What “Not Very Much” Income Is To Mitt Romney
In all things economic, the former Massachusetts governor is a veritable gaffe machine.
Up until now, Mitt Romney has refused to release his tax returns, something that he surely knew would eventually become an issue. And it isn’t too hard to figure out why. When you’re struggling to get past your image as an out-of-touch rich guy, having front-page stories about the millions you’re pulling in isn’t something you’d look forward to. And in Mitt’s case, there are really two problems.
The first is his income, which we can be pretty sure is in the seven figures. And this is despite the fact that he hasn’t actually held a job in years. Unlike people who work for a living, Romney makes money when his money makes him more money. Which leads us to the second problem: the tax rate he pays. Because our tax system treats investment income more favorably than wage income, Romney probably pays the capital gains tax rate of 15 percent on most of his income, as opposed to the 33 percent marginal rate he’d be paying if that money were wages. Which is what Romney was forced to admit yesterday, when he said, “It’s probably closer to the 15 percent rate than anything.” But here’s where Mitt’s tone-deafness on these kinds of issues comes, once again, to bite him:
The vast majority of the income Mr. Romney reported over 12 months in 2010 and ‘11 was dividends from investments, capital gains on mutual funds and his post-retirement share of profits and investment returns from Bain Capital, the firm he once led. And Mr. Romney also noted that he made hundreds of thousands of dollars from speaking engagements.
“I got a little bit of income from my book, but I gave that all away,” Mr. Romney told reporters after an event here. “And then I get speakers’ fees from time to time, but not very much.”
Financial disclosure forms that candidates are required to file annually shows that Mr. Romney earned $374,327.62 in speakers’ fees from February of 2010 to February of 2011, at an average of $41,592 per speech.
Oh Mitt, you really are the gift that keeps on giving. A smarter candidate would say, “I’ve been very fortunate to make significant amounts of money from giving speeches.” But Mitt describes $374,327 in speaking fees in one year as “not very much.” If you put that amount into the Wall Street Journal‘s handy calculator, it turns out that if those speaking fees were the only income Mitt had, he’d still be richer than 98 percent of Americans. But those speaking fees, apparently, are “not very much” to him.
Just to be clear, I don’t think that the fact that Romney considers an amount of income that most of us will never dream of earning “not very much” doesn’t mean he’d be a bad president, in and of itself. But like all Republicans, Romney thinks there’s nothing wrong with the fact that money you get for working gets taxed at a higher rate than money you make for selling a stock or having your grandfather die and leave you a few million, and he’d like to make that disparity even more extreme.
Romney now says he’ll probably release his 2011 returns in April. Which guarantees that there will be plenty of time for the Obama campaign to keep talking about it in anticipation of the big event. At the current rate, he should commit about one head-shaking gaffe per week on economic issues between now and then.
By: Paul Waldman, The American Prospect, January 17, 2012
Insulting Comments At Fox News Debate Show Newt Gingrich Clueless On Black Americans
If you want to understand why the GOP is so ill prepared to compete in an increasingly nonwhite America, just look at the exchange between Fox News questioner Juan Williams and Newt Gingrich halfway through last night’s Republican presidential debate.
It being Martin Luther King Jr. Day, Williams asked Gingrich whether some poor and minority voters might not be insulted at his claim that poor kids lack a work ethic and that black people should be instructed to demand jobs, not food stamps. Gingrich, as is his wont, haughtily dismissed Williams’s question, to wild applause.
Then Williams tried again, mentioning a black woman who had taken Gingrich to task for calling Barack Obama a “food stamp” president. By this point, the overwhelmingly white crowd had begun to boo the only African-American on stage. When Gingrich insisted that Obama was indeed the “food stamp” president—because more Americans are now on food stamps—and dismissed Williams’s criticism as “politically correct,” the crowd began to scream with delight. By the time Gingrich finished his answer, the crowd was on its feet in a standing ovation.
The fascinating thing about the exchange is that Gingrich is not a racist. I suspect he genuinely cares about the African-American poor. In fact, he’s convinced himself that his willingness to say things that many African-Americans consider insulting is an expression of that concern; that only he cares enough about African-Americans to speak the “politically incorrect” truths that black leaders won’t.
