The Politics of Rich and Poor; Wealth and the American Electorate in the Reagan Aftermath. By Kevin Phillips. Random House, 262 pages: $19.95 hardcover.

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There’s not much comfort any more in Abe Lincoln’s populist aphorism. As the ‘80s have demonstrated if you can fool just 51 percent of the electorate just twice in a row, you can pretty well dismantle the polity and despoil the economy.

Having done as much as any other writer to prepare the way for the catastrophe of Reaganism, Kevin Phillips has recoiled in dismay from the legacy of his efforts. Phillips was a leading strategist, an expert in electoral demography, for Richard Nixon’s 1968 presidential campaign. After the election he wrote a political blockbuster, “The Emerging Republican Majority.” From a mountain of data about election results, party affiliation, residential patterns and cultural attitudes, Phillips deduced a seismic shift in American political geology: the mass defection of Southerners, white ethnics, union members and other traditionally Democratic voters. These groups resented the flouting of their work ethic, their sexual ethics and their national pride by welfare recipients, social-service professionals, homosexuals and the New Left, and resented still more that their own taxes subsidized or protected such behavior. So they turned first, some of them, to George Wallace, and then en masse to the Republican Party. Their numbers and fervor, added to the Republicans’ abundant financial support from business, made an unbeatable electoral combination.

The book’s charts and graphs — hundreds of them — were like so many floral wreaths at the funeral of the New Deal coalition. And Phillips himself could be glimpsed, through the thicket of figures, dancing on the Democrats’ grave. Not withstanding his sober, analytic tone, he clearly sympathized with the “populist revolt of the American masses who had been elevated by prosperity to middle-class status and conservatism,” a revolt against “the caste, policies and taxation of Establishment liberalism.”

Phillips has come a long way from his cubby hole in the Nixon campaign offices, where the “savvy city kid” with a “disarming boyish grin” told the visiting Gary Wills that “the whole secret of politics” is knowing who hates who.” Currently, as editor-publisher of the influential “American Political Report”, syndicated columnist and guest commentator everywhere, he is sometimes referred to as the foremost analyst in American politics. It is not an absurd exaggeration.

Phillips’ eminence has not however, extinguished his populist passions. He can still loathe and damn the “case policies and taxation” of an Establishment that dupes and despises his long-suffering, hard-working middle-class American masses.” Now it is a Republican Establishment, whose ascendancy Phillips predicted and initially celebrated, that is doing the duping. Phillips, though, is an honest man. Not only does he deplore the inglorious triumph of plutocracy, but he refrains from predicting the glorious vindication of democracy. He still hates robustly, but hopes more modestly.

Like the emerging Republican majority, “The Politics of Rich and Poor” describes a sea change in American political culture — this time not an electoral but an economic shift: the creation of public policy of vast inequalities of wealth. With characteristically profuse documentation, Phillips shows how the Reagan administration’s tax cuts, budget priorities, deregulation and monetary policy all sharply and perhaps irreversibly, enhanced financial inequalities. Throughout the Reagan years, the popular perception was: the rich may be getting richer, but so are most other people. Now that the facts are in, this is at least debatable, depending on how you compile and interpret data about median family income and other statistical categories. What is not debatable, though, is that the rich got much, much richer, relatively and absolutely, than everyone else. The bottom fifth of the national income scale lost ground — were actually worse off at the end of the decade than at the beginning; the middle three-fifths held their ground, with most gains attributed to a second wage-earner (i.e. a working mother); the upper fifth did well; the upper tenth did extremely well; and the top 1 percent did scandalously well (a 49.8 percent gain in average family income from 1977 to 1988, according to one study).

Powerful as it is, Phillips’ critique of Reagan- era inequality is not as original as he seems to think. Throughout the 80s, he remarks, “hardly anyone asked why such great wealth had concentrated at the top, and whether this was a result of public policy.” Hardly anyone? Exactly these questions were raised, week in and week out, month in and month out, by Michael Harrington, Robert Lekachman, Robert Kuttner, Thomas Edsall, Alexander Cockburn and many others, and in issue after issue of “Dissent”, “Dollars and Sense”, “The Nation” and “In These Times”. Apparently Phillips cannot take seriously anyone to the left of Robert Reich (except for a couple of respectful references to Kuttner and John Judis). Still, if you’re looking for a compact guide to the political economy of the 1980s, you can hardly do better than “The Politics of Rich arid Poor.”

What is original about the book is Phillips’ interpretation of Reaganisim as a cyclical phenomenon. American political history since the Civil War divides up roughly into four cycles: a Republican cycle that culminated in the Gilded Age of the 1880s and ended with the Populist challenge of the 1890s; another Republican cycle following the critical election of 1896, which climaxed in the Roaring ‘20s and ended with the stock-market crash; a Democratic cycle that saw the New Deal and the Great Society and ended with the Vietnam War and the current Republican cycle, beginning with Nixon’s victory in 1968. Phillips identifies some common features of the three Republican periods: tax reduction, entrepreneurialism, corporate restructuring, stepped-up merger activity, disinflation, slumps in agriculture and mining, strong financial markets, laissez-faire ideology, deregulation, and increased inequality of income and wealth. Then he lays out a common sequence: “economic [growth]…as enterprise-oriented policies unleash latent capitalist energies”; then dislocations, including “speculative excesses and even market crashes”; finally, after a decade or so of “heyday psychology” leading to a “capitalist blow-off,” some “major economic or market contraction occurs,” followed by a populist and egalitarian reaction.

