“No Discernable Vision”: Knowing How The Economy Works Is Not Enough
This week will see the release of The 4% Solution: Unleashing the Economic Growth America Needs, a collection of essays from the George W. Bush Institute with a forward by the former president himself. It’s true that annual GDP growth never actually reached 4 percent during Bush’s two terms in office and averaged only 2.4 percent even if we generously exclude the disastrous year of 2008. But look at it this way: Who knows more about what the president ought to do about the economy than Dubya does? After all, there’s only one living American (Bill Clinton) with as much experience being president, so Bush must have the answers we need.
A ridiculous argument? Of course. That’s because experience only gets you so far. It’s obviously a good thing, all else being equal, for the president to know a lot about the economy, just as it’s a good thing for him to know a lot about foreign affairs or domestic policy. But the truth is that although the government has to solve many practical problems, and it’s important to have smart, knowledgeable people in government to work on them, the presidency is not a technocratic position.
For a long time, Republicans grasped this much better than their opponents. It was the Democrats who seemed to prize experience and knowledge, looking admiringly at candidates who understood how government works and could be counted on to manage the problem-solving efforts that would be required, while Republicans favored candidates like Ronald Reagan and George W. Bush, who argued that vision was more important than skills. Yet this year, Republicans have nominated a candidate with no discernible vision whose candidacy is based almost entirely on the knowledge and management experience he supposedly gained in business.
It’s odd that for someone whose argument is so much about his preparation and experience, Mitt Romney barely ever mentions the one job he held that actually resembles being president—the governorship of Massachusetts. But we’ve had former governors who made excellent presidents and former governors who made terrible ones. And the brevity of Barack Obama’s tenure in the Senate didn’t stop him from amassing what was arguably the most impressive string of legislative victories in half a century during his first two years in office.
Mitt Romney barely bothers to persuade the voters that he will be able to get things done in Congress or that he understands foreign policy. Instead, the phrase he repeats over and over on the campaign trail is “I know how the economy works.” The current arguments over Bain Capital notwithstanding, this has been the basic rationale for Romney’s candidacy, that during his time in business he gained a body of knowledge and a unique insight that will allow him, as president, to make dramatic improvements in the economy. During the primaries he argued that this experience would make him a better president than his Republican opponents, and today he argues that it would make him a better president than Barack Obama.
But if there were a magic key to unlock spectacular growth and widely shared prosperity, you’d think we would have found it by now. There hasn’t been a president in decades, the current one included, who didn’t have lots of businesspeople working in his administration. And Barack Obama talks to corporate leaders all the time. If Romney knows something they don’t, he hasn’t told us what it is. If you read through his economic plan, you’ll find that it contains the same things Republicans always advocate: lower taxes, reduced regulations, free trade, and so on. You’ve certainly heard Romney say that his business experience helps him understand the economy. But have you ever heard him say what exactly he learned that no one else knows?
Perhaps he plans to unveil this remarkable insight once the election is over; if so, one can hope that as a patriotic American he’ll share it with the country even if he loses. Because even if it involved some policies that conservatives like, you can bet that President Obama would be happy to take the bargain if it would deliver something like the sustained 4 percent growth George W. Bush promises. If you really could create a humming economy just by cutting taxes for the wealthy and creating some “Reagan Economic Zones” (yes, that’s something Romney proposes, though he doesn’t say much about what it means), Obama would do it. The reason he doesn’t isn’t that he’s a socialist; it’s that the argument isn’t all that persuasive.
So no, Mitt Romney is not in possession of a secret that can deliver us to economic nirvana. We can try to determine whether anything less than admirable happened at Bain Capital during Romney’s time there, and if so how much responsibility he bears. But even if all those questions are answered in Romney’s favor, it wouldn’t change the fact that the policies he advocates are derived not from his experience but from his politics and his moral perspective, just as Barack Obama’s are.
I’m not sure if Romney actually believes that keeping taxes for the wealthy as low as possible and scaling back regulations really does bring prosperity for all. But if he does, it isn’t because he concluded that after a careful examination of the evidence (if that were the case, the last decade would have been the most prosperous in American history). He favors those policies because that’s what his party believes and because they reflect his values. Romney may “know how the economy works” in certain ways. But that knowledge isn’t enough.
By: Paul Waldman, Contributing Editor, The American Prospect, July 17, 2012
“Grave Digger”: Mitt Romney’s Deeper And Deeper Hole
If today is the Romney campaign’s idea of how to get out of the box Romney is in, they’re even less ready for prime time than I thought. This is, well, amazing:
“There may have been a thought at the time that it could be part time, but it was not part time,” [Romney spokesman Ed] Gillespie said. “He took a leave of absence and in fact he ended up not going back at all, and retired retroactively to 1999 as a result,” he added.
