A Quick Thought About the Right Wing Narrative

After watching the debates and seeing the consequent poll results of the Romney win in debate one (a huge surge) and the subsequent Obama wins (stopping the bleeding but not surging back) I'm starting to wonder if the President's poor performance in the first debate was less important than it seemed to be at the time.  Here's what I mean:

Romney campaigned right up until the first debate on the hard right, picking Paul Ryan as VP after continually tacking right to fend off Gingrich, Perry, Santorum, et al during primary season.  This wasn't working, as polls showed pretty clearly.  At the start of the debates, Obama seemed to be pulling away toward a comfortable win and we were talking about how the Tea Party types were going to blame Romney for not being right wing enough to win the election when the truth was going to be the exact opposite.  We also predicted that the base wouldn't allow Romney to tack to the center, as they feared his moderate past.

But then Romney did tack to the center in the first debate.  This caught Obama flat-footed, but I wonder now if that was less important than the fact that when low-information voters started paying attention, they were introduced to this very reasonable-sounding guy, and couldn't understand what all the Romney-bashing had been about.  Even a strong Obama performance in that debate would not have changed this dynamic- Mitt introduced himself to low-info undecideds, and they liked him.  Heck, he hasn't sounded that bad to me in the debates- if that guy were running things I might not fear for the future of the Republic (except for the tax plan- that's still crazy).

And of course the party base has decided to give Mitt a complete pass on the toned-down chest-thumping, as their own terror about another Obama term is definitely worse than a moderate Republican- or they just figure he's lying now so they don't care what he says.

But Romney still may lose the election, and if he does I'm guessing that the far right people who are now ascendent in the GOP are going to blame his moderation for the loss.  But that will be exactly the opposite of reality, which is that running far right was sending him down to a pretty convincing defeat, while running as a moderate is the source of his recent resurgence.  I don't know how to see it any other way.

Predictions Again

Yes, it's me again!

Jonathan Chait has a lengthy article predicting what will happen in Washington depending on who wins the presidency in November.  Great inside baseball here, and the analysis really rings true for me.  Too much to exerpt, but if you have a few minutes I suggest you click on the link.

While Chait covers tax policy very comprehensively, he doesn't predict the outcome for the economy. I've been doing this from time to time, going on record with my opinion, and intend to return with a big "I told you so" later on.  My recovery predictions last month are here.

Since then, however, we've had good economic news (even if conservatives insist on claiming it's all lies).  Unemployment is under 8% in the latest jobs report, and other numbers look good too.

So my prediction that the economy is going to continue getting better between 2013 and 2017 still looks good.  No matter the outcome next month, the next president is going to preside over a steady improvement and will get the credit for it.

Another big change since September is that Romney has finally done his Etch A Sketch to the center, and is giving signals that he won't implement the full Ryan plan when he comes into office.  In my opinion, this is the major reason for his resurgence in the polls.  (The dominant narrative was that Obama's terrible performance in the first debate was the cause, but now that the President kicked butt in debate #2 and hasn't seen much rebound from it, I'm moving over to a different narrative- Romney's pivot to the center was the real key- he sounded reasonable, indicated he might govern as a moderate, and that's won over some independents who were turned off by the hard right turn during the primaries).  So it seems really unlikely now that President Romney will implement the severe austerity budget that is the most plausible way Republicans could damage the recovery.  More and more it's clear that they're going to take their tax cuts and run up the deficit, leading to Keynesian stimulus that should work pretty well (while they gut the safety net and make life miserable for the poor, but that won't stall the recovery for the rest of us).

