Romney Still Doubling Down on Failed Policies

Thursday, 02 August 2012 10:04 By Paul Krugman, Krugman & Co. | Op-Ed
  • font size decrease font size decrease font size increase font size increase font size
  • Print
  • Email

Mitt Romney(Photo: Austen Hufford)There's a tone of incredulity to the writings of Romney apologists. It seems as if they can't believe that the magic words — Capitalism! Free markets! Job creators! — aren't silencing his critics. After all, they say, wasn't Mitt Romney just doing what has been standard for the past 30 years?

Actually, we don't know just how standard his behavior was and won't until we see his tax returns, which will probably never happen (there has to be something really explosive in there). In any case, however, the fact that we've had a Gordon Gekko economy for 30 years doesn't make it O.K.

A couple more illustrations of what those 30 years involved. First, a chart on wage stagnation despite rising productivity, on this page. Second, a dramatic rise in household debt, which many of us now believe lies at the heart of our continuing depression. See the second chart on household debt as a percentage of gross domestic product.

U.S. Median Earnings

U.S. Household Debt

You might ask, what should be done about this troubling performance? Well, President Obama is proposing mild meliorative measures: reform that at least assures workers of having health insurance, and modestly stronger financial regulation. Mr. Romney, on the other hand, wants to double down on the policies that brought us to where we are today: more tax cuts for the rich, more financial deregulation.

And his defenders are mystified that anyone should question the wisdom of this point of view.

Decoupled and Divided

Predictably, Mr. Romney is accusing Mr. Obama of "attacking capitalism" and "dividing America" by raising questions about Bain Capital and those hidden tax returns. This is all par for the course; many of us remember how any criticism of President George W. Bush was unpatriotic, and if I recall correctly, during the dot-com bubble The Wall Street Journal argued that any skepticism about stock market valuations showed a lack of faith in free markets.

The special Romney twist is his desire to have it both ways. He's proud of his business record and his success, he says, but at the same time wants us to believe that he had nothing to do with Bain's actions over a three-year period when he was still its C.E.O., and is completely unwilling to let us see the tax returns that would tell us something about exactly how he achieved his current wealth. (There are two competing theories about his tax stonewalling. One is that he had one or more years of zero taxes. The other is that he actually made a lot of money in 2009, because he shorted the market. We may never know which is true.)

Anyway, just a reminder about what's really dividing America: the fact that a rising tide no longer raises all boats. And there has been a dramatic decoupling between overall economic growth and the fortunes of the typical family.

It's not an "attack on capitalism" to suggest that growing income disparities and the corresponding failure of most Americans to benefit from rising productivity are problems. Still, what can be done? Well, you can ask the rich to pay somewhat higher taxes, and you can strengthen the safety net — which is what Mr. Obama actually advocates. But Mr. Romney wants to do the reverse.

So Mr. Romney wants us to celebrate the success of people like him, even though their success doesn't seem to have benefited ordinary families, and even though he stands for policies that would aggravate the gap between a fortunate few and everyone else.

And then he accuses Mr. Obama of dividing America.

© 2014 The New York Times Company
Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.
Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008. Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including "The Return of Depression Economics" (2008) and "The Conscience of a Liberal" (2007).
Copyright 2014 The New York Times.

Hide Comments

blog comments powered by Disqus