“Turning America Into One Big Pottersville”: Obama Can Really Hurt the GOP By Focusing On Its Radical Economic Plan
Three years ago, two years ago—heck, six months ago—I and a lot of people I know thought: Surely the jobs situation will have picked up as we round the clubhouse turn toward Election Day. I envisioned Barack Obama at the Democratic convention, being able to claim… something fairly modest, but something: three straight months of 200,000-plus-jobs growth. Some kind of hook for an upbeat narrative.
Well, it looks like it ain’t gonna happen. Obama will be able to make some claims, and he damn well better make them without apology or fear of how the 48th Street Fantasy Factory will spin them. But the story isn’t good enough, so there’s but one alternative: convince people that Mitt Romney and a Republican Congress will make things worse. In a rational world, that wouldn’t be too hard, because except for Ronald Reagan’s second term, making things worse is all Republicans have ever done since Nixon. But our world isn’t rational, and Obama is going to have to confront that fact in a huge way or risk being sent to the showers early.
It’s amazing, first of all, the importance now of these jobs numbers. Partly it’s because the economy is bad, true; but partly it’s also the blog-and-tweet, more-faster-now political culture. Romney was having an awful week—and, by the way, still did have an awful week. Those issues—the mandate confusion, Bain, the offshoring, the million-dollar IRA—aren’t going anywhere, and they’ll resurface. But obviously, they had to be relieved up in Boston when the 80,000-jobs number came out Friday morning. Big conversation changer.
It’s the third straight month of anemic growth, and the economists seem to agree that it means we’re not going to be seeing the bulls run any time soon. A decent unemployment picture—say, 170,000 jobs a month being gained, which might, by election time, have gotten the jobless rate back down below the 7.9 percent it was when Obama was sworn in—augured for one kind of Obama fall campaign. Emphasize that we’re finally getting out of the woods first, and bash Romney second.
But the treeline is still on the far horizon. So Obama and the Democrats’ No. 1 job is clear: tie all the Republicans together—Romney, congressional Republicans, and George W. Bush—and warn people about how much worse things could be.
Romney is Bush on steroids. His tax plan is far more extreme. He wants to give millionaires an average—average!—tax cut of $250,000. The same plan would add $3 trillion to the deficit over a decade. Haven’t we tried this before, and didn’t it help lead—along with massive deregulation, which Romney also promises to pursue—to the biggest meltdown in 80 years?
The radical tax plan and its affect on the deficit hasn’t stopped Romney from backing “cut, cap, and balance,” a congressional GOP plan that calls for a Balanced Budget Amendment! Imagine that chutzpah. It’d be as if I torched all my neighbors’ azaleas and then demanded we form a block-beautification committee. Cut, cap, and balance is so extreme, so ludicrous, that 35 GOP senators—a pretty hardened assemblage, you’ll agree—haven’t signed it. It’s out there in Tea Party land.
Want more hypocrisy? Glad you asked. Cut, cap, and balance requires gargantuan and immediate cuts to the federal budget. But remember what Romney told Time magazine in May?: “if you take a trillion dollars, for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.”
Then there’s the Ryan budget and assaults on Medicare. The fact that Romney has no actual jobs plan beyond letting the free market work its magic… It’s just endless. Complete and willful vacuity. Vacuity as a matter of principle. Almost virginal vacuity, as if intercourse with facts were somehow deflowering, leading to a lapsarian state of loss of ignorance. Nothing adds up at all. No attempt is made for things to add up. Except, of course, for those core items that Romney and the congressional Republicans will agree on: cut taxes for the rich, deregulate as much as possible, and re-wreck the economy.
It’s so bad it’s almost hard to believe. I mean this literally. Via Kevin Drum and Jon Chait, I note this nugget from Robert Draper’s New York Times Magazine piece coming up Sunday. The Democratic super PAC, Priorities USA Action, did some polling on Romney. Here’s one thing they found, and place your hand below your jaw, so you don’t hurt yourself as it hits the table: “For example, when Priorities informed a focus group that Romney supported the Ryan budget plan—and thus championed ‘ending Medicare as we know it’—while also advocating tax cuts for the wealthiest Americans, the respondents simply refused to believe any politician would do such a thing.”
