Romney’s “47 Percent” Blunder Reveals the Hidden Heart of His Agenda

Obama may have failed to nail him for calling nearly half the nation parasites, and Romney may have beat a hasty retreat from the beans he spilled in a private moment among rich friends, but Americans should heed the core truth it revealed.

If President Obama wins re-election, historians may view Mitt Romney’s now infamous “47 percent dependent” remark as the decisive turning point. But the comment has deeper implications than the election outcome.

It weakens the long-term credibility of right-wing political discourse on dependency and welfare. And it will help transform the public’s understanding of capitalism, as Americans see that those most dependent on government are corporate elites, turning upside down our ideas of who is parasitical.

In the first debate, Romney never mentioned the 47 percent and Obama, in a devastating blunder, never called him on it. And just two days later, Romney did his ultimate etch-a-sketch and said his comments had been “completely wrong.”

But the now-infamous comments will not fade away since they are the heart of right-wing philosophy and Romney’s agenda. They tell the core conservative narrative of “producers versus parasites” and they reveal the nasty realities of capitalism crucial to understanding our economic system and decline.

Romney defined the 47 percent as those Americans who feel entitled to government benefits, don’t pay income taxes and are parasitical in the sense that, “I’ll never convince them they should take personal responsibility and care for their lives.”

The potent right-wing narrative on which Romney builds is that society is always divided between a class of producers or “strivers,” and one of parasites. The producers are private sector employers and their workers, who create wealth. The parasites are government workers and the needy depending on government benefits, especially welfare.

It has now become dogma among Republicans that the government is inherently incapable of generating wealth, that it can only be a leech, draining resources away from private individuals and corporations, who, if unfettered, would bring untold prosperity to all.

The Republican anti-parasite narrative teaches that society can prosper only when the producers dominate the parasites and keep them from destroying wealth, progress, the work ethic and the broader health of society. In an economic crisis, the 47 percent, specifically white workers, could turn against their corporate employers and even capitalism itself. However, the narrative tells them the source of their troubles are government, the Left and shiftless parasites.

In the US, the history of the “parasite” narrative is inseparable from Republican politics. After the 1929 crash, President Herbert Hoover refused to give massive government aid to the unemployed, claiming that it would reward sloth and bankrupt the government, a theme taken up in the 1930s by big business critics of the New Deal, like the American Liberty League and by Right populists like Father Charles Coughlin.

The moocher discourse regained prominence in the 1950s and 1960s, in the presidential campaign of Barry Goldwater and the immensely popular novels of Ayn Rand, who explicitly wrote about the war between “productives” and “moochers.” Rand became a hero to the new generation of young conservatives that included Paul Ryan, who helped lead the “New Right” to build a base among white workers, especially in the South.

Under Ronald Reagan, the right-wing charge of parasitical dependency became mainstream. Welfare “queens” and government social programs were demonized to rally hard-pressed workers against liberals. Reagan’s success transformed US politics, weaning the white blue-collar class from the Democratic Party and creating a blue-collar class of white “Reagan Democrats” whose anger at employers was replaced by an ironic solidarity with bosses in the struggle against the “parasites.” Herein lies the answer to the question of “What’s the Matter With Kansas?” – why workers act against their own self-interest.

Mitt Romney underwent a magical metamorphosis since being Massachusetts Governor, explicitly embracing the moocher narrative, believing that this would secure his majority among white workers, his swing base most resonant to the parasite story.

But Romney made a fatal error. Parasites had always been defined as a minority of America, mostly African-Americans. But with the “47 percent,” he suddenly turned a huge percentage of whites into “parasites.” This deeply alienated the millions of whites who had always gained self-respect by identifying with the class of the “productives” or “creatives,” a world apart from the minority parasites.

Romney turned his most important swing base – white workers – against him, and, in the long-term, gave them reason to question the legitimacy of the entire parasite narrative.

But it gets worse. By defining half the country as dependent on government, Romney suddenly opened up the question of who was not dependent. And a series of stories about Romney, Bain Capital, and Romney’s taxes began to make clear a revolutionary truth: that the corporations and richest Americans, such as Romney himself, were actually the most dependent, the most parasitical.

The 47 percent began learning some startling truths about Romney and Bain, the company the Romney founded and made him rich. Bain subsidiaries, Holson, Staples, Steel Dynamics and GST Industries received millions of dollars in grants and tax exemptions from communities where they built plants and offices. To encourage Steel Dynamics to build a plant in DeKalb County Indiana, the country and the state gave $37 million the company in subsidies, which was paid by raising taxes for DeKalb residents by .25 percent, a director transfer of wealth from the working class to the corporate elite.

Bain executives such as Romney also owe much of their wealth to special tax laws that allow them to redefine their income as “carried interest,” on which they pay much lower rates than on normal income. Romney and other Wall Street executives are also dependent on tax shelters in paradises like the Cayman Islands, where Bain Capital has organized 138 funds.

