The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath [Paperback]

Kevin P. Phillips (Author), Kevin Phillips (Author)

Book Description

Publication Date: June 1991

The enormous concentration of wealth in the United States during the 1980s--most of it in the hands of the top 1% of the population--will provoke what Phillips calls a watershed change in American politics. His masterly analysis portrays the public's growing concern over this unequal distribution of wealth and the Republican policies that enhanced the imbalance. A national bestseller in hardcover.

Editorial Reviews

From Publishers Weekly

Economic analysis and historical comparisons blend to show that Reagan's presidency left a huge concentration of wealth at the top that harms the poor, adds to the mounting debt and allows foreigners to grab large chunks of America. "A stunning refutation of George Gilder's Wealth and Poverty , Phillips's dispassionate report offers no solutions yet zeros in on key problems," said PW.
Copyright 1991 Reed Business Information, Inc.

From Library Journal

In this extremely readable description of the economic consequences of the "Reagan revolution" of the 1980s, Phillips relies on diverse empirical data to support the notion that there is a cyclical pattern in American politics. Like the 1880s and the 1920s, the 1980s, says Phillips, represented the ascendancy of the Republican party, which allowed the wealthy to make even further dramatic gains over the middle and lower classes. This "circulation of elites" notion points to a populist backlash and possible return of the Democratic party to the presidency in the 1990s, he says. His critique fits nicely with the work of Arthur M. Schlesinger and the pioneering turn-of-the-century European social scientists Roberto Michels and Vilfredo Pareto.
- William D. Pederson, Louisiana State Univ., Shreveport
Copyright 1990 Reed Business Information, Inc. --This text refers to the Hardcover edition.

Product Details

• Paperback: 288 pages
• Publisher: Harpercollins; 1st HarperPerennial Ed Pub 1991 edition (June 1991)
• Language: English
• ISBN-10: 006097396X
• ISBN-13: 978-0060973964
• Product Dimensions: 7.9 x 5.2 x 0.8 inches
• Shipping Weight: 8 ounces
• Average Customer Review: 4.0 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #1,029,259 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

37 of 40 people found the following review helpful

5.0 out of 5 stars Indispensible guide to the 1980's and beyond August 23, 2000

By Douglas Doepke

Format:Paperback

Phillips has documented in some detail the massive income shift of the Reagan years. In almost all categories the upper 10% of American families soared, while the remaining 90% either stagnated, or at the lower end, actually declined. The author's exhaustive charts demonstrate statistically what popular opinion could only entertain: the rich got richer and the poor got poorer. An interesting question to pose is why a Republican strategist like Phillips would document this adverse result in such unsparing fashion. Perhaps like some far-seeing conservatives he views a growing income gap as destabilizing to the country, and hopes to bring forth moderating influences.

In any event, the book stands as an excellent reference for understanding the impact of those years. That Phillips does not delve beyond surface movements for deeper explanation is not an objection to the work as a whole. For what he succeeds in doing with considerable authority and as "one of their own", is to revive class bias as the focal point of American politics. Being a conservative, he is not about the business of endorsing class-struggle as a premise of human history or American politics. Nevertheless, his linking of the Reagan era to previous eras of capitalist overreach helps to revive the long submerged story of class-struggle in America. This is an indispensible book for understanding the 1980's and years beyond.

25 of 28 people found the following review helpful

5.0 out of 5 stars An accurate and detailed account of a socio-economic tragedy May 17, 1999

By Timothy D. Dailey

Format:Paperback

Kevin Phillips has all the credentials necessary to speak on this subject and for those who seem unaware of it; happens to be a republican. His detailed coherent account of what is, in the hands of most authors, a murky story - how the rich really got richer at the expense of the majority during the 80's - is fact filled, copiously notated, and hard to fault without resorting to a willfull ignorance to believe ideology over evidence. A must read book for anybody who got taken at that Three Card Monty table that was the american economy of the 80's

12 of 12 people found the following review helpful

4.0 out of 5 stars Phillips hadn't yet realized the pernicious impacts resulting from a Fed dominated by Wall Street speculators August 14, 2008