Gingrich’s problem isn’t racism; it’s ignorance. Only someone profoundly ignorant of African-American politics would suggest that black Americans have spent the past few decades seeking food stamps, not jobs. We celebrate Martin Luther King Jr. Day, after all, in part because of the speech King gave at an event called the March on Washington for Jobs and Freedom. If you look at the budgets proposed by the Congressional Black Caucus over the years, you’ll see that they often include huge, FDR-style government jobs programs. Gingrich may not think that’s the best way to go about providing jobs, but to suggest that African-Americans and their leaders don’t consider jobs important just reveals how shut off from Africa-American politics he actually is.
I’m sure Gingrich also sees nothing offensive in calling Obama the “food stamp” president. After all, under Obama the number of people using food stamps has gone up! So because Alan Greenspan presided over predatory lending policies by banks, perhaps we should have called him the “Shylock” chairman of the Federal Reserve. And if child molestations by priests rise on this administration’s watch, perhaps we should call Joseph Biden the “pedophilia” vice president.
Gingrich would never use those phrases, of course, because he’s familiar enough with Jews and Catholics to understand why they’d find them offensive. But for Gingrich—a veteran politician from the state of Georgia, speaking at a debate in South Carolina on Martin Luther King Jr.’s birthday—not to understand why calling the first African-American in the Oval Office the “food stamp” president would offend African-Americans is simply amazing. The most plausible explanation is that Gingrich inhabits a cultural and intellectual bubble. A bubble called the Republican Party.
I don’t doubt that Newt Gingrich wants to help African-Americans, just like I don’t doubt that George W. Bush wanted to help Iraqis. But in politics, if you want to help people, it’s a good idea to learn something about them first.
By: Peter Beinart, The Daily Beast, January 17, 2012
“A Model Of Deception”: For House Republicans, A Game Of Debt Charades
Lawmakers went home for the holidays and got an earful from constituents about their juvenile behavior in Washington.
So, in their first major act of 2012, House Republicans picked up exactly where they left off: They staged a duplicitous debate in which they pretended that they were going to deny President Obama permission to increase the government’s borrowing limit.
The pretense had been clear since last summer, when 174 House Republicans voted for a budget deal that guaranteed that the debt limit would continue to increase this year unless two-thirds of the House and Senate voted otherwise — a practical impossibility.
But that didn’t stop many of those same 174 Republicans from marching to the floor Wednesday afternoon to vote for a resolution “disapproving” of the very same debt-limit increase they had already blessed. It was a model of deception: claiming to oppose something they had guaranteed would take effect.
“My resolution that is before this chamber will send a message that the constant borrowing from our children, our grandchildren, must come to an end,” declared Rep. Tom Reed (N.Y.), one of the 174 Republicans who voted to allow the borrowing last summer.
“During my time in Congress, I voted nine times against raising the debt limit because it was not tied to spending controls. This is another time to say no,” argued Rep. Don Manzullo (R-Ill.), who said yes last year to the increase he voted against on Wednesday.
“If we do nothing, American prosperity will drown in debt,” said Rep. Michael Fitzpatrick (Pa.), another of the 174 Republicans who had authorized the drowning.
“The culture of Washington must be reformed from the ground up,” Rep. Adam Kinzinger (R-Ill.) thundered in opposition to the debt-limit increase to which he consented last summer. “The future of our nation depends on it.”
Actually, if the culture of Washington is to be reformed, a good place to start would be for Kinzinger and his colleagues to be more honest about their shenanigans.
The role of calling out Republicans for their two-faced behavior fell on Wednesday to one of their own, conservative Rep. Jeff Flake (Ariz.), who, unlike most of his colleagues, was perfectly consistent: He opposed increasing the limit last year, and he continued to oppose it on Wednesday.
“This vote has been called a charade,” Flake said on the floor. “That is true. It is. Let’s face it.”
Flake, one of the few grownups in the chamber, was not done with his fellow Republicans. “I think we have to admit that even if the Senate had passed the House-passed budget, the so-called Ryan budget, we would still have to raise the debt ceiling,” he reminded them. “I don’t think anybody really disputes that. We are going to have to raise the debt ceiling again and again.”
Then Flake did something truly heretical: He reminded Republicans that “we were headed toward this cliff long before the president took control of the wheel.”
What Flake said was demonstrably true: Both parties created the debt mess, and to fix the problem both would have to be honest. Instead of being honest, however, House Republicans were staging a show so that they could tell voters they opposed the very debt limit hike they had authorized.
Rep. Gerald Connolly (D-Va.) accused the Republicans of donning “flip-flops.”
