Again, every FReeper who hasn't yet should read Luigi Zingales's book A Capitalism for the People. Zingales is an Italian who fled crony capitalism in his homeland for the better version here back when our version of capitalism was clearly better, is a professor at the University of Chicago's Booth School of Business -- remember in academic economics, unlike most other domains, the good-guys are from Chicago -- and had his ideas cited favorably, to his surprise and delight, by Sarah Palin before he publish his own popularization of them.
What we have is essentially a problem of psychology, not economics.
Most average people on the street are still some combination of angry/bitter that not only was no one on Wall Street held accountable for the ‘09 debacle, but all the rest of us were called upon to bail them out with our tax money.
Thus promising to send a few of them to the woodshed holds enormous appeal. (GOP take note....holding a few of these guys accountable when they really DO transgress will give you tremendously more street cred to fight this in the future)
People’s wages have been essentially stagnant over a decade. Yet the news is filled with stories about soaring corporate profits. The typical psychological reaction, for better or worse, is “those cheap bastards are SCROOOOOING me!” And once again, the Big Government advocate who comes along promising to whack them with the Big Stick will find a willing audience.
“I want a raise. Even if I have to elect someone to FORCE you to give me a raise.” Pure sophistry, but don’t underestimate its power.
And to the economically untrained, there is absolutely no reason why capital gains should be taxed at any rate lower than “those of us who actually EARNED it.”
I know those of you who understand economics are pulling your hair out by now....but this is how it works with the vast majority of people.