David Frum is Good

new_york_times:http://www.nytimes.com/2008/09/07/magazine/07Inequality-t.html

By DAVID FRUM
Published: September 5, 2008
I LIVE IN WASHINGTON, in a neighborhood that is home to lawyers, political consultants, television personalities and the chief executive of the TIAA-CREF pension fund. Not exactly an abode of the superrich, but the kind of neighborhood where almost nobody does her own yardwork or vacuums his own floor. Children’s birthday parties feature rented moon bounces or hired magicians. The local grocery stores offer elegant precooked dinners of salmon, duck and artichoke ravioli.
Four miles to the southeast there stretches a different Washington. More than one-third of the people live in poverty. Close to half the young children are overweight. Fewer than half the adults work. The rate of violent crime is more than 10 times that of the leafy streets of my neighborhood.
Measured by money income, Washington qualifies as one the most unequal cities in the United States. Yet these two very different halves of a single city do share at least one thing. They vote the same way: Democratic. And in this, we are not alone. As a general rule, the more unequal a place is, the more Democratic; the more equal, the more Republican. The gap between rich and poor in Washington is nearly twice as great as in strongly Republican Charlotte, N.C.; and more than twice as great as in Republican-leaning Phoenix, Fort Worth, Indianapolis and Anaheim.
My fellow conservatives and Republicans have tended not to worry very much about the widening of income inequalities. As long as there exists equality of opportunity — as long as everybody’s income is rising — who cares if some people get rich faster than others? Societies that try too hard to enforce equality deny important freedoms and inhibit wealth-creating enterprise. Individuals who worry overmuch about inequality can succumb to life-distorting envy and resentment.
All true! But something else is true, too: As America becomes more unequal, it also becomes less Republican. The trends we have dismissed are ending by devouring us.
THE TREND TO INEQUALITY is not new, and it is not confined to the United States. It has manifested itself just about everywhere in the developed world since the late 1970s, and for the same two reasons.
The first reason is the revolution in family life. Not so long ago, most households were home to two adults, one who worked and one who did not. Today fewer than half of America’s households are headed by married couples, and married women usually work. So America and other advanced countries have become increasingly divided between families earning two incomes and those getting by on one at most.
The family revolution coincided with another: a great shift from a national to a planetary division of labor. Inequality within nations is rising in large part because inequality is declining among nations. A generation ago, even a poor American was still better off than most people in China. Today the lifestyles of middle-class Chinese increasingly approximate those of middle-class Americans, while the lifestyles of upper and lower America increasingly diverge. Less-skilled Americans now face hundreds of millions of new wage competitors, while highly skilled Americans can sell their services in a worldwide market.
As long as all Americans were becoming better off, few cared that some Americans were becoming better off than others. But since 2000, something has changed. Incomes at the middle have ceased to rise. The mood of the country has soured. Conservatives who disregard the mood of unease may forfeit their power to defend the more open and productive American economy they did so much to build.
STEP ACROSS THE COUNTY line between Washington and suburban Fairfax County, Va., and you see the forfeiting process at work.
A third of a century ago, Fairfax had only recently evolved from farm country to bedroom community. Some rich families clustered in the village of McLean, where Robert Kennedy had his Hickory Hill estate. Otherwise, Fairfax housed middle-class families looking for inexpensive housing and excellent schools. These middle-class families voted Republican, leading the Old Dominion’s political transition away from its reactionary segregationist past to a modern business-oriented conservatism.
Under its Republican leadership, Fairfax boomed. Giant shopping malls and futuristic office blocks beanstalked over tract homes. The population surged past the one-million mark. Today Fairfax boasts an economy bigger than Vietnam’s. Fairfax households earn among the highest average incomes of any American county, more than $100,000, but that high average conceals wide variations between the highly educated and new arrivals speaking in 40 different tongues. With wealth comes diversity — and what is inequality but diversity in monetary form?
The county’s new wealth and diversity have created important new social problems. The schools are stressed. The roads are choked. Land use is more contentious. As Fairfax has evolved toward greater inequality, it has steadily shifted into the Democratic column. The Democrats Tim Kaine and Jim Webb won almost 60 percent of Fairfax’s votes in, respectively, the 2005 governor’s race and the 2006 U.S. Senate election. Democrats dominate Fairfax’s local government. In 2004, Fairfax voted for John Kerry over George Bush, 53 percent to 45 — the first Democratic presidential victory in the county since the Johnson landslide of 1964. Don’t imagine that this is a case of the shanties voting against the mansions. Kerry won some of his handsomest majorities in the fanciest of Fairfax’s 99 precincts.
In fact, Fairfax’s Democratic preference is typical of upper America. In 2000, Al Gore beat George Bush, 56-39, among the 4 percent of voters who identified themselves as “upper class.” America’s wealthiest ZIP codes are a roll call of Democratic strongholds: Sagaponack, N.Y.; Aspen, Colo.; Marin County, Calif.; the near North Side of Chicago; Beacon Hill in Boston. (Palm Beach, at least, remains securely Republican.) There is a long list of reasons for this anti-Republican tilt among the affluent: social issues, the environment, an ever more internationalist elite’s distaste for the Republican Party’s assertive nationalism. Maybe the most important reason, however, can be reduced to the two words: “Robert Rubin.” By returning to the center on economic matters in the 1990s, the Democrats emancipated higher-income and socially moderate voters to vote with their values rather than with their pocketbooks.
