“Off And Out With Mitt Romney”: A Willing Participant In The Destruction Of The Middle Class
In a better America, Mitt Romney would be running for president on the strength of his major achievement as governor of Massachusetts: a health reform that was identical in all important respects to the health reform enacted by President Obama. By the way, the Massachusetts reform is working pretty well and has overwhelming popular support.
In reality, however, Mr. Romney is doing no such thing, bitterly denouncing the Supreme Court for upholding the constitutionality of his own health care plan. His case for becoming president relies, instead, on his claim that, having been a successful businessman, he knows how to create jobs.
This, in turn, means that however much the Romney campaign may wish otherwise, the nature of that business career is fair game. How did Mr. Romney make all that money? Was it in ways suggesting that what was good for Bain Capital, the private equity firm that made him rich, would also be good for America?
And the answer is no.
The truth is that even if Mr. Romney had been a classic captain of industry, a present-day Andrew Carnegie, his career wouldn’t have prepared him to manage the economy. A country is not a company (despite globalization, America still sells 86 percent of what it makes to itself), and the tools of macroeconomic policy — interest rates, tax rates, spending programs — have no counterparts on a corporate organization chart. Did I mention that Herbert Hoover actually was a great businessman in the classic mold?
In any case, however, Mr. Romney wasn’t that kind of businessman. Bain didn’t build businesses; it bought and sold them. Sometimes its takeovers led to new hiring; often they led to layoffs, wage cuts and lost benefits. On some occasions, Bain made a profit even as its takeover target was driven out of business. None of this sounds like the kind of record that should reassure American workers looking for an economic savior.
And then there’s the business about outsourcing.
Two weeks ago, The Washington Post reported that Bain had invested in companies whose specialty was helping other companies move jobs overseas. The Romney campaign went ballistic, demanding — unsuccessfully — that The Post retract the report on the basis of an unconvincing “fact sheet” consisting largely of executive testimonials.
What was more interesting was the campaign’s insistence that The Post had misled readers by failing to distinguish between “offshoring” — moving jobs abroad — and “outsourcing,” which simply means having an external contractor perform services that could have been performed in-house.
Now, if the Romney campaign really believed in its own alleged free-market principles, it would have defended the right of corporations to do whatever maximizes their profits, even if that means shipping jobs overseas. Instead, however, the campaign effectively conceded that offshoring is bad but insisted that outsourcing is O.K. as long as the contractor is another American firm.
That is, however, a very dubious assertion.
Consider one of Mr. Romney’s most famous remarks: “Corporations are people, my friend.” When the audience jeered, he elaborated: “Everything corporations earn ultimately goes to people. Where do you think it goes? Whose pockets? Whose pockets? People’s pockets.” This is undoubtedly true, once you take into account the pockets of, say, partners at Bain Capital (who, I hasten to add, are, indeed, people). But one of the main points of outsourcing is to ensure that as little as possible of what corporations earn goes into the pockets of the people who actually work for those corporations.
Why, for example, do many large companies now outsource cleaning and security to outside contractors? Surely the answer is, in large part, that outside contractors can hire cheap labor that isn’t represented by the union and can’t participate in the company health and retirement plans. And, sure enough, recent academic research finds that outsourced janitors and guards receive substantially lower wages and worse benefits than their in-house counterparts.
Just to be clear, outsourcing is only one source of the huge disconnect between a tiny elite and ordinary American workers, a disconnect that has been growing for more than 30 years. And Bain, in turn, was only one player in the growth of outsourcing. So Mitt Romney didn’t personally, single-handedly, destroy the middle-class society we used to have. He was, however, an enthusiastic and very well remunerated participant in the process of destruction; if Bain got involved with your company, one way or another, the odds were pretty good that even if your job survived you ended up with lower pay and diminished benefits.
In short, what was good for Bain Capital definitely wasn’t good for America. And, as I said at the beginning, the Obama campaign has every right to point that out.
