Friday, April 16, 2004
Ronald Reagan signed the largest tax increase in U.S. history
According to the April 16, 2004 article by FactCheck.org
Treasury Tax Expert to Bush: Clinton's Increase WASN'T The Biggest.
Treasury Tax Expert to Bush: Clinton's Increase WASN'T The Biggest.
Friday, February 20, 2004
The Primary Beneficiaries of the Bush Tax Cuts are the Wealthy
FactCheck.org straightens out some of the distortions in discussions about the beneficiaries of the 2003 Bush tax cuts:
Here We Go Again: Bush Exaggerates Tax Cuts
February 20, 2004
The President can't keep his figures straight. And most people are getting less than he implies.
Summary
President Bush stumbled Feb. 19, saying the average tax cut is $1,089. The White House corrected that figure to $1,586. But the fact is that most Americans won't see anywhere near either of those amounts.
As we've said before when disputing equally misleading lowball figures given by Howard Dean, half of all individuals and families will get less than $470, and half will get more. The “average” is misleading because it is inflated by very large cuts given to a relative few at the top.
Analysis
Now that the general election campaign is nearing, President Bush has resumed a sales pitch for the tax cuts he's signed. But he persists in making some misleading claims.
At a 24-minute appearance in the White House complex on Feb. 19, the President wrongly stated that "everybody who pays taxes" is getting a cut, which is not true:
Bush: We cut the taxes on everybody who pays taxes. I don't think it makes sense for tax-cutters to say, okay, you win, and you lose. My attitude was, if you pay taxes, you ought to get relief. And we cut all taxes,
In fact, all taxes were not cut and millions who pay only federal payroll taxes got no benefit from Bush's cuts.
It is true that everybody who paid federal income taxes is getting a cut. But according to the nonpartisan Tax Policy Center, 35.6 million individuals and families got zero benefit from the Bush cuts because their income was so low they were not paying federal income taxes before the cuts. This number includes 15.1 million workers who are paying federal payroll taxes for Social Security and Medicare. That's 15 million "taxpayers" who were left out.
The President also bobbled the numbers when describing the average size of the cut. Here's the official White House transcript of what he said, which was wrong, along with the footnotes inserted later by the White House staff to correct the record:
Bush: The tax relief we passed, 11 million* taxpayers this year will save $1,086* off their taxes. . . .
(* 111 million taxpayers will save, on average, $1,586 off their taxes.)
The $1,586 figure is indeed an accurate statement of the average cut received by those who are getting a cut, according to the Treasury Department. However, it is far from typical.
For one thing, the figure does not take into account the 25% of all individuals and families who are receiving zero tax cut this year. It is an average only of those who are getting some cut. When those who get nothing are added in the average cut drops to $1,217, according to the Tax Policy Center.
But most importantly, the average is inflated by the fact that most of the money is going to a relatively few taxpayers at the top of the income scale, as seen from the following table distilled from a more extensive analysis by the Tax Policy Center:
Combined Effect of Bush Tax Cuts 2003
Income
(in thousands) Percent of Households Average Tax Change
Less than 10 23.7 -$8
10-20 16.6 -$307
20-30 13.3 -$638
30-40 9.7 -$825
40-50 7.6 -$1,012
50-75 13.0 -$1,403
75-100 6.8 -$2,543
100-200 6.6 -$3,710
200-500 1.6 -$7,173
500-1,000 0.3 -$22,485
More than 1,000 0.1 -$112,925
Source: Tax Policy Center table T03-0123
Taxpayers making more than $1 million a year get an average cut of nearly $113,000 this year. Such huge cuts at the top tend to pull up the numerical average that the President is fond of citing.
A more meaningful number is the median -- or mid-point. The Tax Policy Center calculates the median cut received for income earned in 2003 is $470.
That means half of all individuals and families get less than that, and half get more.
Even the median figure doesn't give a full picture of how the benefits are spread around, however. Taxpayers make out very differently depending on whether they are married or single, and how many children they have under age 17.
That's because much of the tax relief for 2003 comes in the form of a tax break for married couples -- reduction of the so-called "marriage penalty" -- and a doubling of the tax credit granted for each child under 17, to $1,000 per child. Those do nothing to benefit single taxpayers -- including unmarried workers and millions of elderly widows and widowers, for example. In fact, the Tax Policy Center calculates that nearly 13 million of those over age 65 will get no tax cut.
On the other hand, the Bush cuts do reduce income taxes for many middle-income families to zero this year -- taking them off the federal income tax rolls entirely.
The following table, also from the Tax Policy Center, shows how different types of families in various income ranges make out under the Bush cuts this year:
Combined Effect of Bush Cuts for 2003: Typical Families
(Amounts by which federal income taxes would rise if cuts are repealed)
Income
Single
Married Filing Joint
# of kids under 17–>
0
0
1
2
3
$10,000
$110
$76
$0
$0
$0
$15,000
350
142
610
661
661
$25,000
350
702
1,210
1,661
1,579
$35,000
350
932
1,433
1,897
2,245
$50,000
669
773
1,272
1,773
2,271
$75,000
1,318
1,714
1,817
1,938
2,437
$100,000
2,001
2,596
3,004
3,413
4,510
$125,000
2,695
3,277
3,435
4,094
4,571
$150,000
3,460
4,010
3,918
3,827
4,735
$200,000
5,218
5,623
5,531
4,918
4,364
$500,000
15,585
12,328
12,328
12,328
12,328
$1,000,000
37,713
38,426
38,426
38,426
38,426
Source: Tax Policy Center Table T03-0200
The President is not the only politician who distorts the figures regarding the tax cuts, of course. As we've pointed out before, Howard Dean persisted in a false claim that "sixty percent of us got only $304," when in fact most taxpayers got more.
And some of the points in the President's election-year sales pitch are perfectly valid. For example:
Bush: Nearly 5 million taxpayers will be off the rolls as a result of the tax relief this year.
That's true for federal income taxes -- close to 5 million who previously owed some federal income tax will owe none under the Bush cuts, including many middle-income families with children.
We'll no doubt be hearing more about the tax cuts in the months to come. Both Kerry and Edwards, currently slugging it out for the Democratic nomination, have called for repeal of portions of the Bush cuts that benefit upper-income taxpayers.
Sources
George W. Bush " Remarks by the President on the Economy" Presidential Hall, Eisenhower Executive Office Building 19 Feb. 2004.
Elisabeth Bumiller, “Bush Promotes His Tax Cuts as Beneficiaries Stand By” New York Times 20 Feb. 2004.
Table T03-0123 "Combined Effect of EGTRRA and Conference Agreement on the Jobs and Growth Tax Relief Reconciliation Act of 2003: Distribution of Income Tax Change by AGI Class, 2003" Tax Policy Center Washington DC 23 May 2003.
Table T03-0163 "Combined Effect of EGTRRA and JGTRRA: Number of Tax Units by Size of Income Tax Cut and Individual Characteristics, 2003" Tax Policy Center Washington DC 23 June 2003.
Table T03-0200 "The 2001 and 2003 Tax Cuts for Representative Families By Type of Filer for Tax Year 2003" Tax Policy Center Washington DC 2 Jan 2004.
Monday, January 20, 2003
The lucky duckies who pay no income taxes - another look
According to the January 20, 2003 Wall Street Journal editorial "Lucky Duckies Again: Look at who won't pay taxes under Bush's plan":
Also see the editorial "The Non-Taxpaying Class: Those lucky duckies!" which originally appeared in The Wall Street Journal on November 20, 2002.
As you may have noticed, the critics of President Bush's new tax cut package claim it is a sop to the rich. This charge makes us wonder if they've even read the plan. The truth is that the Bush proposals would make the tax code more progressive, not less. And this isn't altogether a good thing.
The soak-the-rich facts, if any journalists cared to look, are contained in the income distribution tables on the plan compiled by the Treasury Department. Looking at the impact for 2003, Treasury finds that the average reduction in income taxes is a touch more than 12%. But for those who make less than $30,000 the average reduction is about 17%, while for those who earn more than $100,000 it is 11.4% or less. (See the table below.)
There's even better news for modern Robin Hoods. Because the percentage reduction for families with incomes under $50,000 is greater under the Bush plan, those families would pay a smaller share of the total income tax than they do under current law.
Tax Cuts for the Poor
Lower earners would get a larger percentage income tax cut on average under the Bush plan.
Income
Percentage reduction
0-$30,000
17.0%
30-40,000
20.1%
40-50,000
14.5%
50-75,000
11.4%
75-100,000
13%
100-200,000
11.4%
200,000-plus
11.2%
Total
12.3%
Families with incomes over $100,000 would end up paying a larger share of the total income tax. These families would pay 73% of all federal income taxes. Not to put too fine a point on this income redistribution, but taxpayers with incomes over $200,000 could expect on average to pay about $99,000 in taxes under Mr. Bush's plan.
How could this happen? Mr. Bush would relieve 3.8 million lower-income taxpayers from paying any income taxes. The chief tax remover comes from his proposal to accelerate the increase in the child credit to $1,000 from $600, bumping a touch more than three million taxpayers right off the rolls.
No doubt the Bush team proposed this tilt toward lower income taxpayers to mute the class-warrior critics, not that we've noticed any lower decibel level. But one certain consequence is that the plan exacerbates the growing problem of a bifurcated tax system.
We raised this issue several weeks ago, pointing out that the unceasing addition of exemptions, deductions and credits to the tax code was shrinking the tax-paying base. And, as more lower-income people saw tax liabilities fall to zero, more upper-income people shouldered a larger part of the tax burden. We did not, by the way, suggest that lower income people should pay higher taxes. We even went out of our way to flog our favorite horse that everybody should pay less in taxes.
We are merely pointing out the (apparently heretical) truth that the current tax system is very skewed against upper-income Americans. According to IRS data from 2000, the top 5% of tax filers paid more than 50% of total income tax revenue, and the top half of tax filers were responsible for almost all revenue--96% of the total take. This burden on the upper-income holds even when the payroll tax is included in overall distribution tables. (The payroll tax includes the regressive Social Security levy and the 1.45% Medicare tax that applies to every dollar of income.)
The Congressional Budget Office has looked at the distributive impact of various taxes for 1997. The income-tax share of the lowest-income family quintile (the bottom 20%) was negative 1.2% and the share of the highest family quintile was 73.3%. The difference in payroll-tax share was somewhat less dramatic at 3.9% for the lowest quintile and 40.6% for the highest. But when all federal taxes were thrown together, the share of the lowest quintile was 1.6%, while the share of the highest quintile was 60.2%. Karl Marx, call your office.
This super-progressivity comes from two sources: the system of higher marginal-rate brackets for higher income households, and the exclusion of lower income households from any income-tax liability. In 2000, of 129.4 million tax returns filed, about 32 million paid no taxes. Most of these lucky duckies, as we have called them (to some amusing consternation), benefit from tax exemptions, deductions and credits that violate the concept of horizontal tax equity--the notion that people with identical incomes should pay the same amount in taxes.
For instance, the folks at the Tax Foundation have looked at how two single moms--each earning $30,000 a year--would fare under the Bush plan. In 2003, the single mom with one child would pay income tax of $1,028; the mom with two children would not only pay no taxes, she'd also receive a check from the federal government, under the earned income tax credit, for $680. Compared to the single mom who must pay taxes, the single mom who does not is, well, a lucky ducky.
The broader point is that whatever Mr. Bush's tax proposal does for economic growth (and we think it'd do a lot), it gives more proportional benefit to lower-income households. The class warriors should be thrilled.
Also see the editorial "The Non-Taxpaying Class: Those lucky duckies!" which originally appeared in The Wall Street Journal on November 20, 2002.
Sunday, January 12, 2003
Explaining Why People Oppose Policies That Would Benefit Them
In the January 12, 2003 New York Times editorial "The Triumph Of Hope Over Self-Interest," David Brooks explains why people vote against some policies that would benefit them:
Why don't people vote their own self-interest? Every few years the Republicans propose a tax cut, and every few years the Democrats pull out their income distribution charts to show that much of the benefits of the Republican plan go to the richest 1 percent of Americans or thereabouts. And yet every few years a Republican plan wends its way through the legislative process and, with some trims and amendments, passes.
The Democrats couldn't even persuade people to oppose the repeal of the estate tax, which is explicitly for the mega-upper class. Al Gore, who ran a populist campaign, couldn't even win the votes of white males who didn't go to college, whose incomes have stagnated over the past decades and who were the explicit targets of his campaign. Why don't more Americans want to distribute more wealth down to people like themselves?
Well, as the academics would say, it's overdetermined. There are several reasons.
People vote their aspirations.
The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday. So right away you have 39 percent of Americans who thought that when Mr. Gore savaged a plan that favored the top 1 percent, he was taking a direct shot at them.
It's not hard to see why they think this way. Americans live in a culture of abundance. They have always had a sense that great opportunities lie just over the horizon, in the next valley, with the next job or the next big thing. None of us is really poor; we're just pre-rich.
Americans read magazines for people more affluent than they are (W, Cigar Aficionado, The New Yorker, Robb Report, Town and Country) because they think that someday they could be that guy with the tastefully appointed horse farm. Democratic politicians proposing to take from the rich are just bashing the dreams of our imminent selves.
Income resentment is not a strong emotion in much of America.
If you earn $125,000 a year and live in Manhattan, certainly, you are surrounded by things you cannot afford. You have to walk by those buildings on Central Park West with the 2,500-square-foot apartments that are empty three-quarters of the year because their evil owners are mostly living at their other houses in L.A.
But if you are a middle-class person in most of America, you are not brought into incessant contact with things you can't afford. There aren't Lexus dealerships on every corner. There are no snooty restaurants with water sommeliers to help you sort though the bottled eau selections. You can afford most of the things at Wal-Mart or Kohl's and the occasional meal at the Macaroni Grill. Moreover, it would be socially unacceptable for you to pull up to church in a Jaguar or to hire a caterer for your dinner party anyway. So you are not plagued by a nagging feeling of doing without.
Many Americans admire the rich.
They don't see society as a conflict zone between the rich and poor. It's taboo to say in a democratic culture, but do you think a nation that watches Katie Couric in the morning, Tom Hanks in the evening and Michael Jordan on weekends harbors deep animosity toward the affluent?
On the contrary. I'm writing this from Nashville, where one of the richest families, the Frists, is hugely admired for its entrepreneurial skill and community service. People don't want to tax the Frists -- they want to elect them to the Senate. And they did.
Nor are Americans suffering from false consciousness. You go to a town where the factories have closed and people who once earned $14 an hour now work for $8 an hour. They've taken their hits. But odds are you will find their faith in hard work and self-reliance undiminished, and their suspicion of Washington unchanged.
Americans resent social inequality more than income inequality.
As the sociologist Jennifer Lopez has observed: ''Don't be fooled by the rocks that I got, I'm just, I'm just Jenny from the block.'' As long as rich people ''stay real,'' in Ms. Lopez's formulation, they are admired. Meanwhile, middle-class journalists and academics who seem to look down on megachurches, suburbia and hunters are resented. If Americans see the tax debate as being waged between the economic elite, led by President Bush, and the cultural elite, led by Barbra Streisand, they are going to side with Mr. Bush, who could come to any suburban barbershop and fit right in.
Most Americans do not have Marxian categories in their heads.
This is the most important reason Americans resist wealth redistribution, the reason that subsumes all others. Americans do not see society as a layer cake, with the rich on top, the middle class beneath them and the working class and underclass at the bottom. They see society as a high school cafeteria, with their community at one table and other communities at other tables. They are pretty sure that their community is the nicest, and filled with the best people, and they have a vague pity for all those poor souls who live in New York City or California and have a lot of money but no true neighbors and no free time.
