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Sarkozy's Lesson for America

By Newt Gingrich
Thursday, July 5, 2007

The country is at a crossroads, a different kind of place from where we've been before. The special interests seem more reactionary and entrenched than ever, the bureaucracies much larger. We need to marshal the courage to change, and we need to understand what needs changing.

Two books guide my thoughts these days. One is " Testimony: France in the Twenty-First Century," by the new French president, Nicolas Sarkozy. The second is American: " The Forgotten Man: A New History of the Great Depression," by Amity Shlaes. Together they form a map for the crossroads.

Start with the will to change. Most American politicians have lost that. Or, if they have it, they are hostage to advisers who don't have the will to change.

France has a reputation as a country averse to change. But President Sarkozy translated his general exhortation about the need to change and the importance of work into a simple and direct policy proposal: All overtime will be tax-free.

Sarkozy had the courage to campaign on the theme that "the French will have to work harder." Imagine trying to get that past an American campaign consultant. In effect, he repudiated the French left's passion for income transfer and trumped it with a passion for pursuing happiness.

The elites hated that repudiation, but it won the French election. France proves change is possible in a country whose special interests are even more entrenched than ours are.

And what about the second part of the challenge -- knowing what should be done? The great lesson of the past six years is that it is impossible to solve America's problems within the failed reactionary bureaucracies and redistributionist policies of the left.

Republicans were punished in 2006 for their own failure to run the system effectively. They were also punished for failing to develop a new system -- that is, to push for a Sarkozy-scale disruption of the old order. They didn't really even know what was wrong.

Citizens had to choose between a left enthusiastically raising taxes to run failing bureaucracies and a right passively attempting to avoid tax increases while bureaucracies decay and policies fail around it.

But there is a more powerful alternative to this. It could be very popular and economically effective. It is a return to the old liberalism that was so important in America before the New Deal. This is a liberalism we share with Britain: Whig-style free-market liberalism.

The "forgotten man" was a term coined by a great conservative pro-market, pro-growth professor named William Graham Sumner. In an 1883 essay, he asserted: "As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine . . . what A, B, and C shall do for X."

Sumner wanted to know about C, the one he called "the forgotten man." As Shlaes explains, "[t]here was nothing wrong with A and B helping X. What was wrong was the law, and the indenturing of C, his forgotten man, to the cause." Sumner wrote of the forgotten man: "He works, he votes, generally he prays -- but he always pays -- yes, above all, he pays."

Much like Sarkozy today, Sumner wanted to center society's policies on making that productive person more productive. He understood that a social contract that encouraged work led to a brighter future. But the meaning of that phrase forgotten man changed, as Shlaes demonstrates.

Franklin D. Roosevelt bought out constituencies in 1935 and 1936, spending billions on popular projects that created jobs. Nineteen thirty-six was the first peacetime year that the federal government was larger than state and local governments combined -- and it set a trend. The Depression was real, but it also was a pretext for this action.

By helping his groups of forgotten men, Roosevelt created another forgotten man, the individual left out by the groups. That forgotten man was the forgotten man of productivity, not redistributionist pity.

Shlaes's book is historical -- she is a fellow at the Council on Foreign Relations. But the implication for today is that the interest groups are the problem. This is where we must begin -- and get back to the individual.

Washington now is like the corrupt Tory England that the Whigs reformed. Whig liberalism brought growth. Our own Jeffersonian forerunners, the Founding Fathers, also rejected the Crown and understood the importance of small government.

Sarkozy shows us how a courageous leader could translate Shlaes's call to liberalism into the boldest campaign in our lifetime.

The writer, a former speaker of the House, is a senior fellow at the American Enterprise Institute and co-author of "Pearl Harbor: A Novel of December 8."

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