How important is inequality to voters?

In May, New York City Mayor Bill de Blasio announced his Progressive Agenda to Combat Inequality at an event in Washington, D.C. Now, to draw more attention to inequality, he has announced plans to host a forum for presidential candidates on the subject—in Iowa!

What are Americans saying about the issue that Mayor de Blasio and the candidates should know? Do people think the deck is stacked against them? Do they believe inequality is getting worse? How important will the issue be in 2016?

We reviewed recent polls in the latest issue of AEI’s Political Report, and the picture couldn’t be clearer. Americans believe the gap between rich and poor is a serious problem and that it’s getting worse. In an ABC News/Washington Post poll taken earlier this year, a majority, 51 percent, said the gap is a major problem, and another 32 percent said it is a problem but not a major one. Sixty-seven percent in a May CBS News/New York Times poll said the gap was getting larger. Just a quarter thought it had stayed the same, and only 5 percent said it was getting smaller.

Looking beyond those responses, however, the issue doesn’t seem to be front and center for most Americans. When the pollsters ask people to volunteer the most important issue facing the nation, “inequality” or “the gap between the rich and poor” is rarely mentioned by even 2 percent of those surveyed. The economy/jobs and government dysfunction top the public’s list of concerns today. Additionally, when people are asked to rank issues that will be important to their vote, the income gap comes in near the bottom. In a CNN/Opinion Research Corporation poll from September, the top five issues registered voters listed were the economy (52 percent said it was extremely important) followed by Social Security/Medicare (50 percent), terrorism (49 percent), health care and, separately, education (both at 47 percent). The income gap ranked tenth of twelve issues, with a third describing it as extremely important to their vote. Concern about the government’s competence is one reason for the disconnect in the polls between people’s view that the problem is serious but that it is unlikely to be a big issue for them in 2016.

Despite concerns about Washington’s competence, the polls also tell us that in the abstract, people would like the government to pursue policies to try to reduce the gap. Sixty-one percent gave that response in Quinnipiac’s July poll of registered voters. But another question, asked by Bloomberg/Selzer & Co. four times since December 2013, suggests considerable doubt about what the government should do. Each time the question was asked, people were evenly split between the view that “it is better for the government to implement policies designed to shrink the gap” and the view that “it is better for the government to stand aside and let the market operate freely even if the gap gets wider.”

When politicians talk about income inequality, they miss a key part of the story. Americans don’t particularly resent the rich, nor do they particularly admire them. As long as people are able to provide satisfactorily for their own families, how the rich are doing or how big the gap is between the rich and poor doesn’t matter that much to them. A question asked this summer in a survey by The Atlantic and the Aspen Institute illustrates this point. Thirty-six percent said “The concentration of wealth and privilege within the top 1 percent of American society is a problem,” but more than twice that many, 64 percent, said, “As long as I am able to provide the life I want for myself and my family, it doesn’t matter if others are substantially wealthier than I am.” Young and old agreed, as did whites and blacks. A NBC News/Wall Street Journal poll from May sheds additional light. People expressed much more concern about the middle and working class being able to get ahead (68 percent) than about the income gap between the wealthiest Americans and the rest of the country (28 percent).

Americans think it is still possible to start out poor, work hard, and get rich in America, though they also believe it’s mainly just a few people at the top who have the chance to do so. Sixty-one percent gave that response in a recent question asked by CBS News/New York Times pollsters. The responses of blacks and whites were identical at 59 percent. Just 35 percent nationally said everyone has a fair chance to get ahead in the long run.

Politicians who propose ways to restore opportunity in America will be more successful than those who protest the rich getting richer. Presidential candidates, take note.

To read more about public opinion on income inequality, read the latest edition of AEI’s Political Report.  

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E-cigarettes: the risk of over-warning

My views on the ANPRM, described in greater detail below, can be summarized as follows:
1. The increase in the number of calls to poison control centers related to e-cigarettes is not the best metric for determining the need for and appropriateness of exposure warnings and child-resistant packaging requirements for e-cigarettes. FDA should rely instead on comparative data that quantify the risks posed by these nicotine products relative to other household products and impose restrictions and requirements according to these relative risks.
2. There is a real risk of unintended consequences should customers take exposure warnings to mean that the appropriate use of e-cigarettes poses harms or risks akin to tobacco. Traditional cigarettes are known to contain many potent carcinogens that are not present in liquid nicotine. Moreover, second-hand smoke poses known and serious risks for bystanders, especially young children, and the fire-related risk from cigarettes poses additional serious safety threats. If exposure warnings discourage people from switching from traditional cigarettes to e-cigarettes, greater harm to children—not to mention smokers and other bystanders—may be imposed by these regulations.

