Jack Lew, late of Citigroup and currently of the Obama administration, has issued a call for “economic patriotism.” This phrase, which is without meaningful intellectual content, is popular in Democratic circles these days. Ted Strickland, the clownish xenophobe and nearly lifelong suckler upon all available taxpayer teats who once served as governor of Ohio, famously denounced Mitt Romney as a man lacking “economic patriotism” during the 2012 Democratic convention. President Barack Obama has used the phrase. It’s not that I do not appreciate lectures on “economic patriotism” from feckless former executives of dodgy Wall Street enterprises, guys who get rich monetizing their political celebrity, and second-rate ward-heelers from third-rate states; it’s just that nobody ever has been able to explain to me what the term is intended to mean.
The proximate cause of Mr. Lew’s distress is the fact that many U.S. firms either are up and leaving the country entirely or are acquiring foreign competitors in order to reorganize themselves as companies legally domiciled in friendly tax jurisdictions. U.S. pharmaceutical firms in particular have been in a rush to acquire partners in order to escape punitive U.S. corporate taxes for the relatively hospitable climates of Ireland, the United Kingdom, and the Netherlands. Walgreen’s, a venerable firm that, like the lamentable political career of Barack Obama, has its origins in Chicago, is considering abandoning its hometown of 113 years for Switzerland. Eaton, a Cleveland-based manufacturer of electronic components, moved to Ireland. The list goes on.
The strange thing is that the very people who insist on inserting all those special breaks and sweetheart deals into the tax code then turn around and rage when companies use them — i.e., when they comply with the law as written. Firms such as GE and Verizon (a significant Obama donor) have been blasted by the Left for having paid no taxes in some years, and President Obama himself gripes about corporate tax breaks — and then, in every single State of the Union address, he proposes more special exemptions, credits, and carve-outs for politically favored industries. Which is to say, Democrats demand special tax breaks be written into the law, and then they complain when companies or individuals take advantage of those tax breaks. It’s absurd, and it’s intellectually dishonest.
“Economic patriotism” and its kissing cousin, economic nationalism, are ideas with a fairly stinky history, having been a mainstay of fascist rhetoric during the heyday of Franklin D. Roosevelt’s favorite “admirable Italian gentleman.” My colleague Jonah Goldberg has labored mightily in the task of illustrating the similarities between old-school fascist thinking and modern progressive thinking on matters political and social, but it is on economic questions that contemporary Democrats and vintage fascists are remarkably alike. In fact, their approaches are for all intents and purposes identical: As most economic historians agree, neither the Italian fascists nor the German national-socialists nor any similar movement of great significance had anything that could be described as a coherent economic philosophy. The Italian fascists put forward a number of different and incompatible economic theories during their reign, and the Third Reich, under the influence of Adolf Hitler’s heroic conception of history, mostly subordinated economic questions as such to purportedly grander concerns involving destiny and other abstractions.
That’s the Washington way: Create stupid financial incentives, complain when people respond to them — and then declare that conformity with your political agenda is identical to patriotism. The production values may be Hollywood slick, but this is just another third-rate sequel: Banana Republic: The Tax Code Strikes Back.
Except the tax code is not striking back. Democrats complain about it, but they rarely if ever try to do anything about the industry handouts and sweetheart deals enshrined therein — given that they wrote so many of them, why would they?
If we have to have a definition of “economic patriotism,” how about this: Economic patriotism means, at the very least, not creating a tax and regulatory environment so cumbrous and counterproductive that a drugstore chain that has been operating in Chicago since the McKinley administration decides that Zurich or Geneva is more hospitable, while politically favored interests benefit from their relationships with political power. After all, Walgreen’s never promised to straighten out the U.S. economy — Barack Obama did.
Maybe Switzerland would take him, too.
NOTE FROM THE AUTHOR: In the original version of this piece, I’d linked to an article referencing FDR’s description of Mussolini as “that admirable Italian gentleman.” The quote is accurate, but the article I linked to was, as a reader pointed out, associated with an organization of the sort that I would not want to be associated with. My apologies for the sloppy linkage.
— Kevin D. Williamson is roving correspondent for National Review.