Romney’s Genuine Capitalist Bona Fides Could Be His Downfall
Say what you will about him, Mitt Romney is the real thing: a Wall Street guy to his bones, a numbers whiz who took a small start-up, Bain Capital, and helped turn it into a $65 billion giant among private-equity firms (which is what we now call the the old corporate-raiding leveraged-buyout buccaneers we used to think of as “barbarians at the gate” back in ’80s; in case anyone was wondering, they’re now allowed inside the gate). Romney actually is, in other words, what Newt Gingrich and Rick Santorum and Rick Perry can only talk about in the abstract: he’s a real capitalist.
And now we find that he gets paid like one too. To the surprise of very few, the GOP’s nominee presumptive acknowledged on Tuesday that he pays about 15 percent in taxes, far less a percentage than the average middle-class American, thanks to a host of tax breaks proffered by what Warren Buffett once critically called “our billionaire-friendly Congress.”
But Romney’s biggest political problem right now is not that he is at loggerheads with his fellow Rich Guy, St. Warren of Omaha, who has generously demanded that the billionaire-friendly Congress ask more of the super-wealthy in taxes (which Romney vehemently opposes). Buffett doesn’t command that many votes. Romney’s biggest problem is determining whether the mood of the country has really shifted against the financial plutocrats as much as the Occupy Wall Street movement might indicate.
I think it has, and Romney will have a lot of self-defense to do in the general election.
As much as they might have annoyed their conservative base, Gingrich and Perry were on to something when they attacked Bain Capital in South Carolina. The anti-Wall Steet anger cuts across party lines. It’s not so much the kind of activities that Romney and Bain were engaged in; Bain is really just feeling the blowback from anger on both left and pight. Bain may sometimes destroy jobs, but when it fails at a venture, at least it loses money.
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. The reason that what Gingrich and Perry are saying resonates goes back to Wall Street’s offenses over the last decade with subprime mortgage securitization. The issue here is not really about the ordinary “the rough and tumble of market capitalism,” as The Wall Street Journal‘s Gerald Seib suggested at the debate last night. Most Americans don’t have a problem with that. 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 my 2010 book 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. Given the mood of the country, Romney may have a tougher time persuading the public he’s the One during the general election season than he thinks.
By: Michael Hirsh, Chief Correspondent, National Journal; Published in The Atlantic, January 17, 2012
Mitt Romney’s Miserly Concern For The Poor
“I’m concerned about the poor in this country,” Mitt Romney said the other day. “We have to make sure the safety net is strong and able to help those who can’t help themselves.”
I perked up at those words, because they were something of a departure from his usual stump speech and because they happened to come on a day when I had written about the dire implications of Romney’s proposals for the social safety net.
I don’t question his sincerity. The problem: This fine sentiment doesn’t square with his actual policies.
Consider Romney’s support for the budget plan crafted by Wisconsin Rep. Paul Ryan and passed by the Republican House. It would cut Medicaid spending by $700 billion over 10 years, reduce food stamps by $127 billion and cut in half the funding of Pell Grants for low-income college students.
As Fox News’s Chris Wallace usefully pointed out in an interview with Romney last month, “You would cut all of these programs, Governor, that people depend on, and a lot more than that.”
Romney, in response, focused on his proposal for Medicaid. He would turn the program over to the states and allow funding to grow at inflation plus 1 percentage point — significantly less than the historical growth of health-care costs.
“By doing that, you save an enormous amount of money,” Romney said. “I happen to believe that states can do a better job caring for their own poor, rooting out the fraud and waste and abuse that exists within those programs.”
Wallace: “But you don’t think, if you cut $700 billion in aid to the states, that some people are going to get hurt?”
Romney: “By cutting welfare spending dramatically, I don’t think we hurt the poor. In the same way, I think cutting Medicaid spending by having it go to the states, run more efficiently with less fraud, I don’t think will hurt the people that depend on that program for their health care.”
Really? Reforming welfare to encourage work was a good idea, but for those who need temporary help, benefits are increasingly inadequate. Adjusting for inflation, benefits are now below the 1996 level in all but two states. And turning the program into a block grant has meant that states, reeling from the impact of the recession, have been unable to respond adequately to increased needs.
