relating to yours truly. First, here are recent pieces I’ve written for the Wall Street Journal (on the roots of economic inequality), National Review (on the demise of the culture wars), and National Review Online (ditto).

Meanwhile, over at Cato Unbound this month, I’m discussing the politics of the Age of Abundance with Jonah Goldberg of National Review, Matt Yglesias of The Atlantic, and Julian Sanchez of Reason.

My book has received favorable reviews or write-ups in (in reverse chronological order) Toronto’s Globe and Mail, the Philadelphia Inquirer, National Review (no link), the Los Angeles Times (one column by Ron Brownstein and one by Gregory Rodriguez), the Dallas Morning News, City Journal, and the New York Times.

And, last but not least, my Cato book forum (with a talk by me and commentary by the NYT’s David Brooks) was televised recently on C-SPAN2’s Book TV.

In a recent issue of Rolling Stone, Princeton historian Sean Wilentz assesses “The Legacy of 1967″ — with striking parallels to my own look back at the Summer of Love (excerpted from my book) in the current issue of Reason. Both of us stress the dualistic nature of developments that year, as tumultuous changes in American society gave birth to new formulations of both left and right.

For my part, I start off in April of that year, with the announcement in San Francisco of the Summer of Love and, that same week, the formal dedication ceremonies for Oral Roberts University in Tulsa. Wilentz, in similar style, starts at the beginning of 1967, as Country Joe and the Fish ushered in the new year at the Avalon Ballroom in San Francisco while 24 hours later, up in Sacramento, Ronald Reagan was sworn in as governor of California at the stroke of midnight.

The tone of the two articles, though, is quite different. I try to describe that watershed year and the decades that followed from a perspective that transcends the left-right dualities of the era. Wilentz, however, remains stuck solidly within them. He writes as a committed partisan of the left, still fighting the good fight. Check out this paragraph near the conclusion of Wilentz’s piece:

A few years ago, Bill Clinton offered an astute assessment of the decade that shaped the politics of his generation. “If you look back on the Sixties and on balance you think there was more good than harm in it, you’re probably a Democrat,” Clinton observed. “If you think that there was more harm than good, then you’re probably a Republican.” That polarization is the real legacy of the Summer of Love. On a cultural level, our daily lives – the music we listen to, the air we breathe, the rights we are afforded – remain shaped, in large measure, by the progressive movements of that era and the victories they achieved. But on a political level, the social and religious forces who are determined to roll back those victories are still in charge.

For Wilentz, the story of 1967 and its aftermath is basically a simple morality play of good vs. evil. The left is the party of progress; the right, the party of reaction. And while the left’s remaking of the culture is a liberation to be celebrated, the right’s capture of political power is a terrible wrong still to be righted.

I don’t see it that way. Rather than white hats vs. black hats, I see a more complicated picture. On the left I see liberation mixed with destructive nihilism; on the right, hidebound reaction with a saving conservatism:

The events in San Francisco and Tulsa that spring revealed an America in the throes of cultural and spiritual upheaval. The postwar liberal consensus had shattered. Vying to take its place were two sides of an enormous false dichotomy, both animated by outbursts of spiritual energy. Those two eruptions of millenarian enthusiasm, the hippies and the evangelical revival, would inspire a left/right division that persists to this day.

That split pits one set of half-truths against another. On the left gathered those who were most alive to the new possibilities created by the unprecedented mass affluence of the postwar years but at the same time were hostile to the social institutions—namely, the market and the middle-class work ethic—that created those possibilities. On the right rallied those who staunchly supported the institutions that created prosperity but who shrank from the social dynamism they were unleashing. One side denounced capitalism but gobbled its fruits; the other cursed the fruits while defending the system that bore them. Both causes were quixotic, and consequently neither fully realized its ambitions. But out of their messy dialectic, the logic of abundance would eventually fashion, if not a reworked consensus, then at least a new modus vivendi.

Which version rings truer to you? Who was more successful in stepping outside the viewpoints of the drama’s participants and attaining a truly historical perspective?

Top honors go to the feel-good classic of Aquarian consumerism, “I’d like to teach the world to sing,” the centerpiece of Coke’s immensely successful “It’s the Real Thing” campaign:

The TV spot debuted in 1971, and it was so popular that it spawned two hit pop versions (sans Coke references), one recorded by the Hillside Singers and another by the New Seekers. The latter reached #10 on the U.S. pop charts; the former, #13. For more about the song, the ad, and the commercial spinoffs, read here.

And as a special bonus, here’s the Christmas version of the ad:

In terms of sheer effectiveness in zapping fairly complex information into consumers’ noggins, I don’t see how you can beat the McDonald’s Big Mac jingle:

OK, as we reach the final three, the tension is starting to mount (actually, since you’re probably reading from the top down, there’s not likely any tension at all). Second runner-up honors go to Life cereal: “Hey Mikey! He likes it!”

At number 4, here’s an ad for the “Pepsi Generation” — an early victory in the “conquest of cool.”

Leading off the top 5, here’s Madge for Palmolive: “You’re soaking in it.”