GOP Still Clueless About Resentment Of Inequality
In his New York Times opinion piece, “Let’s Not Talk About Inequality,” Thomas B. Edsall does a good job of tracing the change in public attitudes toward Republican economic policies in the wake of the 2008 meltdown.
Edsall quotes Gingrich’s and Romney’s pious pronouncements about workers needing to “become more employable” (Newt) and achieving “success and rewards through hard work” (Mitch), which is a little hard to digest, coming from a guy who gets six figures for a speech and another who made his fortune in hedge funds. This in “an American economy sharply skewed towards the affluent, with rising inequality, a dwindling middle class and the persistence of long-term unemployment.”
Not all Republicans are quite so clueless. Edsall quotes GOP framing guru Frank Luntz, “I’m so scared of this anti-Wall Street effort” because “they’re having an impact on what the American people think of capitalism.” Edsalll also quotes Democratic strategist Geoff Garin, who explains “…The Republican/Tea Party narrative about the economy has been superseded by a different narrative – one that emphasizes the need to address the growing gap between those at the very top of the economic ladder and the rest of the country.”
Garin cites poll data indicating stronger support for “a set of policies generally favored by Democrats calling for the elimination of tax breaks for the rich and tougher regulation of major banks and corporations” and that the public believes the federal government should “pursue policies that try to reduce the gap between wealthy and less well-off Americans.” He also cites polling data spelling big trouble for the GOP:
The job ratings of Republicans in Congress have tanked at 74 percent negative to 19 percent favorable, dropping more steeply than Obama’s, which are 51 negative-44 positive. But the Post survey also found that congressional Republicans run neck and neck with the president when respondents are asked “who would you trust to do a better job” on handling the economy (42-42) and creating jobs (40-40). On an issue on which the public traditionally favors Democrats by wide margins, “protecting the middle class,” Obama held only a 45-41 advantage over congressional Republicans.
Republicans are scrambling to figure out how to blame Democrats for worsening inequality, explains Edsall. But “The issue of inequality is inherently dangerous for Republicans who are viewed by many as the party of the upper class.” Further,
An Oct. 19-24 CBS/New York Times poll asked respondents whether the policies of the Obama administration and the policies of Republicans in Congress favor the rich, the middle class, the poor or treat everyone equally. Just 12 percent said Obama favors the rich, while 69 percent said Republicans in Congress favor the rich.
And when Ryan’s budget scheme is explained to voters, they “are horrified by it,” according to Garin. Edsall marvels at the GOP’s blindness in making it possible for their two front runners to get bogged down in arguments about how much more to give the wealthy while weakening Medicare benefits for the middle class — “in a climate of stark economic adversity for millions of unemployed Americans.”
Edsall is right. Democrats could not have hoped for a more self-destructive scenario in the Republican camp. If Democrats can project a credible message that offers hope for a better future for middle class voters in the months ahead, the optimism that has begun to emerge in Democratic circles will be justified.
By: J. P. Green, The Democratic Strategist, December 13, 2011
The Problem Isn’t Mitt Romney’s $10,000 Bet Offer. It’s His Serial Dishonesty
One of the biggest pieces of news out of Saturday’s debate is that Mitt Romney offered to bet Rick Perry $10,000 over the latter’s claim that Romney wrote in his book that he viewed the individual mandate as a “model” for the country. Dems and Republicans alike are pouncing on the casual offer of a large wager as proof that Romney is out of touch, and reporters are predicting that this moment could crystallize a national media narrative about Romney.
But while the $10,000 moment is politically problematic and revealing in some ways, it doesn’t really deserve to rise to the level of national narrative. What’s more deserving of a national storyline about Romney is his serial dishonesty, his willingness to say and do anything to win.
This morning, Romney is pushing back on the idea that there was anything amiss about the $10,000 bet offer, arguing that he picked an “outrageous” sum to highlight just how “outrageous” Perry’s claim was. But Perry’s claim — while not completely accurate — wasn’t all that outrageous.
Perry argued that Romney wrote that the individual mandate he passed as governor of Massachusetts “should be the model for the country.” It’s true, as PolitiFact points out, that Romney’s book did also say that such reforms should be implemented at the state level. But Romney has in fact talked about the mandate as a national model: In 2007, he said he hoped that “most” states would adopt it, and added that he hopes to see “a nation that’s taken a mandate approach.” Romney is now trying to obscure the fact that he plainly saw his chief accomplishment as something that should ultimately be adopted on a national, or quasi-national, scale.
