Kevin Phillips Turns the Screws on Conservatives
Szamuely, George
THE AMERICAN SPECTATOR VOL. 23, NO. 9 / SEPTEMBER 1990 George Szamuely KEVIN PHILLIPS TURNS THE SCREWS ON CONSERVATIVES How the resentful architect of the GOP's "Southern strategy" became...
...On the question of foreign investment, Phillips's alarm has even less basis...
...I n this year's eagerly promoted tract I The Politics of Rich and Poor,' Kevin Phillips argues that despite George Bush's victory in 1988 the Republican political cycle has come to an end...
...Doubtless, Phillips will look forward to this prospect with some relish...
...Incidentally, in his enthusiasm to elevate the prowess of the Japanese and to downgrade that of the Americans, Phillips scores a spectacular goal for the opposition: at one point, he triumphantly brings up the fact that by 1987 the total national assets of the Japanese were valued at $43.7 trillion, easily surpassing the comparable American figure which he claims to be $36.2 trillion...
...Investments in the United States, however, have been more recent and are thus estimated at something closer to their real market value...
...than there were when Ronald Reagan came to power...
...Reagan's economic policies could only lead to the revival of some kind of corporatist-redistributionist politics (which, Phillips, to say the least, would not take amiss...
...At that point, an embittered class-based dirigiste-protectionist agenda may be in the cards...
...But Nixon did not really need Phillips to tell him that the New Deal coalition was vulnerable...
...When the Republicans in 1972, 1974, and 1976 failed to make the significant advances that Phillips had predicted, he turned bitterly on Nixon...
...But then, if you are not rich enough to travel by air what good is airline deregulation to you...
...For instance, he admits that "consumers in general may have benefited from the spread of deregulation...
...Nor was the Old Right any better...
...Furthermore, around 85 percent of the $1.7 trillion in foreign investment in America consisted of passive holding of stocks and bonds, not controlling shares in businesses...
...This was certainly a bit hard on Nixon, who at least in his rhetoric challenged just about every fashionable 1960s nostrum and was nothing if not divisive as a politician...
...It is interesting to note, however, that the only realignment to take place in recent years is Phillips's own metamorphosis into a mainstream Democrat...
...sometimes we were in for a dose of fascism...
...This is even more impressive than it sounds, since most of the employment growth in recent years has been in the service sector, where it is far more difficult to achieve spectacular leaps in productivity...
...He does not mention that the U.S...
...And they ignore the fact that the numbers do not constitute the same people year in, year out...
...Doubtless, if Reagan had succeeded in cutting the Social Security tax, Phillips would have bewailed the consequences for an America so recklessly squandering its future, or seen the cut as evidence of petit bourgeois resentment...
...Few people have studied his writings and examined his ideas and positions...
...Traditional Republican voting blocs were becoming Democratic, and vice versa...
...Random House, $19.95...
...But then, since the rich were earning vastly more in 1986 than at the start of the decade, their relative tax burden had actually decreased...
...THE AMERICAN SPECTATOR SEPTEMBER 1990 13...
...But then on page after page Americans are also made to feel ashamed because Japan has a lot more billionaires (and a lot richer billionaires, come to think of it) per capita than the U.S...
...Phillips could be wrong in his diagnosis and yet turn out to be right in his prognosis...
...does...
...physical assets, estimated at $35 trillion...
...Statistics usually ignore the fact that such families are mostly headed by individuals under twenty-five or over sixty-five, and hence are often not working...
...In the 1970s, Phillips argued that the political conflicts of the future would no longer be rooted in clashes of economic interests...
...Okay, "American cities and states receiving large-scale direct foreign investment welcomed the infusion...
...Published in 1969, the book put forward a startling thesis: the liberal Democratic New Deal-cum-Great Society era had come to an end...
...As for Ronald Reagan, by 1982 Phillips was already disgusted with marginal-rate tax cuts that he claimed favored the Republican business elites...
...The Republicans were completely in the hands of businessmen and lawyers...
...The neoconservatives...
...Phillips juggles these contradictions as freely as he once used to put together paper coalitions of voting blocs...
...economy and, second, on the change of style in this new decade...
...It is doubtful that Phillips will add much to his reputation with this book, though we already know it has enhanced his popularity with his liberal admirers...
...There was no one around to represent the "less affluent" to whom had fallen the task, he once argued, "of conserving the 'old values.' " 'V et for every conservative movement that came on the scene Phillips had nothing but scorn...
...And there are lots of meaningless statistics of the "x percent of the population owns y percent of the wealth" kind...
...In addition, economists argue, most American overseas investments were made a long time ago and are carried on the books at their original value, unadjusted for inflation and market appreciation...
...Those who made a buck during the Reagan years will be made to suffer through "higher taxes, additional economic regulation, a greater commitment to easing inequality and belief in the usefulness of central government...
