Commentary Magazine


Topic: capitalism

Economics 101 for Bob Beckel

Bob Beckel, the liberal voice on Fox News Channel’s extremely successful The Five, likes to go off on rants regarding Wal-Mart. On Friday he was in rare form, damning the world’s largest retailer (and this country’s largest employer) for having caused more rival businesses to close than any other in history, and for buying most of its merchandise abroad. On other occasions he has complained that Wal-Mart doesn’t pay its employees a “living wage.”

Beckel’s first claim is probably true and the second certainly is. The third claim, however, is economic sophistry.

Wal-Mart is a profit-seeking corporation. It is, in other words, a wealth-creation machine, nothing more, nothing less. Its management, therefore, has a fiduciary duty to the stockholders to maximize the return on their invested capital. It does that in the following three ways.

First, by paying the lowest wages that will supply the company with a satisfactory work force. If Wal-Mart can get a satisfactory worker for a given job at $7.25 an hour, why should it pay more? Bob Beckel never pays more than he has to in order to get what he needs; why should Wal-Mart? Wal-Mart employees are not indentured. They’re perfectly free to search for a job that pays better than the one they have. If they don’t, it’s because they have the best job around for their skill set and particular circumstances. If market forces do not produce a “living wage,”—about as subjective a term as you can find, right up there with “fair”—then it is government’s function to make up the difference through the Earned Income Tax Credit or other mechanism. Corporations are not WPA projects and shouldn’t be used as such by government fiat.

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Bob Beckel, the liberal voice on Fox News Channel’s extremely successful The Five, likes to go off on rants regarding Wal-Mart. On Friday he was in rare form, damning the world’s largest retailer (and this country’s largest employer) for having caused more rival businesses to close than any other in history, and for buying most of its merchandise abroad. On other occasions he has complained that Wal-Mart doesn’t pay its employees a “living wage.”

Beckel’s first claim is probably true and the second certainly is. The third claim, however, is economic sophistry.

Wal-Mart is a profit-seeking corporation. It is, in other words, a wealth-creation machine, nothing more, nothing less. Its management, therefore, has a fiduciary duty to the stockholders to maximize the return on their invested capital. It does that in the following three ways.

First, by paying the lowest wages that will supply the company with a satisfactory work force. If Wal-Mart can get a satisfactory worker for a given job at $7.25 an hour, why should it pay more? Bob Beckel never pays more than he has to in order to get what he needs; why should Wal-Mart? Wal-Mart employees are not indentured. They’re perfectly free to search for a job that pays better than the one they have. If they don’t, it’s because they have the best job around for their skill set and particular circumstances. If market forces do not produce a “living wage,”—about as subjective a term as you can find, right up there with “fair”—then it is government’s function to make up the difference through the Earned Income Tax Credit or other mechanism. Corporations are not WPA projects and shouldn’t be used as such by government fiat.

Second, by paying the lowest amounts for merchandise of satisfactory quality. In a globalized world, that often means buying goods manufactured abroad. The high-wage American economy cannot compete with low-wage third-world countries when it comes to low-tech manufacturing. Most of the cost of a T-shirt or a pair of socks, after all, is the labor. With transportation costs now very low, thanks to containerization, and tariffs at the lowest point in history—a policy pursued by both Democratic and Republican administrations over the last 70 years—buying abroad is the only option for most of the merchandise sold at Wal-Mart. Does Bob Beckel think it’s a good idea for Wal-Mart to buy domestically if that means T-shirts that cost $20 each?

Third, by offering better prices, better quality, and more choices to its customers. Thousands, perhaps tens of thousands, of mom-and-pop, Main-Street retail operations have gone out of business because of Wal-Mart. That is because the customers of those concerns found that they got better deals at Wal-Mart and started shopping there, instead of on Main Street. That was tough, no doubt, on mom and pop, but that’s the “creative destruction” that is an ineluctable aspect of capitalism. Without old-fashion businesses adapting or dying, the economy stagnates and innovation disappears. Just ask anyone who has lived in a socialist economy.

And while it was tough on tens of thousands of moms and pops, it was great for Wal-Mart’s tens of millions of customers, whose standard of living has been raised by Wal-Mart’s low prices, high quality, and convenience.

If Bob Beckel were to have his way—and he won’t—the American standard of living and the size of the American GDP would both decline sharply as prices rose and quality declined. That, of course, would mean fewer total jobs. As with so many liberals, Bob Beckel’s heart is in the right place. But the heart is an organ very ill-suited to economic analysis.

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Housing Collapse Has a Lesson for the Ages

Earlier this month the New York Times ran a feature on the newest discipline to come to college campuses: capitalism. Major universities in the United States are now going to start devoting some class time to learning about it. Which is another way of saying they will learn about America.

Conservatives often complain that liberals talk about conservatism as if they’ve only heard vague rumors about this bizarre species, mostly because it’s easy to avoid conservative opinion if you want to. But they’ll also justly complain that major liberal institutions, like the mainstream media and universities, don’t understand capitalism, and don’t seem to want to. Yet these institutions shape young minds.

There are many choice quotes in the Times article about the sudden interest their own country, but this one stands out:

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Earlier this month the New York Times ran a feature on the newest discipline to come to college campuses: capitalism. Major universities in the United States are now going to start devoting some class time to learning about it. Which is another way of saying they will learn about America.

Conservatives often complain that liberals talk about conservatism as if they’ve only heard vague rumors about this bizarre species, mostly because it’s easy to avoid conservative opinion if you want to. But they’ll also justly complain that major liberal institutions, like the mainstream media and universities, don’t understand capitalism, and don’t seem to want to. Yet these institutions shape young minds.

