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BROOKS: No 1 percent solution


The U.S. economy is probably going to stink for a few more years. It is beset by short-term problems (low consumer demand, uncertain housing prices, too much debt) and long-term problems (wage stagnation, rising health care costs, eroding human capital).

Realistically, not much is going to be done to address the short-term problems, but we can at least use this winter of recuperation to address the country's underlying structural ones. Do tax reform, fiscal reform, education reform and political reform so that when the economy finally does recover the prosperity is deep, broad and strong.

Unfortunately, the country has been wasting this winter of recuperation. Nothing of consequence has been achieved over the past two years. Instead, there have been a series of trivial sideshows. It's as if people can't keep their minds focused on the big things. They get diverted by scuffles that are small, contentious and symbolic.

Take the Occupy Wall Street movement. This uprising was sparked by the magazine Adbusters, previously best known for the 2004 essay, "Why Won't Anyone Say They Are Jewish?" — an investigative report that identified some of the most influential Jews in America and their nefarious grip on policy.

If there is a core theme to the Occupy Wall Street movement, it is that the virtuous 99 percent of society is being cheated by the richest and greediest 1 percent.

This is a theme that allows the people in the 99 percent to think very highly of themselves. All their problems are caused by the nefarious elite.

Unfortunately, almost no problem can be productively conceived in this way. A group that divides the world between the pure 99 percent and the evil 1 percent will have nothing to say about education reform, Medicare reform, tax reform, wage stagnation or polarization. They will have nothing to say about the way Americans have overconsumed and overborrowed. These are problems that implicate a much broader swath of society than the top 1 percent.

They will have no realistic proposal to reduce the debt or sustain the welfare state. Even if you tax away 50 percent of the income of those making between $1 million and $10 million, you only reduce the national debt by 1 percent, according to the Tax Foundation. If you confiscate all the income of those making more than $10 million, you reduce the debt by 2 percent. You would still be nibbling meekly only around the edges.

The 99 versus 1 frame is also extremely self-limiting. If you think all problems flow from a small sliver of American society, then all your solutions are going to be small, too. The policy proposals that have been floating around the Occupy Wall Street movement — a financial transfer tax, forgiveness for student loans — are marginal.

The Occupy Wall Street movement may look radical, but its members' ideas are less radical than those you might hear at your average Rotary Club. Its members may hate capitalism. A third believe the U.S. is no better than al-Qaida, according to a New York magazine survey, but since the left no longer believes in the nationalization of industry, these "radicals" really have no systemic reforms to fall back on.

They are not the only small thinkers. President Barack Obama promises not to raise taxes on the bottom 98 percent. The Occupy-types celebrate the bottom 99 percent. Republicans promise not to raise taxes on the bottom 100 percent. Through these and other pledges, leaders of all three movements are hedging themselves in. They are severely limiting the scope of their proposed solutions.

The thing about the current moment is that the moderates in suits are much more radical than the pierced anarchists camping out on Wall Street or the tea party-types.

Look, for example, at a piece Matt Miller wrote for The Washington Post called "The Third Party Stump Speech We Need." Miller is a former McKinsey consultant and Clinton staffer. But his ideas are much bigger than anything you hear from the protesters: Slash corporate taxes and raise energy taxes, aggressively use market forces and public provisions to bring down health care costs; raise capital requirements for banks; require national service; balance the budget by 2018.

Other economists, for example, have revived the USA Tax, first introduced in 1995 by Sens. Sam Nunn and Pete Domenici. This would replace the personal income and business tax regime with a code that allows unlimited deduction for personal savings and business investment. It's a consumption tax through the back door, which would clean out loopholes and weaken lobbyists.

Don't be fooled by the cliches of protest movements past. The most radical people today are the ones who look the most boring. It's not about declaring war on some nefarious elite. It's about changing behavior from top to bottom. Let's occupy ourselves.

David Brooks is a columnist for the New York Times.