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Romney Is Short on Specifics

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Posted on May 15, 2012

By Eugene Robinson

Republicans say they’re eager for the presidential campaign to turn away from “distractions” and focus instead on the economy. Someone should warn them that if they’re not careful, they might get their wish.

It is true that voters’ unhappiness with high unemployment and slow growth poses a challenge for President Obama as he seeks re-election. But for Mitt Romney and the GOP to take advantage of this potential opening, they’ll have to do more than chant the word “economy” like a mantra. They have to make the case that their policies will work better than Obama’s.

And what might Romney’s proposed economic policies be? Why, they’re basically the same as those of George W. Bush, only worse.

Just as Obama owns the recession and the slow recovery, Bush owns the financial crisis that sent the slumping economy over a cliff. But for all his sins—the gratuitous tax cuts, the off-budget wars, the defiance of basic arithmetic—Bush at least demonstrated a certain empathy for Americans who struggle to make ends meet. One of his budget-busting initiatives, for example, was expanding Medicare to cover prescription drugs without worrying about how this much-needed new benefit would be paid for.

It’s safe to predict that Romney would never make such a gesture out of compassion for the beleaguered middle class. To this day, he refuses to take back his criticism of Obama for bailing out General Motors and Chrysler—even though letting the companies fail would have meant the extinction of the U.S. auto industry and the elimination of hundreds of thousands of jobs.

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It is a measure of Romney’s ideological stubbornness that even with Chrysler rebounding under new ownership and GM reporting record profits, he still insists that his view—let the companies go bankrupt so the “creative destruction” of capitalism could work its magic—was correct.

Romney is something of an expert on creative destruction, I guess, having orchestrated a good deal of it while running the private-equity firm Bain Capital. The Obama campaign recently released an ad about one of Bain’s less successful acquisitions, a small steel mill in Kansas City called GST Steel.

The company, which was more than 100 years old, failed after a decade under Bain’s ownership; GST’s 750 employees lost their jobs, pensions and health benefits. Bain, however, made money, investing $8 million in the company and taking out $4 million in profits and $4.5 million in management fees. The Romney campaign contends that GST, with its unionized workforce, could not compete with cheap foreign steel being dumped on the market. The Obama campaign alleges that Bain burdened GST with crushing debt while sucking the company’s coffers dry.

Is this the genius of free markets at work, or is it “vulture capitalism” run amok? Let’s have that argument. Please.

Let’s also have a long, detailed discussion of Romney’s economic plans versus Obama’s. Romney wants to make tax rates for the wealthy even lower than they are now; Obama wants a small increase for those making more than $1 million a year, whom he challenges to pay “their fair share.” Romney’s entire economic plan, basically, involves tax cuts and deregulation—in other words, a repeat of the Bush-era policies that led to the crisis.

Does Romney have any fresh ideas? Well, when he was governor of Massachusetts, he was smart enough to see that universal health coverage would not only improve the lives of the uninsured but also help rein in runaway medical costs. He found the solution in an innovative idea developed in Republican-leaning think tanks: an individual health insurance mandate.

It worked. In fact, it was Romney’s greatest policy success as a public official. But now he doesn’t talk about it much.

My guess is that Republicans won’t want to talk about the past or the future in much detail. They’d like to keep things blurry, so that we only see Romney in broad outline: a successful businessman who’ll put us back in business. For details, we’ll mail you the prospectus.

I can’t help but think of the “prosperity theology” movement, or scam, in which preachers convince congregants that God’s will is for Christians to be rich—and that the way to become rich is to put lots of money in the collection plate. It’s not believable unless the preacher looks and acts the part. Maybe he lives in a mansion. Maybe his wife drives “a couple of Cadillacs.”

Actually, it’s not believable even then.


Eugene Robinson’s e-mail address is eugenerobinson(at)washpost.com.
   
© 2012, Washington Post Writers Group


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oddsox's avatar

By oddsox, May 19, 2012 at 7:33 am Link to this comment

Marian G, I think you understand that I took issue with your use of the verb “earns” when applied to a country levying taxes.