Republicans still claim the support of the upper-middle, but by dwindling margins. Democrats increased their share of the vote among those earning more than $100,000 by 9 percentage points between 1994 and 1998. Between 1998 and 2006, Democrats increased their share of this upper-middle-class vote by 3 more points.
Till now, conservative strength in the vast American middle more than compensated for any losses at the top and for the immigration-driven expansion of the bottom. Indeed, the Democratic tilt of the very richest Americans could be exploited as a powerful conservative recruiting tool. Resentment of “elites” is a major theme of conservative talk radio. “Who’s looking out for you?” demands Bill O’Reilly, as he excoriates “media elites” who vacation in the Hamptons, Aspen and the Virginia horse country.
But O’Reilly’s question has recoiled upon its onetime beneficiaries. Who is looking out for the Fox-viewing public? For most of the Bush administration, G.D.P. grew strongly, the stock market boomed, new jobs were created. But the ordinary person experienced little benefit. The median household income, which rose in the ’90s, had only just caught up to its 2000 level when the expansion ended in 2007.
You’ll hear a lot of partisan roostering from Democrats about the superiority of the Clinton over the Bush economy. But the difference owes little to the policies of either president. Between 2001 and 2008, the amount that employers paid for labor rose impressively, at least 25 percent. Yet almost all of that money was absorbed by the costs of health insurance, which doubled over the Bush years. In the 1990s, thanks to the advent of H.M.O.’s, health-care costs rose more slowly, so more of the money paid by employers could flow to employees.
Out of their flat-lining incomes, middle-class Americans have had to pay more for food, fuel, tuition and out-of-pocket health-care costs. In the past few months, they have suffered sharp tumbles in the value of their most important asset, their homes. Their mood has turned bleak. Almost 70 percent disapprove of the policies of George W. Bush. At intervals over the past two decades, Gallup has asked Americans whether the United States is a society divided into “haves” and “have-nots.” Back in 1988, more than 70 percent of Americans rejected this description. This year, the country split evenly: 49-49. When asked, “Are you better off than you were five years ago?” only 41 percent of middle-class Americans say yes, the worst result since pollsters started asking the question half a century ago.
It’s this pervasive economic unease that is capsizing the Republican Party, even as Americans have arrived in recent months at a somewhat more optimistic assessment of the progress of the Iraq war.
TO WITNESS THE SLOW-MOTION withering of the G.O.P., drive a little farther west into the Washington metropolitan area, to Prince William County. Here is exurban America in all its fresh paint: vast tracts of inexpensive homes, schools built to the latest design, roads still black in their virgin asphalt.
Whether in Virginia, Missouri or Illinois, there are no more egalitarian and no more Republican places in the United States than these exurbs. The rich shun them, and the poor can find no easy foothold, but the middle-income, middle-educated, white married parents who form the backbone of the G.O.P. are drawn to them as if to a refuge. It’s a modest-enough utopia, and comfortable equality has had its usual pro-Republican consequences: Republicans hold six of the eight seats on Prince William County’s Board of Supervisors and all three of the federal Congressional seats that include parts of the county.
Yet in the past couple of cycles, the once-tight Republican hold upon the county has loosened. Prince William voted (very narrowly) for Gov. Tim Kaine in 2005 and then (slightly less narrowly) for Senator Jim Webb in 2006. A big vote for the 2008 Democratic senatorial candidate Mark Warner seems almost certain, and a victory for Barack Obama seems very possible.
To echo an old Republican question: Who lost Prince William County?
Republican economic management since 2001 has not yielded many benefits for middle-income America. Adjusting for inflation, the incomes of college graduates actually dropped by 5 percent between 2000 and 2004 — and 44 percent of the people of Prince William are college graduates. Prince William is also ground zero for the middle-class revolt against the Bush administration’s easy immigration policies. An estimated 10 million migrants have entered the United States since 2000, at least half of them illegally, and few places in the United States have reacted more angrily than Prince William County. Last year, the Prince William Board of Supervisors voted unanimously to require the local police to check the immigration status of all arrested persons.
It’s widely understood that abundant low-skilled immigration hurts lower America by reducing wages. As the National Research Council noted in its comprehensive 1997 report: “If the wage of domestic unskilled workers did not fall, no domestic worker (unskilled or skilled) would gain or lose, and there would be no net domestic gain from immigration.” In other words, immigration is good for America as a whole only because — and only to the extent that — it is bad for the poorest Americans. Conversely, low-skilled immigration enriches upper America, lowering the price of personal services like landscaping and restaurant meals. And by holding down wages, immigration makes the business investments of upper America more profitable.
