Income Inequality Is a Loser with Voters

Yesterday was Get-nailed-by-the-IRS Day, so it was a fitting time for the New York Times to publish Thomas B. Edsall’s editorial, “Has Obamacare Turned Voters Against Sharing the Wealth?

The short answer is: Yes.

 In 2006, by a margin of more than two to one, 69-28, those surveyed by Gallup said that the federal government should guarantee health care coverage for all citizens of the United States. By late 2014, however, Gallup found that this percentage had fallen 24 points to 45 percent, while the percentage of respondents who said health care is not a federal responsibility nearly doubled to 52 percent.

Why do you think people would change their minds? Obviously, in 2014 we are experiencing what we thought we wanted. Back in 2006 it was just the mere idea of free healthcare.

(Besides, back in 2006, even though the concept had been floated, I doubt many people thought a “government-protected right” translated into “something the government can force you to buy with your own money even if the product is so bad you don’t think it is worth the price.”)

Despite the fact that Edsall implies this explanation for the change in voter sentiment, he doesn’t seem to give it much consideration. Instead, he subsumes the opinions about Obamacare under a wider trend regarding income inequality.

It is part of a larger trend: a steady decline in support for redistributive government policies. Emmanuel Saez, an economics professor at Berkeley and one of the nation’s premier experts on inequality, is a co-author of a study that confirms this trend, which has been developing over the last four decades. A separate study, “The Structure of Inequality and Americans’ Attitudes Toward Redistribution,” found that as inequality increases, so does ideological conservatism in the electorate.

By “ideological conservatism,” Edsall means a lack of faith in government redistribution programs. I don’t know why that is considered “ideological.” It seems to me that ideology is the only thing that could possibly explain anyone having faith in government redistribution programs.

I am thrilled to have evidence that my pessimism was unjustified!

But what would be the explanation?

If we take Obamacare as our example, then maybe the wider trend has a similar cause. Maybe the problem is that Americans strongly suspect that the widening income inequality has been produced, or at least strongly stimulated, by the government itself.

Edsall says many interesting things in his column, but he mostly writes as if this trend is some kind of weird American mindset. Americans simply become more conservative in the presence of growing income inequality. None of the scholars he cites seem to be curious about that possibility.

But one of the studies seems to point in the direction I am suggesting:

The General Social Survey shows there has been a slight decrease in stated support for redistribution in the US since the 1970s, even among those who self-identify as having below-average income,” according to Saez and his three co-authors, Ilyana Kuziemko, a professor at Columbia Business School, Michael I. Norton, a professor at Harvard Business School, and Stefanie Stantcheva, a junior fellow at Harvard.

Even worse for Democrats, the Saez paper found that “information about inequality also makes respondents trust government less,” decreasing “by nearly twenty percent the share of respondents who ‘trust government’ most of the time:”

Hence, emphasizing the severity of a social or economic problem appears to undercut respondents’ willingness to trust the government to fix it — the existence of the problem could act as evidence of the government’s limited capacity to improve outcomes.

So this is the good news. The government’s propaganda to blame the free market all the time is not credible with some people. They know we live in an environment saturated by government in which the government claims to be able to take care of all of us. If we have a problem with growing income inequality at this point in American history, then the government must be to blame.

Even better, Edsall applies all this to Hillary Clinton and the Democrats. The Democrats like Elizabeth Warren want to make income inequality a top priority in their message. But the message won’t sell. Thus, when Hillary Clinton announced her run she pretty much avoided the issue.

In her announcement video on April 12, Clinton chose to emphasize cultural themes of family, same-sex marriage, education and women’s rights – taking the spotlight off income inequality. She avoided the issue of explicitly redistributive goals and focused instead on “roadblocks” facing workers trying to climb the ladder.

But this kind of evasiveness can’t last. Neither core Democratic constituencies on the left nor Republicans on the right will permit Clinton to remain guarded on these divisive issues. If conservative beliefs are strengthening in direct proportion to increasing inequality, however, Democrats are caught in a policy bind that has no short-term solution.

Clinton is stuck between a substantial part of her base and the majority of the American people.