...But Phillips would not be listened to so earnestly had he not written The 'The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath, by Kevin Phillips...
...Their consequence will be a widespread sense of diminished economic possibilities...
...Johnnies-comelately to the ranks of those telling us just how the United States had gone wrong in the 1960s, in part because not a few of them had been involved in the policy mistakes made," he wrote in 1982 in his Post-Conservative America...
...Nixon's men, Phillips wrote in Mediacracy (1975), "had little idea where their 1968 votes had come from and little idea what to do to hold and develop those electoral loyalties...
...Ah, but "relatively few new jobs" came about as a result...
...Total foreign investment in the United States was estimated to be $1.7 trillion in 1989...
...9 / SEPTEMBER 1990 George Szamuely KEVIN PHILLIPS TURNS THE SCREWS ON CONSERVATIVES How the resentful architect of the GOP's "Southern strategy" became resentful liberalism's house conservative...
...George Szamuely writes regularly for Commentary, Insight, the National Interest, and the Wall Street Journal...
...On page after page he offers proof that there are today a lot more billionaires, centimillionaires, and decamillionaires in the U.S...
...But this was to prove not half as devastating as the fall of the dollar during Reagan's second term...
...sometimes we were about to witness a liberal revival...
...But it is typical of Phillips's perpetually carping tone...
...Phillips argues that average living standards hardly improved over eight years...
...Emerging Republican Majority...
...No matter how frequently and how convincingly one may refute arguments about American economic decline, or growing impoverishment at home, or that the rich somehow get richer at the expense of someone else, it is perception that counts...
...To summarize a not unfamiliar argument very briefly: During the Reagan years the cuts in marginal tax rates, the deregulation, and the high interest rates that arose asa result of the budget deficits had led to the rich getting a lot richer a lot faster than anyone else did...
...Nonetheless, Phillips still may be on to something when he predicts that a "soak the rich" program will be enacted...
...But if the Japanese are in possession of capital assets of greater value than those of the Americans, what does it say about their capital productivity that their economy is only one-third the size of the U.S...
...National Review was "social respectability-questing" and had "clearly moved to the left...
...This is only a small share of total U.S...
...Taxation, regulation, inflation-fueled growth may soon be on the way, all under the auspices of the Bush Administration...
...It's also true that for years and years he had been predicting the disintegration of the two-party system, at times envisioning the emergence of a European-style Social Democratic party, at other times hinting at the possibility of a fascist regime...
...To confirm his thesis of American and even worldwide disenchantment with money-making, he time and again cites as authorities men of the caliber of Mario Cuomo, Lester Thu-row, and Robert Kuttner, or English left-wing playwrights...
...After a while, it became very confusing to follow Phillips's train of thought...
...The Democrats had become the creature of minorities and the liberal intelligentsia...
...First of all, there is a matter of style...
...share of world industrial output grew from 36 percent in 1973 to 39 percent in 1986...
...Sometimes the New Right would join forces with the Old Left...
...hillips's prophecy of the coming clash between the rich and poor, or between the rich few and everyone else, rests first on his bleak diagnosis of the U.S...
...Throughout the book Phillips adopts the tired socialist jargon of "distribution of wealth" and "redistribution of wealth," as if a nation's wealth was a fixed asset lying undergound rather than something being created daily...
...Moreover, Phillips has the annoying habit of hedging his bets and whining at the same time...
...The prospect of free-market economics being brought to an end (as he urged in his 1984 book Staying on Top: The Business Case for a National Industrial Strategy), or elites of various kinds (business, media, academic) getting their comeuppance—or the artsy crowd being made to stop indulging their pretentious nonsense—seemed to fill him with excited anticipation...
...What's more, it was far from clear which, if any, of the alarming political eventualities he was predicting he would approve of...
...The ubiquitous "conservative' label attached to his name enabled him to become a staple on network news and an unimpeachable critic of the Reagan and Bush administrations for newspaper stories...
...But there was a greater inequality of incomes than before...
...According to them, "the electorate had been motivated by straight pocketbook tax-cut sentiment, not by animosity toward liberal programs, sociology or bureaucracy...
...So no deindustrialization is going on here...
...Phillips can pretty much get away with anything...
...And so on and so on...
...By campaigning with abrasive superficiality . . . while simultaneously eschewing basic social critiques (and indeed perpetuating many of the most egregious programs), the White House only demonstrated the shallowness of its domestic policy posture...
...Naturally enough, the electorate was not terribly impressed...
...Now foreigners, in particular the Japanese, could come here and buy up U.S...
...Phillips had friendly words about the New Right (at least no one could ac12 THE AMERICAN SPECTATOR SEPTEMBER 1990 cuse this movement of latent liberalism) but then went on to compare men like Paul Weyrich, Richard Viguerie, and Howard Phillips to the European conservative revolutionaries of the late nineteenth and early twentieth centuries who paved the way for Nazism...