There’s some word beyond “perverse” for that—a politician benefiting from the fact that his plans and commitments are so radical that voters simply can’t believe he’d pursue them. That isn’t the only perversity at work here. As Greg Sargent noted on his blog Friday, you might think that when the jobs picture is unsatisfactory, the political debate would be about which candidate has better policies. But instead, it’s a “referendum on Obama.” This is dumb, especially when the other guy is running on such a nest of contradictions and obfuscations. But it’s how life is. I get that. Even so, it shouldn’t stop Obama from making it a co-referendum on Romney and the GOP. Obama’s Bedford Falls may have problems, but the GOP’s Pottersville—no General Motors, no Chrysler, no health care for 32 million, no public investment at all, no regulation of banks, and all the rest—is an ugly place where we don’t want to live.
By: Michael Tomasky, The Daily Beast, July 7, 2012
“Shady Opportunism”: The Political Risks Of Mitt Romney’s Financial Skills
You can conduct byzantine transactions through opaque investment accounts and private corporations in offshore tax havens such as Bermuda and the Cayman Islands. Or you can credibly run for president at a time of great economic distress.
I don’t think you can do both.
Let me be clear that I have nothing against wealth. In fact, I have nothing against great wealth, which is how I would classify Mitt Romney’s estimated $250 million fortune. We can argue about the social utility of private- equity firms such as Bain Capital, but Romney isn’t responsible for distorting the system so that financiers are grossly overpaid. He just took advantage of the situation.
Increasingly, however, I have to wonder whether the achievement Romney touts as his biggest asset in running for president — his business success — might be seen by many voters as a liability.
The question isn’t whether people can relate to a candidate who has tons of money. It’s whether they will connect with a man who didn’t make his money the old-fashioned way — by building a better widget — but by sending capital hither and yon via clicks of a computer mouse to take advantage of arcane opportunities most people never even know about.
Most Americans, for example, do not have an individual retirement account valued at between $20 million and $101 million, as Romney stated last year in a financial disclosure report.
When Romney was running Bain and building up his IRA, the maximum annual contribution permitted by the tax code was $2,000. So how did Romney’s IRA get so huge? He won’t say. It’s possible that he rolled over some money that was originally in a 401(k) retirement plan of the kind offered by many employers. But annual 401(k) contributions were then capped at $30,000, including an employer match — in Romney’s world, chump change.
Analysts surmise that Romney may have placed his interests in various Bain investment partnerships in the IRA, taking advantage of Internal Revenue Service rules that allow these interests to be undervalued for IRA purposes. In some cases they can even be valued at zero, since partnership interests represent future income, not present income, and . . .
Okay, I know I’m losing you here — but you get the point. Individual retirement accounts were created as a way for middle-class Americans to save some tax-deferred money for their senior years. It isn’t clear exactly what Romney is using his gargantuan IRA for, but it’s certainly not what Congress intended.
Then there’s the question of a Bermuda-based company that Romney and his wife, Ann, own, Sankaty High Yield Asset Investors Ltd. According to the Associated Press, the company has been part of Romney’s portfolio for nearly 15 years, but it was not mentioned in any state or federal disclosure reports. It surfaced in Romney’s 2010 tax returns, which he reluctantly released earlier this year.
According to those returns, Sankaty is little more than an empty shell at the moment. But the AP reports that the company “served as Romney’s partnership stake” in a larger group of Sankaty-named funds that Bain once used to manage more than $100 million in investments. (Sankaty, by the way, is the name of a lighthouse on Nantucket.) Channeling private-equity and hedge-fund investments through offshore firms in places such as Bermuda and the Caymans can allow investors to avoid a tax on what is known as “unrelated business income.”
