“The Land Of The Not-Free”: Meet Mitt Romney, The Real European
An odd thing happened during Mitt Romney’s victory-lap speech after Tuesday’s Republican primaries: He didn’t once mention the word “Europe.”
The absence was jarring, because Romney’s claim that President Obama is dragging the United States toward a loathsome European-style “social welfare” future has been a staple of the former Massachusetts governor’s shtick ever since he started campaigning in earnest.
It’s always been an easy line for him: Europe, Romney’s audience understands, is the land of the not-free. The continent gave birth to Karl Marx, for crying out loud! Every now and then, socialist political parties actually take power!
But there is a big problem with Romney’s formulation. For the last year or two, Europe has been implementing, in real time, exactly the policies that Romney and congressional Republicans fervently believe are the best strategy for boosting economic growth. It’s called “austerity,” and it means cutting deficits, slashing spending, and chipping away at all those goodies the social welfare state provides.
And guess what? It’s not working. Compared with the United States, Europe is in shambles. Unemployment is rising across the continent. Just this week, the United Kingdom, which has pursued an austerity regime so severe that it makes House Republicans drool with lust, slipped back into recession. In France, the socialist candidate for president (and likely winner), François Hollande, has been campaigning against austerity. Italy’s prime minister, Mario Monti, is expressing qualms. The latest news out of Brussels, according to the Daily Telegraph, suggests “a major shift in economic strategy” as fears spread “that excessive fiscal tightening will inflict unnecessary damage on a string of eurozone countries.”
The evidence keeps amassing. Maybe, just maybe, John Maynard Keynes was right: Cutting government spending in the face of a weak economy is a recipe for further decline. In a startling turnabout, political leaders all over Europe are questioning the merits of austerity and calling for more stimulative policies.
You can see the problem Romney faces, and why he might suddenly be reluctant to utter the word “Europe.” The facts are uncomfortable: Under Obama, the United States has recovered more quickly from the Great Recession than has Europe. Economic growth is steadier, and unemployment is falling faster. But if Romney wins the White House, bringing along with him Republican majorities in both the Senate and the House, he will have the power to do exactly what he says he wants to do: slash government spending and cut the deficit.
It’s a plan that runs the very real risk of sabotaging the economic recovery. It’s a plan, in other words, that would make the U.S. just like Europe.
Romney’s efforts to tar Obama as a fifth columnist for French-accented Really Big Government have been unrelenting. In December, he told voters in Iowa that Obama’s polices “were making us like Europe,” and “I don’t want Europe here.” In January, after winning the New Hampshire primary, he lambasted Obama for wanting “to turn America into a European-style entitlement society.” Just a few days ago, he explained to Fox News that the conservative base would rally behind his candidacy, because “President Obama has taken America in such a different course than we have ever gone as a nation before. We are becoming far more like a European social-welfare state, and people don’t want to see that.”
Never mind that by historical standards Obama’s efforts to strengthen the American safety net do not come close to the transformational efforts of presidents like Franklin Roosevelt and Lyndon Johnson, making Romney’s assertion that Obama is taking America on “such a different course than we have ever gone as a nation before” transparently ridiculous. If anyone running for president this year in the United States is a pioneer in European-style liberalism, it’s got to be Romney, the first governor to preside over the creation of a statewide universal healthcare plan. (And for a guy who seems to despise Europe so much, Romney sure seems to enjoy vacationing in France.)
But whatever. Romney’s Europe-bashing rhetoric serves multiple purposes. It labels Obama as something different, a “foreigner,” un-American. It also directly appeals to conservative concerns that the social welfare state is unaffordable. In this vein, unless governments everywhere tighten their belts, balance their budgets and get their ships in order, we’re all headed down the hopeless path of Greece, doomed to bankruptcy and social chaos.
Most importantly, Romney’s opposition to European-style Big Government stakes an implicit position on the great economic debate of our time: How best to spur economic growth?
