The Founders' Blue Print for Fighting Wealth Disparities

As America slides back into a Gilded Age society and with Republicans and the conservatives on the Supreme Court waging a constant war on the working and middle classes, it is noteworthy that the Founding Fathers recognized that wealth concentrations in the few was not a good thing for the future or the nation's economy.  Perhaps it was their living experience with the wealth inequalities in Great Britain and the deference given to aristocrats, but whatever the motivation, Jefferson, Washington, Hamilton and others sought to strengthen the average American financial, not strip them of benefits and property to aid the few.  A piece in The Daily Beast looks at some of the actions of the Founders that are diametrically opposed to the policies of the GOP.  Here are some highlights:

Current approaches to addressing rising inequality—raising the minimum wage, expanding higher education, increasing the power of unions, widening the national focus on high technology, aiming for a national renaissance in manufacturing—have not shown any evidence of reversing the concentration of income and wealth. There is one potential solution that could appeal to both pro-labor liberals and free-market conservatives, which has its roots in the philosophies of the Founding Fathers, and is already being practiced in parts of the economy today: employee shares in companies. The idea is to make every citizen a capitalist through citizen shares of corporations.  A story from President George Washington points the way.

On February 16, 1792, Washington signed into law a bill from the U.S. Congress that cut taxes for ship owners and sailors in the American cod fishery, in an effort to revive the failing industry. However, the tax cut was conditioned on a broad-based profit sharing arrangement between shipowners and the crews—a centuries-long custom of sharing the profits made from every catch. The legislation was supported by two politicians who typically agreed on very little: Secretary of the Treasury Alexander Hamilton and Secretary of State Thomas Jefferson, who was responsible for negotiating America’s interests in the fisheries.

Hamilton’s Assistant Secretary of the Treasury, Tench Coxe. Coxe supplied Jefferson with evidence from the leading Philadelphia shipper, Joseph Anthony, that the cod ships with profit sharing were more productive than those with fixed wages.  In the end, Washington’s law not only required a written contract between captain and crew to practice broad-based profit sharing as a condition to receive the tax cuts, and it also said that the tax credits would be paid five-eighths to the crew and three-eighths to the shipowners. The credits relieved the sailors and owners of tariffs, essentially tax payments they had to make on supplies for the fishery.  This is the first documented case in American history where the government made citizen shares—a form of inclusive capitalism—a condition for receiving a tax break.

The cod fishery law reflected the beliefs of many of the Founders that a representative republic required broad-based property ownership—typically land, or, in the case of the cod fishery, shares of profits—and a thriving middle class if the nation was to have a future based on real political liberty.

John Adams repeatedly sounded the alarm on inequality—specifically that he believed the concentration of wealth in property ownership would lead to the concentration of political power, which would undo a republic.

Washington asked Jefferson to draft a liberal approach to the sale of public lands to citizens which commenced, albeit with some complications. They moved against the institution of primogeniture, a key plank of European feudalism, and with the Northwest Ordinance of 1787, they all agreed to abolish servitude in what would become Ohio, Indiana, Michigan, Illinois, Wisconsin, and part of Minnesota, so that citizens could easily acquire land in that part of the young country (though slavery would remain a terrible evil for many decades to come in other parts of the nation).

For more than a half-century, up to the Civil War, federal leaders’ approach to land sales generally allowed low prices, installments, and credits in order to facilitate the wide sale of public land shares to citizens. Homesteads were the most popular economic policy of the 19^th century across the political spectrum after being pushed by senior Democrats. Politicians who argued for selling land to the highest bidder and using the funds for the federal budget were drowned out. Finally, in 1862, after definitively accepting the position that land capital was for the people, Republican President Abraham Lincoln said he was for “the greatest good for the greatest number” and he signed The Homestead Act into law.

[I]t is time for our leaders to develop a hopeful and positive agenda to address the future of the American middle class. What better way than to go back to the American egalitarian tradition of broad-based property ownership of capital in a private market economy? Middle class families have faced relatively flat household incomes for decades and have little access to capital ownership, capital income, and capital gains to expand their wealth.

It is time for new thinking on how to democratize access to capital in ways that remain consistent with our principles. Both progressives and conservatives can turn to their respective icons among America’s leaders to light their way forward.