“I do prefer Crocs, if anybody cares,” Rep. Sam Graves (R-Mo.) retorted.
Apparently, most of the 174 Republicans who blessed the debt-limit increase last year were embarrassed about going to the floor to argue against it, because most of those who spoke were from that GOP minority who voted against the debt-limit increase last year, too.
“We should never have passed that Budget Control Act the way we did,” said Rep. Dan Burton (R-Ind.), who voted no last summer. As a result, he said, Obama is “raising the debt ceiling without us being able to do a thing about it. We made a big mistake.”
Maybe they made a big mistake. Or maybe they did the right thing last year in reaching an agreement that kept the federal government from defaulting.
Reed, the floor leader for Republicans on Wednesday, wanted to have it both ways. “It’s so important, in my opinion, for the future of this nation, the future of the world,” he pleaded, with an urgency that he apparently lacked last summer. “The national debt is a serious threat to our very existence as an American nation.”
Reed and 232 fellow Republicans then voted to “disapprove” of the debt-limit increase — well short of the two-thirds majority needed to overcome a presidential veto. The House’s first legislative act of 2012 had been utterly pointless — which was just the point.
By: Dana Milbank, Opinion Writer, The Washington Post, January 18, 2012
GOP Sen Chuck Grassley: We Need “Child Labor” To Fight Obesity Epidemic
At a recent town hall in Osage, Iowa, Sen. Chuck Grassley (R) responded to a question about the Labor Department’s stricter limits on child labor by claiming that they could exacerbate the child obesity epidemicby making kids less “active”:
Concern was raised about the proposed Department of Labor’s intent to greatly limit child labor on family farms.
“This farm bill will greatly affect our FFA and 4-H programs,” said Grassley. “Kids won’t be able to help on farms not owned by their parents.
“It’s interesting that this child labor bill goes against Michelle Obama’s anti-obesity initiative,” said Grassley. “How can kids be active if they are limited by this law?“
Grassley represents a farm state that both relies on child labor and contributes to the national obesity epidemic through its production of corn products like high-fructose corn syrup. Iowa farmers benefit from billions of dollars in corn subsidies that allow them to put a glut of cheap, unhealthy foods on the market.
As for his Dickensian defense of child labor, that’s sadly par for the course for Republicans these days. Several GOP-led states have rolled back child labor laws. In December, seventy rural state lawmakers led by Rep. Danny Rehberg (R-MT) denounced the Labor Department’s new protections for the country’s most vulnerable workers. They argued that hard manual labor teaches children important “life lessons.”
Under current law, 400,000 children working on farms are not protected from exploitation and dangerous labor. The proposed rules would forbid children younger than 16 from working with pesticides, timber operations, handling “power-driven equipment, or contributing to the “cultivation, harvesting and curing of tobacco.”
Contrary to Grassley’s suggestion, the physical activity children endure during farm labor is no picnic. The fatality rate for child farm workers is four times higher than that of nonagricultural child workers.
Many Republicans have mocked First Lady Michelle Obama’s anti-childhood obesity initiative, but Grassley in particular has powerful financial motivations for supporting some of epidemic’s worst culprits. As a member of the Agriculture, Nutrition, and Forestry committee, he’s raked in hundreds of thousands of dollars in campaign contributions from the Food & Beverage, Food Processing & Sales, and Agricultural Services and Products industries.
By: Marie Diamond, Think Progress, January 17, 2012
“Everyday Workers”: Capitalism’s Real “Risk-Takers”
Mitt Romney is casting the 2012 campaign as “free enterprise on trial” — defining free enterprise as achieving success through “hard work and risking-taking.” Tea Party favorite Sen. Jim DeMint of South Carolina says he’s supporting Romney because “we really need someone who understands how risk, taking risk… is the way we create jobs, create choices, expand freedom.” Chamber of Commerce President Tom Donahue, defending Romney, explains “this economy is about risk. If you don’t take risk, you can’t have success.”
Wait a minute. Who do they think are bearing the risks? Their blather about free enterprise risk-taking has it upside down. The higher you go in the economy, the easier it is to make money without taking any personal financial risk at all. The lower you go, the bigger the risks.
Wall Street has become the center of riskless free enterprise. Bankers risk other peoples’ money. If deals turn bad, they collect their fees in any event. The entire hedge-fund industry is designed to hedge bets so big investors can make money whether the price of assets they bet on rises or falls. And if the worst happens, the biggest bankers and investors now know they’ll be bailed out by taxpayers because they’re too big to fail.