Middle-class Americans surely share in the cost-lowering benefits of immigration. But the middle class also pays the higher local tax bills that can result from immigration. Immigrants do not qualify for many federal benefits, but they do use the roads, schools, hospitals and prisons supported by state and local property taxes — the taxes that fall most disproportionately on the middle class.
It is also clear that immigration thickens the ranks of the American poor. The poverty rate for post-1970 immigrants and their native-born children is almost 50 percent higher than for the native born. (In 1970, established immigrants were much less likely to be poor than the native born.) No mystery why this should be so: one-third of adult new immigrants have not finished high school. And there is reason to fear that this poverty will become entrenched: barely half of Latino students complete high school on time; 48 percent of births to Latino women occur outside marriage.
IN SHORT, the trend to inequality is real, it is large and it is transforming American society and the American electoral map. Yet the conservative response to this trend verges somewhere between the obsolete and the irrelevant.
Conservatives need to stop denying reality. The stagnation of the incomes of middle-class Americans is a fact. And only by acknowledging facts can we respond effectively to the genuine difficulties of voters in the middle. We keep offering them cuts in their federal personal income taxes — even though two-thirds of Americans pay more in payroll taxes than in income taxes, and even though a majority of Americans now describe their federal income tax burden as reasonable.
What the middle class needs most is not lower income taxes but a slowdown in the soaring inflation of health-care costs. If health-insurance costs had risen 50 percent rather than 100 percent over the Bush years, middle-income voters would have enjoyed a pay raise instead of enduring wage stagnation. John McCain’s health plan, which emphasizes tax changes to encourage employees to buy their own insurance rather than rely on employers, is a start — but only the very beginning of a start. Some Republicans have brought great energy to this problem. In the Senate, Robert Bennett of Utah has written a bill with the Oregon Democrat Ron Wyden that would require employers to “cash out” employer-provided health care — and then midwife a national insurance marketplace in which employees would join plans that offered more price control and price transparency. Mitt Romney in Massachusetts put an end to the tax disadvantage that hammers consumers who buy health care directly rather than through their employers. Rudy Giuliani proposed a federal law to enable low-cost insurers in states like Kentucky to sell their products across state lines in high-cost states like New Jersey. But it remains unfortunately true that the Republican Party as a whole regards health care as “not our issue” — and certainly less exciting than another round of tax reductions.
Unlike liberals, conservatives are not bothered by the accumulation of wealth as such. We should be more troubled that the poor remain so poor. With all due respect to the needs of employers, Republicans need to recognize that the large-scale import of unskilled labor is part of the problem.
Meanwhile, the argument over same-sex marriage has become worse than a distraction from the challenge of developing policies to ensure that as many children as possible grow up with both a father and a mother in the home. Over the past 30 years, governments have effectively worked to change attitudes about smoking, seat-belt use and teenage pregnancy. Changing attitudes about unmarried childbirth may prove more difficult. Yet it is a fact that the only way to escape poverty is to work consistently — and that even after welfare reform, low-skilled single parents work less consistently than the main breadwinner in a low-skilled dual-parent household.
At the same time, conservatives need to ask ourselves some hard questions about the trend toward the Democrats among America’s affluent and well educated. Leaving aside the District of Columbia, 7 of America’s 10 best-educated states are strongly “blue” in national politics, and the others (Colorado, New Hampshire and Virginia) have been trending blue. Of the 10 least-educated, only one (Nevada) is not reliably Republican. And so we arrive at a weird situation in which the party that identifies itself with markets, with business and with technology cannot win the votes of those who have prospered most from markets, from business and from technology. Republicans have been badly hurt in upper America by the collapse of their onetime reputation for integrity and competence. Upper Americans live in a world in which things work. The packages arrive overnight. The car doors clink seamlessly shut. The prevailing Republican view — “of course government always fails, what do you expect it to do?” — is not what this slice of America expects to hear from the people asking to be entrusted with the government.
It is probable that the trend to inequality will grow even stronger in the years ahead, if new genetic techniques offer those with sufficient resources the possibility of enhancing the intelligence, health, beauty and strength of children in the womb. How should conservatives respond to such new technologies? The anti-abortion instincts of many conservatives naturally incline them to look at such techniques with suspicion — and indeed it is certainly easy to imagine how they might be abused. Yet in an important address delivered as long ago as 1983, Pope John Paul II argued that genetic enhancement was permissible — indeed, laudable — even from a Catholic point of view, as long as it met certain basic moral rules. Among those rules: that these therapies be available to all. Ensuring equality of care may become inseparable from ensuring equality of opportunity.
Equality in itself never can be or should be a conservative goal. But inequality taken to extremes can overwhelm conservative ideals of self-reliance, limited government and national unity. It can delegitimize commerce and business and invite destructive protectionism and overregulation. Inequality, in short, is a conservative issue too. We must develop a positive agenda that integrates the right kind of egalitarianism with our conservative principles of liberty. If we neglect this task and this opportunity, we won’t lose just the northern Virginia suburbs. We will lose America.