Romney’s campaign says that he pays every penny he is required to pay in taxes — although his income is taxed at about 15 percent, a lower rate than most middle-class Americans pay. Hey, I understand; if I could get away with paying less in taxes, I’d do it, too. And I suppose that if God didn’t want us to have offshore pass-through accounts in sun-drenched tax havens, he wouldn’t have invented them.
But one of the sources of anger and anxiety in this country — on the left and the right — is the sense that there are two sets of rules, one for the rich and powerful and one for everybody else. I don’t think voters want a “regular guy” as president; they want someone who is exceptional. But there is a point at which opportunism begins to shade into rapacity.
In making and managing his money, Romney appears to take every possible, conceivable, imaginable inch that the law arguably allows. That’s good finance. But I doubt it’s good politics.
By: Eugene Robinson, Opinion Writer, The Washington Post, July 5, 2012
“We Own You Mitt”: Conservatives Worrying About Romney
Are prominent conservatives panicking about Mitt Romney’s campaign? It sorta looks that way, today. The Wall Street Journal editorial board — the men who ensure that even educated, newspaper-reading rich conservatives are successfully misinformed on all the major issues of the day — has a big “Mitt Romney is blowing it” editorial today (published online late Wednesday) that seems designed to stir up as much trouble as possible for the candidate.
The first line is hilarious and patently untrue: “If Mitt Romney loses his run for the White House, a turning point will have been his decision Monday to absolve President Obama of raising taxes on the middle class.”
In reality, Mitt Romney will definitely accuse Obama of raising taxes, even if he’s squishy on the “mandate is a tax” line. Also, it’s early July, it’s guaranteed to be an incredibly close race and, honestly, the only people who will notice whether Romney decides to declare the mandate a tax are people who have been paying close enough attention to the race to have already made up their minds.
But the point is actually just to hammer Romney adviser Eric Fehrnstrom for being sort of feckless and horrible at messaging, and to let the Romney campaign know that the Journal will be telling them which things to say, thank you very much. (The conservative press is much better at bullying its candidates into adopting particular strategies and policies than the liberal press, which has approximately zero power over candidates and elected officials.)
This latest mistake is of a piece with the campaign’s insular staff and strategy that are slowly squandering an historic opportunity. Mr. Obama is being hurt by an economic recovery that is weakening for the third time in three years. But Mr. Romney hasn’t been able to take advantage, and if anything he is losing ground.
The Romney campaign thinks it can play it safe and coast to the White House by saying the economy stinks and it’s Mr. Obama’s fault. We’re on its email list and the main daily message from the campaign is that “Obama isn’t working.” Thanks, guys, but Americans already know that. What they want to hear from the challenger is some understanding of why the President’s policies aren’t working and how Mr. Romney’s policies will do better.
Then! The Journal compares Romney to John Kerry. So mean!
Following this explosive editorial, the Weekly Standard’s Bill Kristol, America’s wrongest and dumbest partisan pundit, weighed in with his me-too “Romney’s strategy is all wrong” column, which has the very troll-y headline “Dukakis, Kerry … Romney?” Kristol wants to hear policy specifics from Romney, which is an awful idea, frankly, because Republican policies are pretty much universally unpopular once you go into actual detail, and Romney is correct in believing that his best hope is to remain as vague as possible on as many issues as possible.
But the argument is about a broader fear that a winnable election is slipping through the Republican Party’s grasp, and if that is indeed happening, Romney and his campaign are going to be blamed for letting it happen. As Josh Marshall says, columnists and pundits actually usually don’t have much of an idea what’s going on in a campaign. Conservatives are frustrated that Romney’s not kicking ass in the polls, and if he isn’t, it’s because his stupid campaign (made up of longtime Romney associates, for the most part) is stupid and bad.
It’s possible, though, that the Romney campaign is doing the absolute best it can running against an incumbent president who remains broadly personally popular. And it’s probable that Romney, for all his flaws, was the best candidate to face Obama this year. Buyer’s remorse aside, does anyone honestly think Jeb Bush or Mitch Daniels or Tim Pawlenty or Chris Christie would be performing better right now?
