You didn’t build that, which is why I’m not concerned about the poor. A two-party problem.
Over at First Things Robert George, whose conservative credentials are not remotely in doubt, suggests that President Obama got a bit of a “bum rap” in the criticism over his “You didn’t build that” rhetoric. While George gratuitously qualifies his defense of Obama so as to clarify to his conservative readers that he utterly rejects Obama’s big governmentism and so thinks that Obama deserved the criticism anyway, his begrudging concession to the president makes a substantive point.
[E]xamined in context, I don’t think it is correct to interpret the “that” in “you didn’t build that” as referring to businesses.
Here, I believe, the President is telling the truth in saying that by “that” he meant the infrastructure (roads, bridges, etc.) that makes it possible for businesses to flourish, but which businesses do not themselves provide.
And of course, Obama is right. Government does far more to shape the context for productive business than many if his critics would like to admit, and even if they might wish things were different, in the real world of American politics and governance there are few sharp lines between the free market and political power.
Take, for instance, the Washington Post‘s recent report that one of the main reasons Obama has as much of an eight point lead over Mitt Romney in the absolutely vital state of Ohio is that the president has showered the state with the blessings of federal patronage in the past four years. To be sure, Ohio is no doubt a very meritorious state, and surely no president would ever use his political clout to sway the merit-based procedure of determining what states or business should receive government grants, loans or tax breaks. Yet, as the Post begins its report,
After President Obama pledged in March to create up to 15 manufacturing centers nationwide, the first federal grant went to a place at the heart of his affections: Ohio.
When the Obama administration awarded tax credits to promote clean energy, the $125 million taken home by Ohio companies was nearly four times the average that went to other states.
And when a Cleveland dairy owner wanted to make more ricotta cheese, he won what was then the largest loan in the history of the U.S. Small Business Administration.
And what about the Fed? In another recent article the Washington Post describes how Ben Bernanke has radically increased the role of the Federal Reserve in bolstering and guiding the U.S. economy.
In what might be his final years as chairman of the Federal Reserve, Ben S. Bernanke is transforming the U.S. central bank, seeking to shed its reclusive habits and make it a constant presence in bolstering the economy. The new approach would make the Fed’s policies more responsive to the needs of the economy — and likely more forceful, because what the Fed is planning to do would be much clearer….
Bernanke has already pushed the Fed far along this path. The central bank this month pledged to stimulate the economy until it no longer needs the help, an unprecedented promise to intervene for years. That’s a big change from the Fed’s usual role as a curb on inflation and buffer against financial crises.
That may have a calming effect on the economy, as the article notes, but it also threatens to politicize the Fed and possibly to increase the likelihood of inflation. Micromanaging the free market, as economic theorists know, is fraught with danger. And according to what principles will the Fed operate? Those of the Democrats or the Republicans? Keynes or the Austrian School?
Unfortunately the problem is not simply with the current administration, the current Federal Reserve chairman, or the Democratic Party. As Joel Kotkin wrote over a month ago, both parties are beholden to Wall Street and to big business, and the common man to whom Ronald Reagan was so committed finds himself with no advocate in the 2012 presidential campaign.
In a sane world, one would expect Republicans to run against this consolidation of power, that has taxpayers propping up banks that invest vast amounts in backing the campaigns of the lawmakers who levy those taxes. The party would appeal to grassroots capitalists, investors, small banks and their customers who feel excluded from the Washington-sanctioned insiders’ game. The popular appeal is there. The Tea Party, of course, began as a response against TARP.
Instead, the partynominated a Wall Street patrician, Mitt Romney, whose idea of populism seems to be donning a well-pressed pair of jeans and a work shirt.
Romney himself is so clueless as to be touting his strong fund-raising with big finance. His top contributors list reads something like a rogue’s gallery from the 2008 crash: Goldman Sachs, JPMorgan Chase, Morgan Stanley, Credit Suisse, Citicorp, and Barclays. If Obama’s Hollywood friends wanted to find a perfect candidate to play the role of out-of-touch-Wall Street grandee, they could do worse than casting Mitt….
Who loses in this battle of the oligarchs? Everyone who depends on the markets to accurately give information, and to provide fundamental services, like fairly priced credit.
And who wins? The politically well-situated, who can profit from credit and regulatory policies whether those are implemented by Republicans or Democrats.
Of course, there are those who believe the significant shift within the conservative movement of our time has been from traditionalist conservatism towards an infatuation with the utopian benefits a free market might bring, but as Joe Knippenburg points out (responding to David Brooks), the Republican Party has always been controlled more by the interests of business and economics than it has by thoughtful conservatism, whether of the traditionalist stripe or of the libertarian version.
In electoral politics, the business-oriented guys have always had the upper hand. The traditionalists … have never been major players in partisan politics. They’ve always been more noticeable in various “ivory towers,” like the Intercollegiate Studies Institute and the editorial offices of First Things (if I may be so bold)….
In day to day politics, the pressing (the unsustainable size of government) crowds out the important (the state of our souls and our civil society). We should not stint in reminding our friends, colleagues, and fellow political disputants of what’s really important. But we have to recognize that the failure adequately and responsibly to address our pressing problem puts what we really care about at risk as well.
But Knippenburg is also wise enough to recognize that the Republican Party’s version of economic prosperity doesn’t always help the little guy and it is certainly not winning the hearts and minds of the working class.
A substantial majority (70 percent) of white working class Americans thinks that our economic system unfairly favors the wealthy…. Connected with working class doubts about fairness is a conviction held by almost half (47 percent) that the American Dream once held true, but does no more… One might ask why those people who mistrust the fairness of markets and society at large don’t turn to government to make things right. Surely they’re tempted to do so. And surely Barack Obama wants them to do so. Their hesitation for the moment might be due as much to the likelihood that government just seems to them to present unfairness in another guise.
But Republicans have to come up with a compelling way of talking about the opportunities provided by the marketplace. To be sure, they can offer a celebration of freedom and a critque of government intervention as “crony capitalism,” but I’m not sure how far that goes with a working class person who doesn’t see an obvious path to prosperity for himself and his family.
I wish I had a magic bullet here, but I don’t. We have to recognize that in our economy, the opportunities for those who lack skills are very limited.
It’s easy to criticize government for being too big or for interfering with the economy too much. It’s even easier to criticize the Democratic Party and Barack Obama. Everything gets a lot harder when we recognize that the Republican Party is not offering very persuasive solutions, and in many ways it is simply another part of the problem.
Posted on September 26, 2012, in 2012 election, Banking and Finance, Barack Obama, Democratic Party, Mitt Romney, Republican Party and tagged 47%, big business, big government, Federal Reserve, free market, Joe Knippenburg, Joel Kotkin, Ohio, patronage, Robert George, You didn't build that. Bookmark the permalink. 1 Comment.