The stances of the two main camps have been clear for years and endlessly debated by economists and pundits. The pro-stimulus, Keynesian argument holds that the problem afflicting stagnant economies all over the world is a lack of demand. When everyone is worried about their economic future, everyone simultaneously tightens their belt, and the capitalist machine stops in its tracks. Since no one is willing to buy anything, companies can’t sell their goods and services and respond by laying off their employees, and that further exacerbates the overall problem. Under such constraints, only the government has the power to step in and stimulate demand. Once the economy is growing strongly and consistently, only then do you look for ways to balance the budget — a task that becomes much easier when tax revenues are booming again.
The opposing camp, now commonly referred to as “Austerians,” believes the problem isn’t a lack of demand, but a lack of confidence. People are afraid to invest and buy and take risks because they’re worried that high deficits inevitably lead to high taxes, or high interest rates, or general fiscal chaos (or all of the above). And they’re going to hunker down until they’re sure that governments intend to act responsibly, and live within their means.
The Austerian camp’s stance translated into one of the most delightfully mindbendingly oxymoronic proposals to enter the economic policy parlance in years: “expansionary fiscal contraction.” Cutting government spending will boost confidence, which will lead to growth! To get big, one must first get small.
It was all the rage two years ago. Today, not so much. The problem with expansionary fiscal contraction is that when you try it at a time when the economy is stagnant or recessionary, you run a real risk of exacerbating the problem you are trying to cure. Slashing government spending subtracts demand from the economy. Growth slows, tax revenues fall, and suddenly the government has even less to spend, which subtracts even more demand from the economy.
And that’s exactly what appears to be happening in Europe — in countries such as Greece, Italy, Spain and France, and perhaps most intriguingly, in the United Kingdom, where David Cameron’s new conservative government pursued austerity with a vengeance. From the outset, a clamor of voices warned that the risks were huge, and so far, their worries have been validated. On Monday, the U.K. registered its second quarter of economic contraction, the rule-of-thumb definition for a recession.
It’s very rare that one gets a real-time demonstration of how two different economic policies compare, but the numbers are hard to argue with: In the “euro area,” where austerity has reigned, GDP growth has declined for each of the last four quarters. In the U.S. it has risen. In the euro area, unemployment has been rising for a year. In the U.S. , it’s been falling. As Felix Salmon observes, when one compares the United States, the U.K and the euro area, “the tougher and more credible the austerity, the worse the GDP performance.”
The trend lines are far too obvious to ignore, and they have sparked a political counter-reaction that appears to have reached critical mass this week. In Italy, France, Spain and the Netherlands, austerity is suddenly out of favor.
Meanwhile, the United States, despite the best efforts of Republicans, never pursued austerity as devoutly as Europe. Which is not to say the U.S. hasn’t tightened its belt at all. Perhaps the most stunning counter-argument to Romney’s accusation that Obama is pushing for a government-centered European-style government can be seen in the decline in the size of the public sector under Obama: During his presidency, employment in the public sector — local, state and federal government — has fallen by almost 600,000 jobs. In comparison, Bill Clinton added over 600,000 and George Bush added 800,000. As Paul Krugman points out, if Obama’s administration had added public sector jobs at the same rate as George Bush, unemployment would currently stand around 7 percent.
But even with those headwinds blowing against it, the U.S. has done surprisingly well. The first guess at GDP growth for the second quarter of 2012, due out Friday morning, is likely to peg growth at around 3 percent. Meanwhile, the most recently available statistics for the euro area show it contracting.
Which leads us back to the all-important question: What happens if Romney wins the election? The chances are good that if he is victorious, he will bring in Republican control of Congress along with him. Anything budget-related can be passed using the congressional technique known as “reconciliation,” which means Senate Democrats won’t be able to filibuster. He’ll be able to do what he wants.
Once upon a time, Mitt Romney supported stimulus spending to boost the economy. But now he sings a different tune. He has endorsed Paul Ryan’s budget, — “It’s an excellent piece of work, and very much needed” — which would combine huge cuts to social welfare programs with dramatic tax cuts for the wealthy — an austerity program directly targeted at the poor. Romney’s speeches are generally devoid of specific policy proposals, but he’s fond of encapsulating his overall economic strategy with the three Tea Party-friendly words “cut,” “cap” and “balance” — the simplest definition of austerity one could ask for. And as he said in Philadelphia on April 12, “The economy is struggling because government is too big, and we have to bring it down to size.”
