Romney Puts the Bankruptcy of the Welfare State at the Heart of Campaign

Mitt Romney is on the right. He is going to campaign to the right. So he’s certainly a dangerous man, if I have understood the New York Times correctly. America, however, is a country where it is not prohibited to be liberal and capitalist.

His vice presidential candidate, Paul Ryan, shares Romney’s liberal convictions, even if the ideas of the former for reducing the public debt are not entirely held by the Republican candidate.

So perhaps America is going to present a real electoral campaign. Unlike what is produced in a certain country that we know well, the true problem will be explicitly raised: This crisis is not cyclical – it is structural. To resolve it, one must reinvent the system.

To pretend to believe the welfare state could be patched up is perhaps a good idea for a reelection campaign. On the other hand, it’s not the correct diagnosis of the current situation.

For more than a decade, the uncontrolled debt in the United States has not produced its expected results. Mediocre growth; insufficient tax revenues; weak monetary policy; dependence on poorly-funded social programs by entire generations; and failed banking regulations that would protect taxpayers from risks taken by a minority of speculators are the many real problems raised by the Republicans. They are problems that make people angry. The solutions that have been advanced are hard and unpopular. These are incompatible with an electoral victory in November, say the pollsters.

To the contrary, Barack Obama campaigned by denigrating his opponent until now. So he avoided raising these issues. He speaks about defending the middle-class. He believes in saving the bankrupt welfare state by taxing the rich. If someone talks to him about the doubling of the public debt since his arrival to the White House, he explains that it is the fault of the Republicans, the same people who voted against his plan of a debt-financed stimulus.

The Democratic objective is rendering Romney odious because he is rich; because he succeeded in restructuring companies; because he does not believe the state is the true creator of wealth; because he does not believe that taking the money of the rich to give to the unions and the poor is going to reduce inequalities; and because he does not think that robbing the young to give to the less young is a responsible and progressive policy. Barack Obama thinks that more must be done to save the welfare state: more taxes, more social transfers and more regulation. His model, even if he does not say it, is social-democratic Europe. That is why the French adore Barack Obama. That is why they are told that Mitt Romney is a scary Mormon.

Is Romney Superman? Certainly not. Does he make mistakes? Yes, sometimes. Does he tend to change opinions according to his audience? It can be thought. Would the Republicans be able to find a better candidate? Certainly. But Mitt Romney also proved that he could govern a very Democratic state, Massachusetts, in an honorable way. It’s precisely because he comes from the finance world; he is pragmatic.

Whether one does or does not appreciate the solutions proposed by Paul Ryan, everyone recognizes that the Wisconsin representative distinguishes himself from the pack in the House of Representatives. He is not content simply with slogans and generalities in order to flatter this and that category of voters. While others elected from the Republican Party and the Tea Party promise to reduce public spending but refrain from going into detail, Paul Ryan dares to speak about what upsets people.

Lucid, he departs from the principal that the current crisis is not cyclical, but structural. He agrees that reducing public debt is imperative. Obama still wants to push it to tomorrow. He dares to say that demographic and budgetary reasons have forced the unraveling of the social systems born of President Franklin Roosevelt’s New Deal and President Lyndon Johnson’s New Society.

He therefore proposes a partial privatization of the very popular federal health insurance (Medicare) that covers 48 millions retired Americans. He wants to give states the freedom to manage the assistance for the poor and underprivileged (Medicaid) as they will. He wishes for an elimination of the many popular fiscal deductions in exchange for a strong decrease of the marginal tax rates on the revenue. Regarding the taxation of companies, he advocates the same path: reduce taxes on the benefits, but remove the exemptions that make the tax code incomprehensible and counterproductive. All of these proposals make him an easy target for Barack Obama and an essential man for a Republican that aims for the White House.