It Can Happen Here
Conservatives' new share-the-wealth plan to destroy capitalism and make you $5 richer.
At the height of the Ownership Society, when George W. Bush was pushing private accounts for Social Security, Grover Norquist explained the political rationale in the Washington Monthly: "Owning $5,000 worth of stock makes you 18% more Republican." Last November the GOP learned that Norquist's math worked just as well in reverse. Americans watched the value of their 401(k)s drop by half, and between 2004 and 2008, the electorate became 9 percent more Democratic.
Now chastened Republicans have scaled back their plans in order to make Americans a more modest offer. Mitt Romney and Sen. Lamar Alexander recently proposed turning over the federal government's 60 percent temporary stake in General Motors to the American people so that every household would own shares in GM. The company's current market capitalization is just $800 million, but even at its June peak of $1 billion, America's 120 million households would each receive GM stock worth $5. The Bush years may have wiped out your life savings, but the party of Lincoln will send you a five-spot to start over.
It will take conservatives a little longer to transform the political landscape now that the Ownership Society has been reduced to the Ownership Rebate Offer. (Buy now and get $5 back!) According to Grover Norquist's formula, owning $5 worth of stock will make you only eighteen-one-thousands of 1 percent more Republican. At that annual rate, the 7.2 percent difference between Democrats and Republicans in the 2008 presidential election will disappear in exactly 200 years. On the other hand, the downside risk is smaller as well. GM stock, like GOP stock, has nowhere to go but up.
Of course, the real motive of the Romney-Alexander plan isn't to make you $5 richer. Nobody wants GM stock; giving it to taxpayers is simply the only quick way to get the company out of federal hands. "I don't want the Sierra Club telling General Motors what kind of cars they have to build," Romney says. "Let's let the taxpayers—the shareholders—decide how GM is going to be run."
The old Republican motto was "It's your money." The new motto is "It's your company."
Setting aside practical impediments to the GM giveaway—distributing the shares would probably cost as much as they're worth—do Republicans really want to start down this path? If taxpayers don't have any more luck than past management in running up GM's value, their shares will remain virtually worthless—and Americans will once again tell Ownership Society Republicans thanks for nothing.
But from the Republican standpoint, that outcome would be better than the alternative. If the experiment actually succeeds and GM shares go through the roof, conservatives could realize their worst nightmare: convincing Americans that share-the-wealth nationalization will make them rich.
Mitt Romney, master of reinvention, is at it again. Now he's the new Huey Long. In 1934, here's how Long described his plan to cap millionaires' holdings in Standard Oil: "[Give] the balance to the people of America who own the balance of what the Standard Oil Company is worth!" Here's how Romney sells his share-the-wealth plan 75 years later: "Distribute the shares to the taxpayers of America, let them buy and sell amongst themselves."
Like tax cuts, stock giveaways are a slippery slope. Neil Cavuto of Fox News asked Sen. Alexander, "Why not extend this to any rescued entity, Merrill Lynch, Bank of America, you know, AIG, and on and on?" Alexander agreed: "That might be a good idea." As if Americans weren't already grateful to George W. Bush for their shrunken nest eggs, now Republicans have a plan to give them individual ownership of a whole new portfolio of worthless stocks.
Alexander even made the share-the-wealth argument. He told Cavuto his plan would "create a sort of Green Bay Packers among 120 million Americans. ... You know, everybody loves the Packers in Wisconsin because—because they own a piece of them."