Read the full letter here

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The dogs that aren’t barking in the 2016 campaign

Sherlock Holmes famously solved the mystery of the Silver Blaze by noting the dog that didn’t bark in the night. It strikes me that in this wild and woolly campaign cycle there have been numerous dogs not barking in the night or in the daytime either.

Start with the race for the Democratic nomination, which has not unrolled as predicted. Every observer knows Hillary Clinton’s numbers have been falling and Bernie Sanders has been rising, leading her in Iowa and New Hampshire. Every observer is waiting to see if Joe Biden will run, perhaps in time for the Democrats’ first debate two weeks from now.

But the other declared candidates have gone nowhere. It’s perhaps not surprising in the cases of the maverick Jim Webb and the former Republican Lincoln Chafee. But Martin O’Malley, former Baltimore mayor and Maryland governor, with a pleasant demeanor and a solid liberal record, is the sort of candidate who would have been a serious Democratic contender in cycles past.

He’s been out on the trail, but the latest NBC/Wall Street Journal, Quinnipiac, and CBS/New York Times polls put him at 0 percent. The pollsters are having a hard time finding anyone who backs him.

Cynical conclusion: In a party consumed with identity politics, there are constituencies for a woman and a self-proclaimed socialist, but not for a cis-gender white male, even one who increased spending and effectively supported same-sex marriage. Sympathetic explanation: Democratic voters are attracted to longtime champions of identity politics and uninterested in new faces.

In contrast, even in a field of 15 candidates, almost all have some perceptible support. But past performance is not proving a guide to current results.

Rand Paul, for example, was expected at least to match the showing of his father Ron Paul, who got at least 10 percent (rounded off) in 29 primaries in 2012. But the younger Paul’s domesticated libertarianism and non-interventionist foreign policy is attracting only 2 percent nationally and 4 percent in Iowa and New Hampshire.

Cynical conclusion: Ron Paul’s tattooed and dope-smoking fans aren’t interested in a domesticated version. Sympathetic explanation: Paul’s anti-interventionism lost its appeal when ISIS started beheading Americans.

Iowa Republicans are also showing little enthusiasm for the candidates who finished first in their 2008 and 2012 caucuses. Mike Huckabee is polling at 4 percent there, Rick Santorum at 2 percent. They aren’t duplicating their previous appeal to evangelical Protestants, who have been a bigger proportion of turnout in Iowa than in any other non-Southern Republican contest.

Cynical conclusion: Religious conservatives don’t stay bought. Sympathetic explanation: Religious conservatives look for candidates who share their values, but don’t stick with those who proved incapable of winning nominations.

Of course, one might also say that these Republicans are just being overshadowed, maybe temporarily, by outsiders who haven’t held political office — Donald Trump especially and also Ben Carson and Carly Fiorina. The race is far from over; maybe they’ll do better later on. And maybe Martin O’Malley will catch on too — although when pollsters take Joe Biden off their list of candidates, he currently rises from 0 to 1 percent.

The dogs that aren’t barking tell two different stories about the parties. Democrats, who like to think of themselves as open to new ideas, are sticking with old ideas and causes. Republicans, who used to fall predictably in line, are off on a wild fling.

There’s another dog that isn’t barking as well, on the issues front. House Republican rebels may have pushed Speaker John Boehner out but, as the Wall Street Journal editorial page notes, federal spending during — and because of — Boehner’s leadership has been essentially flat for four years — for the only time since World War II. It fell from 24 percent of gross domestic product in 2009 to 20 percent in 2014.

What’s interesting here is that no one seems to care. Republican rebels don’t, and Democrats who push for more spending behind the scenes aren’t making a public fuss about it. It’s reminiscent of Britain, where the Conservative-led government cut nearly 1 million public sector jobs in five years. But Labour never raised the issue in this year’s campaign and Conservatives gained seats.

Cynical conclusion: No one really misses anything when government spending is cut. Sympathetic explanation: In any large organization there is always room for squeezing out unneeded blubber. That non-barking dog may be something to keep in mind as our campaign continues.

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Study: America has the most competitive large economy on earth

From the Interactive Heatmap of the World Economic Forum’s Global Competitiveness Rankings.

We’re #3! In its latest report, the World Economic Forum  — the Davos people — ranks the US economy as the world’s third most competitive, behind Switzerland and Singapore. So actually the US is the most competitive large economy. From the report:

The United States retains 3rd place. Although many risks arguably loom on the horizon, the country’s recovery can build on improvements in institutions—government efficiency is rated higher than in previous years—its macroeconomic environment, and the soundness of its financial markets.

The United States’ major strength is its unique combination of exceptional innovation capacity (4th), large market size (2nd), and sophisticated businesses (4th). The country’s innovation capacity is driven by collaboration between firms and universities (2nd), human capital (4th on availability of scientists and engineers), and company spending on R&D (3rd). The United States also benefits from flexible labor markets (4th) and an overall well-developed financial sector (5th).

