[The Montana Professor 1.1, Winter 1991 <http://mtprof.msun.edu>]
Kevin Phillips
262 pp., Random House, 1990
Brett Crow
Mathematics
Eastern Montana College
As the debate over the U.S. budget raged in Washington during the autumn of 1990 and repeatedly stuck on the point of how to distribute tax increases, scarcely a week went by when the difference between poor, middle class, and wealthy Americans was not a media topic. If you happened to wonder why this particular topic was suddenly so important, author Kevin Phillips has the answer and a great deal more in his latest book, The Politics of Rich and Poor--Wealth and the American Electorate in the Reagan Aftermath. Phillips, an author with extensive experience in broadcast and print media and in the political arena (as chief political analyst for the 1968 Republican presidential campaign) has done an excellent job of analyzing the national and international economic effects of decisions made during the Reagan presidency and of charting their historical roots. If anything, "aftermath" is too mild a term to describe these changes, even given their historical precedents.
The Politics of Rich and Poor is a well-written, extensively documented, and easily understood portrayal of fundamental changes in the internal financial make-up and external standing of the United States due to political decisions made during the Reagan years. Phillips has provided both hard data and anecdotal evidence to confirm what many may not know or have perhaps only suspected. Internally, wealth has become more and more concentrated at the upper end of the economic spectrum, especially for the wealthiest one percent or so of U.S. taxpayers, while middle and lower income Americans now hold a much smaller share of the nation's total wealth. Externally, the United States has become a net debtor nation for the first time since World War I and has first mortgaged, then sold large amounts of the nation's assets to foreign investors. The net effect is that for most measures of wealth from the individual level (say, the number of billionaires per capita relative to total population) to the international level (like international bank assets) the United States has surrendered its position of economic leadership while decreasing the economic opportunities of most of its own citizens.
Phillips does an excellent job of tracing these developments through the web of changes in fiscal and monetary policy implemented during the 1980s, both in terms of economic principles and in terms of specific results. Some readers may find the wealth of economic statistics excessive, although Phillips has chosen his data well, presenting data sufficient to make and defend his main points. The numerous tables, charts, and graphs are clear and uncluttered, even occasionally stunning when one considers the magnitude of change wrought in the span of a decade. Phillips exposes the flaws in opposing or apparently contradictory economic information, without being an apologist or an advocate of the political decisions themselves. Liberally oriented readers expecting an evaluation of the moral implications of Reagan's economic policies will be disappointed as will conservatives expecting to read about the obvious benefits of those same policies.
Yet the strongest feature of the book is not the economic analysis, but Phillips's comparison of the Reagan years to the Gilded Age of the late nineteenth century and to the Roaring Twenties, two previous episodes of what he terms "heyday capitalism." these times have all been characterized by Republican administrations which have emphasized a reduced governmental role, tax reductions, and the reduction of inflation through tight monetary policy. They have also seen, as direct results, large scale economic restructuring, increases in debt and speculation, labor unrest, and the production of a two-tier economy with great wealth concentration. Most worrisome to the thoughtful reader, though, is that these periods have then ended in what Phillips terms a "speculative implosion," as one or more economic events precipitate a dramatic reversal. Part of Phillips's emphasis is that we may again be on the verge of such a reversal, given the appropriate economic impetus (a thought which makes the Iraqi invasion of Kuwait and the potential recession loom even larger).
The second part of Phillips's thesis is that such economic reversals bring with them similar reversals in the political thinking and voting of the American public, as the Republican administrations and policies are blamed for the economic changes. Phillips believes that the United States is on the verge of such a political reversal, lacking only an economic catalyst and an effective Democratic attack. He makes it quite clear that avoiding this problem presents a challenge to the Bush administration, one known to the Republican strategists and the President. (In fact, he sees the President's 1988 campaign slogan of "a kinder, gentler nation" as a strategy specifically designed to get around mounting public awareness about the concentration of American wealth. Had Michael Dukakis been willing and able to attack this Republican weak spot, the 1988 election might have ended quite differently.) Left unanswered, however, is the question of why the Democratic party at large has not mounted a full-scale assault. Is there such disarray within the Democratic ranks that the forces cannot be gathered, or perhaps such costs or benefits to leading Democratic politicians that the desire to conduct such an attack does not exist?
The Politics of Rich and Poor is a thought-provoking and sometimes disturbing work which should prove especially interesting to readers with interests in American history, political science, or economics. More generally, this is a book well worth the two or three evenings it takes to read for anyone concerned with the last decade's national and worldwide economic changes and with the nature of the political process which has allowed and produced those changes. To say the least, most readers will probably finish this book with a pessimistic, even foreboding, concern about the economic future of the nation, the politicians whose decisions have shaped that future, and the electorate which put those politicians in office. Author Kevin Phillips has done the American public a true service by documenting many of these changes and placing them in an appropriate historical context, while clearly framing the challenges and dangers which lie ahead.
[The Montana Professor 1.1, Winter 1991 <http://mtprof.msun.edu>]