“Offshored And Outsourced”: Mitt Romney’s Bain problem
While the Supreme Court’s upholding of the health-care law was last week’s most important event in historical terms, it will not be the decisive event of the 2012 election. In the long run, polling in swing states suggesting that Mitt Romney’s tenure at Bain Capital is hurting him could have larger implications for where this campaign will move.
It’s certainly true that had the court knocked down President Obama’s signature domestic achievement, the defeat would have been woven into a narrative of ineffectual leadership and mistaken priorities. Instead, the president found vindication not only from the court’s liberals but also from Chief Justice John Roberts.
But precisely because the decision saved the president from disaster on health care, it only reinforced the importance of the economic argument Obama and Romney have been having for months. And here is where Romney’s Bain problem kicks in.
As Democrats, mostly from Washington and New York, debated the efficacy of attacks on Romney’s role in Bain, an entirely different conversation was being driven in the swing states, courtesy of ads broadcast by the Obama campaign and especially by Priorities USA Action, the pro-Obama super PAC. The ads portray highly sympathetic workers who lost their jobs and companies that collapsed even as Bain’s principals made substantial profits.
An NBC News/Wall Street Journal poll last week provided surprisingly dramatic evidence of how much these commercials are wounding Romney.
In the country as a whole, 23 percent said they viewed Romney more positively because of his experience “managing a firm that specializes in buying, restructuring and selling companies,” while 28 percent said this made them view Romney more negatively. But in this year’s 12 battleground states, many of which have gotten a heavy run of the anti-Bain ads, only 18 percent viewed Romney’s business experience positively; 33 percent viewed it negatively. Obama led Romney by three points nationally but by eight in the battlegrounds.
This is disturbing news for Romney, who hoped his business experience would be an unalloyed asset. The numbers also underscore voter resistance to the core conservative claim that job creation is primarily about rewarding wealthy investors and companies through further tax cuts and less regulation. Americans are not anti-business, but they are skeptical that everything that is good for corporations is also good for their employees, and for job creation itself.
The Bain ads have done double-duty, specifically undermining Romney but also serving as a parable for how aspects of the current financial system hurt workers and local communities. Profits and productivity can rise even as real wages stagnate or fall, and jobs can be offshored and outsourced. The Romney campaign’s response to a recent Washington Post story describing Bain’s record on outsourcing — the campaign sought to “differentiate between domestic outsourcing versus offshoring” — sounded more like bureaucratic gobbledygook than an effective answer. Obama picked up on the story immediately, calling Romney an “outsourcing pioneer.”
But can the Obama campaign turn the argument over Romney and Bain into a broader challenge to the Republican claim that the only thing government can do to spur job creation is to get out of the way? “Jobs” will remain the Romney battle cry for the rest of the campaign, but the success of the anti-Bain offensive points to an opportunity for Obama to engage in a kind of political jujitsu. He can argue that Romney’s primary interest is not in job creation at all but in low-tax and deregulatory policies he would favor whether the economy was soaring or flat.
In a recent talk at the Center for American Progress, Stefan Löfven, the new leader of the Swedish Social Democratic Party, outlined a way to turn the debate around, arguing that job creation worldwide should be the focus of center-left parties. New policies on job creation should also be concerned with the quality and conditions of the jobs, how quickly the unemployed can be moved to new work and how the unemployed are treated and assisted toward new opportunities.
Here are the questions voters should be encouraged to ask in 2012: Should government focus directly on innovative approaches to creating good jobs in a new economy? Or should it be relegated to a position of powerlessness in which its only option is to concede ever more benefits to those — including the financial wizards at Bain — who are already doing very well indeed?
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, July 1, 2012
“A Lie Designed To Mislead”: Don’t Buy The GOP Narrative That Obamacare Is A Tax On Middle Class
Majority Leader Mitch McConnell wasted no time getting to the floor of the Senate to argue
that today’s Supreme Court ruling clarifies that Obamacare is nothing more than a tax on the middle class which—according to McConnell—is precisely what the Administration and Congressional Democrats promised it was not.
Leader McConnell, and his fellow Republicans, should read the Majority ruling before they embarrasses themselves further.
In the opening paragraphs of Chief Justice Roberts’ opinion, he clarifies that the law specifically does not involve a tax. If it did, Roberts clarifies, the Court would have had no choice but to reject the case for lack of jurisdiction as a tax case cannot be brought until someone is actually forced to pay the tax. This is, as we know, not the case.
