It May Not Be “The Economy Stupid”: Americans Just Might Favor Social Issues Over Their Pocketbooks
It’s one of the oldest adages in American politics—when all is said and done, Americans vote their pocketbooks rather than their principles.
But is it true?
Both Democrats and Republicans seem to think so.
Indeed, accepting this bit of established political wisdom has long led progressives to argue that millions of middle-class, working Americans, who support Republican candidates and policies, do so in contravention of what is in their own interests. The argument, for the most part, rests in the belief that the “trickle down” approach favored by conservatives—a theory suggesting that when those at the top of the chain are doing well, jobs and money trickle down to the middle and lower class workers—has never really proven to be beneficial to anyone but the wealthy and comes at the expense of the many who, nevertheless, continue to vote for those who would continue the policy.
A true conservative, of course, would argue that such cynicism is vastly misplaced and that a vibrant economy can only happen when those at the top are flourishing—allowing the job creators the confidence and financial wherewithal to grow their businesses and, in the process, create the jobs necessary to allow good fortune to trickle down to the working classes.
Conventional wisdom would suggest that our presidential election, once again, is putting these conflicting belief systems to the test as, in the red corner— standing up for the notion that tax cuts for the wealthiest are the best way to drive the economy forward—is the GOP challenger, Governor Mitt Romney while, in the other corner, representing those who believe that more tax cuts for the wealthy will only result in the rich getting richer at the expense of everyone else, is the blue squad, led by our returning champion, President Barack Obama.
But is this really what this election is all about? Are Americansactually preparing to vote for the candidate who represents the side that appears most likely to put more money in their respective pockets or are there other, more important, factors at work as we get ready to make our choices in November?
It turns out, conventional wisdom might just have this all wrong.
A new website called Politify—claiming to be non-partisan and which garnered some national attention during the primary season— has employed tax information provided by the Internal Revenue Service along with data from the U.S. Census Bureau to create an interesting way to determine whether you and your neighbors may be favoring economic policies that might actually turn out not to be the best thing for you.
The results are pretty interesting.
According to Politify, if we are to take the economic, tax and budget proposals of our two presidential candidates at their face value—policies that each candidate contends hold the answers to making our economic lives better—the results indicate that it is the Obama proposals that dramatically benefit a wide swath of Americans who are expected to cast their vote for Governor Romney.
Indeed—again accordingly to Politify—if Americans truly voted their pocketbooks, President Obama would be re-elected in an historic landslide as the website calculates that the Obama economic agenda benefits 69.8 percent of Americans when compared to Romney’s proposals which only improve the financial lot of 30.2 percent. What’s more, using the official budget information provided by each campaign’s website, the site determines that the Obama proposals will lessen the national deficit by $273 billion by 2015 as the Romney budget would increase the deficit by $566 billion during the same period.
Now, before the more conservative readers here go into cardiac arrest, you might want to visit the website to review the methodology Politify has employed to reach their conclusions. Only then can you determine how much you do—or do not—value their conclusions.
If you do visit the site, you might also enjoy ‘plugging in’ your personal and community data to see how the respective tax and economic policies of the candidates impact directly on you and your neighbors.
There is an additional ‘twist’ worth pointing out—according to the data, it is not just the millions of rural white people expected to cast their votes for the GOP presidential candidate who are behaving contrary to what would appear to be in their self-interest. It turns out that some of the nation’s most liberal neighborhoods are also likely to vote for a candidate whose policies are more harmful to their economic well being that what is being offered by the alternative choice.
Take, for example, my own upper west side of Manhattan neighborhood—a liberal enclave if there ever was one.
Despite the fact that there is a stronger likelihood that hell will freeze over than there is that my zip code will get behind Governor Romney’s candidacy, Politify projects that 62 percent of my neighbors would benefit more from Romney’s economic proposals than those put forth by the President.
Go figure.
What we may be learning here is that people may not be voting their pocketbooks to the extent the experts and pundits would have us believe. Indeed, it may be this very fact that has led the conversation away from the anticipated referendum on the Obama economy and in the direction of social issues such as Medicare and abortion.
While many would be quick to blame the “liberal media” for steering the national conversation towards social issues because it is imagined—possibly incorrectly—that the President holds the winning hand on these subjects, the truth is that neither of the campaigns has been particularly responsive to the media. Accordingly, it may not be reasonable to imagine that it is the media driving the direction the campaign is taking.
