The End Of America As We Know It? Hardly.

Andrew Sullivan posts an excellent retort to Mitt Romney’s fear mongering that the United States is about to make a binary flip from being a free enterprise nation to having a “government-run economy”, based on this illuminating chart:

As you will note, the line indicating growth in corporate profits (in billions of dollars) obstinately refuses to go in the direction that it would need to point in order to signify the government-led smothering of the private sector that Romney wants us to believe is currently taking place.

The Republican presidential candidate has been giving speeches bemoaning the notion that President Obama doesn’t understand capitalism or the free enterprise system, and that this ignorance is leading Obama to implement policies that are harming the economic recovery. Romney has advanced this line of attack frequently, most recently at a campaign event in St. Louis, Missouri, though to be fair, he seems willing to ascribe Obama’s supposed failures to ignorance rather than malice:

I do not believe this has been done with evil intent or ill will. But for a family watching their house being sold at foreclosure, or the family that is forced to spend their kid’s college savings just to make ends meet, the results are just as devastating.

Oh wait, perhaps not:

I will not be that President of deception and doubt. I will lead us to a better place.

Then, of course, comes the obligatory lie about Obamacare, the Affordable Healthcare act:

Today, government at all levels consumes 37 percent of the total economy or G.D.P. If Obamacare is allowed to stand, government will reach half of the American economy. And through the increasing controls government has imposed on industries like energy, financial services and automobiles, it will soon effectively control the majority of our economic activity.

This line only works if you are ill-informed enough to actually believe that Obamacare effectively appropriates and nationalises the entire US healthcare industry, bringing it under government ownership as opposed to just regulating the industry to a higher degree and increasing the customer base of the insurance companies through the individual mandate. So it’s basically a big fat lie, though Romney is clever enough to choose his words carefully, stating “government will reach half of the American economy”, a quite meaningless phrase, but one that deliberately and incorrectly suggests ownership and control of half of the US economy without actually putting him on the record as having said so.

And finally, the crux of Romney’s argument:

One must ask whether we will still be a free enterprise nation and whether we will still have economic freedom. America is on the cusp of having a government-run economy. President Obama is transforming America into something very different than the land of the free and the land of opportunity.

We know where that transformation leads. There are other nations that have chosen that path. It leads to chronic high unemployment, crushing debt, and stagnant wages.

I don’t want to transform America; I want to restore the values of economic freedom.

This is what really irritates me about the Romney argument, this idea that there is a binary choice between “free enterprise” and “government-run”, that America has always dwelt on the free enterprise side of the line and that Obama wants an old-school socialist planned economy. It is borne out of the total allergy to nuance or shades of grey currently affecting the Republican party, and is one of the main reasons why I cannot bring myself to support them at the moment.

Of course there is no such binary choice. What percentage of GDP would have to be consumed by government spending for “free enterprise” to officially be declared dead according to the Romney definition? 37%, the current figure? 50% + 1? Something else? All conservatives – myself included – want to see government spending account for as small a proportion of GDP as possible, and most would agree that the current level – in Britain as well as in America – is too high. But the size of government has expanded under both parties, and though Obama may be guilty of failing to reverse the trend, he has at least slowed the rate of increase in the size of government, when the stimulus measures are factored out. For Mitt Romney to suggest that the US is teetering on the brink of becoming a planned economy under Obama when government spending accounts for 37% of GDP is not only the worst type of scaremongering, it also ignores the significant contribution that his own party made to the problem.

And as for this narrative about Obama seeking to “transform” America, to turn it into something unrecognisable from before – while it may be the only narrative that Romney can hope to ride to the White House in November, it is also untrue. Obama is a centre-left politician implementing mostly centre-left policies, some of which would actually have enjoyed a measure of support among Republicans if they had been proposed by a President Bush, Cheney or McCain. But for Romney to get out the vote, he must convince his supporters of something patently untrue, that Obama is a radical, a dangerous subversive trying to alter the fabric of America.

I’m an economic conservative, I believe in a small state and limited government involvement in private markets. But given the choice between someone on the centre left who is making an honest effort along Keynesian lines to solve the economic difficulties facing America and someone on the right who screams “socialism!” where none exists, and who remains in denial about his own side’s complicity in the downturn and the detrimental effect that his policy proposals would have on the recovery, I have to hold my nose and support the centre left guy.

Which is a shame, because it would be nice to have a genuine choice in 2012.

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