The fact that the Court found that the mandate was constitutional under the taxing authority granted Congress by the Constitution is an entirely different matter. This finding does not reduce the individual mandate to the status of a tax—it merely says that as the penalty for failing to purchase health insurance will fall to the Internal Revenue Service for collection was something Congress could provide for under it’s Constitutional authority.
While I grant you that this gets a bit into the weeds, the effort that is being made by the GOP to use the Court’s basis for decision as a weapon fails on its face and is completely disingenuous. There is a difference between the levying of a tax and the Court finding Constitutional authority for Congress under the taxing authority. But then, anything that is more complicated than your basic “See Spot Run” first grade reading primer has always been fair game and fodder for the GOP message machine which would prefer to base their arguments on misstatements than educating and enlightening its base.
By: Rick Ungar, Contributor, Forbes, June 28, 2012
“Agog At His Magesty”: Grover Norquist Delivers The GOP’s Marching Orders
All hail Grover Norquist!
Bow down, Lindsey Graham. The Republican senator from South Carolina dared to say he might consider supporting a tax increase — but then Norquist paid him a visit on Wednesday. “Every once in a while you have somebody with an impure thought like Lindsey Graham,” Norquist told me. But after their talk, Norquist could report that “Graham will never vote for a tax increase.”
Kneel before him, Tom Coburn. The Republican senator from Oklahoma had toyed with the idea of supporting a deficit-reduction deal that includes some tax increases, before Norquist conquered him. “He had a moment of weakness where he thought you had to raise taxes to get spending restraint,” Norquist said. “He now knows that’s not true.”
Prostrate yourselves, House Republicans. On Thursday, a day after Republican senators hosted Norquist on their side of the Capitol, GOP House members opened up the Ways and Means Committee room so that he could counsel them on The Pledge, an anti-tax edict written by Norquist and signed by all but four House Republicans, most Republican senators and Mitt Romney.
Lawmakers leaving their private audience with Norquist were agog at his majesty. “I agree with him tremendously,” reported Rep. John Fleming (R-La.).
But Sander Levin of Michigan, the top Democrat on Ways and Means, had a less favorable view of the spectacle as he stood in the hallway while Republicans in the committee room kissed Norquist’s ring.
“They’re in this committee room to hold royal court for the person who has asked people to take a pledge . . . not their constituents,” Levin complained. “Essentially, Norquist is here to hold feet to the fire when we need open minds.”
Norquist doesn’t dispute that. The tax-pledge effort he began a quarter-century ago is now the defining mantra of the party: no tax increases, no how, no way, no matter the consequences. With the possible exception of Newt Gingrich, Norquist has done more than anybody to bring about Washington’s political dysfunction.
Since he began, the federal debt has increased roughly eightfold. But Norquist still believes that as soon as next year victory will be his — all because of his pledge.
“Because almost all the Republicans took it, it became, actually, the branding of the party,” Norquist told me Thursday.
Although I think Norquist’s approach has been disastrous for the country, I am awed by his success with the pledge. Now Senate Democrats are trying to turn him into the GOP bogeyman of this election cycle.
“The leader of the Republican Party is up here today on the Hill. . . . You know who it is: It’s Grover Norquist,” Senate Majority Leader Harry Reid (D-Nev.) said at a news conference Thursday, a couple of days after charging, with some validity, that Norquist “has the entire Republican Party in the palm of his hand.”
Norquist didn’t quarrel with the charge, as Fox News’s Chad Pergram put it to him, that he’s giving Republicans “their marching orders.”
“The modern Republican Party works with the taxpayer movement,” he replied, satisfied that “post-pledge, post-tea party, they’re not going to raise taxes.”
That’s probably because Norquist has convinced them that the long-sought victory is just months away. He predicts that Republicans will keep control of the House, take over the Senate, elect Romney president and promptly enact the Ryan budget. “It would be nice if some Democrats join, but it’s not necessary,” he said, arguing that the plan crafted by House Budget Committee Chairman Paul Ryan (R-Wis.) could clear the Senate with only 50 votes as part of the budget “reconciliation” process.
This seems unlikely. Even if they could use the procedure Norquist favors (anti-deficit rules make this difficult) Republicans would have to make their plan temporary, like the George W. Bush tax cuts. And the backlash is likely to make the Obamacare rebellion look tame. We’d quickly be back in the stalemate.
But Norquist’s loyalists in Congress are holding their ranks, dutifully coordinating talking points with him after their private tutorial Thursday on “how the pledge should be communicated.”
“We have a spending problem, and the taxpayer pledge helps us focus on the problem,” House conservative leader Jim Jordan (R-Ohio) told reporters as he departed.
“The problem in Washington is spending,” echoed Rep. Steve Scalise (R-La.).
