The most troubling economic trend facing America this Labor Day weekend is the increasing concentration of income, wealth, and political power at the very top – among a handful of extraordinarily wealthy people – and the steady decline of the great American middle class.
Inequality in America is at record levels. The 400 richest Americans now have more wealth than the bottom 150 million of us put together.
Republicans claim the rich are job creators. Nothing could be further from the truth. In order to create jobs, businesses need customers. But the rich spend only a small fraction of what they earn. They park most of it wherever around the world they can get the highest return.
The real job creators are the vast middle class, whose spending drives the economy and creates jobs.
But as the middle class’s share of total income continues to drop, it cannot spend as much as before. Nor can most Americans borrow as they did before the crash of 2008 — borrowing that temporarily masked their declining purchasing power.
As a result, businesses are reluctant to hire. This is the main reason why the recovery has been so anemic.
As wealth and income rise to the top, moreover, so does political power. The rich are able to entrench themselves by lowering their taxes, gaining special tax breaks (such as the “carried interest” loophole allowing private equity and hedge fund managers to treat their incomes as capital gains), and ensuring a steady flow of corporate welfare to their businesses (special breaks for oil and gas, big agriculture, big insurance, Big Pharma, and, of course, Wall Street).
All of this squeezes public budgets, corrupts government, and undermines our democracy. The issue isn’t the size of our government; it’s who our government is for. It has become less responsive to the needs of most citizens and more to the demands of a comparative few.
The Republican response – as we saw dramatically articulated this past week in Tampa – is to further reduce taxes on the rich, defund programs for the poor, fight unions, allow the median wage to continue to fall, and oppose any limits on campaign contributions or spending.
It does not take a great deal of brainpower to understand this strategy will lead to an even more lopsided economy, more entrenched wealth, and more corrupt democracy.
The question of the moment is whether next week President Obama will make a bold and powerful rejoinder. If he and the Democratic Party stand for anything, it must be to reverse this disastrous trend.
A half dozen fact-checking organizations and websites have refuted Romney’s claims that Obama removed the work requirement from the welfare law and will cut Medicare benefits by $216 billion.
Last Sunday’s New York Times even reported on its front page that Romney has been “falsely charging” President Obama with removing the work requirement. Those are strong words from the venerable Times. Yet Romney is still making the false charge. Ads containing it continue to be aired.
Presumably the Romney campaign continues its false claims because they’re effective. But this raises a more basic question: How can they remain effective when they’ve been so overwhelmingly discredited by the media?
The answer is the Republican Party has developed three means of bypassing the mainstream media and its fact-checkers.
The first is by repeating big lies so often in TV spots – financed by a mountain of campaign money – that the public can no longer recall (if it ever knew) that the mainstream media and its fact-checkers have found them to be lies.
The second is by discrediting the mainstream media – asserting it’s run by “liberal elites” that can’t be trusted to tell the truth. “I am tired of the elite media protecting Barack Obama by attacking Republicans,” Newt Gingrich charged at a Republican debate last January, in what’s become a standard GOP attack line.
The third is by using its own misinformation outlets – led by Fox News, Rush Limbaugh and his yell-radio imitators, book publisher Regnery, and the editorial page of the Wall Street Journal, along with a right-wing blogosphere – to spread the lies, or at least spread doubt about what’s true.
Together, these three mechanisms are creating a parallel Republican universe of Orwellian dimension – where anything can be asserted, where pollsters and political advisers are free to create whatever concoction of lies will help elect their candidate, and where “fact-checkers” are as irrelevant and intrusive as is the truth.
Democracy cannot thrive in such a place. To the contrary, history teaches that this is where demagogues take root.
The Romney campaign has decided it won’t be dictated by fact-checkers. But a society without trusted arbiters of what is true and what is false is vulnerable to every lie imaginable.
But W’s ghost may be there, anyway.
The National Weather Service says tropical storm Isaac is now heading for New Orleans, and Isaac is projected to become a Category 1 hurricane by the time it makes landfall late Monday or early Tuesday.
Isaac is very likely to revive memories of the Bush administration’s monumental incompetence in dealing with the needs of Americans caught in Hurricane Katrina.
