By: Eugene Robinson, Opinion Writer, The Washington Post, January 16, 2012
What “Not Very Much” Income Is To Mitt Romney
In all things economic, the former Massachusetts governor is a veritable gaffe machine.
Up until now, Mitt Romney has refused to release his tax returns, something that he surely knew would eventually become an issue. And it isn’t too hard to figure out why. When you’re struggling to get past your image as an out-of-touch rich guy, having front-page stories about the millions you’re pulling in isn’t something you’d look forward to. And in Mitt’s case, there are really two problems.
The first is his income, which we can be pretty sure is in the seven figures. And this is despite the fact that he hasn’t actually held a job in years. Unlike people who work for a living, Romney makes money when his money makes him more money. Which leads us to the second problem: the tax rate he pays. Because our tax system treats investment income more favorably than wage income, Romney probably pays the capital gains tax rate of 15 percent on most of his income, as opposed to the 33 percent marginal rate he’d be paying if that money were wages. Which is what Romney was forced to admit yesterday, when he said, “It’s probably closer to the 15 percent rate than anything.” But here’s where Mitt’s tone-deafness on these kinds of issues comes, once again, to bite him:
The vast majority of the income Mr. Romney reported over 12 months in 2010 and ‘11 was dividends from investments, capital gains on mutual funds and his post-retirement share of profits and investment returns from Bain Capital, the firm he once led. And Mr. Romney also noted that he made hundreds of thousands of dollars from speaking engagements.
“I got a little bit of income from my book, but I gave that all away,” Mr. Romney told reporters after an event here. “And then I get speakers’ fees from time to time, but not very much.”
Financial disclosure forms that candidates are required to file annually shows that Mr. Romney earned $374,327.62 in speakers’ fees from February of 2010 to February of 2011, at an average of $41,592 per speech.
Oh Mitt, you really are the gift that keeps on giving. A smarter candidate would say, “I’ve been very fortunate to make significant amounts of money from giving speeches.” But Mitt describes $374,327 in speaking fees in one year as “not very much.” If you put that amount into the Wall Street Journal‘s handy calculator, it turns out that if those speaking fees were the only income Mitt had, he’d still be richer than 98 percent of Americans. But those speaking fees, apparently, are “not very much” to him.
Just to be clear, I don’t think that the fact that Romney considers an amount of income that most of us will never dream of earning “not very much” doesn’t mean he’d be a bad president, in and of itself. But like all Republicans, Romney thinks there’s nothing wrong with the fact that money you get for working gets taxed at a higher rate than money you make for selling a stock or having your grandfather die and leave you a few million, and he’d like to make that disparity even more extreme.
Romney now says he’ll probably release his 2011 returns in April. Which guarantees that there will be plenty of time for the Obama campaign to keep talking about it in anticipation of the big event. At the current rate, he should commit about one head-shaking gaffe per week on economic issues between now and then.
By: Paul Waldman, The American Prospect, January 17, 2012
“Creative Destruction”: Re-Examining The Myth Of No-Fault Capitalism
From all evidence, the issue of economic justice isn’t going away. Break the news gently to Mitt Romney, who seems apoplectic that the whole “rich get richer, poor get poorer” thing is being discussed out loud. In front of the children, for goodness’ sake.
“You know I think it’s fine to talk about those things in quiet rooms,” he told the “Today” show’s Matt Lauer last week. “But the president has made this part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach.”
Actually, those blasts weren’t coming from President Obama. That was Romney’s competition for the Republican nomination, sounding like a speakers’ lineup at an Occupy Wall Street rally.
Now, I predict, will come a furious attempt by the GOP to unring the economic justice bell. Damage control efforts began with Newt Gingrich backing away from his sharp-fanged criticism of Romney’s record at Bain Capital, the investment firm he led. Don’t attack the GOP front-runner for being a ruthless, heartless corporate raider, Gingrich announced, but rather for not being conservative enough.
This admonition came as a pro-Gingrich political action committee continued to blast Romney as a ruthless, heartless corporate raider. Inconsistency, thy name is Newt.
By most accounts, Bain was a relative laggard in the ruthlessness department. Other private-equity firms were far more brazen in the way they bought troubled companies, laid off workers, stripped away assets and fattened investors’ bank accounts. While Romney’s claim to have created 100,000 jobs looks like a gross exaggeration, it’s true that Bain stuck with companies such as Staples and Sports Authority and helped them grow.
But as for heartlessness, well, it comes with the turf, right? Bain was just serving as an instrument of “creative destruction,” and if workers lost their jobs, if they had to raid their children’s college funds to pay their mortgages, if perhaps that money ran out and they ended up losing their homes, in the long run they’ll still be better off. Or the country will be better off. Or something.
