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“It’s More Than Romney Promised”: What Would Republicans Say If Mitt Romney Were President And The Economy Was This Strong?

Imagine if Mitt Romney were president right now.

Imagine if, 722 days after winning the election, President Romney were presiding over an economy growing at five percent a year, an unemployment rate dipping beneath six percent, and gasoline that was less than $2-a-gallon.

This is, after all, what Romney promised. Hell, it’s more than Romney promised.

“I can tell you that over a period of four years, by virtue of the policies that we’d put in place, we’d get the unemployment rate down to six percent, and perhaps a little lower,” he told Time during the campaign. December’s tumble to 5.6 percent unemployment is, thus, two years ahead of schedule.

As for the five percent growth rate and the sub-$2 gas — that’s more than Romney dared ask the electorate to expect. Tim Pawlenty — remember him? — promised to nudge growth to five percent and was roundly mocked for his troubles. And to find anyone promising $2-a-gallon gas, you need to dig up Michelle Bachmann’s campaign lit (even Newt Gingrich didn’t dare predict gas under $2.50, and he wanted to use space mirrors to light highways).

If Mitt Romney were president right now, he would be seen as the second coming of Ronald Reagan. There would be parades in the streets. The kids would have “severely conservative” tattoos. Men would be saying “gosh.”

This is the problem with how Washington — Democrats and Republicans alike — interpret economic news. If Mitt Romney was president right now the economic numbers would be seen as proof that he was a remarkable success. They would appear to show that his agenda — repealing Obamacare, cutting taxes, deregulating the economy, greenlighting the Keystone XL pipeline — was precisely what had been needed to unleash the awesome growth engine that is the American economy. Conservatism would be ascendant. Liberalism would be discredited.

But Barack Obama won the election. The Affordable Care Act hasn’t been repealed. Taxes were raised in 2013. Regulation has proceeded apace. The Keystone XL pipeline is no closer to being built. And yet the economy is roaring. The ambitious economic promises the GOP field made for their conservative policies have been achieved despite the continuation of liberal policies.

There is an easy liberal interpretation here: President Barack Obama is great. Liberalism is great. And it’s simply entrenched media narratives and the GOP’s relentless resistance to giving Obama credit for anything that has left his approval rating stuck at 44 percent.

But I come not to praise President Obama. I come to bury the lazy economic thinking that infects American politics and, particularly, political campaigns.

Washington tends to think of itself as the cause and everything that subsequently happens in the world as the result. A booming economy is proof that Bill Clinton is a genius, or that Ronald Reagan is a genius. A crappy economy is proof that Barack Obama is a naif, or that George H. W. Bush can’t govern. It’s a view of causality usually found in five-year-olds, but it is pervasive in American politics. It is also false.

Policy matters, of course. And, particularly in 2008, 2009, and 2010, it was, arguably, the driver of our economic fortunes. But, for the most part, the economy is driven by much beyond what happens in the White House and the Congress (caveat: the Federal Reserve is an immensely powerful actor, but come campaign time, politicians tend to pretend it doesn’t exist).

It’ll be some time yet before we know whether the economy is truly beginning to roar or the engine is about to sputter out. But the $2 gas that’s left economists so optimistic isn’t the fault of anyone in Washington; it’s a mixture of technological innovation leading to more supply, falling global demand leading to yet lower prices for that supply, and Saudi Arabia refusing to slow production because it wants to choke America’s nascent shale-gas industry (Brad Plumer has an excellent look at the causes behind the cheap gas here).

The reasons unemployment has fallen below six percent are varied, and some of them are problematic (like the reduction in labor-force participation). Government policy has played a role, and my read of the evidence is that premature austerity, particularly at the state and local government level, did a lot to slow the recovery. Nevertheless, anyone suggesting that the job gains over the last two years are the clear result of anything Congress did, or didn’t do, is fooling themselves.

It’s an unhappy fact of political life that the direction of the economy tends to decide elections even though it isn’t actually driven by political decisions. Politicians tend to get around that by pretending otherwise: they take more credit than they deserve when the labor market is doing well, and they receive more blame than they deserve when it’s flagging.

By the normal rules of politics — the rules we would be playing under if Mitt Romney had won the election — the recent economic news proves Barack Obama is a magnificent leader and liberal policies an economic boon. But the normal rules of politics, at least when it comes to interpreting the economy, are dumb.