...Both major parties filled him with contempt...
...Nor are stories of American decline relative to the Japanese any more convincing...
...Needless to say, the mergers and acquisitions explosion along with junk bonds make their appearance in the book—as do Michael Milken's estimated take-home pay, "golden parachutes," and the activities of Donald Trump...
...Moreover, the agenda of the new decade is going to be "to correct the excesses of the 1980s" through what Phillips euphemistically calls "the downward redistribution of wealth...
...Back in his first congressional race in 1946, Nixon was already portraying himself as more in touch with the true spirit of the Democratic party than its current leadership...
...America had become a net debtor...
...The people who were enthusiastically greeting Phillips's assorted pronouncements never took the trouble to appreciate this distinctly authoritarian side of his thinking...
...Nonetheless he has always retained his fascination with impending realignments or de-alignments in American politics...
...They had signed on to the liberal Weltanschauung...
...Although he has continued to be described as a "Republican strategist," Phillips seemed to lose interest in the fate of the GOP early on...
...The supply-siders...
...America's share of world industrial employment has been rising at the same rate as Japan's in recent years...
...assets on the cheap...
...and the metropolitan newspapers, the Supreme Court, the major law firms, and the Episcopal Church as their institutional foundations...
...the blacks as their most solid base of support...
...On the question of low-income families, Phillips, like others, makes crucial omissions...
...True, he had argued back in the 1970s that the political conflicts of the future would no longer be rooted in clashes of economic interests...
...The Republicans, on the other hand, could count on the South, the Border, the West, and the Heartland and blue-collar, ethnic voters...
...In fact, they argued, deep cuts in the federal income tax could be made without jeopardizing federal social programs...
...Time, there had been a "slight overall growthin median family income...
...He now said that Nixon had been too dull-witted to exploit widespread detestation of Great Society policies: income transfers from the working poor to the non-working poor, group rights advanced at the expense of individual rights, snobbish liberal intellectuals elevated to new heights...
...In 1989, the typical Japanese worker produced 72.7 percent as much as his American counterpart...
...The Democrats could count on the northeastern states as their stronghold...
...In his columns in the Los Angeles Times and in his two extremely expensive newsletters, he juggled with one permutation after another...
...Like all of Phillips's utterances of the last twenty years or so, these pronouncements have received many sage nods and concerned frowns...
...In any event, the Japanese hold only 15 percent of all direct foreign investment in the U.S...
...There was some basis to this belief, since he had worked for a time in the 1968 Nixon campaign and subsequently for Attorney General John Mitchell...
...In addition, the high value of the dollar during Reagan's first term (caused by a restrictive anti-inflationary monetary policy as well as by a need to attract foreigners to buy Treasury bonds) had devastated American industry and agriculture...
...Phillips proposed as his ideal of tax cuts California's Proposition 13, which involved property tax cuts and hence affected largely lower-middle-class and middle-class households...
...GNP for that year was $4.4 trillion, almost three times greater than the Japanese figure of $1.6 trillion...
...As he put it sneeringly in Mediacracy, "Power has passed from the boardrooms of Manhattan and the clubrooms of Boston to the petroleum clubs of Texas and the defense-industry suburbs of California...
...American overseas assets, moreover, are estimated at $1.3 trillion...
...Perhaps the explanation for the Japanese enthusiasm to invest their money in the United States is staring Phillips in the face...
...The U.S...
...Yes, it is true that the "percentage of total federal income tax payments made by the top one percent of taxpayers actually rose, climbing from 18.05 percent in 1981 [to] 26.1 percent in 1986...
...But what use is that if the "greatest benefit went to the middlemen—to the advisers, promoters, packagers, and refinancers...
...Among the poorest 20 percent of families in 1971, nearly half had worked their way out within seven years...
...For his new book is an indictment of Reagan's economic policies of the type to be found at least every other week in the New Republic...
...Phillips was one of the first to grasp that an enormous political change was taking place in America, and when talk of a "Southern strategy" or a "New American Majority" or the "Silent Majority" started circulating during the Nixon presidency, Phillips was widely believed to be the intellectual inspiration behind it...
...On LBOs he admits that "small shareholders being bought out often did well...
...Today he can be happy that he has done his little bit to help bring that day closer...
...W ith The Politics of Rich and Poor, Phillips has discarded the few vestiges of Conservative Republicanism that clung to his work...
...Although just a few years earlier Lyndon Johnson had trounced Barry Goldwater on a scale surpassed only by FDR's defeat of Alf Landon, what was truly significant, according to Phillips, was the scarcely noticed electoral realignment it heralded...
Vol. 23 • September 1990 • No. 9
