Politics & Policy

Why Romney Needs to Talk about Bailouts

It could solve several of his problems with voters at once.

The most interesting thing about the video of Mitt Romney speaking at a May fundraiser has nothing to do with “the 47 percent.” Rather, it’s his answer to a guest at the event who had a suggestion about what the GOP presidential nominee should say on the campaign trail about bailouts and crony capitalism.

The unnamed speaker pleaded with the candidate: At least bring the issue up. “It doesn’t matter whether you are in the Tea Party or Occupy Wall Street,” he said. People are upset that the government is “permeated by cronyism.”

Romney’s guest continued: “Regulatory agencies aren’t protecting the people they’re supposed to be regulating. . . . People see that the government is working for the powerful interests” and not for average people. The perception that the playing field isn’t level, he noted, “threatens the whole idea that they have this great opportunity” to become successful.

He suggested that Romney promise to clean house at the Securities and Exchange Commission, which has remained reluctant to come down hard on Wall Street malfeasance.

Romney’s answer was to display complete disinterest in an issue that has engaged more potential voters than any other over the past two years.

Romney began with a non sequitur: “I wish they weren’t unionized, so we could go a lot deeper than you’re actually allowed to go,” apparently referring to SEC employees. But public-sector unions have little to do with the tone at the top of government.

Specifically, President Obama has allowed people whose worldview is based in bubble-era Wall Street — such as Larry Summers and Tim Geithner — to make decisions about Wall Street and even the broader economy.

Wall Street knows, then, that all the White House wants is for them to continue business as usual.

Failure to let creative destruction do the work of cleaning up the financial industry is a major reason why the economy can’t recover. Free-market capitalism can’t operate as it should when the firms that control the capital depend on permanent government connections.

Romney went on to argue that voters just don’t care about this complicated stuff: “The things that animate us are not the things that animate them,” comparing his donors to the relatively small slice of the American electorate that, he says, represents swing voters.

Voters on the fence are mostly just thinking about themselves, Romney concluded. They must be wondering, “Who can get jobs for my kids and get rising incomes?” (It was, indeed, an early preview of his August convention speech, in which Romney pledged “to help you and your family.”)

But Romney needs to understand that voters are not just mercenary beasts looking for whichever candidate will help get them a better pay packet.

Voters care about the world around them; they care about what corporate-bailout culture — a culture that predates Obama — has done to their country. And they’re angry about it.

They are angry because they don’t want to live in a country that privileges the well connected, not because they’re necessarily lacking in that regard but because it hurts their country.

To address those worries, Romney needs to start talking about what happened on Wall Street four years ago and what has happened since. Embracing the topic would also help him with voters wary of his history as a Wall Street type himself, who, yes, laid people off.

Americans would accept layoffs if they knew they could find better jobs than the ones they lost. They know, further, that they’re less likely to find them in a world where connections matter more than merit.

If Romney doesn’t start telling people what he’ll do to ensure that Americans succeed on merit rather than on connections, people will write him off as one of the clueless well connected, confirming for good that he is stuck in a bubble.

— Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal. Reach her @nicolegelinas on Twitter.


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