He ended up not going back at all? So I presume since he retroactively retired, he also paid back the salary he earned during that period. But apart from that, how does the Romney campaign explain the following claims made under oath by Romney and his lawyer testifying about his Massachusetts residence to qualify for the race for governor:
Romney testified that “there were a number of social trips and business trips that brought [him] back to Massachusetts, board meetings” while he was running the Olympics. He added that he remained on the boards of several companies, including the Lifelike Co., in which Bain Capital held a stake until 2001…
“He succeeded in that three-year period in restoring confidence in the Olympic Games, closing that disastrous deficit and staging one of the most successful Olympic Games ever to occur on US soil,” said Peter L. Ebb from Ropes & Gray, [his lawyer at the 2002 hearing].
“Now while all that was going on, very much in the public eye, what happened to his private and public ties to the Commonwealth of Massachusetts? And the answer is they continued unabated just as they had.”
So either Ed Gillespie and Romney are lying now, or Romney and his lawyer were lying then. Which is it? They were and are obviously trying to have it every which way to suit whatever purpose at the moment. But legally, CEOs are responsible for their companies, whether they are managing them full time, part time or even retroactively retiring while managing them. Period. The buck stops with the CEO, just as much as it stops with a president. As a Bain partner at the time said today:
“Mitt’s names were on the documents as the chief executive and sole owner of the company,” Ed Conard, who served as a partner at Bain Capital from 1993 to 2007, said in an exclusive interview with Up w/ Chris Hayes. Asked again if Romney was chief executive officer of Bain Capital from 1999 to 2002, Conard said, “Legally, on documents, I suppose, yes.”
Despite Romney’s statements that he left in 1999, Conard’s new remarks suggest that, in fact, Romney’s continued ownership of the firm enabled him to negotiate a better exit deal. “We had to negotiate with Mitt because he was an owner of the firm,” Conard said.
Romney, in other words, doesn’t have a leg to stand on. He has been running a campaign against the “Obama economy” insisting that the president own every single month he has been in office in order to condemn his economic management all the more – despite at least a first year in which Obama cannot really be held responsible for the fallout of an economic collapse he inherited. So Romney insists on maximal responsibility for Obama and the economy.
But responsibility for Bain? Think about it. No one disputes that Romney co-founded Bain, hired most of its staff, and honed its methods and strategies from 1984 to 2002. No one can dispute that he was paid at least $100,000 from 1999 to 2002 for being CEO. There is no massive difference between the kind of strategies Bain pursued from 1984 to 1999 when Romney was managing full-time and from 1999 to 2002, when he was managing part-time and by his own lawyer’s assertion that his Bain activities “continued unabated just as they had.” Is Romney saying that nothing that happened at Bain after 1999 is his responsibility but that everything that happened after January 2009 is all Barack Obama’s fault?
Yep, that’s what he’s saying. It’s a pathetic double standard argument from a suddenly pathetic and panicking campaign. The only way he can dig out of this hole – yes, Bill Kristol is right – is to release 12 years of tax returns just as his father did. Until he does, the Obama campaign has every right to double and triple their insistent criticism of Romney’s Bain record. And there will be more and more blood in the water.
By: Andrew Sullivan, The Daily Beast, July 15, 2012
“Trickle Up Economics”: Americans Favor Extending Tax Cuts For Those Making Under $250,000
I would hardly characterize President Barack Obama’s proposal as a “gambit.” The proposal has been a consistent theme with this administration, which recognizes that Americans want the president to focus on the issues that affect them most—how to create jobs, provide opportunities to advance, and secure a better future for their children.
On Monday, President Obama laid out a vision for the fiscal policies he will pursue to ensure for a better tomorrow—offering additional middle-class tax cuts while asking some to pay a little more. Some might call it risky or foolish to ask to raise taxes during an election, but I believe the American people are often ahead of politicians in understanding what is fair, what works, and want to be offered a choice. For the eight years of “Bushonomics,” those in the middle class got a clear picture of what didn’t work as they lost their jobs, their incomes shrunk, and their homes were devalued or lost while corporate profits rose and executive pay increased.
In the latest National Journal/United Technologies poll, 60 percent favored extending tax cuts for those making $250,000 and below. They understand that economic growth will not come from more failed trickle-down economic theories, but instead by responsibly balancing the need to cut spending, increase revenue, and make sound investments in our future, especially in areas like education, new market development, and infrastructure.
