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If God Resides in Details, Phillips Is Doomed: A Review of The Politics of the Rich and Poor
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17183 |
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Section : |
MODERN THOUGHT
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| Issue
Date : |
12 / 1990 |
5,294 Words |
| Author
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Arthur B. Laffer
Arthur B. Laffer, an economic adviser to President Reagan and
the inventor of the "Laffer curve," is chairman of A.B.
Laffer, V.A. Canto and Associates, a financial consulting firm
in La Jolla, California. |
The danger is clear. Don't confuse Kevin Phillips' message in The Politics of Rich and Poor with the legitimate concern we all share about poverty in America and excessive indebtedness. For Phillips, poverty and debt are expedient platforms from which to launch his attack against everything that was the 1980s.
Someday, we might be fortunate enough to be provided a psychoanalytic report on Kevin Phillips. Wouldn't it be interesting to see just what it takes to get an elite, affluent Nixon fan to portray himself - and his ex-boss - as defenders of the downtrodden and protectors of fuandamental moral values?
Ah well. Phillips' motives are of only passing interest, but the issues his book addresses are substantial. On this score Phillips pours a vast amount of material on top of his readers, inundating them in extremis. The evidence he marshals ranges from anecdotes to tabular reproduction of government data, usually accompanied by a pithy quote from a recognized scholar. The sine qua non, however, of Phillips' genre of Reagan critics, is to provide an attack against the existing order without giving even the slightest hint as to what should have been done.
CORPORATE AND HOUSEHOLD DEBT IN THE 1980S
Armed with tales of credit cards and junk bonds, Phillips characterizes the 1980s as an economic fiasco, wrought by a bunch of Wall Street kids - the "paper entrepreneurs" - who foisted IOUs on an unsuspecting public to restructure basic industries. As coconspirators, the nouveaux riches California cowboys did everything they could to further this debt-laced consumption binge: Meanwhile Reagan's critics described another country. In their eyes the eighties were a last national fling with credit-card economics, a gaudy orgy of unprecedented domestic and international indebtedness, luxury imports, nouveauriche consumption and upper-bracket tax reduction, all indulged in with the greatest recklessness while beggars filled the streets and the average family's real disposable income declined toward a dimming future. Phillips fails to use the best political/economic rationale to explain excessive growth of corporate debt. Instead, he harps on the decade's pure greed.
In 1980 a profitable company that earned one dollar, the net proceeds of which were to be paid to an affluent shareholder in the form of dividends, would have incurred a tax liability of 46 cents. The shareholder who received the 544 cents in dividends would have had a tax liability
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