All of this adds up to a terrain incredibly inhospitable to class-based politics. Every few years a group of millionaire Democratic presidential aspirants pretends to be the people's warriors against the overclass. They look inauthentic, combative rather than unifying. Worst of all, their basic message is not optimistic.
They haven't learned what Franklin and Teddy Roosevelt and even Bill Clinton knew: that you can run against rich people, but only those who have betrayed the ideal of fair competition. You have to be more hopeful and growth-oriented than your opponent, and you cannot imply that we are a nation tragically and permanently divided by income. In the gospel of America, there are no permanent conflicts.
David Brooks, a senior editor at The Weekly Standard, is author of ''Bobos in Paradise: The New Upper Class and How They Got There.''
Wednesday, November 20, 2002
The lucky duckies who pay no income taxes
According to the November 20, 2002 Wall Street Journal editorial "The Non-Taxpaying Class: Those lucky duckies":
The stars look to be in perfect alignment for tax relief. With a GOP majority in both houses of Congress, the Bush Administration is making eager and energetic noises, and the economy is in what Fed Chairman Greenspan calls a soft spot.
But as the Republicans construct their tax plan, there is a large and under-appreciated fact they would do well to keep in mind. Over the past decade or so, fewer and fewer Americans have been paying income taxes and still fewer have been paying a significant percentage of income in taxes. While we would opt for a perfect world in which everybody paid far less in taxes, our increasingly two-tiered tax system is undermining the political consensus for cutting taxes at all.
Even the barest of glances at tax data reveal a system that is steeply progressive. Tax revenue has been increasingly squeezed out of top earners. According to the most recent data, from 1999, the richest--with income above half a million dollars--constituted 0.5% of taxpayers but accounted for 28% of total tax revenue. Simply put, a tiny group of people (553,380) were responsible for more than one-quarter of the income tax take of $877 billion.
...
Well, maybe you're saying--so what? They can afford it. Then take a look at those who aren't Richie Rich. The most recent data from the IRS, in 2000, show that the top 5% coughed up more than half of total tax revenue. Specifically, we are talking about folks with adjusted gross incomes of $128,336 and higher being responsible for 56% of the tax take. Eyebrows raised? There's more. The top 50% of taxpayers accounted for almost all income tax revenue--96% of the total take.
These numbers are more arresting when compared with the situation 14 years earlier. In 1986, the top 1% paid 26% of revenue, the top 5% was responsible for 42% and the top half contributed 93%. And what about the bottom half of taxpayers? They accounted for 7% of the total in 1986 but only 4% in 2000.
This skewed reality is the result of a growing number of absolutely legal escape hatches. Consider what happens to those in the lowest bracket. Say a person earns $12,000. After subtracting the personal exemption, the standard deduction and assuming no tax credits, then applying the 10% rate of the lowest bracket, the person ends up paying a little less than 4% of income in taxes. It ain't peanuts, but not enough to get his or her blood boiling with tax rage.
Of course, lower-income workers are on the hook for the payroll tax--but a sizable group slip free from even that net tax liability via the refundable earned income tax credit. ("Refundable" means that even if your net income tax liability is zero, the government still writes you a check.)
These numbers represent only people who have a positive adjusted gross income. In 1999, there were 127 million tax filers, 94.5 million of whom showed an income tax liability. That is, 26% had no liability at all. The actual number of people filing without paying comes to 16 million (after subtracting those getting earned income tax credits and thus, presumably, still somewhat sensitive to tax rates). So almost 13% of all workers have no tax liability and so are indifferent to income tax rates. And that doesn't include another 16.5 million who have some income but don't file at all.
Who are these lucky duckies? They are the beneficiaries of tax policies that have expanded the personal exemption and standard deduction and targeted certain voter groups by introducing a welter of tax credits for things like child care and education. When these escape hatches are figured against income, the result is either a zero liability or a liability that represents a tiny percentage of income. The 1986 tax reform, for example, with its giant increase in the personal exemption and standard deduction, took six to seven million people off the tax rolls.
...
This complicated system of progressivity and targeted rewards is creating a nation of two different tax-paying classes: those who pay a lot and those who pay very little. And as fewer and fewer people are responsible for paying more and more of all taxes, the constituency for tax cutting, much less for tax reform, is eroding. Workers who pay little or no taxes can hardly be expected to care about tax relief for everybody else. They are also that much more detached from recognizing the costs of government.
All of which suggests that the last thing the White House should do now is come up with more exemptions, deductions and credits that will shrink the tax-paying population even further.
Tuesday, May 1, 2001
A Tale of Two Tax Cuts: What recent history teaches about recessions and economic policy
A Tale of Two Tax Cuts: What recent history teaches about recessions and economic policy
(EPI Issue Brief #157) May 1, 2001
by Michael A. Meeropol
As slow growth continues in the U.S. economy, one of the questions policy makers are asking is whether tax cuts can be used to stave off a recession and, if so, how. The Bush Administration claims that its tax cut proposal (conceived over a year ago) is the best bulwark against an economic slowdown. Since supporters of such tax cuts often invoke historical precedent, such as the fiscal policies of past presidents, it is worth looking at previous attempts to mitigate recessions through tax policy. A close comparison of other attempts to fight recessions with tax cuts-one enacted by President Gerald Ford in 1975 and the other by President Ronald Reagan in 1981-shows that approaches that promote increased consumption by middle- and lower-income families have provided the biggest boosts to flagging economies.
Present-day Republicans, however, are promoting a tax cut that disproportionately benefits those with high incomes, the rationale being that this will stimulate the economy by increasing saving and investment. Critics of these cuts prefer smaller overall tax cuts with greater focus on relief for lower-income individuals; it is these lower- and middle-income families, critics argue, that are most likely to spend any extra disposable income and hence stimulate the economy. A look at recent history supports such claims.
Two major recent recessions-1974-75 and 1981-82-were accompanied by Republican-led tax cuts markedly different from one another both in terms of who benefited and in their long- vs. short-run focus. President Ford's tax cut in 1975 was targeted at low- and moderate-income families and helped to stimulate private consumption, putting the economy back on its feet. By comparison, President Reagan's tax cut in 1981 disproportionately benefited those at the top of the income scale and ultimately did nothing for the slumping economy until 1983.1
Ford's winning strategy (1974-75)
In 1974, the United States economy fell into a deep recession. Unemployment rose from 4.8% in the fourth quarter of 1973 to 8.9 % in the second quarter of 1975. For over five quarters (from the end of 1973 through March 1975) real GDP per capita fell at an annual rate of 3.8%.2 In response, President Ford proposed a significant tax cut in early 1975, which Congress passed by March of that year.
President Ford's tax cut was clearly focused on increasing consumption. Marginal rates were not cut, and instead all taxpayers and their dependents received a credit of $30 (almost $100 in current dollars). In addition, the standard deduction was increased, and a refundable earned income tax credit was enacted. As a result, some beneficiaries of the 1975 tax cut carried no liability for federal individual income taxes.3
The federal budget was nearly balanced in 1974, with a deficit of less than 1% of GDP. That deficit, however, jumped to 3.4% of GDP in fiscal year 1975 and 4.3% in the following year.4 It is clear that the 1975 tax cut, plus some increased spending in the form of extended unemployment compensation benefits, helped raise the federal deficit and increase aggregate demand. As a consequence, this deficit increase was temporary; both deficits and debt as a share of GDP fell at the close of the 1970s.
Much of Ford's stimulus was provided by an expansion in government expenditure, both on the refundable portion of the earned income tax credit and on some extensive expansions of unemployment compensation eligibility. Even though unemployment rose dramatically in 1974, the enactment of new legislation ensured that a higher percentage of the unemployed actually received compensation in 1975 than at any other time between 1967 and today. The high point was reached in April of that year, when 81% of all unemployed workers received compensation. Even as the economy recovered in 1976, the percentage of the unemployed receiving compensation averaged 67%, in marked contrast to both previous and subsequent rates. In fact, between 1967 and 1999, the 1975-77 period is the only three-year period when coverage exceeded 52%.5
Tax and spending changes in 1975 were designed as the first steps toward countering the 1974-75 recession and were heavily weighted toward increasing the disposable income and consumption of moderate- and low-income persons. Ironically, Alan Greenspan led President Ford's Council of Economic Advisers, which was responsible for developing this tax plan.
The results of the plan were striking. First of all, consumption as a percentage of GDP rose from an average of 61.7% in 1974 to 63.1% in 1975. It stayed at that higher level through 1979. Consumption as a percentage of disposable personal income rose from an average of 88.3% in 1974 to over 90% in 1976 through the end of the decade.6 Meanwhile, investment as a percentage of GDP was lower in 1975 than it had been in 1974. It did not recover to the 1973 level until 1977.7 In other words, as with most recession recoveries, consumption increases led and investment increases lagged. The lesson to be learned is that successful counter-cyclical fiscal policy requires tax and spending changes that specifically target increased consumption. President Ford's stimulus package did just that by targeting the low- and moderate-income families most likely to spend any extra income.
After establishing this strategy, monetary policy was then designed to support the president's efforts to stimulate the economy. Nominal interest rates fell throughout 1974, and when they began to rise in early 1975, the recovery was already well under way.8
President Ford's exercise of counter-cyclical fiscal policy worked. A recovery began in the second quarter of 1975. Real GDP per capita had been negative for all of 1974 and was falling at an annual rate of 6.7% in the first quarter of 1975. For the final three quarters of 1975, beginning with the quarter when the temporary tax cuts went into effect, the rate of growth of real GDP averaged over 4%. The rate of growth for 1976 was 3.8%. The unemployment rate fell to 7.7% in 1976 and continued to fall for the rest of the decade.9
The Reagan experiment (1981-83)
In 1981, before the recession had begun, President Reagan convinced Congress to accept a three-year tax cut. He did not justify his proposal as a way of combating recession but claimed instead that it would stimulate the "supply side" of the economy by enhancing incentives to work, save, and invest. The tax cut was heavily weighted toward reducing the tax burden of higher-income taxpayers and corporations. Its impact was also delayed-very little of the cuts actually took effect in 1981.10
A recession began in the fourth quarter of 1981, as unemployment rose from 7.4% to 8.2%. By the fourth quarter of 1982, the unemployment rate peaked at 10.7%. Between October 1981 and December 1982, the shrinkage in per capita GDP averaged 3.4% in annual terms.11 In 1981 the economy needed a stimulus, just as in 1974-75, but this time none was provided. In fact, the federal deficit as a percentage of GDP actually declined in 1981, due to increased revenues resulting from "bracket creep" in the individual income tax and from scheduled increases in the payroll tax for Social Security. Nor was any extension of unemployment benefits passed.
The tax cuts of 1981 brought significant reductions in income tax collections at the high end of the income spectrum and a dramatic reduction in corporate taxes. However, the impact on consumption was virtually nonexistent. In 1982-the first year of 10% rate cuts-the federal budget deficit rose dramatically. Consumption as a percentage of GDP rose in 1982, but investment fell so much that the overall increase in aggregate demand was insufficient to lift the economy out of its recession. The recession lingered through the fourth quarter of 1982 and the unemployment rate continued to rise, reaching its 10.7% peak in the fourth quarter, just when the business cycle was in its trough.
Relative to 1975, the recession did not last much longer. It did, however, do much more damage to the economy because it was so much deeper. Unemployment was above 8% for only four quarters during the 1974-75 recession, with the peak coming in the second quarter of 1975 at 8.9%. In 1981-83, unemployment was above 8% for a full seven quarters, stretching all the way into the first four quarters of the recovery. (It is also worth noting that monetary policy may have been less expansive in 1982 than in 1975 and 1976.)12
Even though Reagan's tax cut was passed before the recession of 1981 began, its impact wasn't even felt until 1983 when the recovery had already begun. That same year, the federal deficit as a percentage of GDP reached 6.1%, as the second of the 10% tax cuts went into effect. So, although 1983 saw growth in real GDP, unemployment was almost as high in 1983 as in 1982, despite a continued increase in the level of consumption relative to GDP. A policy change that might have stimulated even more consumption, such as the passage of extended unemployment benefits, did not occur in 1981. The percentage of unemployed actually receiving benefits averaged only 45% in 1982 and 44% in 1983, far less than the rates in the 1975-77 period.13
Lessons learned
The experience of the 1981-83 recession contrasts sharply with the policy changes made in response to the 1975 recession. The main differences were that:
the Reagan tax cut was backloaded. It had its greatest impact in fiscal year 1983 (federal tax revenue actually declined in that year).
the Reagan tax cut was not focused on the lower- and middle-income workers whose consumption must rise in order to begin the process of recovery. It also was not combined with significant expansion of transfer payments in the form of unemployment compensation, as Ford's tax cut was.
Consumption is the main driving force that can get the economy out of a slump. Investors are notoriously conservative. Once they get spooked by a recession, they usually wait for consumption to rise again before committing to new investment projects. Investment as a percentage of GDP usually doesn't rise until long after a recovery is underway. The past tax cuts show that Ford's cut induced an investment recovery within one year, while the Reagan tax cut failed to induce any recovery for almost two.
The parallels between President Bush's proposal and Reagan's earlier failure are indisputable. Like Reagan, Bush's plan was designed well before the current signs of economic slowdown. And as in 1981, Bush's plan tries to sell the merits of supply-side doctrine that incentives can be improved by reducing marginal tax rates for those subject to income tax. But the Bush proposal goes even further than Reagan's-Bush's cuts are even more concentrated on higher-income families and are even more extremely backloaded.
As recent history makes clear, backloaded tax cuts delay the impact on aggregate demand and mute efforts to fight recessions. And tax cuts that neglect the individuals most likely to spend extra income do not work well when the goal is to combat a recession. A large share of any stimulus should be focused on low- and moderate-income families. To this end, a plan along the lines of the recently proposed "prosperity dividend" -a proposal to issue each taxpayer a one-time rebate of around $500 drawn from the federal budget surpluses-would raise aggregate demand and have the best chance of heading off any imminent recession.14
Endnotes
1. For details of the Ford plan, see Economic Report of the President (1976, 50-57). For details of the Reagan plan and its impact, see Michael Meeropol's Surrender: How the Clinton Administration Completed the Reagan Revolution (1998, 79-81, 91-92).
2. See the web page for Surrender (Meeropol 1998) at http://mars.wnec.edu/~econ/surrender/. The unemployment rate and rate of growth of per capita real GDP data are in Table W.4 found on that web page.
3. See Economic Report of the President, 1976, p. 51.
4. See Economic Report of the President, 1998, p. 373.
5. For data on the percentage of the unemployed receiving compensation from 1967 to 1999, see Committee on Ways and Means, U.S. House of Representatives 2000, Green Book, pp. 284-5.
6. See http://mars.wnec.edu/~econ/surrender/ Table W.5.
7. For investment as a percentage of GDP, see Table W. 4 at http://mars.wnec.edu/~econ/surrender/.
8. For the nominal federal funds rate, see Table W. 2. For the nominal prime rate, see Table W.3.
9. For the nominal federal funds rate, see Table W. 2. For the nominal prime rate see Table W.3.
10. See Table W.4.
11. See Surrender, pp. 79-81.
12. For data on consumption as a percentage of GDP, see Table W.5 at http://mars.wnec.edu/~econ/surrender/. For data on investment, unemployment, and the rate of growth of real GDP, see Table W.4. For data on the federal budget deficit, see Economic Report of the President (1998, p. 373). For the rate of growth of the money supply and the nominal and real federal funds rate, see Table W. 1.
