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03/06/2012 | The war over class war

The Economist Staff

Economic misunderstanding, not overblown rhetoric, is the real problem with the president.

 

IT DOES not take much to be accused of waging class warfare in America. The charge was levelled last year at Mitt Romney, of all the unlikely leftist agitators, when he suggested that certain tax breaks should be available only to those who earned less than $200,000. Rick Santorum, one of Mr Romney’s rivals for the Republican nomination, though he had promised never to use the word “class”, earned a similar rebuke for pointing out that he came from humble origins, supposedly an implicit contrast with Mr Romney, whose father was a governor and cabinet secretary.

For those who see such comments as tantamount to storming the Bastille, Barack Obama’s recent behaviour might bring to mind St Petersburg in 1917. According to Mr Romney, he is attacking nothing less than capitalism and the free-enterprise system. An article in Forbes magazine calls Mr Obama a “socialist in the European reform-Marxism tradition” although not, to be fair, “a communist of the cold war tradition”. John McCain, whom Mr Obama defeated to win the presidency in 2008, detects “class warfare at its worst”.

The main evidence of Mr Obama’s proletarian sympathies is a couple of advertisements recently released by his campaign depicting Bain Capital, the private-equity firm Mr Romney founded and ran for 15 years, as a rapacious corporate raider. In one, downtrodden former employees of a steel mill in which Bain Capital invested describe the firm as a “vampire” which “sucked the life” out of the business, leaving them not only without work but without the health insurance or pensions they had been expecting. In another advertisement, a woman laid off from an office-supply factory asserts that Mr Romney “doesn’t care anything about the middle-class or the lower-class people.”

These ads are unfair, of course, ignoring as they do Bain Capital’s many successful investments, fudging Mr Romney’s role and leaving out many mitigating details. It might be possible to argue that Bain’s financial engineers miscalculated in some instances, extracting too much profit from firms under their control and saddling them with ultimately ruinous debts. But the Obama campaign’s hatchet men are much vaguer and more sweeping, painting a picture of Mr Romney as a callous asset-stripper—a claim for which there is little evidence. Several Democrats have criticised the ads as misleading and misguided—most notably Cory Booker, the Democratic (and black) mayor of Newark, New Jersey, who described as “nauseating” the fixation of the two campaigns with awkward moments from the candidates’ past.

However, Mr Obama is not the first to raise such charges: during the primaries, all Mr Romney’s Republican rivals did. One of them, Rick Perry, denounced Bain Capital’s approach as “vulture capitalism”. Nor are such gibes unusually incendiary for an American presidential campaign. Al Gore made “the people versus the powerful” one of the themes of his bid for the White House. Harry Truman had a much more virulent turn of phrase, fulminating against the “Republican gluttons of privilege” who had “stuck a pitchfork in the farmer’s back”.

By contrast, even as Mr Obama seeks to cast himself as the champion of the middle class and to make “fairness” the central theme of the campaign, he is careful to say that he does not want to demonise profits or success, and believes that the vast majority of people in financial services are well intentioned. He himself, he often notes, is a member of the 1%. In the speech in which he first framed the election as a choice between unfettered capitalism and a fairer, more regulated version, he still laboriously affirmed that “the free market is the greatest force for economic progress in human history”. His talk of raising the top tax bracket to just under 40%, and making sure that millionaires pay at least as high a rate as their secretaries, is a far cry from François Hollande, let alone Robespierre.

Mr Obama has even managed to choke out a few kind words about private equity, which, he says, is “a healthy part of the free market”, manned, in many cases, by “folks who do good work”. He claims he has no problem with the industry itself, but simply does not consider it a good proving ground for future presidents (unlike, say, community organising). Mr Romney’s contention that his experience in business will help him get the jobless back to work is flawed, Mr Obama’s argument runs, since private equity exists “to maximise profits, and that’s not always going to be good for communities or businesses or workers”.

What’s fairness, anyway?

The disclaimers are more than a little disingenuous, since Mr Obama often does seem to suggest that financiers are greedy wreckers from whom America’s economy must be saved. But that aside, and in spite of the Republicans’ bluster, his rhetoric is hardly illegitimate or extreme. America’s middle class is struggling. Median incomes are stagnant, while the rich have been getting richer. It is easy to argue that the average Joe is not getting a fair shake—or at least not the same shake he used to. The question is whether voters care most about that, or whether they simply want to see the economy humming again, equitably or not.