Indeed, the GOP campaign’s willingness to engage on these topics may be more by design than by circumstances as, maybe, the Romney campaign knows something that the pundits do not. In an election sure to be about strength of voter turn-out, it may not, as conventional wisdom instructs, be all about the economy after all.
With voters unsure as to either candidate’s ability to do much of anything to reverse the current economic difficulties in four years time—and instinctively understanding that the depth of our problem is such that there is no quick and easy answer or way out—it may be the social issues that allow the voters to find a more definitive position and send them racing to the polls on election day to vote for the candidate who stands for those positions.
By: Rick Ungar, Op-Ed Contributor, Forbes, August 26, 2012
“The Comeback Skid”: Chris Christie’s “Jersey Comeback” Is Playing The Same Paul Ryan Game
There will be two big stars at the Republican National Convention, and neither of them will be Mitt Romney. One will, of course, be Paul Ryan, Mr. Romney’s running mate. The other will be Chris Christie, the governor of New Jersey, who will give the keynote address. And while the two men could hardly look or sound more different, they are brothers under the skin.
How so? Both have carefully cultivated public images as tough, fiscally responsible guys willing to make hard choices. And both public images are completely false.
I’ve written a lot lately deconstructing the Ryan myth, so let me turn today to Mr. Christie.
When Mr. Christie took office in January 2010, New Jersey — like many other states — was in dire fiscal straits thanks to the effects of a depressed economy. Unlike the federal government, states are required by their constitutions to run more or less balanced budgets every year (although there is room for accounting gimmicks), so like other governors, Mr. Christie was forced to engage in belt-tightening.
So far so normal: while Mr. Christie has made a lot of noise about his tough budget choices, other governors have done much the same. Nor has he eschewed budget gimmicks: like earlier New Jersey governors, Mr. Christie has closed budget gaps in part by deferring required contributions to state pension funds, which is in effect a form of borrowing against the future, and he has also sought to paper over budget gaps by diverting money from places like the Transportation Trust Fund.
If there is a distinctive feature to New Jersey’s belt-tightening under Mr. Christie, it is its curiously selective nature. The governor was willing to cancel the desperately needed project to build another rail tunnel linking the state to Manhattan, but has invested state funds in a megamall in the Meadowlands and a casino in Atlantic City.
Also, while much of his program involves spending cuts, he has effectively raised taxes on low-income workers and homeowners by slashing tax credits. But he vetoed a temporary surcharge on millionaires while refusing to raise the state’s gasoline tax, which is the third-lowest in America and far below tax rates in neighboring states. Only some people, it seems, are expected to make sacrifices.
But as I said, Mr. Christie talks a good (and very loud) game about his willingness to make tough choices, making big claims about spending cuts — claims, by the way, that PolitiFact has unequivocally declared false. And for the past year he has been touting what he claims is the result of those tough choices: the “Jersey comeback,” the supposed recovery of his state’s economy.
Strange to say, however, Mr. Christie has told reporters that he won’t use the term “Jersey comeback” in his keynote address. And it’s not hard to see why: the comeback, such as it was, has hit the skids. Indeed, the latest figures show his state with the fourth-highest unemployment rate in the nation. Strikingly, New Jersey’s 9.8 percent unemployment rate is now significantly higher than the unemployment rate in long-suffering Michigan, which has had a true comeback thanks to the G.O.P.-opposed auto bailout.
Now, state governors don’t actually have much impact on short-run economic performance, so the skidding New Jersey economy isn’t really Mr. Christie’s fault. Still, he was the one who chose to make it an issue. And even more important, he’s still pushing the policies the state’s recovery was supposed to justify.
You see, all that boasting about the Jersey comeback wasn’t just big talk (although it was that, too). It was, instead, supposed to demonstrate that good times were back, revenue was on the upswing, and it was now time for what Mr. Christie really wants: a major cut in income taxes.
Even if the comeback were real, this would be a highly dubious idea. By all accounts, New Jersey still has a significant structural deficit, that is, a deficit that will persist even when the economy recovers. Furthermore, the Christie tax-cut proposal would do very little for the middle class but give large breaks to the wealthy.