So the stakes are high in this presidential election, but not for economic recovery.  Either way, we're going to have continued economic growth.  The important things we're fighting for are:

• Who gets credit for the growth
• What happens to universal health care (if Romney wins, ObamaCare gets repealed and there won't be universal health care for another generation)
• Who bears the tax burden (taxes on the rich are going way down under Romney.  Taxes on the poor are likely to go up to respond to this "47%" rhetoric we keep hearing)
• Deficit reduction- sounds crazy given the campaign rhetoric, but under Democrats the deficit will be brought under control thanks to the expiring Bush tax cuts.  Under Republicans those tax cuts will be renewed and maybe even expanded, and even with the recovery increasing tax revenues it won't be enough to make up for those cuts- deficits have gone up under Republicans since Reagan, and that won't change this time.

So yeah, this election really matters, even if recovery is coming either way.

Abortion and the MA Senate Race

Lately I've been seeing lots of television ads in Massachusetts from the dueling Senate candidates.  Elizabeth Warren has been criticizing Scott Brown for his votes against equal pay for women and against the pro-choice Supreme Court justice.

Scott Brown has responded with an ad featuring his wife insisting that he is pro-choice and is being unfairly painted.

And she has a point- Scott Brown has a history that is consistently pro-choice, unlike many Republican politicians around the country.

But here's the problem: being pro-choice in his heart does the country no good.  The battle for a woman's right to choose what to do with her womb is being waged in the courts most of all, and the makeup of the Supreme Court is the single most important way to protect this right.  Scott Brown voted against Elena Kagan's nomination, and would presumably vote in favor of a pro-life justice proposed by a President Romney.

The fact is, it doesn't mean anything to be pro-choice if you won't use your vote to do anything about it. 

"It's not who I am underneath, it's what I do that defines me".

Bain Capital- Not Job Creators

David Stockman, famous for his work in the Reagan administration and subsequent admission that "trickle down" economics doesn't work, has penned a long and dense piece about Bain Capital and the business models behind private equity.  The lead paragraph:

Bain Capital is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain’s billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise.
 

It goes on to describe how Bain's really big windfalls, the 10 deals that together comprised 75% of investor profits, were mostly inside deals that screwed lenders and suckers who bought IPO shares at inflated prices after Bain had loaded the companies up with so much debt that they couldn't possibly survive in the long term.

The startling fact is that four of the 10 Bain Capital home runs ended up in bankruptcy, and for an obvious reason: Bain got its money out at the top of the Greenspan boom in the late 1990s and then these companies hit the wall during the 2000-02 downturn, weighed down by the massive load of debt Bain had bequeathed them. In fact, nearly $600 million, or one third of the profits earned by the home-run companies, had been extracted from the hide of these four eventual debt zombies...

The Bain Capital investments here reviewed accounted for $1.4 billion or 60 percent of the fund’s profits over 15 years, by my calculations. Four of them ended in bankruptcy; one was an inside job and fast flip; one was essentially a massive M&A brokerage fee; and the seventh and largest gain—the Italian Job—amounted to a veritable freak of financial nature.

In short, this is a record about a dangerous form of leveraged gambling that has been enabled by the failed central banking and taxing policies of the state. That it should be offered as evidence that Mitt Romney is a deeply experienced capitalist entrepreneur and job creator is surely a testament to the financial deformations of our times.

The article gives fascinating details.

I want to be clear about my position: Congratulations to Romney and Bain for exploiting these rules and making tons of money by finding suckers to lend to them and then to buy stock in their IPOs. It's not apparently illegal, and under our capitalist ethos I guess it isn't even really immoral. But it does sound like another aspect of the crony capitalism that many (rightly) decry, and it doesn't seem to imply any understanding of how a government creates jobs. I'd feel better about Romney if he were saying: "all these deals enriched me but didn't really improve our economy or society- as president I'll know how to put a stop to these games so investing gets better at creating value for the middle class". That's obviously not his message.

 

Can We Cut the BS on the Romney-Ryan Tax Plan?

