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Tuesday, October 9, 2012

From the Magazine: Mitt Romney and Barack Obama Basically Agree on the Economy

Illustration by Peter Oumanski

Christina Beckwith was a public high-school Spanish teacher in Michigan when she was laid off because of government spending cuts. She says she wants to vote for whichever candidate will fix the economy, but she isn't sure who that is. “I don't have any training to be able to figure all of that out,” she told me.

It's something I heard a lot recently. Pew Research Center, the polling company, put me in touch with a group of voters who were on the fence about the candidates and were willing to have a journalist contact them as the election neared. These swing voters represented many demographics, from various corners of the country. I spoke to a young soldier in Texas, a grandmother in Minnesota, and a 69-year-old teacher's assistant in Mississippi, among others. Some of them had confusing views. One Tea Party supporter wanted to raise taxes on the rich and strengthen entitlements, like Medicare and Social Security. The teacher's assistant, who said she was voting for Romney, echoed these traditionally Democratic sentiments. She had never been able to figure out where either party stood on these issues, she told me.

We've heard for months that this election is about the economy, and polls show it's by far the issue that people care most about. We've also heard pundits complain that the election will come down to the vicissitudes of undecideds who don't understand these issues. Yet as I spoke to a sampling of voters, it became clear that while, it's true, they knew little about economic policy, most agreed on basic economic questions. And while some leaned Democrat and others Republican, the questions they had and the beliefs they held represented a broad center of American opinion.

In a series of polls going back decades, the Pew Research Center and other surveyors have shown that America is divided on many economic issues in name only. A majority of Americans support Social Security and Medicare, a progressive tax system and a government that regulates business in the public interest, but most share deep skepticism about the government's ability to do all this well. Compared with much of U.S. history and to many countries around the world today, America has already settled its most significant economic debates. From the 1780s to the 1930s, there were a series of profound economic questions that fueled deep discord. Thomas Jefferson and Alexander Hamilton fought over the basic nature of the new U.S. economy (agrarian or industrial?) and who would control the nation's currency (a central bank or the nation's private banks?). Hamilton won the first battle and the second one wasn't resolved until the creation of the Fed in 1913.

In the late-19th and early-20th centuries, the debates covered basics like whether the federal government could even regulate business or tax citizens at all. Then the 1930s brought all sorts of fundamental changes, including the development of Social Security, modern financial regulation and a government-managed housing industry.

Crudely speaking, Franklin D. Roosevelt shifted the nation to the left during the '30s, and the nation has spent the last four decades moving slightly right. We are now in the process of fine-tuning. This becomes particularly apparent when comparing the United States with other industrialized nations. The United States is the rare state without a socialist or communist political party that wins significant votes. Europeans often have national debates about fundamental economic issues: how much industry should be government-controlled; what does private enterprise owe the state; what is the relationship between the European Union's economic authorities and its member states. These debates are mild compared with the ones raging in China, India, Brazil and other rapidly industrializing nations.

Perhaps the best example of this economic consensus are the two candidates for the presidency. For someone who lived in the first 150 years or so of this country, it might be hard to see what's so different about the economic policies of and . Romney seeks a 25 percent top corporate tax rate, and Obama is proposing 28 percent. Romney wants to eliminate capital-gains taxes for the typical investor and leave the rate at 15 percent for higher earners. Obama wants to increase it to 20 percent. They differ on how to tax the highest incomes. But for most Americans, the distinctions might be mistaken for a rounding error. Both men strongly support expanding free trade and maintaining close to the same level of Social Security and welfare benefits. Neither has any specific plan to radically change the way we regulate business, the environment or the workplace.