Among the wealthy, a new voice for fiscal sacrifice
President Obama's discussion Tuesday with leaders of both parties about the expiring Bush tax cuts comes at a time when a growing chorus of progressives and other reasonable-minded Americans have been ramping up pressure on the White House to allow the cuts for millionaires to end - as intended - at the end of the year. Last week that chorus was joined by a group of unlikely, albeit welcome new singers: the millionaires themselves.
In a November letter to President Obama, a group calling itself Patriotic Millionaires for Fiscal Strength argued that the wealthiest Americans do not need, and should not be given, an extension on tax cuts that have done next to nothing to improve broad economic prosperity. "We are writing to urge you to stand firm against those who would put politics ahead of their country," the letter's authors write. "Now, during our nation's moment of need, we are eager to do our fair share."
Signers include a number of early Google executives as well as leaders of companies such as Ben and Jerry's, Men's Wearhouse and Princeton Review. They aren't the first group of ultra-wealthy people to signal discomfort with senseless fiscal policy designed to benefit the top 2 percent. A group of 700 business leaders and individuals known as Responsible Wealth have called the Bush tax cuts "irresponsible" and "downright inexcusable." Bill Gates Sr. and Warren Buffet, of course, have also called for a change in priorities.
For the most part, these are not the kinds of proclamations we have come to expect from America's rich. More often than not their views are distilled through megaphones such as the Chamber of Commerce, which wield outsized influence and use both foreign and national dollars to further the causes of the relative few. We have come to expect America's wealthy to stand behind the Republican Party - a party itself composed largely of millionaires in Congress - and to demand new income tax cuts, or corporate loopholes, or the end of the estate tax, even while they peddle faux concern about the federal government's long-term debt position.
It's worth remembering, however, that it wasn't always this way.
There was a time when the concept of patriotism - the idea of putting country above self - extended beyond our foreign policy. There was a time when economic patriotism was very much a part of the business community's mind-set, even embedded in the worldview of the kinds of Northeast Republicans who are now all but extinct. Robert Johnson, for example, one of the founders of Johnson & Johnson, urged his business colleagues in a 1947 speech never to ignore the plight of the working class. Doing so, he said, "is as foolish as it would be to ignore public health, crime, and the need for education."
During the golden era of the 1950s, a Republican president, along with Republican members of Congress, accepted a top marginal tax rate for millionaires that was 91 percent. "The only way to make more tax cuts now is to have bigger and bigger deficits and to borrow more and more money," President Eisenhower argued. "This is one kind of chicken that always comes home to roost. An unwise tax cutter, my fellow citizens, is no real friend of the taxpayer."
That sentiment would be unimaginable coming out of the mouth of a modern Republican. Ideology has trumped that kind of frankness and logic. Instead, the business community and the wealthy, and the Republican Party they prop up, have abandoned principle and policy - as well as any sense of a social compact - in exchange for a totally distorted view of reality.
After all, any honest look at our economic plight suggests that we must change our posture if we're to confront these challenges successfully. There may have been a time, during the boom of the '90s perhaps, when the business community and the wealthy would have had great incentive to focus their efforts on reducing their tax rates and lobbying for lax regulations that they could argue might otherwise stifle their profits. But that kind of selfishly narrow worldview, that kind of chipping-away-at-the-margins attitude, has no place in this time of deep and painful economic hardship.
It isn't regulations and tax rates that are stifling business. It's a lack of demand, spurred by a lack of investment by business, caused by an economic crisis that was, in turn, the result of the kind of reckless deregulation these same individuals and businesses spent the last several decades fighting for.
Millionaires aren't better off over the long run with the continuation of the Bush tax cuts. They'd be better off if the $700 billion it will take to pay for those cuts was instead put into new stimulative efforts - the kind of efforts that would spur real economic growth. Those initiatives would create jobs and new prosperity not just for the wealthy, but for everyone. They would drive demand.
When business is doing well, millionaires will be doing well too. In the meantime, their selfishness hurts everyone, including themselves. Will they ever snap out of it and see the new reality as it presents itself in front of them? Only time - and perhaps the negotiations that began today - will tell. In the meantime, this group of Patriotic Millionaires gives us hope. They give us reason to believe that not everyone at the top believes that it's only the top that matters.
Katrina vanden Heuvel is editor and publisher of the Nation and writes a weekly column for The Post.