This column is for Ted Forstmann: financier, fun lover, and philanthropist, who died on Nov. 20. But it’s not just for him. It’s to him.
Ted, I’m worried. I wish you were still around to help me get this right. The U.S. is going nuts with populism. That’s always to be expected after a big financial crisis, I know. But this is dysfunctional.
On one side, there are conservative fundamentalists—the Tea Party—who think we can turn the clock back to before the New Deal, if not further. Some of them want to get rid not just of the Federal Reserve but of most of the federal government itself. I have more sympathy with these Teapopulists than with the other lot, the motley crew who want to Occupy Wall Street (call them the Occupopulists). But when it comes to practical politics, this Tea Party has more in common with the Mad Hatter’s than Boston’s.
To begin with, they’ve created a mood in the Republican Party that makes any kind of compromise on our fiscal crisis impossible. We just saw the ignominious failure of the supercommittee, which was supposed to come up with a plan to reduce the deficit. Predictably, each party blames the other side for this flop. Either way, the consequences are dire. First, the markets are spooked, just the way they were by the partisan dogfight over the debt ceiling earlier this year. Second, the country is now on course for more drastic spending cuts in 2013, which could not only slash our defense budget in an irresponsible way but also plunge the economy back into recession.
There’s another problem. Just like the populists of a century ago, the Teapopulists are drawn compulsively to disastrous presidential wannabes. I never asked you what you thought of Mitt Romney, Ted. But I am sure you’d prefer him over the other contenders. Bachmann, Perry, Cain, Gingrich—the one thing these people have in common is that they would lose to Barack Obama next year even if the unemployment rate were twice what it is now. Their appeal to the crucial center—to the independents and the undecided—is just too low.
What’s the case against Romney? That he’s a Mormon? Ted, you were a devout Catholic, just as I am a doubting atheist. But this is America. Religion and government are separate. And we tolerate all faiths, no matter how idiosyncratic, provided they tolerate ours too. That he’s changed his mind on hot-button issues? Well, so does any intelligent person. You often did. What is this, a dogmatism contest?
Actually, the best case for Mitt Romney was just made by the other side. In an unintentionally hilarious piece, The New York Times attempted a hatchet job based on his time as the founder and CEO of Bain Capital: “After a Romney Deal, Profits and Then Layoffs.”
You’re not going to believe this, Ted. You know what this evil bastard did? Yes, that’s right. He used borrowed money to take over failing companies. And that’s not all. He fired some of the folks who worked at those companies. Wait, it gets even worse. He restored those companies to profitability. I know, I know. And—to cap it all—he made hundreds of millions of dollars doing it.
Pretty funny, isn’t it? Because that’s exactly the business model of private equity and leveraged buyouts that you pioneered. And as I was reading about Romney’s very impressive business career, I was reminded of you.
These days people like you are vilified as members of the “1 percent”—the rich elite that the Occupopulists blame for all our ills. Their remedy? Taxes that take the money you gave to great causes like the Children’s Scholarship Fund and channel it to the federal government, which has such a terrific record of managing money, after all.
In Europe these days, the answer to fiscal crisis is to put a technocrat in charge. But I think you’d agree with me, dear Ted, that what the U.S. government really needs is a private-equity guy in the White House.
Niall Ferguson’s latest book, Civilization: The West and the Rest, has just been published by Penguin Press.