Wednesday, May 23, 2012
‘This is not a distraction, this is what this campaign is
going to be about,” President Obama said Monday at the NATO summit. The “this”
in question is Mitt Romney’s tenure at Bain Capital and what it says about
Romney’s economic vision for the country.
Team Romney should have seen this coming. If Newt
Gingrich and Rick Perry were willing to rip Romney for being too capitalistic
in the Republican primary, it doesn’t take a lot of imagination to expect that
Obama and Vice President Joe Biden would happily do the same in the general
election.
And Obama has a point. If you are going to campaign on
the idea that you were a private-sector job creator, it’s certainly fair game
for your opponents to investigate the claim. Now, I think the Obama campaign’s
specific charges and accusations regarding Bain Capital are spurious and unfair
— as did, say, Newark mayor Cory Booker, before he was forced to recant his
heresy.
There are real political dangers for Obama in making
himself the attack-dog-in-chief. Not only is it contrary to his admittedly
tattered post-partisan brand, but voters may reasonably conclude that the
president is focusing on Romney’s record to change the subject from his own.
Still, he’s not entirely wrong. Nor is Washington Post
columnist E. J. Dionne, who hopes the Bain brouhaha will spark a deeper debate
about what kind of capitalism we want. Borrowing a term from Germany’s
Christian Democrats — one widely accepted across much of Europe — Dionne says
we need to build a “social market” as opposed to what he calls an “anti-social
market.”
“Social” is one of those loaded terms that sounds
pleasant enough but presupposes a very large role for the state in our lives.
For instance, “Julia,” the fictional Everywoman the Obama campaign is touting
as the typical beneficiary of progressive government, lives in a social market.
And, therefore, the government heavily influences not just her wages and health
care but her career, recreational activities, and even her childbearing
decisions. “Under President Obama: Julia decides to have a child,” one slide
explains with a dry creepiness.
It’s telling but not remotely surprising that Dionne
looks to Europe, home of the cradle-to-grave welfare state, as the inspiration
for the kind of capitalism he wants here. European capitalism has things to recommend
it, particularly if you have a job — especially a government job — and can live
your life before the bill for the social market comes due, as it has in, say,
Greece.
One microcosm of the social market at work has been
Wisconsin’s public sector, where the generous perks and benefits of government
work have crippled the state’s ability to govern. That’s why Madison, the
spiritual home of the progressive movement, has looked a bit like a modern
Greek city-state ever since Governor Scott Walker took it upon himself to
reform the system. The champions of the social market have not only thrown the
kitchen sink at him in an effort to protect their ideals and their perks,
they’ve brought in sinks from across the country to rain down upon him. And
yet, it looks as if he will triumph next month in the recall effort.
Not entirely by Obama’s design, for the last few years
America’s labor market has looked pretty European. We don’t have the mobs of
unemployed and unemployable youths loitering in the vain hope that some state
worker will die or retire so they can take his place. But we’re not that far
off either. Workers don’t want to leave their jobs because they have no faith
they’ll find others. Few firms want to create new positions because they don’t
know if the market will sustain them.
Under normal circumstances, the U.S. economy creates tens
of millions of jobs every year and destroys tens of millions, with net new
jobs. In a typical year, up to 50 million Americans change jobs, often happily.
They get hired away, promoted, etc.
This process partly explains why America’s capitalism has
been so much more dynamic than Europe’s. In the social market, once you have a
job, you cling to it because you may never get another. European governments
make it much easier to cling to that job by punishing businesses that fire
people. The unhappy byproduct of such “compassion” is that businesses are also
far more reluctant to hire people because each new hire is a potential
long-term liability.
Yes, Romney created jobs while he was creating value and
wealth at Bain; he also destroyed jobs. Both are necessary in a dynamic market
that improves the prospects for most Americans through economic growth. Some
suffer from the process. But I would argue more people suffer under the social
market. Which system is better is, indeed, a worthy — and overdue — debate.
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