“Inescapable Truth”: Obama Has A Jobs Plan, Romney Doesn’t
It’s no secret that the presidential election will be decided by the state of the economy and which candidate has a better plan for creating jobs. So, toward that end, consider a few relevant numbers:
+ 1.4 million to 3.3 million—that’s how many jobs were created or saved by the American Recovery and Reinvestment Act, otherwise known as the stimulus, according to the Congressional Budget Office.
+ 1.9 million—that’s the number of new jobs the American Jobs Act, unveiled by President Obama in September 2011, would create, according to Mark Zandi of Moody’s.
– 4.1 million—that’s how many jobs Paul Ryan’s budget, which Mitt Romney called “an excellent piece of work,” would eliminate through 2014, according to the Economic Policy Institute (EPI).
+11.5 million—that’s how many jobs Romney claimed last September he would create in the first term of his administration. But true to form, Romney never said how he would create that many jobs, nor has any reputable economist backed up his claim. “Nowhere in the 160 page plan could I find a stated job creation number,” wrote Rebecca Thiess of EPI. “The math doesn’t just appear to be fuzzy—it appears to be nonexistent.” Added David Madland of the Center for American Progress: “It is a plan from the Republican candidate for president designed to maximize corporate profits. What it doesn’t do is help the middle class or create jobs.” Even the conservative editorial page of the Wall Street Journal called Romney’s fifty-nine-point economic tome “surprisingly timid and tactical considering our economic predicament.”
Following last month’s disappointing jobs report, Romney offered six specific ideas to lift the flagging economy. Reported Greg Sargent:
He said he would tap our energy resources to “put a lot of people to work in the energy sector.” He said he’d repeal Obamacare, which is “scaring small businesses from hiring.” He said he’d balance the budget so people know “investing in America is going to yield a return in dollars worth something.” He vowed to “open up new markets in American trade.” He said he’d revamp the National Labor Relations Board and lower tax rates on employers, both of which would make it easier to hire people.
Sargent asked a few top economists whether Romney’s ideas would actually create jobs. “On net, all of these policies would do more harm in the short term,” responded Mark Hopkins, a senior adviser at Moody’s Analytics. “If we implemented all of his policies, it would push us deeper into recession and make the recovery slower.”
Hopkins’s quote might just be the most important one of the campaign so far. Every story about the candidates’ positions on the economy should mention this essential dynamic: Obama has a jobs plan. Romney doesn’t. In fact, according to economists, Romney’s prescriptions for the economy would only make a bad situation significantly worse.
By: Ari Berman, The Nation, June 12, 2012
“Government Is The Solution”: Healing The Economy For The Common Good
Why don’t Democrats just say it? They really believe in active government and think it does good and valuable things. One of those valuable things is that government creates jobs — yes, really — and also the conditions under which more jobs can be created.
You probably read that and thought: But don’t Democrats and liberals say this all the time? Actually, the answer is no. It’s Republicans and conservatives who usually say that Democrats and liberals believe in government. Progressive politicians often respond by apologizing for their view of government, or qualifying it, or shifting as fast as the speed of light from mumbled support for government to robust affirmations of their faith in the private sector.
This is beginning to change, but not fast enough. And the events of recent weeks suggest that if progressives do not speak out plainly on behalf of government, they will be disadvantaged throughout the election-year debate. Gov. Scott Walker’s victory in the Wisconsin recall election owed to many factors, including his overwhelming financial edge. But he was also helped by the continuing power of the conservative anti-government idea in our discourse. An energetic argument on one side will be defeated only by an energetic argument on the other.
The case for government’s role in our country’s growth and financial success goes back to the very beginning. One of the reasons I wrote my book “Our Divided Political Heart” was to show that, from Alexander Hamilton and Henry Clay forward, farsighted American leaders understood that action by the federal government was essential to ensuring the country’s prosperity, developing our economy, promoting the arts and sciences and building large projects: the roads and canals, and later, under Abraham Lincoln, the institutions of higher learning, that bound a growing nation together.
