Rich guy: Tax the rich

Here’s a fantastic speech from Nick Hanauer on income inequality.  He’s a very rich venture capitalist, and his remarks are pretty much what I’ve been pointing out for years: policies that benefit the middle class make the whole nation richer; policies that benefit the rich make only the rich richer.

Key quote:

Here’s an incredible fact.  If the typical American family still got today the same share of income they earned in 1980, they would earn about 25% more and have an astounding $13,000 more a year. Where would the economy be if that were the case?

That’s Reaganism in a nutshell: take $1.5 trillion from the middle class and hand it to the already rich.  Every year.  And Mitt Romney and Paul Ryan are champing at the bit to take even more.  (Note that Hanauer isn’t just talking about taxes; he’s also talking about the gains of productivity over the last generation, which used to benefit the whole nation and now just go to the 1%.)

The strange irony is that it isn’t even the rich, as a class, who are demanding more plutocracy.  The super-rich are much more Democratic than the merely rich.  But there’s a fraction of them who never forgave the New Deal and finally see themselves on the way to getting rid of it.  And then, full on regress toward the banana state.

At the same time, I think there’s little mystery in why the moneyed classes, the Very Serious People as Krugman calls them, aren’t really bothered by ongoing recession and high unemployment, here and in  Europe.  Partly it’s because they just don’t see it: they’re still rich, and no one they know is out of a job.  And partly, I think, it’s because rich conservatives are actually most comfortable when everyone else is pinched, and thus ungenerous and unthreatening.  Adam Smith argued against this attitude frequently, in fact– he had to mount arguments that lean years were not, in fact, good for the nation.