If Democrats are the big spenders, why do Republican states get the money?

How your unconscious mind shapes you.
Dec. 2 2010 12:32 PM

Smart Republicans, Stupid Democrats

If Democrats are the big spenders, why do Republican states get the money?

(Continued from Page 1)

But that changed around 1994—after the last Republican takeover of Congress. Then, as now, Republicans rode to power on charges of government profligacy and promises to clean house. Then, as now, Republicans promised to lower taxes and to reduce government expenditure. Then, as now, Republicans warned the Democrat in the White House to come to his senses and move his administration to the right.

Buried in the fine print of Newt Gingrich's "Contract With America," Richardson found an income redistribution scheme. The proportion of government spending on groups that traditionally supported Democrats fell. The proportion of government income from groups that traditionally supported Democrats rose.

"Tax rates declined more for groups that tended to vote Republican. These groups include people with incomes in the upper tail of the distribution, such as small business owners, property owners, and investors accruing capital gains. … At the same time, expenditures fell more for programs directed toward people that tended to vote Democratic. These groups included welfare recipients, inner-city residents, and individuals in the lower tail of the income distribution."

Just as they did in the 1990s, Democrats and Republicans today are arguing not about whether to cut government expenditure, but where and how much to cut it. They are arguing not about whether to extend tax breaks to rich families, but just how rich you have to be to qualify for tax breaks. Smart observers think the Democrats in 2010 will repeat what they did in the 1990s—reduce expenditures on people who tend to vote Democratic and decrease taxes paid by people who tend to vote Republican.

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There is certainly room for debate about Richardson's conclusions. Seth Giertz at the University of Nebraska argues, for example, that the correlation merely reflects the fact that we have a progressive tax system—blue states pay more into the kitty because blue states are richer than red states. We also don't know who in the red or blue states is paying or receiving the money. Is it possible that Republicans in blue states are paying most of the money, while Democrats in red states are receiving most of it?

In an e-mail, Richardson argued—and I agree with him—that the progressive-tax-code explanation is inadequate because the blue-state-red-state trend has unfolded even as the tax code has become less progressive. The tax code today barely distinguishes between the merely wealthy and the insanely rich—your local doctor faces the same taxation level as LeBron James. And the linear relationship between the degree of conservatism in a state and the amount of federal spending it receives contradicts the notion that conservatives in blue states might be footing the bill for liberals in red states. The more conservatives a state has, the less it pays. The more liberals a state has, the less it receives.

At a minimum, conservatives must agree there is a contradiction between being against government spending and dominating the politics of states that get the lion's share of federal spending. The beauty of the trick, from a psychological point of view, is not that Republicans serve their constituents. It is that Republicans have succeeded in making Democrats feel lousy for being out-of-touch elitists who can't be trusted to keep spending under control.

Crucial to their victory in the policy arena, Richardson argued, was the Republican victory in the national conversation. Conservatives pushed through their plan to redistribute income because they dominated the conversation about fiscal prudence, regularly admonishing even their own side for overspending. In the public mind, Republicans became the party of fiscal rectitude, and Democrats became the group that raised taxes on hard-working Americans.

"The second way in which Republicans became beneficiaries of federal spending was by dominating the debate about federal fiscal policies," Richardson wrote. "Republicans emphasized the virtues of the market, the inefficiency of government, and the effectiveness of the private sector. Now Democrats, too, have adopted this economic way of thinking—paying homage, now, to the goal of economic efficiency. This new focus on the Democrats' part has led to improvements in the cost and quality of government services, but it has also enabled the Republicans to advance their own constituents' distributional interests at the same time."

I blame it all on the hidden brain. What, other than unconscious bias, can explain why so many voters pay so much attention to what politicians say, and so little attention to what they do?

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