“No Recipe For Addressing Economic Inequality”: The Republican Candidates Can’t Say How Obama Wrecked The Economy
One of the most striking and mystifying aspects of the Republican presidential primary has been the candidates’ inability—or unwillingness—to offer up any kind of coherent economic prescription for the country. That didn’t change on Thursday night. On the Fox Business debate stage in South Carolina, the remaining GOP field had the floor to rebut President Barack Obama’s rosy picture of the American economy during this week’s State of the Union.
Instead, they pivoted to fear-mongering on foreign policy.
The tone was set with the debate’s very first question, posed to Senator Ted Cruz. Fox Business moderator Maria Bartiromo asked him to respond to Obama’s declaration earlier this week: “Anyone claiming that America’s economy is in decline is peddling fiction.”
That should have been a softball, ready for the surging candidate to hit out of the park. Instead, Cruz launched into a prepared digression on the American soldiers captured and released by Iran before addressing the actual question—with another digression. “The president tried to paint a rosy picture of jobs,” he said. “And you know, he’s right. If you’re a Washington lobbyist, if you make your money in and around Washington, things are doing great. The millionaires and billionaires are doing great under Obama.”
Cruz played on Obama’s own words on the sources of inequality in his State of the Union. “Food Stamp recipients didn’t cause the financial crisis; recklessness on Wall Street did,” Obama said on Tuesday. “Immigrants aren’t the reason wages haven’t gone up enough; those decisions are made in the boardrooms that too often put quarterly earnings over long-term returns. It’s sure not the average family watching tonight that avoids paying taxes through offshore accounts.”
Cruz turned that around, pinning the blame exclusively on the president for rising inequality—not on the wealthy. “Median wages have stagnated. And the Obama-Clinton economy has left behind the working men and women of this country,” he said.
It was like that all night: The candidates never took the bait Obama set up for them, to disprove they are doing anything but “peddling fiction” that his agenda—addressing economic inequality, immigration reform, and energy regulations—has left Americans worse off. Instead, the Republicans beat the drum on fear of ISIS and terrorism abroad, but never provided a counter to Obama’s economic claims.
If the GOP debate revealed one thing about these candidates’ views of rising inequality—a hot topic in the Democratic primary—it’s that they can’t quite bring themselves to cast the wealthy in a bad light.
Ohio Governor John Kasich said that Americans shouldn’t hate the rich—that’s just not American. People are “very concerned about” the economy, he said. “And they wonder whether somebody is getting something to—keeping them from getting it. That’s not the America that I’ve ever known. My father used to say, “Johnny, we never—we don’t hate the rich. We just want to be the rich.”’
Ben Carson shot back at Bernie Sanders and Clinton, who he claimed “would say it’s those evil rich people” who are to blame for inequality. Carson said they’re the wrong target; it’s “the evil government that’s putting all these regulations on us.”
Throughout the night, Republicans proved more comfortable playing to their base’s fear of terrorism than directly rebutting the president’s economic victory lap. Maybe that’s because they can’t muster the same strong descriptive language for how Obama has set fire to the economic world as they have for his foreign policy. So much easier to berate the president on his approach to ISIS all night, as New Jersey Governor Chris Christie did: “If you’re worried about the world being on fire, you’re worried about how we’re going to use our military, you’re worried about strengthening our military and you’re worried most of all about keeping your homes and your families safe and secure, you cannot give Hillary Clinton a third term of Barack Obama’s leadership,” he said.
But what about Obama’s leadership on the economy? The answers were more timid—with the exception, not surprisingly, of Donald Trump, who in his usual style promised he’d “make America rich again and make America great again.”
Why were the candidates so quiet about the economy on Thursday night? Simple. The Republicans don’t have a recipe for addressing economic inequality, instead focusing exclusively on tax breaks or highly regressive flat taxes that help the top earners. As my colleague Suzy Khimm has explained, “Bush, Marco Rubio, and Trump have all released tax plans that they are trying to sell as a boon for ordinary families.” That’s a hard sell, to say the least. A conservative estimate of Trump’s plan, for example, would lower the middle 40 to 50 percent of American wage earners’ taxes by 5.3 percent, but the wealthiest would see almost a 22 percent decrease. Carson and Cruz have called for flat taxes—a highly regressive policy.
