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America’s Love-Hate Relationship with the Rich

Author: Julia E. Sweig, Nelson and David Rockefeller Senior Fellow for Latin America Studies and Director for Latin America Studies
July 18, 2012
Folha de Sao Paulo

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First published in Portuguese in Folha de Sao Paulo.

The Obama and Romney campaigns are exploiting one of the oldest strains in American politics: our love-hate relationship with the wealthy. The mythology suggests we love the rich because they represent the promise of meritocracy: hard work can bring wealth and success to anyone. But we hate the rich because we suspect they exploited the system to fatten their bank accounts, and surely at the expense of someone else's job or livelihood.

Obama's strategists decided last year to use Romney's stewardship of Bain Capital, his private equity firm, against him. Clever, because Romney says his greatest qualification to be president is not his tenure governing liberal Massachusetts but his experience running a large investment firm. The basic charge: many of the businesses Bain Capital purchased and restructured under Romney's leadership eliminated jobs for Americans and "outsourced" them overseas.

Obama's own record on job creation has been weak: he made healthcare reform his legislative priority instead. Now that the Supreme Court has ruled the law constitutional, healthcare for nearly all Americans will surely rank among the most significant achievements of his presidency. Attacking Romney for killing American jobs, arguably also Obama's weak spot, feels a bit defensive.

But it's not just Obama who is vulnerable on jobs. Bill Clinton, Barack Obama, the party's congressional leaders, and all of its major Wall Street donors understand that capital naturally seeks optimal conditions—low wages for example—national borders be damned. Globalization means that America's industrial, tech and service sector jobs now flourish around the world, even if profits are repatriated to the United States. Financial deregulation, free trade agreements, shrinking public investments, regressive taxes, a blind eye to major flaws in corporate and banking governance: the Democratic party helped perpetuate or legislate these decades-long trends, many of which underlie the loss of good jobs for Americans.

Love it or hate it, capitalism in the United States is a bipartisan affair. Democrats run, restructure, and reap the rewards of private equity firms too. But the two parties are not equal when it comes to some fundamentals. Today's Republican party has a much higher tolerance for inequality, arguing that the private accumulation of wealth is ultimately a public, even social good. Romney attacks government and public spending—universal healthcare, even though he has presided over both in the past, primarily because his base otherwise won't vote for him.

The Bain Capital drama is getting boring. Instead, Obama should explain to all voters that the only way to renew our meritocracy is a modern approach to our historic bipartisan strength. With tax revenue generated from capitalist wealth, we invested in fundamentals of a strong society: jobs, health, education, environment, science, art, transportation, defense. Romney will be hard pressed for evidence that the private sector alone can accomplish as much. And he knows it.

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