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Populist Unity Can Overcome the Establishment's Supermajority

Back in 2012 we published an article entitled “The Forgotten 33%,” which included a graphic entitled “American Voter Breakdown 2012.” It depicted the U.S. electorate as comprised of 46% who pay zero net taxes, 20% who work for the government and are net tax consumers, the 1% “super rich,” and the “forgotten 33%,” who work in the private sector and earn enough to be positive net taxpayers.

The point of the article, then and now, was that people with an intrinsic preference for big government comprise a super-majority of voters in America. But something has changed since 2012…

AMERICAN VOTER BREAKDOWN 2016
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The emergence of Donald Trump and Bernie Sanders as serious contenders to become president of the U.S. reflects a growing awareness among voters in all of the above categories that things can and should be better. The 33% who constitute America’s beleaguered taxpayers were angry four years ago, and this time around they’re furious. Their ire is the most easily explained: Now more than ever, they work long hours for less wages or lower profits, all while being told by the establishment press, by mainstream academia, and by left-wing politicians that they’re “privileged,” and still aren’t paying their “fair share.” If they’re white, they’re told their success is the undeserved result of their color, when in fact they’ve been the recipients of institutionalized reverse discrimination for nearly two generations. And no matter what their ethnicity, they confront soaring prices for housing, health care, and college tuition for their children.

The 33% who work and make enough to pay taxes are angry. And they should be. But what about the 46% who pay no net taxes?

The anger of the 46% takes various forms, nearly all of it justified. Many of them work, but qualify for the earned income tax credit and subsidized health care, which makes them net tax consumers. Many of them would like to work harder, but the only jobs available are part-time with unpredictable schedules which makes it impossible for them to work two jobs. Many of them would like to get a better education, but they are the products of failing schools where teacher tenure is more important than student achievement. And if they’re people of color and haven’t yet been successful, they’re perpetually told by the establishment press, by mainstream academia, and by left-wing politicians that they are victims of discrimination and their failures are not their responsibility – fueling additional anger.

And what of the 20% who work for the government? They are, for the most part, ensured decent health care and a secure retirement. But they are the targets of relentless propaganda from their unions, who have waged a multi-decade campaign to convince them they are underpaid, underappreciated, and overworked. Many of them succumb to this nonsense. Others, and more than a few, are disgruntled for the opposite reason – they resent working for a unionized government where merit means less than seniority, and innovation is a threat.

But why are taxes consuming the 33%? Why are opportunities for good jobs and education being denied the 46%? And why does government get bigger every year but deliver less?

There’s a simple answer. Government unions. Especially at the state and local level, government unions have destroyed our public schools and driven our public institutions to the brink of bankruptcy. These government unions perpetually lobby for higher taxes, bigger government – more employees with more pay and benefits, more job killing regulations, and more programs ostensibly intended to help the less fortunate – regardless of their cost or actual effectiveness. The government union agenda is to increase their power and influence – a goal that has no connection with the public interest.

Government unions control state and local politicians, who in turn control every scrap of legislation sought after by big business. They encourage and enable cronyism. Their union controlled pension funds and their union backed government bond underwriting make them the biggest players on Wall Street. They ARE the “establishment” that has gotten everyone so agitated this time around.

Donald Trump, for all his hapless gaffes and hideous vitriol, is far too intelligent to identify government unions as the root cause of most of the problems in America. Unions make or break Trump’s development projects. And even if Trump did attack the government unions, he’d risk confusing voters, who by and large still don’t make a distinction between public and private sector unions.

Bernie Sanders, despite his belated attempts to pander to the African American left by challenging police organizations, is unwilling or unable to make the distinction between police personnel, whom we are lucky to have among us, and police unions that protect bad cops and intimidate politicians. And even if Sanders did take on the police unions, he would never take on the teachers unions – despite the fact they’ve practically destroyed public education in America.

Populist anger in America today is justified, and there is a unifying target for the anger – the “establishment” as represented by government unions and their clients; monopolistic corporations, America’s overbuilt financial sector, and the extreme environmentalist lobby that provides a phony moral cover for their iniquitous schemes. If public sector unions were illegal, this entire corrupt establishment would be threatened as never before. As it is, this awakening national dissent has seismic power, diffused in all directions, turning only on itself.

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Ed Ring is the president of the California Policy Center.

The Faces of the Forgotten 33%

Earlier this month a UnionWatch editorial referenced “The Atlas Generation,” describing those Americans who are not members of the elite 1% super-rich, nor part of the privileged 20% who work for the government, nor among the nearly 50% of America’s population who are, apparently, poor enough to avoid taxes altogether.

Who are these forgotten 33%? Who is this one-third of America, people who, compared to the other two-thirds, pay far more in taxes than they receive in return? Who are the faces of the forgotten 33%?

  • They are small business owners who can’t compete with the crony capitalist captains of big business, who use their financial influence with legislators to enact regulations that small businesses can’t possibly afford to comply with.
  • They are independent contractors who work multiple jobs to earn a mid-five-figure annual gross income, yet pay nearly 50% in taxes on every extra dollar they make (25% federal, 9% state, 13% social security and medicare).
  • They are small investors whose retirement savings lose value at the same time as government employee pension funds beat the market using high-frequency trading and other manipulative tactics that are unavailable to small value investors (and hold taxpayers accountable to cover the difference when they don’t beat the market).
  • They are parents who can’t get a decent education for their children in public schools, because the teacher’s union makes it impossible to fire bad teachers, and creates a self-serving bureaucracy where administrators outnumber teachers. Parents who have no chance to influence local or state education policy because the teacher’s union will spend literally millions to elect their puppets on school boards.
  • They are elected public officials at the state and local level – especially in the large urban centers – city councilmen and county supervisors – who have to close parks and libraries, and defer maintenance of roads and other infrastructure, because they are bound to pay local government employees wages and benefits that are often more than twice what people might earn for similar work in the private sector.

And the forgotten 33% have friends among the rest of the American people.

  • There are the millions of government workers who deliver an honest day’s work and do their jobs well, yet watch people who merely show up get the same compensation and enjoy the same job security as they do, thanks to union work rules and collective bargaining. And there are additional millions of government workers who are tired of seeing their union dues used to promote politicians and causes they don’t support.
  • There are activists, entrepreneurs, educators, and many others within the disadvantaged communities who have seen for themselves the destructive impacts of government welfare and other social programs.
  • There are members of the elite 1%, the super rich, who want to invest in America but face record high taxes, and industry after industry controlled by special interests who have created regulations designed to protect their turf and deter genuine competition.

How long can the alliance of the big – big government, big finance, big labor, and big business – continue to render more and more citizens dependent on entitlements, buy off the unionized government workers with pay and benefits that greatly exceed market norms, and pursue fiscal and monetary policies that channel more and more wealth to the elite 1%?

How long can the alliance of the big continue to rely on taxing the forgotten 33% to fund the entitlements, the pensions, and the Wall Street bailouts?

What combination of the forgotten 33% along with their friends among the other two-thirds of America’s electorate might form a new alliance – the alliance of the accountable? How might such an alliance strike an optimal balance between preserving individual incentives and providing ALL workers a reasonable taxpayer-funded safety net for health and retirement security? A critical first step towards forming a political coalition powerful enough to take on the alliance of the big is for voters to recognize that public sector unions are just as much of a barrier to achieving those goals as the monopolistic corporate and financial interests.