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June 23, 2003

JOHN EDWARDS, POPULIST....A few months ago I was vaguely leaning toward John Edwards as my favorite in the Democratic race. Although I didn't (and still don't) have a detailed understanding of his positions, his policy choices seemed basically OK, he was personable enough to stand up to Bush, he had a good national security record, he knew how to raise money, and he was a Southerner. It seemed like a reasonable combination of electability and decent liberal credentials.

But then he seemed to disappear. Howard Dean became a media darling, Dick Gephardt unveiled a (semi) universal healthcare plan, and John Kerry started going on the attack. Edwards was nowhere to be seen.

So I'm happy to see him give a rousing speech like this last week:

[George Bush's] economic vision has one goal: to get rid of taxes on unearned income and shift the tax burden onto people who work. This crowd wants a world where the only people who have to pay taxes are the ones who do the work.

....This is a question of values, not taxes. We should cut taxes, but we shouldn’t cut and run from our values when we do. John Kennedy and Ronald Reagan argued for tax cuts as an incentive for people to work harder: Americans work hard, and the government shouldn’t punish them when they do.

This crowd is making a radically different argument. They don’t believe work matters most. They don’t believe in helping working people build wealth. They genuinely believe that the wealth of the wealthy matters most. They are determined to cut taxes on that wealth, year after year, and heap more and more of the burden on people who work.

How do we know this? Because they don’t even try to hide it. The Bush budget proposed tax-free tax shelters for millionaires that are bigger than most Americans’ paychecks for an entire year. And just last week, Bush’s tax guru, Grover Norquist, said their goal is to abolish the capital gains tax, abolish the dividend tax, and let the wealthiest shelter as much as they want tax-free.

That's some good crowd pleasing populism, and it pretty closely matches my own views. Today's movement conservatives, having already abandoned the middle class, are now explicitly endorsing the idea of eliminating taxes on unearned income and reducing the top marginal rates on earned income to the point where all too many of the super-rich and their trust fund offspring pay a lower tax rate than your average auto factory worker. After two decades of this, I believe pretty strongly that middle class taxes need to be cut while taxes at the top need to be increased pretty substantially. Edwards' speech presents a plan that does just that.

So good for him. I hope he can present a vision of national security that's equally coherent, equally tough, and as equally informed by liberal values. If he does, he could be a pretty tough candidate to beat.

Posted by Kevin Drum at June 23, 2003 08:34 PM | TrackBack


Bring back the 90% top rate of tax, I say.

Posted by: craigie at June 23, 2003 09:03 PM | PERMALINK

For what it's worth, Kevin, your assesment echos my thinking pretty much as well. Edwards' speech is by far the most interesting economic policy (if not policy, period) put forward so far, because it's 1) true 2) new and 3) said in a way that I think will work.

This is the first forward motion he's had in...what? Forever it seems. I can't think of a single good thing to happen to him all campaign except the Q1 numbers. Maybe this will buy him a second look by the media.

Oh yeah, if he were smart, he'd start coping Blair's rhetoric and style (Blair is really very popular in the US) and argue for a hawkish liberal internationalism as a way of climbing over his biggest challenge; experience and judgement. If he starts now and just hammers away he can invert the debate like Bush did on education, at least neutralizing the issue (IMHO).

But he did just make the race more interesting, didn't he?

Posted by: SamAm at June 23, 2003 09:10 PM | PERMALINK

Hey, Bush gets another term in office, and we'll have a depression, again. Could very well bring back those top rates.

You'd think that the wealthy would be able to realize things like that, but nope.

Posted by: JoeF at June 23, 2003 09:10 PM | PERMALINK

You'd think, but didn't someone once say that a capitalist was someone who would sell you the rope to hang him with? Karl someone, I can't quite remember...

Posted by: craigie at June 23, 2003 09:23 PM | PERMALINK

Although I agree with much of Edwards is saying, I think a better general election-type message to emphasize on taxes is what Tom Friedman said in a recent column, alluded to by Brian S. in a comment thread a few posts back. Namely, that a few more years of Bush tax cuts will inevitably lead to a choice between economy-crippling deficits or major service cuts. Since nobody wants the former, and only movement conservatives want the latter, you'd better go with the Democrats if you want government services like Social Security, Head Start, etc. to stay at a level where most people like them.

Bill Clinton essentially made this point in an appearance on C-SPAN in the last month or so (he was speaking before a class on his presidency at the U. of Arkansas-Little Rock). He explained that the never publicy articulated reasoning behind the phrase "compassionate conservative" was simply code for "you can have the 'compassion', i.e. economic prosperity and government services, that you got in the '90s, but in a 'conservative' way, with lower taxes and smaller government." Of course, this is simply not possible, but it was the only message that Bush could have won with, so he wrapped it in a code phrase because saying it explicitly would have been too easy to expose.