But in any case, the good times are by no means back, and neither is the revenue boom that was supposed to justify a tax cut. So has the very responsible Mr. Christie accepted the idea of at least delaying his tax-cut plan until the promised revenue gains materialize? Of course not.
Which brings me back to the comparison with Paul Ryan. Mr. Ryan, as people finally seem to be realizing, is at heart a fiscal fraud, boasting about his commitment to deficit reduction but actually placing a much higher priority on tax cuts for the wealthy. Mr. Christie may have a different personal style, but he’s playing the same game.
In other words, meet the new boaster, same as the old boaster. And pray that we won’t get fooled again.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 26, 2012
“Deregulation And Worker’s Bargaining Power”: New Insight Into The Decline Of The Middle Class
The recently released 2012 Organisation for Economic Co-operation and Development Employment Outlook provides new insights into the decline of the middle class. The report documents the global shift from labor income to profits. Across the Organisation for Economic Co-operation and Development, known as OECD, the share of income going to wages, salaries, and benefits—labor’s share—declined over the last 20 years. The median labor share in OECD countries fell from 66.1 percent to 61.7 percent of national income. However, the decline in labor compensation was not equally shared by all employees; the wage share of top income earners increased while low-paid workers were hardest hit. On average, the wage share of the top 1 percent of income earners increased by 20 percent over the past two decades.
In the United States, where labor’s share began its decline in the 1980s, it fell a further 2.5 percentage points over the past 20 years. Excluding top earners’ income, the decline in the adjusted labor share was 4.5 percentage points.
The decline in labor’s share of national income did not result from a shift away from labor intensive industries to industries that employ a low share of labor. The OECD’s analysis found overwhelmingly that it is within-industry declines in labor’s share of industry value added that explains the fall in labor’s share. On average, the OECD found, real wage growth within industries did not keep pace with productivity growth.
Examining the causes of the decline in labor’s share, the OECD found that labor-saving technical change across most industries was associated with greater investment in capital and higher productivity growth as machines replaced workers in some jobs. The OECD found a strong association between technical change and the decline in labor’s share. It is important not to be hasty and jump to the conclusion that technological unemployment is to blame for the decline in labor’s share. In fact, the OECD did not find fewer jobs overall for less-educated workers.
Rather, what they found is not a decline in low-skill jobs, but a decline in jobs that pay middle-class wages. The share of the high-skilled in occupations such as manager or IT engineer increased as did jobs at the bottom of the wage distribution, typically low-paid precarious jobs. Unfortunately, this increase in demand and employment of workers in low-paying occupations did not improve the earnings of these workers. Increasingly, better-educated workers who in the past would have found middle-class jobs ended up low-paid employment. The OECD found that educational requirements increased quickly in low-pay occupations and that “workers in these jobs tend to be overqualified” (p. 124). A recent report from the Center for Economic and Policy Research found this to be true in the United States, where 43 percent of low-wage workers have some college or a college degree, 27 percent have a high school degree, and only 20 percent did not graduate from high school.
What, then, explains the failure of real wages to grow in line with productivity growth, and for increased educational attainment to translate into middle-class earnings? The evidence points to the negative effects of deregulation of some industries and increased globalization on workers’ bargaining power.
Deregulation of industries such as energy, transportation, and communication in which union density had traditionally been high opened these industries to new enterprises staffed by non-union workers. Increasing globalization—the delocalization of some parts of the supply chain as well as import competition from low-wage countries for blue-collar workers (but, notably, not for doctors, lawyers, and other high-paid workers) has led to the loss of well-paid unionized jobs. Both of these developments have led to a reduction in workers’ bargaining power vis a vis employers and have weakened unions, leaving workers to fend for themselves and employers to fix wages individually. The result according to the OECD has been to “decrease the bargaining power of workers, particularly those who are low-skilled, and thus their ability to appropriate their share [of productivity gains].”
The unequal distribution of labor income—with nearly all the gains in wages going to the top 1 percent while earnings stagnated or declined for the 99 percent—has gone hand-in-hand with the decrease in the share of national income going to labor and the shift from labor income to profits. Absent a countervailing force that enables workers to share fairly in the economy’s productivity gains, the decline in labor’s share appears likely to continue.