Madison did not favor redistribution of wealth. His proposed plan, as spelled out in a 1792 article in the National Gazette, was to “withhold unnecessary opportunities from the few to increase the inequality of property” in order to avoid an “unmerited accumulation of riches.” He wanted laws that, “without violating the rights of property,” would “reduce extreme wealth towards a state of mediocrity”—meaning a robust middle class. 

Using Washington’s cod fishery legislation as a model and Madison’s ideas as a guide, we can explore a restructuring of the tax code to condition any business tax incentive on having some type of share plan for all employees—whether it’s broad-based profit sharing or an Employee Stock Ownership Plan. No business would be required to implement shares, but every business would at least have a serious incentive to consider the idea and decide if it made sense for their organization. Another proposal could involve a tax credit for any corporation that provides broad-based stock options or grants of stock to all of its workers. Silicon Valley would jump at such a proposal.

Would that today's GOP would remember the concepts of the Founders rather than supporting a return to the Gilded Age.

Progressives Need to Reclaim the Constitution

Under conservatives - reactionaries might be more apt - both the U.S. Constitution and state constitutions across the country have been used to erode rights of citizens.  In Virginia, bizarrely, the Bill of Rights portion of the Virginia Constitution was amended to deprive gays of rights allowed to other citizens.  Thankfully, a U.S. District Court struck down the ban and hopefully, the 4th Circuit Court of Appeals will soon do the same.  All in all, it is a perverse phenomenon to see founding documents aimed at protecting rights being used to the reverse effect - or used to grant special rights to reactionary Christian extremists.  A column in the Washington Post makes the case that this trend needs to be reversed.  The following are column highlights:

You cannot talk for very long to a conservative these days without hearing the words “constitutional” and “constitutionalist.” 

Formulations such as “I am a constitutional conservative” or “I am a constitutionalist” are tea party habits, but they are not confined to its ranks. Many kinds of conservatives contend that everything they believe is thoroughly consistent with the views and intentions of our 18th-century Founders. 

The framers could not possibly have foreseen what the world would look like in 2014. In any event, they got some important things wrong, most glaringly their document’s acceptance of slavery. 

Moreover, because the Constitution was written primarily as a foundation for government, it can answer only so many questions. David Strauss of the University of Chicago Law School authored a book called “The Living Constitution” to make plain that there is a lot more to this concept than its detractors suggest. He notes that “a great part of the framers’ genius lay exactly in their ability to leave provisions general when they should be left general, so as not to undermine the document’s ability to serve as common ground.”

The problem with “originalists,” Strauss says, is that they “take general provisions and make them specific,” even when they’re not. One might add that the originalists’ versions of specificity often seem to overlap with their political preferences.

In the May issue of the Boston University Law Review, Joseph R. Fishkin and William E. Forbath of the University of Texas School of Law show that at key turning points in our history (the Jacksonian era, the Populist and Progressive moments and the New Deal), opponents of rising inequality made strong arguments “that we cannot keep our constitutional democracy — our republican form of government — without constitutional restraints against oligarchy and a political economy that maintains a broad middle class, accessible to everyone.”

Their view is that by empowering the wealthy in our political system, Supreme Court decisions such as Citizens United directly contradict the Constitution’s central commitment to shared self-rule.

“Extreme concentrations of economic and political power undermine equal opportunity and equal citizenship,” they write. “In this way, oligarchy is incompatible with, and a threat to, the American constitutional scheme.”

[W]riting during the Gilded Age, a time like ours in many ways, the journalist James F. Hudson argued that “imbedded” in the Constitution is “the principle” mandating “the widest distribution among the people, not only of political power, but of the advantages of wealth, education and social influence.”

The idea of a Constitution of Opportunity is both refreshing and relevant. For too long, progressives have allowed conservatives to monopolize claims of fealty to our unifying national document. In fact, those who would battle rising economic inequalities to create a robust middle class should insist that it’s they who are most loyal to the Constitution’s core purpose. Broadly shared well-being is essential to the framers’ promise that “We the people” will be the stewards of our government.

