“Bait And Switch Cynic’s”: Obama Angers GOP By Standing Up For Middle Class
Republicans are furious with Barack Obama for waging a “divisive” populist campaign against Wall Street and America’s “elites” – because Republicans think that is supposed to be their job.
Together with the more confrontational tone he’s taken with Republicans since they rebuffed him on his middle class jobs package last summer, President Obama’s State of the Union Address on Tuesday is further proof he’s finally learned his lesson from the previous three years: That while he was off chasing independent “swing” voters said to prize compromise and moderation above all things, scheming Republicans had picked his pocket of those pitchfork-wielding populists who should have been Obama’s all along.
It wasn’t supposed to be like this. In both the physical world and in politics the law of gravity decrees that when things fall apart they are supposed to fall down. So, by all rights a second Great Depression that incinerated $16 trillion in household wealth and was brought about by the same kind of financial shenanigans and Wall Street recklessness that caused that first big depression back in the 1930s, should have provoked the very same kind of anti-business popular backlash that brought FDR to power then and should have created a Second New Deal now.
Yet, as populist historian Thomas Frank writes in his new book, Pity the Billionaire: the Hard Times Swindle and the Unlikely Comeback of the Right, so far the most visible response to the recent economic catastrophe has been a right wing campaign to “roll back regulation, to strip government employees of the right to collectively bargain and to clamp down on federal spending.”
The resurgence of the Republican Party so soon after the debacle of George W. Bush and the collapse of the financial markets in 2008 is a testament to human adaptability.
Rather than allow themselves to be crushed underneath a tide of middle class anger directed against the plutocrats and tycoons who stole their dreams away — as happened to Republicans in the 1930s — conservatives were determined this time around to lead the populist, anti-Wall Street revolt instead of be swallowed by it – even if it was a crusade cynically designed to serve the interests of the very same Wall Street that was responsible for the crisis in the first place.
Congressman Paul Ryan, for example, was both the author of the “kill Medicare as we know it” budget as well as an article in Forbes titled “Down with Big Business” in which Ryan argued that giant corporations could not be counted on to defend capitalism in its hour of need and so it was up to “the American people – innovators and entrepreneurs and small business owners — to take a stand.”
Conservative infatuation with “entrepreneurs” and “small business owners” was no accident. Like those prairie farmers who fed the Populist Movement of the 19th century, mom-and-pop hardware store owners are just as outraged by “crony capitalism” on Wall Street as they are by “European-style socialism” in Washington.
And so by passing the torch of free market capitalism from the international conglomerate to the local chamber of commerce conservatives knew they could give populist cover to a free market agenda that meant lower taxes for the rich and fewer regulations for Wall Street.
But the perfect expression of the Republican Party’s bait-and-switch cynicism came when Republicans tried to beat back Obama’s Wall Street reforms by pretending to be against Wall Street itself. Since “public outrage about the bailout of banks and Wall Street is a simmering time bomb set to go off,” wrote GOP pollster Frank Luntz in an infamous February 2010 memo to his Republican clients, the single best way for Republicans to kill Wall Street reform was to link it to favoritism of Wall Street — like “the Big Bank Bailout” instead.
And that is exactly what Republicans did, piously intoning how the Democrat’s reforms were really giveaways to the rich that sought to “punish” middle class taxpayers while rewarding “big banks and credit card companies.”
Add it all up and everywhere you looked the GOP defenders of the Top 1% were warning of “a colossal struggle between average people and the elites who would strip away the people’s freedoms,” said Frank.
Corrupt and cynical though all of this might be, Republican efforts to portray themselves as champions of little guy standing tall against “the interests” was not wholly implausible, as leaders of the revivified Right found the soil for their misdirection to be uncommonly fertile.
Hoodwinking the Tea Party Right that the “elites”who brought down the economy lived in Washington rather on Wall Street was never going to be a heavy lift.
In their year-long study of the Tea Party movement, The Tea Party and the Remaking of the Republican Conservatism, authors Theda Skocpol and Vanessa Williamson found that while Tea Party members might be impresarios of political organization they were largely ignorant when it came to “what government does, how it is financed and what is actually included (or not) in key pieces of legislation and regulation.”
The blame, they say, lies squarely with “the content of right wing programming,” especially Fox News, which, the authors contend, propagates falsehoods “often as a matter of deliberate editorial policy.” Thus, millions of frightened Americans were uniquely vulnerable to manipulation and misinformation by a corporate-sponsored “‘populist” movement that served the interests of the plutocrats.
