“The Inconvenient Truths Of 2012”: A Party That Wants To Govern Has To Do More Than Run Against Government
Human nature and politics being what they are, Republicans will underestimate the trouble they’re in and Democrats will be eager to overestimate the strength of their post-2012 position.
Begin with the GOP: As Republicans dig out from a defeat that their poll-deniers said was impossible, they need to acknowledge many large failures.
Their attempts to demonize President Obama and undercut him by obstructing his agenda didn’t work. Their assumption that the conservative side would vote in larger numbers than Democrats was wrong. The tea party was less the wave of the future than a remnant of the past. Blocking immigration reform and standing by silently while nativist voices offered nasty thoughts about newcomers were bad ideas. Latino voters heard it all and drew the sensible electoral conclusion.
Democrats are entitled to a few weeks of reveling because their victory really was substantial. Obama won all but one of the swing states and a clear popular-vote majority. The Democrats added to their Senate majority in a year that began with almost everyone predicting they’d lose seats. They even won a plurality of the vote in House races; Republicans held on because of gerrymandering.
Just as important, the voters repudiated the very worst aspects of post-Bush conservatism: its harsh tone toward those in need, its doctrinaire inflexibility on taxes, its inclination toward extreme pronouncements on social issues, and its hard anti-government rhetoric that ignored the pragmatic attitude of the electorate’s great middle about what the public sector can and can’t do. If conservatives are at all reflective, we should be in for a slightly less rancid and divisive debate over the next couple of years.
Yet Obama and his party need to understand that running a majority coalition is difficult. It involves dealing with tensions that inevitably arise in a broad alliance. Democrats won because of huge margins among African Americans, Latinos and Asian Americans, but also because of a solid white working-class vote in states such as Ohio, Michigan and Pennsylvania, particularly from union members. Obama needs to think about economic policies that deliver benefits across this wide spectrum of less well-to-do Americans. A longing for balanced budgets is not what drove these voters to the polls.
At the same time, there was a substantial middle- and upper-middle-class suburban component of the Democratic coalition that is moderate or liberal on social issues and sees the GOP as backward-looking. Many voters in this group bridle at sweeping anti-government bromides because they care about essential government functions, notably education. But they are certainly not classic New Deal or Great Society Democrats.
Such voters are central to what has become known as the “Colorado strategy.” It’s a view that the Democrats’ long-term future depends on moderate, younger and suburban voters, especially women, combined with the growing Latino electorate. And in Colorado itself, this strategy worked exactly as advertised.
As Curtis Hubbard, the Denver Post’s editorial page editor, noted, Obama won big in the party’s bastions in Denver and Boulder. But he also won Jefferson and Arapahoe counties, key Denver-area swing suburbs, and, a bit farther away, in Larimer County around Fort Collins. The Democrats’ victory here had depth: The party recaptured the state House of Representatives while holding the state Senate.
Managing a coalition that includes African Americans, Latinos, white working-class voters and suburbanites in the new and growing metro areas will take skill and subtlety. And Democrats need to recognize that some of their core constituencies — young people, African Americans and Latinos — typically vote in lower numbers in off-year elections. The party requires a strategy for 2014.
But these are happy problems compared with what the GOP and the conservative movement confront. They need to rethink their approach all the way down.
Many conservatives seem to hope that a more open attitude toward immigration will solve the Republicans’ Latino problem and make everything else better. It’s not that simple. For one thing, a more moderate stand on immigration could create new divisions in the party. And its weaknesses among both Latinos and women owe not simply to immigration or to social issues, respectively, but also to the fact that both groups are more sympathetic to government’s role in the economy and in promoting upward mobility than current conservative doctrine allows.
A party that wants to govern has to do more than run against government. For the right, this is the inconvenient truth of 2012.
By: E. J. Dionne Jr., Opinion Writer, The Washington Post, November 14, 2012
“Politics Never Disappears”: With A Recalcitrant Congress, President Obama Shouldn’t Back Down
It is said after every election that the victors should put politics aside and work for the good of the country.
If President Obama believed this pious nonsense, he would put his second term in jeopardy. Asking politicians to ignore politics is like insisting that professional hockey players switch to basketball. In a system with national elections every two years — and in which the two parties are in relatively close balance — politics never disappears.
