While Bill Clinton stumps for Obama, Romney has gone out of his way not to mention the name of the president who came after Clinton and before Obama.
Clinton will have a starring role at the Democratic National Convention. George W. Bush won’t even be at the Republican one – the first time a national party has not given the stage at its convention to its most recent occupant of the Oval Office who successfully ran for reelection.
The GOP is counting on America’s notoriously short-term memory to blot out the last time the nation put a Republican into the Oval Office, on the reasonable assumption that such a memory might cause voters to avoid making the same mistake twice. As whoever-it-was once said, “fool me once …” (and then mangled the rest).
Republicans want to obliterate any trace of the administration that told America there were weapons of mass destruction in Iraq and led us into a devastating war; turned a $5 trillion projected budget surplus into a $6 trillion deficit; gave the largest tax cut in a generation to the richest Americans in history; handed out a mountain of corporate welfare to the oil and gas industry, pharmaceutical companies, and military contractors like Halliburton (uniquely benefiting the vice president); whose officials turned a blind eye to Wall Street shenanigans that led to the worst financial calamity since the Great Crash of 1929 and then persuaded Congress to bail out the Street with the largest taxpayer-funded giveaway of all time.
Besides, the resemblances between George W. Bush and Mitt Romney are too close for comfort. Both were born into wealth, sons of prominent politicians who themselves ran for president; both are closely tied to the nation’s corporate and financial elites, and eager to do their bidding; both are socially awkward and, as candidates, tightly scripted for fear of saying something they shouldn’t; and both presented themselves to the nation devoid of any consistent policies or principles that might give some clue as to what they actually believe.
They are both, in other words, unusually shallow, uncurious, two-dimensional men who ran or are running for the presidency for no clear reason other than to surpass their fathers or achieve the aims and ambitions of their wealthy patrons.
Small wonder the Republican Party wants us to forget our last Republican president and his administration. By contrast, the Democrats have every reason for America to recall and celebrate the Clinton years.
When I left the U.S. economy was in a stall, Greece was on the brink of defaulting, the euro-zone couldn’t get its act together, the Fed couldn’t decide on another round of quantitative easing, congressional Democrats and Republicans were in gridlock, much of the nation was broiling, and neither Obama nor Romney had put forward a bold proposal for boosting the economy, slowing climate change, or much of anything else.
What a difference three weeks makes.
Here’s a bold proposal I offer free of charge to Obama or Romney: Every American should get a mandatory minimum of three weeks paid vacation a year.
Most Americans only get two weeks off right now. But many don’t even take the full two weeks out of fear of losing their jobs. One in four gets no paid vacation at all, not even holidays. Overall, Americans have less vacation time than workers in any other advanced economy.
This is absurd. A mandatory three weeks off would be good for everyone — including employers.
Studies show workers who take time off are more productive after their batteries are recharged. They have higher morale, and are less likely to mentally check out on the job.
This means more output per worker — enough to compensate employers for the cost of hiring additional workers to cover for everyone’s three weeks’ vacation time.
It’s also a win for the economy, because these additional workers would bring down the level of unemployment and put more money into more people’s pockets. This extra purchasing power would boost the economy overall.
More and longer vacations would also improve our health. A study by Wisconsin’s Marshfield Clinic shows women who take regular vacations experience less tension and depression year round. Studies also show that men who take regular vacations have less likelihood of heart disease and fewer heart attacks.
Better health is not just good for us as individuals. It also translates into more productive workers, fewer sick days, less absenteeism. And lower health care costs.
In other words, a three-week minimum vacation is a win-win-win — good for workers, good for employers, and good for the economy.
And I guarantee it would also be a winner among voters. Obama, Romney — either of you listening?
The worst economy since the Great Depression and you might think at least one of the candidates would come up with a few big ideas for how to get us out of it.
But you’d be wrong. Neither candidate wants to take any chances by offering any large, serious proposals. Both are banking instead on negative campaigns that convince voters the other guy would be worse.
President Obama has apparently decided against advancing any bold ideas for what he’d do in the second term, even if he has a Congress that would cooperate with him.