13. For data on coverage of unemployment compensation, see Green Book, op cit. For data on consumption, see Table W.5. For data on investment and the rate of growth, see Table W.4.
14. For more details on the prosperity dividend proposal, see EPI's reports Declare a Prosperity Dividend: A Stimulating Idea for the U.S. Economy (2001) and The Case for a Prosperity Dividend (2001) by Eileen Appelbaum and Richard B. Freeman.
(EPI Issue Brief #157) May 1, 2001
by Michael A. Meeropol
As slow growth continues in the U.S. economy, one of the questions policy makers are asking is whether tax cuts can be used to stave off a recession and, if so, how. The Bush Administration claims that its tax cut proposal (conceived over a year ago) is the best bulwark against an economic slowdown. Since supporters of such tax cuts often invoke historical precedent, such as the fiscal policies of past presidents, it is worth looking at previous attempts to mitigate recessions through tax policy. A close comparison of other attempts to fight recessions with tax cuts-one enacted by President Gerald Ford in 1975 and the other by President Ronald Reagan in 1981-shows that approaches that promote increased consumption by middle- and lower-income families have provided the biggest boosts to flagging economies.
Present-day Republicans, however, are promoting a tax cut that disproportionately benefits those with high incomes, the rationale being that this will stimulate the economy by increasing saving and investment. Critics of these cuts prefer smaller overall tax cuts with greater focus on relief for lower-income individuals; it is these lower- and middle-income families, critics argue, that are most likely to spend any extra disposable income and hence stimulate the economy. A look at recent history supports such claims.
Two major recent recessions-1974-75 and 1981-82-were accompanied by Republican-led tax cuts markedly different from one another both in terms of who benefited and in their long- vs. short-run focus. President Ford's tax cut in 1975 was targeted at low- and moderate-income families and helped to stimulate private consumption, putting the economy back on its feet. By comparison, President Reagan's tax cut in 1981 disproportionately benefited those at the top of the income scale and ultimately did nothing for the slumping economy until 1983.1
Ford's winning strategy (1974-75)
In 1974, the United States economy fell into a deep recession. Unemployment rose from 4.8% in the fourth quarter of 1973 to 8.9 % in the second quarter of 1975. For over five quarters (from the end of 1973 through March 1975) real GDP per capita fell at an annual rate of 3.8%.2 In response, President Ford proposed a significant tax cut in early 1975, which Congress passed by March of that year.
President Ford's tax cut was clearly focused on increasing consumption. Marginal rates were not cut, and instead all taxpayers and their dependents received a credit of $30 (almost $100 in current dollars). In addition, the standard deduction was increased, and a refundable earned income tax credit was enacted. As a result, some beneficiaries of the 1975 tax cut carried no liability for federal individual income taxes.3
The federal budget was nearly balanced in 1974, with a deficit of less than 1% of GDP. That deficit, however, jumped to 3.4% of GDP in fiscal year 1975 and 4.3% in the following year.4 It is clear that the 1975 tax cut, plus some increased spending in the form of extended unemployment compensation benefits, helped raise the federal deficit and increase aggregate demand. As a consequence, this deficit increase was temporary; both deficits and debt as a share of GDP fell at the close of the 1970s.
Much of Ford's stimulus was provided by an expansion in government expenditure, both on the refundable portion of the earned income tax credit and on some extensive expansions of unemployment compensation eligibility. Even though unemployment rose dramatically in 1974, the enactment of new legislation ensured that a higher percentage of the unemployed actually received compensation in 1975 than at any other time between 1967 and today. The high point was reached in April of that year, when 81% of all unemployed workers received compensation. Even as the economy recovered in 1976, the percentage of the unemployed receiving compensation averaged 67%, in marked contrast to both previous and subsequent rates. In fact, between 1967 and 1999, the 1975-77 period is the only three-year period when coverage exceeded 52%.5
Tax and spending changes in 1975 were designed as the first steps toward countering the 1974-75 recession and were heavily weighted toward increasing the disposable income and consumption of moderate- and low-income persons. Ironically, Alan Greenspan led President Ford's Council of Economic Advisers, which was responsible for developing this tax plan.
The results of the plan were striking. First of all, consumption as a percentage of GDP rose from an average of 61.7% in 1974 to 63.1% in 1975. It stayed at that higher level through 1979. Consumption as a percentage of disposable personal income rose from an average of 88.3% in 1974 to over 90% in 1976 through the end of the decade.6 Meanwhile, investment as a percentage of GDP was lower in 1975 than it had been in 1974. It did not recover to the 1973 level until 1977.7 In other words, as with most recession recoveries, consumption increases led and investment increases lagged. The lesson to be learned is that successful counter-cyclical fiscal policy requires tax and spending changes that specifically target increased consumption. President Ford's stimulus package did just that by targeting the low- and moderate-income families most likely to spend any extra income.
After establishing this strategy, monetary policy was then designed to support the president's efforts to stimulate the economy. Nominal interest rates fell throughout 1974, and when they began to rise in early 1975, the recovery was already well under way.8
President Ford's exercise of counter-cyclical fiscal policy worked. A recovery began in the second quarter of 1975. Real GDP per capita had been negative for all of 1974 and was falling at an annual rate of 6.7% in the first quarter of 1975. For the final three quarters of 1975, beginning with the quarter when the temporary tax cuts went into effect, the rate of growth of real GDP averaged over 4%. The rate of growth for 1976 was 3.8%. The unemployment rate fell to 7.7% in 1976 and continued to fall for the rest of the decade.9
The Reagan experiment (1981-83)
In 1981, before the recession had begun, President Reagan convinced Congress to accept a three-year tax cut. He did not justify his proposal as a way of combating recession but claimed instead that it would stimulate the "supply side" of the economy by enhancing incentives to work, save, and invest. The tax cut was heavily weighted toward reducing the tax burden of higher-income taxpayers and corporations. Its impact was also delayed-very little of the cuts actually took effect in 1981.10
A recession began in the fourth quarter of 1981, as unemployment rose from 7.4% to 8.2%. By the fourth quarter of 1982, the unemployment rate peaked at 10.7%. Between October 1981 and December 1982, the shrinkage in per capita GDP averaged 3.4% in annual terms.11 In 1981 the economy needed a stimulus, just as in 1974-75, but this time none was provided. In fact, the federal deficit as a percentage of GDP actually declined in 1981, due to increased revenues resulting from "bracket creep" in the individual income tax and from scheduled increases in the payroll tax for Social Security. Nor was any extension of unemployment benefits passed.
The tax cuts of 1981 brought significant reductions in income tax collections at the high end of the income spectrum and a dramatic reduction in corporate taxes. However, the impact on consumption was virtually nonexistent. In 1982-the first year of 10% rate cuts-the federal budget deficit rose dramatically. Consumption as a percentage of GDP rose in 1982, but investment fell so much that the overall increase in aggregate demand was insufficient to lift the economy out of its recession. The recession lingered through the fourth quarter of 1982 and the unemployment rate continued to rise, reaching its 10.7% peak in the fourth quarter, just when the business cycle was in its trough.
Relative to 1975, the recession did not last much longer. It did, however, do much more damage to the economy because it was so much deeper. Unemployment was above 8% for only four quarters during the 1974-75 recession, with the peak coming in the second quarter of 1975 at 8.9%. In 1981-83, unemployment was above 8% for a full seven quarters, stretching all the way into the first four quarters of the recovery. (It is also worth noting that monetary policy may have been less expansive in 1982 than in 1975 and 1976.)12
Even though Reagan's tax cut was passed before the recession of 1981 began, its impact wasn't even felt until 1983 when the recovery had already begun. That same year, the federal deficit as a percentage of GDP reached 6.1%, as the second of the 10% tax cuts went into effect. So, although 1983 saw growth in real GDP, unemployment was almost as high in 1983 as in 1982, despite a continued increase in the level of consumption relative to GDP. A policy change that might have stimulated even more consumption, such as the passage of extended unemployment benefits, did not occur in 1981. The percentage of unemployed actually receiving benefits averaged only 45% in 1982 and 44% in 1983, far less than the rates in the 1975-77 period.13
Lessons learned
The experience of the 1981-83 recession contrasts sharply with the policy changes made in response to the 1975 recession. The main differences were that:
the Reagan tax cut was backloaded. It had its greatest impact in fiscal year 1983 (federal tax revenue actually declined in that year).
the Reagan tax cut was not focused on the lower- and middle-income workers whose consumption must rise in order to begin the process of recovery. It also was not combined with significant expansion of transfer payments in the form of unemployment compensation, as Ford's tax cut was.
Consumption is the main driving force that can get the economy out of a slump. Investors are notoriously conservative. Once they get spooked by a recession, they usually wait for consumption to rise again before committing to new investment projects. Investment as a percentage of GDP usually doesn't rise until long after a recovery is underway. The past tax cuts show that Ford's cut induced an investment recovery within one year, while the Reagan tax cut failed to induce any recovery for almost two.
The parallels between President Bush's proposal and Reagan's earlier failure are indisputable. Like Reagan, Bush's plan was designed well before the current signs of economic slowdown. And as in 1981, Bush's plan tries to sell the merits of supply-side doctrine that incentives can be improved by reducing marginal tax rates for those subject to income tax. But the Bush proposal goes even further than Reagan's-Bush's cuts are even more concentrated on higher-income families and are even more extremely backloaded.
As recent history makes clear, backloaded tax cuts delay the impact on aggregate demand and mute efforts to fight recessions. And tax cuts that neglect the individuals most likely to spend extra income do not work well when the goal is to combat a recession. A large share of any stimulus should be focused on low- and moderate-income families. To this end, a plan along the lines of the recently proposed "prosperity dividend" -a proposal to issue each taxpayer a one-time rebate of around $500 drawn from the federal budget surpluses-would raise aggregate demand and have the best chance of heading off any imminent recession.14
Endnotes
1. For details of the Ford plan, see Economic Report of the President (1976, 50-57). For details of the Reagan plan and its impact, see Michael Meeropol's Surrender: How the Clinton Administration Completed the Reagan Revolution (1998, 79-81, 91-92).
2. See the web page for Surrender (Meeropol 1998) at http://mars.wnec.edu/~econ/surrender/. The unemployment rate and rate of growth of per capita real GDP data are in Table W.4 found on that web page.
3. See Economic Report of the President, 1976, p. 51.
4. See Economic Report of the President, 1998, p. 373.
5. For data on the percentage of the unemployed receiving compensation from 1967 to 1999, see Committee on Ways and Means, U.S. House of Representatives 2000, Green Book, pp. 284-5.
6. See http://mars.wnec.edu/~econ/surrender/ Table W.5.
7. For investment as a percentage of GDP, see Table W. 4 at http://mars.wnec.edu/~econ/surrender/.
8. For the nominal federal funds rate, see Table W. 2. For the nominal prime rate, see Table W.3.
9. For the nominal federal funds rate, see Table W. 2. For the nominal prime rate see Table W.3.
10. See Table W.4.
11. See Surrender, pp. 79-81.
12. For data on consumption as a percentage of GDP, see Table W.5 at http://mars.wnec.edu/~econ/surrender/. For data on investment, unemployment, and the rate of growth of real GDP, see Table W.4. For data on the federal budget deficit, see Economic Report of the President (1998, p. 373). For the rate of growth of the money supply and the nominal and real federal funds rate, see Table W. 1.
13. For data on coverage of unemployment compensation, see Green Book, op cit. For data on consumption, see Table W.5. For data on investment and the rate of growth, see Table W.4.
14. For more details on the prosperity dividend proposal, see EPI's reports Declare a Prosperity Dividend: A Stimulating Idea for the U.S. Economy (2001) and The Case for a Prosperity Dividend (2001) by Eileen Appelbaum and Richard B. Freeman.
Sunday, April 8, 2001
Talk of Lost Farms Reflects Muddle of Estate Tax Debate
In the April 8, 2001 New York Times article "Talk of Lost Farms Reflects Muddle of Estate Tax Debate," David Cay Johnston explains that the risk of family farms being lost because of the estate tax has been exaggerated by some advocates of the tax's elimination.
Correction Appended
Harlyn Riekena worried that his success would cost him when he died. Thirty-seven years ago he quit teaching to farm and over the years bought more and more of the rich black soil here in central Iowa. Now he and his wife, Karen, own 950 gently rolling acres planted in soybeans and corn.
The farmland alone is worth more than $2.5 million, and so Mr. Riekena, 61, fretted that estate taxes would take a big chunk of his three grown daughters' inheritance.
That might seem a reasonable assumption, what with all the talk in Washington about the need to repeal the estate tax to save the family farm. ''To keep farms in the family, we are going to get rid of the death tax,'' President Bush vowed a month ago; he and many others have made the point repeatedly.
But in fact the Riekenas will owe nothing in estate taxes. Almost no working farmers do, according to data from an Internal Revenue Service analysis of 1999 returns that has not yet been published.
Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers, said he had searched far and wide but had never found a case in which a farm was lost because of estate taxes. ''It's a myth,'' Mr. Harl said.
Even one of the leading advocates for repeal of estate taxes, the American Farm Bureau Federation, said it could not cite a single example of a farm lost because of estate taxes.
The estate tax does, of course, have a bite. But the reality of that bite is different from the mythology, in which family farmers have become icons for the campaign to abolish the tax. In fact, the overwhelming majority of beneficiaries are the heirs of people who made their fortunes through their businesses and investments in securities and real estate.
The effort to end the estate tax -- which critics call the death tax -- gained ground when the House of Representatives voted Wednesday to reduce the tax and then abolish it in 2011. The bill faces an uncertain fate in the Senate.
The estate tax is central in the debate over taxes, not only because the sums involved are huge but also because to both sides it is a touchstone of national values. To those seeking to abolish it, the estate tax is a penalty for success, an abomination that blocks the deeply human desire to leave a life's work as a legacy for the children. It is also a complicated burden that enriches the lawyers, accountants and life insurance companies that help people reduce their tax bills.
To its supporters, on the other hand, the estate tax is a symbol of American equality, a mechanism to democratize society and to encourage economic success based on merit rather than birthright.
Yet for all the passion in the debate, the estate tax does not always seem broadly understood.
While 17 percent of Americans in a recent Gallup survey think they will owe estate taxes, in fact only the richest 2 percent of Americans do. That amounted to 49,870 Americans in 1999. And nearly half the estate tax is paid by the 3,000 or so people who each year leave taxable estates of more than $5 million.
In fact, the primary beneficiaries of the move to abolish the estate tax look less like the Riekenas and more like Frank A. Blethen, a Seattle newspaper publisher whose family owns eight newspapers worth perhaps a billion dollars.
''Being ever bloodthirsty, the I.R.S. will start with the highest value it can on my estate,'' said Mr. Blethen, the 55-year-old patriarch of the publishing family. The figure for his share will probably be several hundred million dollars, more than half of which would go to the government. Mr. Blethen is trying to avoid almost all those taxes through a plan also used by other wealthy families, but if he does not succeed his sons' interest in the business will be wiped out, he said.
Estate taxes are paid by few Americans because they are not assessed on the first $1.35 million of net worth left by a couple. Amounts above this are taxed at rates that begin at 43 percent and rise to 55 percent on amounts greater than $3 million. As the Riekenas and the Blethens have learned, there are many legal ways to reduce the value of one's wealth for estate tax purposes. So even for the largest estates, the tax averages 25 percent.
