“A Vast Left-Wing Conspiracy”: This Is Not Westminster; Congress Writes Laws, Not Presidents
Niall Ferguson responds to critics once again. Read it and make your own mind up. Here’s his summary:
My central critique of the President is not that the economy has under-performed, but that he has not been an effective leader of the executive branch. I go on to detail his well-documented difficulties in managing his team of economic advisers and his disastrous decision to leave it to his own party in Congress to define the terms of his stimulus, financial reform and healthcare reform. I also argue that he has consistently failed to address the crucial issue of long-term fiscal balance, with the result that the nation is now hurtling towards a fiscal cliff of tax hikes and drastic spending cuts.
Niall is surely aware that the Congress writes laws, not presidents. This is not Westminster. And Niall’s preferred top-down approach was indeed pursued by the Clintons in 1994. Healthcare reform failed that time spectacularly prcisely because it didn’t flatter Congress’ prerogatives; under Obama’s “failed” executive leadership, universal healthcare passed for the first time in history. It’s very close to Romneycare. Was that as big a mess as well?
The well-documented difficulties on economic policy come from Ron Suskind’s book, which was subject to strong pushback from the people it quoted. I’m sure there were divisions and fights in the greatest economic crisis since the 1930s. But the results are pretty clear: the economy under Obama has performed much better than the British economy under Osborne, or Europe or Japan. The private sector has recovered at Reagan-like rates. It’s the slashing of public sector jobs that has kept employment so subdued – but far less subdued than anywhere else in the developed world. If this is executive mismanagement, more, please.
Then the notion that Obama “has consistently failed to address the crucial issue of long-term fiscal balance.” What, then, was the Bowles-Simpson Commission about? Ryan didn’t create it – he merely torpedoed it because it dared to raise revenues in order to cut the deficit! Obama actually created it and if the necessary majority in Congress had backed it, he would have gone a long way to sign it. Why not? It would give him credit for the biggest deal since 1993. And that’s precisely why the GOP – spearheaded by Ryan – killed it.
Yes, Obama deserves a shellacking for not owning Bowles-Simpson – in what was, in my view, the biggest error of his presidency. But I have no doubt he wanted and wants a Grand Bargain – and revealed how far he would go by cutting $700 billion from Medicare in the ACA (which Ryan is now exploiting on the campaign trail). But how do you get a grand bargain between the two parties when one party refuses to bargain on its central priority, no tax increases? Given Obama’s record of Medicare cuts (never before imposed by a Democratic president), it’s clear who the culprit is for the fiscal cliff: a Republican party that wanted the US to default rather than agree to even a tiny revenue increase, and that pledged in the primaries to refuse a budget deal that was 10-1 spending cuts to revenue increases.
As for the executive banch, the commander-in-chief role is part of the job. Niall doesn’t mention the extremely successful attack on al Qaeda in Afghanistan and Pakistan, the end of torture, the killing of Osama bin Laden and capture of mounds of intelligence, or the fact that, unlike his predecessor, Obama has not presided over a major terror attack in this country or authorized grotesque torture that effectively destroyed America’s moral standing. As for Iraq, Niall says the exit was premature. It was negotiated by Bush. Maliki didn’t want us there any more. Niall thinks we should occupy a country with all the massive expense that entails – against its will? Seriously? And it’s Obama who is unserious on the debt?
By: Andrew Sullivan, The Daily Beast, August 21, 2012
“Aiding The Masters Of The Universe”: With Romney-Ryan, GOP Becomes Grand Old Private-Equity Party
The ticket Republicans will nominate in Tampa next week is uniquely connected to the “vulture capitalist” constituency, and uniquely committed to protecting the interests of today’s robber-baron class.
Paul Ryan grew up in a wealthy family with a Republican bent and all the right political and corporate connections.
He could easily have made his way into the private sector—doing business with family and friends, as have generations of wealthy Ryans.
