Mitt Romney Tells the Truth About the Economy. Sort of.


Governor Mitt Romney of MA

Mitt Romney's presidential announcement at a farm in Stratham, N.H. yesterday consisted of a series of ridiculous assertions about the President and his track record in office. For a good rebuttal of his key points, check out Andrew Sullivan's scathing report here. However, Romney did say something (albeit inadvertently) that intellectual circles routinely ignore or dismiss that I think is worth talking about. Romney stated:

"Government under President Obama has grown to consume almost 40 percent of our economy," he said. "We are only inches away from ceasing to be a free market economy."

Technically, Romney is wrong here - the US has never been a free market economy, but his general point is correct.The United States is certainly moving further away from free market doctrine that helped destroy large sectors of its economy, and it's a very good thing indeed.

Of course Romney is implying this is a bad thing, and that under his stewardship, the US would return to a mythical time when government didn't intervene in the economy and markets were allowed free reign to allocate resources. This mythical time Republicans talk about usually refers to the Ronald Reagan years - not a good example if you know any of the facts. Reagan was a President who despite his image as a champion of free markets, presided over the greatest period of protectionism in post war history.

Not exactly a shining example of Randian governance.

The fact that the US (and every other western industrialized nation) is not and has never been free market economy seems to be a dirty secret that the intellectual classes cannot seem to get their heads around. The state intervenes at every level in the economy - from the military industrial complex to agriculture to medicare. It is one of the reasons why many sectors have survived huge contractions or bankruptcy, and it is the driving force behind much innovation (the internet, military technology, space technology all come largely from government funded projects). Anyone who denies this is either living in a fantasy land or lying. But still, the myth pervades that government is bad, and only free markets work.

While Mitt Romney's analysis may be somewhat correct, his proposals to rectify it are not. Romney has gained a reputation as an economic expert, mainly due to his success as a business man. Making lots of money for himself does not however translate into skills needed to reform America's economy. Individual business men can take advantage of deregulation and lax labor laws, but it spells disaster for the rest of the population. One mans wealth is more often than not the result of exploitation of cheap labor - a reason why America contains both the richest and poorest citizens in the West.

What is good for Romney is not necessarily good for everyone else, so while he attempts to scare the population about encroaching government, we should all be applauding it.

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