Conservatives of the world, unite! You have nothing to lose but your corporate sponsors. We must save capitalism from the capitalists. We must persuade our corporate and political classes that it is difficult for people to retain their belief that market capitalism works for them when they are struggling to find work, or to keep their homes, or to avoid declines in their living standards as their real wages stagnate and their taxes disappear into bailouts of banks and subsidies for solar millionaires.
Decisions once reported only in the financial pages are now page-one news and the subjects of countless blogs, and critics of capitalism are riding a wave of belief that inequality is rising and opportunity for the ordinary person is not; that the deck is stacked against the guy without access to a private cell phone number on K Street. Corporate elites who believe their decisions on matters such as compensation, plant closings, and foreign investment, to mention only a few items discussed in boardrooms and executive suites, should think again. Sure, some have political advisers to warn them how to cope, after the fact, with the often-predictably unpopular consequences of their decisions. But those consequences should be considered before the fact—before deciding to join a government-union-corporate axis to push for immigration reform that well might help the overall rate of economic growth and profits, but evoke a lack of enthusiasm from the unemployed programmers who will have to compete with the new high-skilled immigrants, or an unwelcoming attitude towards the unskilled newcomers who drive down wages. Or before handing out multimillion-dollar bonuses to bankers so recently bailed out by the taxpayer. Or before exposing valuable technology to theft by China’s state-owned enterprises in order to sell a few more feet of rope in that emerging market.
There’s no need to cater to occupiers, or to egalitarian hustlers, or to climate-change extremists. But there is a need to consider the effect of business decisions beyond quarterly profits and earnings per share, and of political decisions on people besides members of focus groups. Support for the preservation of the wondrous capitalist system that has produced unparalleled material prosperity is worth a few moments of thought, even by executives whose every minute is worth so much in the market. And even by the political class.
Take a break from reading the polls and weighing electoral prospects (nothing wrong with that—we all want to keep our jobs), and spare a moment for consideration of future support for our political and economic system. We have long passed the day of the silent majority, and if howls of righteous anger are not to result in support for measures that will make unhealthy changes in our system, the majority must have a sense that government, as well as business, is on their side. Preservation of our system is the ultimate goal.
In the depths of the Great Depression, Italy’s Benito Mussolini seemed to be converting a clapped-out economy into a model of state-run efficiency, with the cooperation of big business, enchanted by trains that ran on time. Never mind a bit of roughing up of any opposition. In Germany, Hitler’s National Socialism seemingly had his nation on the road to economic recovery, with millions pouring into capitalists’ coffers as the nation rearmed, and the annoying trade unions were tamed. Never mind a bit of broken glass here and there. In Soviet Russia, Lenin and Stalin commanded a wave of industrialization that was the envy of America’s “useful idiots,” dazzled by statistics of rising output and tours of Potemkin Villages, and eager to sell the Soviets the rope with which to hang themselves, as Lenin so pithily put it. Never mind the stacks of frozen corpses behind the myriad infrastructure projects.
Massachusetts Senate candidate Elizabeth Warren backed away from her statement that supporters of hers from Wall Street tell her she could "save capitalism." The Boston Herald reports on the Democratic candidate's walkback:
Massachusetts Democrat Elizabeth Warren says Wall Street types tell her she could "save capitalism" if she wins her race for U.S. Senate. Here's what Warren recently told a reporter, National Journal reports:
President Obama, envious of China’s economic model, proclaimed his admiration for the high-speed railways, bridges, skyscrapers, and solar panels that China is building. (“That used to be us,” he famously said – a line apparently so powerful it became the title of a book.) But even the Chinese know that Obama’s envy is misplaced.
There’s a lot of silliness on all sides of the Bain Capital debate.
On the one hand, Newt Gingrich’s attacks (and the follow-on assaults by Jon Huntsman and Rick Perry) on Mitt Romney’s career at Bain Capital have been unfair, over the top, and, for that matter, all over the place. Gingrich, Perry, and Huntsman deserve much of the criticism they’ve received from conservative commentators.
On the other, Mitt Romney’s claim throughout his campaign that his private sector experience almost uniquely qualifies him to be president is also silly. Does he really think that having done well in private equity, venture capital, and business consulting—or even in the private sector more broadly—is a self-evident qualification for public office? One assumes Mitt Romney would agree that Chris Christie is a better chief executive of New Jersey than Jon Corzine, and that Rudy Giuliani was a better mayor of New York than Mike Bloomberg. But Romney’s biography looks a lot more like Bloomberg's or Corzine's (leaving aside Corzine's recent misadventures) than like that of Giuliani (pre-mayoralty) or Christie. Past business success does not guarantee performance in public office. Indeed, Romney sometimes seems to go so far as to suggest that succeeding in the private sector is intrinsically more admirable than, e.g., serving as a teacher or a soldier or even in Congress. This is not a sensible proposition, or a defensible one.
There’s a line of thinking you often hear from Republican-types about how markets are never wrong. You think a certain CEO’s lavish compensation is ridiculous? Nonsense, those types tell you. You think that a CEO’s VORP—that’s a baseball stat that translates, in this case, to the CEO’s marginal value versus the average replacement CEO—couldn’t possibly be so high? They simply counter that he’s worth the money because there’s someone willing to pay it. The results in a market triumph considerations of value.
Two very important changes have occurred in America, and indeed in other Western economies. My guess is that they will prove to be permanent phenomena, just as permanent as the changes introduced by Franklin Delano Roosevelt’s New Deal.