“The New Elite Aristocracy”: Mitt Romney’s Wealth Problem
Americans have come to expect a certain patrician baseline from their political class. Congress is stocked full of millionaires, and in the 2008 campaign Joe Biden was considered working class for riding Amtrak, despite having a net worth in the hundreds of thousands. No one bats an eye now when Rick Santorum whines about his meager means on the debate stage then releases tax returns revealing that he rakes in over $900K a year.
Yet, Mitt Romney’s wealth has served as an albatross to his campaign. We might be used to millionaires running for president, but Romney would rank among the richest handful of presidents if elected. His vast fortune is more than double the total worth of the past eight presidents combined. Newt Gingrich played on resentments of Romney’s wealth to great success in South Carolina before dialing back his attacks once the Republican establishment turned on him, accusing the former speaker of employing leftist critiques of capitalism.
Romney’s campaign has danced around the issue throughout the campaign, but over the weekend TPM‘s Pema Levy noticed a new strategy emerging from Romney and his friends:
On Friday, Romney had another one of his out-of-touch moments when he said that his wife Ann “drives a couple of Cadillacs.” But rather than try to walk back the comment, team Romney appears to have a new tactic for dealing with this problem.
When Romney and a surrogate were asked about Ann’s Cadillacs on the Sunday talk shows, their response was not to hide or apologize for Romney’s wealth. Instead, their message boiled down to: Yes he’s rich, get over it.
When questioned about the line on Fox News, Romney said, “If people think there’s something wrong with being successful in America then they better vote for the other guy.”
Mitt Romney wants to have it both ways. He sees himself as the fulfillment of the American ideal; the personification of the 1% that many middle class Americans believe they will one day reach, even if upward social mobility is increasingly difficult.
Yet, Romney also presents himself as attuned to the travails of normal working folks. He calls himself unemployed, claims to have once worried about receiving a pink slip, and litters his stump speeches with folksy tales of his normal upbringing (leaving out the years spent in a governors mansion) and starting his own, typical small business.
While the two personas appear to be at odds, Romney could get away with the contradiction if his wealth had been earned through other means. The self-made millionaire is a bedrock part of the American tale. But Romney’s struggles are as much about how he accumulated his vast fortune. Private equity is a largely unknown sector of the American economy, and its mysterious practices have a whiff of the under-the-table financial Wall Street instruments that brought economic ruin to the country. Romney earned most of his $21 million 2010 income, not from direct earnings, but from gains accrued off his investments. Rather than exemplifying the entrepreneurial spirit Americans love, the continued growth of Romney’s bank account highlights the divide between the normal working class and the new elite aristocracy whose fortunes continue to rise based on their already accumulated wealth.
By: Patrick Caldwell, The American Prospect, February 27, 2012
“Wealth-Tainted Asides”: Mitt, Michigan And A Couple Of Cadillacs
Mitt Romney just can’t stop wealth allusions from creeping into the conversation.
He did it again on Friday. At the end of a speech about his economic plan before the Detroit Economic Club, when it felt as though he was just winging it, he said: “I love this country. I actually love this state. This feels good being back in Michigan. Um, you know the trees are the right height. The, uh, the streets are just right. I like the fact that most of the cars I see are Detroit-made automobiles. I drive a Mustang and a Chevy pickup truck. Ann drives a couple of Cadillacs, actually.”
Two Cadillacs?
That’s rich, literally.
That’s not what you want to say when you are in Detroit, which, as I pointed out last week, has the highest poverty rate of any big city in America.
That’s not what you want to say in a city where Megan Owens of the Detroit-based advocacy organization Transportation Riders United said on Friday that roughly half of its bus service has been eliminated in the past five or so years.
That’s not what you want to say when discussing a tax-cut plan that, according to models prepared by the Tax Policy Center, would heavily weight the benefits toward the top of the income spectrum.
That’s not what you want to say when, as David Cay Johnston of Reuters pointed out this week, Romney’s plan would:
“Raise taxes on poor families with children at home and those going to college. Romney does this by reducing benefits from the child tax credit and the earned income tax credit and by ending the American Opportunity tax credit for college education.”
That’s probably not the thing to say in Detroit after arguing in a now-famous New York Times Op-Ed article against the auto bailouts, saying: “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye.”
That was probably not the thing to say on the day after Steven Rattner, the lead adviser on the Obama administration’s auto task force in 2009, smacked you down in a New York Times Op-Ed article for suggesting that the government “should have stayed on the sidelines” and allowed the companies to go through “ ‘managed bankruptcies’ financed by private capital.”
As Rattner put it:
“That sounds like a wonderfully sensible approach — except that it’s utter fantasy. In late 2008 and early 2009, when G.M. and Chrysler had exhausted their liquidity, every scrap of private capital had fled to the sidelines. I know this because the administration’s auto task force, for which I was the lead adviser, spoke diligently to all conceivable providers of funds, and not one had the slightest interest in financing those companies on any terms. If Mr. Romney disagrees, he should come forward with specific names of willing investors in place of empty rhetoric. I predict that he won’t be able to, because there aren’t any.”
