Arrogant Capital. - book reviews

National Review, April 3, 1995 by David Frum

Arrogant Capital, by Kevin Phillips (Little, Brown, 231 pp., $22.95)Mr. Frum is the author of Dead Right (Basic).WHAT IS one to make of Kevin Phillips? The man who is widely regarded as the greatest living expert on American electoral politics is a mixture of political insight and economic preposterousness; deep historical knowledge and glib soundbites; respect for American traditions and hostility to American institutions.

At moments, he writes with the authority of the sage; pages later, he is touting nonsense with the unscrupulousness of an infomercial charlatan.Phillips's latest book exhibits rather more of his flaws than his abilities. Arrogant Capital is the third in a series of books about what Phillips calls ``the Reagan aftermath'' -- following The Politics of Rich and Poor (1990) and Boiling Point (1993) -- and is decidedly the slightest of the three. Evidently it was written in considerable haste, in a frantic attempt to call back the big bet Phillips placed on Bill Clinton in the 1993 book, where he wrote:The 1992 results could be interpreted as a Democratic watershed. . . . A new set of domestic and cultural issues were emerging for the 1990s: health care, education, urban problems, the environment, economic fairness, abortion, and what could be called a ``women's'' array of concerns, including day care, parental leave, equal pay, the feminization of poverty, the glass ceiling in employment, women's political empowerment, and sexual harassment. Issues like these favored the Democrats, affirming that electoral watersheds usually overlap with new domestic-policy agendas.Arrogant Capital begins by attempting to explain away that embarrassing misreading of the 1992 results. Now Phillips insists that while he did predict ``that the post-1968 GOP era would soon end in a populist reaction against both the increasingly unresponsive Washington elite and the economic redistribution of the 1980s in favor of the nation's rich,'' he did not ``try to spell out [the reaction's] form or depth of success.'' This eager attempt to catch the voters' mood on the rebound has, however, proved no more successful than Phillips's previous exercise in soothsaying: having hailed the ascendancy of the Democrats in his 1993 book, Phillips reversed himself and announced the imminent demise of both parties in the present book -- just before the Republican congressional landslide. Forecasting errors are a serious matter for Phillips. More than most political writers, he has advertised himself as a seer. The blurbs selected for the back cover of Arrogant Capital all pay tribute to the uncanny accuracy of Phillips's past prognostications. In fact, his reputation for wizardry rests on his 1969 book, The Emerging Republican Majority. Since then, the prophetic gift has largely deserted him.On the other hand, what remains is in many ways more interesting. Phillips does not need to be a prophet to command attention. He is the unsurpassed master of the historical details of American electoral politics. Who but Phillips could casually drop the fact that no county within forty miles of Washington, D.C., produced any significant vote for Abraham Lincoln in 1860? And Phillips has mastered something even more important still: he has made himself the explicator of -- and apologist for -- the darkest emotions of the American voter.Phillips does not affect to regard the middle-class voter as a person of generous instincts. Phillips has always based his analysis on the premise that Americans vote their resentments. Back in the 1960s, he believed that the majority of Americans resented blacks, students, bureaucrats, and liberal judges; today he claims they resent Wall Street speculators, corporate chieftains, and Washington lobbyists. Always, though, he has maintained that the voters are seething with rage and envy, and that big rewards can be grasped by politicians who can take advantage of those emotions. The political uses of resentment -- that's what Phillips taught Nixon in the 1960s, and it's what he has sought to teach Democrats and independent political entrepreneurs such as Ross Perot in the 1990s.``Hardly anyone doubts how angry the public is at 1990s Washington,'' he observes on the very first page of Arrogant Capital. Citing a survey by Democratic pollster Celinda Lake, Phillips notes that at the end of Clinton's first year in office, 57 per cent of Americans believed that ``lobbyists and special interests'' controlled Washington -- up from 38 per cent just two and a half years before.One plausible explanation for this startling uptick in American cynicism -- that the Clinton Administration actually was under the control of lobbyists and special interests in a way that the recent Republican Administrations were not -- would be scorned by Phillips. He long ago ceased to regard the education lobby, big- city mayors, trade unions, feminists, civil-rights organizations, and retirees as ``special interests.'' Instead, Phillips thinks, the public is angry because the President they elected in a spasm of populist outrage has failed them. Despite Bill Clinton, Phillips maintains, a powerful and entrenched financial elite continues to