All together, everything points to a plan for turbo-boosted austerity. That’s exactly the model that Europe has tried and is now finding wanting. And it’s exactly the wrong medicine for a country in which economic growth is still very vulnerable and unemployment is still high.
Wanna be like Europe? Elect Romney.
By: Andrew Leonard, Salon, April 27, 2012
“Compro-What?”: The Republican Definition Of “Compromise”
What is compromise? Getting more of what you want, according to House Republican Policy Committee Chairman Tom Price of Georgia.
Appearing this morning at a policy briefing hosted by National Journal and United Technologies, Price was asked by National Journal’s John Aloysius Farrell (a former U.S. News contributing editor) whether a term in office would make the Tea Party freshmen more likely to compromise.
His response was classic: “Compromising is one thing as long as you’re compromising and moving in the direction of your principles. If you’re compromising and moving away from the direction of your principles, I’m not sure it’s a compromise.”
Of course by definition, compromising means, um, compromising your principles. Here in fact is the dictionary definition of the word: “an adjustment of opposing principles … by modifying some aspects of each.”
One of the enduring themes from the Obama-Tea Party years here in Washington has been on compromise—whether and when it’s a good thing and how one defines it. Polls have consistently shown that liberals and independents want compromise, but conservatives prefer their leaders to stick to their guns. Democrats have exploited this public opinion gap by portraying Republicans, accurately in my view, as being a party of hardliners unwilling to make the kind of compromises necessary to solve the nation’s problems, especially in a time of divided government. See, for example, their unwillingness to seriously consider the revenue side of the deficit problem.
But since “compromise” is a concept popular with swing voters, they feel the need to radically redefine it in a way they can embrace. (It’s kind of like their Medicare plans.)
California Rep. Xavier Becerra, the chairman of the House Democratic Caucus was interviewed at the event after Price and was asked what a bipartisan solution to the deficit problem would look like. Here’s his answer: “Bipartisan means that at the end, everyone will hate it, and people will all complain that it hit them to some degree. No one should be left out, as I said, all hands on deck.”
Kudos to Becerra for supplying a reality-based answer and apparently understanding the oldspeak definition of “compromise.”
By: Robert Schlesinger, U. S. News and World Report, April 26. 2012
“Magical Capitalism”: Romney’s Principled, Radical View For America
It turns out that there is at least one question on which Mitt Romney is not a flip-flopper: He has a utopian view of what an unfettered, lightly taxed market economy can achieve.
He would never put it this way, of course, but his approach looks forward by looking backward to the late 19th century, when government let market forces rip and a conservative Supreme Court swept aside as unconstitutional almost every effort to write rules for the economic game. This magical capitalism is the centerpiece of Romney’s campaign, and it may prove to be his undoing.
Here’s Romney’s problem. His best strategy is to cast President Obama as a failure because the economy has not come all the way back from the implosion of 2008. The most effective passages in his well-reviewed speech after his primary victories Tuesday were about the shortcomings of the status quo.
“Is it easier to make ends meet?” Romney asked. “Is it easier to sell your home or buy a new one? Have you saved what you needed for retirement? Are you making more at your job? Do you have a better chance to get a better job? Are you paying less at the pump?”
And there was the line pundits were bound to love that played off James Carville’s memorable utterance from Bill Clinton’s 1992 campaign. “It’s still about the economy,” Romney said, clearly relishing the moment, “and we’re not stupid.”
But Romney, unlike Clinton, is not offering a program through which government would take specific steps to solve the problems he catalogues. Instead, he is calling on voters to share his faith that our difficulties would go away if the state simply got out of the way, allowed the market do its thing and counted on the success of the successful to lift up everyone else.
Romney is right in saying he has “a very different vision” from Obama’s, and this is where the magic comes in. He envisions “an America driven by freedom, where free people, pursuing happiness in their own unique ways, create free enterprises that employ more and more Americans. And because there are so many enterprises that are succeeding, the competition for hardworking, educated, skilled employees is intense, so wages and salaries rise.”