That history is hardly reassuring about Romney’s plan to cut hundreds of billions from Medicaid. But the welfare analogy isn’t the only cause for concern. The Congressional Budget Office (CBO), analyzing the Ryan cuts, found that states “would face significant challenges in achieving sufficient cost savings through efficiencies to mitigate the loss of federal funding.”
So much for Romney’s mythical world in which huge cuts can be accomplished with zero harm to the poor and disabled.
Instead, according to the CBO, states would face a menu of unappetizing choices. If they did not want to raise taxes or reduce other spending, they would have to choose among cutting already low provider payments; reducing the benefits that the program covers; or throwing people now eligible for help off the program.
The impact of Romney’s approach on the safety net would go far beyond Medicaid. The brutal arithmetic of his stated plan to cap spending at 20 percent of gross domestic product — while, unlike Ryan, increasing defense funding — is that safety-net programs would have to be chopped significantly beyond where even Ryan would take them.
Romney’s tax plan would exacerbate the unfairness. He would continue the Bush tax cuts for the wealthiest Americans and provide extra breaks that would primarily help the rich. According to a new analysis by the nonpartisan Tax Policy Center, taxpayers with incomes of $1 million or more would see an average tax cut of $287,000 compared to letting the Bush tax cuts for the wealthy expire.
At the same time, Romney would do away with recent increases in the child tax credit and the earned-income tax credit — provisions that help low-income families. As a consequence, between 16 and 20 percent of those with incomes of $50,000 or less would actually see their taxes rise under a President Romney.
In other words, Romney would spend hundreds of billions for a tax cut whose benefits flow overwhelmingly to the wealthiest Americans, even as he would cut even more from programs that help the most vulnerable.
Those skewed priorities are hard to square with Romney’s stated concern, however heartfelt, for the poor. The man from Bain Capital needs to take another look at his figures.
To Mitt Romney, Detractors Suffer From Envy
Mitt Romney thinks he has figured out why people are critiquing his private-sector record: they’re jealous of rich people.
Romney said on Wednesday’s Today show that all the carping about greed and excess in America is “about envy. It’s about class warfare.”
Romney is smarting from attacks over his time as the head of Bain Capital, the Boston private-equity firm he founded. Gov. Rick Perry called Romney a “vulture capitalist” and Newt Gingrich accused him of “looting companies” while at Bain. These broadsides echo the Democrats who have derided Romney as a “corporate buyout specialist” who outsourced and eliminated jobs in order to line his own pockets.
Yet, like the snobby homecoming queen who thinks everyone hates her because they are jealous, Romney can’t see that it’s not his financial success in itself that is the problem. It’s that many people find his self-serving brand of capitalism—which was the hallmark of the recent economic collapse—repulsive.
Don’t blame the green-eyed monster. It’s simply that Americans are increasingly fed up with the behavior of the ultra-wealthy who have enriched themselves with no regard for the pile of middle class bodies they leave in their wake. In fact, a Pew poll released Wednesday discovered that two thirds of the public (66 percent) believes there are “very strong” or “strong” conflicts between the rich and the poor, up 19 points since 2009.
Why would this be? Cue the tape: “Make a profit. That’s the name of the game, right?” a smirking Romney says in King of Bain: When Romney Came to Town, a documentary Gingrich’s super PAC released on the Internet Wednesday.
In other words: don’t hate the player, hate the game.
But it’s not a “game,” Mitt.
Furthermore, making a profit is only one component of owning a business. Whatever happened to the idea that you are responsible for your workers and to the larger community? Too often, people feel like just pawns in a game of ever-increasing largesse for the top dogs. The big shots are always the winners—often getting payouts in the millions when their companies fail—and the “losers” are left to figure out how to eat or buy clothes for their children. (A new study found that $100 million “golden parachutes” have become commonplace for failed CEOs.)