But Paul was always the starry-eyed, perhaps wild-eyed. idealist. He read Austrian economic texts and far-right authors with a passion, committing to memory the writings of Friedrich Hayek, Ludwig von Mises, Milton Friedman and his intellectual heartthrob, Ayn Rand. Reading Rand, the newly minted Republican vice presidential contender once said was “the reason I got involved in public service.”
Ryan has since tried to distance himself from Rand’s militant atheism and even more extreme attitudes regarding the least among us. But his older brother, Tobin, told reporters: “Paul can still quote every verse out of Ayn Rand.”
Rand’s greed-is-good thinking plays well with hedge-fund managers, private equity players and the “vulture capitalist” class that enjoys taking a break from pillaging to plod through novels about, well, guys like them.
But as the youngest Ryan child, Paul got a little mavericky. Much as he talks up the private sector, Paul Ryan forged a career in the public sector. He’s worked as a Congressional aide and congressman—with brief breaks as a conservative “think tank” associate and a speech writer for Jack Kemp’s 1996 presidential campaign—since leaving college.
But older brother Tobin followed the more traditional route for sons of privilege.
As Fortune magazine notes, Tobin Ryan is a full partner with Seidler Equity Partners, a California-based “private equity investment firm that partners with visionary executives to grow their businesses.” Before he went to Seidler, Tobin worked with a politically connected Wisconsin-based private equity firm, King Capital (founded by former Republican Party of Wisconsin chairman Steve King, who served as finance chair for Paul Ryan’s Congressional runs). He also put in a stint with Bain & Company, the consulting firm where Mitt Romney says he “enjoyed working with a team of people to arrive at ideas and solutions” for what Texas Governor Rick Perry described as “vulture capitalist” interventions.
Tobin Ryan joined the Bain & Co. team after Romney moved to the private-equity firm that the consulting firm spawned, Bain Capital. But the connection has raised eyebrows, and spawned plenty of headlines, in the financial press.
The Ryan brothers are, in Tobin’s words, “very close.” Indeed, they live “about a three-wood away from each other” in the town where the Ryans have for decades been a pre-eminent (construction and contracting) business family. Tobin, a frequent media spokesman and surrogate for his brother, refers to Paul’s first US House race as “our first campaign.”
“So we’ve now got a former private equity executive running for president alongside the brother of a current private equity executive,” observes Fortune senior editor Dan Primack.
And Paul Ryan, like Mitt Romney, is politically committed to the aiding the masters of the universe who run the private-equity empires that now so dominate the US economy.
The “Roadmap for America’s Future” budget plan that Ryan wrote in 2010—the document that, arguably, launched into orbit as a Republican star—pledges to change tax policies to create “an enhanced investment climate.”
Specifically, Ryan proposed to:
* eliminate taxes on “interest, capital gains, or dividends” and estate taxes
* allow investments to be “fully deducted immediately” by corporations
* “eliminate the corporate income tax entirely” and replace it with “a single-digit consumption tax” that businesses and investors would calculate themselves.
* repeal the alternative minimum tax, which was designed to assure that millionaires and billionaires who take advantage of tax-code loopholes will have to pay something
How good would a Romney-Ryan administration be to the private-equity constituency?
According to a study by the chairman’s staff of the Joint Economic Committee of Congress, most working Americans who earn under $200,000 a year would see their taxes go up under the latest version of the Ryan budget. By the same token, Mitt Romney—whose income is “comprised of interest income, capital gains and dividends”—would pay less than 1 percent of his income in taxes.
The Romney-Ryan approach, forged and advocated for by candidates with personal and family ties to private-equity concerns, will yield great benefits for those very wealthy Americans who understand private equity as a personal reality.
But as the Joint Economic Committee report says, “House Budget Committee Chairman Representative Paul Ryan claims that the policies outlined in his budget will reform the broken tax code and put ‘hardworking taxpayers ahead of special interests.’ In reality, the Ryan plan gives the largest tax cuts to the wealthiest Americans and will pay for those tax cuts by raising the tax burden on middle-class workers.”