He’s sticking to a worn script that says George W. Bush caused the lousy economy, congressional Republicans have opposed everything he’s wanted to do to boost it, it’s slowly on the mend anyway, the Bush tax cuts shouldn’t be extended for the rich, and we shouldn’t take a chance electing Mitt Romney.
Yet the public wants bigger ideas from the President, and wants to know what he’ll do in his second term to get us out of this mess. A New York Times-CBS News poll released last week showed that a majority of voters believe the president “can do a lot about” the economy. That’s a double-digit jump from the fall of 2011.
The President could propose a new WPA, modeled after the Depression-era jobs program that hired hundreds of thousands of jobless Americans to rebuild the nation’s infrastructure, or a new Civilian Conservation Corps.
He could suggest permanently exempting the first $25,000 of income from payroll taxes, and making up the lost revenues by eliminating the ceiling on income subject to it. He could propose resurrecting the Glass-Steagall Act and breaking up the big banks, so Wall Street doesn’t cause another financial collapse.
But you won’t hear any of this, or anything else of this magnitude, because the White House doesn’t want to take any risks. Polls give Obama a slight edge in the critical eight or so battleground states, so, the thinking goes in the Obama camp, why say anything that might give Romney and the GOP a target?
Besides, polls also show Romney isn’t well-liked by the electorate.
So Obama has decided to campaign as the anti-Romney.
Mitt Romney is playing it even more cautiously. His economic plan is really a non-plan: more tax cuts for the rich, undefined spending cuts, and no details about how he’d bring down the budget deficit. No presidential candidate since Herbert Hoover in 1928 has been more vague about what he’d do on the critical issues facing the nation.
Romney’s advisors assume Obama can’t possibly be reelected with the economy this bad. Just 44 percent of registered voters in a Washington Post-ABC News poll earlier this month approve of the job the president is doing on the economy, while 54 percent disapprove. Even more encouraging for Romney is that 41 percent of those polled “strongly” disapproved of Obama’s economic performance, while just 21 percent “strongly” approved — an enthusiasm gap of major proportion.
Romney has decided to campaign as the anti-Obama.
The two anti-the-other-guy strategies fit with a ton of negative advertising that’s just begun but will reach mammoth proportions after Labor Day. Much of it will be financed by super-PACs and by political fronts already taking in hundreds of millions of dollars in secret donations. Romney’s camp hopes to out-negative Obama by almost two to one.
So whatever happens on Election Day, the next president will have to contend with two handicaps. The public won’t have endorsed any new ideas or bold plans, which means he won’t have a clear mandate to do anything on the economy.
The only thing the public will have decided is it fears and distrusts the other guy more. Which means the winner will also be burdened by almost half the electorate thinking he’s a scoundrel or worse.
The worst economy since the Great Depression, but we’re in an anti-election that will make it harder for the next occupant of the oval office to do a thing about it.
I’m in Alaska, amid moose and bear, trying to steal some time away from the absurdities of American politics and economics. But even at this remote distance I caught wind of Sanford Weill’s proposal this morning on CNBC that big banks be broken up in order to shield taxpayers from the consequences of their losses. Forget the bear and moose for a moment. This is big game.
If any single person is responsible for Wall Street banks becoming too big to fail it’s Sandy Weill. In 1998 he created the financial powerhouse Citigroup by combining Traveler’s Insurance and Citibank. To cash in on the combination, Weill then successfully lobbied the Clinton administration to repeal the Glass-Steagall Act – the Depression-era law that separated commercial from investment banking. And he hired my former colleague Bob Rubin, then Clinton’s Secretary of the Treasury, to oversee his new empire.
Weill created the business model that Wall Street uses to this day — unleashing traders to make big, risky bets with other peoples’ money that deliver gigantic bonuses when they turn out well and cost taxpayers dearly when they don’t. And Weill made a fortune – as did all the other executives and traders. JPMorgan and Bank of America soon followed Weill’s example with their own mega-deals, and their bonus pools exploded as well.
