The Political Issue of the Year

by Burt Folsom on December 28, 2011

What has been the political issue of 2011? Class Warfare. The idea that politicians can tax the rich and then give that confiscated wealth to the middle class and poor, in order to win elections with the votes of those receiving the federal funds. Certainly that idea is a logical one from a purely political point of view. It might work, and it has worked before.

Franklin Roosevelt was the first politician to practice class warfare on a large scale. He blamed the rich for the Great Depression, even though the high tariff, the bailouts, the tax hikes, and the rising Fed rates all played strong parts in creating a Great Depression. All of those steps involve government missteps, not those of private enterprise, but that didn’t stop FDR. In 1936, he sought re-election by more class warfare. He had just hiked the income tax to 79 percent at the top level, and he used his major speech of the 1936 campaign–his Madison Square Garden speech–to attack the rich and promise further assaults on them should he be re-elected. Senator Hiram Johnson of California, who voted for FDR that year, conceded that FDR “starts with probably 8 million votes bought. The other side has to buy them one by one, and they cannot hope to match his money.”

During the last four years, President Obama has tried to “buy” even more than “FDR’s 8 million votes” through Obamacare, Stimulus One, Stimulus Two, Cash for Clunkers, bailouts, and more.

But the other side has something important going for it. Not programs to redistribute wealth, but promises of tax cuts and cuts to federal spending. The FDR-Obama tactics of redistribution have never created jobs or pulled the nation out of a recession or depression. Never. But tax cuts and trimming federal spending has yanked the nation out of double-digit, or near double digit, unemployment (and high inflation) in the 1920s and 1980s. It could do so again.

With the $15,000,000,000,000 national debt, our country can’t afford more costly experiments with redistribution and the piling on of debt. The issue of 2011 has been class warfare. It may also become the issue of 2012. And if the redistributionists win at the ballot box, then the issue of 2013 may be how to administer the permanent decline in the U.S. economy.

Burt Folsom is a professor of history at Hillsdale College. His is also a columnist and the historian-in-residence at the Foundation for Economic Education in Irvington, New York. You can visit his blog at burtfolsom.com.

Dr. Folsom has written several books. One of the most popular ones is The Myth of the Robber Barons in which he discusses the differences between political entrepreneurs and market entrepreneurs. In New Deal or Raw Deal: How FDR’s Economic Legacy Has Damaged America (Simon & Schuster, 2008), Folsom examines the disastrous effects of massive federal spending under Franklin Roosevelt during the New Deal years of the 1930s. The sequel to his work on the New Deal is his latest book, co-authored with his wife, Anita Folsom: FDR Goes to War: How Expanded Executive Power, Spiraling National Debt, and Restricted Civil Liberties Shaped Wartime America (Simon & Schuster, 2011).