Family farmers are often cited as victims. As Senator Charles E. Grassley, an Iowa hog farmer and chairman of the Senate Finance Committee, put it, ''The product of a life's work leaches away like seeds in poor soil.''
Yet tax return data show that very few farmers pay estate taxes. Only 6,216 taxable estates in 1999 included any agricultural land and equipment, the I.R.S. report shows. The average value of these farm assets was $440,000, only about a third of the amount that any married couple could leave untaxed to heirs. What is more, a farm couple can pass $4.1 million untaxed, so long as the heirs continue farming for 10 years.
In Iowa, the average farm has a net worth of $1.2 million. Loyd A. Brown, president of Hertz Farm Management in Nevada, Iowa, which runs more than 400 farms in 10 states, said none of his firm's clients nor anyone he knew was facing problems because of the estate tax.
Just 1,222 estates in 1999 had enough in farm assets to make the farm property alone subject to estate taxes. But these farm assets amounted to one-tenth of these estates, suggesting that the tax applies mostly to gentleman farmers and ranchers, rather than to working farmers like the Riekenas, whose fortunes are tied up in their farms.
As the Riekenas were surprised to discover, avoiding the estate tax was easy. Their lawyer developed a simple plan that involved making gifts to their daughters and buying life insurance to offset any estate taxes that might be due if the parents died before most of the farm had been turned over to their daughters.
There is a real cost, of course -- payments to the lawyer and for the insurance. And in any case the paucity of affected farmers does not end the debate. Patricia A. Wolff, the Farm Bureau's chief lobbyist, said the organization made estate tax repeal its top priority because, while it has not surveyed its members, she was confident ''the majority of farmers and ranchers believe that death taxes are wrong and that it is wrong to tax people twice on what they earn.''
But Mr. Riekena and all two dozen other farmers interviewed across central Iowa -- every one a Republican -- said that while they favored increasing the amount that could be passed to heirs untaxed, they did not support the repeal proposed by President Bush and other leaders of his party. A few snickered or laughed when asked whether the estate tax should be repealed to save the family farm.
But Senator Grassley himself opposes the estate tax, in large part because he thinks that while a decision to keep or sell an asset is an appropriate trigger for a tax, death should not be.
He added another reason: ''I do not think that the function of government is to redistribute wealth.''
Indeed, that seems to be the fault line in the debate: should the government play Robin Hood with estates?
''If you worked hard and put your money away, you paid tax on it as you went along, so it's yours and you should be able to pass it on to your children without the government penalizing you,'' said R. Elaine Gunland, who grows grapes in Fresno, Calif., and whose family may owe estate taxes when she dies.
Mr. Blethen, the fourth-generation publisher of a newspaper started in 1896 with $3,000, says he speaks for many others in supporting repeal of the tax in the name of preserving family businesses.
''I firmly believe that family-owned businesses are the heart and soul of the country,'' said Mr. Blethen, who has created a Web site called deathtax.com.
Mr. Blethen says the estate tax benefits publicly traded companies at the expense of family-owned businesses. The reason is that the public companies can often buy family businesses at a discount because the owners did not raise the cash to pay estate taxes and must sell quickly at fire sale prices.
Mr. Blethen said some of the seven smaller papers his family bought in Washington and Maine came from families that had not planned carefully for the estate tax and decided it was easier to cash out.
''If you like corporate culture, and think America needs more of it, then you love the estate tax,'' he said. ''I think this march toward corporatism is not healthy and we lose innovation, jobs and charitable giving.''
Mr. Blethen said the estate tax also discouraged major new investments in family businesses late in the life of the primary owner because such investments consumed cash that might be needed at any time to pay estate taxes.
He said the estate tax also ''forces you into irresponsible gift making'' to heirs. He felt compelled to give half the future growth of his fortune to his two sons when they were not yet kindergartners even though he had no way of telling whether the boys would turn out to be industrious, as they did, or scalawags.
Despite his fierce opposition to the estate tax, Mr. Blethen does not support President Bush's current plan to repeal the tax because it would also exempt from capital gains taxes the profits on assets passed to heirs when those assets are sold. ''That's not fair,'' Mr. Blethen said.
He said Mr. Bush's proposal would have the perverse effect of encouraging the sale of family-owned businesses, because heirs would see death as their chance to sell tax-free and to diversify their portfolios, instead of continuing to bear the risks of holding a single enterprise.
Mr. Blethen thinks that rather than taxing an estate, taxes should apply when a business is sold. ''You want to defer those capital gains and let them grow so large that the family will keep the business to avoid the capital gains taxes,'' he said.
The debate does not divide neatly among rich and poor. Since February more than 800 wealthy Americans have joined in a public appeal to keep the estate tax. They argue that repealing the tax would further enrich the wealthiest Americans and hurt struggling families. They also argue that financial success should be based on merit rather than on inheritance.
Warren E. Buffett, George Soros, Paul Newman and William H. Gates Sr., father of Microsoft's chairman, William H. Gates III, are among the most prominent in that group, which also includes many people with holdings of just a million dollars.
Mr. Buffett said the estate tax fosters economic growth by encouraging Americans to rise based on merit, not inheritance. ''If you take the C.E.O.'s of the Fortune 500,'' he said in an interview, ''and put in the eldest son of every one of those who ran the place in 1975, the American economy would not run as well as letting the Jack Welches, who started out with nothing, rise to the top of General Electric.''
Back in central Iowa, Mr. Riekena had another reason. He said Washington was focused on the wrong issue when it came to saving family farms.
''For most farmers around here, the estate tax is not high in their minds,'' Mr. Riekena said. ''What we need are better crop prices.''
Photos: Harlyn Riekena, who owns 950 acres of farmland in Iowa, expects to owe nothing in estate taxes. (Suzanne DeChillo/The New York Times)(pg. 1); Frank A. Blethen, publisher of The Seattle Times, says the estate tax could cost his family many millions of dollars after his death. (Peter Yates for The New York Times)(pg. 24) Chart: ''Few Farms in Taxable Estates'' Estate tax opponents say the levy is destroying the family farm. But only the richest 2 percent of the 2.4 million Americans who died in 1999 left estate tax bills. Only one in eight of these taxable estates included any farm property. On average, only one in 40 taxable estates included enough farm land and equipment for the farm asssets alone to incur estate taxes. 49,870: Total number of taxable estates in 1999 6,216, or 12.5 percent, of the taxable estates had any farm assets 1,222, or 2.5 percent of estates, on average, might have had to pay taxes because of their farm assets. (Source: Internal Revenue Service)(pg. 24)
Correction: April 12, 2001, Thursday A front-page article on Sunday about farms and estate taxes referred incompletely to the position of Loyd A. Brown, president of Hertz Farm Management in Iowa. Mr. Brown said that while he did not know of anyone who had lost a farm because of the estate tax, he thought Congress should either eliminate the tax or increase the amount that could be inherited untaxed.
Wednesday, June 21, 2000
The World Health Organization's ranking of the world's health systems (listed alphabetically).
Below is the World Health Organization's ranking of the world's health systems (listed alphabetically).
Click here for a list of the countries by rank.
Rank Country
173 Afghanistan
55 Albania
81 Algeria
4 Andorra
181 Angola
86 Antigua and Barbuda
75 Argentina
104 Armenia
32 Australia
9 Austria
109 Azerbaijan
94 Bahamas
42 Bahrain
88 Bangladesh
46 Barbados
72 Belarus
21 Belgium
69 Belize
97 Benin
124 Bhutan
126 Bolivia
90 Bosnia-Herzegovina
169 Botswana
125 Brazil
40 Brunei
102 Bulgaria
132 Burkina Faso
143 Burundi
174 Cambodia
164 Cameroon
30 Canada
113 Cape Verde
189 Central African Republic
178 Chad
33 Chile
144 China
22 Colombia
118 Comoros
166 Congo
107 Cook Islands
36 Costa Rica
43 Croatia
39 Cuba
24 Cyprus
48 Czech Republic
188 Democratic Republic of the Congo
34 Denmark
157 Djibouti
35 Dominica
51 Dominican Republic
111 Ecuador
63 Egypt
115 El Salvador
171 Equatorial Guinea
158 Eritrea
77 Estonia
180 Ethiopia
96 Fiji
31 Finland
1 France
139 Gabon
146 Gambia
114 Georgia
25 Germany
135 Ghana
14 Greece
85 Grenada
78 Guatemala
161 Guinea
176 Guinea-Bissau
128 Guyana
138 Haiti
131 Honduras
66 Hungary
15 Iceland
112 India
92 Indonesia
93 Iran
103 Iraq
19 Ireland
28 Israel
2 Italy
137 Ivory Coast
53 Jamaica
10 Japan
83 Jordan
64 Kazakhstan
140 Kenya
142 Kiribati
45 Kuwait
151 Kyrgystan
165 Laos
105 Latvia
91 Lebanon
183 Lesotho
186 Liberia
87 Libya
73 Lithuania
16 Luxembourg
89 Macedonia
159 Madagascar
185 Malawi
49 Malaysia
147 Maldives
163 Mali
5 Malta
141 Marshall Islands
162 Mauritania
84 Mauritius
61 Mexico
123 Micronesia
101 Moldova
13 Monaco
145 Mongolia
29 Morocco
184 Mozambique
190 Myanmar
168 Namibia
98 Nauru
150 Nepal
17 Netherlands
41 New Zealand
71 Nicaragua
170 Niger
187 Nigeria
121 Niue
167 North Korea
11 Norway
8 Oman
122 Pakistan
82 Palau
95 Panama
148 Papua New Guinea
57 Paraguay
129 Peru
60 Philippines
50 Poland
12 Portugal
44 Qatar
99 Romania
130 Russia
172 Rwanda
68 Saint Lucia
100 Saint Kitts and Nevis
74 Saint Vincent and the Grenadines
119 Samoa
3 San Marino
133 Sao Tome and Principe
26 Saudi Arabia
59 Senegal
56 Seychelles
6 Singapore
62 Slovakia
38 Slovenia
80 Solomon Islands
179 Somalia
175 South Africa
58 South Korea
7 Spain
76 Sri Lanka
134 Sudan
110 Suriname
177 Swaziland
23 Sweden
20 Switzerland
108 Syria
154 Tajikistan
156 Tanzania
47 Thailand
152 Togo
116 Tonga
67 Trinidad and Tobago
52 Tunisia
70 Turkey
153 Turkmenistan
136 Tuvalu
149 Uganda
79 Ukraine
27 United Arab Emirates
18 United Kingdom
37 United States
65 Uruguay
117 Uzbekistan
127 Vanuatu
54 Venezuela
160 Vietnam
120 Yemen
106 Yugoslavia
182 Zambia
155 Zimbabwe
Click here for a list of the countries by rank.
Rank Country
173 Afghanistan
55 Albania
81 Algeria
4 Andorra
181 Angola
86 Antigua and Barbuda
75 Argentina
104 Armenia
32 Australia
9 Austria
109 Azerbaijan
94 Bahamas
42 Bahrain
88 Bangladesh
46 Barbados
72 Belarus
21 Belgium
69 Belize
97 Benin
124 Bhutan
126 Bolivia
90 Bosnia-Herzegovina
169 Botswana
125 Brazil
40 Brunei
102 Bulgaria
132 Burkina Faso
143 Burundi
174 Cambodia
164 Cameroon
30 Canada
113 Cape Verde
189 Central African Republic
178 Chad
33 Chile
144 China
22 Colombia
118 Comoros
166 Congo
107 Cook Islands
36 Costa Rica
43 Croatia
39 Cuba
24 Cyprus
48 Czech Republic
188 Democratic Republic of the Congo
34 Denmark
157 Djibouti
35 Dominica
51 Dominican Republic
111 Ecuador
63 Egypt
115 El Salvador
171 Equatorial Guinea
158 Eritrea
77 Estonia
180 Ethiopia
96 Fiji
31 Finland
1 France
139 Gabon
146 Gambia
114 Georgia
25 Germany
135 Ghana
14 Greece
85 Grenada
78 Guatemala
161 Guinea
176 Guinea-Bissau
128 Guyana
138 Haiti
131 Honduras
66 Hungary
15 Iceland
112 India
92 Indonesia
93 Iran
103 Iraq
19 Ireland
28 Israel
2 Italy
137 Ivory Coast
53 Jamaica
10 Japan
83 Jordan
64 Kazakhstan
140 Kenya
142 Kiribati
45 Kuwait
151 Kyrgystan
165 Laos
105 Latvia
91 Lebanon
183 Lesotho
186 Liberia
87 Libya
73 Lithuania
16 Luxembourg
89 Macedonia
159 Madagascar
185 Malawi
49 Malaysia
147 Maldives
163 Mali
5 Malta
141 Marshall Islands
162 Mauritania
84 Mauritius
61 Mexico
123 Micronesia
101 Moldova
13 Monaco
145 Mongolia
29 Morocco
184 Mozambique
190 Myanmar
168 Namibia
98 Nauru
150 Nepal
17 Netherlands
41 New Zealand
71 Nicaragua
170 Niger
187 Nigeria
121 Niue
167 North Korea
11 Norway
8 Oman
122 Pakistan
82 Palau
95 Panama
148 Papua New Guinea
57 Paraguay
129 Peru
60 Philippines
50 Poland
12 Portugal
44 Qatar
99 Romania
130 Russia
172 Rwanda
68 Saint Lucia
100 Saint Kitts and Nevis
74 Saint Vincent and the Grenadines
119 Samoa
3 San Marino
133 Sao Tome and Principe
26 Saudi Arabia
59 Senegal
56 Seychelles
6 Singapore
62 Slovakia
38 Slovenia
80 Solomon Islands
179 Somalia
175 South Africa
58 South Korea
7 Spain
76 Sri Lanka
134 Sudan
110 Suriname
177 Swaziland
23 Sweden
20 Switzerland
108 Syria
154 Tajikistan
156 Tanzania
47 Thailand
152 Togo
116 Tonga
67 Trinidad and Tobago
52 Tunisia
70 Turkey
153 Turkmenistan
136 Tuvalu
149 Uganda
79 Ukraine
27 United Arab Emirates
18 United Kingdom
37 United States
65 Uruguay
117 Uzbekistan
127 Vanuatu
54 Venezuela
160 Vietnam
120 Yemen
106 Yugoslavia
182 Zambia
155 Zimbabwe
The World Health Organization's ranking of the world's health systems
Below is the World Health Organization's 2000 ranking of the world's health systems.
Click here for an alphabetical listing of the countries with ranks.
