The circular firing squad

An angry populist mood is reshaping American politics as the national conversation swings from deficits and austerity to inequality of income and wealth

President Woodrow Wilson once observed that you should never interrupt an enemy while he is committing suicide.  His successor President Barack Obama and the Democrats would agree, as they watch the rivals competing for the Republican presidential nomination form a circular firing squad.

In contested presidential nominations, there is always the danger that themes deployed in internecine warfare will be used later by the rival party in the general election.  If Massachusetts Governor Mitt Romney is the Republican Party’s nominee in the fall, his own rivals will have written the script for Barack Obama’s re-election campaign.  Before dropping out and endorsing Newt Gingrich, Texas Governor Rick Perry denounced Romney, who became one of the richest men in America during his years at the private equity firm Bain Capital, as a practitioner of “vulture capitalism.”  In ads and a documentary funded by Las Vegas casino billionaire Sheldon Adelson, a supporter of the far right in Israel, Newt Gingrich has portrayed Romney as a ruthless capitalist destroying companies while draining their resources.  (Gingrich earned Adelson’s contributions by, among other things, calling the Palestinians “an invented people.”)

The attacks on Romney’s business career from the right have immunised Democrats from charges that they are practitioners of “class warfare.”  To the surprise of America’s elite political pundits, who claim that Americans do not resent wealth, even majorities of Republicans agree that the rich and corporations have too much power.  The Occupy Wall Street movement has shriveled, but not before turning the national conversation in the US from deficits and austerity to inequality of income and wealth.

Romney compounded his own problems by refusing until recently to release his 2010 tax returns, which show that he paid a tax rate of only 13.9 percent on his income—mostly capital gains from financial assets, many of which have been sequestered in offshore accounts in Switzerland and the Cayman Islands.  His refusal to release his 2009 returns has fueled speculation that he may have paid even lower taxes or zero taxes that year.  

Romney may survive the challenges from former House Speaker Newt Gingrich, who bested him in the South Carolina primary, and former Pennsylvania Senator Rick Sentorum, who beat him in Iowa.  But if he does limp to the nomination, Romney will be trapped.  His signature accomplishment as Governor of Massachusetts was a healthcare programme that was a model for the federal government’s “Obamacare” health reform that he now attacks. Having planned to downplay “Romneycare” in order to run on his record as a businessman, he now finds himself portrayed by the right as well as left as a callous, job-destroying, out-of-touch plutocrat with ill-got riches.  

In his annual State of the Union message, Obama exploited Romney’s vulnerability by insisting that all who make more than a million dollars should pay at least 30 percent of their incomes in taxes.  The proposal is known as the “Buffett” rule after the observation of billionaire investor Warren Buffett that low taxes on capital gains as distinct from wage income allow him to pay a lower tax rate than his secretary (who, in a further twist of the knife, sat beside the First Lady during the State of the Union speech).  It remains to be seen whether the aloof and cerebral Barack Obama can successfully exploit the angry populist mood that is reshaping American politics.  

While attention has been focused on the carnival of the Republican presidential primary, sweeping if little-discussed developments in America’s role in the world have occurred.   The withdrawal of troops from Iraq and Afghanistan will be accompanied by major cuts in the military budget.  The Obama administration’s new defense strategy breaks with the Bush administration’s “Global War on Terror,” in favour of a less manpower-intensive strategy of “offshore balancing” centered on Asia and designed to counter China.  

In his state of the Union message, the president mentioned China repeatedly in connection with trade conflicts.The contradiction between the Pentagon’s view of China as a threat and the American corporate community’s view of China as a source of state subsidies and cheap, unfree labour appears to be giving way in the US to a coherent view of China as both a military and economic rival.  Even Mitt Romney has denounced China for unfair manipulation of currencies and markets to promote Chinese industry.  Whether or not Barack Obama is elected to a second term, historians may conclude that during the Obama years the war on terror gave way to Sino-American rivalry.  

A contribution to State of the Left - Policy Network's monthly insight bulletin that reports from across the world of social democratic politics

Michael Lind is policy director of the New America Foundation’s Economic Growth Program and a columnist at Salon. His new book, Land of Promise:  An Economic History of the United States, will be published by HarperCollins in April and can be pre-ordered in the U.K. here and in the U.S. here.