However, as accommodative monetary policy will slowly phase out and the US dollar has strengthened, the country will have to embark on a range of reforms to ensure that productivity growth picks up. These include improving the quality of education (18th), in particular at the primary level, and continuing to stabilize its macroeconomic environment (96th), which must include addressing high health and social security costs and ensuring continued strengthening of the financial system. Last but not least, further improvements to the institutional environment (28th) would put growth on a more sustainable footing.

So all the really big problems seem to be with government: poor schools, unfinanced entitlements, and inefficient Washington itself — shutdowns and debt ceiling crises. As for our innovation ranking, pretty good — though I would say the #4 ranking actually understates things. Too much emphasis on what government is doing vs. this.

 

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Why raising taxes on the rich doesn’t reduce inequality

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The progressive/left-wing response to the new Brookings study on inequality is obvious, right? From “Would a significant increase in the top income tax rate substantially alter income inequality?”:

The high level of income inequality in the United States is at the forefront of policy attention. This paper focuses on one potential policy response: an increase in the top personal income tax rate. We conduct a simulation analysis using the Tax Policy Center (TPC) microsimulation model to determine how much of a reduction in income inequality would be achieved from increasing the top individual tax rate to as much as 50 percent. We calculate the resulting change in income inequality assuming an explicit redistribution of all new revenue to households in the bottom 20 percent of the income distribution.

The resulting effects on overall income inequality are exceedingly modest. That such a sizable increase in top income tax rates leads to such a limited reduction in income inequality speaks to the limitations of this particular approach to addressing the broader challenge. To be sure, our results do not speak to the general desirability of a more progressive tax-and-transfer schedule, just to the fact that even a significant tax increase on high-income households and corresponding transfer to low-income households has a small effect on overall inequality.

Study authors William Gale, Melissa Kearney, and Peter Orszag (!) call their proposed tax increase “sizable.” And it is. Top marginal tax rates haven’t been so high in a generation. And few politicians are publicly contemplating such an increase. Well, maybe Bernie Sanders is, though he doesn’t think it would be such a biggie. Remember the golden age that was the 1950s! And some top left-liberal economists have been arguing the US economy would be fine with a 70% top rate, if not higher. Surely some inequality alarmists would love the Brookings scholars to plug higher rates into that TPC model, though it seems doubtful the results would be dramatically different.

What would make a difference? Inequality researcher and best-selling author Thomas Piketty says “the main policy to reduce inequality is not progressive taxation, is not the minimum wage. It’s really education. It’s really investing in skills, investing in schools.” That would seem to reflect the idea, put forward by Steven Kaplan and Joshua Rauh, that technology and globalization have enabled the highly talented and educated individuals to manage or perform on a larger scale, “thus becoming more productive and higher paid.”

Then there’s the much-discussed analysis by economics grad student Matthew Rognlie that suggests surging real-estate prices play a big part in the inequality story. Here’s looking at you, San Francisco. In other words, as Noah Smith explains, “it’s landlords, not corporate overlords, who are sucking up the wealth in the economy.” If so, the Economist recommends, “policymakers should deal with the planning regulations and NIMBYism that inhibit housebuilding and which allow homeowners to capture super-normal returns on their investments.” (More here on how government drives inequality, the bad kind.) And Orszag himself has highlighted recent research showing pay inequality rising because some firms pay just pay a lot better.

Now there may be other reasons to increase high-end taxes, such as to fund expanded wage subsidies for low-income workers. But reducing inequality does not seem to be one of them.

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The Mend of History: The College Board’s 2015 framework

The College Board’s 2014 curriculum framework for Advanced Placement US History, the gold standard for high school history, provoked a well-deserved firestorm, as the original, neutral five-page course outline had been replaced by an ideological 90-page script.

Criticism of the framework was raised on blogs and, as political opposition swelled, state legislatures across the country considered legislative action. The College Board, though initially defensive, promised to review the 2014 framework extensively and release a more balanced one for 2015. In The Mend of History: A Study of the Revisions to the AP US History Standards, we review and analyze the changes that were made.

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Folks here at AEI were among the strongest critics of the 2014 framework. Rick Hess, Michael McShane, Jenn Hatfield, and I all wrote op-eds or blog posts criticizing various elements of the framework’s strong bias. But when we saw the 2015 framework, we were pleasantly surprised. As Rick Hess and I wrote in National Review Online, the standards weren’t just scrupulously fair – they were also “flat out good.” Daniel Henniger wrote a column in the Wall Street Journal titled “Hey, Conservatives, You Won,” calling the revisions “an important political event.”