The Budget Deal's Biggest Losers: American Workers

In today's America, wealth inequality is rising and more and more families are struggling to maintain their standard of living. And for the working poor, the picture is even more bleak.  Especially in the wake of the budget deal in Congress which throws the most needy under the bus - or perhaps onto the trash heap.  Of course, leading the charge to trash the poor are the Republicans and their party base that pretends to support Christian values while acting worse than the Biblical Pharisees.  A piece in the New York Times looks at how American workers are the budget deal's biggest losers.  Here are excerpts:

The pundit consensus seems to be that Republicans lost in the just-concluded budget deal. Overall spending will be a bit higher than the level mandated by the sequester, the straitjacket imposed back in 2011. Meanwhile, Democrats avoided making any concessions on Social Security or Medicare. 

But if Republicans arguably lost this round, the unemployed lost even more: Extended benefits weren’t renewed, so 1.3 million workers will be cut off at the end of this month, and many more will see their benefits run out in the months that follow. And if you take a longer perspective — if you look at what has happened since Republicans took control of the House of Representatives in 2010 — what you see is a triumph of anti-government ideology that has had enormously destructive effects on American workers.

One of the truly remarkable things about American political discourse at the end of 2013 is the fixed conviction among many conservatives that the Obama era has been one of enormous growth in government. . . . . Once Obamacare is fully implemented, the Congressional Budget Office estimates that it will add only about 3 percent to overall federal spending. And, if you ask people ranting about runaway government what other programs they’re talking about, you draw a blank. 

Meanwhile, the actual numbers show that over the past three years we’ve been living through an era of unprecedented government downsizing. Government employment is down sharply; so is total government spending (including state and local governments) adjusted for inflation, which has fallen almost 3 percent since 2010 and around 5 percent per capita. 

And when I say unprecedented, I mean just that. We haven’t seen anything like the recent government cutbacks since the 1950s, and probably since the demobilization that followed World War II. 

[T]the most obvious cuts have been in education, infrastructure, research, and conservation. While the Recovery Act (the Obama stimulus) was in effect, the federal government provided significant aid to state and local education. Then the aid went away, and local governments began letting go of hundreds of thousands of teachers. Meanwhile, public investment fell sharply — so sharply that many observers refer to it as a “collapse” — as state and local governments canceled transportation projects and deferred maintenance.

There are three things you need to know about these harsh cuts. 

First, they were unnecessary. The Washington establishment may have hyperventilated about debt and deficits, but markets have never shown any concern at all about U.S. creditworthiness. In fact, borrowing costs have stayed at near-record lows throughout. 

Second, the cuts did huge short-term economic damage. Small-government advocates like to claim that reducing government spending encourages private spending — and when the economy is booming, they have a point. The recent cuts, however, took place at the worst possible moment, the aftermath of a financial crisis. . . . government cutbacks simply swelled the ranks of the unemployed — and as family incomes fell, so did consumer spending, compounding the damage. The result was to deepen and prolong America’s jobs crisis.

Finally, if you look at my list of major areas that were cut, you’ll notice that they mainly involve investing in the future. So we aren’t just looking at short-term harm, we’re also looking at a long-term degradation of our prospects, reinforced by the corrosive effects of sustained high unemployment. 

So, about that budget deal: yes, it was a small victory for Democrats. It was also, possibly, a small step toward political sanity . . . . the larger picture is one of years of deeply destructive policy, imposing gratuitous suffering on working Americans. And this deal didn’t do much to change that picture.

Obama Says World Must Stop Persecuting People for 'Who They Love'

In a speech at the memorial service for Nelson Mandela, Barack Obama found an opportunity to support LGBT equality and to challenge the world - especially African nations to which America Christofascists are exporting homophobia and hatred - that stop persecuting gays.  No doubt Obama's remarks will only intensify the hatred he faces from white Christofascist/white supremacists in America.  Here are excerpts from his speech:

For the people of South Africa, for those he inspired around the globe - Madiba’s passing is rightly a time of mourning, and a time to celebrate his heroic life. But I believe it should also prompt in each of us a time for self-reflection. With honesty, regardless of our station or circumstance, we must ask: how well have I applied his lessons in my own life?