These tidy little analogies don’t prove anything as Phillips readily admits. But they do suggest political possibilities — except, it seems, to the Democrats. Even the conservative Phillips discerns — and welcomes — signs of “distaste for survival-of-the-fittest economics” and “belief in a more activist role for government and demand for attention to the weaker portions of society.” But although the hapless Michael Dukakis surged hen his campaign turned, briefly and too late, to emphasizing the so-called fairness issue, and would, with the shift of only about 1.5 million votes, have won the election, the Democrats still have not gotten the idea. “Brain-dead” is Phillips’ diagnosis.

Consider these quotes from “The Politics of Rich and Poor”:

1) “The way to win a presidential race against the Republicans is to develop the class-warfare issue.. . To divide up the haves and have nots and to try to reinvigorate the New Deal coalition and to attack.”

2) “The ‘80s will be known as the decade of the fat cats, a time when entrepreneurial pie ties were used to beat the average worker into cowed submission while America’s corporate elite moved yet higher on the hog.”

3) To pay the interest component of the 1988 budget will require a sum ($210 billion) equal to approximately half of all the personal income-tax receipts. This represents. . . a transfer of wealth from labor to capital unprecedented in American History.

Tax revenues are being collected from average Americans (the median income of a family of four is slightly under $30,000) and given to buyers of U.S. government bonds buyers in Beverly Hills, Lake Forest, Shaker Heights and Grosse Pointe and Tokyo and Riyadh. If a Democrat can’t make something of that, what are Democrats for?

The authors of these subversive sentiments are not leftists, or even angry centrists. They are 1) Republican National Chairman Lee Atwater; 2) the conservative economics columnist of the “Dallas News” and 3) George Will. No Democratic presidential candidate of the ‘80s, except Jesse Jackson, came anywhere near this level of candor, common sense and populist indignation.

So what are the democrats for? This is not a rhetorical question. Actually, I don’t believe George Will — or even Kevin Phillips— has a clue. Nor do any Democratic presidential candidates, probably including Jackson. Here’s the answer.

There is an old left-wing slogan: America has only one political part the Property Party; Democrats and Republicans are its two main factions. Attempts have been made, sometimes plausible and sometimes not, to substantiate this slogan. “Right Turn: The Decline of the Democrats & the Future of American Politics” (1987), by Thomas Ferguson and Joel Rogers, is an extremely plausible attempt. Ferguson and Rogers claim that electoral politics, like virtually every other sphere of activity in a capitalist society, is a kind of market. Firms (parties) with similar products (positions) compete for consumers (voters) and promise profits (beneficial government intervention) to investors (contributors). As in the rest of the economy, consumers maybe sovereign in theory, but, in practice, control lies with investors.

An elegant conceptual scheme, and it comes with plenty of empirical support. Phillips’ research on election results is legendary for its thoroughness and astuteness. Ferguson and Rogers’ research into campaign contributions is Phillips’ equal in these respects, as well as being more to the point. Their account of who owns the Republican and Democratic parties, and of how the changing needs of these “investors” have largely determined the shape of American political history, makes clear why the New Deal died and won’t rise again. There is still conflict among business elites, but be cause of changes in America’s inter national economic position, no longer does any of them have important interests that coincide with those of organized labor, consumers, inner-city dwellers or any other substantial segment of the population.

What, then, of Phillips’ hope for a populist, egalitarian reaction to Reaganism? The predicted shift in popular attitudes is undeniable; here and there, already visible. But before it can have any practical result, the Democratic Party must be either transformed or abandoned. As Phillips himself observes: Dukakis far out-drew other major 1988 Democratic contenders in campaign contributions from businessmen, lawyers and financiers. Dependence of this kind was a major constraint, realistically barring more than a façade of populism.”

Dependence of any other kind would, realistically, make for a radically different Democratic Party, and a radically different American polity. The great populist challenge of the l890s was beaten back by a brilliant, unscrupulous, tightly coordinated and lavishly financed counterattack. Since then, the mass production and distribution of ideology has evolved into an advanced technology, whose ownership and control, like that of all other advanced technologies, is becoming ever more concentrated. For political purposes, attitudes and sentiments do not exist before they are expressed. To give large-scale expression to popular sentiments, to work out and put forth a detailed political program based on them, requires information, organization and publicity And all these require a lot of cash.

If you think about where those who currently devise and disseminate political programs on a large scale (i.e., the Democrats and Republicans) get their money, and then reflect on how likely those sources of money are to fund a “populist reaction” to their greed and irresponsibility, you’ll have the measure of Phillips’ (admittedly tentative) hopes. It’s too bad that this shrewdest, most tough-minded of contemporary political analysts didn’t analyze his own assumptions — with the greatest respect, I would still call them illusions — about American electoral politics a little more deeply.


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George Scialabba