Shifting America's animating idea from creation to protection.By DANIEL HENNINGERThe most basic explanation for why Barack Obama may win next Tuesday is that voters indeed want an economic deliverance. The standard fix in politics everywhere is to crowbar the old party out and patch in the other one. It is true as well that the historic nature of the first African-American candidacy would play a big role.
Push past the historic candidacy, however, and one sees something even larger is at stake in this vote. One sees is what Joe (The Plumber) Wurzelbacher saw. The real "change" being put to a vote for the American people in 2008 is not simply a break from the economic policies of "the past eight years" but with the American economic philosophy of the past 200 years. This election is about a long-term change in America's idea of itself.
I don't agree with the argument that an Obama-Pelosi-Reid-government is a one-off, that good old nonideological American pragmatism will temper their ambitions. Not true. With this election, U.S. is at a philosophical tipping point.
The goal of Sen. Obama and the modern, "progressive" Democratic party is to move the U.S. in the direction of Western Europe, the so-called German model and its "social market economy." Under this notion, business is highly regulated, as it would be in the next Congress under Democratic House committee chairmen Markey, Frank and Waxman. Business is allowed to create "wealth" so long as its utility is not primarily to create new jobs or economic growth but to support a deep welfare system.
The political planets are aligned to make this achievable. In the aftermath of the financial crisis, prominent Democrats, European leaders in France and Germany, and more U.S. newspaper articles than one can count have said that the crisis proves the need to permanently tame the American "free-market" model. P.O.W. Alan Greenspan is broadcasting confessions.
This would be a historic shift, one that post-Vietnam Democrats have been trying to achieve since their failed fight with Ronald Reagan's "Cowboy Capitalism."
Of course Cowboy Capitalism built the country. More than any previous nation in history, the U.S. made its way forward on a 200-year wave of upwardly mobile, profit-seeking merchants, tradesmen, craftsmen and workers. They blew out of New England and New York, rolled across the wildernesses of the Middle States, pushed thousands of miles across a tough frontier and banged into San Francisco and Los Angeles, leaving in their path city after city of vast wealth.
The U.S. emerged a superpower, and the tool of that ascent was simple -- the pursuit of economic growth. Now China, India and Brazil, embracing high-growth cowboy capitalism, are doing what America did, only their cities are bigger.
Now comes Barack Obama, standing at the head of a progressive Democratic Party, his right hand rising to say, "Stop. We've grown enough. It's time to spread the wealth around."
What this implies, undeniably, is that the United States would move away from running with the high GDP, high-growth nations rising today as economic and political powers and move over to join the low-growth economies it once displaced -- old Europe.
As noted in a 2006 World Bank report, spending in Europe on social-protection programs averages 19% of GDP (85% of it on social insurance programs), compared to 9% of GDP in the U.S. The Obama proposals send the U.S. inexorably and permanently toward European levels of social protection. This isn't an "agenda." It's a new way of life.
In detail:
Obama's federalized medical insurance system starts the transition away from private medical care and toward Obama's endlessly promised "universal health care." This has always been the sine qua non of achieving a U.S. social-market economy.
Obama's refundable tax credits are direct cash transfers from the federal government. This would place some 48% of Americans, nearly half, out of the income tax system. This isn't just a tax proposal; it's a deep philosophical shift. In Europe it's called being "on the dole."
His stated intent to renegotiate free-trade agreements such as Nafta is also a philosophical shift. It means a transition away from a tradition of a hypercompetitive America dating back to the Industrial Revolution, toward a protected, domestic work force, as in Western Europe. The Democratic proposal to eliminate private union votes -- "card check" -- ensures the spread of a static, Euro-style work force.
Eliminating the payment limit on payroll taxes changes Social Security from an insurance to a welfare program. Obama's tax credits requires performing government-identified activities, the essence of a "directed economy."
All this would shift the animating American idea -- away from creation and toward protection.
Many voters -- progressive Democrats, wealthy older people, academics and college students -- regard this as where America should go. They explicitly want America's energies transferred away from unwieldy economic competition and toward social construction. They want the U.S. to reduce its "footprint" in the world. Monies saved by stepping down from superpower status can be reprogrammed into "investments" (a constant Obama word) in a Euro-style 19% of GDP in social protection programs.
I wish John McCain had been better able to make clearer what the truly "historic" meaning of Tuesday's vote is. Once it's done, it's done.
Write to
henninger@wsj.com