It is a question I ask myself - as a man and as a President. We know that like South Africa, the United States had to overcome centuries of racial subjugation. As was true here, it took the sacrifice of countless people - known and unknown - to see the dawn of a new day. Michelle and I are the beneficiaries of that struggle. But in America and South Africa, and countries around the globe, we cannot allow our progress to cloud the fact that our work is not done. The struggles that follow the victory of formal equality and universal franchise may not be as filled with drama and moral clarity as those that came before, but they are no less important. For around the world today, we still see children suffering from hunger, and disease; run-down schools, and few prospects for the future. Around the world today, men and women are still imprisoned for their political beliefs; and are still persecuted for what they look like, or how they worship, or who they love.

We, too, must act on behalf of justice. We, too, must act on behalf of peace. There are too many of us who happily embrace Madiba’s legacy of racial reconciliation, but passionately resist even modest reforms that would challenge chronic poverty and growing inequality. There are too many leaders who claim solidarity with Madiba’s struggle for freedom, but do not tolerate dissent from their own people. And there are too many of us who stand on the sidelines, comfortable in complacency or cynicism when our voices must be heard. 

The full transcript of Obama's speech can be found here.

SOTU - Pretty Rhethoric But No Bold Vision

I will concede that I missed the first portion of Obama's speech last night, but of the portion that I did see (more than half) contained some ideas that I favor yet nothing that would make me feel motivated to go to the mat working for Obama's re-election. Instead, the strongest reason to back Obama remains fear of the Republican alternative and what kind of insane agenda that GOP control of the White House might bring forth. That's not the type of motivation that will rekindle the enthusiasm and efforts of 2008. And as a LGBT America, while Obama has done much for LGBT rights, the reality is that I am still a third or fourth class citizen in my home state where open discrimination against me is allowed: I can be fired at will, I can be discriminated against in housing, were I to want to adopt agencies paid by the state can discriminate against me, my relationship with my partner receives zero recognition. Indeed, the only federal law "protection" I receive is the possibility that, if I were beaten to death for being gay, my killer might receive a harsher punishment under the federal hate crimes act. It's not exactly an image of the "land of the free" and equality. And sadly, that largely seems to be fine with Obama. Again, the only motivation to support Obama derives from the fact that the GOP wants to make my life even worse. The Washington Post looks at Obama's speech and is likewise underwhelmed. Here are some highlights:

A  STATE OF THE UNION address from a president seeking reelection is always an odd event. Especially in the face of a divided Congress, the president’s proclaimed program stands little chance of enactment. . . . the president’s proposals are made in the context of the race about to be joined, stacked up against the pie-in-the-sky promises of his opponents. The subtext is, inevitably, less a blueprint of the year to come than an explanation of why the president deserves reelection and a sneak preview of a second-term agenda.

In that context, President Obama’s speech Tuesday night combined soaring rhetoric with crowd-pleasing, often small-bore proposals. Mr. Obama spoke movingly about the eroding economic security of much of the middle class. Building on themes he sounded a few months ago in Osawatomie, Kan., the president argued against, as he put it, “settl[ing] for a country where a shrinking number of people do really well, while a growing number of Americans barely get by.”

The president’s biggest new idea was attaching a number to his previously articulated “Buffett Rule” — billionaire Warren Buffett’s position that he should not pay a smaller share of his income in taxes than his secretary’s . . . . Mr. Obama is right to take on the unlevel and distorting playing field of a code that taxes ordinary earned income at a much higher rate than investment income. . . . . Mr. Obama has said he wants to make the tax code simpler, but his proposals would further complicate it . .

Once again Mr. Obama slighted the threat that the federal deficit poses to the growth he said he wants.

Mr. Obama’s discussion of foreign policy focused on the two achievements likely to be a major focus of his election campaign, the withdrawal of the last troops from Iraq and the killing of Osama bin Laden.

The president did not hint at any significant foreign policy initiatives for the coming year; even on Iraq, he failed to discuss future relations with that strategic oil producer, which has headed toward renewed internal conflict since the last U.S. soldiers pulled out.

Indiana Gov. Mitch Daniels, delivering the Republican rebuttal, had the fiscal question right when he said: “If we drift, quarreling and paralyzed, over a Niagara of debt, we will all suffer, regardless of income, race, gender, or other category.” But his eloquence is undercut by his party’s refusal, far more doctrinaire than Mr. Obama’s, to entertain responsible proposals to pay for the nation’s needs.