By: Paul Krugman, Op-Ed Columnist, The New York Times, July 5, 2012
“Truth Be Told”: Hey Mitt, The American Jobs Act Still Exists
Mitt Romney is back to accusing President Obama of having no plan for economic growth:
The president’s policies have not gotten America working again. And the president is going to have to stand up and take responsibility for it. I know he’s been planning on going across the country and celebrating what he calls ‘forward.’ Well, forward doesn’t look a lot like forward to the millions and millions of families that are struggling today in this great country. It doesn’t have to be this way. The President doesn’t have a plan, hasn’t proposed any new ideas to get the economy going—just the same old ideas of the past that have failed. [Emphasis added]
The political world has all but forgotten the American Jobs Act, but it remains on the table as Obama’s plan for juicing the economy. If passed in full, the Jobs Act would cut payroll taxes for businesses, double the size of the payroll tax cut for individuals, give aid to states to prevent public sector layoffs, and increase infrastructure spending. All together, the Jobs Act would create 1.9 million jobs over the next year.
Romney, on the other hand, doesn’t have a plan for generating demand and creating short-term economic growth. What he has is a plan designed for long-term problems; he wants to expand domestic energy production, sign new trade agreements, cut the corporate tax rate and confront China over currency manipulation. What’s more, he wants to dramatically reduce the size of government and shrink the federal workforce. As Greg Sargent pointed out last month, this agenda—particularly the plans to cut federal spending—would have a negative shock on the economy. If you assume Romney intends to implement the Ryan budget—which he has said on multiple occasions—his plan would cost the economy 1.3 million jobs, according to the Economic Policy Institute.
The only jobs plan on the table right now is the one proposed by the Obama administration. Republicans should be pressured to pass it, and Romney should be challenged on his assertion that the White House has nothing to offer.
By: Jamelle Bouie, The American Prospect, July 6, 2012
“Betraying His Calling”: Romney Denies What He Knows About The Private Sector
Mitt Romney is betraying his calling.
He brings to the presidential race a record of accomplishment to which few White House contenders can lay claim: W. Mitt Romney knows how to make money.
Some may argue that a money-making ability alone is no qualification to be president. I agree that having a high net worth is insufficient reason to be declared presidential timber.
But attaining a personal fortune of as much as $250 million, as Romney has done — and not through inheritance or grand theft — is a testament to creative abilities, a strong work ethic, a focused mind and keen understanding of the economic environment.
Romney, however, is blowing it by seeking to appeal to the average voter by selling himself as something he’s not. He also is running away from the opportunity to show voters that he, above all other candidates, knows how Americans can reap a better return on the investments they are making of time, energy and talent in our country.
For the record, and as regular readers of this column know, I regard the political and moral priorities of the current White House occupant to be more in tune with my own. That said, Romney, by reason of experience, has a legitimate claim on the presidency.
A year ago, I said on the TV program “Inside Washington” that Romney understands how the economy works and that he should use the campaign to explain the private sector’s critical role. That point didn’t go down well with some of my liberal friends. Maybe it’s because I was wearing my banker’s hat at the time. Ten years as a commercial banker and bank director were more than enough time to convince me that a thriving business sector is key to economic growth and expanding opportunity. Romney, I believed last year, was well suited to make that case.
Instead, he has made a mess of it, misrepresenting his history and shying away from the truth, apparently out of fear that by sticking up for the country’s privately owned enterprises he will be portrayed as a heartless, money-grubbing capitalist and scourge of the poor. Of course, in this political climate, that might happen anyway. Still, there’s no reason to dissemble.
That’s the only way to describe Romney’s suggestion that job creation was the motivating force behind his work in the private sector. Beyond the question of whether Romney created 100,000 jobs — as he has claimed — is his implicit buy-in to the argument that the private sector’s purpose is to produce jobs.
Romney knows better, even if his critics don’t. The private sector operates to make profits, not jobs.
True, a majority of Americans work in the private sector. But General Motors, Giant Food, the TV networks and others don’t exist in order to employ Americans.
General Motors sells cars, Giant sells food and the networks sell entertainment to make a profit for their owners and investors.
Without question, a payroll is a necessary ingredient in building and selling vehicles, groceries and entertainment.
But owners, regardless of industries, are obligated to control costs. The fewer workers they employ, the better.
