Referendum on Trickle-Down

By E. J. Dionne Jr.
Friday, October 31, 2008; A19

SHIPPENSBURG, Pa. -- Emily Daywalt decided to go to the first political rally of her life because she wanted to cheer Sarah Palin, who was here a few days ago to inspire the faithful. Daywalt said she likes that Palin "hunts and that she believes in God and that she is a strong, independent woman."

But ask the 19-year-old from South Mountain, Pa., why she is voting against Barack Obama, and she homes right in on John McCain's closing argument. Obama, Daywalt said, "wants to spread the wealth," which she interprets as meaning that he'd "give it to people who don't do anything."

For all of the McCain campaign's relentless use of guilt-by-association techniques, the 2008 campaign is concluding on a remarkably substantive argument. It is a debate about what constitutes social fairness and whether a top-down or a bottom-up approach to economic growth will define the country's future.

Obama is often described as cautious, but he has been bold and unrelenting in his criticism of trickle-down economics and tax cuts concentrated on the wealthy. He used yesterday's negative numbers on economic growth to press his case against theories that conservatives have been touting for decades.

"The decline in our GDP didn't happen by accident," Obama said. "It is a direct result of the Bush administration's trickle-down, Wall Street-first, Main Street-last policies that John McCain has embraced for the last eight years."

Yes, economic populism is thriving right now, and if Obama wins, his election would not simply be a non-ideological verdict against the status quo. It would be a clear repudiation of conservative economic ideas and McCain's claim that a more egalitarian approach to growth constitutes "socialism." McCain's attacks on Obama's thinking have been so forceful and direct that they require this election to be seen as a referendum that will settle a long-running philosophical argument.

Obama has presented McCain with a problem. By endorsing tax cuts for Americans earning less than $200,000 a year -- i.e., the vast majority of taxpayers -- Obama has complicated the typical Republican claim that Democrats always support raising taxes.

Obama is candid in saying that he thinks the wealthy should pay more so that most Americans can pay less. He also thinks government can help vulnerable members of the middle class and the poor secure health care and go to college.

This has complicated McCain's effort to root his argument on taxes in middle-class self-interest, since Obama already has that covered. So McCain has actually had to defend giving large tax benefits to the wealthy and to business, and engage in a wholesale argument against any sort of redistribution.

McCain regularly charges that Obama wants to be the "redistributor in chief." Speaking at the rally here at Shippensburg University, Palin was forced to say this about Obama's support for a variety of tax credits aimed at helping the poor and middle class: "He says that he is for a tax credit, which is when government takes your money in order to give it away to someone else."

That is, of course, a mighty peculiar definition of tax credits. It is also an odd argument from a ticket that itself is committed to a research-and-development tax credit for corporations.

It's true that Obama favors "refundable" tax credits to help low-income workers, including some who may pay no income taxes but do pay many other taxes. McCain has argued that Obama's refundable tax credits amount to "welfare." That, too, is a strange claim, since McCain favors refundable credits as part of his health plan. But the whole idea is to convince voters such as Emily Daywalt that Obama really is just out to help those "who don't do anything."

And that is why Obama's 30-minute advertisement on Wednesday night was targeted directly to voters such as Daywalt, or at least to those like her who are still persuadable. It was Obama's tribute to the country's working people who seek nothing more than decent incomes, health care and a chance to see their children succeed. It was less a political ad than a documentary about the value of work and the responsibilities of family life.

For years, Republicans have argued that the way to help struggling working people is to give more money to the wealthy. Obama is saying that we should cut out the middleman and help working people directly. My hunch is that Obama's argument will prevail, and that conservatives will then work overtime to try to deny the judgment that the people have rendered.

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