 

By: Ezra Klein, Vox, January 12, 2015

January 14, 2015 Posted by | Economy, GOP, Mitt Romney | , , , , , , , | Leave a comment

CEO’s And Teapartiers, Shut Up And Pay Your Taxes: Starving The Government Is Not Patriotic

As I sit here in Germany’s financial capital, a few hours by train from where my forbearers set out for the United States a century ago, I’m remembering what antitax Americans are forgetting: Living in a stable and free society that supports economic initiative isn’t a given.

Those who think that U.S. corporations and wealthy individuals already pay too much in taxes and get too little in return are taking for granted social order and economic opportunity. Keeping the peace costs money, and paying police, fire and other emergency personnel requires tax revenue. Just ask U.K. Prime Minister David Cameron, whose plan to make substantial cuts in London’s Metropolitan Police budget now looks ill-timed, amid pictures of looters making off with stolen goods.

U.S. corporations benefit every day from operating in an environment where bricks aren’t flying through windows and gunshots aren’t going off in parking lots. Civil unrest can be expensive, as executives at Sony Corp learned this week after its London warehouse went up in flames.

It also costs money to educate a workforce, something that also seems glossed over by those who want to slash money for federal education grants.

When I first arrived in Germany, people asked me whether the news they saw on TV is true, that “everyone in the United States is lining up for food stamps,” as one Frankfurter put it. Their questions were a reminder that even though Germany’s tax burden is higher than that in the United States, its economy weathered the global recession of 2008-09 better than America’s did, and its unemployment rate today, at 7%, is significantly lower than ours at 9.1%.

People like Grover Norquist, who claim that high taxes are the root of all our economic problems, have no answer for facts like these.

Those who want to lower business taxes often say that the U.S. corporate tax rate of 35% is higher than the 25% average of the world’s developing economies. But that argument ignores the long list of tax loopholes that allow U.S. companies to pay much lower rates in actuality.

Go down the list of second-quarter earnings reports for companies in the S&P 500 Index  and stop when you get to one that paid 35% of earnings. That might take a while.

What the United States needs isn’t more tax cuts, but tax reform to eliminate the many loopholes that create an uneven playing field.

Tax corporate cash

Given the sluggish pace of U.S. economic growth, perhaps such reform could include a tax on the enormous amounts of cash that American companies now have sitting on their balance sheets.

Non-financial companies in the S&P 500 are sitting on more than $1 trillion in cash right now — an absurd amount given that many of those same companies are laying off workers. Some estimates put the total closer to $2 trillion.

Forcing corporations to spend that money, either by hiring workers or paying investor dividends, would go a long way toward spurring growth.

When I hear Norquist — along with the candidates active in the tea-party movement that are too weak to resist signing his so-called loyalty oath — complain about actually having to pay for government services, I think we’ve come to take those services for granted.

I also think such whining is the exact opposite of the can-do attitude of the waves of immigrants who helped build the U.S. economy and continue to do so today. I’d like to introduce them to some of the start-up CEOs that I interview every week in Silicon Valley.

During the past few months, I’ve been writing a series of profiles on tech entrepreneurs for the site Entrepreneur.com. Neither I nor my editors planned it this way, but given that recent immigrants tend to be among the hardest-working Americans, perhaps it’s no surprise that none of the first four that I’ve written about are native to the United States.

These executives are people who, like generations of immigrants before them, came to the States and put their energy into building companies, rather than sitting around complaining how terrible a place this is to do business. They also, by the way, create jobs.

They come from across the globe: Victoria Ransom and Alain Chuard of Wildfire Interactive grew up in New Zealand and Switzerland, respectively; Mikkel Svane and his Zendesk co-founders hail from Denmark; Rahim Fazal of Involver is from Vancouver, B.C.

Yet all of them came to the United States to build their businesses. Why would they do that if it’s so hostile to their efforts, as the antitax extremists claim the country to be?

The answer is it’s not. On the contrary, America’s still the most attractive country for entrepreneurs. Keeping it that way costs money — something that tax haters seem to forget.

 

By: John Shinal, MarketWatch, August 12, 2011

August 13, 2011 Posted by | Businesses, Capitalism, Class Warfare, Conservatives, Consumers, Corporations, Democracy, Economic Recovery, Economy, Education, Freedom, GOP, Government, Ideologues, Ideology, Immigrants, Liberty, Middle Class, Politics, Republicans, Right Wing, Small Businesses, Tax Evasion, Tax Loopholes, Taxes, Teaparty, Unemployed, Wall Street, Wealthy | , , , , , , , , , , , , , , | Leave a comment

   

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