Liberals and ‘libertarian populists’ are wrong: politics isn’t a zero-sum fight between corporations and the poor – Ezra Klein

Washington Post: Liberals and ‘libertarian populists’ are wrong: politics isn’t a zero-sum fight between corporations and the poor – Ezra Klein

…Positing this zero-sum death struggle between corporate America and poorer Americans is the key to the emergent arguments around “libertarian populism.” The basic idea there is that if Washington would simply close its doors to corporate pleading then corporations would lose political power and the policy concessions that go with it and lower-income Americans would win economic power. In a zero-sum world, less “crony capitalism” for corporations equals more economic uplift for the poor.

But the “libertarian populism” agenda is more an example of how both corporations and the poor could lose. You can see this reasonably clearly in Ben Domenech’s effort to sketch a “libertarian populist” agenda. After ticking through a number of ways to beat back “crony capitalism,” he comes to the poor, and writes:

the truth, despite much of the left’s complaints, is that economic mobility has actually remained fairly strong even in this lackluster economy, and America’s poor are – in real (consumption) and nominal (when you add wages, transfers and benefits) terms – doing better than ever when compared to previous generations. In fact, most of the biggest problems with today’s economy are the result of government, which has damaged the labor market with awful incentives (disability, overgenerous unemployment, awful retraining programs, minimum wages and other barriers to entry, tax/regulatory discrimination against small businesses, etc.) which need to be eliminated.

So corporations get less and the poor — who really aren’t doing that badly, you know — get less, too. The savings will presumably be pumped into lower tax rates, particularly for the rich (Domenech himself goes on to argue for a flat tax, which is extremely regressive). I’ve yet to see a “libertarian populist” who argues for pumping the money into health insurance for the poor, or really anything to directly improve their lives.

Conversely, the liberal agenda — best embodied in the budget released by the House Progressives — is a vision of how corporations and the rich could lose even as the poor win (the catch is whether you think their taxes would severely damage the economy).

The country’s poor — and everyone else — are right to wonder how much power the altruists have in an age when corporations hold so much political sway. The comforting response, however, is quite a lot, at least in recent years.