Because they have such shallow policies to draw on, the GOP finds it easier to play on fears of an uncertain international landscape. That works just fine when they’re pitching themselves to an anxious, unhappy Republican base. But when one of these candidates faces Clinton or Sanders in the general election, the Democratic nominee will easily poke holes through his paper-thin economic message.
By: Rebecca Leber, The New Republic, January 15, 2015
“GOP Response; The Breadbags Of Empathy”: From Tiny Booties Made From Hostess Twinkie Wrappers To Bidding For Plutocrats
Imagine going to the doctor and saying, “My back is killing me. I can barely move. What can you do to help me? Should we do an X-ray? Physical therapy? Medication?” And the doctor responds, “Yeah, I hurt my back once. It was awful. So I know exactly what you’re feeling. Anyway, thanks for coming in—just see the receptionist on the way out to pay your bill.”
That’s not too far off from what we heard from Senator Joni Ernst in the GOP response to the State of the Union address last night. I’m particularly interested in this part:
As a young girl, I plowed the fields of our family farm. I worked construction with my dad. To save for college, I worked the morning biscuit line at Hardees.
We were raised to live simply, not to waste. It was a lesson my mother taught me every rainy morning.
You see, growing up, I had only one good pair of shoes. So on rainy school days, my mom would slip plastic bread bags over them to keep them dry.
But I was never embarrassed. Because the school bus would be filled with rows and rows of young Iowans with bread bags slipped over their feet.
Our parents may not have had much, but they worked hard for what they did have.
These days though, many families feel like they’re working harder and harder, with less and less to show for it.
Because America is still the home of the world’s most creative and inspiring strivers, within minutes people were not only posting pictures of themselves with bread bags on their feet to Twitter, some even crafted shoes out of bread to photograph. But what, precisely, is the point of the bread bag story supposed to be?
The point is affinity, saying to ordinary people, in Christine O’Donnell’s immortal words, “I’m you.” I understand your struggles and fears, because I’ve experienced them. I don’t need to walk a mile in your shoes to feel your pain, because I’ve already done it, though mine were covered in bread bags. At a time like this, Ernst’s ability to tell stories about her hardscrabble roots is no doubt one of the big reasons Republican leaders chose her to deliver their response.
There’s a second part of this message that no Republican is going to lay out too explicitly, and Ernst certainly doesn’t, which is that because I’m just like you, when it comes time to make decisions about the policies that will affect you, I will have your interests at heart.
But there’s a problem with that, because despite the years she spent trudging through the snow in her bread bag feet, Joni Ernst’s beliefs about economics are no different from Mitt Romney’s, Jeb Bush’s, or those of any other Republican whose childhood feet were shod in loafers hand crafted from the finest Siberian tiger leather. There’s almost perfect unanimity within the GOP on economic issues, an agreement that the minimum wage should not be raised, that taxes on the wealthy are onerous and oppressive and should be reduced, that regulations on corporations should be loosened, and that government programs designed to help those of modest means only serve to make them indolent and slothful, their hands so atrophied that bootstrap-pulling becomes all but impossible.
But now that both parties agree that they must address economic inequality and stagnant wages, you really need to follow up the tale of long-ago hard times with some specifics about what you want to do now. And this is where things break down. When Ernst got to laying out the GOP economic agenda, here’s what she offered: First, the Keystone XL pipeline, which as an economic stimulus is a joke. For whatever combination of reasons—the fact that environmentalists hate it is the most important—Republicans have locked themselves into arguing that a project that will create at most a few thousand temporary jobs is the most important thing we can do to boost the American economy. Second, Ernst said, “Let’s tear down trade barriers in places like Europe and the Pacific.” Kind of vague there, but nobody likes trade barriers. She didn’t elaborate, however. And finally, “Let’s simplify America’s outdated and loophole-ridden tax code.” Which, again, nobody disagrees with in the abstract, but I doubt there are too many struggling families saying that their biggest problem is that the tax code is riddled with loopholes.
So that isn’t much of a program. But she did close by saying that America is “the greatest nation the world has ever known.” And it’s inspiring that someone like Joni Ernst can start life in the most modest of circumstances, fitted as a baby with tiny booties made from Hostess Twinkie wrappers, then graduate to bread bags as she learned to castrate hogs (they do help keep the blood off your one good pair of shoes), and eventually grow up to do the bidding of the nation’s noblest plutocrats. It shows what’s possible in this great country of ours.