Citigroup was bailed out in 2008, as was much of the rest of the Street, but that didn’t alter the business model in any fundamental way. The Street neutered the Dodd-Frank act that was supposed to stop the gambling. JPMorgan, headed by one of Weill’s protégés, Jamie Dimon, just lost $5.8 billion on some risky bets. Dimon continues to claim that giant banks like his can be managed so as to avoid any risk to taxpayers.
Sandy Weill has finally seen the light. It’s a bit late in the day, but, hey, he’s already cashed in. You and I and millions of others in the United States and elsewhere around the world are still paying the price.
What’s the betting that one of the presidential candidates will take up Weill’s proposal?
These are the dog days of summer and the silly season of presidential campaigns. But can we get real, please?
The American economy has moved way beyond outsourcing abroad or even “in-sourcing.” Most big companies headquartered in America don’t send jobs overseas and don’t bring jobs here from abroad.
That’s because most are no longer really “American” companies. They’ve become global networks that design, make, buy, and sell things wherever around the world it’s most profitable for them to do so.
As an Apple executive told the New York Times, “we don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” He might have added “and showing profits big enough to continually increase our share price.”
Forget the debate over outsourcing. The real question is how to make Americans so competitive that all global companies — whether or not headquartered in the United States — will create good jobs in America.
Apple employs 43,000 people in the United States but contracts with over 700,000 workers overseas. It assembles iPhones in China both because wages are low there and because Apple’s Chinese contractors can quickly mobilize workers from company dorms at almost any hour of the day or night.
But low wages aren’t the major force driving Apple or any other American-based corporate network abroad. The components Apple’s Chinese contractors assemble come from many places around the world with wages as high if not higher than in the United States.
More than a third of what you pay for an iPhone ends up in Japan, because that’s where some of its most advanced components are made. Seventeen percent goes to Germany, whose precision manufacturers pay wages higher than those paid to American manufacturing workers, on average, because German workers are more highly skilled. Thirteen percent comes from South Korea, whose median wage isn’t far from our own.
Workers in the United States get only about 6 percent of what you pay for an iPhone. It goes to American designers, lawyers, and financiers, as well as Apple’s top executives.
American-based companies are also doing more of their research and development abroad. The share of R&D spending going to the foreign subsidiaries of American-based companies rose from 9 percent in 1989 to almost 16 percent in 2009, according to theNational Science Foundation.
What’s going on? Put simply, America isn’t educating enough of our people well enough to get American-based companies to do more of their high-value added work here.
Our K-12 school system isn’t nearly up to what it should be. American students continue to do poorly in math and science relative to students in other advanced countries. Japan, Germany, South Korea, Canada, Australia, Ireland, Sweden, and France all top us.
American universities continue to rank high but many are being starved of government funds and are having trouble keeping up. More and more young Americans and their families can’t afford a college education. China, by contrast, is investing like mad in world-class universities and research centers.
Transportation and communication systems abroad are also becoming better and more reliable. In case you hadn’t noticed, American roads are congested, our bridges are in disrepair, and our ports are becoming outmoded.
So forget the debate over outsourcing. The way we get good jobs back is with a national strategy to make Americans more competitive — retooling our schools, getting more of our young people through college or giving them a first-class technical education, remaking our infrastructure, and thereby guaranteeing a large share of Americans add significant value to the global economy.
But big American-based companies aren’t pushing this agenda, despite their huge clout in Washington. They don’t care about making Americans more competitive. They say they have no obligation to solve America’s problems.
They want lower corporate taxes, lower taxes for their executives, fewer regulations, and less public spending. And to achieve these goals they maintain legions of lobbyists and are pouring boatloads of money into political campaigns. The Supreme Court even says they’re “people” under the First Amendment, and can contribute as much as they want to political campaigns – even in secret.
The core problem isn’t outsourcing. It’s that the prosperity of America’s big businesses – which are really global networks that happen to be headquartered here – has become disconnected from the well-being of most Americans.
Mitt Romney’s Bain Capital is no different from any other global corporation — which is exactly why Romney’s so-called “business experience” is irrelevant to the real problems facing most Americans.
