Boiling Point: Democrats, Republicans, and the Decline of Middle-Class Prosperity. - book reviews

Washington Monthly, March, 1993 by Nicholas Lemann

Letting his ego out for a trot, Kevin Phillips begins Boiling Point by observing that during last year's presidential campaign, Bill Clinton, Ross Perot, Pat Buchanan, Tom Harkin, Mario Cuomo, Jerry Brown, Lloyd Bentsen, Douglas Wilder, and Dick Gephardt all demonstrated that they had either read his last book, The Politics of Rich and Poor, "or drawn on its theses." On the other hand, "George Bush and his political advisers chose to ignore the book." Is it any accident that they're unemployed today? But the further implication--woe betide the president who ignores Kevin Phillips--is superfluous, because we now have, for perhaps the first time in our history, a president who can absolutely be counted on to read and assimilate the message of any new book on public affairs that gets even a fraction of the attention that is sure to come to Boiling Point. It's inconceivable that President Clinton won't be influenced by this book--which may not be good news.

Nearly everybody in the politics business agrees with Phillips that he deserves to be treated as an oracle. His status is well-earned. As a statistics-wielding young staff member on the 1968 Nixon presidential campaign, and shortly thereafter as the author of The Emerging Republican Majority, Phillips identified the most powerful force in national politics during the past quarter-century: Middle-class populism. As opposed to the People's Party populism of the late 19th century, or Huey Longism during the Depression, middle-class populism is not headquartered among the poor and dispossessed, and therefore it can go either way politically. During times of economic prosperity, such as the late sixties, the middle class could be persuaded to direct its resentment toward a cultural elite made up of intellectuals and bureaucrats who sneered at patriotism and other mainstream values and had empathy only for themselves and the minority poor. During times of relative cultural stability and economic trouble, such as the late eighties and early nineties, the middle class would switch to resenting the rich. (That's why Dan Quayle's sallies against the cultural elite didn't work in 1992.)

Thus, depending on its mood, the middle class might vote either Democratic or Republican--the only constant being the enormous potency of the resentment-of-the-elite theme. It was an important bellwether when Phillips, who seems to have a mystical, instinctive oneness with the middle class, announced a switch in his own resentments from cultural to economic in 1990 with the publication of The Politics of Rich and Poor.

If you take what Phillips says as indicative of the political mood, the big news about Boiling Point is that the middle-class anger of The Politics of Rich and Poor, and of the 1992 campaign, was just a warm-up; now Phillips and the middle class are getting really angry. It must be said that two weeks into the Clinton administration, Phillips seemed to be right on the money. Already there have been two controversies (over Zoe Baird's child care and gays in the military) that revealed the depth of the heartland's simmering rage over the values, lifestyle, and prosperity of the elite, and in both cases Clinton, even though he has spent the last year communing full-time with the people, seemed to have been blindsided by their reaction. Phillips spent the month of January issuing dire warnings that if Clinton included a lot of new taxes on the middle class in his economic plan, all hell could break loose. The wave that swept Bill Clinton into office, in other words, and that he may have hoped would quickly dissipate, may instead continue to gather force all through his term as president.

Tax and offend

The bulk of Boiling Point is made up of a long, detailed complaint about the economic condition of the middle class. Phillips does not operate in the manner of a disinterested social scientist testing a hypothesis; rather, he has gathered under one roof what must be every recent study and article that supports his point. The result of this relentless procession of grim news (delivered in Phillips's relentlessly dense and prosecutorial prose) is that you finish Boiling Point feeling as if you've been hit over the head with a sledgehammer. Everybody (except perhaps the editorial page of The Wall Street Journal) now agrees that in recent years growth in family income has stagnated, that the share of national wealth going to the rich has increased, and that one-parent families and the less educated have been hit the hardest. Phillips gives this situation the emotional freight of the Great Depression.

Tax policy lies at the center of his case. Phillips correctly points out that the net result of the three major pieces of tax legislation of the eighties--the 1981 supply-side income tax cut, the 1983 "rescue" of the Social Security system, and the 1986 simplification of the federal tax code--was that taxes on the rich declined substantially while taxes on the middle class rose. The loss in government revenue caused by the 1981 law was partially offset by increases in other taxes that are more regressive than the federal income tax. They included state and local taxes, user fees, and, most notoriously, the Social Security tax, whose maximum individual assessment rose by 150 percent during the eighties. The increase in the federal deficit also helped the rich, because the government's interest payments are essentially a subsidy to wealthy bondholders. Back in the conservative fifties, Phillips says, median-income families paid less than 10 percent of their earnings to the federal government, but "one profile of Charles Wilson, the chairman of General Motors, estimated that he would have kept only $164,000 from a 1950 salary of $626,000." The top federal income tax rate was 91 percent until 1964; today, it is 31 percent.