Fortunately, the president knows foolishness when he sees it. He has been toughened by four years of unremitting Republican opposition and has behind him both a large electoral college victory and an advantage of about 3 million popular votes. The word “mandate” is overused — just ask George W. Bush. But Obama was absolutely clear during the campaign about his insistence that taxes on better-off Americans need to rise as part of any deal on the budget deficit and “fiscal cliff.”
And so did Obama gracefully but firmly challenge Republicans on Friday to extend the Bush-era tax cuts for the middle class immediately and then begin negotiations on how to raise taxes on the well-to-do. He was asking them to give up their leverage because he knows they don’t have much leverage to begin with. Meet the newly empowered Obama.
The voters clearly heard what Obama was saying during the campaign. According to the media exit poll, only 35 percent of voters said taxes should not be increased. Fully 47 percent of all voters supported raising taxes on Americans earning $250,000 or more, including 66 percent of Obama’s voters. An additional 13 percent, of all voters and Obama’s, said taxes should go up for everyone.
If Republican leaders in Congress want to pretend that Obama’s reelection means absolutely nothing, the president seems willing to let all the Bush tax cuts expire. This is the only way to deal with recalcitrance, reflected in the fact that Senate Minority Leader Mitch McConnell didn’t even let the president make his case on Friday before issuing a flat statement rejecting any tax increases. Obama can only hope that he can break more reasonable Senate Republicans away from their hard-line leadership.
House Speaker John Boehner has tried to sound more reasonable, and Obama took him at his word. Graciousness comes easily when you are operating from a position of strength.
Still, even in his conciliatory mode, Boehner made clear that preserving low tax rates for the rich remains the GOP’s single highest priority. The speaker said he might support new revenue but only through some vague “tax reform.” But that’s what Mitt Romney offered during the campaign. Boehner is saying he will make a deal with the victorious candidate only on the basis of the program of the defeated candidate. Here’s hoping this is just a bargaining position.
By emphasizing Obama’s victory as a demographic and organizational triumph, conservatives have been laying the groundwork for renewing their sotto voce campaign suggesting that Obama is somehow “illegitimate” or not “one of us.”
Yet the exit poll found that those who rallied to Obama represent a broad coalition of all of us. Yes, he won African-Americans, Latinos and Asian-Americans overwhelmingly. But the exit poll also shows that 32 percent of Obama’s voters were white women and 24 percent of them were white men, while 23 percent were African-American men and women, and 14 percent were Latinos. This is a genuinely diverse alliance.
Obama’s victory was also plainly a triumph for the center-left: 46 percent of Obama’s voters called themselves moderates, 42 percent called themselves liberals and 12 percent said they were conservatives. Judging by its attitudes toward unfairness in the economy, this is far more a populist coalition than an establishment center. Obama’s voters are invested in growth, raising incomes and reducing unemployment, not austerity and budget balancing.
And this may have been the most important aspect of Obama’s first post-election policy statement. He did not lead with balancing the budget. “Our top priority,” he said right at the start, “has to be jobs and growth,” and then listed his proposals to expand opportunities.
Obama seems to understand that the interests of the coalition that elected him overlap with the national interest. And the politics of the moment reinforce the balanced approach he is advancing now. You get the sense that Republicans understand this and will eventually act accordingly.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, November 11, @012
“Blind To Every Human Virtue”: Mitt Romney And Bain Capital Create Their Own 47% “Victims”
Here’s the 47% Question: If the hedge fund founded by the Republican candidate for president buys a company in a small Midwestern town and then sends all its jobs to China, do those workers thereby become the “victims” Mitt Romney had in mind when he dismissed those who “do not take responsibility for their lives” because they are “dependent” on government?
That’s the situation facing 170 workers at an auto sensor manufacturing plant in Freeport, Illinois after a Bain Capital-owned company, Sensata Technologies, bought out their factory and then decided it would be cheaper to board up the plant and send its parts to China — but not before subjecting workers to the final humiliation of training their Chinese replacements.
In response, some workers have set up a camp across from the factory and are calling “Bainport” to protest the move, according to Dave Johnson at Truthout. Others have asked Mitt Romney to intercede on their behalf with his former company, foolishly taking Romney at his word that, as president, he would “get tough” with China and fight for every American job. Good luck with that.
It’s not as if the company is hurting for money. According to a company financial statement quoted by Johnson, Sensata’s net income last year was $355 million, up 16% from 2010. Its total revenues were $1.8 billion in 2011, up almost 19% from the year before.