Indeed, the report concludes, “The richest households would receive the greatest benefit from these changes. The top 0.1 percent, for example, would receive an estimated average federal tax cut of close to $1.18 million per taxpaying household in 2015.”
America’s robber barons have had to wait for more than a century—since Teddy Roosevelt went rogue and joined the anti-trust campaigners—for a Republican ticket that would truly represent their interests.
But every indication is that the Romney-Ryan ticket will be of, by and for the private-equity managers who have become the masters of America’s economic universe.
The Romney-Ryan ticket rejects the American faith of not just Democratic presidents such as Harry Truman and Franklin Roosevelt but of Republican presidents such as Dwight Eisenhower and Teddy Roosevelt.
“The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power,” Teddy Roosevelt warned at Osawatomie, Kansas, in 1910. “The prime need to is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise.”
That remains the prime need.
Now, unfortunately, the party of Teddy Roosevelt is preparing to nominate a ticket that is passionately at odds with the principle that the general welfare must prevail over the passions of men “whose chief object is to hold and increase their power.”
By: John NIchols, The Nation, August 20, 2012
“An Unserious Man”: Ryanomics Is And Always Has Been A Con Game
Mitt Romney’s choice of Paul Ryan as his running mate led to a wave of pundit accolades. Now, declared writer after writer, we’re going to have a real debate about the nation’s fiscal future. This was predictable: never mind the Tea Party, Mr. Ryan’s true constituency is the commentariat, which years ago decided that he was the Honest, Serious Conservative, whose proposals deserve respect even if you don’t like him.
But he isn’t and they don’t. Ryanomics is and always has been a con game, although to be fair, it has become even more of a con since Mr. Ryan joined the ticket.
Let’s talk about what’s actually in the Ryan plan, and let’s distinguish in particular between actual, specific policy proposals and unsupported assertions. To focus things a bit more, let’s talk — as most budget discussions do — about what’s supposed to happen over the next 10 years.
On the tax side, Mr. Ryan proposes big cuts in tax rates on top income brackets and corporations. He has tried to dodge the normal process in which tax proposals are “scored” by independent auditors, but the nonpartisan Tax Policy Center has done the math, and the revenue loss from these cuts comes to $4.3 trillion over the next decade.
On the spending side, Mr. Ryan proposes huge cuts in Medicaid, turning it over to the states while sharply reducing funding relative to projections under current policy. That saves around $800 billion. He proposes similar harsh cuts in food stamps, saving a further $130 billion or so, plus a grab-bag of other cuts, such as reduced aid to college students. Let’s be generous and say that all these cuts would save $1 trillion.
On top of this, Mr. Ryan includes the $716 billion in Medicare savings that are part of Obamacare, even though he wants to scrap everything else in that act. Despite this, Mr. Ryan has now joined Mr. Romney in denouncing President Obama for “cutting Medicare”; more on that in a minute.
So if we add up Mr. Ryan’s specific proposals, we have $4.3 trillion in tax cuts, partially offset by around $1.7 trillion in spending cuts — with the tax cuts, surprise, disproportionately benefiting the top 1 percent, while the spending cuts would primarily come at the expense of low-income families. Over all, the effect would be to increase the deficit by around two and a half trillion dollars.
Yet Mr. Ryan claims to be a deficit hawk. What’s the basis for that claim?
Well, he says that he would offset his tax cuts by “base broadening,” eliminating enough tax deductions to make up the lost revenue. Which deductions would he eliminate? He refuses to say — and realistically, revenue gain on the scale he claims would be virtually impossible.
At the same time, he asserts that he would make huge further cuts in spending. What would he cut? He refuses to say.
What Mr. Ryan actually offers, then, are specific proposals that would sharply increase the deficit, plus an assertion that he has secret tax and spending plans that he refuses to share with us, but which will turn his overall plan into deficit reduction.