In any event, capitalism means never having to say you’re sorry. Perish the thought that anyone would critically examine this ethos except in a “quiet room.”
But to the horror of radical free-market ideologues, the myth of no-fault capitalism is under scrutiny. No one is arguing against markets, which are indeed the best way to create wealth and thus the best weapon against poverty. No one is arguing that investors who risk their capital in a company should not be able to reap rewards. What the ideologues ignore, however, is that workers also have “capital” at risk — in the form of mind and muscle, creativity, loyalty, years of service. Why is this investment so casually dismissed?
The first of the Republican candidates to raise the fairness issue was Rick Santorum, who spoke in debates of the pain many families were suffering because of economic dislocation. This was before his strong showing in Iowa, so no one was paying attention.
Then Gingrich and Rick Perry picked up the theme in an attempt to slow Romney’s march to the nomination. Whether they meant what they said or were just being tactical, the effect was to open a discussion of economic fairness and justice that will be hard to squelch.
The next logical step is to look at the results being produced by the radically deregulated, no-fault capitalism that has been practiced in this country since the Reagan revolution. Overall, we’ve had tremendous growth and low inflation. But we’ve also seen rising inequality and falling mobility. Middle-class incomes have stagnated, upper-class incomes have skyrocketed, and rags-to-riches stories are now less likely than in most of the “European social democracies” Romney holds in such disdain.
We have failed to keep pace with other industrialized societies in public education, and rather than offer relevant retraining to employees displaced by innovation and globalization, we leave them to their own devices. As a result, we’re starting to lose not just basic manufacturing jobs but also high-value-added, knowledge-based jobs to countries where workers are more qualified.
Government has played a huge role in guiding the nation through previous economic upheavals — after World War II with the GI Bill, for example. It can and should play such a role now.
That’s my view, at least. Thanks to the Republican candidates, of all people, we’ll get to hear what President Obama and his eventual opponent think.
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
Adam Smith’s “Invisible Hand” Picking Our Pockets
Now that Newt Gingrich has torn the mask off the ugly face of predatory corporate capitalism, it’s clear why defenders of the status quo such as AEI President Arthur C. Brooks were so eager to frame the debate after the Wall Street collapse in 2008 as an existential clash between “entrepreneurship” and “European-style statism” in which freedom itself was endangered by “expanding bureaucracies, a managed economy and large-scale income redistribution.”
Trickle-down, supply-side capitalism sold itself for decades to a gullible public as the comforting belief that a rising tide raises all boats. There was no need for class warfare, the rich assured us, since giving them more money meant more jobs for us. That was the implicit bargain when America agreed to cut the taxes of the rich in half.
Yet, the most important economic story of the last 30 years has been the growing income gap brought on by the radical transformation of the American economy from one that makes things to one that packages debt – and does so by enhancing the purchasing power of the masses at the expense of the predictable wage growth that supplies the foundation of a stable and broadly-based middle class society.
Denied the utilitarian argument that trickle-down capitalism works best for everyone, defenders of laissez faire have more recently turned to metaphysics and morality in order to build their firewall against what they can all see coming: a Second New Deal.
This helps explain the peculiar, desperate and almost frenzied explanations we’re hearing from plutocrats like Mitt Romney, who is being forced (thanks to Occupy Wall Street and now Newt Gingrich) to explain to us in greater detail just how he came by all those millions.
Romney’s reliance on the fall-back reactionary politics of “envy” and “class warfare” shows it’s a story he’s not keen on telling.
As Charles Blow wrote in the New York Times, Romney “lambasted” his Republican opponents Newt Gingrich and now Rick Perry for poking about into what Romney did as head of the private equity firm Bain Capital. Obviously targeted for a friendly Republican audience rather than a more skeptical general election one, Romney’s only comeback seemed to be a tactical one — that attacks against him and his performance as a latter-day Robber Baron were playing right into the hands of President Obama, who Romney charges with dividing America through the “bitter politics of envy.”
On NBC’s Today show Romney went further and said the entire debate about income inequality was out of bounds, even telling host Matt Lauer that questions about whether those palatial fortunes of the rich were fairly won should be entertained — if they are entertained at all — only “in quiet rooms” where opposition to out-sized fortunes could either be safely reasoned with or bought off.
Listen carefully because Romney’s is the authentic voice of the New American Aristocracy.
And that’s the problem, says Blow. With all due respect to Romney’s “quiet rooms,” says Blow, Americans have been quiet for far too long about a reward system that unfairly favors the few.
Notes Blow, a report released last week by the Pew Research Center found that about two-thirds of Americans perceive a “strong conflict” between rich and poor. That is up 19 percentage points from 2009. Another report cited by Blow showed that the United States ranks near the bottom among Western countries in the social mobility it provides its citizens.
