29 January 2015

Obama still doesn’t understand America


It is surprisingly hard to kill bad ideas. Often, they seem to be like the wicked Witch in Narnia. Even when she loses a battle with Aslan, she somehow survives, hides away – and waits for another opportunity to deploy her malice, Thus it is with socialism.

In the 1980s, it seemed as if free marketeers and Conservatives had won decisive victories on both sides of the Atlantic. The passion of Margaret Thatcher turned market economics into moral nostrums; the homespun wisdom of Ronald Reagan made Americans feel good while reminding them of their core values. It was almost a renaissance of that much underrated President, Calvin Coolidge: the business of America is business.

With the end of the Soviet Empire, the two leaders’ crusades ended in a triumph. Many of us assumed that it had also led to a decisive intellectual victory and the terminal discrediting of socialist ideas. Surely everyone now knew that governments did not create wealth, but merely spent it. Surely the importance of the real wealth creators would now be recognised. It was surely incontrovertible that the road to national prosperity was well signposted. The rule of law, free markets, some form of democracy, wise politicians who tried to base their tax policies on Gladstone’s maxim, that money is best left to fructify in the pockets of the people: all that is much easier to understand than Das Kapital – and unlike Marx, it works.

That is not enough for President Obama. America does have social problems. In some inner city areas, there is a culture of unemployment which has so entrenched itself that too many of the unemployed are in danger of becoming unemployable (this is also true in the UK). Mr Obama thinks he knows whom to blame: the guilty rich, the wealthiest one percent of the American people. They are responsible for the break-down of family life in North-East Washington, for drug dealing in the Wire districts of Baltimore or gang warfare in South Los Angeles. Everything that is wrong in America is all the fault of the rich. It has often been suggested that Barack Obama is a European social democrat who does not like his own country, because he wishes that it were a different one, in which he could be honest about his real beliefs. His recent comments do nothing to refute that claim. They do provide evidence that he does not understand American history.

It is true that since the mid-Nineteenth Century, successful American entrepreneurs have made and spent great fortunes. In most large cities, they flaunted their wealth and the consequences of their conspicuous consumption are easily visible. Museums, galleries, libraries: hospitals, universities, opera houses; that is how many of the rich chose to spend their money. Augustan Rome had Maecenas. Modern America has had two score of similar benefactors.

Contemplating this munificence, a British visitor may feel a bit ambivalent. Take the Huntingdon Hartford in Pasadena, full of British art. You will come upon, say, a Gainsborough. It is a painting of a pretty girl in front of the family house. There is an air of timeless elegance. But men cannot step outside time. The girl has long since suffered the doom of all mortality, and buildings also have their vicissitudes. Today, if the house has survived, it may well have become the county lunatic asylum, while the painting has been removed to California. To a Brit, most American galleries have a melancholy sub-text. In part, they are memorials to our imperial decline. Many of their treasures were acquired by American so-called robber barons from our declining barons.

But the American rich never monopolised the nation’s wealth. Any visitor from Europe will be struck by the prosperity enjoyed by ordinary Americans. Many of those described as “middle class” in the US would be considered working-class in old Europe. Yet the linguistic upgrade is justified by their standard of living. It is true that in recent years, much of the American middle class has not enjoyed a large real-terms increase in income. There is one obvious way of rectifying that: a cut in the cost of government, followed by cuts in taxation. America produced one of the wisest economists of all time, Arthur Laffer. It is time to apply his teaching in his own country.

It is also time to remind Mr Obama that America has been the most successful economy in all history. One reason for this is an instinctive awareness shared by most Americans – and by too few Europeans. You do not make the poor rich  by trying to make the rich poor.

Bruce Anderson is a political commentator.