Thursday in Cleveland, Ohio, President Obama delivered a speech that purportedly outlined the differences between his “economic vision” and Mitt Romney’s. According to Obama, the middle class has reached “a make-or-break moment,” and the upcoming election will represent a choice between “two fundamentally different views of which direction America should take.” There are two points I want to make in response – one now, the other tomorrow.
Today, I want to contest President Obama’s assertion that his vision is “fundamentally different” than Mitt Romney’s. In doing so, I do not suggest that one candidate’s economic platform is better or worse than the other’s, or that they are the same.
President Obama portrayed Mitt Romney’s economic vision as a continuation of George W. Bush’s policies. For example, he said, “if you want to give the policies of the last decade another try, then you should vote for Mr. Romney.” President Obama stated that, during that decade under Bush,
“We were told that huge tax cuts, especially for the wealthiest Americans, would lead to faster job growth. We were told that fewer regulations, especially for big financial institutions and corporations, would bring about widespread prosperity.”
This is the ideology to which President Obama tells us he offers a “fundamentally different” alternative. On the whole, however, the policies that President Obama has pursued favor lower taxes and less regulation; and, in general, his policies tend to coincide more than conflict with Bush’s. For example, Elliot Spitzer said, “[t]he fundamental error of this administration is that it is continuity” of “the Bush Administration view” that the banks were “too big to fail.” Matt Stoller described the policy choice before Bush and Obama this way:
“The wealth of taxpayers was and is being transferred to banks. In 2008, the choice before Bush, and then Obama, was clear. They could hand taxpayer resources to Wall Street and oversee a series of budget crises in states and localities, with the opportunity for later privatization of public assets and the breaking of public sector unions. Or Bush, and then Obama, could crack down on Wall Street, and make sure that bailout monies went to states and localities, and, with record low interest rates, spur tremendous investment in new energy, infrastructure, and education initiatives. It was a choice. Bush picked Wall Street. Obama also picked Wall Street.”
While the bailout had bipartisan support among politicians, others criticized it harshly and/or offered better—for regular people—alternatives, including Nobel winning economists Paul Krugman and Joseph Stiglitz, and President Reagan’s budget director David Stockman. This shows that there were alternatives to the bailout, just not within the scope of the Bush-Obama vision. In turn, this belies Obama’s characterization of his own regime as “fundamentally different” than the Republican version.
President Obama’s record on regulation is mixed. For example, he signed Dodd-Frank, which Obama called “the strongest consumer financial protections in history.” However, most would probably agree that this characterization was overblown even at the time. Since then, Matt Taibbi has documented how politicians from both parties, including members of President Obama’s administration, have gutted the regulations. Taibbi also strongly criticized the administrations role in creating this year’s JOBS Act, describing the Act as “a sweeping piece of deregulation that… appears to have been specifically written to encourage fraud in the stock markets.”
Regarding taxes, President Obama seems to have largely accepted a conservative approach. The Buffett Rule (endorsed by the President) “sets the bar too low,” according to economist Robert Reich, who not only explains why a higher target would benefit most Americans, but also show that historically our country has taxed at much higher rates. Reich contends, “[a]ny serious person looking at these three realities would conclude that the rich should be paying far more.” Yet neither candidate has proposed that the rich pay “far more” than they do now. That is not to say that Obama and Romney agree on specifics of taxation – they do not. But nor are their respective approaches “fundamentally” at odds.
Most voters probably want a “fundamentally” different approach to economic policies. The problem is, Obama and Romney only offer mildly different approaches to the same elitist policy regime. This regime creates inequality. That is why we at ACED have focused our efforts on the upcoming election. A more equal society needs “fundamentally different” leadership.
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