Yet, Romney’s former colleague, Sensata board chairman Paul Edgerley, says Bain’s responsibilities to investors demands shuttering the Freeport plant and shipping operations to Asia.
Johnson says the layoffs will surely have a ripple-effect in this small town of about 25,000 that has only three principal employers and a poverty rate well above the national average. And so, Bain’s decision to move the plant to China is a dagger in the heart of this community, says Johnson, and represents “the epitome of corporate America’s lack of patriotism, [with] it’s capital unmoored from any sense of responsibility for the people that make the profits or the communities where they live.”
In moving the plant to China, Sensata is simply operating according to the business strategy mapped out for the hedge fund by Romney himself: Buy assets with little money down. Load them with debt. Raid their pension funds. Break their unions. Then “harvest them” for profits.
On that infamous video disrespecting the bottom 47%, Romney makes a dubious value judgment when he says individuals who are not resourceful or self-reliant enough to make it in the survival-of-the-fittest jungle created for them by cut-throat capitalists like those at Bain Capital are therefore “irresponsible” when they lean on others in hard times, especially when it’s the crutch of government.
That’s the same self-serving justification we hear from conservative economists like Charles Murray who ignore the consequences of globalization and technological change and blame instead the middle class for its own shrunken prospects when average Americans stray from the traditional family values and old-fashioned American work ethic Murray thinks is all that separates rich from poor.
Romney’s is an ethic that equates “morality” with “success.” This may help explain a presidential campaign that justifies egregious falsehoods and elaborate fabrications if they win Romney a point or two with a gullible public.
Newt Gingrich was right when he called out Romney during the Republican primaries as a “predatory corporate raider” who only pretends to be a real capitalist.
A real capitalist, said the original Austrian-school economist Joseph Schumpeter, would know that the fruits of the free market’s dynamic innovations could only be harvested by societies prudent enough to make provision for the victims of capitalism’s relentless change.
Schumpeter, Austria’s finance minister in 1919 and the originator of the famous phrase about capitalism’s “creative destruction,” believed public relief during Hard Times was “imperative on moral and social grounds” and also important to stabilize demand, writes Hans-Michael Trautwein.
“Schumpeter was in favor of unemployment relief as the best way to counteract the effects of the business cycle on workers’ welfare,” says Trautwein in a paper on the great economists’ views on unemployment.
Predators like Mitt Romney, in contrast, want to have their cake and eat it too. They want the benefits that go with destroying other people’s lives for their own profit but without the responsibility to pay the least in compensation.
A real capitalist concerned about the viability of a free market capitalist system in a democratic society would be far more alert to the caveats Schumpeter laid out. And the fact that Romney isn’t, as he speaks contemptuously of the victims his Bain Capital business model have created, exposes Romney as someone who cares little about the free market beyond his own ability to profit spectacularly from the very same unregulated and lightly taxed rigged system he would promote as president.
The irony of the rapacious worldview Romney shares with many in America’s plutocratic class is that it fails as both morals and economics. This is one reasonRomney’s peculiar brand of buccaneer capitalism has so often had to be rescued from itself.
How can it be possible, for example, that a company like Citibank could sell securities it knows to be toxic to one set of customers while at the same time betting on those very same securities to default – and then only getting a $285 million fine from regulators, which is a slap on the wrist considering the monstrous sums involved?
That is what New York Times columnist Thomas Friedman wants to know when he says of Citibank’s fraud” “It doesn’t get any more immoral than this.”
Romney complains about the 47% he says are parasites. Yet, as Friedman notes, “there is in our economy now a disconnect between pay and performance,” which is a fairly serviceable definition of “parasite” in my book.
Under the rules now in place, says Friedman, Romney’s Bain Capital can make tens of millions of dollars on firms it buys that go bankrupt. A bank like Citigroup can sell toxic securities to a hedge fund that loses hundreds of millions of dollars on the deal while Citigroup still makes $160 million in fees and trading profits betting against those same assets.
Despite the wrong turns it has taken in recent decades, Friedman still believes capitalism and free markets are the best engines for generating growth and relieving poverty — “provided they are balanced with meaningful transparency, regulation and oversight.”
What we’ve lost in the last decade, he says, is that balance. “And if we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis. And, if that happens, the cry for justice could turn ugly.”