Both Clay and Lincoln battled those who used states’ rights slogans to crimp federal authority and who tried to use the Constitution to handcuff anyone who would use the federal government creatively. Both read the Constitution’s commerce clause as Franklin Roosevelt and progressives who followed him did, as permitting federal action to serve the common good. A belief in government’s constructive capacities is not some recent ultra-liberal invention.
Decades of anti-government rhetoric have made liberals wary of claiming their legacy as supporters of the state’s positive role. That’s why they have had so much trouble making the case for President Obama’s stimulus program passed by Congress in 2009. It ought to be perfectly obvious: When the private sector is no longer investing, the economy will spin downward unless the government takes on the task of investing. And such investments — in transportation and clean energy, refurbished schools and the education of the next generation — can prime future growth.
Yet the drumbeat of propaganda against government has made it impossible for the plain truth about the stimulus to break through. It was thus salutary that Douglas Elmendorf, the widely respected director of the Congressional Budget Office, told a congressional hearing last week that 80 percent of economic experts surveyed by the University of Chicago’s Booth School of Business agreed that the stimulus got the unemployment rate lower at the end of 2010 than it would have been otherwise. Only 4 percent disagreed. The stimulus, CBO concluded, added as many as 3.3 million jobs during the second quarter of 2010, and it may have kept us from lapsing back into recession.
So when conservatives say, as they regularly do, that “government doesn’t create jobs,” the riposte should be quick and emphatic: “Yes it has, and yes, it does!”
Indeed, our unemployment rate is higher today than it should be because conservatives blocked additional federal spending to prevent layoffs by state and local governments — and because progressives, including Obama, took too long to propose more federal help. Obama’s jobs program would be a step in the right direction, and he’s right to tout it now. But he should have pushed for a bigger stimulus from the beginning. The anti-government disposition has so much power that Democrats and moderate Republicans allowed themselves to be intimidated into keeping it too small.
Let’s turn Ronald Reagan’s declaration on its head: Opposition to government isn’t the solution. Opposition to government was and remains the problem. It is past time that we affirm government’s ability to heal the economy, and its responsibility for doing so.
By: E’ J’ Dionne, Jr., Opinion Writer, The Washington Post, June 10, 2012
“Extremely Weak Tea”: The Media Circus Finds A New Spectacle
Political coverage of President Obama can be odd sometimes. We’ve reached the point at which media professionals no longer evaluate the president’s comments at a press conference, for example, but rather evaluate how the comments might be used against him later.
What matters isn’t the substance, then, but whether the substance has the potential to be wrenched from context in future attack ads.
Take this morning, for example. Obama hosted a press conference at the White House, starting with a seven-minute opening statement on the economy and the need for Congress to act on pending job legislation. Then he opened the floor to questions, most of which dealt with the Eurozone crisis.
At one point, a reporter asked, “What about the Republicans saying that you’re blaming the Europeans for the failure of your own policies?” Obama responded:
“The truth of the matter is that, as I said, we’ve created 4.3 million jobs over the last two, 27 months — over 800,000 just this year alone. The private sector is doing fine. Where we’re seeing weaknesses in our economy have to do with state and local government, oftentimes cuts initiated by, you know, governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don’t have the same kind of flexibility as the federal government in dealing with fewer revenues coming in.”
Reporters figured Republicans would seize of the notion of the private sector “doing fine,” so pretty much every other word uttered during the press conference has been deemed irrelevant. Now, the “gaffe” is what matters — include Obama’s important explanation of the policies needed to improve the economy and the damage done by austerity-like measures in the public sector.
Sigh.
As gaffes go, this strikes me as extremely weak tea. The choice of words probably could have been slightly better, but really, to treat this as some kind of breakthrough moment in the campaign is pretty silly. Indeed, what Obama said, in context, is largely correct — compared to the public sector, the private sector really is doing fine.
This isn’t complicated. Corporate profits have soared, the stock market is up, and private sector job growth has fueled the recovery entirely on its own. In fact, private sector job growth last year was the second best year we’ve seen since the late 1990s, and 2012 is on track to be even stronger.
The public sector, meanwhile, continues to be a drag on the economy, laying off workers and cutting budgets. Comparing the two sectors, there’s nothing shocking about saying one is “fine” and the other isn’t.
