Romneynomics

It's great news for us Democrats that former Romney partner in Bain Capital -- Edward Conard -- is out with a new book on economics, Unintended Consequences: Why Everything You've Been Told About the Economy is Wrong. My first guess when hearing about the book was that some devious liberal in the publishing industry talked Conard into this timing, telling him that his arguments were so compelling that the book would no doubt help Romney win the election if it came out in the spring of 2012. However, having read more about Conard, I am now convinced that he really is arrogant enough to believe that making his case would help Mitt's cause. God bless him for it. The more attention we can give to the starkness of his celebration of Romneynomics, the better.

Conard's book is essentially Ayn Rand with more math. (He might say with more economics, but as the title of his book suggests, the theories he describes are far more theological in nature than economic, as he essentially ignores most of the well-grounded economic research of the last 70 years.) Conard believes that growing concentration of wealth is not just a good thing, but a fantastically great thing. The only problem our economy has, he suggests, is that we need a lot more of it. The mind-blowing gains in wealth over the last 30 years by the top 1 percent, the dazzling fortunes of a very few while most people's incomes and salaries have flat-lined, the fact that 95 percent of the gains in wealth the last four years have gone to those top 1 percent or that they now own over 40 percent of the wealth in this country: the only downside according to Conard is that it is not enough. Because, as he says, "It's not like the current payoff is motivating everybody to take risks." He suggests that if the wealth concentrated at the top were twice as large, more unproductive people ("art history majors," as he derisively refers to non-rich people) would be motivated to become risk-takers.

It's big of Conard to admit that this is counterintuitive (one of the few things I do agree with him on). But, he insists, only by the super-wealthy people getting rewarded (deeply, richly, extravagantly, overwhelmingly rewarded apparently) does society advance. Their investments are, he says, what makes our economy more efficient and more productive, saving money for everyone. In true Ayn Rand form, he even criticizes Warren Buffet for giving money to charities rather than investing it in new products and companies, arguing that the latter is far better for society than curing disease or feeding children or educating people. And here's a shocker: he doesn't blame Wall Street bankers at all for the financial crisis in 2008. Just bad luck, he says, one of those "run on the bank" things that happen from time to time in a capitalist economy. 

The economic history you have to ignore to believe all this is pretty extraordinary. You have to ignore that of the three most prosperous decades of the last century, two (the 1950s and '60s) were in an era with tax rates on the wealthy between 70 and 90 percent, and that the third (the 1990s) started with two rounds of tax increases on the rich. You have to ignore that the massive concentrations of wealth and tax cutting for the rich of the last three decades seem to have produced very little of the job creation or income enhancement for the middle class Conard says would come, as well as the fact that the last two periods of great wealth concentration in this country produced the worst economic depressions in our history (in 1929 and 1894). You would have to ignore the fact that there were no major financial collapses in the years between the passage of Glass-Steagall in 1933 and its repeal in 1999, and only nine years later we get one almost as big as those previous two. You would have to ignore the massive amounts of research that have shown the huge economic gains that resulted from investments in people's education like the GI Bill, Head Start, school lunches and Pell Grants -- as well as the huge impact that private charitable programs have had in turning people's lives around and making them productive citizens.

In addition to ignoring history and research, Conard ignores common sense and simple facts. In the Adam Davidson article, he goes on and on extolling the investment he made that saves a fraction of a penny on every can of soda. He brags, "It makes every American who buys a soda can a little bit richer because their paycheck buys more." Really? I'm sure the companies make a little more money because of that, but I haven't noticed the price of soda dropping. And if paychecks keep losing ground, grocery bills keep going up, people keep getting laid off or having their hours cut, the company makes a little more on every can but the rest of us aren't helped at all. But none of that bothers Conard at all, because to him if the rich are getting richer, all is well. As Davidson puts it, "Conard says that the merciless process of economic selection has assured that they have somehow benefited society." 

What does all this have to do with Romney, besides their close personal ties and the fact that Conard is one of Romney's biggest supporters (he was the one that set up the phony corporation to funnel money into a pro-Romney Citizens United slush fund)? These views are at the core of Romney's -- and Paul Ryan's, and the entire Republican Party's -- economic philosophy. One of Romney's chief economic advisers, Glenn Hubbard, admitted that Romney and Conard share "beliefs about innovation and growth and responsible risk-taking." The entire Romney-Ryan budget is a document built on these kinds of ideas: structure society so that the rich make more and more money, and everyone will benefit forever after.

This is bad economics, as history -- including the recent history of the Bush years -- has clearly demonstrated to us. But the values of this thinking are even worse. Here's Conard's summary of his philosophy: "God didn't create the universe so that talented people would be happy. It's not beautiful. It's hard work. It's responsibility and deadlines, working until 11:00 at night when you want to watch your baby and be with your wife. It's not serenity and beauty." No, it certainly isn't. I prefer the thinking of another wealthy man whose family made lots of productive investments in the private sector, and who was part of an administration that presided over the most prosperous decade in American history, but who also knew there were other things that mattered in life:

"Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product ... if we should judge America by that -- counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

"Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans."

That was Bobby Kennedy, and I will take his view of life over the ugliness of Romneynomics every day of the week.