exploit America's antiquated constitutional machinery to enrich itself and the foreign economic competitors with which it is allied, while impoverishing the middle class.As always when he comments on economic matters, Phillips's penetrating mind is gummed by nineteenth-century ideological dust. Like some long-buried Pasionaria of the Free Unlimited Coinage of Silver, Phillips contrasts the evils of international Finanzkapital with the craggy virtues of agriculture and manufacturing. The simplest and least conspiratorial explanation of the growing power of financial markets -- which is that the out-of-control welfare states of the 1990s are borrowing far more money than the relatively well-managed economies of the 1960s -- does not even rate a mention from him.But then, Phillips isn't much interested in explaining things. He inveighs against the litigation explosion and the growing number of lawyers. However, when he tries to articulate a reason for this deplorable phenomenon, he stammers: ``There are simply too many attorneys, which forces them to keep generating legislative, regulatory, and litigational subject matter and opportunity.'' Too many lawyers, in other words, produce too many laws. Serious-minded critics of the legal profession -- such as, curiously, the dean of Harvard Law School, Robert Clark -- have offered evidence that the causation runs exactly the other way. A society that insists on emitting enormous numbers of laws and regulations will quickly enough find itself employing enormous numbers of experts to help citizens cope with those laws and regulations. The litigation explosion of the 1980s was merely an aftershock of the regulatory explosion of the 1970s.The same indifference to serious explanations is manifested in Phillips's account of the multiplication of bureaucrats and quasi-bureaucrats in Washington. He rattles off the numbers with appropriate alarm: 11,000 congressional staffers in 1970 versus 20,000 in 1990; 19 per cent of professional associations located in Washington in 1971 versus 32 per cent in 1990; 21,000 members of the District of Columbia bar in 1975 versus 61,000 in 1993; 1,500 journalists working in the capital in 1950 versus 12,000 today. But unlike other writers who have pondered these numbers -- notably Jonathan Rauch in Demosclerosis: The Silent Killer of American Government -- Phillips does not ask himself what all these people are doing and why non- Washingtonians are paying them to do it. He seems to regard this cancerous multiplication as an almost completely autochthonous phenomenon: ``a bipartisan awareness, involving perhaps a hundred thousand people, that the city on the Potomac had become a golden honeypot for the politically involved.''But of course, Washington has become such a honeypot precisely because its Presidents and legislators have for thirty years followed the course that Phillips broadly favors -- writing ever more complicated tax laws, regulating markets ever more closely, penalizing foreign exporters ever more heavily. When the political authorities in effect tell businesses ``Get a lobbyist or we might destroy you,'' it's hardly surprising that businesses suddenly start employing people to take congressional staffers to lunch. The growth of Washington's professional population is a direct consequence of the growth of the Federal Government's appetite for power. Nobody who, like Phillips, favors further arrogations of power by that government has standing to complain about the size of the bureaucracy needed to exercise it -- or about the number of supplicants who flock to Washington to beg that this power be exercised in ways that help them and hobble their competitors.Nowhere is the disjunction between cause and effect sharper -- or more useful to Phillips -- than in the long discussion of stagnant middle-class incomes that runs through all three of the books he has published in the past five years. Thus, in The Politics of Rich and Poor he amassed data showing (accurately) that the number of rich and very rich people increased sharply in the 1980s. In Boiling Point, he amassed more data purporting to show that the standard of living of middle-class Americans had stagnated. But Phillips offered scant evidence that these two sets of facts had anything to do with each other.And it would be surprising if they did. After all, in the past -- in the boom years from 1896 to 1917, for example, or in the 1920s -- increases in the number and and wealth of the best-off Americans have coincided with rising living standards for the middle class. Periods in which the number and wealth of the rich shrink -- such as the 1930s -- have coincided with stagnating or falling middle- class living standards. In good times, all prosper, if unequally; in bad times, all suffer, if again unequally.For many Americans, this old rule of thumb continued to work in the 1980s. Phillips complained in Boiling Point that the ``middle class'' shrank by between 5 and 10 percentage points in the 1980s. Conceivably, that's true. But far more people were moving upward out of the middle class than downward. Of America's 66 million families, 17 million enjoyed incomes of $50,000 or more (in 1991 dollars) in 1980, and 22.3 million enjoyed such incomes in 