And if the public remembers the Bush administration’s incompetence with Katrina, they may also recall the Bush administration’s incompetence and its lies about weapons of mass destruction in Iraq — which led us into that devastating war.
And the public may recall how George W. Bush took the $5 trillion surplus Bill Clinton bequeathed to him and turned it into a $6 trillion budget deficit by slashing taxes, mostly on the rich, and by creating an expensive new Medicare drug benefit that helped drug companies more than it helped seniors.
The public might even recall how the Bush administration tried not to see what Wall Street was up to when the Street went on a rampage of risky bets, and then, when Wall Street was about to melt down, pushed Congress into approving a no-strings bailout — both of which cost the nation billions more.
Indeed, we’re still living with George W. Bush’s legacy — the last Republican to occupy the White House — which is a truth that Romney is desperate to put out of our minds. He wants to blame the bad economy, and most of everything else, on Obama.
The GOP was intent on not even bringing up Bush’s name at the GOP convention, because the former president might also remind Americans how little the Republicans care about average Americans, like those caught in Hurricane Katrina, and how much they care about top corporate and Wall Street executives, like those being entertained in Tampa.
But Hurricane Isaac seems likely to remind Americans anyway.
Let us hope and pray Isaac doesn’t cause the disaster of Katrina. We can at least be confident that the Obama administration will respond as the Bush administration didn’t.
But the split screen on the TV newscasts — part GOP convention, part Hurricane Isaac bashing into the Gulf Coast — may nonetheless pose a public-relations disaster for the GOP.
I’ve been struck by the baldness of Romney’s repetitive lies about Obama — that Obama ended the work requirement under welfare, for example, or that Obama’s Affordable Care Act cuts $716 billion from Medicare benefits.
The mainstream media along with a half-dozen independent fact-checking organizations and sites have called Romney on these whoppers, but to no avail. He keeps making these assertions.
Every campaign is guilty of exaggerations, embellishments, distortions, and half-truths. But this is another thing altogether. I’ve been directly involved in seven presidential campaigns, and I don’t recall a presidential candidate lying with such audacity, over and over again. Why does he do it, and how can he get away with it?
The obvious answer is such lies are effective. Polls show voters are starting to believe them, especially in swing states where they’re being repeated constantly in media spots financed by Romney’s super PAC or ancillary PACs and so-called “social welfare” organizations (political fronts disguised as charities, such as Karl Rove and the Koch brothers have set up).
Romney’s lying machine is extraordinarily well financed. By August, according to Jane Mayer in her recent New Yorker article, at least 33 billionaires had each donated a quarter of a million dollars or more to groups aiming to defeat Obama – with most of it flooding into attack ads in swing states.
In early August, “Americans for Prosperity,” one of the nonprofit front groups masquerading as a charity, and founded in part by billionaire right-wingers Charles and David Koch, bought some $27 million in ad time on spots now airing in eleven swing states.
So Romney’s lying machine is working.
But what does all this tell us about the man who is running this lying machine? (Or if Romney’s not running it, what does it tell us about a man who would select the people who are?)
We knew he was a cypher — that he’ll say and do whatever is expedient, change positions like a chameleon, eschew any core principles.
Yet resorting to outright lies — and organizing a presidential campaign around a series of lies — reveals a whole new level of cynicism, a profound disdain for what remains of civility in public life, and a disrespect of the democratic process.
The question is whether someone who is willing to resort to such calculated lies, and build a campaign machine around them, can be worthy of the public’s trust with the most powerful office in the world.
David Brooks in today’s New York Times commits the standard error of pundits who want to appear neutral but know the Romney-Ryan plan would be a disaster for America. He asserts that Ryan makes a serious effort at entitlement reform. “If you believe entitlement reform is essential for national solvency, then Romney-Ryan is the only train leaving the station.”
Ryan “reforms” Medicaid by destroying it – cutting the federal contribution by some $800 billion and then continuing the cuts after the first ten years until federal spending is a small fraction of what it is today, and handing it over to the states, which can’t possibly keep the program going.