Rank Country
1 France
2 Italy
3 San Marino
4 Andorra
5 Malta
6 Singapore
7 Spain
8 Oman
9 Austria
10 Japan
11 Norway
12 Portugal
13 Monaco
14 Greece
15 Iceland
16 Luxembourg
17 Netherlands
18 United Kingdom
19 Ireland
20 Switzerland
21 Belgium
22 Colombia
23 Sweden
24 Cyprus
25 Germany
26 Saudi Arabia
27 United Arab Emirates
28 Israel
29 Morocco
30 Canada
31 Finland
32 Australia
33 Chile
34 Denmark
35 Dominica
36 Costa Rica
37 United States of America
38 Slovenia
39 Cuba
40 Brunei
41 New Zealand
42 Bahrain
43 Croatia
44 Qatar
45 Kuwait
46 Barbados
47 Thailand
48 Czech Republic
49 Malaysia
50 Poland
51 Dominican Republic
52 Tunisia
53 Jamaica
54 Venezuela
55 Albania
56 Seychelles
57 Paraguay
58 South Korea
59 Senegal
60 Philippines
61 Mexico
62 Slovakia
63 Egypt
64 Kazakhstan
65 Uruguay
66 Hungary
67 Trinidad and Tobago
68 Saint Lucia
69 Belize
70 Turkey
71 Nicaragua
72 Belarus
73 Lithuania
74 Saint Vincent and the Grenadines
75 Argentina
76 Sri Lanka
77 Estonia
78 Guatemala
79 Ukraine
80 Solomon Islands
81 Algeria
82 Palau
83 Jordan
84 Mauritius
85 Grenada
86 Antigua and Barbuda
87 Libya
88 Bangladesh
89 Macedonia
90 Bosnia-Herzegovina
91 Lebanon
92 Indonesia
93 Iran
94 Bahamas
95 Panama
96 Fiji
97 Benin
98 Nauru
99 Romania
100 Saint Kitts and Nevis
101 Moldova
102 Bulgaria
103 Iraq
104 Armenia
105 Latvia
106 Yugoslavia
107 Cook Islands
108 Syria
109 Azerbaijan
110 Suriname
111 Ecuador
112 India
113 Cape Verde
114 Georgia
115 El Salvador
116 Tonga
117 Uzbekistan
118 Comoros
119 Samoa
120 Yemen
121 Niue
122 Pakistan
123 Micronesia
124 Bhutan
125 Brazil
126 Bolivia
127 Vanuatu
128 Guyana
129 Peru
130 Russia
131 Honduras
132 Burkina Faso
133 Sao Tome and Principe
134 Sudan
135 Ghana
136 Tuvalu
137 Ivory Coast
138 Haiti
139 Gabon
140 Kenya
141 Marshall Islands
142 Kiribati
143 Burundi
144 China
145 Mongolia
146 Gambia
147 Maldives
148 Papua New Guinea
149 Uganda
150 Nepal
151 Kyrgystan
152 Togo
153 Turkmenistan
154 Tajikistan
155 Zimbabwe
156 Tanzania
157 Djibouti
158 Eritrea
159 Madagascar
160 Vietnam
161 Guinea
162 Mauritania
163 Mali
164 Cameroon
165 Laos
166 Congo
167 North Korea
168 Namibia
169 Botswana
170 Niger
171 Equatorial Guinea
172 Rwanda
173 Afghanistan
174 Cambodia
175 South Africa
176 Guinea-Bissau
177 Swaziland
178 Chad
179 Somalia
180 Ethiopia
181 Angola
182 Zambia
183 Lesotho
184 Mozambique
185 Malawi
186 Liberia
187 Nigeria
188 Democratic Republic of the Congo
189 Central African Republic
190 Myanmar
Source: WHO World Health Report
Click here for an alphabetical listing of the countries with ranks.
Rank Country
1 France
2 Italy
3 San Marino
4 Andorra
5 Malta
6 Singapore
7 Spain
8 Oman
9 Austria
10 Japan
11 Norway
12 Portugal
13 Monaco
14 Greece
15 Iceland
16 Luxembourg
17 Netherlands
18 United Kingdom
19 Ireland
20 Switzerland
21 Belgium
22 Colombia
23 Sweden
24 Cyprus
25 Germany
26 Saudi Arabia
27 United Arab Emirates
28 Israel
29 Morocco
30 Canada
31 Finland
32 Australia
33 Chile
34 Denmark
35 Dominica
36 Costa Rica
37 United States of America
38 Slovenia
39 Cuba
40 Brunei
41 New Zealand
42 Bahrain
43 Croatia
44 Qatar
45 Kuwait
46 Barbados
47 Thailand
48 Czech Republic
49 Malaysia
50 Poland
51 Dominican Republic
52 Tunisia
53 Jamaica
54 Venezuela
55 Albania
56 Seychelles
57 Paraguay
58 South Korea
59 Senegal
60 Philippines
61 Mexico
62 Slovakia
63 Egypt
64 Kazakhstan
65 Uruguay
66 Hungary
67 Trinidad and Tobago
68 Saint Lucia
69 Belize
70 Turkey
71 Nicaragua
72 Belarus
73 Lithuania
74 Saint Vincent and the Grenadines
75 Argentina
76 Sri Lanka
77 Estonia
78 Guatemala
79 Ukraine
80 Solomon Islands
81 Algeria
82 Palau
83 Jordan
84 Mauritius
85 Grenada
86 Antigua and Barbuda
87 Libya
88 Bangladesh
89 Macedonia
90 Bosnia-Herzegovina
91 Lebanon
92 Indonesia
93 Iran
94 Bahamas
95 Panama
96 Fiji
97 Benin
98 Nauru
99 Romania
100 Saint Kitts and Nevis
101 Moldova
102 Bulgaria
103 Iraq
104 Armenia
105 Latvia
106 Yugoslavia
107 Cook Islands
108 Syria
109 Azerbaijan
110 Suriname
111 Ecuador
112 India
113 Cape Verde
114 Georgia
115 El Salvador
116 Tonga
117 Uzbekistan
118 Comoros
119 Samoa
120 Yemen
121 Niue
122 Pakistan
123 Micronesia
124 Bhutan
125 Brazil
126 Bolivia
127 Vanuatu
128 Guyana
129 Peru
130 Russia
131 Honduras
132 Burkina Faso
133 Sao Tome and Principe
134 Sudan
135 Ghana
136 Tuvalu
137 Ivory Coast
138 Haiti
139 Gabon
140 Kenya
141 Marshall Islands
142 Kiribati
143 Burundi
144 China
145 Mongolia
146 Gambia
147 Maldives
148 Papua New Guinea
149 Uganda
150 Nepal
151 Kyrgystan
152 Togo
153 Turkmenistan
154 Tajikistan
155 Zimbabwe
156 Tanzania
157 Djibouti
158 Eritrea
159 Madagascar
160 Vietnam
161 Guinea
162 Mauritania
163 Mali
164 Cameroon
165 Laos
166 Congo
167 North Korea
168 Namibia
169 Botswana
170 Niger
171 Equatorial Guinea
172 Rwanda
173 Afghanistan
174 Cambodia
175 South Africa
176 Guinea-Bissau
177 Swaziland
178 Chad
179 Somalia
180 Ethiopia
181 Angola
182 Zambia
183 Lesotho
184 Mozambique
185 Malawi
186 Liberia
187 Nigeria
188 Democratic Republic of the Congo
189 Central African Republic
190 Myanmar
Source: WHO World Health Report
Tuesday, November 9, 1999
The Paranoid Style in American Politics
“The Paranoid Style in American Politics.” by Richard Hofstadter†
Harper’s Magazine, November 1964, pp. 77-86.
It had been around a long time before the Radical Right discovered it—and its targets have ranged from “the international bankers” to Masons, Jesuits, and munitions makers.
American politics has often been an arena for angry minds. In recent years we have seen angry minds at work mainly among extreme right-wingers, who have now demonstrated in the Goldwater movement how much political leverage can be got out of the animosities and passions of a small minority. But behind this I believe there is a style of mind that is far from new and that is not necessarily right-wind. I call it the paranoid style simply because no other word adequately evokes the sense of heated exaggeration, suspiciousness, and conspiratorial fantasy that I have in mind. In using the expression “paranoid style” I am not speaking in a clinical sense, but borrowing a clinical term for other purposes. I have neither the competence nor the desire to classify any figures of the past or present as certifiable lunatics., In fact, the idea of the paranoid style as a force in politics would have little contemporary relevance or historical value if it were applied only to men with profoundly disturbed minds. It is the use of paranoid modes of expression by more or less normal people that makes the phenomenon significant.
Of course this term is pejorative, and it is meant to be; the paranoid style has a greater affinity for bad causes than good. But nothing really prevents a sound program or demand from being advocated in the paranoid style. Style has more to do with the way in which ideas are believed than with the truth or falsity of their content. I am interested here in getting at our political psychology through our political rhetoric. The paranoid style is an old and recurrent phenomenon in our public life which has been frequently linked with movements of suspicious discontent.
Here is Senator McCarthy, speaking in June 1951 about the parlous situation of the United States:
Now turn back fifty years to a manifesto signed in 1895 by a number of leaders of the Populist party:
Next, a Texas newspaper article of 1855:
These quotations give the keynote of the style. In the history of the United States one find it, for example, in the anti-Masonic movement, the nativist and anti-Catholic movement, in certain spokesmen of abolitionism who regarded the United States as being in the grip of a slaveholders’ conspiracy, in many alarmists about the Mormons, in some Greenback and Populist writers who constructed a great conspiracy of international bankers, in the exposure of a munitions makers’ conspiracy of World War I, in the popular left-wing press, in the contemporary American right wing, and on both sides of the race controversy today, among White Citizens’ Councils and Black Muslims. I do not propose to try to trace the variations of the paranoid style that can be found in all these movements, but will confine myself to a few leading episodes in our past history in which the style emerged in full and archetypal splendor.
Illuminism and Masonry
I begin with a particularly revealing episode—the panic that broke out in some quarters at the end of the eighteenth century over the allegedly subversive activities of the Bavarian Illuminati. This panic was a part of the general reaction to the French Revolution. In the United States it was heightened by the response of certain men, mostly in New England and among the established clergy, to the rise of Jeffersonian democracy. Illuminism had been started in 1776 by Adam Weishaupt, a professor of law at the University of Ingolstadt. Its teachings today seem to be no more than another version of Enlightenment rationalism, spiced with the anticlerical atmosphere of eighteenth-century Bavaria. It was a somewhat naïve and utopian movement which aspired ultimately to bring the human race under the rules of reason. Its humanitarian rationalism appears to have acquired a fairly wide influence in Masonic lodges.
Americans first learned of Illumism in 1797, from a volume published in Edinburgh (later reprinted in New York) under the title, Proofs of a Conspiracy Against All the Religions and Governments of Europe, Carried on in the Secret Meetings of Free Masons, Illuminati, and Reading Societies. Its author was a well-known Scottish scientist, John Robison, who had himself been a somewhat casual adherent of Masonry in Britain, but whose imagination had been inflamed by what he considered to be the far less innocent Masonic movement on the Continent. Robison seems to have made his work as factual as he could, but when he came to estimating the moral character and the political influence of Illuminism, he made the characteristic paranoid leap into fantasy. The association, he thought, was formed “for the express purpose of rooting out all religious establishments, and overturning all the existing governments of europe.” It had become “one great and wicked project fermenting and working all over Europe.” And to it he attributed a central role in bringing about the French Revolution. He saw it as a libertine, anti-Christian movement, given to the corruption of women, the cultivation of sensual pleasures, and the violation of property rights. Its members had plans for making a tea that caused abortion—a secret substance that “blinds or kills when spurted in the face,” and a device that sounds like a stench bomb—a “method for filling a bedchamber with pestilential vapours.”
These notions were quick to make themselves felt in America. In May 1798, a minister of the Massachusetts Congregational establishment in Boston, Jedidiah Morse, delivered a timely sermon to the young country, which was then sharply divided between Jeffersonians and Federalists, Francophiles and Anglomen. Having read Robison, Morse was convinced of a Jacobinical plot touched off by Illuminism, and that the country should be rallied to defend itself. His warnings were heeded throughout New England wherever Federalists brooded about the rising tide of religious infidelity or Jeffersonian democracy. Timothy Dwight, the president of Yale, followed Morse’s sermon with a Fourth-of-July discourse on The Duty of Americans in the Present Crisis, in which he held forth against the Antichrist in his own glowing rhetoric. Soon the pulpits of New England were ringing with denunciations of the Illuminati, as though the country were swarming with them.
The anti-Masonic movement of the late 1820s and the 1830s took up and extended the obsession with conspiracy. At first, this movement may seem to be no more than an extension or repetition of the anti-Masonic theme sounded in the outcry against the Bavarian Illuminati. But whereas the panic of the 1790s was confined mainly to New England and linked to an ultraconservative point of view, the later anti-Masonic movement affected many parts of the northern United States, and was intimately linked with popular democracy and rural egalitarianism. Although anti-Masonry happened to be anti-Jacksonian (Jackson was a Mason), it manifested the same animus against the closure of opportunity for the common man and against aristocratic institutions that one finds in the Jacksonian crusade against the Bank of the United States.
The anti-Masonic movement was a product not merely of natural enthusiasm but also of the vicissitudes of party politics. It was joined and used by a great many men who did not fully share its original anti-Masonic feelings. It attracted the support of several reputable statement who had only mild sympathy with its fundamental bias, but who as politicians could not afford to ignore it. Still, it was a folk movement of considerable power, and the rural enthusiasts who provided its real impetus believed in it wholeheartedly.
As a secret society, Masonry was considered to be a standing conspiracy against republican government. It was held to be particularly liable to treason—for example, Aaron Burr’s famous conspiracy was alleged to have been conducted by Masons. Masonry was accused of constituting a separate system of loyalty, a separate imperium within the framework of federal and state governments, which was inconsistent with loyalty to them. Quite plausibly it was argued that the Masons had set up a jurisdiction of their own, with their own obligations and punishments, liable to enforcement even by the penalty of death. So basic was the conflict felt to be between secrecy and democracy that other, more innocent societies such as Phi Beta Kappa came under attack.
Since Masons were pledged to come to each other’s aid under circumstances of distress, and to extend fraternal indulgence at all times, is was held that the order nullified the enforcement of regular law. Masonic constables, sheriffs, juries, and judges must all be in league with Masonic criminals and fugitives. The press was believed to have been so “muzzled” by Masonic editors and proprietors that news of Masonic malfeasance could be suppressed. At a moment when almost every alleged citadel of privilege in America was under democratic assault, Masonry was attacked as a fraternity of the privileged, closing business opportunities and nearly monopolizing political offices.
Certain elements of truth and reality there may have been in these views of Masonry. What must be emphasized here, however, is the apocalyptic and absolutistic framework in which this hostility was commonly expressed. Anti-Masons were not content simply to say that secret societies were rather a bad idea. The author of the standard exposition of anti-Masonry declared that Freemasonry was “not only the most abominable but also the most dangerous institution that ever was imposed on man.…It may truly be said to be hell’s master piece.”
The Jesuit Threat
Fear of a Masonic plot had hardly been quieted when the rumors arose of a Catholic plot against American values. One meets here again the same frame of mind, but a different villain. The anti-Catholic movement converged with a growing nativism, and while they were not identical, together they cut such a wide swath in American life that they were bound to embrace many moderates to whom the paranoid style, in its full glory, did not appeal. Moreover, we need not dismiss out of hand as totally parochial or mean-spirited the desire of Yankee Americans to maintain an ethnically and religiously homogeneous society nor the particular Protestant commitments to individualism and freedom that were brought into play. But the movement had a large paranoid infusion, and the most influential anti-Catholic militants certainly had a strong affinity for the paranoid style.
Two books which appeared in 1835 described the new danger to the ?American way of life and may be taken as expressions of the anti-Catholic mentality. One, Foreign Conspiracies against the Liberties of the United States, was from the hand of the celebrated painter and inventor of the telegraph, S.F.B. Morse. “A conspiracy exists,” Morse proclaimed , and “its plans are already in operation…we are attacked in a vulnerable quarter which cannot be defended by our ships, our forts, or our armies.” The main source of the conspiracy Morse found in Metternich’s government: “Austria is now acting in this country. She has devised a grand scheme. She has organized a great plan for doing something here.…She has her Jesuit missionaries traveling through the land; she has supplied them with money, and has furnished a fountain for a regular supply.” Were the plot successful, Morse said, some scion of the House of Hapsburg would soon be installed as Emperor of the United States.
