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The Elites Are Having a Tea Party

According to Glenn Beck, “On one side, we have the elites, and on the other side, we have the regular people.” And now that many of the representatives of the “regular people” won the midterm elections and the elites lost, it is important to know who’s who.

In a recent Washington Post article, Charles Murray, co-author of “The Bell Curve,” explains that the new elites are made up of people who got top-quality educations in Ivy League colleges and universities. Although entry into these schools is based on merit, the elites are nevertheless self-perpetuating, Murray argues, because only one in 20 Ivy League students comes from a family that is not at the top of our society in terms of income, education or occupation.

If Murray is right, this is an urgent plea for an increase in taxes large enough to finance a drastic improvement of our public education system, from kindergartens to colleges and universities. Is this what the tea party, on behalf of the “regular people,” is calling for? Quite the opposite.

Murray’s analysis notwithstanding, Gov. Chris Christie of New Jersey won the tea party’s presidential straw poll because he chose to eliminate the state’s after-school program and to cut state aid to school districts by 15 percent, rather than raise taxes. The California Legislature went along with Gov. Arnold Schwarzenegger’s similar choice to cut the budget of the state’s university system by more than $400 million and force a 32 percent tuition increase, rather than raise taxes. Gov.-elect Jerry Brown made sure that he would not be able to reverse this decision when he pledged not to raise taxes without an approval by a referendum. And for the country as a whole, John Boehner, the likely incoming House speaker, has promised an extension of the Bush tax cuts even to the richest 2 percent of families and more spending cuts on the part of the government.

What Americans are not told, either by Beck, Murray or even by President Obama, is that taxes are good for “regular people.” This was not always a political controversy. Rutgers became the state university of New Jersey in 1956, when the tax rate on the rich was 91 percent and the president was Dwight Eisenhower, a Republican. Two years later, Congress concluded that education was essential to national security and passed the National Defense Education Act, which helped California add 10 universities and colleges with 80 new programs, including new medical and law schools. The University of Ohio, in Boehner’s home state, opened its elite avionics center, the largest institution within the university, in 1963, when the highest marginal tax rate was also 91 percent.

If the leaders of the tea party really wanted to inform the “regular people” about what tax revolts would do to them, they would tell them about the revolt that started it all, California’s Proposition 13, which slashed the state’s taxes in 1978. According to research by the RAND Corp., in the 1970s California had one of the best education systems in the country, but by 2003 it had fallen to 46th place. In the nation as a whole, expenditure on education as a percentage of personal income decreased by about 20 percent between the 1970s and the year 2000. When the public education system is starved of funds, is it surprising that the education-defined elite become self-perpetuating?

Beck called on “regular people” to wrest back control of the country and punish the elite. With low taxes, no less! For the next two years, taxes will not increase and government services, including public universities, will deteriorate further. And the defeated elites? They are having a tea party, laughing all the way to the Ivy League.

Moshe Adler is the author of “Economics for the Rest of Us” and the director of the undergraduate program at the Harry Van Arsdale Center for Labor Studies in New York.

Moshe Adler
Contributor
Moshe Adler teaches economics at Columbia University and at the Harry Van Arsdale Center for Labor Studies at Empire State College. Adler is also an economic consultant, specializing in the effects of…
Moshe Adler

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