Without a government that’s focused on more and better jobs, we’re left with global corporations that don’t give a damn.
And they’re doing much of it in secret.
It’s a perfect storm:
The greatest concentration of wealth in more than a century — courtesy “trickle-down” economics, Reagan and Bush tax cuts, and the demise of organized labor.
Unlimited political contributions — courtesy of Republican-appointed Justices Roberts, Scalia, Alito, Thomas, and Kennedy, in one of the dumbest decisions in Supreme Court history, “Citizens United vs. Federal Election Commission,” along with lower-court rulings that have expanded it.
Complete secrecy about who’s contributing how much to whom — courtesy of a loophole in the tax laws that allows so-called non-profit “social welfare” organizations to accept the unlimited contributions for hard-hitting political ads.
Put them all together and our democracy is being sold down the drain.
With a more equitable and traditional distribution of wealth, far more Americans would have a fair chance of influencing politics. As the great jurist Louis Brandeis once said, “we can have a democracy or we can have great wealth in the hands of a comparative few, but we cannot have both.”
Alternatively, inequality wouldn’t be as much of a problem if we had strict laws limiting political spending or, at the very least, disclosing who was contributing what.
But we have an almost unprecedented concentration of wealth and unlimited political spending and secrecy.
I’m not letting Democrats off the hook. Democratic candidates are still too dependent on Wall Street casino moguls and real casino magnates (Steve Wynn has been a major contributor to Harry Reid, for example). George Soros and a few others have poured big bucks into Democratic coffers. So have a handful of trade unions.
But make no mistake. Compared to what the GOP is doing this year, Democrats are conducting a high-school bake sale. The mega-selling of American democracy is a Republican invention, and Romney and the GOP are its major beneficiaries.
And the losers aren’t just Democrats. They’re the American people.
You need to make a ruckus. Don’t fall into the seductive trap of cynicism. That’s what the sellers of American democracy are counting on. If you give up on our system of government, they win everything.
This coming Monday, for example, the Senate has scheduled a cloture vote on the DISCLOSE ACT, which would at least require that outfits like the Chamber of Commerce and Karl Rove’s “Crossroads GPS” disclose who’s contributing what. Contact your senators, and have your friends and relatives in other states — especially those with Republican senators (who have been united in their opposition to disclosure) — contact theirs. If the DISCLOSE ACT is voted down, hold accountable those senators (and, when and if it gets to the House, those House members) who are selling out our democracy for the sake of their own personal ambitions.
It’s not merely Republicans versus Democrats, or conservatives versus liberals. The larger battle is between regressives and progressives.
Regressives want to take this nation backward — to before Social Security, unemployment insurance, and Medicare; before civil rights and voting rights; before regulations designed to protect the environment, workers, consumers, and investors. They want to sabotage much of what this nation has achieved over the last century. And they’re out to do it by making the rich far richer, turning Americans against one another in competition for a smaller and smaller slice of the pie, substituting private morality for public morality, and opening the floodgates to big money in politics.
Progressives are determined to take this nation forward — toward equal opportunity, tolerance and openness, adequate protection against corporate and Wall Street abuses, and an economy and democracy that are working for all of us.
The upcoming election is critical but it’s not the end of this contest. It will go on for years. It will require that you understand what’s at stake. And that you energize, mobilize, and organize others.
To hear the media report it, President Obama is proposing a tax increase on wealthy Americans. That’s misleading at best. He’s proposing that everyone receive a continuation of the Bush tax cuts on the first $250,000 of their incomes. Any dollars they earn in excess of $250,000 will be taxed at the old Clinton-era rates.
Get it? Everyone is treated exactly the same. Everyone gets a one-year extension of the Bush tax cut on the first $250,000 of income. No “class warfare.”
Yet regressive Republicans want Americans to believe differently. The editorial writers of the Wall Street Journal say the President wants to extend the Bush tax cuts only “for some taxpayers.” They urge House Republicans to extend the Bush tax cuts for “everyone” and thereby put Senate Democrats on the spot by “forcing them to choose between extending rates for everyone and accepting Mr. Obama’s tax increase.”
