Summer 2013

How the 1% thinks

– The Wilson Quarterly

Cut spending — but tax me more!

The rich really are different, as F. Scott Fitzgerald said — especially in their politics. A rare survey of one-percenters shows that they are much more concerned than the general public about federal budget deficits, and much more eager to cut spending. They have a “distinctive antipathy” to government regulation of the economy.

The 83 wealthy individuals in the Chicago area surveyed in 2011 by political scientists Benjamin I. Page, Larry M. Bartels, and Jason Seawright were unusually politically active. Virtually all of them had voted in the 2008 presidential election, and two-thirds contributed to political campaigns (an average of $4,633 during the previous 12 months). They sprinkled their conversations with casual references to “Rahm” (Emanuel, who was then President Barack Obama’s chief of staff) and “David” (Axelrod, Obama’s top political adviser until he left the administration for an academic job earlier this year). That had something to do with the fact that Chicago is Obama’s hometown, but it’s also further evidence that the wealthy generally exercise disproportionate influence over government policy, the authors write in Perspectives on Politics. And these folks sure are wealthy, with an average income of more than $1 million and median wealth of $7.5 million.

When the group was asked to name the most important problems facing the country, 87 percent cited budget deficits. By contrast, in a survey of the general public done around the same time, only seven percent of respondents pointed to deficits or the national debt.

Jobs and the economy topped the public’s list of worries, and the rich rated unemployment second, but the authors say the well-to-do weren’t willing to put their money where their mouth was. They favored private-sector solutions over government action. More than half of the general public said the federal government should provide jobs for those who can’t find work. Among the rich, a scant eight percent embraced the idea.

Presented with a list of nine areas of government activity, the public favored more spending in all but one (economic aid to other nations). Fifty-nine percent of those surveyed wanted more money for Social Security and federal health-care programs. Given a list of 12 areas, the rich folk favored cutting back in nine, including job programs, Social Security, health care, and even defense. They, too, wanted to cut foreign aid.

The rich favored spending more in three areas: infrastructure such as roads and bridges, scientific research, and aid to education. But even in these cases, there were crucial differences between the one-percenters and the rest. Despite broad agreement on a number of particular issues — 93 percent of the wealthy favored merit pay for teachers, as compared with 77 percent of the general public — there were limits to the generosity of the rich. Only about a third of them agreed that the federal government should “spend whatever is necessary” to create good schools for all. Nearly 90 percent of the public endorsed the open wallet approach.

It may be that wealthy Americans are better informed than others about America’s problems and more realistic about public policy, Page, Bartels, and Seawright allow. Their survey undermines a number of stereotypical assumptions about the rich.

Two-thirds of the one-percenters said they were willing to pay more taxes in order to reduce the deficit, while only a third of the general public did. Nearly three-quarters of the rich agreed that it might be good for the federal government to run a deficit during a recession. Less than a third of the general public embraced this mainstream economic view — even though large majorities favored big increases in spending on federal programs.

Yet the one-percenters’ knowledge is “one-sided,” the authors contend. The wealthy likely don’t know many people who need Medicaid or have been laid off from a job. The people they do know, however, is one of the factors that give them outsized influence over government policies.

THE SOURCE: “Democracy and the Policy Preferences of Wealthy Americans” by Benjamin I. Page, Larry M. Bartels, and Jason Seawright. Perspectives on Politics, March 2013.

Image courtesy of Wikimedia Commons