Government's role in marketplace on trial in Michigan
STERLING HEIGHTS, Mich. -- Charles Bell believes in free enterprise — up to a point.
When his job at Chrysler's assembly plant here was in jeopardy, along with the jobs and economic security of thousands of colleagues — not to mention the entire industry — he welcomed a government rescue.
"Free enterprise can't mean the end of manufacturing," Bell, 48, says. "There's a human side to it."
As voters here go to the polls Tuesday to choose a Republican presidential candidate and President Obama addresses a United Auto Workers conference, Michigan and its auto industry are climbing back from a near-death experience — and the state is a multibillion-dollar national laboratory for government intervention in the marketplace.
Obama's decision to bail out General Motors and Chrysler with $62.5 billion, along with his promotion of favored emerging industries and billions in fiscal stimulus, has earned him kudos from workers like Bell. But Republicans such as Mitt Romney call him a "crony capitalist" for favoring labor unions loyal to Democrats and accuse him of being a European-style socialist.
"There is a theme of economic issues running through the campaign that's beyond the usual discussion about how's the economy doing," says Michigan Democratic Party Chairman Mark Brewer. "It goes to what is the proper role of government."
While the candidates debate how much federal intervention is too much, Americans appear to be losing their faith in free enterprise. Only 50% viewed capitalism favorably in a Pew Research Center poll in December. Two years earlier, Gallup counted 61% on capitalism's side.
Among the possible reasons:
•The Occupy Wall Street movement has focused attention on the gap between rich and poor. From 1979 to 2007, inflation-adjusted average income for the top 1% grew 275%; income for those at the bottom grew just 18%.
•More Americans have become reliant on the government. More than 46 million receive food stamps, nearly a 50% increase since Obama became president. His health care law is projected to add at least 16 million to Medicaid, an increase of 27%.
•The tax code is under renewed scrutiny, fueled by evidence that many of the nation's wealthiest individuals pay lower tax rates than their employees. Romney, accused by Newt Gingrich of being a "vulture capitalist" during his private-equity career, earned more than $20 million in each of the past two years but paid only 14% in taxes.
Obama brings up the auto rescue almost daily. "Even when some politicians said we should just let Detroit go bankrupt, we stepped up," he told campaign donors in Miami last week, recalling Romney's opposition to the deal. That same day, his campaign unveiled a TV ad about it in Michigan.
"People who accuse this government of socialism haven't seen socialism in action," says Nigel Gault, the British-born chief economist of consulting firm IHS Global Insight. "I know what socialism is. The British government put huge parts of the economy under government control. We had British Airways, we had British Telecom, we had British Steel and (carmaker) British Leyland. And most of them were complete disasters. That's socialism."
