Fortune, July 16, 1990

Books and Ideas: The Identity Crisis of Kevin Phillips

By Walter Olson

America is headed for an all-out kicking match between its Gucci-clad haves and its shoeless have-nots. Or so we may be hearing in coming months, since class conflict is the theme of The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath (Random House, $19.95), a new book by one of the nation's most unstoppable opinionizers.

Author Kevin Phillips is to quote dispensers what Pez is to candy dispensers. Asking Nexis for his recent clips triggers the equivalent of a pinball TILT, warning that more than 500 are forthcoming. Phillips is one of the political commentators who dominate the talk-show circuit and, significantly, one of the few routinely labeled as a conservative.

He came to note in 1969 when, as a Richard Nixon adviser, he wrote The Emerging Republican Majority, a clever analysis of voting patterns around the country. As prophecy the book was shaky -- the fabled Sunbelt lasted longer as a catch-phrase than as a cohesive voting bloc -- but the author marshaled his maps and statistics with insight and striking detail and won an all-purpose public role as campaign oddsmaker, national mood intuiter, and roving commentator on substantive policy.

Gradually Phillips grew more pessimistic about the prospects of conservative success. His view was that Nixon had ushered in a rightward political trend in 1968 that was due any day to peter out, allowing a cyclical return to liberal-left dominance. What happened instead was that Ronald Reagan got elected. In the years that followed, Phillips relentlessly forecast practical failure and public rejection of conservative leaders and their policies.

The more successes Reagan scored, the harsher grew his tone. "No serious observer ever thought that an actor from Hollywood would make it into the first tier along with George Washington, Thomas Jefferson, Abraham Lincoln, and perhaps Franklin D. Roosevelt," Phillips wrote in 1987. "What now seems far-fetched is earlier speculation that he might join the six or eight of the second tier. He won't." Nor had the Noted Conservative much use for such figures as Margaret Thatcher, Robert Bork, or George Bush.

It got hard to tell where the mood forecaster left off and the change-of-mood exhorter began. In his monthly column for the Los Angeles Times, Phillips began beating the drum for an industrial policy and big tax hikes for upper earners, and accused free-trade supporters of being unpatriotic. Recently he proposed that well over $100 billion a year be shunted from defense into new government domestic spending. The differences between his creed of "populism" and the views of some leftish Democrats are not always easy to discern.

His current book represents a sort of wet-winged emergence from the ideological chrysalis. He insists that the way for Democrats to beat Republicans is to get the public mad at big business and the wealthy, and he devotes most of his 221 pages to stoking that resentment with every rhetorical means at his disposal. He even flays Democrat Michael Dukakis for stressing problem solving and economic growth instead of that more divisive theme during the 1988 campaign.

The across-the-board Reagan tax cuts, he asserts, amounted to a "program almost certain to help the rich at the expense of others and to stuff more money into already fat investment accounts." He omits no demagogic potshot or slighting reference to the "minks and Jaguars" set that the Republican Party supposedly represents. The book is a work of intense partisanship, but not the brand of partisanship so often ascribed to its author.

All those top-hatted GOP plutocrats can relax for the moment: Phillips's ammunition is soggy, his account of our supposed Gilded Age hopelessly leaden. Few readers will make it to the end. In The Growth Experiment (reviewed in Fortune June 4), Lawrence B. Lindsey elegantly pre-refuted the Phillips line on taxes. Lindsey, who is a Harvard economist, noted that cutting the rates of the highest earners doubled their contribution to federal income tax revenues from 7% in 1981 to 14% in 1986.

One example of Phillips's style of argument will spare the need for many. Even the affluent, he writes, "enjoying their champagne and raspberries, wondered how real the good times were. For the 20 to 30 percent of citizenry in circumstances prosperous enough to grump at but pay for $7 movie tickets or to disregard restaurant prices outrunning the cost-of-living index, the Eighties had been good years. Yet troubling undercurrents had begun to make it all look shaky."

This is memorably absurd. Reagan (with Paul Volcker) cut the rate of inflation from 13% to 4%. Phillips can't take that away from them, but his consolatory grievance is that many prices (around half, in fact) outran the cost-of-living index, a vexing problem that his own preferred policies would no doubt rectify. The literal-minded reader might conclude from his account that in the 1980s movie theaters turned into ritzy places that drew their clientele exclusively from the upper 20% or 30% of household incomes. Or does his odd syntax imply that middle-class moviegoers could afford to buy $7 tickets but could not afford to grump at them?

What Phillips does not tell readers is why restaurant prices, in particular, were rising. One reason is that restaurants use more than their share of low-wage labor. When job creation took off and unemployment plunged in Reagan's second term, managers found they had to bid up wages because competent waiters, dishwashers, and cashiers had other options. And so menu prices rose. Some war on the have-nots, no?

The whole book is like this. The non sequiturs slither in all directions like amoebas on a slide. Several passages have already begun to date hilariously, including one deploring the fortunes being made in Northeastern real estate, and another referring to disgraced former House Speaker Jim Wright as a leading "populist." And in order to portray deregulation as unfairly tilted toward the affluent, Phillips is obliged to ignore the single best-known result of airline deregulation: making family vacations cheaper.

Having spent year after inaccurate year hinting at a coming capitalist bust and statist resurgence, Phillips is understandably in no mood to dish out predictions wholesale in his latest volume. (Last August he announced that a leftward trend was under way, not just in the U.S., but in Western Europe as well; three months later the Berlin Wall began crumbling.) In fact, he scurries past overly specific forecasts with a sort of cat-from-stove alacrity. His new book says the Republicans will hold on to the White House "until disillusionment can no longer be avoided." And when will that be? Presumably we'll know when it happens.

Better writers and thinkers than Phillips have already tried to establish most of his propositions -- and failed. Robert Kuttner and Lester Thurow, to name two, have criticized deficit financing and Wall Street excesses with less stridency and more logic. But of course Kuttner and Thurow are acknowledged liberal-to-left Democrats. Phillips is unique in trailing that "C-R" behind him wherever he goes like a toy balloon, or as if he had just made it through a tough primary.

Bill McGurn, Washington bureau chief of the conservative National Review, chuckles when asked about Phillips. "Liberals love him, because he tells them what they want to hear," said McGurn. "I've never seen a conservative writer quote him, except maybe to disagree."

I have a proposal. I want to be a leftish Democratic pundit. I promise to take the opposite side on every issue from Kevin Phillips, the anointed conservative Republican. I will find nice things to say about Reagan, Bush, Thatcher, and Bork. I will call for more tax cuts and deregulation instead of trade wars and industrial policy. I will say that stirring up hatred of business persons is evil in itself and self-defeating as a way of helping low earners. All this, I take it, will qualify me to fill the seat reserved for a left-wing Democrat at TV round tables.

Reporters and talk-show bookers can reach me care of the Manhattan Institute in New York City. Shall I wait by the phone?


Walter Olson is a senior fellow at the Manhattan Institute for Policy Research.

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