By: Eileen Appelbaum, Washington Whispers, U. S. News and World Report, August 25, 2012
“Limousine Jerks”: The Rise Of The “Drawbridge Republicans”
As Republicans head toward next week’s convention something extraordinary has come into view now that their ticket is complete.
Mitt Romney came from wealth and went on to build his own quarter-of-a-billion dollar fortune. Paul Ryan, who has never worked a day in the private sector (outside a few months in the family firm) reports a net worth of as much as $7 million, thanks to trusts and inheritances from his and his wife’s family.
Wealthy political candidates are nothing new, of course. But we’ve never had two wealthy candidates on a national ticket whose top priority is to reduce already low taxes on the well-to-do while raising taxes on everyone else — even as they propose to slash programs that serve the poor, or that (like college aid) create chances for the lowly born to rise.
Call them the Drawbridge Republicans. As the moniker implies, these are wealthy Republicans who have no qualms about pulling up the drawbridge behind them. Such sentiments used to be reserved for the political fringe. The most prominent example was Steve Forbes, whose twin obsessions during his vanity presidential runs in 1996 and 2000 — marginal tax rates and inflation — were precisely what you’d expect from an heir in a cocoon.
(In case you were wondering, Ronald Reagan wasn’t a Drawbridge because he entered office when marginal rates, at 70 percent, were truly damaging to the economy. But as GOP business leaders now tell me privately, the Clinton-era top rate of 39.6 percent, let alone today’s 35 percent, are hardly a barrier to work or investment).
Most rich Republicans who champion regressive tax plans find it necessary to at least pretend they’re doing something to help average folks. John McCain, who’s lived large for decades thanks to his wife’s inheritance, famously had trouble keeping track of how many homes he owned — but McCain also tried bravely to create a path to citizenship for illegal immigrants. George W. Bush campaigned as a “compassionate conservative,” and touted education initiatives that made this claim plausible.
Today’s Drawbridge Republicans can’t be bothered. Yes, when their political back is to the wall — as Romney’s increasingly is — they’ll slap together a page of bullet points and dub it “a plan for the middle class.” But this is only under duress. The rest of the time they seem blissfully unaware of how off-key they sound. As the humorist Andy Borowitz tweeted the other day, “As a general matter, it’s a bad idea to talk about austerity if you just had a horse lose in the Olympics.”
Contrast conservative Prime Minister (and heir) David Cameron’s decision to defer his plans to lower the top 50 percent marginal rate in the UK. “When you’re taking the country through difficult times and difficult decisions,” Cameron said, “you’ve got to take the country with you. That means permanently trying to make the argument that what you’re doing is fair and seen to be fair.” As his spokesman added: “We need to ask those with the broadest shoulders to contribute the most.”
Now that’s a conservative ruling class with a conscience! Can anyone imagine Romney and Ryan saying the same?
The interesting question concerns psychology. Drawbridge Republicans are flesh and blood human beings peddling indefensible priorities. How do they manage it and still feel good about themselves? One possibility is that they’re simply missing the genes for empathy and self-awareness. (Steve Forbes always did seem a bit like a bubble boy whose inheritance left him impervious).
But for today’s GOP ticket that explanation feels off. Romney, for all his awkwardness, campaigned and governed in a liberal state, and he enacted a pioneering universal health care law that’s helped many of modest means achieve health security. Ryan is equally mysterious — the boy-next-door who pays lip service to “upward mobility” yet seems to have no notion his plans would likely produce what liberal analyst Robert Greenstein calls “the largest redistribution of income from the bottom to the top in modern U.S. history.”
My hunch is that extreme forms of rationalization and other defense mechanisms help Drawbridge Republicans cope with the cognitive dissonance. The growth of partisan media makes it easy to tune out disquieting dissenting views.
Whatever lies behind it, the rise of the Drawbridge Republicans makes the stakes of this election even higher. If Romney and Ryan actually win on their Drawbridge agenda, the United States will have crossed a scary new Rubicon for a supposedly advanced democracy. For years, whenever I’ve heard people criticize “limousine liberals,” I’ve always thought, well, at least that’s better than being a “limousine jerk.” Now it turns out that’s exactly what a Drawbridge Republican is.
By: Matt Miller, Opinion Writer, The Washington Post, August 21, 2012
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