Regressives also want Americans to think the President’s proposal would hurt “tens of thousands of job-creating businesses,” as the Journal puts it.
A small business owner earning $251,000 would pay the Bush rate on the first $250,000 and the old Clinton rate on just $1,000.
Congress’s Joint Tax Committee estimates that in 2013 about 940,000 taxpayers would have enough business income to break through the $250,000 ceiling – and, again, they’d pay additional taxes only on dollars earned above $250,000.
All told, fewer than 3 percent of small business owners would even reach the $250,000 threshold.
A third lie is Obama’s proposal will “increase uncertainly and further retard investment and job creation,” as the Journal puts it.
Don’t believe it.
The real reason businesses aren’t creating more jobs is American consumers — whose purchases constitute 70 percent of U.S. economic activity — don’t have the money to buy more, and they can no longer borrow as before. Businesses won’t invest and hire without consumers. Even as executive pay keeps rising, the median wage keeps dropping — largely because businesses keep whacking payrolls.
The only people who’d have to pay substantially more taxes under Obama’s proposal are those earning far in excess of $250,000 — and they aren’t small businesses. They’re the fattest of corpulent felines. Their spending will not be affected if their official tax rate rises from the Bush 35 percent to the Bill Clinton 39.6 percent.
In fact, most of these people’s income is unearned — capital gains and dividends that are now taxed at only 15 percent. If the Bush tax cuts expire on schedule, the capital gains rate would return to the same 20 percent it was under Bill Clinton (the Affordable Care Act would add a 3.8 percent surcharge).
Funny, I don’t remember the economy suffering under Bill Clinton’s taxes. I was in Clinton’s cabinet, so perhaps my memory is self-serving. But I seem to recall that the economy generated 22 million net new jobs during those years, unemployment fell dramatically, almost everyone’s income grew, poverty dropped, and the economy soared. In fact, it was the strongest and best economy we’ve had in anyone’s memory.
In sum: Don’t fall for these big lies — Obama wants to extend the Bush tax cut “only for some people,” small businesses will be badly hit, businesses won’t hire because of uncertainty this proposal would create, or the Clinton-era tax levels crippled the economy,
A ton of corporate and billionaire money is behind these lies and others like them, as well as formidable mouthpieces of the regressive right such as Rupert Murdoch’s Wall Street Journal editorial page.
The truth is already a casualty of this election year. That’s why it’s so important for you to spread it.
Just when you thought Wall Street couldn’t sink any lower – when its myriad abuses of public trust have already spread a miasma of cynicism over the entire economic system, giving birth to Tea Partiers and Occupiers and all manner of conspiracy theories; when its excesses have already wrought havoc with the lives of millions of Americans, causing taxpayers to shell out billions (of which only a portion has been repaid) even as its top executives are back to making more money than ever; when its vast political power (via campaign contributions) has already eviscerated much of the Dodd-Frank law that was supposed to rein it in, including the so-called “Volker” Rule that was sold as a milder version of the old Glass-Steagall Act that used to separate investment from commercial banking – yes, just when you thought the Street had hit bottom, an even deeper level of public-be-damned greed and corruption is revealed.
Sit down and hold on to your chair.
What’s the most basic service banks provide? Borrow money and lend it out. You put your savings in a bank to hold in trust, and the bank agrees to pay you interest on it. Or you borrow money from the bank and you agree to pay the bank interest.
How is this interest rate determined? We trust that the banking system is setting today’s rate based on its best guess about the future worth of the money. And we assume that guess is based, in turn, on the cumulative market predictions of countless lenders and borrowers all over the world about the future supply and demand for the dough.
But suppose our assumption is wrong. Suppose the bankers are manipulating the interest rate so they can place bets with the money you lend or repay them – bets that will pay off big for them because they have inside information on what the market is really predicting, which they’re not sharing with you.