If this sounds like a joke, that’s because it is. Yet Mr. Ryan’s “plan” has been treated with great respect in Washington. He even received an award for fiscal responsibility from three of the leading deficit-scold pressure groups. What’s going on?
The answer, basically, is a triumph of style over substance. Over the longer term, the Ryan plan would end Medicare as we know it — and in Washington, “fiscal responsibility” is often equated with willingness to slash Medicare and Social Security, even if the purported savings would be used to cut taxes on the rich rather than to reduce deficits. Also, self-proclaimed centrists are always looking for conservatives they can praise to showcase their centrism, and Mr. Ryan has skillfully played into that weakness, talking a good game even if his numbers don’t add up.
The question now is whether Mr. Ryan’s undeserved reputation for honesty and fiscal responsibility can survive his participation in a deeply dishonest and irresponsible presidential campaign.
The first sign of trouble has already surfaced over the issue of Medicare. Mr. Romney, in an attempt to repeat the G.O.P.’s successful “death panels” strategy of the 2010 midterms, has been busily attacking the president for the same Medicare savings that are part of the Ryan plan. And Mr. Ryan’s response when this was pointed out was incredibly lame: he only included those cuts, he says, because the president put them “in the baseline,” whatever that means. Of course, whatever Mr. Ryan’s excuse, the fact is that without those savings his budget becomes even more of a plan to increase, not reduce, the deficit.
So will the choice of Mr. Ryan mean a serious campaign? No, because Mr. Ryan isn’t a serious man — he just plays one on TV.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 19, 2012
“Tell Tale Signs”: Recognizing When Paul Ryan Is Lying Or Trying To Avoid Something
In poker a “tell” is the physical giveaway or tic that lets you know someone is lying about his or her hand. In politics it’s the mode of evasion a politician chooses to sidestep a truth he or she doesn’t want to admit or to avoid saying something against self-interest. In his debut interview with Fox News’ Brit Hume Tuesday, Rep. Paul Ryan’s “tells” were audacious and revealing. They suggest an opening Democrats would be wise to pursue.
Ryan (R-Wis.) tried to cloak himself in his supposedly charming “wonky-ness” to sidestep two simple questions from Hume: When does Mitt Romney’s budget reach balance, and when does Ryan’s own budget plan do the same? Ryan pirouetted because Hume’s queries threatened to expose his famed “fiscal conservatism” as a fraud.
It’s worth parsing Ryan’s tactics in this exchange because it shows the brand of disingenuousness we’re dealing with. So let’s go to the videotape. Have a look at the relevant two-minute portion of the clip (excerpted on this CNN video) and then we’ll dissect it.
Okay, you’re back. Hume started with a simple question: “The budget plan that you’re now supporting would get to balance when?”
Now, for context, recall that in the last era of epic budget smackdowns, 1995 and 1996, Newt Gingrich would have had an equally simple answer: in seven years. President Bill Clinton’s failure to embrace the goal of a balanced budget at all was a major political liability that Clinton finally (and shrewdly) erased when he came out with his own 10-year plan in mid-1995. (It’s worth underscoring that a 10-year path to balance was viewed then as the outer limit of credibility — pledging to end the red ink any further than a decade out didn’t pass the laugh test.)
Since Ryan knows that Romney’s bare sketch of a plan never reaches balance, he stumbles momentarily before trying to move the conversation to his comfortable talking points about Romney’s goal of reducing spending to historic norms as a share of gross domestic product.
But Hume grows quietly impatient. He practically cuts Ryan off.
“I get that,” Hume says. “But what about balance?”
You can see Ryan flinch. He doesn’t know, he says. Why not? “I don’t want to get wonky on you,” he says, recovering, “because we haven’t run the numbers on that specific plan.” But that’s not “getting wonky” at all. As common sense (and the Gingrich/Clinton approach) suggests, there’s nothing arcane about this subject. You decide on a sensible path to balance as a goal and come up with policies that achieve it. All this means is that Romney hasn’t done what a fiscally conservative leader would do. Trying to evade this as a matter of not “getting wonky” is Ryan’s tell. He’s betting Hume is too dumb, uninterested or short on time to press the point.