But making matters worse, the Democrats have not exactly covered themselves in glory when it comes to making clear whose side they are on. The bank bailouts begun under George Bush are easily blamed on Democrats who both inherited them when they won the White House and voted for them when they controlled Congress. Corporate control of Washington is also a problem that undermines public faith in Democrats who are supposed to govern Washington. And when “Clintonism” is a word that means the “People’s Party” is catering to the interests of the rich and powerful — or when neo-liberalism” defines an economic system indistinguishable from conservative laissez faire — you can forgive the average voter for having trouble separating Wall Street elites from Washington ones.
With a powerful media network like Fox News at its disposal, able to “make viewers both more conservative and less informed,” it’s not difficult to understand how Republicans have been able to lead a mass revolt against “elites” that largely serves the interests of those very same elites.
But with his more recent moves to the left President Obama has begun to turn this around and win back a middle class that should have been with him from the beginning.
“After flirting with the role of the reasonable centrist after his party’s defeat in 2010, President Obama has decided to run for re-election as a full-throated liberal populist,” writes New York Times conservative Ross Douthat with a tone of resignation and disappointment more than agreement.
Peter Beinart of the Daily Beast agrees: “From Mitt Romney to Newt Gingrich to Glenn Beck, the conservative assault on Barack Obama comes down to this: unfettered capitalism is true Americanism.”
Among right wing conservatives, Obama’s efforts to use government to make American capitalism more stable and just isn’t the sort of rescue mission that both Democratic and Republican administrations have been waging since the New Deal. Conventional stimulus spending and jobs programs are instead “an alien imposition, hatched in foreign lands, and designed to make us less free,” says Beinart. And so Obama will either effectively answer that charge “or he will lose the 2012 election.”
My money is on Obama who’s recent course correction may turn out to be his own “Southern Strategy.” The original got its name back in 1968 after Richard Nixon had a Eureka! Moment when he realized there was no way Southern whites who voted with Barry Goldwater in 1964 and were now standing with George Wallace at the schoolhouse door belonged in the Democratic Party of Civil Rights and the Great Society. And today, they don’t.
Nearly 50 years later, Barack Obama seems to have had his own epiphany when he looked around at those who were shaking their fists at “Big Government” but who’d also been put out on the street by Big Banks and Big Business, and the President wondered: How can these people possibly be Republicans?
Proof that President Obama is onto something with his new, more populist approach is the fact that the unerring homing missile of popular resentments and discontents — Newt Gingrich — is going after plutocrat Mitt Romney as a “malefactor of great wealth,” while dancing on Romney’s grave with a victory speech in South Carolina that spit out the word “elite” 27 times.
The contortions that Republicans have had to go through to recast themselves as the Party of the People in order to advance an agenda lop-sided in its favoritism for the wealthy few exposes the structural deformities that have always bedeviled American conservatives.
Like lizards who camouflage themselves from predators, there has always been something chameleon-like about right wing conservatives compelled to adopt protective coloration to survive in a hostile liberal environment.
That is why right wing conservatives have had to learn to speak the language of liberalism — borrowing words like freedom, liberty and democracy in order to superficially appear to embrace ideas and ideals forbidden to them by their reactionary belief system.
That is why members of the Religious Right and Conservative Movement are more familiar with the liberal community organizer Saul Alinsky than Alinsky’s intended liberal audience seems to be, taking to heart his advice in Rules for Radicals that the way for political movements to get things done is to “go home, organize, build power.”
And immediately after the economy collapsed in 2008 and 2009, conservatism positioned itself as a popular protest movement for economic hard times, jettisoning “aspects of conservative tradition that were either haughty or aristocratic,” says Frank “while symbols that seemed noble or democratic or popular, even if they were the traditional property of the other side, were snapped up and claimed by the Right itself.”
Right wing conservatives knew a popular uprising by angry and distressed Americans against the Powers That Be was in the offing. But this time, unlike the 1930s, Republicans intended to lead that revolt instead of be victims of it.
No wonder, then, that Republicans are calling the President “divisive” when he tries to take back from them the backing of The People that rightfully belongs to him.