There are many choice quotes in the Times article about the sudden interest their own country, but this one stands out:

While most scholars in the field reject the purely oppositional stance of earlier Marxist history, they also take a distinctly critical view of neoclassical economics, with its tidy mathematical models and crisp axioms about rational actors.

That about sums it up. They may not like the “purely oppositional” (read: given to mass murder) nature of Marxist history, but they don’t like the rationality of capitalism either. They have now designed the perfect course for those students who have an interest in economics but don’t like numbers or genocide.

But one thing conservatives have been known to repeat ad nauseam about capitalism is that it is truly race-blind. In a market economy, the basic trade principle of mutual benefit based on rational self-interest dominates. And attempts to distort the market in favor of one racial or ethnic group can end up helping that group marginally in the near term while hurting that group in the long term. On that note, those college professors just starting to explore capitalism might want to take a look at today’s New York Times report on the housing bust and the recession:

The Urban Institute study found that the racial wealth gap yawned during the recession, even as the income gap between white Americans and nonwhite Americans remained stable. As of 2010, white families, on average, earned about $2 for every $1 that black and Hispanic families earned, a ratio that has remained roughly constant for the last 30 years. But when it comes to wealth — as measured by assets, like cash savings, homes and retirement accounts, minus debts, like mortgages and credit card balances — white families have far outpaced black and Hispanic ones. Before the recession, non-Hispanic white families, on average, were about four times as wealthy as nonwhite families, according to the Urban Institute’s analysis of Federal Reserve data. By 2010, whites were about six times as wealthy….

Many experts consider the wealth gap to be more pernicious than the income gap, as it perpetuates from generation to generation and has a powerful effect on economic security and mobility. Young black people are much less likely than young white people to receive a large sum from their parents or other relatives to pay for college, start a business or make a down payment on a home, for instance. That, in turn, makes their wealth-building prospects shakier as they move into adulthood.

The Times explains why minorities are suffering more during the current economic downturn:

Two major factors helped to widen this wealth gap in recent years. The first is that the housing downturn hit black and Hispanic households harder than it hit white households, in aggregate. Many young Hispanic families, for instance, bought homes as the housing bubble was inflating and reaching its peak, leaving them saddled with heavy debt burdens as house prices plunged in places like suburban Phoenix and inland California.

Black families also were hit disproportionately by the housing collapse, because heading into the recession housing constituted a higher proportion of their wealth than for white families, leaving them more exposed when the market crashed. Higher unemployment rates and lower incomes among blacks left them less able to keep paying their mortgages and more likely to lose their homes, experts said.

And the housing bubble and bust were brought about in part by well-intentioned presidents from both parties trying to expand home ownership. But George W. Bush’s attempts to rein in the lending practices of the government-sponsored lenders and improve federal oversight were stymied, most effectively by Massachusetts Democrat Barney Frank.

That housing slump will forever be a major part of Frank’s legacy. And as the Times story notes, the widening of the wealth gap, especially during a down economy with high unemployment, can have lasting effects by constricting the generational transfer of wealth and enabling the wealth gap to persist or widen further even as the economy recovers.

Of course, leftist ideologues would love for this to be a tale of rapacious capitalists bent on profiting by stealing the wealth of minorities. The reality is that the government was only trying to help, and ended up doing lasting damage. It’s a familiar story with an important lesson that American academia’s newly minted professors of capitalism will have a hard time avoiding.

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Justice, Politics and the Poor

In an important Wall Street Journal op-ed, Arthur Brooks point out that fairly or not, “over the decades many Americans have become convinced that conservatives care only about the rich and powerful.” This is a problem, according to the American Enterprise Institute president, because:

Citizens across the political spectrum place a great importance on taking care of those in need and avoiding harm to the weak. By contrast, moral values such as sexual purity and respect for authority—to which conservative politicians often give greater emphasis—resonate deeply with only a minority of the population. Raw money arguments, e.g., about the dire effects of the country’s growing entitlement spending, don’t register morally at all.

Conservatives are fighting a losing battle of moral arithmetic. They hand an argument with virtually 100% public support—care for the vulnerable—to progressives, and focus instead on materialistic concerns and minority moral viewpoints.

Mr. Brooks, with whom I co-authored a monograph on the morality of democratic capitalism, lays out the case for how conservatives can make improving the lives of vulnerable people a primary focus. (The main reason to do so, Brooks makes clear, is that it’s the right thing to do.)

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In an important Wall Street Journal op-ed, Arthur Brooks point out that fairly or not, “over the decades many Americans have become convinced that conservatives care only about the rich and powerful.” This is a problem, according to the American Enterprise Institute president, because:

Citizens across the political spectrum place a great importance on taking care of those in need and avoiding harm to the weak. By contrast, moral values such as sexual purity and respect for authority—to which conservative politicians often give greater emphasis—resonate deeply with only a minority of the population. Raw money arguments, e.g., about the dire effects of the country’s growing entitlement spending, don’t register morally at all.

Conservatives are fighting a losing battle of moral arithmetic. They hand an argument with virtually 100% public support—care for the vulnerable—to progressives, and focus instead on materialistic concerns and minority moral viewpoints.

Mr. Brooks, with whom I co-authored a monograph on the morality of democratic capitalism, lays out the case for how conservatives can make improving the lives of vulnerable people a primary focus. (The main reason to do so, Brooks makes clear, is that it’s the right thing to do.)

As it happens, I’m reading a book by Tim Keller, Generous Justice, in which he makes the case for promoting justice and compassion from the vantage point of the Hebrew Bible and the New Testament. Keller points out that God gives the poor and downtrodden particular attention and has a special place in His heart for them. The Lord has a “zeal for justice” that binds Him to the socially weak, the dispossessed, and those living in the shadows of society.