By Michael Emmett Brady VINE™ VOICE

Format:Paperback

Phillips wrote this book in 1990.This allows a reader to compare it with later books that dealt with the same problem ,such as " Boiling Point " in 1993 and " Arrogant Capital " in 1994.The first point that Phillips demonstrates overwhelmingly was that the Reagan tax cuts were primarily aimed at increasing the wealth and political power of the Wall Street speculators and investment banks like Bear Stearns,Merrill Lynch,Goldman Sachs, Morgan Stanley,Lehman Brothers,J.P. Morgan,Credit Suisse,Deutsche Bank,etc. This was possible because Reagan was not able to differentiate between Wall Street speculators ,on the one hand ,and entrepreneurship and enterprise ,on the other hand. For instance,ALL of the supply side economists(Laffer,Wannsiki,etc.)and most of the University of Chicago economists advising President Reagan were tied in to the Wall Street crowd ,either directly or indirectly.Phillips covers this in chapter 3.It is here that he makes two serious mistakes in less than one half of a sentence that costs him one-half of a star.He states :" Most of the conservative theorists acknowledged their restatement of Adam Smith..."(Phillips,1990,p.65).First,none of the supply siders or University of Chicago economists are conservative in the sense that Adam Smith was .They are Libertarians.This is a major confusion that is ubiquitous in America.Second,NONE of the policies recommended by these supply side and Chicago advisors follows from Smith.First ,Smith favored (a) an overall, progressive tax system,not a flat or proportional system (Smith,1776,Modern Library(Cannan) edition,p.794),(b)retaliatory and revenue tariffs(Smith,pp....434-439),and (c)direct government intervention into the economy through the provision of universal religious instruction and education,provided for free by the government to all individuals who could not afford to pay,in order to counteract the massive undepletable ,negative externalities/spillover effects arising from the workings of the Invisible Hand of the Market(self interest plus the specialization and division of labor[Smith,pp.716-768,pp.734-741);Phillips does better on p.69 in recognizing Smith's opposition to the interactions of monopolies and government and their negative impact on the political sphere of life.]

A major plus of Phillips exposition is not only the massive statistical support that he presents in this book about the increasing inequality of income between different income classes but a very clear cut example that can be understood by any reader : " Under Reagan,as under Coolidge,the clear evidence is that the net tax burden on rich Americans as a percentage of their total income shrank substantially because of the sweeping tax cuts.The surge in actual tax payments was the result of higher upper-bracket incomes.To measure the benefits,imagine a businessman who had made $333,000 in salary,dividends and capital gains in 1980,and paid $120,000 in federal income taxes.As prosperity returned in 1983,his income climbed to $ 500,000.Yet with the typical tax rates reduced,he might well have paid,say,$150,000 in taxes,more actual payment,of course,but less relative burden."(Phillips,1990,p.82;It is unfortunate that Phillips did not explicitly tie this example in to his Table 2 analysis on p.58 that showed the higher incomes going to providers of " financial services ",a.k.a.,Wall Street speculators).

Phillips loses another one half of a star due to his failure to explicitly deal in this book with the negative impact of the rise of the Wall Street speculators under Reagan ,and their support from the Federal Reserve System under Volcker and/or Greenspan,as well as the support given to them by the Securities and Exchange Commission(SEC),the regulatory agency which is supposed to protect middle class American from the ravages of speculators and projectors. The topic " Speculation " is not included in the subject index at the back of the book wheras it figures prominently in the later books ,such as " Boiling Point" and " Arrogant Capital ".Phillips's Table 2 on pp.56-58 is a brilliant historical summary of the negative impact of speculation on the economy;however,he needed to explicitly discuss this problem in the same way that Adam Smith did in The Wealth of Nations on pp.260-340,especially on pp.339-340,where Smith pinpointed,as did the Scholastic philosopher -theologians of the medieval Catholic Church in the 13th century,the dangers of speculation,especially where bankers and financial interests are involved.

