Why have the rich turned against U.S. President Barack Obama?
That has been a persistent theme of this campaign: We were reminded of it this week, when Mitt Romney's team raised more money than the President's for the second month running, and more colourfully in weekend reports of the Republican presidential candidate's lavish fundraisers in the Hamptons.
Viewed from outside the U.S., the animosity of America's 1 per cent toward the President is a bit of a mystery. Although those at the bottom of the income scale and in the middle are still suffering from the economic downturn that began in 2008, with unemployment above 8 per cent, the affluent have bounced back quite smartly. The stock market has recovered, corporate coffers are overflowing with cash, and the luxury goods market is booming.
Even Wall Street, where hostility toward the White House is especially acidic, has reason to be grateful. Bankers got the biggest government bailout of all – much more than laid-off workers or beleaguered homeowners received from this Democratic administration – and the President resisted calls from the left to nationalize the banks he rescued, even as the British nationalized some of theirs.
Part of the answer is self-interest. As the economics writer Matthew Yglesias has argued, there is one easy and obvious explanation for the animosity of the rich toward the incumbent: He wants to raise their taxes significantly. That is certainly right. On Monday, Mr. Obama reiterated his support for letting the Bush-era tax cuts expire for households with incomes of more than $250,000 (U.S.), while keeping the lower rates in place for everyone else.
This is a powerful point. It can be tempting to imagine that the affluent might fret less about their tax bills than the poor, who are struggling to get by, but the elaborate tax-avoidance strategies of superrich Americans suggest otherwise.
But this is about more than bank balances. Some of Mr. Obama's most vehement critics in the private sector insist they are willing to pay higher taxes, if that's what it takes to get the United States back on track. Their complaint, if you take them at their word, is instead with the President's attitude toward them, toward their wealth and toward capitalism itself.
Their sense of insult is easy to mock: Do those testosterone-pumped Masters of the Universe really have the tender feelings of teenage girls? It is a mistake, though, to dismiss the outrage of the 1 per cent, simply because it is so emotionally rendered. The truth is that Mr. Obama is telling a very different story about capitalism from the one Americans are accustomed to hearing, and it is no surprise that the rich don't like it one bit.
Consider the two narratives on the campaign trail this week. In Colorado, Mr. Romney described those who make more than $250,000 a year with the Republican term "job creators." And he warned that the President's proposal to raise taxes at the top wasn't bad just for the rich, it would hurt the whole country: "At the very time the American people are seeing fewer jobs created than we need, the President announces he's going to make it harder for jobs to be created. I just don't think this President understands how our economy works.
Mr. Obama, meanwhile, insisted that "we love folks getting rich." But his focus is different: "I do want to make sure that everybody else gets that chance as well." One way to do that is to tax the rich. As a new television ad for the President argued this week, Mr. Obama's plan is to "ask the wealthy to pay a little more so the middle class pays less, eliminate oil subsidies and tax breaks for companies that outsource."
This is more than a fight about taxes. It is a fight about whether 21st-century capitalism is working for the American middle class and who should pay to fix it. The Republicans are telling Ronald Reagan's story of trickle-down economics – the winners in the capitalist contest are "job creators" whose prosperity helps everyone else. The wealthier they are, the wealthier all Americans will be.
The Democrats are challenging that win-win story. Their contention is that the U.S. economy is failing the middle class. They argue that those at the top need to contribute "a little more" to help rebuild the American middle. Even more threateningly, they point out that some of the business strategies that have enriched the elite have actually hollowed out the middle.
It is this last argument that most enrages the 1 per cent. Mr. Obama's most extreme critics delight in accusing him of being socialist and sometimes communist. That charge is not just overheated, it is plain wrong. But American capitalists are right to sense a challenge from the White House. The President is arguing that what works for the top isn't working for the middle, and that is a criticism the country's lionized elite hasn't heard from its leader in a very long time.