Joe Biden having a stroke because he can't
get Paul Ryan to say anything truthful
 

When I ask the question in the title above, what I mean is this: Paul Ryan and Mitt Romney have spent a great deal of energy trying to tell us that they plan to do the following:

1. Lower tax rates
2. Through tax deductions, keep the tax burden the same on the wealthy
3. Not raise taxes on the middle class
4. Not increase the deficit
5. Increase defense spending
6. Keep taking care of the poorest of the poor

To anyone with basic math skills, this is obviously impossible.  Democrats keep focusing on various parts of this plan- it's hard to argue it since the details are really vague- so they've been talking about how this means middle class taxes will have to go up (i.e. #3 above will have to be given up).

Naturally, Republicans disupte this, by claiming that the laws of Mathematics have been changed... or something.

But really, Republicans are right in a sense.  They're not going to raise taxes on the middle class, which would pretty much end them as a viable party in the US.  But it's simple, really: it's number 4 that will be ignored.  Think about it: when have Republicans every cared about deficits once they're in charge?

The interesting part of that is that increased deficits is exactly what liberals have been calling for the past few years, and should help goose the recovery.  So if Republicans win and institute their plan the way I expect, it might actually succeed- but not because of the wondrous tax cuts; it will work because of good old-fashioned Keynesian deficit spending.  The problem is that once we're in recovery we'll have a structural deficit that will be very hard to close- and I'll have to listen to insufferable Republicans tell me how tax cuts worked like magic again.

David Frum writes about how Mitt Romney's tax plan is going to hurt those just below the top 1%:

Romney adviser Martin Feldstein, one of America’s most distinguished tax economists, recently crunched the numbers of the Romney tax plan in The Wall Street Journal.

Against those who claim that Romney’s tax plan is arithmetically impossible, Feldstein argues it could be done. All it would take is a 30 percent -reduction in the tax deductions available to everybody reporting taxable income of more than $100,000.
 

In other words, a big tax cut of greatest value to those earning more than $500,000 a year (the people who pay the top rate on the majority of their income) will be offset by a tax increase that will fall most heavily on those who earn between $100,000 and $300,000 of taxable income.

...When Mitt Romney talks of capping itemized deductions at $17,000 to finance a cut in the top rate of federal income tax to 28 percent, he is talking about paying for a tax cut for the Porsche customer with a tax increase on the Porsche salesman. Both may be “rich” from the point of view of the typical American worker. But they are not rich in anything like the same way.
 

I like the line about the Porsche salesman.  But Frum misses something that should be obvious to anyone who has observed Republicans over the past two decades: those deductions are never going to be capped.

Once in power, Republicans are great at giving out the candy (tax cuts for the wealthy and the poor, Medicare Part D, lots of military spending), but not nearly so good at cutting out the fat that they're so good at talking about while campaigning.

So don't worry, Porsche salesmen!  President Mitt Romney will never be able to get rid of the mortgage deduction, and in fact he'll barely make a half-hearted effort at making his tax plan revenue neutral.  It will be tax cuts for the whole top 5%, spending cuts on programs for the poor that will barely make a dent in the grand scheme of themes, and then enormous deficits as far as the eye can see.  I wonder what the Tea Party will say then?

Leeches!

My wingnut Right correspondent sent me an article starting with this factoid:

63.7 million Americans received either welfare benefits, Social Security, or support for higher education

 

I think the point is a riff on the "47%" meme, that too many Americans are sucking off the government teet.  But there are a few problems with this line of reasoning:

Social Security benefits come from the SS Trust Fund, which is funded by.... wait for it.... Social Security taxes, not regular federal income taxes. As the original author of this factoid must know, many more than 53% of Americans pay SS taxes.

So including Social Security benefits in that riff makes no sense.  Next, we're talking about support for higher education.  So now conservatives are suggesting that the government should not be helping low income students go to college? Let's break that down a little:

I know the far Right sees poor people in menial jobs as leeches sucking off the teet of the rest of us. I don't agree that the person who cleans toilets should be apologizing to her boss for not paying enough taxes, but let's leave that aside for the moment. Now let's say this toilet cleaning lady has a son, who wants to get an education so he can contribute more taxes to society and make a life for himself. As we know, people without a college education have very little chance of climbing out of poverty. As we also know, college tuitions are MUCH higher than they were in the old days, completely unaffordable for all but the wealthy.