If the media pushback is that the current growth rates aren’t yet good enough, that’s certainly fair — but I think everyone realizes Obama has said the same thing several thousand times. Republicans and reporters may enjoy being opportunistic with these comments, but that doesn’t make the story legitimate.
For his part, Mitt Romney quickly learned of the media reports and told voters that the president is “out of touch.” Yes, Mr. Elevator For My Cars who isn’t concerned about the poor and who enjoys firing people wants to talk about which presidential candidate is “out of touch.”
The election is 150 days away. It’s only going to get sillier.
By: Steve Benen, The Maddow Blog, June 8, 2012
“America’s Real Welfare Queen”: Romney Critical Of Government Aid That Helped Bain Capital Profit
Mitt Romney likes to say that “government does not create prosperity.”
His record in the private equity industry shows otherwise.
During Romney’s years as chief executive of Bain Capital LLC, companies owned by the firm received millions of dollars in benefits from a variety of state and local government economic development programs.
In California, taxpayer money built one Bain company a conveyor bridge between two of its buildings. New York City gave another Bain company tax breaks and lower energy bills to discourage it from moving to New Jersey. And in Indiana, a county government issued bonds to help buy new equipment for a Bain-owned steel plant — a business success featured in a Romney campaign ad touting his private sector prowess.
“From a national perspective, this makes no economic sense to allow cities and states to do this,” said Arthur Rolnick, former director of research for the Federal Reserve Bank of Minneapolis. “In general, you want the market to be making these decisions — not the political system.”
The public-private agreements, which began in the first decade of Romney’s tenure as CEO, show that government played a supporting role in establishing Bain as among the nation’s most successful private equity firms and enabling him to accumulate a fortune his campaign says could reach $250 million.
Criticizing Government Involvement
On the campaign trail, the presumptive Republican nominee has hammered at President Barack Obama for favoring an unhealthy government role in the economy.
“When government, rather than the market, routinely selects winners or losers, or puts its hands on the scales of justice then enterprises and entrepreneurs can’t predict their prospects,” Romney said in a March 19 speech at the University of Chicago.
Asked about the disconnect between Romney’s free market rhetoric and Bain’s track record, Amanda Henneberg, a campaign spokeswoman, said: “It’s not at all uncommon for state and local governments to use competitive incentives and programs to create a favorable business climate.”
Yet in his Chicago speech, the former Massachusetts governor decried the “endless subsidies and credits intended to shape behavior in our economic society,” and assailed government “intrusion in the workings of the free marketplace itself.”
Exhibit A in Romney’s attack is the Obama administration’s investment in the failed solar power company Solyndra, which could cost taxpayers more than $500 million.
Massachusetts Investment Bankruptcy
Romney’s effort to capitalize on the administration’s stumbles was complicated this week by the June 1 failure of a Massachusetts clean energy company that received state financing while he was governor.
As a private equity investor, Romney showed no reluctance to accept help from government coffers — on one occasion even becoming partners with taxpayers.
In October 1994, a Connecticut state fund made a $500,000 equity investment in Environmental Data Resources of Milford, Connecticut, which Bain had helped start. The state’s Connecticut Innovations agency the previous year also had given the firm a separate $500,000 to be paid back with royalties from its software products.
The company used the money to hire several technologists and digitize old maps of industrial sites, according to Rob Barber, the company’s chief executive.
EDR Expansion
Beginning in 1991, Bain had invested $2.3 million in the company, which produced software for environmental site assessments, ultimately recording a 35.7 percent return, according to a Deutsche Bank prospectus that detailed the performance of Bain’s funds through 1999. Starting with just three employees, EDR grew to about 50 workers by the middle of the decade, Peter Cashman, the company’s founder, said in an interview.
Victor Budnick, who was then Connecticut Innovations’ director of investments, says the company obtained better terms for the public funds than it likely could have received from private investors. Private money would have been “disadvantageous from the perspective of ownership,” Budnick said.