In contrast, Mitt Romney continues to offer ideas that advance little meaningful change and instead, a return to the failed policies from the past of cutting taxes for those who can most afford them, while exploding the deficit, increasing our future debt obligations, and leaving no means to invest in growth.
The president’s proposal, along with an offer to discuss real tax reform after the election, put Republicans back on the defensive and elevated the debate to a referendum for the American voter in November—49 percent of independents in a recent Washington Post poll said the president’s vision for the future is more important to them than what he did in his first term. By proactively controlling the debate and focusing the attention on the “do-nothing” Congress and Romney’s policies of the past, the president will continue to look like the true leader and that is a winning formula. Focusing on America’s future is Obama’s strength and greatest political weapon.
By: Penny Lee, Washington Whispers, U. S. News and World Report, July 11, 2012
“Congressional Enemies Among Us”: Five Ways Republicans Have Sabotaged Job Growth
New numbers released today by the Bureau of Labor Statistics show that the economy added a mere 80,000 jobs in June. That’s down from an average of 150,000 jobs a month for the first part of the year, and far too little to keep up with population growth.
Republican intransigence on economic policy has been a key contributor to the sluggish recovery. As early as 2009, Republican fear-mongering over spending and their readiness to filibuster in the Senate helped convince the White House economic team that an $800 billion stimulus was the most they could hope to get through Congress. Reporting has since revealed that the team thought the country actually needed a stimulus on the order of $1.2 to $1.8 trillion. The economy’s path over the next three years proved them right. Here are the top five ways the Republicans have sabotaged the economic recovery since:
1. Filibustering the American Jobs Act. Last October, Senate Republicans killed a jobs bill proposed by President Obama that would have pumped $447 billion into the economy. Multiple economic analysts predicted the bill would add around two million jobs and hailed it as defense against a double-dip recession. The Congressional Budget Office also scored it as a net deficit reducer over ten years, and the American public supported the bill.
2. Stonewalling monetary stimulus. The Federal Reserve can do enormous good for a depressed economy through more aggressive monetary stimulus, and by tolerating a temporarily higher level of inflation. But with everything from Ron Paul’s anti-inflationary crusade to Rick Perry threatening to lynch Chairman Ben Bernanke, Republicans have browbeaten the Fed into not going down this path. Most damagingly, the GOP repeatedly held up President Obama’s nominations to the Federal Reserve Board during the critical months of the recession, leaving the board without the institutional clout it needed to help the economy.
3. Threatening a debt default. Even though the country didn’t actually hit its debt ceiling last summer, the Republican threat to default on the United States’ outstanding obligations was sufficient to spook financial markets and do real damage to the economy.
4. Cutting discretionary spending in the debt ceiling deal. The deal the GOP extracted as the price for avoiding default imposed around $900 billion in cuts over ten years. It included $30.5 billion in discretionary cuts in 2012 alone, costing the country 0.3 percent in economic growth and 323,000 jobs, according to estimates from the Economic Policy Institute. Starting in 2013, the deal will trigger another $1.2 trillion in cuts over ten years.
5. Cutting discretionary spending in the budget deal. While not as cataclysmic as the debt ceiling brinksmanship, Republicans also threatened a shutdown of the government in early 2011 if cuts were not made to that year’s budget. The deal they struck with the White House cut $38 billion from food stamps, health, education, law enforcement, and low-income programs among others, while sparing defense almost entirely.
There have also been a few near-misses, in which the GOP almost prevented help from coming to the economy. The Republicans in the House delayed a transportation bill that saved as many as 1.9 million jobs. House Committees run by the GOP have passed proposals aimed at cutting billions from food stamps, and the party has repeatedly threatened to kill extensions of unemployment insurance and cuts to the payroll tax.
According to the Congressional Budget Office, those policies — the payroll tax cut, food stamps, unemployment insurance, and discretionary spending for low-income Americans — have the highest multipliers, meaning more job boosting potential per dollar.
By: Jeff Spross, Think Progress, July 6, 2012
“Turning America Into One Big Pottersville”: Obama Can Really Hurt the GOP By Focusing On Its Radical Economic Plan
Three years ago, two years ago—heck, six months ago—I and a lot of people I know thought: Surely the jobs situation will have picked up as we round the clubhouse turn toward Election Day. I envisioned Barack Obama at the Democratic convention, being able to claim… something fairly modest, but something: three straight months of 200,000-plus-jobs growth. Some kind of hook for an upbeat narrative.