But the conservative “victory” didn’t result in any liberal defeat. Indeed, the executive director of the American Historical Association, who took to the NY Times to pan the critics of the 2014 standards, opined that the new framework was clearer than the last and that “one of the great strengths of this framework is that it enables teachers and students to explore issues and ideas that have united and divided Americans.”  As Rick Hess and I wrote elsewhere, the division at hand wasn’t between liberals and conservatives, but between those in academia who believe that the sins of America’s past are uniquely worthy of emphasis, and most Americans who believe that our virtues should be taught alongside them.

Given that, and given the opportunity for this revision to serve as a heartening example of what happens when Americans of various perspectives engage in a good-faith effort to tell the story of our remarkable, common history, it seemed worthwhile to examine some of the changes made— and how and why they improved the document. Our new report juxtaposes the textual differences between the 2014 and the 2015 frameworks and considers their import — less to further an argument than to establish a record of what was done.

Here are some examples of “Before” and “After” that give flavor for the differences:

• Early Colonial History

Then: European attempts to change American Indian beliefs and worldviews on basic social issues such as religion, gender roles and the family, and the relationship of people with the natural environment led to American Indian resistance and conflict.

Now: As European encroachments on Native Americans’ lands and demands on their labor increased, native peoples sought to defend and maintain their political sovereignty, economic prosperity, religious beliefs, and concepts of gender relations through diplomatic negotiations and military resistance.

• The Constitution

Then: Calls during the ratification process for greater guarantees of rights resulted in the addition of a Bill of Rights shortly after the Constitution was adopted.

Now: In the debate over ratifying the Constitution, Anti-Federalists opposing ratification battled with Federalists, whose principles were articulated in the Federalist Papers (primarily written by Alexander Hamilton and James Madison). Federalists ensured the ratification of the Constitution by promising the addition of a Bill of Rights that enumerated individual rights and explicitly restricted the powers of the federal government.

• Immigration

Then: International and internal migrations increased both urban and rural populations, but gender, racial, ethnic, religious, and socioeconomic inequalities abounded, inspiring some reformers to attempt to address these inequities.

Now: As cities became areas of economic growth featuring new factories and businesses, they attracted immigrants from Asia and from southern and eastern Europe, as well as African American migrants within and out of the South. Many migrants moved to escape poverty, religious persecution, and limited opportunities for social mobility in their home countries or regions.

• The Free Market

Then: As cities grew substantially in both size and in number, some segments of American society enjoyed lives of extravagant “conspicuous consumption,” while many others lived in relative poverty.

Now: As the price of many goods decreased, workers’ real wages increased, providing new access to a variety of goods and services; many Americans’ standards of living improved, while the gap between rich and poor grew.

• The End of History

Then: Demographic changes intensified debates about gender roles, family structures, and racial and national identity.

Now: Despite economic and foreign policy challenges, the United States continued as the world’s leading superpower in the 21st century.

These last two don’t compare like to like clauses, but rather the final clause in each respective framework. The 2014 framework ended with a frayed consensus on what it means to be an American, and the document as a whole evinced a belief that the proper result of teaching American history is to produce a citizenry more disaffected with America. The 2015 framework ends by declaring that, despite our challenges, the United States continues to be the leading superpower in the 21^st century.

The Mend of History does not purport to be exhaustive, but it is representative. By and large, it is likely that careful readers will be pleasantly surprised by what they will find: surprised at what would have been the gold standard in teaching high school US history if it had not become a point of national controversy and pleased by what our students are now learning about their country.

Access the report here.

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Still feeling the crash

Seven years after the financial crash of 2008, AEI Senior Fellow and polling expert Karlyn Bowman examines how the crash affected, and continues to affect, public opinion on the economy. She notes that in the fall of 2008:

“[M]any Americans feared that the country’s economic system would collapse. The poll results from the time were dire, and it is only in looking back on them that we can appreciate how unusual those responses were. The Reuters/University of Michigan October 2008 preliminary report on consumer sentiment registered ‘its largest monthly decline in the [50-plus-year] history of the surveys.’

Americans have still not fully recovered from the crash. They remain uncertain about the economy’s trajectory and the security of the financial system, and these sentiments will affect the 2016 campaign. Recent poll findings make it clear that things have improved, but as the findings of our new AEI Public Opinion Study and of the latest AEI Political Report suggest, there is considerable distance to go.”

Read the full piece, “Still feeling the crash.”

To arrange an interview with Karlyn Bowman, or another AEI scholar, please contact AEI Media Services at mediaservices@aei.org or 202.862.5829.

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Obama’s leading from behind foreign policy a win for Russia?: Goldberg on Fox News’ ‘Special Report’

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Russia defies Obama Administration by launching airstrikes in Syria: Bolton on Fox Business Network’s ‘Lou Dobbs Tonight’

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Russia launching airstrikes into Syria: Aron on Newsmax’s ‘Midpoint with Ed Berliner’

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