Ouch. I need to catch my breath after that one.
O.K., carrying on.
The “couple of Cadillacs” comment probably wasn’t the thing to say the day after the Pew Research Center found that most Americans now support the bailouts, with 56 percent saying “the loans the government made to G.M. and Chrysler were mostly good for the economy.”
That probably wasn’t the thing to say in a city where you published an op-ed in The Detroit News on Valentine’s Day continuing to argue against the bailout, saying:
“This was crony capitalism on a grand scale. The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better.”
That probably wasn’t the thing to say the week that your campaign felt the need to remove this lovely little passage from The Detroit News’s endorsement of you before sending it to reporters:
“We disagree with Romney on a point vital to Michigan — his opposition to the bailout of the domestic automobile industry. Romney advocated for a more traditional bankruptcy process, while we believe the bridge loans provided by the federal government in the fall of 2008 were absolutely essential to the survival of General Motors Corp. and Chrysler Corp. The issue isn’t a differentiator in the G.O.P. primary, since the entire field opposed the rescue effort.”
The Detroit Free Press’s endorsement this week echoed the complaint about Romney’s opposition on the bailouts, calling him “dead wrong” and saying that in the past year he has been “refashioning himself as something other than what his record suggests. He has made gestures toward economic and social radicalism, and eschewed the common sense of cooperative governing that made him a success in Massachusetts.”
But what is likely more telling about Romney’s ineloquence and continued wealth-tainted asides that draw attention away from his message onto his wallet is this gem from his Friday endorsement by The Arizona Republic:
“There are better orators in American politics. Indeed, the Democrats appear to have one. And certainly there are Republicans who better project the passion for the office they seek. Steady, unflappable Romney would not a ‘passion president’ make.”
So, poor oratory, anemic passion, possessed of “utter fantasy,” and gestures toward radicalism while cruising in a couple of Caddies: That’s probably not the image you want going into a make-or-break primary.
By: Charles Blow, Op-Ed Columnist, The New York Times, February 24, 2012
Romney For Sale: Mitt Hosts $10K “Policy Roundtables”
Giving a preview of how he would govern as president, Mitt Romney hosted a series of “policy roundtables” with top dollar donors Thursday at the JW Marriott hotel in Washington, DC. Once again demonstrating that he is much more concerned with helping the very rich than the very poor, the panels were open to all interested parties — who were willing and able to raise $10,000for his campaign, each.
The roundtable topics included education, energy, financial institutions and markets, defense/homeland security/foreign policy, health care, and infrastructure. Unsurprisingly, the panels were chaired and hosted by a few prominent Republican politicians and several wealthy investors and industry insiders. They roundtable leaders and industry finance chairs included:
– L.E. Simmons (energy), who has has “guided the investment of over $1.6 billion in private equity capital used to build energy service and equipment companies.”
– Patrick Durkin, managing director of Barclay’s Capital and a top Romney lobbyist-bundler.
– Richard Breeden, a hedge fund manager and a former SEC chairman under President George H. W. Bush.
– Tom Farrell, president and CEO of Dominion Power.
– Former Sen. Jim Talent (R-MO) (infrastructure), now a “distinguished fellow” at the right-wing Heritage Foundation.
– Former HHS Secretary and ex-Utah Gov. Mike Leavitt (R), now head of a “health care intelligence business.”
If the number $10,000 seems familiar, perhaps it was because he offered to make a bet with then-primary opponent Gov. Rick Perry (R-TX) for that amount in a disagreement over his previous positions on federal health insurance mandates. Now, Romney is asking the wealthiest 1 percent to make a similar-sized bet on him. And, according to one of the event’s co-chairs, the event raised $1.5 million for Romney’s campaign.
By: Josh Israel, Think Progress, February 11, 2012
Why Mitt Romney’s Tax Returns Undermine The GOP’s Investment Tax Argument
According to Republican gospel, taxes on investment must always be low, or else investors will simply sit on their money, refusing to do the very thing that could earn them more money. However, as David Abromowitz laid out in Bloobmerg View today, Mitt Romney’s tax returns undermine this argument.
After all, Romney made his fortune via investments made by Bain Capital, the private equity firm that he ran. And Bain’s investments between 1984 and 1999 “occurred when capital-gains rates were much higher than they are today. Yet Bain consistently attracted massive amounts of private capital, and thrived”:
Bain’s haul is further evidence that fair tax rates don’t hold back profit-seeking capitalists, at least until those rates reach a point that no one is proposing. From 1984 until 1999, the top rates on capital gains — the profit from investments as opposed to compensation for work — were often at 28 percent, and never lower than 20 percent. Indeed, in 1987, under President Ronald Reagan, the 20 percent rate rose to 28 percent — a 40 percent increase in potential taxation of Bain investment profit. (Yes, Reagan did raise taxes, even on capital.)