Ryan then adds that “the plan that we’ve offered in the House balances the budget.” But he immediately stops short of saying when — you see his eyes dart to the right at that moment, his next tell — because that would mean admitting it reaches balance in the 2030s. And Ryan wants to get through this interview without saying that, because he knows it doesn’t sound good. After all, what kind of “fiscal conservative” has a 25-year plan to balance the budget? Instead, in a practiced maneuver signaled by his telltale sideways glance, he moves to a contrast with President Obama, who he says has never offered a budget that ever reaches balance.
This is true — but is a plan to balance the budget when Ryan is nearly 70 really different enough to make Ryan the “deficit hawk”? Please.
Meanwhile, Hume’s quiet baritone presses on.
“Your own budget . . . when does that contemplate reaching balance?” Hume asks.
There’s no exit. Not until the 2030s, Ryan finally admits, looking uncomfortable — but then he quickly adds, making a face, that’s only under the Congressional Budget Office’s scoring rules, implying that they’re silly constraints every Fox News viewer would agree are ridiculous (instead of sensible rules meant to credit politicians only for policy proposals that are real). Ryan adds that “we believe” if we get the economy growing, “it would balance in 10 years.” But that’s supply-side faith-based budgeting again — exactly what we ran an empirical test on in the 1980s. (And the truth is, if Ryan’s big tax cuts were properly accounted for, his plan’s real date of balance would push well beyond 2040).
Why am I harping on this? Because it’s impossible to overstate how central the unjustified label of “fiscal conservative” is to the Ryan brand and the GOP’s strategy. As Clinton understood in the 1990s, “fiscal responsibility” is a values issue important to the voters who decide modern presidential elections.
The point: Democrats can’t afford to let Ryan/Romney’s phony image as superior fiscal stewards survive. And Hume’s interview shows how swiftly this charade can be exposed if Democrats and the press zero in on simple questions like Hume’s. If the press is primed to cover this more intelligently, such queries will also expose the big Republican lie — the idea that you can balance the budget as the baby boomers age without taxes rising.
Let me be clear. The most important issue facing the country isn’t when we’re going to balance the budget. It’s how to get growth and jobs reignited in the near term and how to renew the country’s promise and competitiveness after that (an agenda in which long-term budget sanity is just the ante). But if Democrats spend all their energy on Medicare — and don’t knock out the GOP ticket’s undeserved reputation for fiscal responsibility — they’ll find themselves in unexpected peril as the race heads to the fall.
BY: Matt Miller, Opinion Writer, The Washington Post, August 16, 201
“A Deliberate Political Calculation”: Mitt Romney Is Betraying The Tea Party
Mitt Romney, Paul Ryan, journalist most likely to echo their talking points Jennifer Rubin, talk radio’s Rush Limbaugh, conservative movement favorite Charles Krauthammer, and usually sensible right-leaning policy wonks Yuval Levin and Avik Roy are all doing something extraordinary, given their avowed beliefs: They’re attacking a Democratic president for a spending cut, or else defending Republican challengers who want to reinstate hundreds of millions in spending.
The spending isn’t part of the defense budget.
They’re attacking President Obama for cuts to an entitlement program passed as party of Lyndon Johnson’s Great Society. And they’re insisting that the funds be restored to the program.
Why would right-leaning folks do that?
Cuts to Medicare are unpopular with voters — and Republicans care more about winning elections than cutting entitlements, something last demonstrated when they passed Medicare Part D during the Bush era, a budget-busting vote that supposed fiscal conservative Paul Ryan joined.
