by Jude Fernando
The outcome of the United States Presidential elections is too close to call. Yet, three presidential debates reinforced the perception among informed voters that Mitt Romney is both a weak and most unpredictable candidate. He does not grasp the complexities of the economy—a failing he obscures by refusing to be clear about his policies. His continual self-contradiction and his appeal to the fears of voters highlight insincerity.
Mitt Romney’s small government is a travesty.
Mitt Romney’s scapegoating of “big government” for all our economic and social woes is not backed by a meaningful definition of big government, nor does it seem to be based on an historically informed understanding of the government’s role in the economy and its implications for development. His five-point plan could not possibly address any of the issues he falsely attributes to big government. Romney even knocks policies that he admits are successful, if they have anything to do with the “big government” that he vehemently detests.
Romney’s idea of a small government is a dangerous caricature. Romney’s corporate approach to the role of government, his sound bite complaints, and his five-point solution argued during the past two presidential debates deprived the voters of a space to think reflectively of the role of government. Instead his rhetoric instills a culture of fear of big government, deflecting criticism from the same corporations backed by Republican presidents and their lobbyists — the ones who continue to secure state power for the service of corporations.
The truth is that Romney is not against big government. His proposals will make the government even bigger by blurring the distinction between the roles of the government and corporations. Such a de facto government constrains the space for basic human freedoms because it deprives the people equal access to the basic necessities of life irrespective of their social and economic status. It is far more intrusive into all aspects of social life because its raison d’etre is to shift the role of government from one that creates a balance between social objectives and private economic objectives to one that focuses exclusively on private interests, hoping — against all evidence to the contrary — that the social benefits will automatically trickle down from the pursuit of private interests. Romney is more than willing to expand government to support the military-industrial complex, to subsidize corporations with tax breaks and to bail out “too-big-to-fail” corporations. Given his disinterest in the 47 percent, it’s hard to believe he thinks those benefits will trickle down to the rest of us. He’s more than willing to reduce or deny social benefits to seniors, the unemployed, the sick, the young and many American women. Philanthropic business activities and recruiting more women to the Massachusetts legislature are certainly not evidence that he understands social inequalities and do not compensate for what his big-corporation policies have taken away from marginalized groups.
A “small government,” defined solely by the amount of taxes it collects and the size of the bureaucracy it maintains, gives rise to a powerful minority of elites at the expense of the public good, and its use of excessive non-material power and safeguarding of private interests far outweigh the benefits of lower taxes and subsidies. Increasing inequalities, corporate betrayals of society, military expenditures, foreign-policy manipulations, agricultural subsidies and currency manipulation are all examples of small government in action.
Romney’s small government actually resembles big government in the era of the Cold War. This concept marries corporate and government interests, precisely what motivated Dwight D. Eisenhower’s warning about the dangers of the military-industrial complex. The government has constantly grown bigger not only because of the necessity of meeting the security needs of the United States alone, but because it continues to bankroll and bail out the very corporations in the military-industrial complex that proved to cause the decline in U.S. competitiveness in today’s global economy. Romney is oblivious to the fact that, historically, low inflation, low unemployment and high productivity were more common in the United States before globalization integrated our economy with the world market. Then, gains from economic growth were usually reinvested in the United States, and wealth stayed here. Responses to economic policies could be more easily predicted and managed because national boundaries were not forcibly opened to international trade. Few countries could compete with the United States in terms of wealth, resources, productivity and technical innovation, and it was rare for a U.S. corporation to abandon its home country in search of cheap labor and markets on foreign soil. The rest of the world simply had less ability to compete economically and politically with the United States. The kind of global corporatism presented by Romney, his foreign bank accounts and corporate off-shoring, is in large measure responsible for the decline of U.S. prosperity, our vulnerability to financial speculators and our lower standard of living compared with virtually all other developed Western nations. Today’s world is a different place, and the United States no longer enjoys the luxuries it used to. When President Obama took the reins, he faced an economy wrecked by a financial sector run amok — one represented well by the machinations of Bain Capital. Economic crashes in global markets must be explained in terms of economic fundamentals that are beyond the control of any one president, and especially a president handicapped by an intransigent Republican party whose members in Congress moved heaven and earth to block virtually all actions intended to pull the economy out of a tailspin. Today, the unemployment rate has dropped to 8 percent, and the real estate sector is making slow progress toward recovery. Currently, the levels of employment and mortgage borrowing are flat, meaning layoffs have declined and there are few new hires, and low interest rates are finally beginning to stimulate borrowing. Given the intensity of the global crisis, no more could be expected, and Romney’s five-point plan is no different from the policies that got us into this mess in the first place.
One of Romney’s many misguided economic arguments is that further cuts in expenditures and taxes will encourage private sector investments in areas critical for future development. Historical evidence provides little support to this claim, and it is certain that the social costs of these cuts will outweigh any economic benefits. So far, the private sector has failed to respond to tax cuts and trillion-dollar government investments, and they are unlikely to change their tune. Nor does evidence suggest that increases in wealth due to tax cuts will automatically increase employment because the rich often invest in non-employment-generating investments such as financial markets that have brought us to the present crisis. The tax cuts, government investment guarantees and subsequent bailouts resulted in a shameful increase in the division of wealth in America, and yet, politicians like Romney have the audacity to blame the government for the crisis.
Romney was vague in his definition of small business, as he seems to think both Joe the Plumber and Donald Trump are small-business owners, and he appears clueless about the complex factors affecting the growth of small businesses. Tax cuts cannot conceivably grow small businesses and help them to add employees. Big corporations, not big government, have caused the collapse of small businesses, and giving more breaks to corporations certainly won’t bring small businesses back. Tax cuts won’t offset the cost of health care and other expenses or make it possible for small producers to compete with cheap imports. No amount of tax cuts will enable small businesses to invest in research and development, and it’s highly doubtful that big corporations will generously come forward to help them. The crisis of the economy today is not due to a lowered capacity to produce; in fact, today’s crisis is about overproduction and lack of consumer demand. At one level, limits to spending are inevitable as societies develop. Consumers aren’t spending money because they don’t have money to spend. Debt, uncertain employment and lowered expectations are the new rule. Big government is not to blame for this; global capitalism is, and the best way for a nation to navigate the bumps of the world market is to have a good social support system — the right kind of big government — at home.
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