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By Nicole Gelinas

After The Fall: Saving Capitalism From Wall Street--and Washington

Eye on the News

Nicole Gelinas
Christie Doesn’t Go to China
The New Jersey governor defends the messy but essential process of democracy.
30 September 2011

In his speech on Tuesday at the Reagan Library, New Jersey governor Chris Christie said that when America tackles even domestic issues, “the whole world is watching.” Then he defended an American principle more important than any of the specific economic policies he mentioned: “Divided government,” that is, governance in which disagreement is the order of the day and compromises can only be reached after extensive debate. Defending democracy may not seem radical, but Christie’s words offered a welcome antidote to the prescriptions that so many of our corporate leaders and their mouthpieces have suggested lately: Why can’t America be more like China?

It’s not just New York Times columnist Tom Friedman, conventional-wisdom dispenser to the C-suite, who wrote in 2009 that “one-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages.” This past week, Coca-Cola CEO Muhtar Kent told the Financial Times that doing business in China is terrific. In China, he said, “You have a one-stop shop in terms of the Chinese foreign investment agency and local governments are fighting for investment with each other.” He praised, too, in the FT’s paraphrase, “China’s budget discipline.”

Kent joins casino magnate Steve Wynn, who told investors in July that although he’d like to create “tens of thousands of jobs in Las Vegas,” he is “afraid to do anything in the current political environment of the United States,” as “you watch television and see what’s going on, on this debt-ceiling issue.” Wynn noted how much easier it was in China:

September will be our fifth anniversary in the People’s Republic . . . and we love it there. We are so grateful to be part of that market and to be allowed to participate . . . . We find the political environment, the regulatory environment, the human-resource environment that we’re in to be absolutely delicious. Life is quite straightforward in China. The government is predictable.

Wynn and Kent have at least partial company in asset-management titan Stephen Schwarzman of The Blackstone Group. While not championing China, Schwarzman wrote in the Financial Times in September that to avoid a “long period of potential decline,” America needs “the ability to put together a cohesive team,” just as distressed companies do. Indeed, like a business, he wrote, the U.S. requires a “united front—that is the key. This united front needs to include everyone.” America’s lack of consensus on how to achieve long-term fiscal stability, Schwarzman writes, is “embarrassing.” In his view, everyone is at fault: Tea Party members, for “attack[ing] the administration and the Democrats,” and Obama administration officials, for having “attribute[ed] blame for the financial and economic crisis” to financial firms. “A united front is difficult when our leaders cannot even agree within their own parties,” Schwarzman observes.

Earlier this week, former President Bill Clinton joined the mindless-political-consensus bandwagon, saying at a New York forum that “there’s not a single example on the planet of a successful country with a growing income and a growing job base that doesn’t have . . . an effective government working together on a coordinated economic strategy.” Outdoing them all, North Carolina Governor Bev Purdue got straight to the point this week, suggesting that “we ought to suspend, perhaps, elections for Congress for two years and just tell them we won’t hold it against them, whatever decisions they make, to just let them help this country recover.”

You know what would be less “embarrassing” but truly worrisome? If Americans were to stop engaging in the robust debate that necessarily precludes a monolithic “united front.” America faces as-yet-unanswered questions about an unknowable future. How much, if at all, should Washington cut defense spending? How much should the government continue to protect our financial industry? How high should marginal tax rates be? Is Social Security a Ponzi scheme or a sacred social-insurance program—or both? The last thing we need as we navigate these issues is premature “unity,” cemented by the type of wise-man consensus that helped get us into this mess. If the nation suddenly unified, it would run the risk of again choosing the wrong answer, with few dissenting voices able to break through the groupthink.

So let’s be thankful that we’re not China. There, the government can decree that it wants a favored class of people to take group tours to new resort casinos, and—behold—the favored class takes group tours to new resort casinos. We’re America, where people have freely decided to become more frugal with their hard-earned dollars, despite a massive federal stimulus. Of course, if you’re Steve Wynn, the new frugality is nothing to cheer. In Las Vegas, he says, “we get people that carry their beer in from 7-Eleven, move their own bags and don’t eat in our fine dining. We can’t use them.”

Maybe Chinese government officials can approve permits and award tax breaks much quicker than American officials can, as Coke’s Kent prefers. But that’s at least partly because China’s government quashes pesky dissenters on everything from environmental to labor questions. As for Schwarzman: he’s a risk manager, so he should surely appreciate that the unquantifiable future risk of putting a “unified nation” behind the wrong answer is potentially far greater than the easily quantified and bearable present reality of some hurt feelings and nasty headlines. “Unity” in the wrong direction would hurt ordinary Americans in more ways than merely looking disorganized and impolite to global investors. Finally, as for Clinton’s “coordinated economic strategy”: our centrally planned economic strategy of homeownership for everyone didn’t work out so well, did it?

To his credit, Governor Christie seems to understand what America needs. He said Tuesday that in his state, a functional government “does not mean that we have no argument or acrimony. There are serious disagreements, sometimes expressed loudly—Jersey style.” He said the problem in Washington is not that division exists, but that the tenor of the division, as displayed in the debt-ceiling debate, can make “our democracy appear as if we could no longer effectively govern ourselves.” While no advocate of unthinking unity, Christie also recognizes the need for constructive compromise in a democratic system.

If the rumors are correct that Christie hasn’t ruled out a presidential run, more people might hear this crucial message. Democracy isn’t a quiet, invitation-only cocktail party hosted by an authoritarian regime. In a democracy, we argue things out.

Nicole Gelinas, a City Journal contributing editor and the Searle Freedom Trust Fellow at the Manhattan Institute, is the author of After the Fall: Saving Capitalism from Wall Street—and Washington.

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