Romney’s “class envy” claim is predicated on a lie we often here from the uber-rich and their defenders: the highest goal and achievement for Americans is to be wealthy, when all most people want is to be able to provide a decent lives for their families.
Pew Research found in 2008 that only 13 percent of adults say it’s “very important” for them to be wealthy. The survey found that, “Four times more people say ‘doing volunteer work or donating to charity’ is a very important priority than say the same about being wealthy.” And about five times more Americans (67 percent) say it’s very important to them to have enough free time. Having children, living a religious life, and getting married also ranked vastly higher than being wealthy.
Yet, Romney has made the “class envy” trope central to his message. In his New Hampshire victory speech Romney whined that President Obama “divides us with the bitter politics of envy.
Romney complained to on Wednesday’s Today show, “Everywhere [President Obama] goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach and I think it will fail.” In maximum Thurston Howell III mode, Romney allowed, “I think it’s fine to talk about those things in quiet rooms.” But the president is talking about it in public!
How uncouth. Doesn’t Obama know that it’s always best to discuss the unwashed masses over martinis at the gentlemen’s club?
The unlikely hero in this tale has been Newt Gingrich, who has been making the most coherent argument for ethical capitalism. Says Gingrich, what we want is “a free enterprise system that is honest … fair to everyone and gives everyone an equal opportunity to pursue happiness.” Criticizing Romney’s brand of free enterprise, Gingrich said, “It’s not fine if the person who is rich manipulates the system, gets away with all the cash and leaves behind the human beings.”
Be still, my heart.
Newt’s new message—and Romney’s continued tin ear to this issue—may pay dividends in the upcoming primary states. Unlike Iowa and New Hampshire, which have some of the lowest unemployment rates in the country, people in South Carolina are suffering mightily with a 9.9 percent unemployment rate. Ditto for the following two primary states, Florida and Nevada, with jobless rates in the double digits.
Romney gaffes, such as “I like to be able to fire people” probably aren’t going to engender a lot of love. Nor will his joking that, “I’m also unemployed … and I’m not working” as he told a group of unemployed Floridians. In Nevada—with the highest foreclosure rate in the country—a clip showing Romney saying, “Don’t try and stop the foreclosure process” is sure to be a dud.
Romney needs to figure out that Americans aren’t player haters. They don’t have “Mitt envy.” They just want jobs.
I’ll bet Romney $10,000 I’m right.
By: Kirsten Powers, The Daily Beast, January 13, 2012
For “A Government That Represents All The People”, Overturn Citizens United
In America today, the top 1 percent earns more income than the bottom 50 percent and the wealthiest 400 individuals own more wealth than the bottom half of the country–150 million Americans. We have the most unfair distribution of wealth and income of any industrialized country.
In America today, the middle class is largely disappearing while the rich and largest corporations are doing phenomenally well. Meanwhile, despite a $15 trillion national debt, the effective tax rate for the top 1 percent is the lowest in decades and many large corporations enjoy huge tax loopholes and pay little or nothing in taxes.
In America today, while insurance companies and the pharmaceutical industry enjoy large profits, 50 million Americans lack health insurance, and we are the only major country on Earth that does not provide healthcare to all as a guaranteed right.
All of these disturbing American realities, and many more, are related to the sad fact that the Washington political establishment is much more interested in representing the wealthy and the powerful than the needs of ordinary Americans. Why is that? The answer is simple. We have a horrendous campaign finance system in which Big Money is able to elect the candidates of its choice and defeat those who oppose its agenda.
The absurd Citizens United Supreme Court decision makes a bad situation much worse. Now, corporations can go right into their treasuries, set up super PACs, and spend as much as they want, without disclosure, on political advertising. This gives the Big Money interests even more power over the political process. It makes it harder and harder for the voice of the average American to be heard.
If we are serious about giving ordinary Americans the power to control their political future, we must overturn the Citizens United decision, eliminate super PACSs, and move toward public funding of elections. Our goal must be a government that represents all of the people, and not just those wealthy individuals and corporations who can put millions into political campaigns.
By: Sen Bernie Saunders, Vermont; U. S. News and World Report Debate Club, January 13, 2012
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