The deal ultimately profited both the government and EDR. The state got back $3.8 million in return for its $500,000 equity stake plus an additional $1 million from its royalty- linked investment, according to Pamela Hartley, a spokeswoman for Connecticut Innovations.
Management-led Negotiations
There is no indication that Romney, who became CEO of Bain Capital in 1984, was directly involved in any of the individual companies’ negotiations with government officials. Such operational issues were typically left to the management of companies Bain acquired.
“I never heard of Bain Capital,” says Walter Sprouse, who was president of the Randolph County Economic Development Corporation in North Carolina when it ponied up $375,000 to help lure Sealy Inc.’s corporate headquarters.
Even so, Romney benefitted from the incentives, along with other Bain investors. When the Internet advertising company Double Click Inc. considered moving its Manhattan-based corporate headquarters, New York City’s Economic Development Corporation in 1999 provided a $4 million package of sales and energy tax breaks tied to the company’s payroll.
The company reported a loss of $56 million that year and was acquired by Google Inc. in 2008. Bain realized $88.6 million on its initial $8.5 million Double Click investment, made in 1997, according to the Deutsche Bank prospectus.
Bain Portfolio Returns
Bain’s investments in the companies that benefited from government actions were part of a portfolio that earned an 88 percent average annual return through the end of 1999, the prospectus said.
The two-time presidential candidate says his business experience qualifies him to turn around the troubled national economy. He accuses government of “standing in the way” of recovery.
Yet, government officials employed a variety of techniques to help Bain-owned companies. In Kansas City, city officials issued industrial revenue bonds as part of a financing arrangement that saved a Bain-owned steel company about $3 million in property taxes over five years, according to the Kansas City Business Journal.
Decaying Steel Plant
The GS Technologies facility, dating to the late 19th century, had employed around 4,500 workers at its peak. By the mid-1990s, the plant, which produced wire rods for the auto and furniture industries, cried out for modernization.
“Really, it was in bad, bad shape. It looked like something out of a Dickens novel,” said Mario Concha, who headed the company’s international division at the time.
To help fund a $70 million updating, the city in October 1993 authorized a $45 million industrial revenue bond, which GS Technologies was to purchase. Kansas City issued the first $5 million the following year and used the proceeds to buy steel- making equipment and lease it back to the company. That arrangement was designed so that the city could cut the mill’s property tax bill by 50 percent, according to the Kansas City Business Journal.
New equipment didn’t solve all the company’s problems. Foreign competition and a two-month strike in 1997 fueled a downward spiral, which led to bankruptcy in 2001. The Obama campaign has featured GS Technologies in a political ad that includes one former mill worker accusing Bain of “vampire” capitalism.
Industrial Revenue Bonds
Industrial revenue bonds, typically repaid with money generated from the project they fund, act as a subsidy for private business, reducing either their financing costs or their tax bill, said Timothy Bartik, senior economist of the W.E. Upjohn Institute in Kalamazoo, Michigan.
One of Bain’s companies drew government benefits on two coasts. In 1993, when Leiner Health Products of Torrance, California, was looking for a new home, officials in nearby Carson, California, agreed to construct a $500,000 conveyor bridge linking two buildings the maker of vitamins and nutritional supplements was eyeing.
“Our construction guys were in awe of how fast the turnaround time was for permits,” Giffen Ott, the former Bain executive who was the company’s vice president of manufacturing, told The Los Angeles Times.
Ott didn’t respond to e-mail and telephone requests for comment.
Upgrading Public Roads
Five years later, Leiner decided to move a portion of its manufacturing operation from Ohio to a new site in York County, South Carolina. State and local officials provided a package of benefits that included worker training, upgrades to public roads, water and sewer facilities, and tax breaks. Officials with the state’s Employment Security Commission even handled inquiries from would-be job applicants, according to a July 21, 1998 article in The Herald of Rock Hill, South Carolina.
The county cut Leiner’s property tax assessment by 43 percent, saving the company “millions of dollars,” according to Mark Farris, York County economic development director.
Leiner has since been acquired by NBTY Inc., which itself was acquired by the Carlyle Group in 2010. Michael Collins, NBTY’s chief financial officer, didn’t respond to e-mail and telephone requests for comment.
