Will the Mitt/Newt Slugfest Boost the Occupy Movement?
The Occupy Movement brought key issues like economic inequality, Wall Street greed, and political corruption to the table. And we may have the GOP front runners to thank for keeping them there. Here’s a look at how the Battle of Newt and Mitt can help keep the OWS flame alive...
The Populist Platform
Newt Gingrich’s populist messages in South Carolina dealt Mitt Romney a body blow. Newt hit the multi-millionaire on his low tax rate and his role in the oft-reviled private equity industry to leave him stumbling through debate questions and looking generally ill at ease. Getting branded as a corporate raider who pays less in taxes than your housecleaner is not a great image, to say the least.
Newt leveled three sets of charges at his rival on economic issues, all of which resonate with core Occupy Wall Street concerns. The first two were key in the South Carolina primary, and the third may be important in the next phase as Newt attempts to draw Ron Paul supporters into his camp. They are:
1) Taxes (OWS concern = economic inequality)
2) Private equity (OWS concern = Wall Street predation, ruthless capitalism, senseless job destruction)
3) Federal Reserve (OWS concern = power of big banks over government)
Each of these issues, of course, is viewed through somewhat different lenses by left and right-leaning populists. For Occupiers, questions about the Federal Reserve, for example, tend to call up issues of the banking industry’s influence on government at the expense of the ordinary Americans. For many Tea Partiers, a greater concern is 1) the relationship between the Fed’s activity and the government deficit and 2) the desire of some to abandon fiat money in favor of a return to the gold standard. Newt signaled his stance in Saturday night’s victory speech:
“Dr. Ron Paul, who on the issue of money and the Federal Reserve, has been right for 25 years. While I disagree with him on many other things, there’s no doubt that a lot of his critique of inflation, of flat money into the federal reserve is absolutely right, in the right direction, and its something I can support strongly.”
However Newt spins them, all three issues are likely to produce robust discussions that highlight and educate the public on matters that OWS would like to have at the center of national economic debate. OWS and Tea Partiers often agree that the Fed should be more transparent and that it’s structure is problematic, so even if Newt comes at the issue from the perspective of right-wing populism, there are enough intersections that OWS can celebrate the discussion.
The tax and private equity issues have brought a flood of commentary throughout the media, such as a recent New York Times piece by Floyd Norris questioning the fact that investment income is now taxed at a lower rate than earned income—a debate driven by Mitt’s admission that he pays a mere 15 percent in taxes. Norris demonstrated that this discrepancy has not historically been the case and also why it is unfair . Thanks to the attacks on Mitt, Americans have been talking about “vulture capitalism” (Newt’s term for private equity) and the ruthless policies and game-rigging financial engineering it is known for. Of course, this produced an entirely predictable chorus of “Shame on Newt” from financiers and their apologists, succinctly captured by Steve Moore of the Wall Street Journal, who whined on Fox News: “This is what our capitalist system is about!”
Truly, Occupiers could not have hoped for better media coverage of their grievances.
Having won in S.C. on a wave of populist discontent, Newt must now must do some fancy footwork in the ring. He has to figure out how to continue tapping into widespread resentment against elites while simultaneously bringing many of those same elites – particularly the financiers -- on his side in the fall presidential battle. If Newt decides to go full force on populist economic issues, he will certainly garner enthusiasm from some elements on the right. But he’s got a problem: If you keep hitting the Money Men, they tend to hit back. And they might just leave the show altogether and throw their weight behind Obama, who has served their interests well on many fronts.
Another small problem: Just as Mitt became the face of the brutal and unfair aspects of our capitalist system in recent debates, Newt may find himself the poster boy for the corrupt influence of money in politics. In the final days of the S.C. showdown, Mitt began to signal that he was willing to hit on his opponent's big Achilles' heel in his demand that records of Newt’s 1997 ethics violation be released.
Here’s a little history on why Newt’s populist-champion narrative has more holes that a slice of Swiss cheese.
As Speaker of the House, the number of ethics violations Newt racked up through unsavory money transactions is breathtaking, and resulted, as Mitt reminds us, in a $300,000 fine. But there’s more. Oh, so much more.
The worst thing about Newt is what political economist Thomas Ferguson pointed out in a paper for the Institute for New Economic Thinking – namely that Newt was the key architect of the current pay-to-play system in Congress. More than anyone else, he is responsible for building the system in which members of Congress who bring in the most cash get the plum and powerful committee appointments. It was not always thus. Before Newt and his buddy Tom Delay saw the potential for pay-to-play, committee appointments came through seniority. But after Newt & Co. came to power, influence in Congress was nakedly up for sale. Today, both parties actually post prices for key positions, as Ferguson noted in the Financial Times.
This crass turn in American politics has undermined democracy and has done more to separate the will of the voters from the actions of the politicians they elect than perhaps anything else in the last fifty years. It’s the shameless mentality that once prompted Newt’s former buddy and fellow Georgia politician Ralph Reed to talk giddily about his aspiration to start “humping corporate accounts” following his turn in electoral politics.
When Newt left Congress, he then went on to become a consultant for, oh, Everybody in the Universe. He cozied up to Big Oil and changed his stance on climate change. He hopped into bed with health care executives, selling access to lawmakers and collecting millions from the industry for his think tank. And he famously took $1.6 million from Fannie Mae and Freddie Mac for his services as a “historian.” Know any real historians who rake in that kind of cash?
Americans’ deep anger about the degree to which Big Business buys the political system has been channeled through the Occupy Movement, and Newt’s role not only as a key conduit in this system, but one of its engineers, may open up public discussion of this issue, much as Mitt’s low tax rate and corporate raiding have helped keep the torch burning on income inequality and predatory capitalism.
Mitt will certainly try to overwhelm Newt with money. But he can also call out Newt’s particular affinity for channeling cash through the political system and expressing more enthusiasm for lobbying than anyone in recent memory. Calling him Mr. Anti-Free Market Capitalism is one tactic, branding him as Mr. Corruption is yet another. And the branding has begun. On Sunday, Mitt headed to Florida and challenged the former Speaker on his influence-peddling, criticizing him for “what's he been doing for fifteen years…working as a lobbyist and selling influence around Washington.”
Mitt asked Newt to release his records concerning his years working for Freddie Mac, emphasizing the GOP view that the government-backed lender played a key role in the housing bubble and subsequent collapse, which has been a major source of economic distress to Florida residents.
Newt and Mitt will continue to duke it out, each trying to position himself as a Man of the People. As for the Occupiers, we’ll be sending “thank you for your support” letters to both candidates.