A Test of OWS: Who will win the election, the plutocrat (Romney) or the appeaser (Obama)?

Mitt Romney is going to spend a lot of time--much more than he had anticipated--defending himself in the general election over Bain Capital and the freshly acknowledged low-tax rate he's been paying (about 15 percent) while amassing a $250 million fortune. The attacks will come from Obama, who will position himself as the champion of the middle class and the OWS movement. The irony is that, as I've written repeatedly and go into considerable detail about in my book, Capital Offense, Obama has done little but appease Wall Street under the ministrations of Tim Geithner and Larry Summers. But compared to Romney, he's Mother Teresa.

Romney is just too easy a target. Like many Wall Streeters (Jamie Dimon, for example), he doesn't seem to understand why he's so disliked.  At the Tuesday news conference at which he revealed, under pressure, his tax rate, the GOP's presumptive nominee also jovially mentioned that he earns "speaker's fees from time to time, but not very much." The "not very much" turns out to be more than $360,000 in one year, according to USA Today--a sum that by itself would put him in the top income bracket. (Maybe that's why he has $10,000 to stake in casual bets with Rick Perry.) Beyond that, Congress's whole point in granting such low tax rates to investment income like Romney's (through a device called "carried interest") is to create jobs. Yet Romney can't say even now whether Bain created or destroyed more net jobs during his time there, as Glenn Kessler of the Washington Post has pointed out. 

Romney's biggest problem is that, as both the OWS and tea-party movements indicate, much of the country is still incensed over the inequality of income and corruption of capitalism that a bailed-out Wall Street has come to symbolize. The anger against financial plutocrats is perhaps greater than any time since the 1930s. 

It's not so much the kind of activities that Romney and Bain were specifically engaged in. Bain may sometimes destroy jobs, but when it fails at a venture, at least it loses money. Firms like Bain  also go bankrupt. Unlike the coddled Wall Street banks -- the elite among the elite -- who no longer have to follow the rules of capitalism.   

Yet the public may no longer be interested in making the distinction between Wall Street firms that follow the rules and those that don't--and that's what could mean trouble for Mitt. Gingrich and Rick Perry's case against Bain in South Carolina has resonated largely because of Wall Street's offenses over the last decade with subprime mortgage securitization.

The issue here is not really about the ordinary "rough and tumble of market capitalism," as the Wall Street Journal's Gerald Seib suggested at the GOP debate Monday night. Most Americans don't have a problem with that. As I've said previously, the issue is really the CORRUPTION of market capitalism represented by the massive fraud that Wall Street banks got away with, for which they were then bailed out by the federal government with no questions asked. All this has aggravated, for average Americans, the frustration they already feel because of the record levels of income inequality that exist in our economy. 

That's why the public is likely to get its dander about  Romney's 15 percent. It is an issue that unites conservatives and liberals, OWS protesters and tea partiers alike. As I wrote in Capital Offense, both the Left and the Right were justifiably offended by the way the American system of capitalism---real capitalism, that is, the way it's supposed to work --- was subverted during the subprime era. Liberals were appalled by the rampant destruction of social equity, and the rigged way so much wealth was amassed in the hands of the 1 percent; conservatives were outraged that the system didn't work the way it was supposed to: in other words, if you fail, you die.

So Romney's biggest problem may not be his robotic campaign style, or the tin ear that lead him to bet Perry $10,000 (presumably at low tax rates) at one point. His biggest problem may be his golden resume. He was clearly part of the problem--as much as Larry Summers, Tim Geithner and some of the other "mechanics" that Obama brought in to fix things--so it stands to reason  that Romney will have a hard time persuading the public he's the solution.