Monday, October 29, 2012

Ed Kilgore — How Mitt Romney Wants to Make America Like China

Near the end of a transcript of a Mitt Romney speech to donors revealed by MoJo’s David Corn (who brought the famous Boca Moment to our attention), Romney makes this plenary comment about the United States and China that goes a little deeper than claims of currency manipulation: 
"When I heard the head of Coca-Cola say that the business environment in America is less hospitable than the business environment in China, I knew we had a problem. I want to make sure that America has the most attractive business conditions in the world—that every entrepreneur once again says, “I want to be an American.” Whether it’s energy or regulation or tax policy or labor policy or legal policy or health care policy—I want America to be the best place for business."
This is interesting because Mitt is looking at a country with a wildly different history, political system, culture and economy and focuses strictly on what he clearly considers to be the cost advantages it offers to businesses . Yeah, China’s a semi-communist authoritarian gerontocracy with a horrendous human rights record, but man, look at those low wages and lack of regulation! I’m sure Mitt also admires China’s “labor policy,” which has no room for free unions, and its “legal policy,” which insulates companies from liability for their behavior.
How Mitt Romney Wants to Make America Like China
Ed Kilgore | The Washington Monthly

Of course, this is not just Mitt Romney talking. Mitt is expressing the desire of "job creators," who are the big donors to political campaigns, for a playing field tilted against workers so that adopt America can adopt Sam Walton's business model:  "I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment." — Attributed in Adam L. Penenberg, "Why Google Is Like Wal-Mart", Wired, 21 April 2005

How does Sam Walton's business model work when it doesn't pay a living wage? People get second or third jobs, and government welfare and Medicaid pick up the difference. See, for example, Taxpayers Should Stop Subsidizing Walmart by Tina Dupuy. Of course, this doesn't scratch the surface of corporate welfare at Walmart or other welfare in corporate America.

But we need to "broaden the tax base."

Oh, and then there's the bit about rolling back regulation (which led to the financial crisis). I have a professor friend who was telling me that he was travelling to Beijing to give courses on a periodic schedule. I said that it sounded great. He replied that it was the worst thing he had ever agreed to in his life, the pollution was so bad. What was that about abolishing the EPA to free up business?


paul meli said...

"How does Sam Walton's business model work when it doesn't pay a living wage? People get second or third jobs, and government welfare and Medicaid pick up the difference."

Not only that, no business can succeed on sales limited to its own employees. This is also true for all businesses in the aggregate (closed system), so business success is dependent upon a net add from somewhere.

The net add comes from government…it hires some 12% of the workforce and creates sales for many private businesses with spending on public purpose.

An all-private (no-government involvement) economy seems impossible to me.

Why do businesses think they want that?

Matt Franko said...

I dont think this "what is good for business is good for America" macro theme is working with the younger generation... the GOP may get a little mileage out of it here in 2012 one more time, but this is a theme that is so 1980's and is dying... only old farts have ever read Ayn Rand and that type of garbage... nobody young even knows what Ayn Rand is...

They are going to have to come up with something else to attract the next generation of voters imo or they are headed to permanent minority status.... they have to come up with a "reverse southern strategy" of sorts... if they eek out a win here in 2012 this will be delayed... rsp,

Ignacio said...

So how does a worker without income able to consume the goods they produce and increase income for the corp and their 1% stockholder?

I keep asking Germans and Japanese if they have found aliens to export goods in exchange of alien paper (however stupid that sounds, who likes to hoard pieces of paper instead of goods, whatever), I guess soon we will be asking american politicians and CEO's the same.

Can it get dumber?

Ignacio said...

Or is it like Matrix machines?

"There are levels of survivability we are willing to accept."

Impoverish everybody and everything, but just stay at the top. What a hell of nihilist we have in command then.

But I think that has ever worked in history, except for short periods which lead to violence until the whole thing collapsed and reborn again.

I don't think humanity has EVER been in a deflationary period for longer than a few years, we are not even talking about steady-state or stagnant economy, but deflationary economy. That's their recipe, and a failed one?