Romney portraying himself as an entrepreneur who altruistically created employment opportunities is not only incorrect but also conveys a false picture of free enterprise. That, in turn, skews public understanding of what the private sector can and can’t do; creating a more equitable and just society is one of the things businesses don’t set out to do. Romney seems ashamed of touting financial performance as an essential factor in economic growth, choosing instead to come across as a one-man hiring hall.
The pander is apparent in other ways. Take the Obama campaign’s charge that the private equity firm co-founded by Romney, Bain Capital, “invested in companies that moved jobs overseas.” The Romney camp responds by touting the former governor’s “record of job creation in the private sector.”
What clumsiness, if not cowardice.
There is nothing wrong with a company legally outsourcing jobs domestically or even sending jobs offshore if the effort allows the company to reduce its costs and operate more economically.
In this globalized economy, America must adjust to competitive forces. Certainly there are costs and downsides that come with outsourcing and offshoring jobs. That is not at issue. Change is constant. Workforce adjustments must be made. Government has a role to play. But adapting to competition at home and abroad is mandatory if we are to survive economically.
Romney, more than most, knows better, and he won’t touch this reality.
He betrays his calling because he’s willing to say — and be — all things to become president.
By: Colbert I. King, Opinion Writer, The Washington Post, July 6, 2012
“Insane Economic Policy”: GOP’s Rejection Of Medicaid Funds Is One More Ideologically Driven Bad Idea
My emotions after the Supreme Court’s ruling on the Affordable Care Act last week went through various stages: confusion (thanks, CNN), shock and finally sheer joy. It was a complete surprise to have the highest court uphold the entire law, including the individual mandate. Liberals rightly celebrated the ruling as a historic step toward ensuring a better quality of life for all Americans.
But in the jubilation hangover, some more sober analysis has taken its place. One important aspect of the Court’s decision gives no reason to celebrate: the ruling that the federal government can’t withdraw all Medicaid funds from governors who refuse to expand Medicaid rolls in their states, essentially making it possible for them to opt out. The Medicaid expansion is meant to give coverage to about 17 million Americans by 2019, accounting for almost half of the 32 million people the bill promised to insure. Yet as Sarah Kliff reported, if states opt out of expanding Medicaid, it could leave some of the poorest Americans stuck in a no-man’s land in which they don’t qualify for Medicaid but also don’t qualify for subsidies to buy insurance. Beyond literally being a matter of life or death for many uninsured Americans, it’s also an economic issue: the White House calculated that expanding the number of Americans with insurance would increase economic well-being by about $100 billion a year, or about two-thirds of a percent of GDP.
It seems foolhardy for governors to reject what is basically free money to help more people in their own states gain health insurance. Josh Barro wrote just after the ruling that while the White House’s stick was taken away, its carrot—the federal government’s picking up 100 percent of the states’ Medicaid expansion tab for the early years, gradually declining to 90 percent after that—would be enough to incite states to participate. And they stand to see other economic benefits. States that already provide coverage and care to people living at 133 percent of the poverty line would no longer shoulder those costs, saving them millions. Even for those that don’t offer such coverage, the bill stands to save all states money by getting rid of the “hidden tax” they pay in higher insurance premiums that account for the cost of covering the uninsured, also potentially saving millions.
Yet Republican governors are already contemplating rejecting the money. The Hill reported this week that fifteen governors are either flat-out planning to reject the Medicaid expansion money or are leaning in that direction. Firm nos have come from Florida, Iowa, Kansas, Louisiana, Nebraska, South Carolina and Wisconsin. Eight more are still undecided yet appear to be following suit: Alabama, Georgia, Indiana, Mississippi, Missouri, Nevada, Texas and Virginia. Yet Brian Beutler reports today that these very states have some of the country’s highest uninsured rates and would stand to see the biggest benefits. Florida ties with Nevada and New Mexico in second to last place in the country at 21 percent uninsured, and South Carolina and Louisiana come in with 19 and 17 percent rates, respectively.