I have no fundamental disagreement with your most recent post, although the Chinese renminbi, not the Euro, posts a greater threat to replace the dollar as the world’s default currency.

As for banks, I say it’s long past time we broke them up.  Glad to hear more talk of this lately.

http://open.salon.com/blog/oddsox/2011/10/10/too_big_to_fail_too_big_to_begin_with

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By Tom Degan, May 17, 2012 at 2:51 am Link to this comment
(Unregistered commenter)

I hate to keep sounding like a broken record but….

The people just don’t matter - TICK….
The people just don’t matter - TICK….
The people just don’t matter - TICK….
The people just don’t matter - TICK….

The only reason (I think) the GOP eventually backed down last summer was because they realized that it would work more to their benefit if they waited until just before the 2012 election to tank the economy. That is what is happening.

It makes me giggle whenever I hear them referred to as the Republican “party”. They’re about as much of a “party” as the mafia is. Wake up and smell the elephant dung, boys and girls.

The right wing has been in serious denial throughout its long and weird history (You may recall the “peculiar institution” of slavery). Modern times are no different for these freaks. Here’s what they need to (but won’t) understand: America’s financial affairs are in shambles. There is only one way out of the hole we have dug for ourselves - and it’s going to involve taxes: Decades of SERIOUS taxation. The people who benefited the most from the thirty-year financial drunk - the Plutocracy - will be the ones who will have to bear the burden of the shovel. And that will mean bringing the tax rates for the richest two-percent back to where they during the Eisenhower era when many of them were in a ninety percent bracket. That is the only way out. Deal with it.

http://www.tomdegan.blogspot.com/

Tom Degan

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IMax's avatar

By IMax, May 16, 2012 at 5:02 pm Link to this comment

Mr. Robnson,

AK News reported Kurdistan Regional Government (KRG) Prime Minister Nechirvan Barzani is, this day and next, visiting with Turkish Prime Minister Recep Tayyip Erdogan, Turkish President Abdullah Gul and Turkish Foreign Minister Ahmet Davutoglu. Reportedly there’s an agenda to discuss bilateral relations and the Kurdistan Workers’ Party.

Turkey talking with the KRG.  Bright news, I’d say.

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By Maani, May 16, 2012 at 3:33 pm Link to this comment

Romney “short on specifics?!”  Au contraire!

He was specifically against Obama’s part of the stimulus that helped prevent an even BIGGER economic meltdown (though he supported Bush’s stimulus).  He was specifically against bailing out the auto industry - which not only worked, but may well have saved the entire industry from crippling bankruptcy.  He was specifically against extending unemployment benefits for millions at a time when tens of millions are out of work.  He specifically supported the overall GOP plan to make Obama a one-term president - even if that meant wrecking this country in every possible way.  He specifically suppoers - even adds to - the ongoing “war on women.”  He specifically supports an economic policy and position that has already been PROVEN a complete loser, and would, no surprise, only further enrich the top 1% at the expense of the 99%.

I could go on.  But to suggest that Romney is “short on specifics” is short on recent history.

Peace.

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By Marian Griffith, May 16, 2012 at 11:31 am Link to this comment
(Unregistered commenter)

@OddSox
—-“A country earns money from taxes.”
Here we disagree.
A country may raise revenues by levy of taxes, but the “earning” is done by the taxpayers.
And earnings begin with labor.
Because capital, which (may/should/will) create the wealth and income from which the government may draw tax revenues, can’t happen before someone gives labor.  Labor comes first.  And that’s why we need to stop taxing Labor (payroll taxes) and tax consumption instead.—-

