Redistributing Wealth Is the Wrong Way to Fix a Rigged Game
If rich Americans are gaming the system to illegitimately increase their wealth, if they are pulling up the ladder so that they can never be replaced as elites, if they are too socially distant from the people over whose lives they wield great influence, and if they aren't even punished like regular people when they break the rules, surely there are urgent policy changes needed that are a lot more targeted to reforming the elite than 'raise their taxes and spread the wealth.'
Better to eliminate ill-gotten gains than to redistribute them.
... You could eliminate every business subsidy in Washington, and you'd still have in place a massive income gulf and a wealthy elite able to pass its advantages on to the next generation (through proximity to jobs, social connections, acculturation, spending money on education) that have nothing to do with government. The egalitarian laissez-faire economy is a fantasy ...
Republican populists are obsessed with the role of elites using the government to reinforce their privilege. Certainly examples of this exist. But the main driver of inequality today is the marketplace, and the main bulwark against that inequality is the federal government. The federal government disproportionately taxes the rich, and it disproportionately spends on the poor.
Mr Chait has set up a false alternative. To say that the "main driver of inequality today is the marketplace" is a fairly empty observation. The marketplace is a complex system of institutions itself created by legal rules, and these rules are mostly established by government.
The law constitutes and codifies the corporate form.
The law defines the scope of property rights, including intellectual property rights. These political artifacts specify the contours of the marketplace and have vast, systemic distributive consequences. These facts are usually trotted out to correct free-market enthusiasts in the grip of the fallacious idea that "the market" somehow exists outside politics, and that the pattern of income and wealth emerging from the operation of market exchange is therefore "natural" and not already thoroughly political. I'm sure Mr Chait has made these points himself, so it should be be easy for him to see that to say that the marketplace drives inequality is just to say that government does, because the marketplace is a creature of politics.
Housing policy: Tax law ought to treat renters and owners equitably, rather than permitting mortgage interest but not rent to be deducted. In high-rent cities, permitting more construction at a lower cost would be a huge boon to most renters. Matt Yglesias has made this point over and over again with respect to the building-height limit in Washington, D.C. In suburbs, there is a much higher demand among working-class families for apartments than there is supply, because incumbent homeowners, fearing crime and traffic, almost never want multifamily units built near their neighborhoods. Eliminating all zoning laws isn't the right fit for every community, but moderate free-market reforms that reduce incumbent veto power would benefit poor and working class households.
The most important premise of Republican populism is the belief, accepted as self-evidently true after four and a half years of relentless repetition, that Obama's governing style is corrupt, or at least close to corrupt. Obama's agenda, writes Carney, amounts to "taxpayer transfers to the big companies with the best lobbyists, with some crumbs hopefully falling to the working class."
Douthat calls it "cronyist liberalism."
But this is almost completely wrong. There's a speck of truth here: Obama has fallen short of the soaring idealistic vision of governance campaigned on in 2008 -- negotiations conducted on-camera, lobbyists treated in his administration like lepers -- but he's still easily surpassed the normal presidential standard of good governance. The Bush administration devolved into a massive K Street patronage operation; Reagan's administration featured five distinct genres of corruption scandal (sixteen Reagan HUD staffers were convicted of bid-rigging, high-level staffers Michael Deaver and Lyn Nofziger were convicted of illegal influence peddling, Reagan's EPA was a sewer, etc.).