Ryan “reforms” food stamps by slashing them – reducing the federal contribution by around $125 billion and then, beyond the first decade, essentially ending the program altogether.
He “reforms” Medicare by substituting vouchers that can’t possibly keep up with the rising costs of health care.
Originally he wanted to “reform” Social Security by turning it into private savings accounts whose value would rise or fall at the whim of the Wall Street casino. (Now he doesn’t suggest any reform of Social Security. )
You want real entitlement reform? President Obama has begun it. Rational people would make sure he gets a second term to:
Use the government’s huge bargaining clout in Medicare and Medicaid to push down drug costs and the costs of medical providers, and to shift from a fee-for-services system to a payments-for-healthy-outcomes system.
Then allow anyone of any age to join Medicare so all Americans can get affordable health care.
Fold food stamps and other programs for the poor into a single enlarged Earned Income Tax Credit — a monthly cash grant that’s inversely related to income.
Save Social Security by eliminating the ceiling on income subject to it. (Now, income over $110,100 isn’t touched.)
These are real reforms. Ryan isn’t an entitlement reformer. He’s an entitlement destroyer. And in an era of rampant economic insecurity, Ryan’s destruction would cause American families even greater hardship.
Mitt Romney hasn’t provided details so we should be grateful he’s selected as vice president a man with a detailed plan Romney says is “marvelous,” “bold and exciting,” “excellent,” “much needed,” and “consistent with” what he’s put out.
So let’s look at the five basic features of this “marvelous” Ryan plan.
FIRST: It would boost unemployment because it slashes public spending next year and the year after, when the economy is still likely to need a boost, not a fiscal drag. It would be the same austerity trap now throwing Europe into recession. According to the Economic Policy Institute, Ryan’s plan would mean 1.3 million fewer jobs next year than otherwise, and 2.8 million fewer the year after.
SECOND: Ryan would take from lower-income Americans and give to the rich – who already have the biggest share of America’s total income and wealth in almost a century. His plan would raise taxes on families earning between 30 and 40 thousand dollars by almost $500 a year, and slash programs like Medicare, food stamps, and children’s health What would Ryan do with these savings? Reduce taxes on millionaires by an average of over $500,000 a year.
THIRD: Ryan wants to turn Medicare into vouchers that won’t keep up with the rising costs of health care – thereby shifting the burden onto seniors. By contrast, Obama’s Affordable Care Act saves money on Medicare by reducing payments to medical providers like hospitals and drug companies.
FOURTH: He wants to add money to defense while cutting spending on education, infrastructure, and basic research and development. America already spends more on defense than the next five biggest military spenders put together. Our future productivity depends on the public investments Ryan wants to cut.
FIFTH AND Finally, Ryan’s budget doesn’t even reduce the federal budget deficit – not for decades. Remember: He’s adding to military spending, giving huge additional tax cuts to the very rich, and stifling economic growth by cutting spending too early. The Center for Budget and Policy Priorities estimates Ryan’s Roadmap would push public debt to over 175 percent of GDP by 2050.
So there you have it. The Ryan – Ryan-ROMNEY – economic plan.
And the five reasons why it would be a disaster for America.
Mitt Romney says “every year I’ve paid at least 13 percent [of my income in taxes] and if you add in addition the amount that goes to charity, why the number gets well above 20 percent.”
This is supposed to be in defense of not releasing his tax returns.
Assume, for the sake of the argument, he’s telling the truth. Since when are charitable contributions added to income taxes when judging whether someone has paid his fair share?
More to the point, Romney admits to an income of over $20 million a year for the last several decades. Which makes his 13 percent — or even 20 percent — violate the principle of equal sacrifice that lies at the core of our notion of tax fairness.
Even Adam Smith, the 18th century guru of free-market conservatives, saw the wisdom of a graduated tax embodying the principle of equal sacrifice. “The rich should contribute to the public expense,” he wrote, “not only in proportion to their revenue, but something more in proportion.”