Now let's say the cleaning lady's son is a nice kid and a hard-working person, but not a genius. He's not smart enough to get a scholarship to a prestigious place, and of course his mother couldn't send him to Costa Rica for cool service projects to pad his resume, so he can only get into a low level state school or a private school with no scholarship aid.

Here's my question for anyone trying to defend this line of reasoning: what is this kid supposed to do if he can't get a government loan or grant to help him go to college? There are tens of millions of kids like that, and they can't all get private charity and they're not all geniuses who can get scholarships to Yale.  Is there some other suggestion for kids like that? If his mother contributes $5 in taxes, would that make anyone feel better?

My conservative correspondent hates it when I call him and his kind heartless bastards, but here they are telling me that people getting government help for education are screwing the rest of us. The apparent solution is for this kid to flip burgers his whole life, or work hard until he's assistant manager of McDonald's, which is as far as he'll get without college. And then they'll still spit on him because he won't be paying much in taxes, but they won't give him another way out.

Everyone can't be rich, after all.  It seems like the new right wing won't be satisfied until we've recreated pre-revolutionary France with a permanent underclass and a permanent ruling and wealthy class.  I don't particularly like the way that society ended.

 

The Case Against Scott Brown

I think I've said this before on this blog that the problem for Democrats with respect to the Massachusetts senate race is that Scott Brown, the incumbent, is not crazy.  He is pro-choice.  He voted for Dodd-Frank financial reform.  Unlike many national Republicans who take great pride in their refusal to compromise with Godless Socialist Democrats, Brown is touting his centrist credentials.  Beyond that, Brown is a really talented politician- he's comfortable on camera, comes off as a Regular Guy, and has the right mix of nice guy and tough guy on the stump and in debates.

So what's my problem with Scott Brown?  As should be obvious to anyone who reads this blog, I'm kind of partisan, and I want lots of Democrats in Congress.  But what about Brown specifically?  Here's my anti-Scott Brown case:

• The national Republican party is really crazy.  It's true that Scott Brown isn't crazy, but at the end of the day he's stil a vote for Mitch McConnell as majority leader of the Senate.  If Republicans are in control of the Senate, most Massachusetts voters agree that would be very bad for the country.  In the last debate with Elizabeth Warren, the moderator tried to pin him down on whether or not he would vote for McConnell as majority leader, and he repeatedly demurred.  He's trying to run away from the national party; we shouldn't let him.
• Although Brown voted for Dodd-Frank, the price of his vote was steep.  He insisted that the funds to pay for the bill come from taxpayers instead of from the banks, as Democrats wanted. I really don't understand how any thinking person can believe that after nearly destroying the economy, the quite-necessary regulation drafted to try to stop a recurrence shouldn't be paid for by fees from that industry.  This is a reminder of how far into the pocket of the financial industry the Republican party has moved.
• While Brown is pro-choice, he's never indicated that he'll refuse to vote for a Supreme Court justice chosen by a Republican president.  That's where the abortion battles are being fought; it does no good to have a pro-choice Senator if he's going to vote for an anti-choice judge.
• I don't mean to leave Brown's opponent out of this post; Elizabeth Warren is a pretty good candidate!  She's thoughtful, intelligent, hard-working, and a true advocate for consumers and those who are victims of corporations engaging in crony capitalism.  I won't go deeper into this point, as this post is about Brown, not her, but I would feel really proud to have her as my Senator.  Her viral rift that inspired Obama's "you didn't build that" clip was brilliantly framed:

Look, if Scott Brown switched parties and became a moderate Democrat, I'd still prefer a liberal, but I'd accept him as reasonable enough.  But we really can't afford another Republican vote in the Senate.

