Blind Trust

The American ruling class is failing us—and itself.

At other moments in our history, the informal networks of the wealthy and powerful who often wield at least as much influence as our elected politicians accepted that their good fortune imposed an obligation: to reform and preserve the system that allowed them to do so well. They advocated social decency out of self-interest (reasonably fair societies are more stable) but also from an old-fashioned sense of civic duty. "Noblesse oblige" sounds bad until it doesn't exist anymore.

An enlightened ruling class understands that it can get richer and its riches will be more secure if prosperity is broadly shared, if government is investing in productive projects that lift the whole society, and if social mobility allows some circulation of the elites. A ruling class closed to new talent doesn't remain a ruling class for long.

But a funny thing happened to the American ruling class: It stopped being concerned with the health of society as a whole and became almost entirely obsessed with money. Oh yes, there are bighearted rich people when it comes to private charity. Heck, David Koch, the now famous libertarian-conservative donor, has been extremely generous to the arts, notably to New York's Lincoln Center.

Yet when it comes to governing, the ruling class now devotes itself in large part to utterly self-involved lobbying. Its main passion has been to slash taxation on the wealthy, particularly on the financial class that has gained the most over the past twenty years. By winning much lower tax rates on capital gains and dividends, it's done a heck of a job.

Listen to David Cay Johnston, the author of Free Lunch and a columnist for Tax Notes. "The effective rate for the top four hundred taxpayers has gone from 30 cents on the dollar in 1993 to 22 cents at the end of the Clinton years to 16.6 cents under Bush," he said in a telephone interview. "So their effective rate has gone down more than 40 percent." He added: "The overarching drive right now is to push the burden of government, of taxes, down the income ladder."

And you wonder where the deficit came from.

If the ruling class were as worried about the deficit as it claims to be, it would accept that the wealthiest people in society have a duty to pony up more for the very government whose police power and military protect them, their property, and their wealth.

The influence of the ruling class comes from its position in the economy and its ability to pay for the politicians' campaigns. There are not a lot of working-class people at those fundraisers President Barack Obama has been attending lately. And I'd underscore that I am not using the term to argue for a Marxist economy. We need the market. We need incentives. We don't need our current levels of inequality.

Those at the top of the heap are falling far short of the standards set by American ruling classes of the past. As John Judis, a senior editor at the New Republic, put it in his indispensable 2000 book The Paradox of American Democracy, the American establishment has at crucial moments had "an understanding that individual happiness is inextricably linked to social well-being." What's most striking now, by contrast, is "the irresponsibility of the nation's elites."

Those elites will have no moral standing to argue for higher taxes on middle-income people or cuts in government programs until they acknowledge how much wealthier they have become than the rest of us and how much pressure they have brought over the years to cut their own taxes. Resolving the deficit problem requires the very rich to recognize their obligation to contribute more to a government that, measured against other wealthy nations, is neither investing enough in the future nor doing a very good job of improving the lives and opportunities of the less affluent.

"A blind and ignorant resistance to every effort for the reform of abuses and for the readjustment of society to modern industrial conditions represents not true conservatism, but an incitement to the wildest radicalism." With those words in 1908, President Theodore Roosevelt showed he understood what a responsible ruling class needed to do. Where are those who would now take up his banner?