A state or country gets the majority of its ‘income’ from taxes. (there are some other sources but those tend to be minor or incidental. Unless the country has nationalised production (usually natural resources like oil or other valuables).
It spends this on various programs.
If the amount of money spent exceeds the income then typically countries will borrow money from (international) banks (and in some parts of Europe from pension and trust funds).
In addition to that a country (but no other economic unit) can print money. This however does not actually reduce the debt. Instead it reduces the value of the currency and as such makes the amount of money that was borrowed less valuable. It also acts as a hidden form of taxation as the citizens of the country can buy less goods with the same amount of money.
The USA of all countries is further unique because its currency is the baseline for most international trades. The normal reactions to inflation and devaluation of the currency do not work with the dollar because you can not move the baseline. Incidentally this is why the Euro was such a threat to the USA economy, it could become an alternative baseline currency (and economy) allowing the bond holders of the USA to actually adjust their interest rates according to the percentage of debt (to a level similar as e.g. portugal somewhere between 10 and 15pct).

You are correct that ultimately it is production and consumption that form the basis of any economy and that financial manipulations are nothing but a huge inflatory effect. What needs to be done is to stop banks from issuing loans based on their own financial products. A stock option or stock is not an assest but instead it is a risk and should count towards the fractional reserve banking limit. A CDS is not an asset either, and a property back security is neither an asset nor a security.
Thanks to Big Shrub, Clinton and Little Shrub banks have been allowed to increasingly use projected future profits as securities for their own lending (which is the same as trading on the stock market with borrowed money). On top of that they have used this new freedom not to lend money to companies (who hopefully would do something economically productive with it) but instead to create more of these financial instruments that generate future profits. By that they have started a runaway money printing press.
By now returning to sound banking practices is next to impossible. The amount of money backed by nothing more than theoretical future profits in the nth degree dwarfs the actual ecomic production that determines the actual value of money. Doing something about this would instantly crash the world’s economy. Doing nothing will have the same result but more slowly so of course that is the politicians favoured course of action. Bankers don’t care, they come out ahead either way.

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By fanuel nsingo, May 16, 2012 at 7:25 am Link to this comment
(Unregistered commenter)

Mitt ‘Willard’ Romney is a clown. His failure to swallow his pride by not acknowledging the rebounding of GM and Chrysler is so laughable. He’s a greedy capitalist who is being used by hge corporates that are fuelling the increase in gasoline prices in the form of ‘big oil’ ads. It deeply saddens me that lone soldier and last man standing, Ron Paul couldnt garner the much-needed delegate votes to secure his GOP nomination, however, we still keep our fingers crossed that come the national convention, Tampa, Florida will finally belong to Dr Paul, for Peace, Liberty and Gold. However, its becoming too obvious that Dr. Paul is already on his way out since his announcement via email to suspend all remaining primaries campaign. This then offfers no other option than to seek to re-elect President Obama. Obama’s moves to suspend tax breaks for conniving US companies who ship jobs offshore is a welcome move, and too is his appeal for US companies to return home(and be given tax cuts)in order to create employment. Speaker John Boehner and his GOP clowns, obviously including Romney ensured that the Buffet Rule that the Democrats were proposing was kicked out. This move should be truly an awakening dawn for all and sundry who thought Romney is a saint. His other moves to file for tax extensions just before the weekend was meant to be unnoticeable, but the whole world is watching. Many stories of bullying a classmate, his dog by the roof of his car, the controversy surrounding Ann Romney(work), the Rush Limbaugh connection, etc are all negatives for Willard. Also, the Ron Paul supporters had to resort to affidavits in order to expose GOP electoral fraud. After my analysis gentleman, make up your minds.

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oddsox's avatar

By oddsox, May 15, 2012 at 4:05 pm Link to this comment

Marian Griffith, you write:
“ordinary people…can in fact accurately tell what needs to be done without any need for a degree in economics nor an 1million income for telling other people what to believe.”

For a moment, I thought you were referring to Paul Krugman, but I believe his earnings are a little short…

“Any entity, be it an individual, a household or a country, that is running a deficit needs to spend less AND earn more. For a while they can cover losses by increasing their loans but not even the credit card companies can hide for very long the fact that if you increase your loans you only run up a bigger deficit.”

Exactly.  Tell Krugman.