1990. (The new prosperity coursed with special vitality through black America: only 810,000 black families brought in more than $50,000 in 1980; 1.3 million had crossed the threshold of comfort in 1990.)On the other hand, it's also true that many Americans were moving downward, and that the income of the average household -- a category that includes individuals living alone -- has been stagnating at about $30,000 (in 1990 dollars) since 1969.What's going on? A hundred and one things, but perhaps the most important of them is this: the collapse of the American family as a social unit. In 1980, 61 per cent of American households were families headed by a married couple. In 1992, only 55 per cent were -- an amazing shift. By grim contrast, the number of households in which a once-married woman lived without a husband jumped by 34 per cent in the 12 years from 1980 to 1992.The economic implications of these changes are huge. In 1991, 38 per cent of all families headed by a married couple enjoyed incomes over $50,000. Fewer than 8 per cent of husbandless women earned so much. If you flip that number over, its implications are even more startling: of those households earning incomes of $50,000 or more, 81 per cent were headed by a married couple.Family incomes grew rapidly between 1945 and 1973 largely because families themselves were so stable. Divorce rates were low, illegitimacy was rare, and most families sent only one wage-earner into the workforce. (A recent survey of corporate executives found evidence that men who are the sole support of their families work harder than men whose wives also work. Perhaps it's the weight of responsibility, or perhaps when the wife is at home the husband can concentrate his energies more fully on the job.) Under those conditions, every extra dollar paid to a full- time worker translated into a higher income for his wife and children.In an era of extreme family instability, however, economic growth does not suffice to enrich families. Dividing one income between two post-divorce households has, among other consequences, a depressing effect on national income statistics. And that's assuming the father can be induced to pay child support. If a divorced father refuses, his former wife and their children form a new, probably very low-wage, household that depresses the national statistics even more deeply -- as do the households of the millions of women whose boyfriends fathered children on them and then abandoned them to a weary life of welfare or minimum-wage labor.None of this excites Phillips much. His attention is concentrated on the powerful potential of the fact that many have suffered economically while a few have prospered enormously. That disparity, in the hands of a clever pol, yields a resentment that might be profitably galvanized, and wherever you detect resentment, you find Kevin Phillips ahead of you.Recognizing the truth that it's Big Government that spawns lobbyists, and that it's social breakdown that produces the dreary economic numbers against which Phillips rages, makes nonsense of the ten-point reform package with which he ends Arrogant Capital. He recommends, for example, moving federal agencies out of Washington. ``The Interior Department could be moved to Denver or Salt Lake City, Agriculture to Des Moines or Kansas City, Housing and Urban Development to Philadelphia or Chicago. Uprooted lobbies would mean broken lines of influence.'' On the contrary -- moving agencies to smaller centers where they would quickly rank among the largest local employers and where they could go about their business far from the scrutiny of Congress and the national press would guarantee capture by special-interest groups and doom forever any hope of shrinking the agencies' payrolls.In the same heedless spirit, Phillips repeats University of Texas professor Steve Magee's suggestion that the number of people admitted to law schools each year should be shrunk in order to cap the lawyer explosion. But of course, capping the number of lawyers without simultaneously choking the flow of laws and regulations would simply foster artificial scarcities in the profession and inflate the incomes of those lawyers now in practice.As for Phillips's recommendations that the country attempt to raise the incomes of the middle class through protectionism and tax increases on corporations and high-income earners -- all one can say is that it has been tried before, and with dismal results.To engage with these ideas, however, is to fundamentally misunderstand them. Kevin Phillips is no more interested in the question of whether higher taxes will spark the economy than the designers of the 1948 Cadillac were interested in whether tail fins would in fact stabilize their car at high speeds. What Phillips cares about is devising formulas that can be put to effective use by canny political operators. Despite the 1994 congressional results, his distinctive blend of nationalism and class resentment may yet prove to be just such a formula. And those of us who admire Phillips's talents -- while deploring the uses to which he has devoted them -- had better remain prepared to explain to an electorate enraged and frightened by the economic costs of social breakdown exactly why he's wrong.