Free market purists object to such government aid to business, saying profitable companies don’t need it and unprofitable ones should be allowed to fail.
A Corporate Gift
“It is a gift to the corporation,” says James Bennett, eminent scholar at George Mason University in Fairfax, Virginia. “The American welfare queen is the American corporation. All they’re doing is grabbing for taxpayer benefits and taxpayer dollars.”
The attractiveness of such deals can be glimpsed in cases where the marriage of public and private resources pays off for both sides. In 1998, state and local officials in Indiana assembled a package of incentives to convince Steel Dynamics Inc. (STLD) to locate a $341 million steel plant in Whitley County, in the state’s northeast corner.
Whitley County issued a $13 million taxable industrial revenue bond to buy the giant caster at the heart of the steel- making operation along with a separate $10 million bond for sewer and water improvements. State officials kicked in workforce training aid.
Company Expansion
In the intervening years, the company has expanded its Whitley County facility twice and now employs 596 workers. Last year, it produced 876,000 tons of structural steel beams for the construction industry and rails for the nation’s railroads, according to the company’s filings with Securities and Exchange Commission.
“It was a fabulous opportunity. Jobs have developed beyond our expectations,” said Jeff Gage, who was the county attorney at the time.
In an ad entitled “American Dream,” the Romney campaign boasts of the role his “private sector leadership team” played in Steel Dynamics’ success.
Some of his allies acknowledge that a savvy public sector deserves some of the credit.
“The government was trying to help out,” real estate developer Donald Trump, a Romney supporter, said during a May 14 appearance on Fox News, “and sometimes, that’s not the worst thing in the world.”
By: David J. Lynch, Bloomberg, June 5, 2012
“Rooting For America To Fail”: Republicans Are Deliberately Sabotaging The Economy
Raise your hands if you think Republicans are deliberately sabotaging the US economy to prevent the re-election of Barack Obama. Me too. Okay, knowing what you do about the Republican Party, raise your hands if you can think of any reason why Republicans wouldn’t throw a monkey wrench into the machinery of our economic engine to accomplish Mitch McConnell’s stated goal of making Barack Obama a one-term president. Me neither.
I wouldn’t have said this earlier, but I have no doubt now that Republicans are deliberately making the economy worse for political gain. I’m trying to picture a Republican consultant advising his clients against such a move on grounds of, say patriotism and propriety, and I just can’t. Probably because they would be out of a job. It’s amazing what people can convince themselves it is okay to do once they’ve convinced themselves they are in the right.
The filibustering of every conventional and sensible proposal the Obama Administration has put forward to help stimulate the economy — up to and including tax cuts that were Republican ideas to begin with — was only our first clue that Republicans were rooting for America to fail.
But neither does it take a genius to imagine the phone calls being made by Mitt Romney’s henchmen or the candidate himself (properly filtered, of course, to provide maximum deniability) to all of those bankers and business types sitting on their $2 trillion in uninvested cash that, if they want access to a future Romney Administration, they’d better keep sitting on that cash until after the November election. Think of this strategy as just an extension of the Republican Party’s K Street Project, the one where America’s trade associations and lobbyists were informed by partisan mob enforcers like disgraced Majority Leader Tom DeLay that doing business with the new Republican House was on a strictly pay to play basis.
But what I am also sure about is that Greg Sargent of the Washington Post is certainly correct when he says the establishment media will never let Democrats get away with accusing Republicans of deliberately doing harm the country because the establishment media has far too much to lose from allowing such a suggestion to take root.
As an elite establishment itself, whose place and privileges in American politics comes from its having mastered the rituals of our two-party system, the mainstream media is threatened by anyone who challenges the comfortable status quo of two evenly-balanced, sane and sensible, political parties. The media sees its own interests as neutral observer and referee threatened when people begin opening up that Pandora’s Box which exposes one of those major parties to be exactly what congressional scholars Thomas Mann and Norm Ornstein said about the GOP, that it: “has become an insurgent outlier in American politics. It is ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.”
