The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath.

* The Politics of Rich and Poor. Wealth and the American Electorate in the Reagan Aftermath (Random House, 262 pp., $19.95) is a bitter commentary on what its author, Kevin Phillips, calls the "upward redistribution of wealth" during the Reagan Era. Mr. Phillips argues that the current American political structure is at a crossroads, as a result of twenty years of industry deregulation and tax-code restructuring that worked to the advantage of the wealthy.

Mr. Phillips cites two previous periods, the 1920s and the 1880s, as the precedent for his predictions about the political consequences of unbridled capitalism, and concludes that Republican popularity may be in jeopardy unless GOP policymakers break through the failed consensus into a tough new domestic and international candor." The Democrats traditionally follow trends and act as "collaborators without inspiration" during Republican heydays." So while Mr. Phillips blames the GOP for the nation's fiscal woes, he chides the Democrats for failing to capitalize on the "decadence" of the upper classfor failing to make class distinctions their dominant issue.

Through most of this book Mr. Phillips prods the Democrats onward, inundating the reader with data and rhetoric. The presentation is striking mostly because of what Mr. Phillips leaves out. For example, he demonstrates that tax reforms during the Eighties were evil by presenting the tax rates of each decile. These numbers, at face value, indicate a slight disparity in favor of taxpayers in the top deciles. That the current tax structure has these same upper-bracket taxpayers paying more taxes than ever before, and a significantly higher percentage of all taxes, is dismissed by Mr. Phillips, who insists that the "tax burden" is still not great enough on the rich."

Mr. Phillips also devotes significant attention to his concern about foreign investment in America. He warns that 12 per cent of America's manufacturing base is now foreign owned, and foreign investment in American real estate increased from $83 billion in 1980 to $304 billion in 1988. This, we are warned, reveals the indisputable shift of comparative wealth and economic leverage away from the United States." The symbolic significance of foreign ownership is easy enough to discern, but Mr. Phillips is awkwardly positioned on this point, since he clearly favors higher corporate taxes and higher income taxes for the rich," which would have the exact effect of decreasing American investment in American assets and enterprises. At the same time he favors protectionist policies that would eliminate American jobs, lead to reciprocal policies abroad (to the disadvantage of export industries), and increase the prices of foreign goods.

But reality is little more than an incidental detail for Kevin Phillips. The Politics of Rich and Poor is more a handbook on how to engender class division than a "crystallized" vision of "tough new ... candor." The author's curious resentment of the prosperity of the Reagan Era is onmipresent and burdensome-but there is little else holding this opportunistic work together. If there is one thing that we have learned from recent events, it is that resentment does not make for sound economics.