Equal sacrifice means that in paying taxes people ought to feel about the same degree of pain regardless of whether they’re wealthy or poor. Logically, this means someone earning $20 million a year should pay a much larger proportion of his income in taxes than someone earning $200,000, who in turn should pay a larger proportion than someone earning $50,000.
But Romney’s alleged 13 percent tax rate is lower than that of most middle class Americans who earn a tiny fraction of what he earns.
At a time when poverty is increasing, when public parks and public libraries are being closed and when public schools are shrinking their offerings and their hours, when the nation’s debt is immense, and when the 400 richest Americans have more wealth than the bottom 150 million of us put together — Romney’s 13 percent is shameful.
On Friday, Paul Ryan, the presumptive Republican vice-presidential nominee, made the most populist speech of this campaign season.
“It’s the people who are politically connected, it’s the people who have access to Washington that get the breaks,” he told an enthusiastic crowd of over 2,000 at a high school gym in Virginia.
“Well, no more. We don’t want to pick winners and losers in Washington… . Hardworking taxpayers should be treated fairly and it should be based on whether they’re good, whether they work hard and not who they know in Washington. That’s entrepreneurialism. That’s free enterprise.”
Sounds good, but earlier this week – three days after being picked as Romney’s running-mate – Ryan went to Las Vegas to pay homage to Sheldon Adelson, the casino billionaire who is the poster boy for using money to become “politically connected” in Washington, and getting the “breaks” that come with it. Adelson has promised to donate up to $100 million to make sure Romney and Ryan are in the White House next year.
When China’s pitch for the 2008 Olympics was endangered by a House resolution opposing the bid because of China’s “abominable human rights record,” Adelson phoned Tom DeLay, then House majority whip and recipient of Adelson’s political generosity — urging him to block the resolution, which DeLay promptly did. The next day, according to the New York Times, a Chinese vice premier promised Mr. Adelson an endless line of gamblers to the Macau casino.
The money Adelson has committed to putting Romney and Ryan into the White House is a business investment. Adelson has a lot riding on the 2012 election.
Last year, his Las Vegas Sands Corporation came under investigation by the Justice Department and the Securities and Exchange Commission for possible violations of the Foreign Corrupt Practices Act — bribing Chinese officials to help expand its casino in Macau.
The U.S. attorney’s office in Los Angeles, meanwhile, is investigating whether the Sands Corporation violated federal money-laundering laws by accepting more than $100 million from high-rolling gamblers accused of drug trafficking and embezzlement, rather than reporting the suspicious funds to the government.
Ryan has also been a major recipient of contributions from billionaire energy moguls Charles and David Koch. Koch Industries PAC has donated more than $100,000 to Ryan’s campaigns and his leadership PAC – more than any other corporate PAC, according to a NY Times analysis of campaign records.
You see, Koch industries spans a variety of oil and gas investments – whose value would be compromised if Congress and the White House got serious about climate change.
Small wonder Paul Ryan has emerged as one of Congress’s most outspoken skeptics of climate change. He has also repeatedly voted against energy efficiency standards, including a House vote to prohibit the EPA from regulating greenhouse gases.
Several months ago, when I debated Paul Ryan on ABC-TV’s “This Week,” he said we need to shrink the size of government because big corporations and wealthy individuals otherwise use government to their advantage.
“If the power and money are going to be here in Washington, that’s where the influence is going to go … that’s where the powerful are going to go to influence it,” he said.
It’s an odd argument coming from Ryan because his proposed budget doesn’t shrink government by cutting benefits and payments to big business and the rich. He increases military payments to defense contractors, for example, slashes Wall Street regulations, and gives giant tax benefits to the rich.
His budget shrinks government mainly by cutting benefits and payments to the poor and lower-income Americans. Over 60 percent of his spending cuts target programs for Americans in the bottom third of the income ladder.
Ryan is correct when he says “it’s the people who are politically connected, it’s the people who have access to Washington that get the breaks.”
But his faux populism obscures the main point. A much smaller government still dominated by money would continue to do the bidding of billionaires like casino mogul Sheldon Adelson, energy moguls like the Koch bothers, military contractors, and other high rollers now actively trying to put Ryan and Romney into the White House.
It just wouldn’t do anything for the rest of us.