By: Ted Frier, Open salon, January 29, 2012
Buffett Rule Will Raise $50 Billion Per Year, Affect Just 0.08 Percent Of Taxpayers
When President Obama announced his latest vision for the so called “Buffett rule” — a 30 percent minimum tax on millionaires — during his State of the Union address this week, Republicans were quick to criticize it. For instance, Speaker of the House John Boehner (R-OH) derided the proposal as a “political gimmick.” “It’s a smokescreen,” added Rep. Steve Scalise (R-LA).
However, as a new analysis from Citizens for Tax Justice pointed out, the Buffett rule as laid out in the speech could raise up to $50 billion per year to pay down the deficit, while affecting just 0.08 percent of taxpayers:
Citizens for Tax Justice has calculated that President Obama’s “Buffett Rule” would, if in effect this year, raise $50 billion in a single year and affect only the richest 0.08 percent of taxpayers— that’s just eight percent of the richest one percent of taxpayers. […]
To calculate the $50 billion figure, we assumed that there would be a minimum tax that applies to adjusted gross income (AGI) minus charitable deductions. (We’ll call this modified AGI.)
We assumed that a taxpayer with modified AGI greater than $1 million would face a minimum tax of 30 percent of modified AGI. The taxpayer would pay whichever is greater, their personal income tax under the existing rules or this minimum tax.
Obviously, $50 billion by itself won’t balance the budget, but it certainly doesn’t hurt. At the same time, the Buffett rule will aid in correcting some of the problems in the tax code — like one quarter of millionaires paying lower rates than millions of middle class families and some millionaires paying no income tax at all — that have helped drive income inequality up to a level not seen in the U.S. since the 1920s.
By: Pat Garofalo, Think Progress, January 27, 2012
Six Facts About Mitt Romney’s Tax Returns
After weeks of refusals and equivocation, Mitt Romney finally released his tax returns last night to a handful of media outlets, showing that he made $21.7 million in 2010 and $20.9 million last year. He only actually released one year of returns, 2010, and his estimated return for 2011, even though many have called on him to follow the precedent set by his father and release many more years of returns.
Nonetheless, there is much to learn from the astonishing 550 pages of returns Romney released:
1. Romney paid a lower tax rate than many middle-class Americans: Romney’s returns reveal that he paid an effective tax rate of 13.9 percent, lower even than the low rate of 15 percent he estimated he paid last week. While this is far less than what many middle-class Americans pay, it’s also well below what wealthy people pay. The average effective tax rate for someone in Romney’s income bracket is 25 percent.
2. Romney makes more in a day than the average American makes in a year, and becomes a 1 percenter every week: As Bloomberg News notes, “In 2008, according to the IRS, the median adjusted gross income was $33,048, which Romney made in less than a day. Reaching the top 1 percent of taxpayers required $380,354 in adjusted gross income, about Romney’s earnings in a week.”
3. Romney paid almost nothing in payroll taxes: Romney contributed just .1 percent of his income to Social Security and Medicare in 2010 via the payroll tax because the tax is only assessed on earned wages, but all of Romney’s income came from investments. Most working Americans pay 7.65 percent.
4. Romney has accounts in countries notorious for tax dodging: By now, it’s well known by now that Romney invests in funds based in the Cayman Islands, but Romney’s returns were “crammed with information about foreign holdings” and reveal that he held accounts in Switzerland and Luxembourg, countries famous for hiding money thanks their low taxes and strict banking secrecy laws. Aides said he closed his Swiss account in 2010 because it might have been “politically embarrassing.”
5. Romney and Gingrich’s tax plans would slash Romney’s taxes: Romney already pays less than many middle class Americans, but under his proposed tax plan, his rates would be slashed in half. Meanwhile, under challenger Newt Gingrich’s plan, Romney would pay almost nothing, since Gingrich has proposed cutting the capital gains tax rate to zero and Romney earns almost all of his money from investments.
6. Romney needs four lawyers, including the former IRS commissioner to defend his tax plan: Romney’s campaign held a conference call with reporters this morning to defend and explain his tax returns, and apparently felt the need to have former IRS Commissioner Fred Goldberg, along with three other top lawyers and his campaign communications director to explain the returns. At one point, the call had to be interrupted so officials could confer with mega accounting firm PricewaterhouseCoopers.
Another small revelation from Romney’s returns is that while Romney said his speaking fees amounted to “not very much” in terms of income, he actually made $111,000 in speaking fees in 2011 and $529,000 in 2010, as Politico’s Ken Vogel points out.