As I said, the words of the WSJ editorial page carry weight, so we’ll see if Romney (who has already called the mandate a tax) makes some sort of gesture toward “shaking up” his campaign (which would lead, naturally, to headlines about his campaign being in disarray — it’s lose-lose!), but these guys are actually just whining about how it’s harder to beat Obama than they have always thought it ought to be.
By: Alex Pareene, Salon, July 5, 2012
“Blind Trusts Don’t Seem So Blind”: Where And How Does Mitt Romney Hide His Money?
Mitt Romney never wanted to release his tax returns. He refused disclosure in 1994 during his unsuccessful U.S. Senate bid, in 2002 when he won election as Governor of Massachusetts, and in his failed 2008 attempt to gain the Republican nomination for President. Last January Romney finally released his 2010 tax return and an estimate for 2011 after constant badgering by his Republican primary rivals.
Those documents revealed his offshore bank accounts and his tax rate, just shy of 15 percent, or less than what most middle-class Americans pay, despite his estimated worth of up to $250 million. As the Washington Post reported: “By offering a limited description of his assets, Romney has made it difficult to know precisely where his money is invested, whether it is offshore or in controversial companies, or whether those holdings could affect his policies or present any conflicts of interest.” Now journalist and author Nicholas Shaxson digs deeper in a new investigation published by Vanity Fair.
According to Shaxson, Romney is using every possible loophole to avoid paying more taxes. He takes his payments from Bain Capital as investment income, allowing him to pay at a rate much lower than the 35 percent he would owe if he had earned an “ordinary income” of salaries and wages.
But as Shaxson also points out, nobody even knows how much Romney should pay because nobody knows what his offshore accounts actually hold. He maintains accounts and entities not only in Switzerland, but in Bermuda and the Cayman Islands as well.
Consider the example of Sankaty High Yield Asset Investors Ltd., a Bermuda-based corporation set up by Romney in 1997. This entity wasn’t even disclosed in financial documents until 2010, and upon examining that return, Shaxon writes: “We have no idea what is in this company, but it could be valuable, meaning that it is possible Romney’s wealth is even greater than previous estimates.” Furthermore, Bain Capital holds at least 138 funds in the Cayman Islands, with Romney having personal interests in at least 12 that are worth as much as $30 million. The Romney campaign has stated that his taxes would not be affected even if he included these interests, but there’s no way to confirm this because everything is hidden behind confidentiality laws.
Equally intriguing are the Romneys’ blind trusts, designed, as Shaxon explains, “to avoid conflicts of interest for those in public office by having politicians’ assets managed by independent trustees.” But in Romney’s case, the blind trusts don’t seem so blind. Their personal lawyer, Bradford Malt, was appointed to be the trustee, and in 2010, the Romneys invested $10 million in Solamere Founders Fund, which was founded by their son Tagg and former campaign fundraiser Spencer Zwick.
Shaxson also asks whether Romney used “blocker corporations” in the Cayman Islands and elsewhere to escape paying taxes on his retirement account, which is estimated to contain as much as $102 million. Offshore blocker corporations are used to avoid the Unrelated Business Income Tax.
The Obama campaign has hit Romney’s financial holdings hard in ads – and even created a world map showing the overseas locations where the Republican candidate holds accounts. Other Democrats have joined this line of attack. In an interview with The Huffington Post, former Ohio Governor Ted Strickland asserted, “Why would any person who aspired to be president, as Mitt Romney has for probably much of his life, open a Swiss bank account? What does that say about his political judgment and what does it say about his commitment to the United States of America?”
Illinois Senator Dick Durbin adds that there are only two reasons why one would want to hold a Swiss bank account: “Number one, you believe the Swiss franc is a stronger currency than the United States dollar. And that apparently was the decision the Romney family made during the Bush presidency.”
“And secondly, you want to hide something, you want to conceal something,” he said. “It is impossible for him to explain or defend owning a Swiss bank account.”
