The Great Republican Hypocrisy
Late this summer, August 27-30, the world will once again be treated to the spectacle of a Republic National Convention. It's only fitting that this one will be held in Tampa, Florida, the state that made it possible for George W. Bush to steal the election in 2000. The convention is a sure bet to be a theater of the absurd, but this year the candidate it anoints and the speeches that sing his praises will highlight the hypocrisy of the new Grand Old Party like never before.
Of all the hypocritical hype resonating through the rhetoric of these Republicans, none is more damaging than the myth of free market and the jive about private-sector job creators. A vibrant economy operating without state intervention or regulation is one of the most pernicious, pervasive, and persistent myths in contemporary American politics.
Today even in the aftermath of the wild-assed, credit-crazed, derivative-driven, deliriously leveraged bubble economy that finally triggered the financial meltdown in 2008 – even after the near-collapse of the global economy and the Great Recession that followed (and still lingers), few Republican leaders dare to say a kind word about the need for state regulation or tax reform, and Democrats too often concede in practice what they dare not renounce in principle. In fact, there is not a country in the world, never has been and never will be, where the economy operates in a political-administrative or legal vacuum. Which is to say, there is no such thing as a free market or a pure market economy.
Nothing even close. And while it's true that the state plays a smaller role in some economies than in others, the United States is in no sense exemplary except by one measure: hypocrisy.
For proof, we can turn to no less an authority than Niall Ferguson, a self-confessed true believer in Adam Smith's "invisible hand". Earlier this year Ferguson published a trenchant piece which appears to fly in the face of his own classical liberal worldview ("We're All State Capitalists Now," Foreign Policy, February 9, 2012).* He poses "a simple question that can be answered with empirical data: Where in the world is the role of the state greatest in economic life, and where is it smallest?" His answer is more revealing than Dolly Parton's bikini, and one of the things it reveals is the hypocrisy of the Republican right – first and foremost, the crown prince of creative destruction, Mitt Romney.
Romney and his ilk would have us believe that America is the shining city on a hill of Ronald Reagan's fantasies, and that Barack Obama wants to transform the country into a state-owned and -operated giveaway ghetto where all things are equal and everyone is equally miserable - "making us like Europe". But the Europe Romney dismisses does not actually exist. It's a Europe that conveniently fits into the fairytale that undergirds the Great Republican Hypocrisy, a Europe where the state stifles free enterprise and the people suffer. In fact, public spending in most European states is not a great deal higher than in the United States; but the difference is that in European countries the lion's share of state expenditures benefit society whereas in the United States federal spending mainly benefits banks, corporations, and, of course, a bloated defense establishment.
"[In Communist] China…spending represents 23 percent of GDP, down from around 28 percent three decades ago. By this measure, China ranks 147th out of 183 countries for which data are available. Germany ranks 24th, with government spending accounting for 48 percent of GDP. The United States, meanwhile, is 44th with 44 percent of GDP. By this measure, state capitalism is a European, not an Asian, phenomenon: Austria, Belgium, Denmark, Finland, France, Greece, Hungary, Italy, the Netherlands, Portugal, and Sweden all have higher government spending relative to GDP than Germany. The Danish figure is 58 percent, more than twice that of the Chinese."
But, of course, a cursory glance at Ferguson's figures reveals that public spending in the U.S. is also nearly double that of Communist China. Ferguson presents a table comparing countries against 15 rule-of-law indicators. The table displays the results of a World Economic Forum (WEF) Executive Opinion Survey in 2011-2012. Here's what Ferguson gleans from the data:
"It is an astonishing yet scarcely acknowledged fact that on no fewer than 14 out of 15 issues relating to property rights and governance, the United States now fares markedly worse than Hong Kong. Even mainland China does better in two areas. Indeed, the United States makes the global top 20 in only one: investor protection, where it is tied for fifth. On every other count, its reputation is shockingly bad."
"The real contest of our time is not between a state-capitalist China and a market-capitalist America, with Europe somewhere in the middle. It is a contest that goes on within all three regions as we all struggle to strike the right balance between the economic institutions that generate wealth and the political institutions that regulate and redistribute it."
Now for the hypocrisy – of Romney, not Ferguson. There's no better or more time-honored method of concealing crime, corruption, and all manner of misconduct than to say somebody else is doing it – underlings, rivals, opponents. That's precisely what Romney and Republican leaders in Congress are doing, rather than admit the truth – that the biggest recipients of state aid (what they call "welfare") in America are its richest citizens and corporations; that the redistribution of income in America in the past three decades has shifted wealth from the middle class to the super rich, leaving American society looking more like Venezuela than Sweden; and that one reason for this historic shift is a tax system that allows – nay, invites – the 1% to pay taxes at a rate far below the maximum and far below that of most middle-class taxpayers earning a tiny fraction as much. Meanwhile, they shamelessly demand deep cuts in social spending, demand that the Bush tax cuts for the wealthy be extended (or, better yet, made permanent), and stridently oppose efforts to staunch the massive hemorrhage of dollars dumped daily into that bottomless pit called the Pentagon.
It's a Machiavellian trick using misdirection and red herrings to camouflage the truth about the real America, especially about the economy – how it works, who or what is to blame when it isn't working, where all the "stimulus" money went (hint: they're "too big to fail"), why more jobs weren't created, and the like. Dishonesty is the real epidemic that's bringing us down. If we cannot be honest with ourselves and each other, cannot face the plain fact, for example, that the current levels of extreme inequality and structural unemployment has reached a point where it is incompatible with a mass-consumption society, our fate as a nation is sealed.