Posted by: Haggai at June 23, 2003 09:44 PM | PERMALINK

Forget 90%. Let's make it 100%.

Who do those rich people think they are?

Do they think that they can allocate their resources into more productive areas than politicians can?

Do they think their investments create more goods and services and jobs per dollar than federal bureaucracies?

Do they think the charities that they contribute to are more efficient and effective than government programs?

Do they think that just because they earned their money they should be allowed to keep it?

What bastards!

Posted by: Gil at June 23, 2003 09:44 PM | PERMALINK

"Bring back the 90% top rate of tax, I say."

Hell yeah. Punishing success is always a viable option. The upper 1% pays what, about 37% of the income taxes, and many of these tax payers are really family owned small businesses? Yeah, the notion of progressive taxation is wonderful, what enlightened person could possibly be against it? But then again, "progress" assumes a path toward an ultimate destination. What is that destination?

Posted by: Ratbane at June 23, 2003 09:48 PM | PERMALINK

I'm really resisting the desire to be snarky here.....but I understand the point, so I'll suppress my temptation.

Posted by: Brian Schefke at June 23, 2003 09:52 PM | PERMALINK

Feh. My sister just told me she paid zero taxes last year. That's zero. Not "no additional payment on April 15", but "got a check back for all the withholding". A Zero percent bracket.

And she's paid zero the year before. AND she's applying for a refund of some taxes they paid in the year 2000.

Jeebus freakin' Keeerist. I love my sister, but WTF!

Posted by: squiddy at June 23, 2003 09:53 PM | PERMALINK

Someone wake me up when Edwards advocates taxation on large punitive damages awards. A man who gores his own ox is sincere

Posted by: mark safranski at June 23, 2003 09:54 PM | PERMALINK

Friedman is wrong: "service cut" doesn't resonate with most Americans, who are often schizophrenic about government services. Say "cutbacks in programs" and many will smile at the shrinkage of government.

But say what those cutbacks mean--Social Security in peril, failing schools, crummy roads, sick kids, unprotected ports, etc. and things become more graphic.

If Edwards had Dean's fire, he'd be alright. I really wanted to like Edwards--on paper he is great. But every time I see him on TV, I just want to throw a shoe at the screen: he just sounds so wimpy.

Posted by: GK at June 23, 2003 09:57 PM | PERMALINK


Sure, one's going to have to explain what "service cut" means; it's not enough to just say it.

Actually, IIRC, Friedman had a column a couple of years ago in the same vein, where he dealt with the "it's your money" slogan (can't remember for sure, but I think it was around the time of Bush's initial big tax cut plan) and provided some very plausible examples of what that would mean.

Posted by: Brian Schefke at June 23, 2003 10:10 PM | PERMALINK

craigie wrote: "You'd think, but didn't someone once say that a capitalist was someone who would sell you the rope to hang him with"

The marginal cost on that bit of income is murder, but hey, they're cutting the estate tax, so it's all good.

Posted by: Jon H at June 23, 2003 10:23 PM | PERMALINK

What I have to congratulate Edwards with is that he understands the "language game" of politics much better than Howard Dean or John Kerry. Not once does Edwards say we have to "repeal the tax cut" as Howard Dean does. He knows that people hear "repeal the tax cut" and think "that guy's going to raise taxes!"

Edwards is packaging his platform for the audience very well and knows that the Bush tax scheme has to be repealed but phrases it in such a way that the listeners hear more about "working hard" and having a "fair tax burden" for those who get "unearned income."

Say what you want about Edwards' mediocre campaign (I'm a Howard Dean supporter), I hereby declare his speechwriters to be superior to Dr. Dean's and Sen. Kerry's.

Posted by: Dean at June 23, 2003 10:25 PM | PERMALINK

squiddy wrote: "Feh. My sister just told me she paid zero taxes last year. That's zero. Not "no additional payment on April 15", but "got a check back for all the withholding". A Zero percent bracket."

Would you trade places with her, if you could? Is she getting *that* good of a deal?

It's like the guy who wrote in to the Wall Street Journal. He admitted being one of the people the journal calls non-tax-paying "Lucky Duckies", and offered to switch places with one of the editors for a year. Somehow, I doubt they're going to take him up on it. I'm sure the WSJ eds would agree that high income & 'high' taxes beats low income and no taxes, any day of the year.

