One reason to deplore our corrupt revolving-door politics and crony-corporatist economy is that it has produced a man like Newt Gingrich.
Through his defenses of his pro-corporate welfare lobbying efforts and his facile attacks on Mitt Romney’s profits, Gingrich has emerged this election as an enemy of the free market — an unlikely distinction for a member of the Republican Party, which is supposed to stand for the free market. The pious preachments of liberal college professors, the foolhardy machinations of liberal central planners, and the even the greedy public-policy profiteering of subsidy-suckling CEOs and regulatory robber barons are all less harmful to economic liberty than the insidious and Orwellian campaign by the former speaker.
Gingrich, both himself and through a superPAC technically separate from his campaign, has attacked Romney’s lucrative career at Bain Capital. This is not automatically unconservative. There is nothing sacrosanct about making money, and defenders of the free market certainly aren’t obligated to side with finance, as the bailouts reminded us. But the Gingrich video doesn’t hit Romney for chasing bailouts or subsidies, for using eminent domain, or any sort of cronyism. Gingrich is attacking Romney for trying “to reap massive rewards for himself and for his investors.”
The knocks on Romney in Gingrich’s video are that Bain Capital “took foreign seed money,” and that the struggling firms Romney tried to save laid off workers. The Gingrich narrative — that Romney made money by laying off good working men and women — is breathtakingly simplistic, the sort of thing you expect from an Upton Sinclair or a Dennis Kucinich. Layoffs cause pain, and conservatives and free-traders have historically had trouble sympathizing with the emotional and financial difficulties caused when the invisible hand determines that one’s job does not yield the optimal allocation of wealth. To put it in free-market lingo: Every misallocation of resources benefits someone, and sometimes that person is an underprivileged, low-income, hard-working American.
So Romney went into failing companies and tried to save them. When it worked, this not only maximized value for shareholders, it also saved jobs by saving companies. At times, the alternative to laying off a huge chunk of the work force today was laying off the entire work force next month.
I’m sure that Romney’s Bain record contains some unseemly activity. Did he bet on bailouts and then use political connections to secure them? Did he use government to crowd out competitors or pressure owners to sell? This sort of thing goes in the world of private equity. But Gingrich doesn’t tar Romney as a crony capitalist. He tars Romney as a capitalist.
Gingrich says it’s OK for Romney to make money, but that he made too much money. Maybe Romney could have saved some jobs had he been willing to take less profit. So Gingrich contends Romney should have run his for-profit business as a charity, which is more than a little ironic coming from a man who has run his political campaign as a for-profit business.
Conservatives ranging from Rush Limbaugh to Ron Paul have lashed out at Gingrich for his anti-Bain demagoguery, but his assault on Romney’s profit is actually less egregious than his defense of his own profit-making efforts. While most of Gingrich’s post-speaker income has come from selling books and movies, he has made millions by lobbying for corporate welfare. Gingrich denies he was a lobbyist, but only because he didn’t register as one, a transparent dodge.
While being paid by drug companies, Gingrich convinced Republican lawmakers to expand Medicare so that it would subsidize prescription drugs. While being paid by ethanol companies, Gingrich argued in favor of federal subsidies for ethanol. Also, while paid by government-sponsored, housing-bubble-inflator Freddie Mac, Gingrich lauded exactly this model of government-sponsored enterprises steering the economy. Gingrich made money by pushing for bigger government to benefit his clients.
Indirectly, he was pocketing taxpayer dollars, but he described this as “free enterprise.” Anyone who criticized Gingrich’s efforts to profit off of making government bigger showed “a socialist bias that you shouldn’t earn money,” Gingrich told USA Today.
Free-market populism has begun bubbling up on the American Right in recent years. The bailouts, Fannie Mae and Freddie Mac, and Obama’s corporatism have fueled this. Many Americans have no problem with others getting rich — it’s getting rich unfairly that upsets Americans. Gingrich is consistently on the wrong side of this issue.
Gingrich the lobbyist extracted wealth from society through his government connections, and then defended it, perversely, as “free enterprise.” Now Gingrich the candidate is attacking Romney for the crime of being implicated in capitalism.
Gingrich wants to blur the lines between the pursuit of profit — a noble, beneficial thing when done honestly and voluntarily — and the extraction of wealth. Liberals often fail to see the difference. Gingrich hopes to fool Republicans on this score, too.
Timothy P.Carney, The Examiner’s senior political columnist, can be contacted at [email protected]. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.
