Writing today on the Washington Post's Post-Partisan Blog, E.J. Dionne takes issue with Mitt Romney's effort to analogize President Obama poor economic record to that of the British Labour Party in the 1970s. At issue is Romney's adaptation of a campaign poster employed by Margaret Thatcher during the late 1970s, calling attention to the failure of the Labour Party's economic policies. These policies, of course, helped produce high unemployment, high inflation and economic stagnation, all leading to a 1976 IMF bailout orchestrated by the Ford Administration. Like Thatcher's poster, which asserted (correctly) that "Labour's Not Working," Romney's new poster asserts "Obama's Not Working."
Dionne does not dispute that economic conditions in the United States are in some ways analogous to those in Britain in the 1970s, e.g., unemployment is high and debt is rising. (At the same time, inflation is still at bay here, partly because unions exert far less influence than they did in Britain in the 1970s.) Still, he claims there is a key difference between 1970s Britain and the current environment that deprives Romney's analogy of much force. According to Dionne:
"[T]he big difference is that the economic mess Obama inherited was the creation of some of the very policies that Romney now endorses, including low taxes on the wealthy and deregulation."
Apparently Dionne, like Labour in the 1970s, believes that we can tax and regulate our way to prosperity.
Unfortunately, Dionne does not explain how higher taxes on those citizens who create the most wealth, and already pay most federal income taxes, a cornerstone of Labour's policies in the 1970s, would have prevented the current downturn or otherwise stimulate the economy. Perhaps he should review the economic records of Ronald Reagan, John F. Kennedy and Lady Thatcher herself, all of whom cut taxes "across the board," including on the "wealthy," to get the economy moving again. As Lady Thatcher's predecessor Winston Churchill colorfully put it: "[F]or a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."
Nor does Dionne specify which "deregulation" led to the current economic downturn or, for that matter, document his claim that Romney, who was not a public official at the time, supported such deregulation. Finally, he does not mention that deregulation in both Britain and the United States in the early 1980s apparently helped produce sustained periods of economic growth in both countries or that President Obama's administration has sought to expand the power of cartelistic labor unions in so as to increase the cost of doing business in the United States and interfere with the process of competitive federalism.
This blogger suspects that Romney's message will have more resonance than Dionne cares to admit.