Very Wobbly


When you get an article sent to you twice before 9 AM, and four times by noon, it deserves noting. Paul Krugman writes today about the nagging concern he has about whether the Democrats in Congress can stand up to the wealthy elite who finance their campaigns, spend billions on lobbyists, and offer lucrative future career opportunities. While he is ever the optimist, I think we know the answer. (In fact, he provides an example that gives us the answer in at least one instance.)

Krugman cites a poll saying that the public wants across-the-board change. Citizens who think America is on the wrong track were asked to suggest a phrase that best describes their concern. The most commonly chosen were "Big businesses get whatever they want in Washington" and "Leaders have forgotten the middle class."

But the Democracy Corps memo warns that "Democrats have not yet found their voice as agents of change." Indeed. What the memo doesn’t say, but is all too obvious, is that one big reason the Democrats are having trouble finding their voice is the influence of big money.

The most conspicuous example of this influence right now is the way Senate Democrats are dithering over whether to close the hedge fund tax loophole – which allows executives at private equity firms and hedge funds to pay a tax rate of only 15 percent on most of their income.

Only a handful of very wealthy people benefit from this loophole, while closing the loophole would yield billions of dollars each year in revenue. Retrieving this revenue is a key ingredient in legislation approved by the House Ways and Means Committee to reform the alternative minimum tax, something that must be done to avoid a de facto tax increase for millions of middle-class Americans.

A handful of super wealthy hedge fund managers versus millions of middle-class Americans – it sounds like a no-brainer. . . .

One of the saddest stories I tell in my book is that of Al Smith, the great reformist governor of New York, who gradually turned into a narrow-minded economic conservative and bitter critic of F.D.R. H. L. Mencken explained it thusly: "His association with the rich has apparently wobbled him and changed him. He has become a golf player."

So Krugman asks this final question: "So, how wobbled are today’s Democrats?"

I don’t think we have long to find out.