Of inequality, Yglesias writes:
Normally talk about the growth in inequality begins and ends with a discussion of whether or not it’s a problem and should we try to “spread the wealth around” or just not worry. But completely aside from whether or not it’s substantively a problem, it’s a political problem for conservatives. That top ten percent is, in an important way, the base of the conservative coalition — providing loyal votes, campaign and institutional funding, etc. And as the economic circumstances of the top ten percent become more and more different from the economic circumstances of the rest of the country, it becomes harder and harder to articulate a policy agenda that speaks to the concerns of both the top ten and also the broad middle.
Did Matt not look at the exit polls? Did he not notice that Obama dominated in fundraising among really, really rich people? Here’s a bet for Matt. Take the group that voted for Obama and the group that voted for McCain. Calculate the Gini coefficient for each of those two groups. I’ll bet $1000 dollars that income inequality is higher in the Obama-voting group. If Matt doesn’t want to take this bet, then he needs to explain why divergence in material circumstances poses more of a political problem for Republican coalition-building than it does for the Democrats–the more economically unequal coalition. If rich Democrats, who are now roughly as numerous as rich Republicans, tend to favor progressively redistributive policies, which they do, then in what sense does material divergence pose an in-principle problem for successful cross-income-class coalition politics? If rich Republicans are just greedy, self-dealing, anti-downward-redistribution thugs, then that poses a problem when it comes to teaming up with the “broad middle,” if the broad middle demands transfers. But that has nothing to do with differences in economic circumstance.
Here’s something people haven’t been talking about. How much has the recent runup in income inequality reversed due to the financial collapse and general economic slowdown? If it turns out to be a lot, will Democrats (and Republican inequality hawks like Jim Manzi) accept that the grounds for redistribution have weakened? If, like Paul Krugman, you thought rising inequality threatened our democracy, will you credit Alan Greenspan, Chris Cox, and Phil Gramm (or whomever you found convenient to blame) for saving it? For your consideration….