The symbol of the Republican Party is the elephant, and in popular lore, the elephant never forgets. But this year, some key GOP figures forgot things they were supposed to know.
The late 1970s and early 80s, when the economy was ailing with stagflation, was a time of intellectual ferment. One of the books that circulated widely was George Gilders Wealth and Poverty. The key chapter is No. 19, in which Gilder notes that the seminal conflict in any economy is between the past and the future that is, between the existing industries and the industries that will someday replace them.
Ronald Reagan was a different kind of Republican because he put the GOP on the side of the future. In doing so he put a paradoxical twist on the word conservative. What he sought to conserve was not the status quo, but Americas free-market dynamism the revolutionary force that puts the status quo under constant threat.
So it is astonishing to see GOP candidates like Newt Gingrich, Rick Perry and Jon Huntsman whack Mitt Romney for his work at Bain Capital, a private equity firm that invested in startups and declining companies, tried to restore them to health and then sold them.
Gingrich was by far the worst. He said Romney should give back the money he earned bankrupting companies and laying off workers. A Gingrich-allied Super PAC released a trailer for a film titled When Mitt Romney Came to Town that deploys all the manipulative techniques familiar to the genre: tearful laid-off employees, grainy images of shuttered factories, narration that works in the word greed as often as possible.
In the struggle between past and future, the defenders of the past always have the rhetorical edge. Its easy to point to the short-run price thats paid when products or services become obsolete and livelihoods are lost. Sorry, but sometimes restoring companies to profitability requires cost-cutting and layoffs and even then success is hardly assured.
It takes far more political skill to speak up for the still-unknowable future, for the messy process that clears away declining companies, allowing capital to migrate to enterprises that deliver the wealth creation and productivity we need to prosper.
Defending that messy process is what most people expect Republicans to do. Gingrich, Huntsman and Perry sound as if they want no part of it.
Yet what Joseph Schumpeter called creative destruction is essential if we are to avoid decline. Standards of living cannot rise unless obsolete industries are swept away, something the Soviets never learned and the Chinese have learned only imperfectly since the late 1970s.
There are many definitions of socialism, but in practice it is an economy that steadily declines because too much capital is locked up by losing enterprises that cannot be driven out of business.
Gingrich gives lip service to capitalism, but in his rage at being thwarted in Iowa by a Romney ad blitz, he reached for the nearest weapon at hand. Perhaps its telling that he gravitated toward the rhetoric of the left, just as he did earlier in bashing Rep. Paul Ryans Medicare reform proposal branded by Gingrich as right-wing social engineering.
Running for president is a brutal and revealing process. In Gingrichs case, it has reinforced every doubt about his suitability for the nations highest office.