An analysis by the Wall Street Journal of 77 Bain deals in that time period showed that the firm “produced about $2.5 billion in gains for its investors,” on about $1.1 billion invested. Clearly, even with capital-gains rates almost double those today, fund managers such as Romney didn’t lack investors.
As billionaire investor Warren Buffett put it, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital-gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain.” It’s worth remembering that it was conservative icon Ronald Reagan who completely equalized the tax treatment of investment and wage income, rejecting the argument that a lower capital gains rate was necessary to incentivize investment.
As Nobel Prize winning economist Paul Krugman has noted, the case for a lower capital gains tax is dubious at best. “Nothing in our history or experience says that unearned income has to be taxed this lightly,” he wrote.
By: Pat Garofalo, Think Progress, February 9, 2012
“Bait And Switch Cynic’s”: Obama Angers GOP By Standing Up For Middle Class
Republicans are furious with Barack Obama for waging a “divisive” populist campaign against Wall Street and America’s “elites” – because Republicans think that is supposed to be their job.
Together with the more confrontational tone he’s taken with Republicans since they rebuffed him on his middle class jobs package last summer, President Obama’s State of the Union Address on Tuesday is further proof he’s finally learned his lesson from the previous three years: That while he was off chasing independent “swing” voters said to prize compromise and moderation above all things, scheming Republicans had picked his pocket of those pitchfork-wielding populists who should have been Obama’s all along.
It wasn’t supposed to be like this. In both the physical world and in politics the law of gravity decrees that when things fall apart they are supposed to fall down. So, by all rights a second Great Depression that incinerated $16 trillion in household wealth and was brought about by the same kind of financial shenanigans and Wall Street recklessness that caused that first big depression back in the 1930s, should have provoked the very same kind of anti-business popular backlash that brought FDR to power then and should have created a Second New Deal now.
Yet, as populist historian Thomas Frank writes in his new book, Pity the Billionaire: the Hard Times Swindle and the Unlikely Comeback of the Right, so far the most visible response to the recent economic catastrophe has been a right wing campaign to “roll back regulation, to strip government employees of the right to collectively bargain and to clamp down on federal spending.”
The resurgence of the Republican Party so soon after the debacle of George W. Bush and the collapse of the financial markets in 2008 is a testament to human adaptability.
Rather than allow themselves to be crushed underneath a tide of middle class anger directed against the plutocrats and tycoons who stole their dreams away — as happened to Republicans in the 1930s — conservatives were determined this time around to lead the populist, anti-Wall Street revolt instead of be swallowed by it – even if it was a crusade cynically designed to serve the interests of the very same Wall Street that was responsible for the crisis in the first place.
Congressman Paul Ryan, for example, was both the author of the “kill Medicare as we know it” budget as well as an article in Forbes titled “Down with Big Business” in which Ryan argued that giant corporations could not be counted on to defend capitalism in its hour of need and so it was up to “the American people – innovators and entrepreneurs and small business owners — to take a stand.”
Conservative infatuation with “entrepreneurs” and “small business owners” was no accident. Like those prairie farmers who fed the Populist Movement of the 19th century, mom-and-pop hardware store owners are just as outraged by “crony capitalism” on Wall Street as they are by “European-style socialism” in Washington.
And so by passing the torch of free market capitalism from the international conglomerate to the local chamber of commerce conservatives knew they could give populist cover to a free market agenda that meant lower taxes for the rich and fewer regulations for Wall Street.
But the perfect expression of the Republican Party’s bait-and-switch cynicism came when Republicans tried to beat back Obama’s Wall Street reforms by pretending to be against Wall Street itself. Since “public outrage about the bailout of banks and Wall Street is a simmering time bomb set to go off,” wrote GOP pollster Frank Luntz in an infamous February 2010 memo to his Republican clients, the single best way for Republicans to kill Wall Street reform was to link it to favoritism of Wall Street — like “the Big Bank Bailout” instead.
And that is exactly what Republicans did, piously intoning how the Democrat’s reforms were really giveaways to the rich that sought to “punish” middle class taxpayers while rewarding “big banks and credit card companies.”
Add it all up and everywhere you looked the GOP defenders of the Top 1% were warning of “a colossal struggle between average people and the elites who would strip away the people’s freedoms,” said Frank.
Corrupt and cynical though all of this might be, Republican efforts to portray themselves as champions of little guy standing tall against “the interests” was not wholly implausible, as leaders of the revivified Right found the soil for their misdirection to be uncommonly fertile.
Hoodwinking the Tea Party Right that the “elites”who brought down the economy lived in Washington rather on Wall Street was never going to be a heavy lift.
