. . . [why do average people support policies that harm their economic interests, while at the same time supporting policies which contribute to the concentration of financial and political power of a small group of wealthy elites?]
The answer actually leads to one of the most spectacular political stories in American history. It has to do with a shift in populism which started with Nixon and was solidified under Reagan.
Here is a very brief history of the shift.
In the 60s, business started to worry about the power of Labor. This was prompted perhaps because their staggering postwar profits started to wane.
So they began investing in a political party. They used financial pressure to replace the Liberal Rockefeller wing with candidates who would help them lower labor costs, regulations, and taxes. In short, they wanted to end New Deal Capitalism (which taxed their profits in order to build a strong middle class).
They had a very serious hurdle. America was very prosperous during the postwar period, which lead to a broad consensus for the New Deal. In order to over turn the New Deal, the Right had to win the hearts and minds of the country. They had to break the New Deal coalition and sever the relationship the Democrats had with the middle class - especially in the South and Heartland.
It all started with LBJ and the Civil Rights Movement. Nixon and Goldwater used the Southern Strategy to weaken the hold the democrats had on the South, and they used 60s backlash to weaken the Democratic hold on the heartland. They basically told the south that they didn't think the Federal Government should tell them how to run their lives. Then, Nixon told his Silent White Majority that he would take the country back from the bra burning atheist antiwar free loving hippies. (notice how they shifted from postwar anti-business populism to values or "culture war" populism. This was a strategic way of getting poor people and workers into the tent)
By the time Reagan arrived on the scene the Dixiecrats had completely converted to the Republican party.
How would the GOP keep them in the tent? Remember: the Democrats offered them economic salvation. So what did Ronnie do? Sine he was put in office to help the rich, what kind of salvation would he offer to the poor, whose programs he was cutting. Enter Pat Robertson and the Moral Majority. Like Nixon, Reagan - a divorced man who never set foot in a church and was estranged from his children - shifted the populism from economic to family values.
In the back of the house, he helped big money take over Washington, while in the front of the house he would win elections by protecting middle America from drugs & sin.
The Republican Party won loyalty not by talking about tax cuts to offshore millionaires or how they were going to help business ship manufacturing jobs to Asian sweatshops, but by focusing on social issues, communists, and terrorists. In short, they would fight evil demons at home and abroad. This is how they got poor people to vote against their economic interests - by shifting the discussion from disappearing jobs to Islamo-fascist mexican socialists who are going to confiscate your guns and make your child gay.
(in other words. the GOP has cultivated useful idiots in order to win elections so that they can help their backers continue to get subsidies, bailouts, and tax breaks for sending jobs overseas)