With Shaxson’s revealing piece, speculation over Romney’s handling of his money will no doubt continue. If the Romney campaign wants everyone to stop questioning his tax returns and offshore accounts, why not just disclose all of the information, as his father George Romney did during his own 1968 presidential run?
By: Lynn Zhong, The National Memo, July 4, 2012
“Call It A Penalty, Call It A Fine, Don’t Call It A Tax”: Debunking The Individual Mandate “Tax”
Having lost their Supreme Court fight against the Affordable Care Act, opponents of health care reform have in recent days been attacking the individual mandate provision of the law as a “tax” on the middle class. This line of reasoning only makes sense if you think penalties for littering, speeding, or engaging in other irresponsible behavior are also “taxes.”
Yes, it’s true that conservative Chief Justice John Roberts used a tax rationale when upholding the constitutionality of the individual mandate—and the entire law—last week. But Roberts was making a technical argument and using the word “tax” in a way that really only makes sense in an arcane legal context.
First, some background: The health care law’s so-called “individual mandate” provision requires people who can afford to buy health insurance to do so, and when it’s phased in, it will assess a penalty of up to 2.5 percent of household income on those who don’t. That’s only fair, since the health care costs of the uninsured are borne by the rest of us.
You don’t need a law degree to understand the difference between a fine and a tax, and this one falls pretty neatly into the former category, as we explain below. Moreover, the vast majority of Americans—rich, poor, or middle class—will never be assessed what’s more rightly understood as the “freeloader penalty” at the center of this debate.
Still, while the tax-themed attack on the individual mandate is incoherent, it remains dangerous. Opponents of health reform well understand the power of the T-word to fire popular resentment, and will try to confuse the public about what the individual mandate is and how it works. Here are some facts to keep in mind.
Unlike taxes, this penalty is avoidable
Taxes are, for the most part, involuntary. We pay taxes on our income and when we buy things. The only way to avoid taxes is to earn less money and consume less. Penalties and fines, however, are quite different. We can avoid fines by avoiding bad behavior.
The individual mandate presents people with a choice: Either have health insurance or pay an annual penalty. The only people who will pay this penalty are those who willfully neglect to take responsibility for getting health insurance—and then stick the rest of us with the bill when they get sick or injured.
People who have health insurance will never pay the penalty
More than 80 percent of Americans today have health insurance, and the health reform law will dramatically expand coverage. When the law is fully phased in, only 6 percent of Americans will face the choice of either buying private insurance they can afford or paying a penalty, according to the Urban Institute. And only 1.2 percent of Americans will actually pay the penalty, according to congressional estimates.
Americans who can’t afford insurance will have it provided for them
Under the law, people who can’t afford to buy insurance will receive Medicaid coverage or the government will split with them the cost of buying private health insurance. Therefore, the penalty will only apply to people who can afford health insurance but would rather have taxpayers—you and me—bail them out when they need medical attention.
The individual mandate is grounded in conservative principles of individual responsibility
The idea that people should be required to purchase health insurance if they can afford to do so was first popularized by the conservative Heritage Foundation in 1989 and first implemented in law by former Massachusetts Gov. Mitt Romney—a Republican. The idea then and today is to promote individual responsibility and to prevent self-sufficient people from relying on public assistance. “[E]ach household has the obligation, to the extent it is able, to avoid placing demands on society by protecting itself,” Heritage wrote in defense of the individual mandate.
Happily, the evidence suggests that the individual mandate penalty will apply nationwide to a small fraction of the population. Less than 1 percent of residents of Massachusetts, the only state with an individual mandate in place, were assessed the penalty in 2009.
Once the federal law takes full effect in 2014 and Americans see that the individual mandate penalty only applies to a small number of freeloaders, the antitax argument should lose all power.
It already appears to be waning in some very telling quarters. An advisor to Romney on Monday said that the presumptive GOP presidential nominee agrees with President Barack Obama that the individual mandate penalty is not a tax.
By: Gadi Dechter, Center for American Progress, July 3, 2012
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