In their year-long study of the Tea Party movement, The Tea Party and the Remaking of the Republican Conservatism, authors Theda Skocpol and Vanessa Williamson found that while Tea Party members might be impresarios of political organization they were largely ignorant when it came to “what government does, how it is financed and what is actually included (or not) in key pieces of legislation and regulation.”
The blame, they say, lies squarely with “the content of right wing programming,” especially Fox News, which, the authors contend, propagates falsehoods “often as a matter of deliberate editorial policy.” Thus, millions of frightened Americans were uniquely vulnerable to manipulation and misinformation by a corporate-sponsored “‘populist” movement that served the interests of the plutocrats.
But making matters worse, the Democrats have not exactly covered themselves in glory when it comes to making clear whose side they are on. The bank bailouts begun under George Bush are easily blamed on Democrats who both inherited them when they won the White House and voted for them when they controlled Congress. Corporate control of Washington is also a problem that undermines public faith in Democrats who are supposed to govern Washington. And when “Clintonism” is a word that means the “People’s Party” is catering to the interests of the rich and powerful — or when neo-liberalism” defines an economic system indistinguishable from conservative laissez faire — you can forgive the average voter for having trouble separating Wall Street elites from Washington ones.
With a powerful media network like Fox News at its disposal, able to “make viewers both more conservative and less informed,” it’s not difficult to understand how Republicans have been able to lead a mass revolt against “elites” that largely serves the interests of those very same elites.
But with his more recent moves to the left President Obama has begun to turn this around and win back a middle class that should have been with him from the beginning.
“After flirting with the role of the reasonable centrist after his party’s defeat in 2010, President Obama has decided to run for re-election as a full-throated liberal populist,” writes New York Times conservative Ross Douthat with a tone of resignation and disappointment more than agreement.
Peter Beinart of the Daily Beast agrees: “From Mitt Romney to Newt Gingrich to Glenn Beck, the conservative assault on Barack Obama comes down to this: unfettered capitalism is true Americanism.”
Among right wing conservatives, Obama’s efforts to use government to make American capitalism more stable and just isn’t the sort of rescue mission that both Democratic and Republican administrations have been waging since the New Deal. Conventional stimulus spending and jobs programs are instead “an alien imposition, hatched in foreign lands, and designed to make us less free,” says Beinart. And so Obama will either effectively answer that charge “or he will lose the 2012 election.”
My money is on Obama who’s recent course correction may turn out to be his own “Southern Strategy.” The original got its name back in 1968 after Richard Nixon had a Eureka! Moment when he realized there was no way Southern whites who voted with Barry Goldwater in 1964 and were now standing with George Wallace at the schoolhouse door belonged in the Democratic Party of Civil Rights and the Great Society. And today, they don’t.
Nearly 50 years later, Barack Obama seems to have had his own epiphany when he looked around at those who were shaking their fists at “Big Government” but who’d also been put out on the street by Big Banks and Big Business, and the President wondered: How can these people possibly be Republicans?
Proof that President Obama is onto something with his new, more populist approach is the fact that the unerring homing missile of popular resentments and discontents — Newt Gingrich — is going after plutocrat Mitt Romney as a “malefactor of great wealth,” while dancing on Romney’s grave with a victory speech in South Carolina that spit out the word “elite” 27 times.
The contortions that Republicans have had to go through to recast themselves as the Party of the People in order to advance an agenda lop-sided in its favoritism for the wealthy few exposes the structural deformities that have always bedeviled American conservatives.
Like lizards who camouflage themselves from predators, there has always been something chameleon-like about right wing conservatives compelled to adopt protective coloration to survive in a hostile liberal environment.
That is why right wing conservatives have had to learn to speak the language of liberalism — borrowing words like freedom, liberty and democracy in order to superficially appear to embrace ideas and ideals forbidden to them by their reactionary belief system.
That is why members of the Religious Right and Conservative Movement are more familiar with the liberal community organizer Saul Alinsky than Alinsky’s intended liberal audience seems to be, taking to heart his advice in Rules for Radicals that the way for political movements to get things done is to “go home, organize, build power.”
And immediately after the economy collapsed in 2008 and 2009, conservatism positioned itself as a popular protest movement for economic hard times, jettisoning “aspects of conservative tradition that were either haughty or aristocratic,” says Frank “while symbols that seemed noble or democratic or popular, even if they were the traditional property of the other side, were snapped up and claimed by the Right itself.”
Right wing conservatives knew a popular uprising by angry and distressed Americans against the Powers That Be was in the offing. But this time, unlike the 1930s, Republicans intended to lead that revolt instead of be victims of it.
No wonder, then, that Republicans are calling the President “divisive” when he tries to take back from them the backing of The People that rightfully belongs to him.
By: Ted Frier, Open salon, January 29, 2012
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