In recent years, American progressivism has been torn between two competing approaches to reducing inequality. The first focuses on the top 1 percent; the second emphasizes the bottom 10 percent.
Vermont Sen. Bernie Sanders and former Secretary of State Hillary Clinton have been operating within the terms set by Top 1 Percent progressivism. For both the Democratic Party and the country, that’s the wrong focus.
For Top 1 Percent progressives, the accumulation of riches at the very top is what gets the juices flowing. They prioritize much higher taxes on top-earners, more aggressive regulation of Wall Street, restrictions on the compensation of chief executives, and criminal prosecution of those responsible for the financial crisis.
Bottom 10 Percent progressives are not enthusiastic about concentrations of wealth. But that’s not what keeps them up at night. Their focus is on deprivation and lack of opportunity. . They don’t see Wall Street as some kind of public enemy.
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Their defining document is one of the 20th century’s greatest speeches, delivered by Franklin Delano Roosevelt in 1944, in which he called for a Second Bill of Rights, including the right to a decent education, the right to adequate medical care and food, and the right to “adequate protection from the economic fears of old age, sickness, accident, and unemployment.”
To Bottom 10 Percent progressives, new Wall Street reforms, restrictions on CEO compensation and criminal prosecutions of bankers might be good ideas, but they can be a distraction. It’s far more important to enact initiatives that would help Americans who are struggling — by expanding the earned income tax credit, providing health care for everyone, improving childhood education, and increasing Supplemental Nutrition Assistance. (Simplification or removal of occupational licensing requirements for people who want to start a business, such as interior designers, manicurists, and florists, would also help.)
Thus far in the Democratic presidential campaign, disputes between Sanders and Clinton have been dominated by issues like “getting tougher on Wall Street” and raising taxes on the rich. But how, exactly, could that help Americans who are unable to make ends meet?
Top 1 Percent progressives purport to have some answers: For one, increasing taxes on the highest earners brings in revenue to spread around. It’s also true too that wealthy people have disproportionate political power. Top 1 Percent progressives think that if they’re made less wealthy, they’ll distort the democratic process less.
In reality, however, increasing taxes on the very wealthiest Americans can’t do a whole lot to help those at the bottom. And the right way to reduce the baleful effects of wealth on the political system is through campaign finance reform.
Why, then, have Sanders and Clinton spent so much time arguing over who would be tougher on Wall Street?
The most convincing answer is narrowly political: Attack the top 1 percent, and you get enthusiastic applause from a lot of Democrats in the bottom 99 percent. That applause tends to be muted — even among Democrats — when you call for helping the bottom 10 percent.
A third strategy would be to emphasize the challenges faced by the many Americans who have managed to avoid being poor, but who have struggled with stagnant wages and mounting bills. There’s a lot that could be done for them, including more generous parental leave and lower college bills. But 1 Percent progressivism gives them very little.
Sure, those who want to tax the rich and break up big banks can also support reforms to increase opportunity, reduce economic deprivation, and help the middle class. But emphasis matters. Both campaigning and governing require priority-setting and clear-eyed leadership.
Sanders and Clinton should stop competing to see who hates Wall Street more — and talk instead about how to provide help and opportunity for the many millions of Americans who urgently need it.
Cass Sunstein, a Bloomberg View columnist, is director of the Harvard Law School’s program on behavioral economics and public policy.