More broadly, political reporters and commentators are always tempted to seize on such moments as the $10,000 bet as defining of a candidate’s character. But this moment is ultimately almost as trivial as was John Edwards’ $400 haircut. More important is the broader pattern of dissembling and dishonesty that only begins with his equivocations over the mandate. To wit: Romney attacked Newt Gingrich for opposing mass deportation of longtime illegal residents without saying whether he supports such deportation. Romney continues to insist Obama apologized for America, even though this has been repeatedly proven flatly false. Romney released an ad ripping Obama’s quotes out of context in a highly dishonest way — and the campaign later boasted about the media attention the dishonesty secured. Romney falsely asserted that Obama is “bowing to foreign dictators” — then his campaign later insisted the claim was “metaphorical.” And so on.
This broader pattern is what deserves the status of national narrative about Romney’s character, not some throwaway line about a bet.
By: Greg Sargent, The Washington Post, The Line Plum, December 12, 2011
Gingrich’s Tax Plan Would Give Millionaires A $600,000 Tax Cut
The latest 2012 GOP presidential frontrunner, Newt Gingrich, has, like Texas Gov. Rick Perry (R-TX) before him, released a plan to overhaul the U.S. tax code by giving taxpayers the option of paying a single, flat, income tax rate, as opposed to using today’s progressive tax code. In fact, Gingrich goes a bit further than Perry, setting his flat rate at 15 percent, as opposed to Perry’s 20 percent.
Gingrich claims that his plan will “allow Americans the freedom to choose to file their taxes on a postcard, saving hundreds of billions in unnecessary costs each year.” However, according to an analysis by the Tax Policy Center, the plan will also achieve another of Gingrich’s ends — giving millionaires a tax cut of more than $600,000 per year:
Gingrich’s plan would create an optional 15 percent flat tax with a per-person deduction of $12,000. He would drop the corporate tax rate to 12.5 percent from 35 percent, allow businesses to write off capital expenses and eliminate taxes on capital gains and estates, according to his website.
People earning more than $1 million a year would receive an average tax cut of $613,689 in 2015, compared with what they pay now. That change would boost their after-tax income by 28.7 percent and put their average tax rate at 11.9 percent.
Under the plan, half of the entire benefit goes to the richest 1 percent of taxpayers. The richest 0.1 percent of the country will receive a tax cut worth nearly $2 million each and every year. These tax cuts are in addition to what the wealthy are already receiving from their disproportionate share of the Bush tax cuts.
The end result of the plan would be millionaires paying a lower tax rate than middle-class families, as a millionaire would pay an 11.9 percent rate, while a family making $40,000-$50,000 would pay 12.7 percent.
Gingrich has already criticized his top competitor, Mitt Romney, for not lavishing enough tax breaks onto the wealthy. And it would seem that Gingrich’s critique is extremely genuine, as his own tax plan hands out tons of breaks to the very wealthy, in the misguided hope that prosperity will then trickle down to everybody else.
By: Pat Garofalo, Think Progress, December 12, 2011
All The G.O.P.’s Gekkos: “I Create Nothing I Own”
Almost a quarter of a century has passed since the release of the movie “Wall Street,” and the film seems more relevant than ever. The self-righteous screeds of financial tycoons denouncing President Obama all read like variations on Gordon Gekko’s famous “greed is good” speech, while the complaints of Occupy Wall Street sound just like what Gekko says in private: “I create nothing I own”, he declares at one point; at another, he asks his protégé, “Now you’re not naïve enough to think we’re living in a democracy, are you, buddy?”
Yet, with the benefit of hindsight, we can see that the movie went a little off at the end. It closes with Gekko getting his comeuppance, and justice served thanks to the diligence of the Securities and Exchange Commission. In reality, the financial industry just kept getting more and more powerful, and the regulators were neutered.
And, according to the prediction market Intrade, there’s a 45 percent chance that a real-life Gordon Gekko will be the next Republican presidential nominee.
I am not, of course, the first person to notice the similarity between Mitt Romney’s business career and the fictional exploits of Oliver Stone’s antihero. In fact, the labor-backed group Americans United for Change is using “Romney-Gekko” as the basis for an ad campaign. But there’s an issue here that runs deeper than potshots against Mr. Romney.
For the current orthodoxy among Republicans is that we mustn’t even criticize the wealthy, let alone demand that they pay higher taxes, because they’re “job creators.” Yet the fact is that quite a few of today’s wealthy got that way by destroying jobs rather than creating them. And Mr. Romney’s business history offers a very good illustration of that fact.
