POLITICS

Why Republicans Can't Convince People They Care About Inequality

"It's the one form of bigotry that is still allowed in America, and that's bigotry against the successful."
Republican presidential candidate Jeb Bush.
Republican presidential candidate Jeb Bush.

American income inequality is a disaster for Republicans. Not for their donors, who are the principal beneficiaries of the new Gilded Age -- but for their politicians. 

Consider Phil Gramm. Last week, the former Republican senator from Texas was the principal GOP witness at a hearing before the House Financial Services Committee. His task was, essentially, to spout Republican-friendly econ talk for a couple of hours, and blame all of the nation's economic woes on Democrats.

Gramm used this platform to bemoan the plight of the super-rich.

"It's the one form of bigotry that is still allowed in America, and that's bigotry against the successful," Gramm declared.

He went on to describe his "good friend Ed Whitacre," a former AT&T CEO who was pilloried for accepting what Gramm described as a $75 million retirement package (it was actually $158.5 million). According to Gramm, the payout should have been even bigger.

"He added billions of dollars in value," Gramm said. "He was exploited! It was an outrage!"

Hear Gramm's comments, and learn about his role in the 2008 financial crash, in The Huffington Post's "So That Happened" podcast below. The action starts at 29:27.

Gramm isn't some random voice howling in the wilderness. He taught House Financial Services Committee Chairman Jeb Hensarling (R-Texas) economics in college, and did the same for former Texas Gov. Rick Perry (R), who is again seeking the GOP presidential nomination. He was also co-chair of the 2008 presidential campaign for Sen. John McCain (R-Ariz.) -- until he claimed the U.S. was suffering from "a mental recession" due to the country devolving into "a nation of whiners."

But Gramm keeps getting invited back to major GOP platforms, because a lot of Republicans love what he has to say. At last week's hearing, GOP lawmakers were fawning all over him.

Gramm's inflammatory testimony makes two basic points, which can ultimately be reduced to the same grotesque idea. One: Rich people deserve to be rich. They get paid a lot because they are valuable. Two: People who complain about their station in life have no grounds to do so unless they are rich, because rich people take too much flak from an envious public.

Behind both of these is the same idea: The economic world is fair. If you make a lot of money, it's because you are talented and work hard. If you don't make a lot of money, it's because you really don't have that much to offer society. The determinations of the market are the just distributions of a free, democratic nation.

This is, of course, wrong. All kinds of people get rich -- smart and stupid, virtuous and vile. J.K. Rowling is rich. So is Donald Trump.

This is a problem for Republican presidential contenders, not only because some of them may actually believe the Gramm Doctrine. They also have to deal with a donor base and crowd of primary voters who very much want to believe that the world is fair. If they work hard enough, they can make it, and nobody deserves their hard-earned money in a welfare check. Obama has been giving away the farm while they've been out working the fields.

But if you want to deal with economic inequality, there are only two real options. One is to dramatically restructure markets so that private sector outcomes are less inegalitarian -- for example, by enforcing antitrust laws, breaking up the monopolies and oligopolies that dominate the U.S. economy, giving workers more say in how companies are managed, cracking down on predatory finance, and curbing the political influence of wealthy managers and shareholders.

The other option is to accept inegalitarian market outcomes, but redistribute the winnings of the top tier, elevating those who didn't win big.

GOP orthodoxy has been opposed to both of these strategies for decades. Ask a Republican member of Congress what's wrong with the American economy, and they'll echo other elements of Gramm's testimony, saying that too many meddling regulators are holding back The Job Creators. So much for restructuring markets.

But the GOP also hates policies that redistribute wealth. In the 1970s, it was Ronald Reagan railing against welfare recipients. In 2012, it was former Massachussetts Gov. Mitt Romney and the incorrigible "47 percent." Today, it's former Florida Gov. Jeb Bush and Wisconsin Gov. Scott Walker bashing the very existence of a minimum wage (though Bush toned down his attack after some negative press).

But that hasn't stopped Walker and Bush from portraying conventional conservative policies as a cure for today's inequality, even as they have fueled a new Gilded Age. Bush's Super PAC is called "Right To Rise" -- suggesting that he alone has the prescription for helping the poor vault out of poverty. His campaign has hired Glenn Hubbard, a chief architect of George W. Bush's tax cuts benefiting the wealthy. Scott Walker says we can educate our way out of inequality, which sounds nice, until you realize that current low-paying professions won't magically pay better if every American has a Ph.D.

Gramm's words aren't Bush's or Walker's. But they reflect a very real sentiment in Republican circles -- one that Bush, Walker and the other presidential contenders can't ignore if they want to win the backing of billionaires who believe their good fortunes are the will of God.