Dr. Keller focuses on why a just society should care about the poor and reflect God’s concern for justice; he wisely doesn’t interject himself into our contentious political debates. But Keller’s argument does have political implications, since the case for “generous justice” (which includes a commitment to care for the poor) is based on the nature of the human person and their intrinsic worth. And those issues are central to political theory.

I understand that politics involves a balancing act and prioritization. There are obviously many issues that cry out for attention. Still, it seems to me that any political philosophy or party that doesn’t take into account the care and concerns of the weak and marginal is morally desiccated and hardly worthy of one’s allegiance. At the risk of sounding simplistic, what matters to God ought to matter to us, not for reasons having to do with arbitrary and outdated doctrines but with our basic design. The child in inner city Detroit and sub-Saharan Africa have worth because God has bestowed worth on them, as on us; because they and we are created in His image and likeness.

Now precisely how solidarity with the poor works itself out in public policy is a complicated matter involving prudential judgments. But that a society should care about the poor really is not.

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Obama’s Unease with Free Enterprise

In a speech last week in St. Louis, Mitt Romney spoke about the “liberating power of the free enterprise system” and went on to say this:

That same system has helped lift more people out of poverty across the globe than any government program or competing economic system. The success of America’s free enterprise system has been a bright beacon of freedom for the world. It has signaled to oppressed people to rise up against their oppressors and given hope to the once hopeless. It is called the Free Enterprise System because we are both free to engage in enterprises, and through those enterprises we ensure our freedom.

For conservatives, this has been a terribly underutilized argument. When it comes to measuring an economic system based on its moral outcomes, there is simply no competitor when it comes to the free enterprise system. No economic system in history has come nearly as close as capitalism to raising the poor from the dust and elevating the dignity of the human person.

As Arthur Brooks and I explain in Wealth & Justice: The Morality of Democratic Capitalism, there is a certain irony in the fact that capitalism is best at doing what it is most often accused of doing worst: distributing wealth to people at every social stratum rather than simply to elites. The evidence of history is clear on this point – the poor gain the most from capitalism, in part because, in most other economic systems, the game is rigged for the well-to-do. “The capitalist engine is first and last an engine of mass production,” is how the economist Joseph Schumpeter put it, “which unavoidably means also production for the masses…. It is the cheap cloth, the cheap fabric, boots, motor cars and so on that are the typical achievements of capitalist production and not as a rule improvements that would mean much to the rich man.”

Beyond that, capitalism places intrinsic limits on the authority of the state. It requires private spheres of human action that are beyond the reach of government. As Michael Novak has said, in a free society the state should be subsidium. It loses legitimacy as it encroaches into areas where it does not belong.

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In a speech last week in St. Louis, Mitt Romney spoke about the “liberating power of the free enterprise system” and went on to say this:

That same system has helped lift more people out of poverty across the globe than any government program or competing economic system. The success of America’s free enterprise system has been a bright beacon of freedom for the world. It has signaled to oppressed people to rise up against their oppressors and given hope to the once hopeless. It is called the Free Enterprise System because we are both free to engage in enterprises, and through those enterprises we ensure our freedom.

For conservatives, this has been a terribly underutilized argument. When it comes to measuring an economic system based on its moral outcomes, there is simply no competitor when it comes to the free enterprise system. No economic system in history has come nearly as close as capitalism to raising the poor from the dust and elevating the dignity of the human person.

As Arthur Brooks and I explain in Wealth & Justice: The Morality of Democratic Capitalism, there is a certain irony in the fact that capitalism is best at doing what it is most often accused of doing worst: distributing wealth to people at every social stratum rather than simply to elites. The evidence of history is clear on this point – the poor gain the most from capitalism, in part because, in most other economic systems, the game is rigged for the well-to-do. “The capitalist engine is first and last an engine of mass production,” is how the economist Joseph Schumpeter put it, “which unavoidably means also production for the masses…. It is the cheap cloth, the cheap fabric, boots, motor cars and so on that are the typical achievements of capitalist production and not as a rule improvements that would mean much to the rich man.”

Beyond that, capitalism places intrinsic limits on the authority of the state. It requires private spheres of human action that are beyond the reach of government. As Michael Novak has said, in a free society the state should be subsidium. It loses legitimacy as it encroaches into areas where it does not belong.

This doesn’t mean, of course, that capitalism is perfect, that it doesn’t ever become exploitive and self-destructive, or that regulations aren’t necessary. True friends of capitalism understand that it has to assist people through wrenching economic and social transitions. I understand, too, that President Obama claims to be a strong defender of capitalism. But what I have noticed is that when he speaks about capitalism and free enterprise, his words of praise are almost always qualified, minimalist, and pro forma. Their purpose appears to be inoculation, to prevent his critics from charging that Obama is not a strong defender of the free market and limited government. Yet the president’s record belies his claims.

The last three-and-a-half years, combined with his previous records, has a unifying theme to it: Barack Obama is constantly looking to expand the reach and power of government. He believes it’s the solution to almost everything that ails us. He reiterated that belief as recently as last week. There is no apparent off switch when it comes to the president’s spending habits.

In health care, Obama believes the solution is granting greater control to government, whereas conservatives believe the solution is granting greater control to individuals. For Obama, the word profit is almost always used despairingly, as synonymous for greed, as though it is an impairment rather than the engine of national wealth. He believes there is a moral imperative for government to redistribute wealth. He accuses strong champions of the free market (like Representative Paul Ryan) of supporting “thinly veiled social Darwinism.” And as the president’s stance toward Catholic institutions have shown, he wants to force religious institutions and civil society to bow and to bend to the will of government. His goal is for government to manage more and more of our private lives – not because he wishes us harm but because he believes it is in our self-interest. That is at the core of the progressive theory he clearly embraces.