As I said, fear of the GOP remains the main reason to support Obama in 2012. Yes, fear can be a motivator, but nothing like true enthusiasm when in comes to guaranteeing people actually get out and vote.

Paul Krugman - We Are the 99.9%

Once again, Paul Krugman gets to the heart of what's happening to the middle class in America and the soaring inequalities in wealth and power that are making the USA look more and more like a 1950's banana republic rather than a nation of opportunity and liberty for all. It's not a pretty picture - especially for the early 20's generation that is facing bleak employment prospects and which is likely to never see the economic security know to my parent's generation. Most distressingly, the power holders in Washington seem to care little about acting in any meaningful way to address the middle class' downward spiral. Here are highlights from Krugman's column in the New York Times:

“We are the 99 percent” is a great slogan. It correctly defines the issue as being the middle class versus the elite (as opposed to the middle class versus the poor). And it also gets past the common but wrong establishment notion that rising inequality is mainly about the well educated doing better than the less educated; the big winners in this new Gilded Age have been a handful of very wealthy people, not college graduates in general.

If anything, however, the 99 percent slogan aims too low. A large fraction of the top 1 percent’s gains have actually gone to an even smaller group, the top 0.1 percent — the richest one-thousandth of the population.

And while Democrats, by and large, want that super-elite to make at least some contribution to long-term deficit reduction, Republicans want to cut the super-elite’s taxes even as they slash Social Security, Medicare and Medicaid in the name of fiscal discipline.

The recent Congressional Budget Office report on inequality didn’t look inside the top 1 percent, but an earlier report, which only went up to 2005, did. According to that report, between 1979 and 2005 the inflation-adjusted, after-tax income of Americans in the middle of the income distribution rose 21 percent. The equivalent number for the richest 0.1 percent rose 400 percent.

For the most part, these huge gains reflected a dramatic rise in the super-elite’s share of pretax income. But there were also large tax cuts favoring the wealthy. In particular, taxes on capital gains are much lower than they were in 1979 — and the richest one-thousandth of Americans account for half of all income from capital gains.

[I]f you look at who really makes up the 0.1 percent, it’s hard to avoid the conclusion that, by and large, the members of the super-elite are overpaid, not underpaid, for what they do.

For who are the 0.1 percent? Very few of them are Steve Jobs-type innovators; most of them are corporate bigwigs and financial wheeler-dealers. One recent analysis found that 43 percent of the super-elite are executives at nonfinancial companies, 18 percent are in finance and another 12 percent are lawyers or in real estate. And these are not, to put it mildly, professions in which there is a clear relationship between someone’s income and his economic contribution.

Meanwhile, the economic crisis showed that much of the apparent value created by modern finance was a mirage. . . . . So should the 99.9 percent hate the 0.1 percent? No, not at all. But they should ignore all the propaganda about “job creators” and demand that the super-elite pay substantially more in taxes.