Just like that, all would be well — as if we never needed the trust-busting of the Progressive Era, the social legislation of the New Deal, the health programs of the Great Society and the coordinated action of the world’s governments in 2008 and 2009 to keep the Great Recession from becoming something far worse.
This is Romney’s true radicalism. I suspect it is a principled radicalism. And exposing its implications will be Obama’s opening to make the campaign about something other the economy, stupid. Romney’s speech Tuesday was every bit as important as his supporters said it was. It contained both the foundation of an effective campaign based on the electorate’s discontents and the basis for undermining the very argument Romney wants to make.
Romney’s philosophical inclinations give the president ample room to speak to non-ideological, non-utopian voters, the 10 percent or 15 percent who will decide this election.
They may not like government very much, but they are also wary about what capitalism does when the watchdogs fall asleep. They don’t cotton to further tax cuts for the wealthy. They reject the idea that worrying about how unequal the rewards in our society have become is the same thing as being “envious” of those who have done well. They are fully onboard that opportunity and not “entitlement” is the American way. But they rather welcome the help — low-interest student loans, for example — that government can offer to those looking to rise and prosper.
That’s why Romney’s shift to Obama’s side in the president’s battle with House Republicans over student loans may be his most instructive flip-flop yet. It shows that Romney will do all he can to soften his underlying radicalism. His goal is to deprive Obama of ways to reveal the concrete impact of free-market utopianism — and the price of the cutbacks Romney embraced by endorsing Rep. Paul Ryan’s budget.
What Romney has going for him is a journalistic presumption that he is either a closet “moderate” or so opportunistic that he is altogether lacking in a coherent worldview. The first is wrong. The second is unfair to Romney. What he believes matters, and it is the biggest obstacle between him and the White House.
By: E. J. Dionne, Jr, Opinion Writer, The Washington Post, April 25, 2012
“Committed To Decline And Despair”: It’s Time For The GOP To Grow Up
The United States needs two responsible governing parties if it’s ever going to address its most pressing problems.
I’ve grown so used to dismissing Tom Friedman’s work for The New York Times that when he writes something genuinely good, it comes as a surprise. To wit, in his column for the Sunday paper, he aruges that our political system has devolved into a “vetocracy”—a system where “no one can aggregate enough power to make any important decisions at all.”
The culprits, according to Friedman, are polarization, broken institutional norms—in particular, filibuster abuse—the massive proliferation of special interests, and the growing importance of money in politics. The ultimate outcome of this, says Friedman, is governmental paralysis:
America’s collection of minority special-interest groups is now bigger, more mobilized and richer than ever, while all the mechanisms to enforce the will of the majority are weaker than ever. The effect of this is either legislative paralysis or suboptimal, Rube Goldberg-esque, patched-together-compromises, often made in response to crises with no due diligence. That is our vetocracy.
This dovetails with a problem that Friedman only alludes to:
[I]f you believe the fantasy that America’s economic success derives from having had a government that stayed out of the way, then gridlock and vetocracy are just fine with you. But if you have a proper understanding of American history — so you know that government played a vital role in generating growth by maintaining the rule of law, promulgating regulations that incentivize risk-taking and prevent recklessness, educating the work force, building infrastructure and funding scientific research — then a vetocracy becomes a very dangerous thing.
If there’s anything that defines the current political moment, it’s the fact that—of the two major parties—one has completely abandoned the American consensus that Friedman describes. In the mythology of the Republican Party, government has never played a part in the country’s growth or prosperity—the “free market” alone is responsible for the nation’s current prosperity. Not only does this run counter to the historical record—to say nothing of observable reality—but it has resulted in a world where one party refuses to accept a role for government in anything.
As Friedman (obliquely) points out, this is a recipe for disaster. The institutions of the United States aren’t built for one-party rule, and we can’t make progress on pressing issues—climate change, health care, aging infrastructure—without a mutual understanding between the two parties. Republicans don’t have to abandon their preference for small government or their skepticism for federal programs, but effective action requires the GOP to back away from its opposition to the public sector, and reconsider the role of government in solving the nation’s problems.