The president is enchanted with the vision of a government-centered society to a degree that is highly unusual in American politics. That wasn’t as clear in 2008 as it is today. And it’s one reason why the outcome of the election this time around is likely to be different than the outcome of the election last time around.

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Obama Auto Czar Defends Romney

The Obama campaign has a new 2-minute ad out, set to air in five battleground states, that accuses Mitt Romney of closing down a steel company and throwing people out of their jobs in order to make a buck for Bain Capital. It shows images of displaced workers, many of them at the end of their working careers, who are, not surprisingly, unhappy with what happened. It’s tough to lose a job, especially one you’ve held for a long time.

The ad is, of course, unadulterated demagogy. Never mind that the closing took place in 2001, two years after Romney left Bain Capital. Never mind that 2001 was a terrible year for the American steel industry. Never mind that ten percent of the jobs in America disappear every year as the economy endlessly remakes itself through the process of creative destruction that makes capitalism work.

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The Obama campaign has a new 2-minute ad out, set to air in five battleground states, that accuses Mitt Romney of closing down a steel company and throwing people out of their jobs in order to make a buck for Bain Capital. It shows images of displaced workers, many of them at the end of their working careers, who are, not surprisingly, unhappy with what happened. It’s tough to lose a job, especially one you’ve held for a long time.

The ad is, of course, unadulterated demagogy. Never mind that the closing took place in 2001, two years after Romney left Bain Capital. Never mind that 2001 was a terrible year for the American steel industry. Never mind that ten percent of the jobs in America disappear every year as the economy endlessly remakes itself through the process of creative destruction that makes capitalism work.

Indeed, the ad is so shamelessly dishonest that it has produced a surprising critic, Steve Rattner. He is Obama’s former “auto czar,” who presided over the administration’s remaking of General Motors and Chrysler, a process that cost tens of thousands of jobs, as dealerships across the country were closed down by order of the Obama administration.

“I think the ad is unfair. Mitt Romney made a mistake ever talking about the fact that he created 100,000 jobs. Bain Capital’s responsibility was not to create 100,000 jobs or some other number. It was to create profits for his investors, most of whom were pension funds, endowments and foundations. It did it superbly, acting within the rules and acting very responsibly and was a leading firm,” Ratner said on MSNBC’s “Morning Joe” on Monday.

“So I do think to pick out an example of somebody who lost their job unfortunately, this is part of capitalism, this is part of life. And I don’t think there’s anything Bain Capital did that they need to be embarrassed about,” he said.

Rattner, to be sure, made his considerable fortune in a private equity firm not dissimilar to Bain Capital, called Quadrangle Group, and so might be inclined to see things from Romney’s point of view. But this is exactly right. Corporations are not WPA projects; they don’t exist to provide jobs but to maximize profits. Indeed, management has a fiduciary obligation to the stockholders to do exactly that. The theory of businesses as job providers was tried, in effect, in the Soviet Union, which always had a zero unemployment rate. Except for the highly privileged elite at the top, it produced nothing but poverty and a stunning lack of technological innovation.

Romney in particular and Republicans in general need to stop apologizing for advocating capitalism. It is what has made this country so extraordinarily rich, both for the Steve Rattners and Mitt Romneys and for the average American family as well, which lives at a level of affluence undreamed of even two generations ago.

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A Chance to Defend Democratic Capitalism

I’ll be very interested in tonight’s GOP presidential debate, in part to see if Newt Gingrich and Rick Perry go after Mitt Romney based on his association with Bain Capital. I wouldn’t be surprised if they try to avoid the topic (Gingrich did during his appearances in South Carolina on Sunday). Why? Because it’s clear the attacks on Bain — which conservatives rightly understood as an assault on enterprise and democratic capitalism — backfired badly on both men. They’ve been pounded by non-RINOs  like Rush Limbaugh, Mark Levin, Michelle Malkin, James Taranto, Charles Murray, Mark Steyn, National Review, Club  for Growth, and many more.

The tack taken by Gingrich and Perry qualifies as one of the more inexplicable campaign decisions I can recall; the product, if one wants to be generous, of desperation. (The “King of Bain” video may be the most comical piece of campaign propaganda I have ever seen, something you’d expect from a person with Michael Moore’s views and one-tenth of his talent. It has been utterly destroyed by fact checkers.)

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I’ll be very interested in tonight’s GOP presidential debate, in part to see if Newt Gingrich and Rick Perry go after Mitt Romney based on his association with Bain Capital. I wouldn’t be surprised if they try to avoid the topic (Gingrich did during his appearances in South Carolina on Sunday). Why? Because it’s clear the attacks on Bain — which conservatives rightly understood as an assault on enterprise and democratic capitalism — backfired badly on both men. They’ve been pounded by non-RINOs  like Rush Limbaugh, Mark Levin, Michelle Malkin, James Taranto, Charles Murray, Mark Steyn, National Review, Club  for Growth, and many more.

The tack taken by Gingrich and Perry qualifies as one of the more inexplicable campaign decisions I can recall; the product, if one wants to be generous, of desperation. (The “King of Bain” video may be the most comical piece of campaign propaganda I have ever seen, something you’d expect from a person with Michael Moore’s views and one-tenth of his talent. It has been utterly destroyed by fact checkers.)

Whatever animated the attacks, they appear to have helped Governor Romney, who is rising in the polls both nationally and in South Carolina.  And InsiderAdvantage poll released last night, for example, finds Romney with the support of 32 percent of  likely GOP voters surveyed, a nine-point gain from its last poll, taken on  January 11. “The only candidate to really gain any ground in this survey since our poll of last Wednesday night is Mitt Romney,” said InsiderAdvantage chief pollster Matt Towery to Newsmax.