“It is an ascertained fact,” wrote another Protestant militant,
Lyman Beecher, the elder of a famous family and the father of Harriet Beecher Stowe, wrote in the same year his Plea for the West, in which he considered the possibility that the Christian millennium might come in the American states. Everything depended, in his judgment, upon what influences dominated the great West, where the future of the country lay. There Protestantism was engaged in a life-or-death struggle with Catholicism. “Whatever we do, it must be done quickly.…” A great tide of immigration, hostile to free institutions, was sweeping in upon the country, subsidized and sent by “the potentates of Europe,” multiplying tumult and violence, filling jails, crowding poorhouses, quadrupling taxation, and sending increasing thousands of voters to “lay their inexperienced hand upon the helm of our power.”
****************
The Paranoid Style in Action
The John Birch Society is attempting to suppress a television series about the United Nations by means of a mass letter-writing campaign to the sponsor,…The Xerox Corporation. The corporation, however, intends to go ahead with the programs.…
The July issue of the John Birch Society Bulletin…said an “avalanche of mail ought to convince them of the unwisdom of their proposed action—just as United Air Lines was persuaded to back down and take the U.N. insignia off their planes.” (A United Air Lines spokesman confirmed that the U.N. emblem was removed from its planes, following “considerable public reaction against it.”)
Birch official John Rousselot said, ”We hate to see a corporation of this country promote the U.N. when we know that it is an instrument of the Soviet Communist conspiracy.”
—San Francisco Chronicle, July 31, 1964
****************
Anti-Catholicism has always been the pornography of the Puritan. Whereas the anti-Masons had envisaged drinking bouts and had entertained themselves with sado-masochistic fantasies about the actual enforcement of grisly Masonic oaths,* the anti-Catholics invented an immense lore about libertine priests, the confessional as an opportunity for seduction, licentious convents and monasteries. Probably the most widely read contemporary book in the United States before Uncle Tom’s Cabin was a work supposedly written by one Maria Monk, entitled Awful Disclosures, which appeared in 1836. The author, who purported to have escaped from the Hotel Dieu nunnery in Montreal after five years there as novice and nun, reported her convent life in elaborate and circumstantial detail. She reported having been told by the Mother Superior that she must “obey the priests in all things”; to her “utter astonishment and horror,” she soon found what the nature of such obedience was. Infants born of convent liaisons were baptized and then killed, she said, so that they might ascend at once to heaven. Her book, hotly attacked and defended , continued to be read and believed even after her mother gave testimony that Maria had been somewhat addled ever since childhood after she had rammed a pencil into her head. Maria died in prison in 1849, after having been arrested in a brothel as a pickpocket.
Anti-Catholicism, like anti-Masonry, mixed its fortunes with American party politics, and it became an enduring factor in American politics. The American Protective Association of the 1890s revived it with ideological variations more suitable to the times—the depression of 1893, for example, was alleged to be an international creation of the Catholics who began it by starting a run on the banks. Some spokesmen of the movement circulated a bogus encyclical attributed to Leo XIII instructing American Catholics on a certain date in 1893 to exterminate all heretics, and a great many anti-Catholics daily expected a nationwide uprising. The myth of an impending Catholic war of mutilation and extermination of heretics persisted into the twentieth century.
Why They Feel Dispossessed
If, after our historically discontinuous examples of the paranoid style, we now take the long jump to the contemporary right wing, we find some rather important differences from the nineteenth-century movements. The spokesmen of those earlier movements felt that they stood for causes and personal types that were still in possession of their country—that they were fending off threats to a still established way of life. But the modern right wing, as Daniel Bell has put it, feels dispossessed: America has been largely taken away from them and their kind, though they are determined to try to repossess it and to prevent the final destructive act of subversion. The old American virtues have already been eaten away by cosmopolitans and intellectuals; the old competitive capitalism has been gradually undermined by socialistic and communistic schemers; the old national security and independence have been destroyed by treasonous plots, having as their most powerful agents not merely outsiders and foreigners as of old but major statesmen who are at the very centers of American power. Their predecessors had discovered conspiracies; the modern radical right finds conspiracy to be betrayal from on high.
Important changes may also be traced to the effects of the mass media. The villains of the modern right are much more vivid than those of their paranoid predecessors, much better known to the public; the literature of the paranoid style is by the same token richer and more circumstantial in personal description and personal invective. For the vaguely delineated villains of the anti-Masons, for the obscure and disguised Jesuit agents, the little-known papal delegates of the anti-Catholics, for the shadowy international bankers of the monetary conspiracies, we may now substitute eminent public figures like Presidents Roosevelt, Truman, and Eisenhower., secretaries of State like Marshall, Acheson, and Dulles, Justices of the Supreme Court like Frankfurter and Warren, and the whole battery of lesser but still famous and vivid alleged conspirators headed by Alger Hiss.
Events since 1939 have given the contemporary right-wing paranoid a vast theatre for his imagination, full of rich and proliferating detail, replete with realistic cues and undeniable proofs of the validity of his suspicions. The theatre of action is now the entire world, and he can draw not only on the events of World War II, but also on those of the Korean War and the Cold War. Any historian of warfare knows it is in good part a comedy of errors and a museum of incompetence; but if for every error and every act of incompetence one can substitute an act of treason, many points of fascinating interpretation are open to the paranoid imagination. In the end, the real mystery, for one who reads the primary works of paranoid scholarship, is not how the United States has been brought to its present dangerous position but how it has managed to survive at all.
The basic elements of contemporary right-wing thought can be reduced to three: First, there has been the now-familiar sustained conspiracy, running over more than a generation, and reaching its climax in Roosevelt’s New Deal, to undermine free capitalism, to bring the economy under the direction of the federal government, and to pave the way for socialism or communism. A great many right-wingers would agree with Frank Chodorov, the author of The Income Tax: The Root of All Evil, that this campaign began with the passage of the income-tax amendment to the Constitution in 1913.
The second contention is that top government officialdom has been so infiltrated by Communists that American policy, at least since the days leading up to Pearl Harbor, has been dominated by men who were shrewdly and consistently selling out American national interests.
Finally, the country is infused with a network of Communist agents, just as in the old days it was infiltrated by Jesuit agents, so that the whole apparatus of education, religion, the press, and the mass media is engaged in a common effort to paralyze the resistance of loyal Americans.
Perhaps the most representative document of the McCarthyist phase was a long indictment of Secretary of State George C. Marshall, delivered in 1951 in the Senate by senator McCarthy, and later published in a somewhat different form. McCarthy pictured Marshall was the focal figure in a betrayal of American interests stretching in time from the strategic plans for World War II to the formulation of the Marshall Plan. Marshal was associated with practically every American failure or defeat, McCarthy insisted, and none of this was either accident or incompetence. There was a “baffling pattern” of Marshall’s interventions in the war, which always conduced to the well-being of the Kremlin. The sharp decline in America’s relative strength from 1945 to 1951 did not “just happen”; it was “brought about, step by step, by will and intention,” the consequence not of mistakes but of a treasonous conspiracy, “a conspiracy on a scale so immense as to dwarf any previous such venture in the history of man.”
Today, the mantle of McCarthy has fallen on a retired candy manufacturer, Robert H. Welch, Jr., who is less strategically placed and has a much smaller but better organized following than the Senator. A few years ago Welch proclaimed that “Communist influences are now in almost complete control of our government”—note the care and scrupulousness of that “almost.” He has offered a full scale interpretation of our recent history n which Communists figure at every turn: They started a run on American banks in 1933 that forced their closure; they contrived the recognition of the Soviet Union by the United States in the same year, just in time to save the Soviets from economic collapse; they have stirred up the fuss over segregation in the South; they have taken over the Supreme Court and made it “one of the most important agencies of Communism.”
Close attention to history wins for Mr. Welch an insight into affairs that is given to few of us. “For many reasons and after a lot of study,” he wrote some years ago, “I personally believe [John Foster] Dulles to be a Communist agent.” The job of Professor Arthur F. Burns as head of Eisenhower’s Council of Economic Advisors was “merely a cover-up for Burns’s liaison work between Eisenhower and some of his Communist bosses.” Eisenhower’s brother Milton was “actually [his] superior and boss within the Communist party.” As for Eisenhower himself, Welch characterized him, in words that have made the candy manufacturer famous, as “a dedicated, conscious agent of the Communist conspiracy”—a conclusion, he added, “based on an accumulation of detailed evidence so extensive and so palpable that it seems to put this conviction beyond any reasonable doubt.”
Emulating the Enemy
The paranoid spokesman sees the fate of conspiracy in apocalyptic terms—he traffics in the birth and death of whole worlds, whole political orders, whole systems of human values. He is always manning the barricades of civilization. He constantly lives at a turning point. Like religious millenialists he expresses the anxiety of those who are living through the last days and he is sometimes disposed to set a date fort the apocalypse. (“Time is running out,” said Welch in 1951. “Evidence is piling up on many sides and from many sources that October 1952 is the fatal month when Stalin will attack.”)
As a member of the avant-garde who is capable of perceiving the conspiracy before it is fully obvious to an as yet unaroused public, the paranoid is a militant leader. He does not see social conflict as something to be mediated and compromised, in the manner of the working politician. Since what is at stake is always a conflict between absolute good and absolute evil, what is necessary is not compromise but the will to fight things out to a finish. Since the enemy is thought of as being totally evil and totally unappeasable, he must be totally eliminated—if not from the world, at least from the theatre of operations to which the paranoid directs his attention. This demand for total triumph leads to the formulation of hopelessly unrealistic goals, and since these goals are not even remotely attainable, failure constantly heightens the paranoid’s sense of frustration. Even partial success leaves him with the same feeling of powerlessness with which he began, and this in turn only strengthens his awareness of the vast and terrifying quality of the enemy he opposes.
The enemy is clearly delineated: he is a perfect model of malice, a kind of amoral superman—sinister, ubiquitous, powerful, cruel, sensual, luxury-loving. Unlike the rest of us, the enemy is not caught in the toils of the vast mechanism of history, himself a victim of his past, his desires, his limitations. He wills, indeed he manufactures, the mechanism of history, or tries to deflect the normal course of history in an evil way. He makes crises, starts runs on banks, causes depressions, manufactures disasters, and then enjoys and profits from the misery he has produced. The paranoid’s interpretation of history is distinctly personal: decisive events are not taken as part of the stream of history, but as the consequences of someone’s will. Very often the enemy is held to possess some especially effective source of power: he controls the press; he has unlimited funds; he has a new secret for influencing the mind (brainwashing); he has a special technique for seduction (the Catholic confessional).
It is hard to resist the conclusion that this enemy is on many counts the projection of the self; both the ideal and the unacceptable aspects of the self are attributed to him. The enemy may be the cosmopolitan intellectual, but the paranoid will outdo him in the apparatus of scholarship, even of pedantry. Secret organizations set up to combat secret organizations give the same flattery. The Ku Klux Klan imitated Catholicism to the point of donning priestly vestments, developing an elaborate ritual and an equally elaborate hierarchy. The John Birch Society emulates Communist cells and quasi-secret operation through “front” groups, and preaches a ruthless prosecution of the ideological war along lines very similar to those it finds in the Communist enemy.* Spokesmen of the various fundamentalist anti-Communist “crusades” openly express their admiration for the dedication and discipline the Communist cause calls forth.
On the other hand, the sexual freedom often attributed to the enemy, his lack of moral inhibition, his possession of especially effective techniques for fulfilling his desires, give exponents of the paranoid style an opportunity to project and express unacknowledgeable aspects of their own psychological concerns. Catholics and Mormons—later, Negroes and Jews—have lent themselves to a preoccupation with illicit sex. Very often the fantasies of true believers reveal strong sadomasochistic outlets, vividly expressed, for example, in the delight of anti-Masons with the cruelty of Masonic punishments.
Renegades and Pedants
A special significance attaches to the figure of the renegade from the enemy cause. The anti-Masonic movement seemed at times to be the creation of ex-Masons; certainly the highest significance was attributed to their revelations, and every word they said was believed. Anti-Catholicism used the runaway nun and the apostate priest; the place of ex-Communists in the avant-garde anti-Communist movements of our time is well known. In some part, the special authority accorded the renegade derives from the obsession with secrecy so characteristics of such movements: the renegade is the man or woman who has been in the Arcanum, and brings forth with him or her the final verification of suspicions which might otherwise have been doubted by a skeptical world. But I think there is a deeper eschatological significance that attaches to the person of the renegade: in the spiritual wrestling match between good and evil which is the paranoid’s archetypal model of the world, the renegade is living proof that all the conversions are not made by the wrong side. He brings with him the promise of redemption and victory.
A final characteristic of the paranoid style is related to the quality of its pedantry. One of the impressive things about paranoid literature is the contrast between its fantasied conclusions and the almost touching concern with factuality it invariably shows. It produces heroic strivings for evidence to prove that the unbelievable is the only thing that can be believed. Of course, there are highbrow, lowbrow, and middlebrow paranoids, as there are likely to be in any political tendency. But respectable paranoid literature not only starts from certain moral commitments that can indeed be justified but also carefully and all but obsessively accumulates :evidence.” The difference between this “evidence” and that commonly employed by others is that it seems less a means of entering into normal political controversy than a means of warding off the profane intrusion of the secular political world. The paranoid seems to have little expectation of actually convincing a hostile world, but he can accumulate evidence in order to protect his cherished convictions from it.
Paranoid writing begins with certain broad defensible judgments. There was something to be said for the anti-Masons. After all, a secret society composed of influential men bound by special obligations could conceivable pose some kind of threat to the civil order in which they were suspended. There was also something to be said for the Protestant principles of individuality and freedom, as well as for the nativist desire to develop in North America a homogeneous civilization. Again, in our time an actual laxity in security allowed some Communists to find a place in governmental circles, and innumerable decisions of World War II and the Cold War could be faulted.
The higher paranoid scholarship is nothing if not coherent—in fact the paranoid mind is far more coherent than the real world. It is nothing if not scholarly in technique. McCarthy’s 96-page pamphlet, McCarthyism, contains no less than 313 footnote references, and Mr. Welch’s incredible assault on Eisenhower, The Politician, has one hundred pages of bibliography and notes. The entire right-wing movement of our time is a parade of experts, study groups, monographs, footnotes, and bibliographies. Sometimes the right-wing striving for scholarly depth and an inclusive world view has startling consequences: Mr. Welch, for example, has charged that the popularity of Arnold Toynbee’s historical work is the consequence of a plot on the part of Fabians, “Labour party bosses in England,” and various members of the Anglo-American “liberal establishment” to overshadow the much more truthful and illuminating work of Oswald Spengler.
The Double Sufferer
The paranoid style is not confined to our own country and time; it is an international phenomenon. Studying the millennial sects of Europe from the eleventh to the sixteenth century, Norman Cohn believed he found a persistent psychic complex that corresponds broadly with what I have been considering—a style made up of certain preoccupations and fantasies: “the megalomaniac view of oneself as the Elect, wholly good, abominably persecuted, yet assured of ultimate triumph; the attribution of gigantic and demonic powers to the adversary; the refusal to accept the ineluctable limitations and imperfections of human existence, such as transience, dissention, conflict, fallibility whether intellectual or moral; the obsession with inerrable prophecies…systematized misinterpretations, always gross and often grotesque.”