An indignant refusal of federal money in these states may sound familiar. Alabama, Louisiana, Mississippi, South Carolina and Texas were among the handful of states to say they would reject federal stimulus money way back in early 2009. The argument was similar back then: as with the Medicaid expansion money, the states were expected to change some policies to protect more of their residents from economic harm. In the case of the stimulus money, they had to expand unemployment benefits to more people. That’s what made GOP governors too cranky to accept the funds. Eventually all fifty accepted federal funds, although some still turned away the money meant to increase those unemployment benefits. Meanwhile, the last holdout, South Carolina, had the nation’s second-highest unemployment rate at the time that it was contemplating rejecting the funds on ideological grounds.
But other federal money was later rejected outright. After President Obama’s 2010 State of the Union, he called for building a high-speed rail network and pledged $8 billion in stimulus money for rail projects in various states. Yet four Republican governors—New Jersey’s Christie, Wisconsin’s Walker, Ohio’s Kasich and Florida’s Scott—refused to take money for the projects. They would have created tens of thousands of jobs in each state—an estimated 16,000 in Ohio, 10,000 in Wisconsin and 10,000 in Florida.
Meanwhile, as research my colleague Mike Konczal and I conducted showed, ultraconservative Republican governors across the country have been enacting policies that hurt their economies, and therefore the entire economy, in other ways. In the midst of a massive jobs crisis, the eleven states that flipped red after the 2010 midterms and Texas accounted for 70 percent of public sector job losses last year, either laying off or pushing these workers out through attrition. The rest of the states lost only an average of .5 percent of their government workforces. Without these massive waves of job losses, our unemployment rate would likely be closer to 7 percent.
What ties all of these conservative state-level actions together? An adherence to ideology over what’s best for the economy—even their own state economies. The belief that government spending should be shrunk at all costs has steamrolled over policies that shouldn’t be about party affiliation. Taking federal money for much-needed updates to our infrastructure that would also create thousands of jobs is clearly the right choice. Throwing government workers out of their jobs at a time of sky-high unemployment is clearly the wrong choice. And now these conservative states are threatening to keep millions of Americans out of health insurance policies because they worry about higher state spending in the long run. This despite the fact that their residents and their budgets stand to see huge benefits now. The Republican Party’s abhorrence of government is driving bad economic decision-making—and that’s hurting all of us.
By: Bryce Covert, The Nation, July 5, 2012
“In No Mood For Happy Talk”: The Public Wants Outsourcing Of Jobs Stopped
In his latest ‘Public Opinion Snapshot,’ TDS Co-Editor Ruy Teixeira has some very bad news for outsourcing pioneer Mitt Romney and his fellow Republicans who have been so blase about it. “The public is very, very concerned about outsourcing and wants action to mitigate the damage from the practice,” notes Teixeira, explaining:
Let’s start with how heavily the public believes outsourcing contributes to our ongoing economic problems. In a September 2010 NBC/Wall Street Journal poll, 86 percent agreed (including 68 percent who strongly agreed) that U.S. companies outsourcing work to foreign countries is one of the reasons for our struggling economy and unemployment. This was ranked the highest of eight reasons tested in the survey.Similarly, in a December 2010 Allstate/National Journal survey, 67 percent thought outsourcing played a major role in high unemployment, compared to just 28 percent who thought it played a minor role and 4 percent who thought it played no role at all.
And Americans believe somethjing can — and should — be done about it, continues Teixeira:
Not surprisingly, the public wants something done about this problem. In the August 2010 edition of the same survey, 70 percent thought it was either extremely (39 percent) or very (31 percent) important to reduce the number of jobs being outsourced in order to help the U.S. economy recover from the recession.Even more impressive, in the March 2011 Pew Mobility survey, “Keep jobs in America” was ranked first out of 16 possible steps government could take to make sure people don’t fall behind economically. Ninety percent deemed it either one of the most effective steps (59 percent) or a very effective step (31 percent) the government could take.
If the Republicans thought that Romney’s profiteering from outsourcing was not going to be much of an issue, they are in denial. As Teixeira concludes, “These data suggest conservatives’ attempts to portray outsourcing as no big deal and nothing to worry about are doomed to fail. The public is in no mood for happy talk on this one.”
By: Democratic Strategist Staff, July 3, 2012
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 