Romney, having been bequeathed this unexpected gift by Gingrich and Perry, should take  advantage of it. I for one would be delighted to hear a leading Republican (outside of Representative Paul Ryan) make a powerful moral defense of democratic capitalism, to explain how it has lifted more people from poverty and destitution than any other economic system in human history, and why wealth creation is a moral good. The tendency in a campaign is to lay out a series of policy proposals, which are certainly important, but not to ground those policies in a political philosophy, which is equally important.

I’ve always thought that voters, even (and maybe especially) in the midst of a primary campaign, appreciate public figures who take the time and care to articulate a public philosophy. Not all the time, of course, but from time to time. It it what Ronald Reagan did supremely well and helps explain why he reshaped the conservative movement and American politics in such deep and lasting ways.

Newt Gingrich and Rick Perry, having last week unleashed an extraordinary attack on capitalism, have now provided an opening to Romney (and Rick Santorum, as I argued last week). There’s every reason in the world for conservatives to defend and champion democratic capitalism, not superficially but in depth, in a manner that is both intellectually serious and touches the human heart. It actually can be done — see Reagan and Margaret Thatcher for more — and I hope someone in the current GOP field dares to try.

 

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Newt Backing Off of Bain Criticism?

Apparently realizing he may have gone too far, Newt Gingrich started backing off his attacks on Mitt Romney’s record at Bain at a book-signing yesterday. And on Fox News this morning he defended himself from charges that he’s anti-capitalist:

A defensive Newt Gingrich, under fire from all sides for his attacks against Mitt Romney’s experience at Bain Capital, shot back at his critics Thursday morning, insisting that he was going after a “very specific case” involving his rival — not capitalism in general.

“It’s legitimate to ask the question — and this is the whole Wall Street problem — how come the big boys made a lot of money and [others] went broke?” Gingrich said on Fox News. “And that’s not an attack on capitalism. That’s not an issue about the whole capitalist system. That is a question about a very particular style of activity involving a very particular person.”

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Apparently realizing he may have gone too far, Newt Gingrich started backing off his attacks on Mitt Romney’s record at Bain at a book-signing yesterday. And on Fox News this morning he defended himself from charges that he’s anti-capitalist:

A defensive Newt Gingrich, under fire from all sides for his attacks against Mitt Romney’s experience at Bain Capital, shot back at his critics Thursday morning, insisting that he was going after a “very specific case” involving his rival — not capitalism in general.

“It’s legitimate to ask the question — and this is the whole Wall Street problem — how come the big boys made a lot of money and [others] went broke?” Gingrich said on Fox News. “And that’s not an attack on capitalism. That’s not an issue about the whole capitalist system. That is a question about a very particular style of activity involving a very particular person.”

Gingrich won’t come right out and say the attacks were wrong. But it’s hard to believe he will keep up his Bain criticism at the same pace after the massive blowback he’s received from conservatives. Politico reports the newest commercial from the pro-Gingrich Super PAC is actually a positive ad, which seems to suggest the group is dropping the Bain attacks, at least for now.

But then again, Gingrich has no incentive to necessarily stand by and support the 27-minute attack on Bain Capital released by the pro-Gingrich Super PAC. The film is already out, voters are already viewing it, the media’s already covering it, and any damage it will cause Romney is already well on its way. That’s not to mention the spectacular footage of Gingrich and Rick Perry slamming Romney for destructive business practices and “vulture capitalism” that are sure to feature prominently in Obama campaign ads if Romney gets the nomination.

If Gingrich had started to back away from the attacks before the film was released, the media would have probably pressed him on whether he would ask the Super PAC to stop it from going public. Now, Gingrich doesn’t have to worry about that. By distancing himself from the Bain hit film now, he’s hoping he can have it both ways.

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“Vulture Capitalism” Attack Ripped from Pat Buchanan’s ’92 Playbook

Newt Gingrich and Rick Perry are continuing to slam Mitt Romney for “vulture capitalism,” a phrase that NBC reports was “newly-minted” by Perry. Actually, it turns out that the phrase isn’t really that new – and this isn’t even the first time a GOP candidate has used it to attack a primary rival.

In 1992, Pat Buchanan seized on the term in a fit of desperation, and used it to bludgeon frontrunner President George H.W. Bush in the days leading up to the New Hampshire primary. The Boston Globe reported on February 11, 1992:

Patrick Buchanan accused the Bush administration yesterday of promoting “vulture capitalism,” and called for a more compassionate conservatism that would consider human needs.

With time running out to make his case to New Hampshire voters before next Tuesday’s primary, Buchanan is pressing to personalize his appeal in new television ads that show him talking directly into the camera about his views and with campaign stops like the former residence of a supporter, Steve Embry, a victim of the recession.

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Newt Gingrich and Rick Perry are continuing to slam Mitt Romney for “vulture capitalism,” a phrase that NBC reports was “newly-minted” by Perry. Actually, it turns out that the phrase isn’t really that new – and this isn’t even the first time a GOP candidate has used it to attack a primary rival.

In 1992, Pat Buchanan seized on the term in a fit of desperation, and used it to bludgeon frontrunner President George H.W. Bush in the days leading up to the New Hampshire primary. The Boston Globe reported on February 11, 1992:

Patrick Buchanan accused the Bush administration yesterday of promoting “vulture capitalism,” and called for a more compassionate conservatism that would consider human needs.