Posted by: Jon H at June 23, 2003 10:29 PM | PERMALINK

I'm sure we'll hear less "repeal the tax cut" rhetoric in the general election. Only the party faithful like to take the medicine of (slightly) higher taxes.

Posted by: Kennedy at June 23, 2003 10:38 PM | PERMALINK

Anyone can hire a good speechwriter and read a fine speech, as Edwards did. But there are two real questions:

(1) What does Edwards stand for? Those who have followed him since he entered the Senate say that he has yet to define himself and what he stands for, and his vague generalities during the debates confirm that.

(2) Do we really want to turn the country over to someone who has a total of only four years of government experience, and who has never run anything larger than his own Senate office?

But he does have a great head of hair.

Posted by: John at June 24, 2003 02:55 AM | PERMALINK

"The upper 1% pays what, about 37% of the income taxes..."

Of what possible relevance is this?

What portion of their income goes to all forms of taxes--including income, social security, medicare, excise taxes, duties on imported goods, etc.? In comparison to the portion of those in, say, the middle quintile? Why the fixation on just income taxes? And the percentage of a certain kind of taxes that they pay, instead of the percentage of their income that goes to taxes?

Posted by: raj at June 24, 2003 05:38 AM | PERMALINK

Please, please, and I say this as a southerner, please God not another southern (or in the Bush's case "southern") president.

Posted by: Harry Tuttle at June 24, 2003 06:09 AM | PERMALINK

Really, the weasels want to define the parameters of the tax debate to only include income taxes. Don't let them get away with it. Besides, if I make a million dollars a year, you can take 40%, I'll still be happy. Even more so if I'm making billions.

Posted by: Ringo Mountbatten at June 24, 2003 06:09 AM | PERMALINK

Edwards has always been and will always be the Democrat's greatest chance at a victory in 2004, but we're all a little too angry right now to accept the thought of a centrist. This is why Edwards is moving to the left, to capture the base. During the campaign season, should he get the nomination (a proposition I find less and less likely by the day), he would do well to move back to the center.

I think right now the most likely candidate is John Kerry. Dean proved two nights ago that he doesn't operate well under pressure (And wow, Russert, could you be more cold-hearted? The man's son just went to jail.) and the Presidency is all about pressure.

Posted by: Kenneth G. Cavness at June 24, 2003 06:45 AM | PERMALINK

All of the Democratic candidates should coopt this effective rhetoric because it has such great political promise. Operate as a team to build a unified message. Don't be afraid to give each other credit.

Posted by: wetzel at June 24, 2003 06:59 AM | PERMALINK

Was that speech really moving left? I don't think it was. Plain language and sharp rhetoric are not only the properties of Dr. Dean.

Edwards-Clark, anyone?

Posted by: SamAm at June 24, 2003 07:46 AM | PERMALINK

Squiddy: My sister just told me she paid zero taxes last year [...] And she's paid zero the year before. AND she's applying for a refund of some taxes they paid in the year 2000.

Jon H: Would you trade places with her, if you could? Is she getting *that* good of a deal? (mentions Wall Street Journal "Lucky Ducky" editorial)

She's not a "Lucky Ducky". She and her husband are worth a few million US$. She's benefitting from our regressive taxation.

Posted by: squiddy at June 24, 2003 08:21 AM | PERMALINK

But he does have a great head of hair.

This is one of the most important requirements for executive leadership in the private sector. It makes sense that we would look for this in our president, too. :)

Posted by: Dean at June 24, 2003 08:35 AM | PERMALINK

Regardless of whether or not Edwards can win the nomination, this was a great speech for the Democratic party, period. If a Dem is going to win in 2004 they need to make it clear the ends that the tax-cut means is leading us towards, because Joe and Jane America aren't going to like it. The Repubs will be able to hold off on spending cuts for another few years at their current pace, but these chickens will definitely come home to roost before the 2008 election. One key to 2004 is letting people know what's in store for the future: you can't just cut taxes forever without eventually losing services (I agree with GK that you need to replace 'services' with something more tangible, like 'education'). We all know that; the key is making the guy that says "I'm gonna get a tax cut. Woohoo!" understand that he's basically just charging the tax cut to his own personal credit card.

Posted by: Mike D at June 24, 2003 08:47 AM | PERMALINK

We don't *have* to repeal Bush's tax cut; they're slef-repealing. In order to fudge the budgetary numbers, many of them have sunset clauses.

So just let them expire. The Dems have the advantage in several areas:

No action needs to be taken. It isn't an active step, like voting for a tax cut. The candidate just shrugs and says "I honored the sunset provision built into the original law."