This glimpse across a long span of time emboldens me to make the conjecture—it is no more than that—that a mentality disposed to see the world in this way may be a persistent psychic phenomenon, more or less constantly affecting a modest minority of the population. But certain religious traditions, certain social structures and national inheritances, certain historical catastrophes or frustrations may be conducive to the release of such psychic energies, and to situations in which they can more readily be built into mass movements or political parties. In American experience ethnic and religious conflict have plainly been a major focus for militant and suspicious minds of this sort, but class conflicts also can mobilize such energies. Perhaps the central situation conducive to the diffusion of the paranoid tendency is a confrontation of opposed interests which are (or are felt to be) totally irreconcilable, and thus by nature not susceptible to the normal political processes of bargain and compromise. The situation becomes worse when the representatives of a particular social interest—perhaps because of the very unrealistic and unrealizable nature of its demands—are shut out of the political process. Having no access to political bargaining or the making of decisions, they find their original conception that the world of power is sinister and malicious fully confirmed. They see only the consequences of power—and this through distorting lenses—and have no chance to observe its actual machinery. A distinguished historian has said that one of the most valuable things about history is that it teaches us how things do not happen. It is precisely this kind of awareness that the paranoid fails to develop. He has a special resistance of his own, of course, to developing such awareness, but circumstances often deprive him of exposure to events that might enlighten him—and in any case he resists enlightenment.
We are all sufferers from history, but the paranoid is a double sufferer, since he is afflicted not only by the real world, with the rest of us, but by his fantasies as well.
† Richard Hofstadter is DeWitt Clinton Professor of American History at Columbia University. His latest book, “Anti-intellectualism in American Life,” was awarded the Pulitzer Prize for General Nonfiction earlier this year. This essay is adapted from the Herbert Spencer Lecture delivered at Oxford University in November 1963.
* Many anti-Masons had been fascinated by the penalties involved if Masons failed to live up to their obligations. My own favorite is the oath attributed to a royal archmason who invited “having my skull smote off and my brains exposed to the scorching rays of the sun.”
* In his recent book, How to Win an Election, Stephen C. Shadegg cites a statement attributed to Mao Tse-tung: “Give me just two or three men in a village and I will take the village.” Shadegg comments: “ In the Goldwater campaigns of 1952 and 1958 and in all other campaigns where I have served as consultant I have followed the advice of Mao Tse-tung.” “I would suggest,” writes senator Goldwater in Why Not Victory? “that we analyze and copy the strategy of the enemy; theirs has worked and ours has not.
Harper’s Magazine, November 1964, pp. 77-86.
It had been around a long time before the Radical Right discovered it—and its targets have ranged from “the international bankers” to Masons, Jesuits, and munitions makers.
American politics has often been an arena for angry minds. In recent years we have seen angry minds at work mainly among extreme right-wingers, who have now demonstrated in the Goldwater movement how much political leverage can be got out of the animosities and passions of a small minority. But behind this I believe there is a style of mind that is far from new and that is not necessarily right-wind. I call it the paranoid style simply because no other word adequately evokes the sense of heated exaggeration, suspiciousness, and conspiratorial fantasy that I have in mind. In using the expression “paranoid style” I am not speaking in a clinical sense, but borrowing a clinical term for other purposes. I have neither the competence nor the desire to classify any figures of the past or present as certifiable lunatics., In fact, the idea of the paranoid style as a force in politics would have little contemporary relevance or historical value if it were applied only to men with profoundly disturbed minds. It is the use of paranoid modes of expression by more or less normal people that makes the phenomenon significant.
Of course this term is pejorative, and it is meant to be; the paranoid style has a greater affinity for bad causes than good. But nothing really prevents a sound program or demand from being advocated in the paranoid style. Style has more to do with the way in which ideas are believed than with the truth or falsity of their content. I am interested here in getting at our political psychology through our political rhetoric. The paranoid style is an old and recurrent phenomenon in our public life which has been frequently linked with movements of suspicious discontent.
Here is Senator McCarthy, speaking in June 1951 about the parlous situation of the United States:
How can we account for our present situation unless we believe that men high in this government are concerting to deliver us to disaster? This must be the product of a great conspiracy on a scale so immense as to dwarf any previous such venture in the history of man. A conspiracy of infamy so black that, which it is finally exposed, its principals shall be forever deserving of the maledictions of all honest men.…What can be made of this unbroken series of decisions and acts contributing to the strategy of defeat? They cannot be attributed to incompetence.…The laws of probability would dictate that part of…[the] decisions would serve the country’s interest.
Now turn back fifty years to a manifesto signed in 1895 by a number of leaders of the Populist party:
As early as 1865-66 a conspiracy was entered into between the gold gamblers of Europe and America.…For nearly thirty years these conspirators have kept the people quarreling over less important matters while they have pursued with unrelenting zeal their one central purpose.…Every device of treachery, every resource of statecraft, and every artifice known to the secret cabals of the international gold ring are being used to deal a blow to the prosperity of the people and the financial and commercial independence of the country.
Next, a Texas newspaper article of 1855:
…It is a notorious fact that the Monarchs of Europe and the Pope of Rome are at this very moment plotting our destruction and threatening the extinction of our political, civil, and religious institutions. We have the best reasons for believing that corruption has found its way into our Executive Chamber, and that our Executive head is tainted with the infectious venom of Catholicism.…The Pope has recently sent his ambassador of state to this country on a secret commission, the effect of which is an extraordinary boldness of the Catholic church throughout the United States.…These minions of the Pope are boldly insulting our Senators; reprimanding our Statesmen; propagating the adulterous union of Church and State; abusing with foul calumny all governments but Catholic, and spewing out the bitterest execrations on all Protestantism. The Catholics in the United States receive from abroad more than $200,000 annually for the propagation of their creed. Add to this the vast revenues collected here.…
These quotations give the keynote of the style. In the history of the United States one find it, for example, in the anti-Masonic movement, the nativist and anti-Catholic movement, in certain spokesmen of abolitionism who regarded the United States as being in the grip of a slaveholders’ conspiracy, in many alarmists about the Mormons, in some Greenback and Populist writers who constructed a great conspiracy of international bankers, in the exposure of a munitions makers’ conspiracy of World War I, in the popular left-wing press, in the contemporary American right wing, and on both sides of the race controversy today, among White Citizens’ Councils and Black Muslims. I do not propose to try to trace the variations of the paranoid style that can be found in all these movements, but will confine myself to a few leading episodes in our past history in which the style emerged in full and archetypal splendor.
Illuminism and Masonry
I begin with a particularly revealing episode—the panic that broke out in some quarters at the end of the eighteenth century over the allegedly subversive activities of the Bavarian Illuminati. This panic was a part of the general reaction to the French Revolution. In the United States it was heightened by the response of certain men, mostly in New England and among the established clergy, to the rise of Jeffersonian democracy. Illuminism had been started in 1776 by Adam Weishaupt, a professor of law at the University of Ingolstadt. Its teachings today seem to be no more than another version of Enlightenment rationalism, spiced with the anticlerical atmosphere of eighteenth-century Bavaria. It was a somewhat naïve and utopian movement which aspired ultimately to bring the human race under the rules of reason. Its humanitarian rationalism appears to have acquired a fairly wide influence in Masonic lodges.
Americans first learned of Illumism in 1797, from a volume published in Edinburgh (later reprinted in New York) under the title, Proofs of a Conspiracy Against All the Religions and Governments of Europe, Carried on in the Secret Meetings of Free Masons, Illuminati, and Reading Societies. Its author was a well-known Scottish scientist, John Robison, who had himself been a somewhat casual adherent of Masonry in Britain, but whose imagination had been inflamed by what he considered to be the far less innocent Masonic movement on the Continent. Robison seems to have made his work as factual as he could, but when he came to estimating the moral character and the political influence of Illuminism, he made the characteristic paranoid leap into fantasy. The association, he thought, was formed “for the express purpose of rooting out all religious establishments, and overturning all the existing governments of europe.” It had become “one great and wicked project fermenting and working all over Europe.” And to it he attributed a central role in bringing about the French Revolution. He saw it as a libertine, anti-Christian movement, given to the corruption of women, the cultivation of sensual pleasures, and the violation of property rights. Its members had plans for making a tea that caused abortion—a secret substance that “blinds or kills when spurted in the face,” and a device that sounds like a stench bomb—a “method for filling a bedchamber with pestilential vapours.”
These notions were quick to make themselves felt in America. In May 1798, a minister of the Massachusetts Congregational establishment in Boston, Jedidiah Morse, delivered a timely sermon to the young country, which was then sharply divided between Jeffersonians and Federalists, Francophiles and Anglomen. Having read Robison, Morse was convinced of a Jacobinical plot touched off by Illuminism, and that the country should be rallied to defend itself. His warnings were heeded throughout New England wherever Federalists brooded about the rising tide of religious infidelity or Jeffersonian democracy. Timothy Dwight, the president of Yale, followed Morse’s sermon with a Fourth-of-July discourse on The Duty of Americans in the Present Crisis, in which he held forth against the Antichrist in his own glowing rhetoric. Soon the pulpits of New England were ringing with denunciations of the Illuminati, as though the country were swarming with them.
The anti-Masonic movement of the late 1820s and the 1830s took up and extended the obsession with conspiracy. At first, this movement may seem to be no more than an extension or repetition of the anti-Masonic theme sounded in the outcry against the Bavarian Illuminati. But whereas the panic of the 1790s was confined mainly to New England and linked to an ultraconservative point of view, the later anti-Masonic movement affected many parts of the northern United States, and was intimately linked with popular democracy and rural egalitarianism. Although anti-Masonry happened to be anti-Jacksonian (Jackson was a Mason), it manifested the same animus against the closure of opportunity for the common man and against aristocratic institutions that one finds in the Jacksonian crusade against the Bank of the United States.
The anti-Masonic movement was a product not merely of natural enthusiasm but also of the vicissitudes of party politics. It was joined and used by a great many men who did not fully share its original anti-Masonic feelings. It attracted the support of several reputable statement who had only mild sympathy with its fundamental bias, but who as politicians could not afford to ignore it. Still, it was a folk movement of considerable power, and the rural enthusiasts who provided its real impetus believed in it wholeheartedly.
As a secret society, Masonry was considered to be a standing conspiracy against republican government. It was held to be particularly liable to treason—for example, Aaron Burr’s famous conspiracy was alleged to have been conducted by Masons. Masonry was accused of constituting a separate system of loyalty, a separate imperium within the framework of federal and state governments, which was inconsistent with loyalty to them. Quite plausibly it was argued that the Masons had set up a jurisdiction of their own, with their own obligations and punishments, liable to enforcement even by the penalty of death. So basic was the conflict felt to be between secrecy and democracy that other, more innocent societies such as Phi Beta Kappa came under attack.
Since Masons were pledged to come to each other’s aid under circumstances of distress, and to extend fraternal indulgence at all times, is was held that the order nullified the enforcement of regular law. Masonic constables, sheriffs, juries, and judges must all be in league with Masonic criminals and fugitives. The press was believed to have been so “muzzled” by Masonic editors and proprietors that news of Masonic malfeasance could be suppressed. At a moment when almost every alleged citadel of privilege in America was under democratic assault, Masonry was attacked as a fraternity of the privileged, closing business opportunities and nearly monopolizing political offices.
Certain elements of truth and reality there may have been in these views of Masonry. What must be emphasized here, however, is the apocalyptic and absolutistic framework in which this hostility was commonly expressed. Anti-Masons were not content simply to say that secret societies were rather a bad idea. The author of the standard exposition of anti-Masonry declared that Freemasonry was “not only the most abominable but also the most dangerous institution that ever was imposed on man.…It may truly be said to be hell’s master piece.”
The Jesuit Threat
Fear of a Masonic plot had hardly been quieted when the rumors arose of a Catholic plot against American values. One meets here again the same frame of mind, but a different villain. The anti-Catholic movement converged with a growing nativism, and while they were not identical, together they cut such a wide swath in American life that they were bound to embrace many moderates to whom the paranoid style, in its full glory, did not appeal. Moreover, we need not dismiss out of hand as totally parochial or mean-spirited the desire of Yankee Americans to maintain an ethnically and religiously homogeneous society nor the particular Protestant commitments to individualism and freedom that were brought into play. But the movement had a large paranoid infusion, and the most influential anti-Catholic militants certainly had a strong affinity for the paranoid style.
Two books which appeared in 1835 described the new danger to the ?American way of life and may be taken as expressions of the anti-Catholic mentality. One, Foreign Conspiracies against the Liberties of the United States, was from the hand of the celebrated painter and inventor of the telegraph, S.F.B. Morse. “A conspiracy exists,” Morse proclaimed , and “its plans are already in operation…we are attacked in a vulnerable quarter which cannot be defended by our ships, our forts, or our armies.” The main source of the conspiracy Morse found in Metternich’s government: “Austria is now acting in this country. She has devised a grand scheme. She has organized a great plan for doing something here.…She has her Jesuit missionaries traveling through the land; she has supplied them with money, and has furnished a fountain for a regular supply.” Were the plot successful, Morse said, some scion of the House of Hapsburg would soon be installed as Emperor of the United States.
“It is an ascertained fact,” wrote another Protestant militant,
that Jesuits are prowling about all parts of the United States in every possible disguise, expressly to ascertain the advantageous situations and modes to disseminate Popery. A minister of the Gospel from Ohio has informed us that he discovered one carrying on his devices in his congregation; and he says that the western country swarms with them under the name of puppet show men, dancing masters, music teachers, peddlers of images and ornaments, barrel organ players, and similar practitioners.
Lyman Beecher, the elder of a famous family and the father of Harriet Beecher Stowe, wrote in the same year his Plea for the West, in which he considered the possibility that the Christian millennium might come in the American states. Everything depended, in his judgment, upon what influences dominated the great West, where the future of the country lay. There Protestantism was engaged in a life-or-death struggle with Catholicism. “Whatever we do, it must be done quickly.…” A great tide of immigration, hostile to free institutions, was sweeping in upon the country, subsidized and sent by “the potentates of Europe,” multiplying tumult and violence, filling jails, crowding poorhouses, quadrupling taxation, and sending increasing thousands of voters to “lay their inexperienced hand upon the helm of our power.”
****************
The Paranoid Style in Action
The John Birch Society is attempting to suppress a television series about the United Nations by means of a mass letter-writing campaign to the sponsor,…The Xerox Corporation. The corporation, however, intends to go ahead with the programs.…
The July issue of the John Birch Society Bulletin…said an “avalanche of mail ought to convince them of the unwisdom of their proposed action—just as United Air Lines was persuaded to back down and take the U.N. insignia off their planes.” (A United Air Lines spokesman confirmed that the U.N. emblem was removed from its planes, following “considerable public reaction against it.”)
Birch official John Rousselot said, ”We hate to see a corporation of this country promote the U.N. when we know that it is an instrument of the Soviet Communist conspiracy.”
—San Francisco Chronicle, July 31, 1964
****************
Anti-Catholicism has always been the pornography of the Puritan. Whereas the anti-Masons had envisaged drinking bouts and had entertained themselves with sado-masochistic fantasies about the actual enforcement of grisly Masonic oaths,* the anti-Catholics invented an immense lore about libertine priests, the confessional as an opportunity for seduction, licentious convents and monasteries. Probably the most widely read contemporary book in the United States before Uncle Tom’s Cabin was a work supposedly written by one Maria Monk, entitled Awful Disclosures, which appeared in 1836. The author, who purported to have escaped from the Hotel Dieu nunnery in Montreal after five years there as novice and nun, reported her convent life in elaborate and circumstantial detail. She reported having been told by the Mother Superior that she must “obey the priests in all things”; to her “utter astonishment and horror,” she soon found what the nature of such obedience was. Infants born of convent liaisons were baptized and then killed, she said, so that they might ascend at once to heaven. Her book, hotly attacked and defended , continued to be read and believed even after her mother gave testimony that Maria had been somewhat addled ever since childhood after she had rammed a pencil into her head. Maria died in prison in 1849, after having been arrested in a brothel as a pickpocket.