Finally, out came the 55-year-old Norquist, all of 5-foot-6 with a graying beard. He spoke expansively to reporters for more than half an hour, waving off the notion that he might be becoming a PR problem for the party.
“There are significantly more Republicans in Congress since they started taking the pledge,” he said. “The advocates of spending more and taxing more are losing.”
Losing? Or just locked in an unending blood feud?
By: Dana Milbank, Opinion Writer, The Washington Post, June 22, 2012
“Threatening To Further A Very Bad Trend”: Romney’s All Wrong On Public Sector Employment
Is the 2012 election going to hinge on voters’ beliefs about the government workforce? It seems that at least this week’s news cycle will. It’s an important conversation to have. Public sector job loss is at the heart of our stagnant economy and is a big reason why the recovery can’t get real lift-off. Yet this isn’t a coincidental phenomenon or a bipartisan issue. Republican lawmakers are to blame for the bulk of these job losses, and their solutions to the problem will only add fuel to the fire.
To recap for those who don’t watch the Sunday talk shows: in a press conference on Friday, President Obama said, “The private sector is doing fine.” The full quote shows that he was talking about private sector job creation versus public sector job loss, but the pundits began a-punditing and soon his quote had become synonymous with “the economy is doing fine,” as if the private sector is all that matters.
Never one to sit on an opportunity to muddy his own message, Mitt Romney jumped in later in the day to take it further. Instead of confining his attack to Obama’s (purported) suggestion that things are hunky-dory in the private sector while the economy is still clearly suffering, Romney maligned some of the most beloved public sector workers. He said of Obama: “He wants another stimulus, he wants to hire more government workers. He says we need more fireman, more policeman, more teachers.… It’s time for us to cut back on government and help the American people.”
Both soundbites are likely to get so bent out of shape by the media game of telephone that they’ll eventually end up unrecognizable. But at the heart of each statement lies a fundamental difference in how the two candidates—and the two parties—view the nature of the jobs crisis. From Obama’s point of view, we’re not being dragged down by job loss in the private sector but by losses in the public sector. Romney sees exactly the opposite: we should cut even more jobs in the government and invest more heavily in private sector job creators. (He even explicitly called for government job cuts just a week ago.) So which view is right?
Evidence backs Obama’s perspective. Since the recovery officially began, the number of local government jobs has fallen by 3 percent, while the private sector has actually been able to add jobs—4.3 million, to be exact. And it’s worth comparing those numbers to recent recessions to get the full effect of just how bad, and abnormal, this trend is. Romney is at least partly right in that the private sector isn’t doing as well as it could be. At this point in the recessions experienced in 1992 and 2003, it had added 5 million and 4.5 million jobs, respectively.
But the public sector looks far, far worse now than it did then. As Ben Polak and Peter K. Schott write in the New York Times today, “In the past, local government employment has been almost recession-proof. This time it’s not.” Local government employment actually grew in the past two recessions by 7.7 percent and 5.2 percent for each respective period. This time around, it’s hemorrhaging jobs.
So it seems that while both candidates’ exaggerations were a bit off—Obama misspoke in suggesting that the private sector is completely shielded from pain—he gets closer to the heart of the problem than Romney. The huge fall in public sector employment really is dragging down the economy. As we wonder how to get out of this economic mess, it’s good to keep in mind another point Polak and Schott make: “If state and local governments had followed the pattern of the previous two recessions, they would have added 1.4 million to 1.9 million jobs and overall unemployment would be 7.0 to 7.3 percent instead of 8.2 percent.” That’s a huge difference.
But it’s also extremely important to remember why we’re in this situation. Polak and Schott hypothesize that it could be an electorate that is no longer willing to stomach paying for a growing government workforce. Or perhaps, they say, it’s that state and local governments have run out of ways to handle their extremely crunched budgets. But as Mike Konczal and I showed not too long ago, the massive job loss we’ve been experiencing in the public sector is no random coincidence or unfortunate side effect. It is part of an ideological battle waged by ultra conservatives who were swept into power in the 2010 elections. Republicans seized control of eleven states, and of those, five were at the top of the list for public sector job loss. Only seven states lost more than 2.5 percent of their government workforce from December 2010 to December 2011, and those five newly Republican states were among them. All others fared far better: they lost an average of .5 percent of their government employees.
This means that the eleven states that went red two years ago were responsible for 40 percent of these public sector job losses in 2011. If we add in Texas, a massive red state, we can pinpoint the source of 70 percent of those losses. And these losses were the result of deliberate decisions: even in the face of tight budget constraints, many of these states cut taxes for corporations and top earners while slimming down the public payrolls. It was part and parcel of a new agenda that came in with Tea Party–esque Republican legislators.