“This has nothing to do with envy and everything to do with fairness,” says Blow.
Indeed, as all those Tea Party Republicans who’ve been brushing up on their early American history can no doubt tell us, it’s precisely the power of concentrated capital to re-create a British aristocracy wearing colonial blue that was at the heart of the bitter rivalries and antagonisms that separated Federalists from Anti-federalists, Hamiltonians from Jeffersonnians.
More recently, conservative apologists for Big Monied interests were quick to label Elizabeth Warren as a leftist radical who hates all that is decent and holy about American rugged “individualism,” while harboring the typical Harvard elitist’s contempt for the simple desire of average Americans to get ahead. Yet, even conservatives had to concede that when Warren spoke about the American Social Compact she was articulating the commonplace truth that “nobody in this country got rich on his own. Nobody.”
Nevertheless, the starkly elitist and anti-government writings of Ayn Rand are enjoying an Indian Summer among America’s plutocracy largely due to the flattering portrait Rand paints of them as society’s only “productive class” and upon whom the rest of us parasites must feed. These are the members of America’s superclass, says Rand, who have it within their power to bring civilization itself to a halt should they decide to “Go Galt” – go on strike – in order to resist the taxes imposed on them to support the lassitude of the greater idle masses.
Warren articulates an alternative view in which the resources of these wealthy job creators are nothing but worthless paper in the absence of the critical collective investments society makes in the human and economic infrastructure necessary to build the kind of economy where all that paper can be profitably put to use.
You can see now why Warrren’s alternative narrative about the value of investments in roads, research and schools made by a government Rand’s superclass is so intent on dismantling would be seen as destabilizing to the self-serving mythology plutocrats have constructed for themselves that unregulated private capital is solely responsible for wealth creation and the jobs that go with it. And this is why conservatives were so determined that Elizabeth Warren and her subversive ideas be knocked down, and now — and even by social conservatives who believe birth control is immoral and should be illegal who nevertheless lined up to attack Warren on her imagined assaults on “individualism” and “personal autonomy.”
Recently, I wrote about the arbitrage Republicans have used to great effect in recent decades to profit from the gap that exists between the way the public thinks about how the economy works and how it really does. The public thinks the same old rules still apply about people being rewarded for the risks they take and the contributions they make within a competitive “free market,” where taxing away the fruits of those labors in order to give rewards to others less prudent or hard-working is thought to be both unfair and unjust.
That in a nutshell is the basic concept called The American Work Ethic to which most American voters subscribe.
But there is a huge gap between the facts and fictions of our economic existence that Blow helps to illuminate when he writes about an older Contract with America that the wealthy in this country have now broken.
The old “social symbiosis,” says Blow, was one where Americans working together “create a society in which smart, hard-working people can be safe and prosper, and the rich in turn reinvest a fair share of that prosperity back into society for posterity.”
It’s an arrangement in which everyone benefits, says Blow. “But somewhere along the way this got lost. Greed got good. The rich wanted all of the societal benefits and none of the societal responsibilities. They got addicted to seeing profits go up and taxes go down, by any means necessary, no matter the damage to the individual or the collective. Those Maseratis weren’t going to pay for themselves. And the resulting income inequality helped to stall economic mobility.”
The values of “freedom,” “individualism,” “entrepreneurship” – and the corresponding attacks against “envy” and “class warfare” – which the Republican Party and its wealthy benefactors are feverishly putting forward to protect their privileges and vested interests, are predicated on public belief in what Blow calls the “idea of equal opportunity” that is central to this country’s “optimistic ethos.”
But income inequality and “corporate greed,” he says, “are making a lie of that most basic American truism. The rich and their handmaidens on the political right have consolidated America’s wealth on the ever-narrowing peak of a steep hill and greased the slope. And they want to cast everyone at the bottom as lazy or jealous, without acknowledging the accident of birth and collusion of policies that helped grant them their perch.”
A Republican Party whose agenda is now so wholly At One with America’s One Percent thinks nothing of passing laws to dismantle unions in order to prevent average workers from gaining economic leverage by means of pooling the one resource they possess – their labor. Yet, at the same time, Republicans define as “persons” those legally incorporated enterprises that are nothing more than creatures of the state and of those laws which allow the wealthy to pool that resource which they have in such abundance – their capital.
And once this basic inequity receives the attention it deserves, that low roar you hear gaining volume in the distance will be the sound of Americans waking up to fact that for far too long the plutocrats in this country have been using Adam Smith’s famous “Invisible Hand” to pick their pockets.
By: Ted Frier, Open Salon, January 15, 2012
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