One can point to the economy and the deficit and point out that a) the tax cut isn't having the predicted benefit at all and b) extending it makes the deficit *much, much worse*.

Point out that the sunset provisions were the only way the credit-card conservatives could sell the government bankruptcy program in the first place

Most importantly, *Bush signed them into law.* If letting a sunset clause take effect is a tax hike, Bush is the one who approved it. (And his only defense is to admit he never really intended for it to expire, so he admits to flimflam numbers and loses cred with what remains of the fiscally responsible Republicans.)


Posted by: Gregory at June 24, 2003 08:59 AM | PERMALINK

I'm not optimistic about the strategies expressed here.

First, I believe the Republican strategy of tax shifting is designed to bring the middle class into the "Hate government, hate taxes" Republican fold.

Second, the sunset provisions are booby-traps for future Democratic and moderate Republican politicians -- honoring the sunsets will be demagogued as tax increases.

Our opponents are ruthless radicals, and there is a great reservoir of folks in America today who admire simple-minded ruthlessness, especially of the Ayn Rand and/or religiously inspired variety.

They're hatred of my government and taxes must be matched and surpassed by hatred and ruthlessness against them -- times infinity.

They want perpetual war abroad and perpetual destruction and starvation of government domestically. Let's give them both -- here and in spades.

Posted by: John Thullen at June 24, 2003 09:33 AM | PERMALINK

I think punitive damage awards are already taxable. Edwards certainly paid taxes on all of his attorneys' fees.

Posted by: Joe Schmoe at June 24, 2003 10:06 AM | PERMALINK

Interesting that some people think this speech was a move to the left, other think a move to the right. What I think Edwards is doing is laying out a vision for an AMERICAN Left, a way to be pro-populist and be in favor of government help for the middle class and poor that supports hard work and American values instead of European-style socialism. He is espousing, I think, a Leftist Capitalism.
Taking back Capitalism. Edwards is very close to being my man!

And I agree with an above post. Combine this ecconomic vision with Blair's foriegn policy and I think we will have both a winning appeal to the American center AND strong turn to the left.

Posted by: Decnavda at June 24, 2003 10:06 AM | PERMALINK

The thing that Edwards has done, (and yes, it echoes the attempt of Friedman's article on this), is to clarify what are the philosophies behind tax schemes. Edwards is making an earnest attempt to get the message across that the political philosophy behind the tax cut is fundamentally different than that of the Bush rhetoric.
I hope Edwards stays on message with this. In agreement with Mike D, this is a great message for Dems in general.
Also, this brings to mind a past post by Larry Lessig- that Edwards is the candidate that can really inspire. All that may sound odd after the past while with Dean seeming to take that post. But I have no doubt that Dean will lose to Bush. Edwards is a closer call.

Posted by: Owens at June 24, 2003 10:10 AM | PERMALINK

The problem with populism is that them-and-us rhetoric doesn't lead to good governance, it's merely a way to gain power. And it seems unlikely to succeed in gaining power now that people are too smart, well educated and sophisticated to fall for empty populist posing. They can see the hangover coming after the beer blast. People no longer believe in magic, no longer believe that you can just vote yourself wealth and comfort by taking it from those who have more.

We understand better that this is like a farmer that eats his seed stock rather than saving it to plant next season. The idea of unearned comfort and plenty is compelling and we respond to such promises, but we also have the nagging critic in our minds that counsels us not to fall for pipe dreams.

Democrats will continue to lose elections until we reform ourselves and become the party of good governance rather than the party of jealousy and resentment. Our culture isn't one of fixed stations, a society stratified by permanent class distinctions. We think we can improve ourselves, or that our children can do so, and so lack the vindictiveness of less mobile societies. There is a minority that has failed, given up, lost hope for progress, but not a large enough minority to gain and hold power.

A winning message is one that enlists the productive energies of all sectors of society in a joint effort to improve, one that focuses on building a better, more prosperous, more just society. Populist messages are losers because they divide society and offer nothing more than looting the swells. It doesn't take genius to see that hard times follow the looting.

A winning tax strategy message is one that proposes to raise adequate revenue while increasing productive capacity, one which both feeds us this winter and saves seed for next spring. This isn't easy, economists disagree and politicians take mistaken positions, but the objective is correct even when we fail to achieve it. The message is correct even when we don't have sure answers about how we will proceed. The combination of a message stating the objective and policy proposals to achieve it provides a framework for debate that is engaging and inclusive. The debate will not only improve the policy proposals, it will attract supporters.