You write:
“A country earns money from taxes.” 
Here we disagree. 
A country may raise revenues by levy of taxes, but the “earning” is done by the taxpayers. 
And earnings begin with labor.
Because capital, which (may/should/will) create the wealth and income from which the government may draw tax revenues, can’t happen before someone gives labor.  Labor comes first.  And that’s why we need to stop taxing Labor (payroll taxes) and tax consumption instead.

Note that just as cutting worthwhile spending doesn’t automatically lead to a healthier economy, neither does raising tax rates necessarily cause an increase in revenues. 

You had it right early on, MG:  “spend less AND earn more.”
It’s good to hear the talk of taking Simpson-Bowles back out from under the bus.

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By Marian Griffith, May 15, 2012 at 11:50 am Link to this comment
(Unregistered commenter)

@Oddsox
The economically sane response to the crisis are well known and come as no surprise to ordinary people. They can in fact accurately tell what needs to be done without any need for a degree in economics nor an 1million income for telling other people what to believe.

Any entity, be it an individual, a household or a country, that is running a deficit needs to spend less AND earn more. For a while they can cover losses by increasing their loans but not even the credit card companies can hide for very long the fact that if you increase your loans you only run up a bigger deficit.
A country earns money from taxes and to increase that they need to either raise the percentage or broaden the tax base. Kicking people out of their jobs and out of their homes is economic suicide for government as it shrinks the tax base.
A country spends money on necessities and luxuries just as anybody else. Normally you begin by cutting down on the luxuries if you need to cut your spending. I.e. things that you do not need to survive. For a country that means keeping the programs that keep people alive and healthy, that keep people qualified and that support the productive economy. Things that fall outside that are reduced or cut entirely.

The problem of course is that the definition of ‘the people’ in government has become incredibly skewed as politicians more and more became limited to the richest few. They define people as those in similar situations like them: rich, making an income through financial manipulation, without healthcare or insurance problems and being able to move by helicopter if no road is available.
People like that have a very different idea of economics than those who are trying to survive in a severely depressed economy and a system that steadily moves wealth out of the lower 90 pct into the high 0.1pct. Which is clearly visible in which government programs they deem essential and which (i.e. the ones not benefitting them personally) they want to abandon entirely.

The only real puzzling thing is the lunacy of the tea party activists.

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mrfreeze's avatar

By mrfreeze, May 15, 2012 at 9:51 am Link to this comment

felicity - If only your comment were tattooed on the forehead of every journalist in America today:

“if the media start doing some homework and actually
become an information source rather than a conduit
for gobble-d-gook.”

So much of the Presidential campaign (which began one nano-secound after Obama was sworn in) is nothing but nonsense. We don’t have an honest press in this county and we don’t have a population smart enough to filter the truth from all the lies.

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By felicity, May 15, 2012 at 8:35 am Link to this comment

And where did the Republican argument against a tax
increase on those with incomes above $250,000/year
because it would “wipe out” small businesses go?

Perhaps, someone somewhere in the media revealed that
small business owners with incomes above 250
grand/year amounts to about 3% of small business
owners? 

Hopefully, Romney’s penchant for avoiding ‘specifics’
will go the way of the sudden disappearance of their
small business/tax increase argument - they will if
the media start doing some homework and actually
become an information source rather than a conduit
for gobble-d-gook.

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By bigchin, May 15, 2012 at 8:26 am Link to this comment
(Unregistered commenter)

Obama is short on democracy…

and Robinson, long on stenography, is short on journalism.

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oddsox's avatar

By oddsox, May 15, 2012 at 7:49 am Link to this comment

ER making the Romney=Bush argument?
Doubt it’ll sell. 
Despite recent polls, Obama should still win in November. 
But if he does it’ll be in spite of his record on the Economy.

My concern about Romney and the Economy is whether he would place enough attention to helping SMALL business. 
But on that score, unfortunately, Obama is already a known quantity.

—Replace Dodd-Frank with Glass-Stegall
—break up the big banks using Anti-Trust action
—tax Consumption, not Labor.

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