By: Paul Waldman, Senior Writer, The American Prospect, January 21, 2015
“GOP Has Been Wrong For The Past Six Years”: Mitch McConnell’s “No Compromise” Strategy Is Finally Failing
In his seventh State of the Union on Tuesday night, President Barack Obama touted the low unemployment rate, low gas prices, increase in clean energy production, lower teen pregnancy rates and host of other statistics that supported his optimistic vision. “The shadow of crisis has passed,” he said. “And the state of the union is strong.”
Giving the official Tea Party response to Obama’s address, Representative Curt Clawson painted a very different picture of the state of America. “In 2014, our economy continued sluggish growth and millions of Americans are still out of work,” he said. “We know them. We see them.” This message was echoed in every other Republican response to Obama’s speech—five in all.
These dual visions of America have been competing since the midterms, when Republicans trounced Democrats in races across the country. But every day, since then it’s become increasingly clear that Obama’s message is a much more accurate depiction of the United States than what Republicans are offering—and the GOP message will likely look more ridiculous as the 2016 presidential election approaches.
Take the Affordable Care Act. Republicans have been arguing for years that Obamacare would cripple the health care system and destroy the economy. Clawson repeated those claims in his response. “We also need to lift the economic shackles of Obamacare,” he said. “It makes us uncompetitive.” These are ridiculous arguments. The odds that Obamacare would cause a death spiral in the insurance industry, for instance, were always exaggerated. But the topline metrics now show that Obamacare is working. Millions more people now have insurance. Health care cost growth has slowed, although it’s unclear how much of that is due to the health care law. Insurers aren’t fleeing the exchanges and premiums aren’t skyrocketing. All of the fatal scenarios that the GOP predicted aren’t happening. It’s possible those trends will change dramatically in the years to come, but right now, there are no signs of that.
Or take the economy. Remember threats that Obamanomics would strangle the recovery? That hasn’t played out either. The unemployment rate is down to 5.6 percent. Growth is strong. Obama can’t take all the credit for the recovery. The Federal Reserve’s willingness to ignore inflation hawks and keep interest rates at zero is a key reason why the U.S.’s recovery is the envy of the developed world, for instance. But the fact is that the economy really has strengthened considerably over the past year. Republican arguments that Obama’s policies would stifle growth and prevent the economy from bouncing back no longer are credible.
As Senator Elizabeth Warren points out, the recovery has not been felt equally—wages are still stagnant. Obama made that point in his address. Yet, lower gas prices, even though they aren’t due to Obama’s actions, are effectively acting as a tax cut for middle class Americans across the country. In turn, optimism in the economy has ticked up considerably over the past two months—and so have Obama’s approval ratings. Americans are starting to believe in the recovery—and to give Obama credit for it.
Republican talking points largely haven’t adjusted to this new reality. “We see our neighbors agonize over stagnant wages and lost jobs,” said Senator Joni Ernst in the official Republican response to Obama’s State of the Union. “We see the hurt caused by canceled healthcare plans and higher monthly insurance bills. We see too many moms and dads put their own dreams on hold while growing more fearful about the kind of future they’ll be able to leave to their children.” Clawson even said Obama’s speech was “pretty much the same rhetoric we’ve heard for the past six years,” which is simply not true.
But some Republicans are starting to realize that this message doesn’t jibe with an improved economy. Senate Majority Leader Mitch McConnell, for instance, opened the 114th Congress by trying to take credit for the recovery. But even if more Republicans adopt new talking points, the president and his party are generally the ones who benefit, politically, from an improving economy. Given Republicans’ doomsday predictions through the first six years of Obama’s presidency, it’s hard to imagine voters crediting the GOP for the recovery over Obama.
McConnell has largely been treated as a political mastermind during Obama’s presidency. He was one of the leaders of “no compromise” strategy that the party adopted to stifle Obama’s agenda and prevent him from claiming credit for any bipartisan accomplishments. In many ways, it was a success. Republicans won landslide victories in 2010 and 2014. They soured the country on the president and have, until now, sunk his approval ratings on many issues.