In that case, the election will revolve not around fairness, but competence. Mr Romney is fond of saying that Mr Obama has no idea how the economy works and how jobs are created. The way the Obama campaign talks about Bain Capital suggests that his criticism is correct. Mr Obama, as noted above, likes to insinuate that there is a conflict between pursuing profits and creating jobs. In the long run, however, in a competitive economy, that is nonsense. Only profitable firms can sustain any jobs, and the more profitable they are, the more money they have to invest in new ventures with new workers. Mr Obama is guilty not of rhetorical excess but of economic muddle. That is far more worrying.

The Economist (Reino Unido)

 



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07/01/2010|
03/01/2010|
03/01/2010|
03/01/2010|
17/12/2009|
15/12/2009|
15/12/2009|
13/12/2009|
13/12/2009|
28/11/2009|
28/11/2009|
28/11/2009|
28/11/2009|
27/11/2009|
27/11/2009|
27/11/2009|
27/11/2009|
27/11/2009|
27/11/2009|
21/11/2009|
21/11/2009|
18/11/2009|
18/11/2009|
16/11/2009|
16/11/2009|
30/10/2009|
30/10/2009|
11/10/2009|
10/10/2009|
10/10/2009|
07/10/2009|
07/10/2009|
04/10/2009|
30/09/2009|
30/09/2009|
27/09/2009|
27/09/2009|
27/09/2009|
22/09/2009|
20/09/2009|
18/09/2009|
18/09/2009|
18/09/2009|
16/09/2009|
16/09/2009|
16/09/2009|
08/09/2009|
07/09/2009|
06/09/2009|
06/09/2009|
05/09/2009|
05/09/2009|
26/08/2009|
21/08/2009|
19/08/2009|
19/08/2009|
15/08/2009|
15/08/2009|
15/08/2009|
11/08/2009|
11/08/2009|
11/08/2009|
11/08/2009|
19/07/2009|
19/07/2009|
18/07/2009|
18/07/2009|
27/03/2009|
22/03/2009|
22/03/2009|
27/01/2009|
27/01/2009|
27/01/2009|
17/01/2009|
17/01/2009|
17/01/2009|
17/01/2009|
17/01/2009|
17/01/2009|
11/01/2009|
06/12/2008|
06/12/2008|
06/12/2008|
06/12/2008|
23/11/2008|
23/11/2008|
16/11/2008|
16/11/2008|
04/11/2008|
04/11/2008|
03/11/2008|
03/11/2008|
24/10/2008|
24/10/2008|
24/10/2008|
24/10/2008|
15/09/2008|
15/09/2008|
15/09/2008|
15/09/2008|
15/09/2008|
15/09/2008|
06/09/2008|
06/09/2008|
05/09/2008|
05/09/2008|
05/09/2008|
05/09/2008|
01/09/2008|
01/09/2008|
01/09/2008|
01/09/2008|
22/08/2008|
22/08/2008|
17/08/2008|
17/08/2008|
16/08/2008|
16/08/2008|
28/07/2008|
28/07/2008|
28/07/2008|
28/07/2008|
28/07/2008|
28/07/2008|
19/07/2008|
19/07/2008|
24/05/2008|
24/05/2008|
03/05/2008|
03/05/2008|
29/04/2008|
11/02/2008|
05/01/2008|
09/12/2007|
18/11/2007|
10/11/2007|
10/11/2007|
06/11/2007|
06/11/2007|
06/09/2007|
26/08/2007|
25/08/2007|
11/07/2007|
16/06/2007|
16/06/2007|
10/06/2007|
10/06/2007|
19/05/2007|
19/05/2007|
19/05/2007|
19/05/2007|
24/04/2007|
24/04/2007|
14/04/2007|
14/04/2007|
05/04/2007|
05/04/2007|
05/04/2007|
28/02/2007|
28/02/2007|
05/02/2007|
05/02/2007|
04/02/2007|
04/02/2007|
04/02/2007|
04/02/2007|
04/02/2007|
04/02/2007|
29/01/2007|
29/01/2007|
29/01/2007|
29/01/2007|
11/01/2007|
11/01/2007|
11/01/2007|
11/01/2007|
27/12/2006|
27/12/2006|
27/12/2006|
27/12/2006|
27/12/2006|
27/12/2006|
20/12/2006|
20/12/2006|
17/11/2006|
30/09/2006|
28/07/2006|
12/04/2006|
12/04/2006|
12/04/2006|
06/03/2006|
21/02/2006|
17/02/2006|
31/01/2006|
10/01/2006|
28/12/2005|
31/10/2005|
26/09/2005|
29/08/2005|
11/08/2005|
08/08/2005|
24/06/2005|
24/06/2005|
24/06/2005|
03/04/2005|
03/04/2005|
03/04/2005|
03/04/2005|

ver + notas
 
Center for the Study of the Presidency
Freedom House