By: Alex Seitz-Wald, Think Progress, January 24, 2012
“The Larger Debate Is Just Beginning”: What We’ve Learned From Romney’s Returns
Mitt Romney’s campaign, as promised, released the former governor’s 2010 tax returns, as well as an estimate for his 2011 returns, and we’re starting to get a sense of why the Republican candidate wasn’t eager to share these details.
Mitt Romney offered a partial snapshot of his vast personal fortune late Monday, disclosing income of $21.7 million in 2010 and $20.9 million last year — virtually all of it profits, dividends or interest from investments.
None came from wages, the primary source of income for most Americans. Instead, Romney and his wife, Ann, collected millions in capital gains from a profusion of investments, as well as stock dividends and interest payments.
By any fair estimate, over $42 million in income over two years isn’t bad for a guy who jokes about being “unemployed.” Indeed, Romney would be in the top 1% based solely on the income he makes in one week.
Romney said last week that his rate was “closer to 15%,” but as it turns out, despite his vast wealth, he actually only paid a 13.9% rate last year — lower than his political rivals who aren’t nearly as wealthy, and lower than most middle-class American workers.
And what about those overseas investments?
His 2010 return also showed that he had a financial account in Switzerland that was closed in 2010 and that he generated income from overseas investments. He also reported financial accounts in Bermuda and the Cayman Islands.
A Reuters report added that Romney’s Swiss bank account was closed in 2010 “after an investment adviser decided it could be politically embarrassing to Romney.”
I suspect those with far more expertise in this area will subject these materials to considerable scrutiny, but at first blush, the disclosure appears to raise at least as many questions as it answers.
Why did Romney set up $100 million trust funds for his sons without paying any gift taxes? Were his accounts in the Caymans and in Switzerland created to avoid paying taxes? Was the closing of the Swiss account related to this IRS investigation? And given all of the questions surrounding Romney’s Bain-era work, why does the Republican candidate continue to insist he won’t disclose returns from previous years?
What’s more, following up on a point from last week, even if Romney argues that he’s simply playing by the rules — taking advantage of existing tax loopholes to pay lower rates than much of the middle class — this doesn’t explain why Romney is eager to exacerbate issues on tax fairness with his tax plan that makes the problem worse.
In a debate over tax fairness and income inequality, Romney is practically a case study for What’s Gone Wrong, but he can at least plausibly argue that this is a mess he benefits from, but didn’t create. Romney, however, prefers to believe the problem doesn’t exist.
Greg Sargent did a nice job capturing the larger political context:
I’m not sure the Obama campaign could have scripted this more perfectly. In a remarkable bit of good timing, President Obama is set to deliver a State of the Union speech focused on income inequality and tax unfairness on exactly the same day that Mitt Romney will reveal that he made over $40 million in the last two years — all of it taxed at a lower rate than that paid by middle class taxpayers. […]
Romney doesn’t just disagree with Obama on these fundamental issues; he personally symbolizes virtually the entire 2012 Democratic message. He is the walking embodiment of everything Dems allege is wrong with our system and the ways it’s rigged in favor of the wealthy and against the middle class. Yet this is the standard bearer the GOP seems set to pick.
Romney and his aides believe these materials should end the discussion. That’s backwards — the larger debate is just beginning.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, Janueary 24, 2012
Mitt Romney Has Signed Paul Ryan’s Suicide Note
Suddenly Republicans are wondering: is Mitt Romney really so electable after all?
Turns out Rick Santorum won Iowa. Newt Gingrich’s attacks on Romney’s record at Bain have drawn blood. More blood has flowed from Romney’s own admission this week that he pays a tax rate of only about 15 percent on his ample income. Then there’s Romney’s offhand dismissal of the $374,000 he earned in speaking fees in 2011—enough in itself to qualify Romney for the top 1 percent—as “not very much.” All of which has led political analyst Jeff Greenfield to quip, “Only way for Mitt to look more like embodiment of wealth is to wear a top hat and monocle (thank God he doesn’t smoke cigars!)”.
Yet in itself, great personal wealth need not be an obstacle to the presidency. John F. Kennedy was wealthier than Mitt Romney, and Lyndon Johnson not a lot less so. The two Roosevelts were likewise far from poor; ditto the two Bushes.