But the worst examples of riskless free enteprise are the CEOs who rake in millions after they screw up royally.
Near the end of 2007, Charles Prince resigned as CEO of Citgroup after announcing the bank would need an additional $8 billion to $11 billion in write-downs related to sub-prime mortgages gone bad. Prince left with a princely $30 million in pension, stock awards, and stock options, along with an office, car, and a driver for five years.
Stanley O’Neal’s five-year tenure as CEO of Merrill Lynch ended about the same time, when it became clear Merrill would have to take tens of billions in write-downs on bad sub-prime mortgages and be bought up at a fire-sale price by Bank of America. O’Neal got a payout worth $162 million.
Philip Purcell, who left Morgan Stanley in 2005 after a shareholder revolt against him, took away $43.9 million plus $250,000 a year for life.
Pay-for-failure extends far beyond Wall Street. In a study released last week, GMI, a well-regarded research firm that monitors executive pay, analyzed the largest severance packages received by ex-CEOs since 2000.
On the list: Thomas E. Freston, who lasted just nine months as CEO of Viacom before being terminated, and left with a walk-away package of $101 million.
Also William D. McGuire, who in 2006 was forced to resign as CEO of UnitedHealth over a stock-options scandal, and for his troubles got pay package worth $286 million.
And Hank A. McKinnell, Jr.’s, whose five-year tenure as CEO of Pfizer was marked by a $140 billion drop in Pfizer’s stock market value. Notwithstanding, McKinnell walked away with a payout of nearly $200 million, free lifetime medical coverage, and an annual pension of $6.5 million. (At Pfizer’s 2006 annual meeting a plane flew overhead towing a banner reading “Give it back, Hank!”)
Not to forget Douglas Ivester of Coca Cola, who stepped down as CEO in 2000 after a period of stagnant growth and declining earnings, with an exit package worth $120 million.
If anything, pay for failure is on the rise. Last September, Leo Apotheker was shown the door at Hewlett-Packard, with an exit package worth $13 million. Stephen Hilbert left Conseco with an estimated $72 million even though value of Conseco’s stock during his tenure sank from $57 to $5 a share on its way to bankruptcy.
But as economic risk-taking has declined at the top, it’s been increasing at the middle and below. More than 20 percent of the American workforce is now “contingent” — temporary workers, contractors, independent consultants — with no security at all.
Even full-time workers who have put in decades with a company can now find themselves without a job overnight — with no parachute, no help finding another job, and no health insurance.
Meanwhile the proportion of large and medium-sized companies (200 or more workers) offering full health care coverage continues to drop – from 74 percent in 1980 to under 10 percent today. Twenty-five years ago, two-thirds of large and medium-sized employers also provided health insurance to their retirees. Now, fewer than 15 percent do.
The risk of getting old with no pension is also rising. In 1980, more than 80 percent of large and medium-sized firms gave their workers “defined-benefit” pensions that guaranteed a fixed amount of money every month after they retired. Now it’s down to under 10 percent. Instead, they offer “defined contribution” plans where the risk is on the workers. When the stock market tanks, as it did in 2008, the 401(k) plan tanks along with it. Today, a third of all workers with defined-benefit plans contribute nothing, which means their employers don’t either.
And the risk of losing earnings continues to grow. Even before the crash of 2008, the Panel Study of Income Dynamics at University of Michigan found that over any given two-year stretch about half of all families experienced some decline in income. And the downturns were becoming progressively larger. In the 1970s, the typical drop was about 25 percent. By late 1990s, it was 40 percent. By the mid-2000s, family incomes rose and fell twice as much as they did in the mid-1970s, on average.
What Romney and the cheerleaders of risk-taking free enterprise don’t want you to know is the risks of the economy have been shifting steadily away from CEOs and Wall Street — and on to average working people. It’s not just income and wealth that are surging to the top. Economic security is moving there as well, leaving the rest of us stranded.
To the extent free enterprise is on trial, the real question is whether the system is rigged in favor of those at the top who get rewarded no matter how badly they screw up, while the rest of us get screwed no matter how hard we work.
The jury will report back Election Day. In the meantime, Obama and the Democrats shouldn’t allow Romney and the Republicans to act as defenders of risk-taking free enterprise. Americans need to know the truth. The only way the economy can thrive is if we have more risk-taking at the top, and more economic security below.
By: Robert Reich, Salon, January 17, 2012
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