Romney's Big Lie

Mitt Romney opened the general election campaign last night in Manchester, New Hampshire, using his acceptance speech [1] to unleash a fierce attack on Barack Obama's "false promises and failed leadership."

He said little about his own policies, preferring to contrast his free enterprise vision with what he called Obama's government-centered vision.

And buoyed by his victory, Romney felt free to issue a clear defense of privilege.

At the heart of the contrast Romney drew with Obama was the big lie. After the absurd charge that under Obama, we will have "effectively ceased to be a free enterprise economy," Romney made his defense of privilege:

We've already seen where this path leads. It erodes freedom. It deadens the entrepreneurial spirit. And it hurts the very people it's supposed to help. Those who promise to spread the wealth around only ever succeed in spreading poverty.

What world is he living in? In America, extreme levels of inequality have led to economic calamity. The Gilded Age extremes of the 1920s -- when the richest 1% owned about 44% of all private wealth -- were followed by the Great Depression. The excesses of the Bush years -- when the richest 1% owned nearly 40% of all private wealth -- were followed by the Great Recession.

And of course, the greatest period of growth and widely shared prosperity in the US came in the decades after World War II. And in those decades, public policy purposefully "spread wealth around." The top end tax rate was at 90%. With labor unions representing over 30% of the workforce, workers shared in the benefits of rising productivity. The GI Bill gave an entire generation of veterans access to college and affordable housing. Dwight Eisenhower, a Republican president, built the interstate highway system vital to national competitiveness. Wall Street, shackled by New Deal reforms, went decades without a major bank crisis.

And from 1945 to about 1975, America grew together. The rich got richer, but the incomes of middle and low income Americans grew faster than those at the top. The broad middle class -- the heart of what made America exceptional -- was built step by step.

That period ended when America made a conservative turn in the mid-1970s, consolidated under Ronald Reagan. Top end tax rates were slashed; finance deregulated; domestic investments starved; trade policy turned over to multinationals; a fierce war waged against labor unions. Exactly the policies that Mitt Romney champions today.

The results are very clear. Growth slowed. The rich captured ever more of its rewards. Workers didn't share in rising productivity. Incomes for most Americans stagnated. The middle class sank. The economy was racked by Wall Street excesses. And the 1% now control as much wealth as 90% of Americans. In 2010, the 1% captured [2] a staggering 93% of all of the income growth in the society.

You got it wrong, Mitt. We can understand why you'd be confused. As Upton Sinclair famously said, "it is difficult to get a man to understand something when his salary depends on his not understanding it."

Mitt has amassed a personal fortune of over 200 million dollars and pays 14% tax rates on $20 million in annual income, so it isn't surprising that he confuses this history. Spreading the wealth around is in the national interest, but it surely isn't in his.