Romney, however, seems already type-cast as a dangerously out-of-touch Richie Rich.
The journalists and commentators who watch his campaign tend to blame Romney personally for the disconnect. Little gaffes get magnified into campaign-wrecking disasters, like describing $374,000 in speaking fees as “not much.”
But when a campaign is connecting, it can ride out gaffes. Bill Clinton reached the White House despite Hillary Clinton dismissing at-home moms as “staying home to bake cookies,” and Obama rode out the fuss triggered by a tape recording of his description of rural white voters “clinging to their guns and religion.”
Romney’s trouble is not his too-pressed shirts or his too-coiffed hair or even his tax returns. Bill and Hillary Clinton also had a tax return problem in 1992: it was revealed that they had claimed a tax deduction for donating used socks and underwear to Goodwill. It looked petty and grasping. They won anyway.
Romney’s problem is not his wealth. It is his apparent lack of concern for others’ nonwealth. But that lack of concern has been sharpened to a dangerous point, not by Romney himself, but by the missteps of his party.
Why would the typical voter care whether Romney is rich or not? From the point of view of the typical voter at the median household income of $49,500, all the presidential candidates look rich. They almost always do.
The question of utmost concern to the voter is, what will these rich politicians do for me? Or to me?
And here’s where Romney faces his real challenge—2012 will be a tough re-elect for Barack Obama. When Democrats face tough elections, there is one thing they can always be counted on to do: accuse Republicans of having a secret plan to eliminate Medicare. Jimmy Carter did it in the presidential debate of 1980: “Governor Reagan, as a matter of fact, began his political career campaigning around this nation against Medicare.” Bill Clinton did it in his duel against Newt Gingrich in 1995-96: “Yesterday [congressional Republicans] sent me legislation that said—we will only keep the government going, and we will only let it pay its debts if and only if we accept their cuts in Medicare, their cuts in education, their cuts in the environment, and their repeal of 25 years of bipartisan commitments to protect the environment and public health.”
President Obama would dearly like to do it again in 2012. But this time, Republicans made it easy for him. Obama does not have to accuse them of having a secret plan to eliminate Medicare. In 2011, all but four House Republicans and all but five Senate Republicans voted for a very public plan to withdraw the Medicare guarantee from Americans younger than age 55.
The Paul Ryan plan would instead offer future retirees support to buy a private insurance plan—with the amount of the support rising at the rate of general inflation. If health care costs continue to rise during the next three decades at the same pace as in the past three decades, then—under this proposal—today’s 30-somethings would receive support sufficient to cover about 25 percent of their Medicare costs, leaving them to find the other 75 percent themselves. The money saved would be applied to balance the budget and finance a big tax cut, reducing the top income-tax rate to 28 percent from the otherwise scheduled 39.6 percent.
Conservative columnist Charles Krauthammer at the time expressed worry that the Ryan plan might prove a “suicide note.”
And at first Mitt Romney shrewdly kept his distance. “I appreciate what Paul Ryan has done,” Romney said on May 27, 2011, and cautiously added, “I’m going to have my own plan.” Asked whether he’d sign the plan, Romney demurred: “That’s the kind of speculation that is getting the cart ahead of the horse.”
A week later, Romney’s resistance was weakening. Asked June 2, 2011, whether he would sign the Ryan plan if it comes to him, he said yes, but added again, “I’m going to have my own plan.”
Through the fall, Romney yielded more and more ground to pressure from congressional Republicans entranced by Ryan’s vision.
In November, Romney did at last release that Medicare plan of his own. Structurally, the Romney plan resembled Ryan’s. But it remained vague on the key feature: how much premium support would future seniors get?
Then Gingrich began to rise in the polls, the first adversary to seriously worry the Romney campaign. To protect his right flank, Romney in December for the first time expressed unequivocal support for the Ryan plan—and the end of the Medicare guarantee for those now under 55.
Would a President Romney do such a thing? Would Congress really ultimately go along with it? Probably not and certainly not. But can President Obama credibly allege that a President Romney might do it? And will those allegations exact an electoral cost?
If the answers to those questions prove to be “yes,” conservative critics will blame Romney for his “weakness” as a candidate. But the real weakness will be that Romney acceded to those conservatives’ pressure to co-sign Paul Ryan’s suicide note.
By: David Frum, The Daily Beast, January 20, 2012
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