The Empty Bully Pulpit

While most of the fault for the debt limit debacle lies with the insane elements of the Republican Party, Barack Obama is not without his share of fault. Time and time again, Obama has rolled over and given away half the store before even beginning negotiations with the GOP - and in the process has encouraged even more extremism from Republicans. Worse yet, he has failed to use the pulpit of the presidency to take his case to the public. The address he made last week was mediocre and failed to lay out in harsh terms the damage being done by the far right of the Republican Party. It drives me crazy. And I am not alone. Robert Reich has a piece at Huffington Post that laments Obama's ongoing failure to use his bully pulpit. Here are some highlights:
*
How did we get into this mess? I thought I'd seen Washington at its worst. I was there just after Watergate. I was there when Jimmy Carter imploded. I was there during the government shut-down of 1995. But I hadn't seen the worst. This is the worst.
*
How can it be that with over 9 percent unemployment, essentially no job growth, widening inequality, falling real wages, and an economy that's almost dead in the water -- we're locked in a battle over how to cut the budget deficit?
*
Part of the answer is a Republican Party that's the most irresponsible and rigidly ideological I've ever witnessed. Part of the answer is the continuing gravitational pull of the Great Recession. But another part of the answer lies with the president -- and his inability or unwillingness to use the bully pulpit to tell Americans the truth, and mobilize them for what must be done.
*
We were excited by the prospect of a leader who could educate -- an "educator in chief" who would use the bully pulpit to explain what has happened to the United States in recent decades, where we must go, and why. But the man who has occupied the Oval Office since January, 2009 is someone entirely different -- a man seemingly without a compass, a tactician who veers rightward one day and leftward the next, an inside-the Beltway dealmaker who doesn't explain his compromises in light of larger goals.
*
He is well aware that the Great Recession wiped out $7.8 trillion of home values, crushing the nest eggs and eliminating the collateral that had allowed the middle class to keep spending despite declining real wages -- a decrease in consumption that's directly responsible for the anemic recovery. But instead of explaining this to the American people, he joins the GOP in making a fetish of reducing the budget deficit, and enters into a hair-raising game of chicken with House Republicans over whether the debt ceiling will be raised.
*
Never once does he tell the public why reducing the deficit has become his number one economic priority. Americans can only conclude that the Republicans must be correct -- that diminishing the deficit will somehow revive economic growth and restore jobs.
*
Why is Obama not using the bully pulpit? Perhaps he's too embroiled in the tactical maneuvers that pass for policy making in Washington, or too intent on preserving political capital for the next skirmish, or cynical about how the media will relay or distort his message. He may also disdain the repetition necessary to break through the noise and drive home the larger purpose of his presidency. I have known (and worked for) presidents who succumbed to all these, at least for a time.
*
A more disturbing explanation is that he simply lacks the courage to tell the truth. He wants most of all to be seen as a responsible adult rather than a fighter. As such, he allows himself to be trapped by situations -- the debt-ceiling imbroglio most recently -- within which he tries to offer reasonable responses, rather than be the leader who shapes the circumstances from the start.
*
Obama cannot mobilize America around the truth, in other words, because he is continuously adapting to the prevailing view. This is not leadership.

Are Republican Voters Vanishing ?

David Frum, a resident fellow at the American Enterprise Institute who is hardly a liberal by any means and who at times is down right reactionary, has an interesting column in the New York Times Magazine which looks at an apparent trend that ties failed Republican polices with the shift in party allegiance from Republican to Democrat. To me the column is especially interesting because some of the regions Frum looks at are in Virginia, a state that is rapidly changing in terms of political party alliances. Fairfax County for instance is now a bastion for the Democrat Party whereas once it was solidly Republican. I truly believe that there is a significant chance that Virginia will go for Obama this year if he can carry the urban areas and Fairfax County and Arlington County

*

Frum's basic premise is that the GOP policies over the last decade or so have ignored the needs of the middle class and instead catered to either the ultra-wealthy in terms of economic policies and conservative Uber-Christians on social policy. It is social policy, not economics that has held members of the latter group to the GOP even though they typically are not as well educated and often earn lower incomes in the GOP column. Everyone else is or is susceptible to trending to the Democrats. As an aside, I looked at this later issue in a post back in May of this year (See: Biblical Literalism or Low IQ: Which Came First?) which referenced a study that seemed to demonstrate that Christians have lower IQ's in direct correlation with the level to which they accept of Biblical literalism (NOTE: Per the study, Sarah Palin's religious background puts her in the low IQ category). Interestingly enough, Frum sees gay marriage as a GOP distraction from more important issues. I believe that Frum's analysis is correct. Hopefully, the GOP will ignore his advice and hasten their own political demise. Here are some selected highlights from Frum's article:

*

As a general rule, the more unequal a place is, the more Democratic; the more equal, the more Republican. The gap between rich and poor in Washington is nearly twice as great as in strongly Republican Charlotte, N.C.; and more than twice as great as in Republican-leaning Phoenix, Fort Worth, Indianapolis and Anaheim. My fellow conservatives and Republicans have tended not to worry very much about the widening of income inequalities. . . . . As America becomes more unequal, it also becomes less Republican. The trends we have dismissed are ending by devouring us.

*

As long as all Americans were becoming better off, few cared that some Americans were becoming better off than others. But since 2000, something has changed. Incomes at the middle have ceased to rise. The mood of the country has soured.

