How close is Mitt Romney to locking up the Republican party’s nomination for president? Close enough that his remaining viable GOP rival is now accusing him of committing capitalism.
Newt Gingrich wants voters to know that, under Mr Romney’s leadership, Bain Capital, the private equity firm, bought up poorly performing companies, fired workers to revitalise them and sold the newly-streamlined firm for enormous profits. Mr Gingrich’s charge may be smart politics during a period of high unemployment, but it seems a bizarre charge from a man who uses the word socialism almost as an expletive. Even the most populist Democrat concedes that creative destruction is crucial for an economy’s long-term dynamism.
We haven’t heard the last of this. Long after Mr Gingrich has returned to his role as author and professional provocateur, the Democrats will be working to define Mr Romney as a soulless child of privilege who likes to fire people. That’s too bad, because it obscures a much more important debate: what is the proper role of corporate money in American politics?
In fact, if Mr Gingrich seems angry and desperate these days, it’s in large part because Mr Romney’s supporters have spent millions in recent weeks to destroy Mr Gingrich’s candidacy with a barrage of negative television ads. And they did it without Mr Romney having to utter a word. Following a controversial Supreme Court decision in January 2010, super-political action committees, known as super-Pacs, that support a particular candidate without formal ties to his/her campaign, can now spend unlimited sums without having to disclose where the money came from.
This gives corporate America extraordinary power within the US political process. No longer does the public have a right to know which companies are spending millions to influence the outcome of an election. In the past, candidate A had to accept public responsibility for attacks on candidate B. Now, corporate-funded super-Pacs can cast all the aspersions they want without their preferred candidate getting mud on his suit.
Americans won’t hear their public officials debating the wisdom of this system because elected officials in both parties know that it provides incumbents with crucial electoral advantages. Corporations are much more likely to invest in the candidate who already occupies a seat than in the one they don’t know. This system gives public officials an even more obvious incentive to craft policies and cast votes that potential corporate donors will like.
“If someone who is very wealthy comes in and takes over your company and takes out all the cash and leaves behind the unemployment? I don’t think any conservative wants to get caught defending that kind of model.” So says Mr Gingrich of Mr Romney. But America needs more creative destruction, not less, particularly in the financial, energy and automotive sectors.
It is corporate influence in US politics, not “predatory capitalism”, that is the primary force now widening the gap between America’s haves and have-nots.
The writer is president of Eurasia Group, a political risk consultancy