Attention, Tea Partiers: What we’re seeing right now is another instance of political calculation trumping spending discipline. Republicans tell themselves that they need to win now to better advance their agenda later, a process that just repeats itself with each election cycle, the deficit reduction never actually coming. The tactics that Romney and Ryan are employing make the chances of GOP led entitlement reform grow dimmer by the day. Yes, President Obama was going to attack Mitt Romney and Paul Ryan for wanting to cut Medicare. And this preemptive attack by Team Romney may prove effective. But ponder its consequences for a moment.
Medicare cuts are central to Ryan’s plan to get America back on sound fiscal footing, and health-care reform that addresses Medicare costs is widely regarded as necessary to any serious deficit-reduction plan, given the rapid pace at which the program’s costs are increasing. Says Avik Roy, after observing Team Romney’s latest attacks, “The dream scenario is possible: that the 2012 election gives Medicare reformers a mandate to put the program on permanently stable footing. One might even call it the audacity of hope.”
That is almost exactly wrong. What voters are hearing from Mitt Romney and Paul Ryan is that Barack Obama cut their Medicare, and the Republicans will reinstate it. That message does not produce a mandate to reform Medicare. It produces a mandate to preserve the status quo, and to oppose future cuts. Thanks to Romney and Ryan, it’s likely down-ticket Republicans will be using the same talking points.
Thus Medicare cuts will be an even less likely GOP accomplishment.
A lot of right-leaning pundits are getting deep in the weeds about the attacks and counterattacks flying back and forth. Team Romney is right about X! Team Obama is wrong about Y!
They’re ignoring the incoherent elephant in the room. As Josh Barro puts it:
What Romney and Ryan are up to is simple: They want to have it both ways on Medicare. They are for Medicare cuts, because Medicare is expensive and the federal budget needs to be controlled. And they are against Medicare cuts, because Medicare cuts are unpopular.
The political impulses behind this strategy are clear. Why any policy experts would try to offer a substantive defense of it is not.
Scott Galupo at The American Conservative makes a related point: that there’s no coherent reason to think that the relatively small cuts implemented by President Obama are an affront to seniors and their care, while the relatively deeper cuts that would be implemented ten years hence under the Romney-Ryan plan would be unobjectionable. “Never asked, let alone answered … if Romney’s Medicare reforms are so painless, why not demand that current beneficiaries accept them?” he writes. “Why is it necessary to spare them from structural reforms that are so self-evidently ‘sensible’?”
Take a look at Ryan’s response:
“We’re going to have this debate, and we’re going to win this debate,” Ryan said. “It’s the president who took $716 billion … from the Medicare program to spend on Obamacare. That’s cuts to current seniors that will lead to less services for current seniors. We don’t do that. We actually say end the raid and restore that, so that those seniors get the benefits today that they organize their lives around.”
Whether or not you buy his fairness argument, the political truth is that it gets harder to pass Medicare cuts every year, because the necessity of cuts is partly a function of the fact that America is aging, and the demographic of Medicare recipients is just going to keep on increasing. Even the presumption that you can pass a law now calling for cuts beginning 10 years in the future, and that successive Congresses will sustain the arrangement, is dubious. It’s just typical politician “pain for others later, not for us now” responsibility evasion. All the more reason why, from a deficit hawk’s perspective, it’s insanity to reinstate an entitlement cut Obama already made.
They should celebrate it.
That’s the one part of Obamacare that Republicans should want to keep if they have the courage of their convictions. But the point is actually that they never have and don’t now have the courage of their deficit convictions, and are very unlikely to ever pass anything like the Ryan plan the Tea Party fell in love with. Reihan Salam sensibly suggests that it would be better to get Medicare savings sooner than a decade from now. It’s telling that the conservative movement and the GOP are presently campaigning against that proposition. Why anyone trust them to cut the deficit at this point is beyond me, given the fact that they find a way to fail every time.
But promising to repeal cuts that were already passed is taking it a step farther.
By: Conor Friedersdorf, The Atlantic, August 16, 2012
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