With time running out to make his case to New Hampshire voters before next Tuesday’s primary, Buchanan is pressing to personalize his appeal in new television ads that show him talking directly into the camera about his views and with campaign stops like the former residence of a supporter, Steve Embry, a victim of the recession.

Buchanan’s popularity hit its peak during the New Hampshire primary. On February 16, 1992, The New York Times editorial page applauded his critique of capitalism, and argued that it led to his surge in the state:

He started his New Hampshire primary campaign intending to push President Bush back to old-time Republican religion. Then he came to New Hampshire, where businesses have failed in record numbers, unemployment in some towns has exceeded 20 percent and welfare rolls have swollen. Meet the new Patrick Buchanan.

Now the archconservative journalist campaigns by assailing “vulture capitalism.” Now the thundering apostle of free-market economics proclaims that “conservatism is about more than the constitutional right of big fishes to eat little fishes.” …

His conversion to this new-time religion may or may not be sincere. But it is paying dividends. Barely three weeks ago, President Bush seemed destined to bury Mr. Buchanan, who had never been elected to anything. Now with the election two days away, the President is scrambling to preserve a convincing margin of victory.

Unsurprisingly, conservatives dissented. On March 1, 1992, Charles Krauthammer wrote, in a masterful takedown of Buchanan, that the anti-capitalist sentiment was just one of the many symptoms of the candidate’s fascistic ideology:

Buchanan has converted to protectionism, i.e., government shutting markets in the name of the nation. And now the pretender to the throne of Ronald Reagan has gone beyond mere autarky to public denunciations of “vulture capitalism.”

This is Reaganism? Sounds more like Peronism. After a lifetime denouncing the left for letting government regulate the economy, Buchanan is a born-again economic populist, championing the shirtless ones against rapacious capitalism.

While Buchanan’s attacks on Bush aren’t identical to the current attacks on Romney, his dark portrayal of free market activity and use of left-wing rhetoric is remarkably similar. But Buchanan’s modest success didn’t continue on past the New Hampshire primary. And the current anti-capitalist rhetoric from some Republican candidates isn’t likely to get them very far either.

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Romney vs. the “Bitter Politics of Envy”

Mitt Romney’s main challenge going forward, aside from the general need to unite the party, is to find a message that refutes the class warfare arguments without offering up clumsy sound bites. If his victory speech last night was any indication, he may be finding his voice on this. He said:

President Obama wants to put free enterprise on trial. In the last few days, we have seen some desperate Republicans join forces with him. This is such a mistake for our party and for our nation. This country already has a leader who divides us with the bitter politics of envy. We must offer an alternative vision. I stand ready to lead us down a different path, where we are lifted up by our desire to succeed, not dragged down by a resentment of success. In these difficult times, we cannot abandon the core values that define us as unique — we are one nation, under God.

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Mitt Romney’s main challenge going forward, aside from the general need to unite the party, is to find a message that refutes the class warfare arguments without offering up clumsy sound bites. If his victory speech last night was any indication, he may be finding his voice on this. He said:

President Obama wants to put free enterprise on trial. In the last few days, we have seen some desperate Republicans join forces with him. This is such a mistake for our party and for our nation. This country already has a leader who divides us with the bitter politics of envy. We must offer an alternative vision. I stand ready to lead us down a different path, where we are lifted up by our desire to succeed, not dragged down by a resentment of success. In these difficult times, we cannot abandon the core values that define us as unique — we are one nation, under God.

Even more important than his defense of capitalism and the free market is the acknowledgement that President Obama’s success in November will depend entirely on how successful the president will be at dividing the country and setting Americans against one another.

The class warfare Obama will employ will mirror to some extent the recent attacks on Romney’s business experience from Newt Gingrich, Jon Huntsman, and Rick Perry. But the other element of Obama’s strategy will be what the White House’s allies and insiders have described as seeking a coalition of “voters who have gotten ahead on the basis of educational attainment… and a second, substantial constituency of lower-income voters who are disproportionately African-American and Hispanic.”

Obama reinforced this recently at a fundraiser where he suggested a Republican administration that replaced him would employ racist policies against minorities. Aside from the divisive rhetoric on race, the president signaled in his “Teddy Roosevelt” address that he will continue to demagogue wealth and success to capitalize on the Occupy Wall Street protest movement and scapegoat his political opponents for the failure of his policies to keep unemployment numbers where he promised they would be.

Obama won four years ago on the strength of his lofty oratory on uniting the country. He’s made it clear he will be taking the opposite approach in November. This gives Romney the opportunity to do what he did last night: instead of offering a disquisition on Schumpeter and Friedman, seek to protect Americans from the divide-and-conquer strategy to which the president is about to subject them.

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So This Is What A Free Market Looks Like

Alana mentions an aspect of Newt Gingrich’s attacks on Mitt Romney that is less about capitalism and more about electability: that he clumsily (read: honestly) defends what many see as the dirty work of capitalism. This is a fair argument to make, inasmuch as Romney has a tendency to litter his campaign stops with cartoonishly unattractive, but accurate, descriptions of the free market (i.e. let Detroit go bankrupt, he likes being able to fire people, “Don’t try to stop the foreclosure process”).

In his column yesterday, Jay Nordlinger writes of his pleasant surprise at watching Romney engage an “occupy” protester and defend corporate profits. Jay writes: “I don’t think I had ever seen a candidate do this. You’re supposed to blast corporate profits or change the subject.” Indeed, Romney doesn’t like to sugarcoat his defense of capitalism in all its glory, and the worry is that it risks turning him into the Col. Nathan Jessup of this election, just itching to turn to a liberal and say:

You have the luxury of not knowing what I know. That the factory’s closing, while tragic, probably saved jobs. And my existence, while grotesque and incomprehensible to you, saves jobs. You don’t want the truth because deep down in places you don’t talk about at parties, you want me on that Wall Street, you need me on that Wall Street. We use words like market, creative destruction, invisible hand. We use these words as the backbone of a life spent defending something. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very economic freedom that I provide, and then questions the manner in which I provide it. I would rather you just said thank you, and went on your way.