That would be a mammoth violation of public trust. And it would amount to a rip-off of almost cosmic proportion – trillions of dollars that you and I and other average people would otherwise have received or saved on our lending and borrowing that have been going instead to the bankers. It would make the other abuses of trust we’ve witnessed look like child’s play by comparison.
Libor is the benchmark for trillions of dollars of loans worldwide – mortgage loans, small-business loans, personal loans. It’s compiled by averaging the rates at which the major banks say they borrow.
So far, the scandal has been limited to Barclay’s, a big London-based bank that just paid $453 million to U.S. and British bank regulators, whose top executives have been forced to resign, and whose traders’ emails give a chilling picture of how easily they got their colleagues to rig interest rates in order to make big bucks. (Robert Diamond, Jr., the former Barclay CEO who was forced to resign, said the emails made him “physically ill” – perhaps because they so patently reveal the corruption.)
But Wall Street has almost surely been involved in the same practice, including the usual suspects — JPMorgan Chase, Citigroup, and Bank of America – because every major bank participates in setting the Libor rate, and Barclay’s couldn’t have rigged it without their witting involvement.
In fact, Barclay’s defense has been that every major bank was fixing Libor in the same way, and for the same reason. And Barclays is “cooperating” (i.e., giving damning evidence about other big banks) with the Justice Department and other regulators in order to avoid steeper penalties or criminal prosecutions, so the fireworks have just begun.
There are really two different Libor scandals. One has to do with a period just before the financial crisis, around 2007, when Barclays and other banks submitted fake Libor rates lower than the banks’ actual borrowing costs in order to disguise how much trouble they were in. This was bad enough. Had the world known then, action might have been taken earlier to diminish the impact of the near financial meltdown of 2008.
But the other scandal is even worse. It involves a more general practice, starting around 2005 and continuing until – who knows? it might still be going on — to rig the Libor in whatever way necessary to assure the banks’ bets on derivatives would be profitable.
This is insider trading on a gigantic scale. It makes the bankers winners and the rest of us – whose money they’ve used for to make their bets – losers and chumps.
What to do about it, other than hope the Justice Department and other regulators impose stiff fines and even criminal penalties, and hold executives responsible?
When it comes to Wall Street and the financial sector in general, most of us suffer outrage fatigue combined with an overwhelming cynicism that nothing will ever be done to stop these abuses because the Street is too powerful. But that fatigue and cynicism are self-fulfilling; nothing will be done if we succumb to them.
The alternative is to be unflagging and unflinching in our demand that Glass-Steagall be reinstituted and the biggest banks be broken up. The question is whether the unfolding Libor scandal will provide enough ammunition and energy to finally get the job done.
Remember, 125,000 news jobs are needed just to keep up with the increase in the population of Americans who need jobs. That means the jobs situation continues to worsen.
The average of 75,000 new jobs created in April, May and June contrasts sharply with the 226,000 new jobs created in January, February and March.
In Ohio yesterday, Obama reiterated that he had inherited the worst economy since the Great Depression. That’s true. But the excuse is wearing thin. It’s his economy now, and most voters don’t care what he inherited.
In fact, a good case can be made that the economy is out of Obama’s hands — that the European debt crisis and the slowdown in China will have far more impact on the U.S. economy over the next four months than anything Obama could come up with, even if he had the votes.
It’s also out of the Fed’s hands. No matter how low the Fed keeps interest rates, it doesn’t matter between now and Election Day. Companies won’t borrow to expand if they don’t see enough consumers out there demanding their products. Consumers won’t spend if they’re worried about their jobs and paychecks. And consumers won’t borrow (or be able to borrow) if they don’t have the means.
Yet Obama must show he understands the depth and breadth of this crisis, and is prepared to do large and bold things to turn the economy around in his second term if and when he does have the votes in Congress. So far, his proposals are policy miniatures relative to the size of the problem.
The real political test comes after Labor Day. Before Labor Day, Americans aren’t really focused on the upcoming election. After Labor Day, they focus like a laser. If the economy is moving in the right direction then — if unemployment is dropping and jobs are increasing — Obama has a good chance of being reelected. If the jobs doldrums continue — or worse — he won’t be.