All of this is even more important when we switch from discussing the causes of the jobs crisis to the solutions. Romney’s plan looks very similar to those being played out in these ultraconservative states: he wants to further eviscerate the public workforce—including, apparently, policemen and teachers, who are desperately needed right now—while continuing tax breaks and creating even more for top earners and corporations.
On the other side of the aisle, Obama is still demanding—even if the demand is falling on deaf ears—that Congress pass his American Jobs Act, which would spend $35 billion in federal funds to keep those very government workers in their jobs. Guess who opposes that plan? Congressional Republicans and Mitt Romney.
There are still some remaining questions when it comes to Obama’s plan. Where’s the money to put public employees back to work after so many lost their jobs? Even more troublesome, if these job losses are due to ideologically driven decisions, will more federal spending really make a dent? Will these ultraconservative Republicans even accept the money? But it is clear that under a President Romney that money won’t even be offered and even less may be extended. Whether employed by the government or a private business, any voter should be nervous about a candidate that is threatening to further a trend that’s already holding our economy back.
By: Bryce Covert, The Nation, June 11. 2012
“Illogical Reasoning”: Mitt’s Utterly Empty Massachusetts Boasts
The Obama campaign has been criticizing Mitt Romney’s record as Massachusetts governor, and the presumptive Republican nominee is now responding with an ad of his own. Romney certainly has a right (and, from a strategic standpoint, an obligation) to rebut his opponent’s attacks, but the defense he offers is a textbook demonstration of how to make something out of nothing.
The spot makes three specific boasts about Romney’s term as governor, which ran from 2003 to 2007. The first involves job creation:
“As Governor of Massachusetts, Mitt Romney had the best jobs record in a decade.”
That sounds impressive, but look a little closer. In the decade before Romney’s tenure, Massachusetts had three other governors, all Republicans. One of them, Bill Weld, clearly had a better jobs record than him. When Weld came to office in January 1991, the state’s economy really was in a freefall. A major Boston-based bank, the Bank of New England, had just failed and the jobless rate was 7.4 percent and climbing fast. Within a few months it reached 9.7 percent, then began falling as the economy – in the state and nationally – revived. Weld left office at the end of July ’97 (to pursue an ill-fated bid to become ambassador to Mexico) with the jobless rate at just 4.1 percent.
His successor, Paul Cellucci, oversaw a further decline, with the rate plummeting to just above 2 percent in 2000. But the economy began sagging, and the number started to rise again. On April 10, 2001, he resigned to become George W. Bush’s ambassador to Canada. If you use the data from March ’01, Cellucci’s last full month on the job, he left the state with a jobless rate of 3.1 percent. If you use the April ’01 data, the figure was 3.3 percent. Either way, it’s comparable to the 0.9 percent drop that Romney presided over from ’03 to ’07.
The only governor in the decade before Romney’s arrival with a clearly worse jobs record was his immediate successor, Jane Swift, who served as acting governor from April ’01 to January ’03. During that time, unemployment climbed to 5.6 percent, which is where it stood when Romney was sworn-in.
So what Romney’s “best governor in a decade” boast actually means is that he had a better jobs record than Cellucci and Swift. And the reality is that there wasn’t a dramatic difference between his jobs record and Cellucci’s. So really, Romney is just bragging that he was better than Swift, who served less than half a term.
Then there’s this:
“He balanced every budget without raising taxes.”
This is only true in a very literal sense. Romney didn’t raise the income or sales taxes, but his first budget did impose more than $500 million in new fees that directly hit middle class residents. At the time they were enacted, the National Conference of State Legislatures noted that no other state had relied so heavily on fees to balance its books. Not that this is news: Obama’s campaign has been playing up Romney’s fee spree, and his Republican opponents threw it in his face during both of his presidential runs.
The ad’s final claim is that Romney achieved balanced budgets “by bringing parties together to cut through gridlock.” Again, this means a lot less than it sounds like. A balanced budget is required in Massachusetts and the state’s legislature is overwhelmingly Democratic. The only way for Romney to meet his constitutional duties was to sign a balanced budget approved by Democrats.
What Romney is banking on, of course, is that swing voters aren’t aware of this context, or don’t care about it even if they are. His entire strategy depends on economic anxiety leading voters to look for reasons to throw out Obama and to give Romney the benefit of the doubt, even if those reasons aren’t logical. From that standpoint, this ad might work just fine.
By: Steve Kornacki, Salon, June 8, 2012
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