Mitt Romney sells himself as a successful businessman who “knows” how to create jobs because he “understands” what it takes because Romney himself is rich. In place of policy, in other words, all that Romney has to offer is biography.
Mitt Romney wants to be our president. Yet as Chrystia Freeland reminds us, Romney embraces a “ravage capitalism that is loyal to no nation-state and blind to every human virtue but profit” – a win-at-all-costs ethos that has a familiar, if dangerous, pedigree among history’s self-destructive ruling classes.
What separates successful states from failed ones, says the author of Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, are governing institutions that are either inclusive or extractive.
Extractive states are those controlled by ruling elites whose sole objective is extracting as much wealth as they can from the rest of society, says Freeland, while inclusive states “give everyone access to economic opportunity.”
Greater inclusiveness creates more prosperity which, in turn, creates an incentive for ever greater inclusiveness, says Freeland
Elites themselves prosper from these inclusive systems, says Freeland, but there also comes a time when these elites face the self-destructive temptation to pull up the ladder behind them once they’ve extracted wealth from the broader community “to such a degree that the society becomes dysfunctional and mired by social problems.”
Marx’s famous warning about capitalism containing the seeds of its own destruction may be the danger America faces today, says Freeland, as the 1% percent “pulls away from everyone else” by cannibalizing the broad Middle Class Republic that America has built up since the Second World War — with its public investments in education, infrastructure, basic research and development and health and retirement security — and as these elites pursue “an economic, political and social agenda that increases that gap even further and ultimately destroys the open system that made America rich and allowed its 1 percent to thrive in the first place.”
This is the absurdity of Mitt Romney’s comment about the 47% who are “dependent upon government,” says Freeland, since it’s those at the “top of the economic pyramid who have been most effective at capturing government support — and at getting others to pay for it.”
Today’s super-rich may be different from you and me but they are no different from their plutocratic predecessors throughout history, says Freeland.
“Now, as then, the titans are seeking an even greater political voice to match their economic power,” she writes. “Now, as then, the inevitable danger is that they will confuse their own self-interest with the common good. The irony of the political rise of the plutocrats is that they threaten the system that created them.”
By: Ted Frier, Open Salon, November 3, 2012
“Logic, Fairness, And Common Sense”: The Final Days, The Biggest Issue, And The Clearest Choice
As we go into the final days of a dismal presidential campaign where too many issues have been fudged or eluded — and the media only want to talk about is who’s up and who’s down — the biggest issue on which the candidates have given us the clearest choice is whether the rich should pay more in taxes.
President Obama says emphatically yes. He proposes ending the Bush tax cut for people earning more than $250,000 a year, and requiring that the richest 1 percent pay no less than a third of their income in taxes, the so-called “Buffett Rule.”
Mitt Romney says emphatically no. He proposes cutting tax rates on the rich by 20 percent, extending the Bush tax cut for the wealthy, and reducing or eliminating taxes on dividends and capital gains.
Romney says he’ll close loopholes and eliminate deductions used by the rich so that their share of total taxes remains the same as it is now, although he refuses to specify what loopholes or deductions. But even if we take him at his word, under no circumstances would he increase the amount of taxes they pay.
Obama is right.
America faces a huge budget deficit. And just about everyone who’s looked at how to reduce it — the non-partisan Congressional Budget Office, the bi-partisan Simpson-Bowles Commission, and almost all independent economists and analysts — have come up with some combination of spending cuts and tax increases that raise revenue.
Just last Thursday, executives of more than eighty large American corporations called for tax reform that “raises revenues and reduces the deficit.”
The practical question is who pays for those additional revenues. If Romney’s view prevails and the rich don’t pay more, everyone else has to.
That’s nonsensical. The rich are far richer than they used to be, while most of the rest of us are poorer. The latest data show the top 1 percent garnering 93 percent of all the gains from the recovery so far. But median family income is 8 percent lower than it was in 2000, adjusted for inflation.
The gap has been widening for three decades. Since 1980 the top 1 percent has doubled its share of the nation’s total income — from 10 percent to 20 percent. The share of the top one-tenth of 1 percent has tripled. The share of the top-most one-one hundredth of 1 percent — 16,000 families — has quadrupled. The richest 400 Americans now have more wealth than the bottom 150 million of us put together.
Meanwhile, the tax rates paid by the wealthy have dropped precipitously. Before 1981 the top marginal tax rate was never lower than 70 percent. Under President Dwight Eisenhower it was 93 percent. Even after taking all the deductions and tax credits available to them, the rich paid around 54 percent.