The Los Angeles Times recently surveyed the record of Bain Capital, the private equity firm that Mr. Romney ran from 1984 to 1999. As the report notes, Mr. Romney made a lot of money over those years, both for himself and for his investors. But he did so in ways that often hurt ordinary workers.
Bain specialized in leveraged buyouts, buying control of companies with borrowed money, pledged against those companies’ earnings or assets. The idea was to increase the acquired companies’ profits, then resell them.
But how were profits to be increased? The popular image — shaped in part by Oliver Stone — is that buyouts were followed by ruthless cost-cutting, largely at the expense of workers who either lost their jobs or found their wages and benefits cut. And while reality is more complex than this image — some companies have expanded and added workers after a leveraged buyout — it contains more than a grain of truth. One recent analysis of “private equity transactions” — the kind of buyouts and takeovers Bain specialized in — noted that business in general is always both creating and destroying jobs, and that this is also true of companies that were buyout or takeover targets. However, job creation at the target firms is no greater than in similar firms that aren’t targets, while “gross job destruction is substantially higher.”
So Mr. Romney made his fortune in a business that is, on balance, about job destruction rather than job creation. And because job destruction hurts workers even as it increases profits and the incomes of top executives, leveraged buyout firms have contributed to the combination of stagnant wages and soaring incomes at the top that has characterized America since 1980.
Now I’ve just said that the leveraged buyout industry as a whole has been a job destroyer, but what about Bain in particular? Well, by at least one criterion, Bain during the Romney years seems to have been especially hard on workers, since four of its top 10 targets by dollar value ended up going bankrupt. (Bain, nonetheless, made money on three of those deals.) That’s a much higher rate of failure than is typical even of companies going through leveraged buyouts — and when the companies went under, many workers ended up losing their jobs, their pensions, or both.
So what do we learn from this story? Not that Mitt Romney the businessman was a villain. Contrary to conservative claims, liberals aren’t out to demonize or punish the rich. But they do object to the attempts of the right to do the opposite, to canonize the wealthy and exempt them from the sacrifices everyone else is expected to make because of the wonderful things they supposedly do for the rest of us.
The truth is that what’s good for the 1 percent, or even better the 0.1 percent, isn’t necessarily good for the rest of America — and Mr. Romney’s career illustrates that point perfectly. There’s no need, and no reason, to hate Mr. Romney and others like him. We do, however, need to get such people paying more in taxes — and we shouldn’t let myths about “job creators” get in the way.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 8, 2011
Poor Timing On Mitt Romney’s “Frugal” Habits
The New York Times has a feature piece today on Mitt Romney’s “thrifty habits.” Apparently, the guy considers himself pretty cheap.
It was a stark sign of the tug of war, still evident in Mr. Romney’s life, between an instinctive, at times comical frugality, and an embrace of the lavish lifestyle that accompanied his swelling Wall Street fortune.
Mr. Romney, 64, has poured $52 million of his own money into campaigns for the Senate and the White House, but is obsessed with scoring cheap flights on the discount airline JetBlue.
He has acquired six-figure thoroughbred horses for his wife, Ann, yet plays golf with clubs from Kmart. And he has owned a series of multimillion-dollar homes, from a lakefront compound in New Hampshire to a beach house in California, but once rented a U-Haul to move his family’s belongings himself between two of the vacation retreats.
For the record, if a guy spends $12 million on one of several luxurious mansions, and then rents a U-Haul to move belongings himself, I’m not sure “frugal” is the right adjective.
In any case, the timing of the piece is unfortunate. The article invests 2,000 words in making the case that Romney “has never become entirely comfortable with his own wealth,” and is one of those guys who just doesn’t like to open his wallet, but the article went to print just as Romney was willing to drop $10,000 on a bet over a fairly obscure point during a nationally-televised debate.
As a rule, thrifty individuals don’t throw around five-figure wagers on a whim.
There was also this tidbit:
The Romneys lived in an affluent suburb, Bloomfield Hills, with a housekeeper and two refrigerators in the kitchen. But George Romney still required his children to mow the lawn, shovel snow, rake leaves, weed the garden. “I know he worried that because my brother, sisters and I had grown up in a prosperous family, we wouldn’t understand the lessons of hard work,” Mitt Romney wrote.
I’m pretty sure this is the same guy who later hired a landscaper that relied on undocumented workers and told the company, “Look, you can’t have any illegals working on our property. I’m running for office, for Pete’s sake, I can’t have illegals.”
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, December 11, 2011
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