It’s been more than a month since Mann and Ornstein dropped that bombshell in the pages of the Washington Post and there is still no discussion of its ominous implications on the Sunday political talk shows, says Sargent. Indeed, for their troubles as pundits too hot to handle, Mann and Ornstein have been effectively blackballed from Meet the Press, Face the Nation, and State of the Union.
Most of the time the media loves to talk about itself, says Sargent, so you’d think Mann and Ornstein’s allegation that “the press’s addiction to fake even-handedness has led them not to acknowledge, or at least grapple with, a fact that is absolutely central to understanding what’s happening with our politics right now,” would have Sunday show producers burning up the phone lines trying to book the duo on their shows.
“But what continues to strike me is the radio silence on these shows about both these themes,” Ornstein told Sargent. “The Republicans bear a lot of the onus for rank obstructionism. But there’s a false equivalence here, and the press corps has been AWOL in its duty to report the truth.”
Ornstein said that judging by the communication he’s had with elite reporters, his description of the GOP as a radical party “has generated lots of discussion in the newsrooms. But the shows are making a conscious decision to ignore it.”
So, despite all you hear about the so-called “liberal bias” against Republicans, you can see why the mainstream media is predisposed to shoot down the idea that Republicans might be secretly planting Comp-4 explosive around our economy’s foundation in order to detonate it while Barack Obama and the Democrats are the ones likely to suffer the collateral damage.
Which is why it’s good to see Democrats making the charge anyway.
As Sargent reports, Harry Reid called out Republicans on the Senate floor the other day for their opposition to the Paycheck Fairness Act, saying that from the GOP perspective the act to help ensure women get equal pay for equal work already has two strikes against it because “it would be good for women and good for the economy.”
Obama senior adviser David Axelrod said on Face the Nation this weekend in regard to the disappointing May jobs reports and Republican efforts to obstruct Obama’s job creation policies that: “Instead of high-fiving each other on days when there is bad news, they should stop sitting on their hands and work on some of these answers.”
And on Friday after the bad jobs numbers were released, Democratic National Committee executive director Patrick Gaspard went on MSNBC to accuse Republicans of “cheerleading for failure,” notes Sargent
“There was a time when charges like these were approached with a bit more caution by Democratic leaders,” says Sargent. “Now top Obama and Dem officials are going out into every conceivable forum and repeating the claim that Republicans are actively rooting for widespread economic misery and are doing all they can to block solutions designed to alleviate it.”
Paul Krugman says Obama has no choice but to make Republicans the issue and to note we’d all be better off were it not for deliberate GOP sabotage. Ed Kilgore at Washington Monthly is not so sure. He thinks swing voters will always hold the President and his party accountable for the state of the economy no matter how much the other guys are gumming up the works.
And even those of us who think Democrats need to call out Republicans for their obstruction have to admit that, despite everything Republicans have done to make the jobs situation worse, the Republican counterattack against charges they are sabotaging the economy practically writes itself: “Stop whining, Mr. President, and lead.”
Nevertheless, while there are many things I thought the GOP capable of doing, deliberately standing in the way of America’s economic recovery with all of the hardship and misery it would entail for millions of their fellow citizens, wasn’t one of them. That was actually one of the few outrages I was not willing to impute to these radical Republicans in their heedless pursuit of power.
But even that low ceiling above my scorn and contempt for the modern GOP was shattered by last summer’s debt-ceiling debacle when Republicans showed just how far they were willing to go to achieve their narrow ideological ends.
The subsequent credit rating downgrade that, for good measure, Republicans even blamed on Democrats for not parleying in good faith, was an abject lesson in how quickly and easily even responsible Republican opinion can be herded into line by today’s conservative movement. Within a matter of a few short weeks, the initial indignation among sensible conservatives at the suggestion by House Republicans that the full faith and credit of the United States should be put on the table as a bargaining chip to bully Democrats into caving on spending, was converted into accepted conventional wisdom on the right.
Compared to the game of debt-ceiling chicken that threatened what the White House called “economic Armageddon,” what’s not to believe about Republicans intentionally keeping the economy in the doldrums for another six months if the reward at the end is absolute political power?
By; Ted Frier, Open Salon, June 5, 2012
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