The top tax rate is now only 35 percent and the tax on capital gains (increases in the value of investments) is only 15 percent. Since so much of what they earn is from capital gains, many of the super-rich, like Mitt Romney himself, pay 14 percent or less. That’s a lower tax rate than many middle-class Americans pay.
In fact, if you add up all the taxes paid — not just on income and capital gains but also payroll taxes (which don’t apply to income above incomes of $110,100), and sales taxes — most of us are paying a higher percent of our income in taxes than are those at the top.
So how can anyone argue against raising taxes on the rich? Easy. They say it will slow the economy because the rich are “job creators.”
In the immortal words of Joe Biden, that’s malarky.
The economy did just fine during the three decades after World War II, when the top tax rate never fell below 70 percent. Average yearly economic growth was higher in those years than it’s been since, when taxes on the rich have been far lower.
Bill Clinton raised taxes on the rich and the economy did wonderfully well. George W. Bush cut them and the economy slowed.
The real job creators are America’s vast middle class, whose spending encourages businesses to expand and hire — and whose lack of spending has the opposite effect.
That’s why the recovery has been painfully slow. So much income and wealth have gone to the top that the vast majority of Americans in the middle don’t have the purchasing power to get the economy moving again. The rich save most of what they earn, and their savings go anywhere around the world where they can get the highest return.
It would be insane to compound the damage by raising taxes on the middle class and not on the rich.
Logic, fairness, and common sense dictate that the rich pay more in taxes. It’s the key to avoiding January’s fiscal cliff and coming up with a “grand bargain” on taming the budget deficit. And it’s central to getting the economy back on track.
By: Robert Reich, Robert Reich Blog, October 28, 2012
“Don’t Worry, He’s Lying”: The Basic Gist Of The Case For Mitt Romney
Yesterday, I did an online debate with Buzz Bissinger, author of Friday Night Lights, for New York magazine. We went through a wide range of topics, but one thing we stuck on—for a while—was the issue of Mitt Romney’s political commitments. Bissinger refused to believe that Romney is the conservative he’s campaigned as for the last 18 months, and he insisted Romney would be more moderate than he’s appeared if elected president. Here’s the nut of his argument:
[T]ake a look at Romney’s record as Mass governor. He was not some crazoid conservative. He crossed party lines. He provided the template for Obamacare, for God’s sake.
Romney has at least shown some ability to cross lines, however weak. Obama has not. He is not politically adept. He is not good at crossing the aisle. I can only go on what I have read, but he does not like politics and all the gab and bullshit. Politics is gab and bullshit. So I think Romney has a much better chance of appealing to Dems than Obama will ever have appealing to Rs.
One thing I’ve noticed in defenses of Romney is this idea that we should trust that he’s lying to his conservative supporters, and will be more moderate once in office. This view was recently pushed by Bret Stephens of The Wall Street Journal, who wrote an entire column asserting that Romney has no intention of following through on any of his promises.
Since Romney is a chameleon—and happy to switch positions for electoral gain—I can see why some would look at him and assume that he doesn’t plan to carry out his stated plans if elected president. But there are two things worth remembering: First, that presidents almost always attempt to fulfill their campaign promises. Americans like to believe otherwise, but the truth is that the first-term agenda of most presidents mirrors their rhetoric during the campaign. Barack Obama promised middle-class tax cuts and health-care reform, and he delivered. Tax cuts and education reform formed the basis for George W. Bush’s campaign in 2000, and were the first items on his agenda in 2001. Mitt Romney has promised large, across-the-board tax cuts, increased military spending, and cuts to social services. Most likely, that’s what he’ll do.
One last thing: All of this is to say nothing of congressional Republicans, who are committed to following through on the right-wing budgets they passed last year. If Romney wins the White House, one of their own—Wisconsin Representative Paul Ryan—will be second-in-command, and it’s absurd to think that they won’t want him to make a push for implementing the Ryan budget. Indeed, as long as they control the Senate, Republicans will be able to pass the Ryan budget without a single Democratic vote. And if they don’t? As Bush demonstrated in his first term, it’s not hard to find a few vulnerable Democrats who will support your priorities for the sake of electoral safety.
By: Jamelle Bouie, The American Prospect, October 18, 2012
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