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Alana mentions an aspect of Newt Gingrich’s attacks on Mitt Romney that is less about capitalism and more about electability: that he clumsily (read: honestly) defends what many see as the dirty work of capitalism. This is a fair argument to make, inasmuch as Romney has a tendency to litter his campaign stops with cartoonishly unattractive, but accurate, descriptions of the free market (i.e. let Detroit go bankrupt, he likes being able to fire people, “Don’t try to stop the foreclosure process”).

In his column yesterday, Jay Nordlinger writes of his pleasant surprise at watching Romney engage an “occupy” protester and defend corporate profits. Jay writes: “I don’t think I had ever seen a candidate do this. You’re supposed to blast corporate profits or change the subject.” Indeed, Romney doesn’t like to sugarcoat his defense of capitalism in all its glory, and the worry is that it risks turning him into the Col. Nathan Jessup of this election, just itching to turn to a liberal and say:

You have the luxury of not knowing what I know. That the factory’s closing, while tragic, probably saved jobs. And my existence, while grotesque and incomprehensible to you, saves jobs. You don’t want the truth because deep down in places you don’t talk about at parties, you want me on that Wall Street, you need me on that Wall Street. We use words like market, creative destruction, invisible hand. We use these words as the backbone of a life spent defending something. You use them as a punchline. I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very economic freedom that I provide, and then questions the manner in which I provide it. I would rather you just said thank you, and went on your way.

Of course, no one is accusing Romney of breaking the law (or of serving with distinction in the Marines), so we can’t take the metaphor too far. Nonetheless, this would, needless to say, not be the most attractive general election message to voters in swing states. But it would be the truth, wouldn’t it? And conservatives can handle that, can’t they?

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Dem Intentions Don’t Justify Smears

The attacks on Mitt Romney’s business career from his Republican opponents are getting nastier. The knives are out as supporters of Newt Gingrich and Rick Perry are trying to label Romney as a “predatory capitalist” who looted companies and put people out of work while making millions at Bain Capital. The spectacle of right-wingers blasting a venture capitalist they also deem insufficiently conservative as unfit for office because he oppressed the working class in the service of wealthy investors is comical if not ironic.

The charges are largely false. Romney’s efforts to build new companies and resuscitate dying ones created more jobs than were lost. But conservatives justify these absurd attacks because they claim the Democrats will say even worse about Romney this fall, rendering him unelectable. Yet the reasoning here is faulty. It is true President Obama’s campaign staff will do their best to demagogue Romney on his business record. But do Republicans think this issue, which allows Romney to highlight his success as a job creator and expertise on an economy that Obama can’t match, makes the GOP any more vulnerable this fall than the even more glaring weaknesses Gingrich, Rick Santorum or Perry possess?

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The attacks on Mitt Romney’s business career from his Republican opponents are getting nastier. The knives are out as supporters of Newt Gingrich and Rick Perry are trying to label Romney as a “predatory capitalist” who looted companies and put people out of work while making millions at Bain Capital. The spectacle of right-wingers blasting a venture capitalist they also deem insufficiently conservative as unfit for office because he oppressed the working class in the service of wealthy investors is comical if not ironic.

The charges are largely false. Romney’s efforts to build new companies and resuscitate dying ones created more jobs than were lost. But conservatives justify these absurd attacks because they claim the Democrats will say even worse about Romney this fall, rendering him unelectable. Yet the reasoning here is faulty. It is true President Obama’s campaign staff will do their best to demagogue Romney on his business record. But do Republicans think this issue, which allows Romney to highlight his success as a job creator and expertise on an economy that Obama can’t match, makes the GOP any more vulnerable this fall than the even more glaring weaknesses Gingrich, Rick Santorum or Perry possess?

As the Wall Street Journal reports today, Romney’s record at Bain is eminently defensible. While it is true Obama will bash Romney endlessly as a quintessential Wall Street capitalist, surely even the frontrunner’s GOP critics understand that any Republican will be skewered as the handmaiden of Wall Street. The president has clearly signaled he intends to run to the left this year by attacking Congress and big business in the name of the 99 percent the Occupy Wall Street protesters talk about. So it’s no secret Romney’s actions at Bain will be depicted as indicative of the heartless capitalism Democrats supposedly deplore. But contrary to the claims of those conservatives who claim Romney is especially vulnerable to this line of attack, the former venture capitalist is actually far better equipped to fight back against left-wing demagoguery than any of his opponents.

Unlike Gingrich or Santorum, let alone Perry, Romney actually can explain to the voters why some companies fail and others succeed. Rather than his business career being an electoral liability, it provides him with the intellectual wherewithal to put forward a coherent position on economic issues that no other Republican or President Obama can match. If the election this year is to be decided via a clear choice between a man who created wealth and one who is merely interested in scapegoating wealth creation, then Republicans should feel fairly confident they would come out on top.

The attacks on Romney’s record being financed by wealthy Gingrich supporters are not about vetting a would-be Republican candidate but an effort at exacting revenge for the negative ads published about the former speaker. Unlike the squeaky-clean Romney’s record, Gingrich’s troubling past is an insurmountable obstacle to his election.