*

STEP ACROSS THE COUNTY line between Washington and suburban Fairfax County, Va., and you see the forfeiting process at work. A third of a century ago, Fairfax had only recently evolved from farm country to bedroom community. Some rich families clustered in the village of McLean, where Robert Kennedy had his Hickory Hill estate. Otherwise, Fairfax housed middle-class families looking for inexpensive housing and excellent schools. These middle-class families voted Republican, leading the Old Dominion’s political transition away from its reactionary segregationist past to a modern business-oriented conservatism.

*

Today Fairfax boasts an economy bigger than Vietnam’s. Fairfax households earn among the highest average incomes of any American county, more than $100,000, but that high average conceals wide variations between the highly educated and new arrivals speaking in 40 different tongues. With wealth comes diversity — and what is inequality but diversity in monetary form?

*

As Fairfax has evolved toward greater inequality, it has steadily shifted into the Democratic column. The Democrats Tim Kaine and Jim Webb won almost 60 percent of Fairfax’s votes in, respectively, the 2005 governor’s race and the 2006 U.S. Senate election. Democrats dominate Fairfax’s local government. In 2004, Fairfax voted for John Kerry over George Bush, 53 percent to 45 — the first Democratic presidential victory in the county since the Johnson landslide of 1964.

*

Till now, conservative strength in the vast American middle more than compensated for any losses at the top and for the immigration-driven expansion of the bottom. Indeed, the Democratic tilt of the very richest Americans could be exploited as a powerful conservative recruiting tool. Resentment of “elites” is a major theme of conservative talk radio.

*

For most of the Bush administration, G.D.P. grew strongly, the stock market boomed, new jobs were created. But the ordinary person experienced little benefit. The median household income, which rose in the ’90s, had only just caught up to its 2000 level when the expansion ended in 2007. . . . Out of their flat-lining incomes, middle-class Americans have had to pay more for food, fuel, tuition and out-of-pocket health-care costs. In the past few months, they have suffered sharp tumbles in the value of their most important asset, their homes. Their mood has turned bleak. Almost 70 percent disapprove of the policies of George W. Bush.

*

TO WITNESS THE SLOW-MOTION withering of the G.O.P., drive a little farther west into the Washington metropolitan area, to Prince William County. Here is exurban America in all its fresh paint: vast tracts of inexpensive homes, schools built to the latest design, roads still black in their virgin asphalt. . . . [I]n the past couple of cycles, the once-tight Republican hold upon the county has loosened. Prince William voted (very narrowly) for Gov. Tim Kaine in 2005 and then (slightly less narrowly) for Senator Jim Webb in 2006. A big vote for the 2008 Democratic senatorial candidate Mark Warner seems almost certain, and a victory for Barack Obama seems very possible.

*

IN SHORT, the trend to inequality is real, it is large and it is transforming American society and the American electoral map. Yet the conservative response to this trend verges somewhere between the obsolete and the irrelevant. Conservatives need to stop denying reality. The stagnation of the incomes of middle-class Americans is a fact. And only by acknowledging facts can we respond effectively to the genuine difficulties of voters in the middle.

*

What the middle class needs most is not lower income taxes but a slowdown in the soaring inflation of health-care costs. If health-insurance costs had risen 50 percent rather than 100 percent over the Bush years, middle-income voters would have enjoyed a pay raise instead of enduring wage stagnation. But it remains unfortunately true that the Republican Party as a whole regards health care as “not our issue” — and certainly less exciting than another round of tax reductions.

*

Meanwhile, the argument over same-sex marriage has become worse than a distraction from the challenge of developing policies to ensure that as many children as possible grow up with both a father and a mother in the home.

*

At the same time, conservatives need to ask ourselves some hard questions about the trend toward the Democrats among America’s affluent and well educated. Leaving aside the District of Columbia, 7 of America’s 10 best-educated states are strongly “blue” in national politics, and the others (Colorado, New Hampshire and Virginia) have been trending blue. Of the 10 least-educated, only one (Nevada) is not reliably Republican.

*

Inequality, in short, is a conservative issue too. We must develop a positive agenda that integrates the right kind of egalitarianism with our conservative principles of liberty. If we neglect this task and this opportunity, we won’t lose just the northern Virginia suburbs. We will lose America.