Anti-Catholicism, like anti-Masonry, mixed its fortunes with American party politics, and it became an enduring factor in American politics. The American Protective Association of the 1890s revived it with ideological variations more suitable to the times—the depression of 1893, for example, was alleged to be an international creation of the Catholics who began it by starting a run on the banks. Some spokesmen of the movement circulated a bogus encyclical attributed to Leo XIII instructing American Catholics on a certain date in 1893 to exterminate all heretics, and a great many anti-Catholics daily expected a nationwide uprising. The myth of an impending Catholic war of mutilation and extermination of heretics persisted into the twentieth century.
Why They Feel Dispossessed
If, after our historically discontinuous examples of the paranoid style, we now take the long jump to the contemporary right wing, we find some rather important differences from the nineteenth-century movements. The spokesmen of those earlier movements felt that they stood for causes and personal types that were still in possession of their country—that they were fending off threats to a still established way of life. But the modern right wing, as Daniel Bell has put it, feels dispossessed: America has been largely taken away from them and their kind, though they are determined to try to repossess it and to prevent the final destructive act of subversion. The old American virtues have already been eaten away by cosmopolitans and intellectuals; the old competitive capitalism has been gradually undermined by socialistic and communistic schemers; the old national security and independence have been destroyed by treasonous plots, having as their most powerful agents not merely outsiders and foreigners as of old but major statesmen who are at the very centers of American power. Their predecessors had discovered conspiracies; the modern radical right finds conspiracy to be betrayal from on high.
Important changes may also be traced to the effects of the mass media. The villains of the modern right are much more vivid than those of their paranoid predecessors, much better known to the public; the literature of the paranoid style is by the same token richer and more circumstantial in personal description and personal invective. For the vaguely delineated villains of the anti-Masons, for the obscure and disguised Jesuit agents, the little-known papal delegates of the anti-Catholics, for the shadowy international bankers of the monetary conspiracies, we may now substitute eminent public figures like Presidents Roosevelt, Truman, and Eisenhower., secretaries of State like Marshall, Acheson, and Dulles, Justices of the Supreme Court like Frankfurter and Warren, and the whole battery of lesser but still famous and vivid alleged conspirators headed by Alger Hiss.
Events since 1939 have given the contemporary right-wing paranoid a vast theatre for his imagination, full of rich and proliferating detail, replete with realistic cues and undeniable proofs of the validity of his suspicions. The theatre of action is now the entire world, and he can draw not only on the events of World War II, but also on those of the Korean War and the Cold War. Any historian of warfare knows it is in good part a comedy of errors and a museum of incompetence; but if for every error and every act of incompetence one can substitute an act of treason, many points of fascinating interpretation are open to the paranoid imagination. In the end, the real mystery, for one who reads the primary works of paranoid scholarship, is not how the United States has been brought to its present dangerous position but how it has managed to survive at all.
The basic elements of contemporary right-wing thought can be reduced to three: First, there has been the now-familiar sustained conspiracy, running over more than a generation, and reaching its climax in Roosevelt’s New Deal, to undermine free capitalism, to bring the economy under the direction of the federal government, and to pave the way for socialism or communism. A great many right-wingers would agree with Frank Chodorov, the author of The Income Tax: The Root of All Evil, that this campaign began with the passage of the income-tax amendment to the Constitution in 1913.
The second contention is that top government officialdom has been so infiltrated by Communists that American policy, at least since the days leading up to Pearl Harbor, has been dominated by men who were shrewdly and consistently selling out American national interests.
Finally, the country is infused with a network of Communist agents, just as in the old days it was infiltrated by Jesuit agents, so that the whole apparatus of education, religion, the press, and the mass media is engaged in a common effort to paralyze the resistance of loyal Americans.
Perhaps the most representative document of the McCarthyist phase was a long indictment of Secretary of State George C. Marshall, delivered in 1951 in the Senate by senator McCarthy, and later published in a somewhat different form. McCarthy pictured Marshall was the focal figure in a betrayal of American interests stretching in time from the strategic plans for World War II to the formulation of the Marshall Plan. Marshal was associated with practically every American failure or defeat, McCarthy insisted, and none of this was either accident or incompetence. There was a “baffling pattern” of Marshall’s interventions in the war, which always conduced to the well-being of the Kremlin. The sharp decline in America’s relative strength from 1945 to 1951 did not “just happen”; it was “brought about, step by step, by will and intention,” the consequence not of mistakes but of a treasonous conspiracy, “a conspiracy on a scale so immense as to dwarf any previous such venture in the history of man.”
Today, the mantle of McCarthy has fallen on a retired candy manufacturer, Robert H. Welch, Jr., who is less strategically placed and has a much smaller but better organized following than the Senator. A few years ago Welch proclaimed that “Communist influences are now in almost complete control of our government”—note the care and scrupulousness of that “almost.” He has offered a full scale interpretation of our recent history n which Communists figure at every turn: They started a run on American banks in 1933 that forced their closure; they contrived the recognition of the Soviet Union by the United States in the same year, just in time to save the Soviets from economic collapse; they have stirred up the fuss over segregation in the South; they have taken over the Supreme Court and made it “one of the most important agencies of Communism.”
Close attention to history wins for Mr. Welch an insight into affairs that is given to few of us. “For many reasons and after a lot of study,” he wrote some years ago, “I personally believe [John Foster] Dulles to be a Communist agent.” The job of Professor Arthur F. Burns as head of Eisenhower’s Council of Economic Advisors was “merely a cover-up for Burns’s liaison work between Eisenhower and some of his Communist bosses.” Eisenhower’s brother Milton was “actually [his] superior and boss within the Communist party.” As for Eisenhower himself, Welch characterized him, in words that have made the candy manufacturer famous, as “a dedicated, conscious agent of the Communist conspiracy”—a conclusion, he added, “based on an accumulation of detailed evidence so extensive and so palpable that it seems to put this conviction beyond any reasonable doubt.”
Emulating the Enemy
The paranoid spokesman sees the fate of conspiracy in apocalyptic terms—he traffics in the birth and death of whole worlds, whole political orders, whole systems of human values. He is always manning the barricades of civilization. He constantly lives at a turning point. Like religious millenialists he expresses the anxiety of those who are living through the last days and he is sometimes disposed to set a date fort the apocalypse. (“Time is running out,” said Welch in 1951. “Evidence is piling up on many sides and from many sources that October 1952 is the fatal month when Stalin will attack.”)
As a member of the avant-garde who is capable of perceiving the conspiracy before it is fully obvious to an as yet unaroused public, the paranoid is a militant leader. He does not see social conflict as something to be mediated and compromised, in the manner of the working politician. Since what is at stake is always a conflict between absolute good and absolute evil, what is necessary is not compromise but the will to fight things out to a finish. Since the enemy is thought of as being totally evil and totally unappeasable, he must be totally eliminated—if not from the world, at least from the theatre of operations to which the paranoid directs his attention. This demand for total triumph leads to the formulation of hopelessly unrealistic goals, and since these goals are not even remotely attainable, failure constantly heightens the paranoid’s sense of frustration. Even partial success leaves him with the same feeling of powerlessness with which he began, and this in turn only strengthens his awareness of the vast and terrifying quality of the enemy he opposes.
The enemy is clearly delineated: he is a perfect model of malice, a kind of amoral superman—sinister, ubiquitous, powerful, cruel, sensual, luxury-loving. Unlike the rest of us, the enemy is not caught in the toils of the vast mechanism of history, himself a victim of his past, his desires, his limitations. He wills, indeed he manufactures, the mechanism of history, or tries to deflect the normal course of history in an evil way. He makes crises, starts runs on banks, causes depressions, manufactures disasters, and then enjoys and profits from the misery he has produced. The paranoid’s interpretation of history is distinctly personal: decisive events are not taken as part of the stream of history, but as the consequences of someone’s will. Very often the enemy is held to possess some especially effective source of power: he controls the press; he has unlimited funds; he has a new secret for influencing the mind (brainwashing); he has a special technique for seduction (the Catholic confessional).
It is hard to resist the conclusion that this enemy is on many counts the projection of the self; both the ideal and the unacceptable aspects of the self are attributed to him. The enemy may be the cosmopolitan intellectual, but the paranoid will outdo him in the apparatus of scholarship, even of pedantry. Secret organizations set up to combat secret organizations give the same flattery. The Ku Klux Klan imitated Catholicism to the point of donning priestly vestments, developing an elaborate ritual and an equally elaborate hierarchy. The John Birch Society emulates Communist cells and quasi-secret operation through “front” groups, and preaches a ruthless prosecution of the ideological war along lines very similar to those it finds in the Communist enemy.* Spokesmen of the various fundamentalist anti-Communist “crusades” openly express their admiration for the dedication and discipline the Communist cause calls forth.
On the other hand, the sexual freedom often attributed to the enemy, his lack of moral inhibition, his possession of especially effective techniques for fulfilling his desires, give exponents of the paranoid style an opportunity to project and express unacknowledgeable aspects of their own psychological concerns. Catholics and Mormons—later, Negroes and Jews—have lent themselves to a preoccupation with illicit sex. Very often the fantasies of true believers reveal strong sadomasochistic outlets, vividly expressed, for example, in the delight of anti-Masons with the cruelty of Masonic punishments.
Renegades and Pedants
A special significance attaches to the figure of the renegade from the enemy cause. The anti-Masonic movement seemed at times to be the creation of ex-Masons; certainly the highest significance was attributed to their revelations, and every word they said was believed. Anti-Catholicism used the runaway nun and the apostate priest; the place of ex-Communists in the avant-garde anti-Communist movements of our time is well known. In some part, the special authority accorded the renegade derives from the obsession with secrecy so characteristics of such movements: the renegade is the man or woman who has been in the Arcanum, and brings forth with him or her the final verification of suspicions which might otherwise have been doubted by a skeptical world. But I think there is a deeper eschatological significance that attaches to the person of the renegade: in the spiritual wrestling match between good and evil which is the paranoid’s archetypal model of the world, the renegade is living proof that all the conversions are not made by the wrong side. He brings with him the promise of redemption and victory.
A final characteristic of the paranoid style is related to the quality of its pedantry. One of the impressive things about paranoid literature is the contrast between its fantasied conclusions and the almost touching concern with factuality it invariably shows. It produces heroic strivings for evidence to prove that the unbelievable is the only thing that can be believed. Of course, there are highbrow, lowbrow, and middlebrow paranoids, as there are likely to be in any political tendency. But respectable paranoid literature not only starts from certain moral commitments that can indeed be justified but also carefully and all but obsessively accumulates :evidence.” The difference between this “evidence” and that commonly employed by others is that it seems less a means of entering into normal political controversy than a means of warding off the profane intrusion of the secular political world. The paranoid seems to have little expectation of actually convincing a hostile world, but he can accumulate evidence in order to protect his cherished convictions from it.
Paranoid writing begins with certain broad defensible judgments. There was something to be said for the anti-Masons. After all, a secret society composed of influential men bound by special obligations could conceivable pose some kind of threat to the civil order in which they were suspended. There was also something to be said for the Protestant principles of individuality and freedom, as well as for the nativist desire to develop in North America a homogeneous civilization. Again, in our time an actual laxity in security allowed some Communists to find a place in governmental circles, and innumerable decisions of World War II and the Cold War could be faulted.
The higher paranoid scholarship is nothing if not coherent—in fact the paranoid mind is far more coherent than the real world. It is nothing if not scholarly in technique. McCarthy’s 96-page pamphlet, McCarthyism, contains no less than 313 footnote references, and Mr. Welch’s incredible assault on Eisenhower, The Politician, has one hundred pages of bibliography and notes. The entire right-wing movement of our time is a parade of experts, study groups, monographs, footnotes, and bibliographies. Sometimes the right-wing striving for scholarly depth and an inclusive world view has startling consequences: Mr. Welch, for example, has charged that the popularity of Arnold Toynbee’s historical work is the consequence of a plot on the part of Fabians, “Labour party bosses in England,” and various members of the Anglo-American “liberal establishment” to overshadow the much more truthful and illuminating work of Oswald Spengler.
The Double Sufferer
The paranoid style is not confined to our own country and time; it is an international phenomenon. Studying the millennial sects of Europe from the eleventh to the sixteenth century, Norman Cohn believed he found a persistent psychic complex that corresponds broadly with what I have been considering—a style made up of certain preoccupations and fantasies: “the megalomaniac view of oneself as the Elect, wholly good, abominably persecuted, yet assured of ultimate triumph; the attribution of gigantic and demonic powers to the adversary; the refusal to accept the ineluctable limitations and imperfections of human existence, such as transience, dissention, conflict, fallibility whether intellectual or moral; the obsession with inerrable prophecies…systematized misinterpretations, always gross and often grotesque.”
This glimpse across a long span of time emboldens me to make the conjecture—it is no more than that—that a mentality disposed to see the world in this way may be a persistent psychic phenomenon, more or less constantly affecting a modest minority of the population. But certain religious traditions, certain social structures and national inheritances, certain historical catastrophes or frustrations may be conducive to the release of such psychic energies, and to situations in which they can more readily be built into mass movements or political parties. In American experience ethnic and religious conflict have plainly been a major focus for militant and suspicious minds of this sort, but class conflicts also can mobilize such energies. Perhaps the central situation conducive to the diffusion of the paranoid tendency is a confrontation of opposed interests which are (or are felt to be) totally irreconcilable, and thus by nature not susceptible to the normal political processes of bargain and compromise. The situation becomes worse when the representatives of a particular social interest—perhaps because of the very unrealistic and unrealizable nature of its demands—are shut out of the political process. Having no access to political bargaining or the making of decisions, they find their original conception that the world of power is sinister and malicious fully confirmed. They see only the consequences of power—and this through distorting lenses—and have no chance to observe its actual machinery. A distinguished historian has said that one of the most valuable things about history is that it teaches us how things do not happen. It is precisely this kind of awareness that the paranoid fails to develop. He has a special resistance of his own, of course, to developing such awareness, but circumstances often deprive him of exposure to events that might enlighten him—and in any case he resists enlightenment.
We are all sufferers from history, but the paranoid is a double sufferer, since he is afflicted not only by the real world, with the rest of us, but by his fantasies as well.
† Richard Hofstadter is DeWitt Clinton Professor of American History at Columbia University. His latest book, “Anti-intellectualism in American Life,” was awarded the Pulitzer Prize for General Nonfiction earlier this year. This essay is adapted from the Herbert Spencer Lecture delivered at Oxford University in November 1963.
* Many anti-Masons had been fascinated by the penalties involved if Masons failed to live up to their obligations. My own favorite is the oath attributed to a royal archmason who invited “having my skull smote off and my brains exposed to the scorching rays of the sun.”
* In his recent book, How to Win an Election, Stephen C. Shadegg cites a statement attributed to Mao Tse-tung: “Give me just two or three men in a village and I will take the village.” Shadegg comments: “ In the Goldwater campaigns of 1952 and 1958 and in all other campaigns where I have served as consultant I have followed the advice of Mao Tse-tung.” “I would suggest,” writes senator Goldwater in Why Not Victory? “that we analyze and copy the strategy of the enemy; theirs has worked and ours has not.
Subscribe to:
Posts (Atom)