Well, it looks like it ain’t gonna happen. Obama will be able to make some claims, and he damn well better make them without apology or fear of how the 48th Street Fantasy Factory will spin them. But the story isn’t good enough, so there’s but one alternative: convince people that Mitt Romney and a Republican Congress will make things worse. In a rational world, that wouldn’t be too hard, because except for Ronald Reagan’s second term, making things worse is all Republicans have ever done since Nixon. But our world isn’t rational, and Obama is going to have to confront that fact in a huge way or risk being sent to the showers early.
It’s amazing, first of all, the importance now of these jobs numbers. Partly it’s because the economy is bad, true; but partly it’s also the blog-and-tweet, more-faster-now political culture. Romney was having an awful week—and, by the way, still did have an awful week. Those issues—the mandate confusion, Bain, the offshoring, the million-dollar IRA—aren’t going anywhere, and they’ll resurface. But obviously, they had to be relieved up in Boston when the 80,000-jobs number came out Friday morning. Big conversation changer.
It’s the third straight month of anemic growth, and the economists seem to agree that it means we’re not going to be seeing the bulls run any time soon. A decent unemployment picture—say, 170,000 jobs a month being gained, which might, by election time, have gotten the jobless rate back down below the 7.9 percent it was when Obama was sworn in—augured for one kind of Obama fall campaign. Emphasize that we’re finally getting out of the woods first, and bash Romney second.
But the treeline is still on the far horizon. So Obama and the Democrats’ No. 1 job is clear: tie all the Republicans together—Romney, congressional Republicans, and George W. Bush—and warn people about how much worse things could be.
Romney is Bush on steroids. His tax plan is far more extreme. He wants to give millionaires an average—average!—tax cut of $250,000. The same plan would add $3 trillion to the deficit over a decade. Haven’t we tried this before, and didn’t it help lead—along with massive deregulation, which Romney also promises to pursue—to the biggest meltdown in 80 years?
The radical tax plan and its affect on the deficit hasn’t stopped Romney from backing “cut, cap, and balance,” a congressional GOP plan that calls for a Balanced Budget Amendment! Imagine that chutzpah. It’d be as if I torched all my neighbors’ azaleas and then demanded we form a block-beautification committee. Cut, cap, and balance is so extreme, so ludicrous, that 35 GOP senators—a pretty hardened assemblage, you’ll agree—haven’t signed it. It’s out there in Tea Party land.
Want more hypocrisy? Glad you asked. Cut, cap, and balance requires gargantuan and immediate cuts to the federal budget. But remember what Romney told Time magazine in May?: “if you take a trillion dollars, for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.”
Then there’s the Ryan budget and assaults on Medicare. The fact that Romney has no actual jobs plan beyond letting the free market work its magic… It’s just endless. Complete and willful vacuity. Vacuity as a matter of principle. Almost virginal vacuity, as if intercourse with facts were somehow deflowering, leading to a lapsarian state of loss of ignorance. Nothing adds up at all. No attempt is made for things to add up. Except, of course, for those core items that Romney and the congressional Republicans will agree on: cut taxes for the rich, deregulate as much as possible, and re-wreck the economy.
It’s so bad it’s almost hard to believe. I mean this literally. Via Kevin Drum and Jon Chait, I note this nugget from Robert Draper’s New York Times Magazine piece coming up Sunday. The Democratic super PAC, Priorities USA Action, did some polling on Romney. Here’s one thing they found, and place your hand below your jaw, so you don’t hurt yourself as it hits the table: “For example, when Priorities informed a focus group that Romney supported the Ryan budget plan—and thus championed ‘ending Medicare as we know it’—while also advocating tax cuts for the wealthiest Americans, the respondents simply refused to believe any politician would do such a thing.”
There’s some word beyond “perverse” for that—a politician benefiting from the fact that his plans and commitments are so radical that voters simply can’t believe he’d pursue them. That isn’t the only perversity at work here. As Greg Sargent noted on his blog Friday, you might think that when the jobs picture is unsatisfactory, the political debate would be about which candidate has better policies. But instead, it’s a “referendum on Obama.” This is dumb, especially when the other guy is running on such a nest of contradictions and obfuscations. But it’s how life is. I get that. Even so, it shouldn’t stop Obama from making it a co-referendum on Romney and the GOP. Obama’s Bedford Falls may have problems, but the GOP’s Pottersville—no General Motors, no Chrysler, no health care for 32 million, no public investment at all, no regulation of banks, and all the rest—is an ugly place where we don’t want to live.
By: Michael Tomasky, The Daily Beast, July 7, 2012
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