The Presidential Debate: Romney Smack-Down

Who looks interested, and who looks like he'd rather be somewhere else?

Wow.  I figured there wouldn't be much news from the debate last night.  I mean, the craft of televised presidential debating has been advanced quite a bit over the years.  The candidates are usually so well prepared that they're never really surprised.  They know that the way to deal with an embarassing question is just to change the subject, and most politicians are pretty good at that.  If I had any concern, it was that a gaffe might be created by the right wing machine out of an innocent comment- I'd been reading about how, for example, Al Gore's "sighs" were basically an invention of the national media, even though flash-polls of regular voters never noticed them.  Once the media gets a narrative, they don't usually let go, and that can be hard to predict or control.

But instead what we got was a no-show by the President.  The depths of my rage about this are surprising to me.  This morning I was driving to work and listening to a clip of Obama at the debate, and I started screaming at the radio for him to wake the F--- up, missing my exit.  Say it, Samuel L:

Anyway, I feel like I felt in 2010 when Martha Coakley lost the MA senate election to Scott Brown. In that campaign, Coakley won a very competitive primary battle to fill Ted Kennedy's seat, and apparently expected a coronation against Brown.  Her whole strategy was negative and hostile, she was a lackluster compaigner, and Brown turned out to be a very talented politician.  He snuck up and won the election, and I saved all my anger for Coakley.  The stakes are really high here, and the politicians who run for election shouldn't care about it less than the activists who support them.

That doesn't mean I blame every Democrat for losing elections.  This year in Massachusetts, for example, Brown is running against Elizabeth Warren.  Now he's the incumbent, and he's proven to be a great retail politician who connects well with voters.  He's not crazy like many of his fellow Republicans around the country.  Warren has a good chance to beat him, but Brown has a great chance to hold the seat.  But at least Warren is bringing it with everything she's got- she's campaigning hard, she's putting out the right message, but it's a tough race and I won't be mad at her if she loses.

But the President is another matter; Obama was a competent debater in 2008, both in the primaries and in the general election.  It's not like Romney is some kind of Master up there- he's good, but he left plenty of openings.  Most notably, Romney really pulled his Etch-A-Sketch last night- every time Obama brought up an unpopular position of the GOP, Romney claimed not to hold it, in opposition to his party's platform and everything he's said on the stump and while campaigning.  All the President had to do was call him on it, and he just didn't!

So there are two more presidential debates, and Obama needs to be a lot more combative.  I'm not goign to psychoanalyze the guy from afar, but he needs to figure out why he seemed so disinterested and passive last night.  If he doesn't improve on that performance, then he deserves to lose the election. 

But that doesn't mean the rest of us deserve to be stuck with Mitt Romney and the Crazies as President.  Wake the F--- Up, Mr. President, Wake the F--- up!

The Fiscal Cliff- A Quick Note

OK, OK, I'm convinced that the "Fiscal Cliff" at the end of this year is going to be a problem.  Previously I had said that I looked forward to tax rates returning to Clinton-era levels.  But liberal economists are joining conservatives in saying that this would be very bad for the economy while it's still doing so poorly.

Of course liberals have different reasons than conservatives for saying this.  Conservatives have been saying that tax hikes are always bad, no matter what the rates before and no matter what problem they're trying to solve (hell, Paul Ryan is still trying to convince us that the deficit problem can be solved with tax cuts, which would do the exact opposite).

So I do want taxes returned to previous levels, with which our government can be sustained.  But it can't really happen on the middle class yet- a tax hike will be anti-stimulative.  That will be fine when unemployment is back below 6%, but not now.

The problem is that I don't trust the Democrats on this issue, and I fear they'll make the Bush tax cuts permanent in their negotiations with a hard-line GOP.  I sure hope they can keep their eyes on this tax prize.