But it came at a major cost, and the cost seems to be getting greater by the day: Republicans lost all ability to shape policy, especially in the first two years of Obama’s presidency. Instead of compromising on issues like health care reform, financial regulation, and fiscal stimulus, Republicans sidelined themselves in lockstep opposition, determined not to leave fingerprints on the legislation. In turn, they adopted a message that each of Obama’s major legislative achievements—Obamacare, the Dodd-Frank financial regulatory law, and the stimulus—were going to crush the economy and destroy different industries. It was an appealing message when the economy was still struggling. Now it’s rapidly becoming a political liability.
That doesn’t mean McConnell’s strategy was wrong. If the GOP had compromised with Obama and pulled his policy rightward, voters almost certainly would have rewarded Democrats. The country might even be in better shape, but the Republican Party probably wouldn’t be. Ultimately, Republicans were in an impossible position. The economy was eventually going to recover, and Obama was going to get credit for it.
The president has spent the first six years of his presidency waiting for the moment he could take that credit, knowing it was coming. On Tuesday night, it came. Even with five separate responses to the president’s address, there was nothing Republicans could say to fight the growing sense that Obama’s policies are working and that the GOP has been wrong for the past six years.
By: Danny Vinik, The New Republic, January 20, 2015
“Your Tax Dollars”: Family Of New GOP Senate Pork Buster Joni Ernst Pocketed Almost Half A Million In Government Assistance
Anyone who tuned in to hear the GOP response to the State of the Union address was treated to an introduction to the GOP’s newest freshman Senate star, Joni Ernst of Iowa.
You may recall Ms. Ernst’s legendary campaign commercial where she informed us all that she had grown up castrating pigs and was, therefore, uniquely qualified to cut the pork from bloated federal spending. You may also recall that, in the castration commercial, she told us about how her family had taught Ernst what she needed to know about the importance of living within one’s means—a lesson, Ernst argued, that has been lost on the federal government.
Turns out, the Senator’s family has a somewhat unusual concept of what “living within one’s means” actually involves as we now know that her father and uncle have been the beneficiaries of some of that good old government pork that the newly minted Senator has sworn to snip from the body of the federal budget.
Apparently, living within their means, inside the Senator’s family, involves including some of your tax dollars and mine as a part of the family budget.
While it may be true, as Senator Ernst recounted in her official response to the SOTU, that she had to walk to school in the snow, uphill both ways, when she was a kid—not really as her actual claim to feeling the pain of low income Americans is that she and her friends wore bread bags over their one and only pair of shoes to protect them from the snow—her family may well have paid for those shoes with taxpayer cash.
An examination by the Washington DC based District Sentinel website reveals that Ernst’s father, Richard Culver, pocketed $38,395 in taxpayer money in the guise of corn subsidies.
But then, Ernst’s dad can’t hold a candle to his brother when it comes to receiving government redistribution of wealth as Senator Joni’s Uncle Dallas has pocketed a cool $370,000 in government subsidies.
Somehow, as Senator Ernst castigated the federal government for all this wasteful spending and wealth redistribution, she failed to mention that her own family has benefitted substantially from the same.
I suppose we can forgive this bit of hypocrisy given Ernst’s long record of involving herself in ‘clean’ government back in Iowa, right?
Not so much.
As reported by Salon, it turns out that daddy’s construction company (and here I thought he was but a poor, struggling farmer) was awarded some $215,665 in building contracts from the Montgomery County during the years 2009 and 2010.
There is certainly nothing inappropriate in a builder winning a few government contracts—unless it turns out that the builder’s daughter Joni, who would go on to become a United States Senator, happens to be the powerful county auditor for that very same Montgomery County.
“The Iowa Code lays out stringent conflict of interest standards for county contracts. Chapter 331 of the code stipulates that ‘[a]n officer or employee of a county shall not have an interest, direct, or indirect, in a contract with that county.’ The provision applies if 5 percent of a company’s outstanding stock is owned by either a county employee or an immediate family member – including a parent – of an employee.”
I’m not sure how much more “on point” the statute could be.
Meet the new GOP—same as the old GOP.