As a political philosophy populism is the ugliest form of self governance, it is mob rule, majoritarianism. It fails to grasp the significance of minority rights and needs in stable social systems.

Posted by: back40 at June 24, 2003 10:16 AM | PERMALINK

One thing worth remembering: Clinton won in 92 by being relentlessly positive and forward-looking. He wasn't just against Bush--he was for something. A "new way," "bridge to the future," whatever the hell. The point is, he was optimistic, and cheerful, and full of ideas. He was an alternative.

I don't think the Dems can win this time around just by being anti-Bush.

Posted by: Realish at June 24, 2003 10:21 AM | PERMALINK

Was that an error when you refered to Democrats as "we". You certainly do not sound like one.

Your comments were relevant to "Populism" as "Mob Socialism". This is NOT what Edwards was promoting. Edwards talked about the virtue of rewards and wealth going to those who worked for them, and pointed out that Bush and his cronnies are not exibiting those values.

In the terms of current Left theory debate, Edwards was supporting "Equality of Opportunity". You were criticising "Equality of Outcome".

I just saw Kevin's post below re: the war beween the DLC and the liberals, and I meant to post that maybe Edwards' Polulist Capitalism could unite the two. But if back40 is actually a Democrat, I fear the DLC may just not get it.

Posted by: Decnavda at June 24, 2003 10:30 AM | PERMALINK

Besides, if John Edwards were President and he wanted to know, "What would Abraham Lincoln do?", he could just ask him!

Or was that some other guy...

Posted by: Decnavda at June 24, 2003 10:32 AM | PERMALINK

"Was that an error when you refered to Democrats as "we". You certainly do not sound like one."

You don't seem to be paying attention to the debates within the Democratic party. But, your comments demonstrate the emptiness of populist approaches to governance which try to exclude dissent and demonize dissenters. This is a losing strategy.

Posted by: back40 at June 24, 2003 10:58 AM | PERMALINK

Oh, come on! I say that you do not sound like a Democrat, and I am excluding dissent and demonizing dissenters? Even if I was being unneccessaryly catty, how much more mild could I have been? Lots of people who do not sound like Democrats are not "demons". And I was actually concerned that you might be a Republican just trying to snidely suggest that all Democrats "believe that you can just vote yourself wealth and comfort by taking it from those who have more."

Anyway, could you please respond substantively? Calpundit quoting Edwards saying that we should not punish people who work hard, and criticising Republicans as only wanting to tax people who work. You respond by criticising Edwards as avocating looting and voting yourself wealth from those who have more. Maybe Edwards has advocated such things at other times, but you did not quote them, and the argument that you are criticising is the exact opposite argument from the one Kevin quoted. It is a new KIND of Populism.

Posted by: Decnavda at June 24, 2003 11:20 AM | PERMALINK

Actually, I should have said a "different" kind of Populism rather than a "new" kind. Capitalist Populism co-existed with socialist populism for many years, but just somehow disapeared from view in the mid 20th century.

Posted by: Decnavda at June 24, 2003 11:23 AM | PERMALINK

Actually, if it was just the us-versus-them rhetoric that you objected to, you might have a point. I think us-v-then is okay as long as "them" is the Bush Administration, but if is taken as ALL "rich people", that would be a bad thing. We can align outselves with some rich people (Buffet, maybe?) and make a distinction between the "deserving" rich and the "undeserving" rich, just like the Republicans used to make a distiction between the "deserving" and "undeserving" poor. (Ulike now, when they are just against all poor.)

Posted by: Decnavda at June 24, 2003 11:29 AM | PERMALINK

Good for Edwards. I like the speech very much and it pretty much dovetails with my own thinking regarding the ultimate agenda of Bush's economic team.

Unfortunately a lot of Edwards' appeal rests on the "electability" factor. He's a Southerner, good looking, great story, speaks well ... I'm not sure how much else is there, though.

Posted by: Henry Shieh at June 24, 2003 02:10 PM | PERMALINK

I agree with Henry, and others, about the speech. It was a great example of how to attack Bush's idiocies effectively.

As far as his appeal being based on "electability," though, what's wrong with that? In my mind it's the top qualification for the nomination. The main job is to beat Bush.

Posted by: Bernard Yomtov at June 24, 2003 03:21 PM | PERMALINK

"The upper 1% pays what, about 37% of the income taxes"

This sort of thing implies that head taxes - you know, taxing every person the exact same dollar amount, regardless of their income - is the way to go. Why else would you compare the population count (upper 1%) to percentage of government spending paid for (37% of income taxes)? The upper 1% makes around 37% of income.

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