Between Mitt Romney and Paul Ryan, the Republican Party is committed to a radical attack on the size and role of government. The Romney economic plan, which draws its ideas from Paul Ryan’s budget, would eliminate most non-defense discretionary spending, and funnel the savings to tax cuts for the wealthiest Americans. Vital government functions like environmental regulation, scientific research, and poverty reduction would be sacrificed on the altar of small government. This isn’t a sustainable state of affairs. A world where government completely withdraws from the lives of ordinary Americans is one where we all but commit to a path of decline and disrepair.
If there’s anything that this country needs right now, it’s a responsible and functional Republican Party. I won’t hold my breath.
BY: Jamelle Bouie, The American Prospect, April23, 2012
“No Excuse For Inaction”: The Awful Race Disparities That Still Haunt Us
Even though a black family lives in the White House, hardly anyone seriously argues that we live in a postracial society. That aspirational description of 21st century America came into vogue about four years ago, as President Barack Obama raced to victory in the 2008 presidential election, and a great number of black and white Americans wanted to believe the nation was finally closing the books on its discriminatory history.
But no. President Obama’s election didn’t suddenly sweep away all the accumulated consequences of past racism in our society. The preexisting racial disparities, so engrained in the fabric of our economy and culture, didn’t erase themselves in the wake of his victory.
As my Progress 2050 colleagues Christian E. Weller, Julie Ajinkya, and Jane Farrell make regrettably clear in their recently released report, “The State of Communities of Color in the U.S. Economy: Still Feeling the Pain Three Years Into Recovery,” racial and ethnic minority groups aren’t living in a paradise free of racial disadvantage. Quite the contrary, their research demonstrates that people of color aren’t benefiting apace with white Americans as our nation gradually rebounds from the financial collapse and economic recession that gripped us all when President Obama took office:
[T]he data we summarize in this report shows that communities of color are substantially less likely than their white fellow citizens to enjoy the opportunities that come from having a good job, owning a home, and having a financial safety cushion in the form of health insurance, retirement benefits, and private savings. This difference exists because economic opportunities eroded faster for communities of color than for whites during the Great Recession—and those opportunities have been coming back much more slowly for communities of color than for whites during the economic recovery.
The disparities Weller, Ajinkya, and Farrell write about aren’t new. Anyone who’s paid scant attention to the drumbeat of sour economic news knows that white unemployment, while at near-record heights, never drew within spitting distance of the chronically high rates suffered by African Americans and Latinos. As a result of this one fact, my colleagues write, a host of other calamities followed for people of color during the economic downturn like toppling dominoes, including:
— Black Americans enjoying fewer job opportunities than all other racial and ethnic groups.
— Poverty rates, already higher for communities of color, rising faster in the recession and declining slower during recovery than for white Americans
— Homeownership, a major source of financial security, disappearing faster for black Americans during the recession and recovery than for white Americans
Those are old, bitter, and racially disparate facts. But what is especially galling is the yawning silence and indifference that seems to accompany the periodic recitation of them. Worse, there exists in some conservative quarters a refusal to acknowledge the truth and an eagerness to embrace discredited notions about postracialism. Acting as if racial disparities don’t exist or believing we’re now living in some fantasy world free of racial divisions is nothing more than an excuse to preserve the status quo. It serves to protect the advantages of those who are already employed and comfortable, while keeping racial and ethnic minorities locked out of the improving economy.
But despite the cloudy pessimism disclosed in the report, there also exists the opportunity for hopeful change. More than a catalogue of racial disparities, the report provides a roadmap for policies that, if implemented, would help equalize the burdens faced by people of color. Specifically, it suggests federal policies that would accelerate job creation, shore up unemployment insurance, raise the minimum wage, increase access to health insurance, and implement comprehensive immigration reform to protect workers’ rights.
Armed with the facts of disparity and a prescription for change, policymakers have no excuse for inaction. Reporting the bad news, as Weller, Ajinkya, and Farrell have done, removes the blinders from their eyes. Policymakers’ indifference to the pain of their fellow citizens can only be interpreted as willing refusal to ensure that all Americans—including communities of color—share equitably in the rebuilding and recovery of the nation’s economy.
By: Sam Fulwood III, Center for American Progress, Published in AlterNet, April 17, 2012
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