Gingrich pulls back curtain on "predatory" capitalism
You mean the wealthy on Wall Street aren't benevolent "job creators" after all and that one of the pirate captains flying the Jolly Roger of buccaneer capitalism is a "predatory corporate raider" who goes by the name of Mitt Romney? Who knew?
In boardrooms across America, the plutocrats are freaking out. Their carefully plotted strategy of making the 2012 election a referendum between economic "freedom" and suffocating "big government" is being blown to smithereens by that infamous bomb-thrower, Newt Gingrich, who is detonating the idea that unsupervised laissez faire capitalism is the unmitigated blessing its cheerleaders at the Wall Street Journal have always claimed it to be.
I guess I spoke too soon when I wrote the other day that an entire philosophical tradition of conservative anti-capitalism had been lost now that the Republican Party has made itself into the wholly-owned subsidiary of Wall Street. But how was I to know Newt Gingrich was about to launch a jihad against the black magic of compound interest?
Gingrich is the guy, remember, who closed down the government in order to stick it to President Clinton for a perceived slight he suffered on Air Force One. So, why should we be surprised that Gingrich would lay waste to 30 years of supply-side mythology if doing so let him get back at that spoiled rich kid who used daddy's money to torment him in Iowa?
This is what everyone in the Republican Party was afraid from the start Gingrich would do to them given his well-known MO, says Mother Jones' Kevin Drum: "Destroy them utterly if they declined to nominate him."
And with a $5 million in the bank thanks to right-wing casino mogul Sheldon Adelson, Gingrich now has lots of money to put to use the Karl Rove strategy of inflicting maximum pain by hitting an opponent right where he's strongest. And in South Carolina Gingrich intends to hit Mitt Romney where he is strongest, specifically by pulling down all those statues erected to "The Job Creator from Bain Capital."
The political effect of these attack ads, says New York magazine's Jon Chait, is to tear down Romney's carefully-crafted image in such a way that "his private-sector experience becomes an indicator -- not that he will fix the economy -- but that he will help the already-rich. It's a smash-you-over-the-head blunt message, with ominous music and storybook dialogue."
And according to the transcript of the ad Gingrich plans to run: "Mitt Romney was not a capitalist during his reign at Bain. He was a predatory corporate raider. His firm didn't seek to create value. Instead, like a scavenger, Romney looked for businesses he could pick apart. Indeed, he represented the worst possible kind of predator, operating within the law but well outside the bounds of what most real capitalists consider ethical.....He and his friends at Bain were bad guys. Any real capitalists should disavow Romney's 'creative destruction' model that made him wealthy at the expense of thousands of American jobs."
This is brutal stuff that plays right into President Obama's hands as he portrays the GOP as the Party of the One Percent unconcerned with the fate of the other 99%, says Drum. It also undermines the whole trickle-down rationale underpinning finance capitalism.
The supply-side oligarchs who rule the Republican Establishment are beside themselves as they circle the wagons against this madman from Georgia, who not only says Wall Street plutocrats who preach the virtues of capitalism have no clothes but that the clothes they do have on order are being imported from Chinese sweat shops which pay slave wages to child coolie labor.
The day before voters went to the polls in New Hampshire's primary, the Wall Street Journal reported that the right wing Club for Growth reflected the shock among conservatives when it went after Gingrich for his "disgusting" attacks against Romney and his record at Bain Capital.
The group's president, former Rep. Chris Chocola (R-Ind), said in a written statement: "Attacking Governor Romney for participating in free-market capitalism is just beyond the pale for any purported 'Reagan conservative.'"
Like smart traders who buy low and sell high, America's plutocracy has profited spectacularly from the yawning gap which exists between the values used by the public to judge and reward economic behavior and the public's understanding of the revolutionary changes in the economy over the past 30 years that have made those values obsolete.
When conservatives talk about the virtue of competition and "entrepreneurship," for example, they are exploiting the ignorance of a public that still believes America's economy is dominated by people who make things and so thinks rewards should naturally go to those who can make things faster, better, cheaper.
As a reader on Andrew Sullivan's Daily Beast site put it: "Most Americans appreciate a free market system in which those that produce the best goods and services at the best value should be successful and become wealthy. However, when people become fabulously wealthy at the expense of others while producing nothing but investment gain for the investors, I think most Americans take pause."
Yet, as economic historian Kevin Phillips notes, Wall Street is no longer the servant of Main Street where profits are confined to the earnings it can make by providing capital to entrepreneurs and businesses to invest in real things and good ideas. Today, financial firms earn more than 40% of all corporate profits and command a quarter of stock market capitalization -- up from just 6% when Ronald Reagan was elected in 1980 - largely because of the powers Wall Street's been given from deregulation to create debt and to earn fees from the distribution of that debt.
Historically, says Phillips, this transformation from a making to a papering economy "is as momentous as the emergence of railroads, iron and steel and the displacement of agriculture during the decades after the Civil War."
And the problem for Mitt Romney is that he embodies these fundamental if poorly understood changes, which is why Republicans are so furious with Newt Gingrich for putting this all up in lights.
All Republicans talk about free markets, says Kevin Drum, but Mitt Romney has actually lived it. "That makes him a more concrete messenger, someone who can credibly say that he not only believes in free markets, but has lots of experience in making them work."
Chances are that when Americans hear about free enterprise from conservatives "it's usually accompanied by images of sunrises over wheat fields, hardworking farmers, and small-town construction workers heading home after a day of honest labor," says Drum. "It is very definitely not accompanied by images of well-coiffed guys in suits and green eyeshades, making millions by sitting in boardrooms and approving mass layoffs by adding a quick line to a spreadsheet before they head out to lunch."
Someone like Newt Gingrich can get up on his soapbox and keep things "fuzzy" by delivering a stem-winder about free markets, the glories of competition and keeping government of our backs "and then just walk off the stage -- mission accomplished," says Drum.
Not so Mitt Romney. When Romney talks about free markets the stakes are much higher, says Drum.
"He can't get away with platitudes," says Drum. "His experience at Bain Capital will inevitably be Exhibit 1 in just what he means when he talks about free markets."
Short of being the CEO of Goldman Sachs, "this is quite possibly the worst possible face you can imagine for a conservative message about the glories of free enterprise and wealth creation," adds Drum. "Romney, whether he likes it or not, won't be able to talk about those glories without also facing up to the human destruction that often follows in its wake."
Americans may say they are for free markets. But at the end of the day they are just regular folks who believe in a regular day's pay for a regular day's work. So, "if you rub their noses in the true face of modern capitalism, they aren't going to like what they see," Drum insists.
And that is what Gingrich is threatening to do. So, you can understand why Republicans and their wealthy benefactors are so uneasy -- and incensed -- by what Gingrich is about to do.
The revolutionary bomb-thrower who once brought down a House Speaker and ended 40 years of consecutive Democratic rule is now poised to blow up the Republican Party's designated heir apparent and with him the Republican Party's name-brand issue.
Wouldn't it be ironic, then, if Newt Gingrich's final act as America's most famous radical was to squander the profits Republicans have so regularly earned -- both economically and politically - through the arbitrage which exploits the gap between fact and fiction, reality and myth, in America's system of free market capitalism?