In the 1990s, Bain was spared from possible collapse when the Federal Deposit Insurance Corporation forgave $10 million of over $30 million that Bain owed.

The 47 percent did not have to work hard to see that Bain Capital is hardly the only recipient of “corporate welfare.” As of March 31, 2012, the federal government has given investment bankers $4.6 trillion in TARP bailouts of which only $1.3 trillion has been paid back.

The bailouts had become a sore point among white workers and other believers in the parasite narrative. Wall Street bailouts have opened them to the larger story of corporate welfare, something likely to become a leading story as the issue of “who is dependent” blows open.

The money the government gives annually to corporations runs into hundreds of billions. These include tax breaks, depreciation allowances, submarket sales of land and natural resources to mining and oil companies. Energy companies receive about $78.8 billion annually in subsidies. Under the Mining Act of 1872, $230 billion dollars worth of federal land was given to mining copies from 1872 to 1993. Federal subsidies to agribusiness may have totaled $245.2 billion from 1995 to 2009.

The 47 percent already knows that government spending brings billions in profits to defense contractors such as Lockheed-Martin, General Dynamics, Raytheon and Boeing. In 2011, the top 100 military contractors received a total of about $117.5 billion from the Pentagon. Lockheed Martin alone received $17.4 billion, Boeing $8.4 billion, Raytheon $6.2 billion and General Dynamics $5.5 billion.

The white workers in the 47 percent will have to ask if big military companies, like the banks, aren’t “dependents.”

After the election, the new debate about “dependency” will expand. The 47 percent will inevitably learn that corporate dependency is hardly new. Right from America’s beginning, state public works projects underwrote the private economy. Throughout the 19th century, the railroads were built with largely public money, but the profits went to private robber barons. The federal government handed over 19 million acres in land, as well as about $1.1 billion in 2010 dollars in grants to the Union Pacific and the Central Pacific, the “private” companies that built the transcontinental railroad.

Nobody would drive Ford’s Model T or Romney Sr.’s AMC Rambler without roads built by the government. While praising the achievements of private entrepreneurs, Mitt Romney proclaims, “We once built the interstate highway system and the Hoover Dam,” neglecting to mention that these were massive public works projects. The 47 percent are more likely to see through this now.

They may also be more ready to see that the corporation itself is an invention of the state, an artificial person, who is entitled to have its private property protected by the government, no matter how many billions it is worth.

Romney’s 47 percent blunder – and the huge debate it unleashed – has exposed two deep and subversive realities that could reshape US politics after the election. One is that the rich are parasitical and have always mooched much of their wealth from the state.

The trillions spent on welfare for the rich could unleash mass anger against elites like Romney who claim to have made it on their own. The hyper-individualistic rhetoric of the 1% will begin to sound absurd, especially to the white workers in the 47 percent who have been taken in by these deceptions for so long.

The second subversive reality is that capitalism is a form of state welfare for the corporations, undermining the most basic idea of capitalism itself.

If the corporations and the richest Americans are government-dependents, then capitalism looks to the 47 percent who believed in the “free market” myths as an outrageous lie. Their anger could still be trained on welfare recipients, but this time the corporations could bear the brunt of their sense of betrayal.

Of course, there is no inevitability that the dependency debate will lead in this hopeful direction, even if the 47 percent are now more receptive. It will take concerted action by progressives after the election to make good use of this new “teachable moment.” The Occupy movement started this education, and deteriorating economic conditions will continue to feed public discussion about “free market” dogmas and the statist realities of capitalism, in which governments helps the largest companies dominate the market and that 100 percent, but especially the rich, are government-dependents.

If the American government is to serve 100 percent of the American people, not the 1% in the corporate elite, it is necessary – but not sufficient – to defeat Romney. What happens after the election is crucial. Obama and the Democrats have been co-perpetrators of many of the myths about “free market” capitalism. Obama will not blow away these myths, but it will be easier for the movements to educate the public if the Democrats, who share skepticism of Republican “dependency” and “parasite” rhetoric, are in power.

After the election, mass campaigns like the Occupy movement, focusing on removing money from politics, ending most corporate welfare, expanding social welfare and creating true democracy, must continue and expand. The government, even an Obama led government, must know the people will never be quiet until it becomes a government of the people, not the corporations.

The writers’ new book, “The Surplus American,” documents a chilling social unraveling in which the majority of Americans are being rendered redundant. Yet the official jobless are just the tip of the iceberg, symbolizing an emerging majority with no viable place in a society being abandoned by its globalizing corporate elites. The authors explain the history and future of surplus peoples – and why new social justice movements, such as Occupy, are vital to solving the crisis of surplus people by putting people before profit and investing in a sustainable economy and society. Buy at a 15% discount at Paradigm Publishers.