This leads us to the end of the book and Phillips' discussion of the political ramifications of this process of allowing more and more income to be siphoned off to the " financial services" sector of the economy,i.e.,securitization/speculation and the generation of imcome without production by attempting to manipulate the income, balance, and cash flow accounts of American corporations and financial institutions.

Phillips correctly identifies what the Wall Street crowd,which controls both political parties,more(Republican) or less(Democrat),regards as their biggest future challenge :" Our biggest fear is that the Democrats surface with a leader who is able to capitalize on the theme of economic populism".(Quotation from GOP Pollster V.Breglio;Phillips,1990,p.210).One need only look at the reliance of the Clinton's,Kerry's,and Obama's on Wall Street money to recognize that such a leader does nor exist. Read more ›

10 of 14 people found the following review helpful

4.0 out of 5 stars The conservatives exposed November 10, 2002

By john steppling

Format:Hardcover

The myths (or many of them)of the right are given full exposure in this fine book. Well researched and well written, it is a good primer on the delusions of the privledged class (just read some of the other reviews on this page).
Over all a significant contribution to the new analysis of conservative revisionism.

5.0 out of 5 stars "We Have Met the Enemy . . ." April 29, 2013

By Richard E. Baldwin

Format:Paperback

Kevin Phillips, The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath, 1990.

"We Have Met the Enemy . . ."

Policy books more than two decades old are rarely rewarding. Kevin Phillips' The Politics of Rich and Poor (1990) is an exception. Phillips was a one-time high level Republican advisor who helped craft Nixon's "Southern Strategy" in 1968 and published The Emerging Republican Majority in 1969. The subject of The Politics of Rich and Poor, he said, was "the new political economics, intensifying inequality and pain for the poor, the unprecedented growth of upper-bracket wealth, the surprisingly related growth of federal debt, global economic realignment, foreigners gobbling up large chunks of America, the meaninglessness of being a millionaire in an era with nearly a hundred thousand `decamillionaires." (p. xxii).

Phillips does not connect these changes to impersonal forces. He credits them to the policies associated with the Reagan administrations. The core of this argument lies in his third and fourth chapters. The third chapter is entitled "Wealth and Poverty: the Spirit of Federal Policy and Income Distribution During the Reagan Era." He duly notes that some of these developments were international, yet he insists that "by 1988 many of the new patterns of wealth during the 1980s . . . could be traced to specific approaches followed by the new administration after January 1981" (p. 53).

The third chapter looked at the general intellectual and psychological currents that fed Reagan's policies, emphasizing the enthusiasm for "free markets" and "entrepreneurialism...." In the fourth chapter--"Wealth and Favoritism: The Specifics of Federal Policy and Income Redistribution During the Reagan Era"--Phillips traces the new patterns to specific actions by the federal government. He discusses four basic categories of change effected during the Reagan years:

1. Tax-Bracket Reductions. The top income tax rates were cut from 70% to 28%, capital gains rate, which had dropped from 49% to 28% in 1978, was further cut to 20%. For a period in the mid-1980s the top rate for incomes between $70,000 and $150,000 was 33% while everything over $150,000 was taxed at only 28%! Meanwhile the Social Security Tax rate rose from 6% to 7.5%.
2. Budget Policy. In simple terms, domestic spending was cut while defense spending (which fed huge profits to owners of defense related industries) was increased dramatically.
3. Deregulation. Deregulation had begun in the Carter years with the deregulation of transportation--airlines, railroads, truckers--and selective deregulation made good sense. Fired by a latter-day faith in laissez faire government, however, the Reagan administrations deregulated with reckless abandon. Deregulation in the financial markets was especially effective at redistributing income from the poor to the rich.
4. Money and Debt. Fiscal and monetary policies were managed to shift income and wealth from the bulk of the population to the top and tippy-top few.

Phillips acknowledges that international forces had some influence, but his basic point is simple: we did it to ourselves. Although he demonstrated over 20 years ago that "Washington's excessive commitment to private wealth worked against the national interest" (p. 218), we remain unable to make reasonable policy corrections. Read more ›