By: Rick Ungar, Contributor, Forbes, January 22, 2015
“This Isn’t The Debate Republicans Want To Have”: Republicans Befuddled By Obama Plan To Cut Middle-Class Taxes
Even President Obama’s most fervent opponents must acknowledge that he’s getting quite good at putting them on the defensive. Facing a Republican Congress and with only two years remaining in his presidency, he seems to come up with a new idea every couple of weeks to drive them up a wall. So he certainly wasn’t going to let the State of the Union address go by without using the opportunity — days of pre- and post-speech commentary, plus an audience in the tens of millions — to its utmost.
At Tuesday’s speech, Obama will announce a series of proposals meant to aid middle class and poor Americans and address inequality, most particularly an increase in the child care credit and a $500 tax credit for working couples (here’s the White House’s fact sheet on the proposals). To pay for it, investment and inheritance taxes on the wealthy would be increased and some loopholes that small numbers of the super-rich (like one Willard Romney) exploit will be closed. While the SOTU is often the occasion for dramatic announcements that are soon forgotten, this one lands in the center a debate that is looking like it will shape the upcoming presidential race. Naturally, Republicans are not pleased.
But if you listen carefully to what they’re saying, you’ll notice that they are barely mentioning the proposals for middle-class tax breaks which are supposed to be the whole purpose of this initiative; instead, all their focus is on the increases America’s noble job creators would have to endure in order to pay for it.
“Slapping American small businesses, savers and investors with more tax hikes only negates the benefits of the tax policies that have been successful in helping to expand the economy, promote savings, and create jobs,” said Orrin Hatch. “More Washington tax hikes and spending is the same, old top-down approach we’ve come to expect from President Obama that hasn’t worked,” said John Boehner’s spokesperson. “This is not a serious proposal,” said Paul Ryan’s flak. “We lift families up and grow the economy with a simpler, flatter tax code, not big tax increases to pay for more Washington spending.” For the record, a “flatter” tax system means either the poor paying more or the rich paying less, though Republicans never say which they prefer.
Marco Rubio was on the same page. “Raising taxes on people that are successful is not going to make people that are struggling more successful,” he said on Face the Nation. “The good news about free enterprise is that everyone can succeed without punishing anyone.” That was about as close as any Republican came to actually talking about the tax cuts Obama is proposing (though this National Review editorial does discuss them, by arguing that it’s an attack on motherhood). That’s probably because Republicans been in favor of ideas like them in the recent past.
While Obama does want to provide new funds to make community college free to anyone who wants it, most of his proposals in this round use the tax code to help people of modest means, which is exactly what Republicans usually suggest when they’re forced to come up with an idea to help the poor or middle class. Since they believe that government programs to help ordinary people are useless almost by definition, the only way to give anyone a hand is with a tax cut. And yes, the hand they usually extend is toward the wealthy, whose burdens are so crushing that justice demands that lawmakers not rest until they can be afforded relief. But tax cuts are so magical they can help anyone, which is why Republicans been in favor of expanding the Earned Income Tax Credit and the child care tax credit before.
But paying for it by increasing investment and inheritance taxes on the wealthy, like Obama is proposing? Not on your life.
One thing’s for sure: as the economy improves, both parties are now being forced to address the underlying issues of stagnant wages and inequality that have been an anchor around ordinary people’s lives for the last few decades. It’s fair to say this isn’t the debate Republicans want to have, and it’s easy to mock them for their insistence that they’re really the party with something to offer the middle class and the poor. But it’s a lot more productive to just take them at their word and see what they actually propose to do.
So Mitt Romney says he has cast off his previous contempt for those of modest means and now wants to focus his 2016 presidential campaign on the issue of poverty? All right — what are his ideas? If they’re actually worthwhile, he should get whatever credit he’s due. If it’s more trickle-down policies and stern lectures about bootstrap-pulling, then we’ll know nothing has changed.
You can argue — and many will — that it’s pointless for Obama to introduce significant policy proposals like this when he knows they couldn’t make it through the Republican Congress. But what alternative does he have? He could suggest only Republican ideas, but he wouldn’t be much of a Democratic president if he did that. Or he could offer nothing at all, and then everyone would criticize him for giving up on achieving anything in his last two years. If nothing else, putting these proposals forward can start a discussion that might bear legislative fruit later on. Major policy changes sometimes take years to accomplish, so it’s never too early to start. And if Republicans have better ideas, let’s hear them.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line, The Washington Post, January 19, 2015