Conservatives do have some points they can pound Romney on. He’s vulnerable on health care and social issues which, were he facing stronger opponents, would have ensured his defeat. But for Gingrich’s friends to be playing the “predatory capitalist” card in a vain effort to smear Romney is both hypocritical and absurd. The idea that conservatives would seek to destroy a candidate because he is someone who took in a free enterprise capital venture is the stuff of satire. It won’t help Gingrich or, I suspect, even damage Romney much. But it is testimony to the depths some Romney-haters will sink in their futile effort to destroy him.

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The Ballad of John and Cee Lo

It was, in it’s way, a great moment. Dumb and profound at once. On NBC television, singer Cee Lo Green ushered in 2012 at a Times Square studio by singing John Lennon’s leftist anthem “Imagine,” only he updated an originally atheist lyric so that it now came out as a multiculturally sensitive, ecumenical one. In 1971, Lennon wrote and sang about his paradise on earth, in which there’s “nothing to kill or die for/and no religion too.” Green changed that to “nothing to kill or die for/and all religion’s true.”

I’m very much in favor of “Imagine” as a living document. If you want to know what left-liberals are thinking at a given moment just listen to how they tweak this dystopian dirge to reflect resentments and sensitivites du jour. In January 2012, multiculturalism trumps atheism. Stay tuned for updates.

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It was, in it’s way, a great moment. Dumb and profound at once. On NBC television, singer Cee Lo Green ushered in 2012 at a Times Square studio by singing John Lennon’s leftist anthem “Imagine,” only he updated an originally atheist lyric so that it now came out as a multiculturally sensitive, ecumenical one. In 1971, Lennon wrote and sang about his paradise on earth, in which there’s “nothing to kill or die for/and no religion too.” Green changed that to “nothing to kill or die for/and all religion’s true.”

I’m very much in favor of “Imagine” as a living document. If you want to know what left-liberals are thinking at a given moment just listen to how they tweak this dystopian dirge to reflect resentments and sensitivites du jour. In January 2012, multiculturalism trumps atheism. Stay tuned for updates.

That Lennon’s original was ever embraced as a harmless expression of goodwill and brotherly love has always been baffling. Four decades of elementary school graduation ceremonies have seen little kids across America sing “Imagine no possessions,” and “no heaven” as if the four decades prior didn’t revolve around the global threat posed by a state-owned and godless Soviet Union. Kids (and adults) sang, “Imagine all the people living for today” right up until the West that ignored tomorrow went broke. The song, if you take it seriously, is a three-minute blueprint for civilizational collapse.

Which means that at the seam of 2011 and 2012, on a live TV show, broadcast from the world’s cultural nucleus, you better take it seriously. So Cee Lo Green, a guy whose biggest hit was “F_ck You,” only without the dash, thought better of going with God is dead as a New Year’s tiding.

He explained via Twitter, after Lennon’s fans and God’s detractors complained: “I was trying to say a world were [sic] u could believe what u wanted that’s all.”

Well, that’s a lot. It’s not so common for cultures to allow you to believe in whatever you want. The only ones that do allow it are those that also value possessions, heaven, hell, countries, ideals “to kill or die for,” and all the other stuff that “Imagine” relegates to the non-”dreamer” category of close-minded buzz-kills. It turns out that eschewing traditional Western institutions is incompatible with religious freedom.

Cee Lo Green’s biggest problem is not the Twitter blowback from aggrieved Lennonists but the unfeasability of his own can’t-we-all-get-along-while-rejecting-serious-ideas position. Not that I credit a pop star who booked a network appearance with maintaining a political position. But there’s a lot more where Green came from. He is reminiscent of Alec Baldwin, who went down to the Occupy Wall Street demonstration to get his fair share of abuse. Baldwin, a liberal superhero, is also a more successful capitalist than any greedy Wall Street trader you’ll ever meet. So he took it upon himself to explain to the anti-capitalist anarchists squatting in Zuccotti Park that they just didn’t understand the gifts and wonders of the free market. They agreed to disagree. It turns out that aspiring to criminalize capitalism is incompatible with Hollywood success.

And capitalist success is crucial to celebrity leftism. Cee Lo Green is apparently a man of some faith, and there is no reason to doubt his enthusiasm for religion. But he is also a man of some means. And if you had just launched, say, a high-profile reality show in England would you want to ring in 2012 with a worldwide anti-God statement? Not if your manager apprised you of the the latest demographics from the UK, you wouldn’t. In England, the most popular name for male newborns is Mohammed, and the head of the Anglican Church has been preaching that “all religions are true” well before Green came to the same public revelation.

But before the Islamophobia spotters fire up their Twitter guns, the following needs to be made clear. I think it’s generally a good thing not to gratuitously offend religious believers. Of all faiths. In a limited sense, Green is right. (Koran-burning Pastor Terry Jones of Gainesville, Florida, is wrong.) But the inability to bring a modicum of intellectual discrimination into line with one’s human decency creates a problem. All religions can–indeed must–be permitted and accommodated, quite apart from the trendy compulsion to advertise the impossible conviction that they are all also “true.”

Yet broadly speaking, if successful performers incorporate the feelings of the faithful into their calcuations for monetary gain, it says good things about capitalism. Empathy and respect are worth something in the free market.

Are liberals squishy ecumenicists or angry atheists? Compassionate capitalists or anarchist socialists? That’s for liberals to decide. But the best among them will do so after a little consultation with the capitalist consumer. One man who both learned and forgot that lesson was the burgeoning capitalist, John Lennon. In 1966, before he felt up to the task of telling humanity what to rid itself of, he contented himself with telling an American teen magazine that the Beatles were “more famous than Jesus.” A global protest erupted and record burnings followed, and in a series of press conferences that would make his Twitter defenders cringe Lennon publicly apologized, regretted, backtracked, and generally atoned. “I just said what I said,” he offered, “and it was wrong.” Imagine that.

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