I keep hearing that Mitt Romney’s pick of Paul Ryan “enables the country to have the debate it needs to have,” or “permits us to have a grownup discussion,” or “finally presents America with a real choice.” The New York Times oped page proclaims: “Let the Real Debate Begin!”
Debate? What debate?
Romney isn’t even standing by Ryan’s budget plan. He’s been distancing himself from it from the moment he tabbed Ryan for the ticket. “I’m the one running for President,” he keeps saying in response to reporters’ questions about whether he agrees with Ryan.
Not even Ryan will say publicly what the Romney economic plan entails. “We haven’t run the numbers yet,” he repeats – as if there were numbers in the Romney plan to run. But the numbers in Romney’s plan are like the numbers in Romney’s tax returns — they’re invisible to anyone who might have an interest in knowing.
But even if Romney were to adopt Ryan’s budget plan intact we still wouldn’t have a real debate because Ryan’s own plan itself lacks specifics that add up.
None of the budgets Ryan has come up with as chair of the House Budget Committee indicate which tax loopholes he’d close and exactly which programs for lower-income Americans he’d eliminate in order to balance the budget.
Ryan claims that his revenue targets can be met by “broadening the tax base,” but he hasn’t said how he’d do it. He’s insisted on keeping two of the biggest loopholes that overwhelmingly favor the wealthy —the preferential tax rates on capital gains and dividends.
In fact, Ryan’s budget is larded with so much defense spending and so many tax cuts for the wealthy that it doesn’t even lower the debt — when exposed to realistic assumptions.
It baldly assumes that tax cuts for the rich will generate revenues totaling 18.4 percent of the economy over the next decade. That’s supply-side nonsense. When the non-partisan Tax Policy Centerlooked at Ryan’s budget plan, it calculated that revenues would average only 16.3 percent over the decade — $4 trillion less.
Under that revenue estimate, Ryan’s budget would increase debt as a share of the economy for more than four decades – pushing the public debt to over 175 percent of GDP by 2050.
We can’t even have a clear debate about programs like Medicare, because Romney and Ryan seem determined to sow as much confusion as possible about their proposed voucher system. (At least Romney says his own approach to Medicare is “almost identical” to Ryan’s.)
They’ve been charging all week that President Obama’s Affordable Care Act “robs” Medicare of more than $700 billion over the next decade. In reality, the Romney-Ryan plan saves exactly the same amount. But it does so by shifting costs to seniors whose vouchers won’t keep up with the projected cost of health care. Obama’s savings come from reduced payments to medical providers.
What’s really driving Medicare costs – as well as future federal budget deficits – is the increasing costs of health care overall, combined with aging boomers. But don’t expect a debate over how to reign in healthcare costs because Romney and Ryan haven’t put forward a healthcare plan. All they want to do is repeal the Affordable Care Act, leaving 50 million Americans without health insurance coverage.
We won’t have a clear debate over whether to raise tax rates on the wealthy because Romney and Ryan are sticking to the conservative bromide that the wealthy and big corporations need more tax cuts in order to create jobs – even though America’s top earners are now taking home more of the nation’s income than they have in eighty years, and corporations are sitting on more than a trillion dollars of cash they don’t know what to do with.
We won’t even have a debate over how to prevent another meltdown of Wall Street or a taxpayer bailout of “too-big-to-fail” banks because Romney and Ryan don’t have a plan for preventing another Wall Street crisis. All they want to do is repeal the Dodd-Frank act.
Romney’s choice of Ryan won’t usher in a “real debate” about much of anything except, perhaps, the danger to our democracy of billionaires like casino-magnate Sheldon Adelson (whose blessing Ryan immediately sought this week) who are pouring tens of millions of dollars into negative advertising. (Adelson alone has committed $100 million of his fortune.)
Those negative ads, by the way, are making it all the harder for average Americans to sort out the truth from well-financed big lies – and understand, let alone debate, the big issues this election year.
What Romney didn’t say was that his running-mate’s budget — approved by House Republicans and by Romney himself — would cut Medicare by the same amount.
The big difference, though, is the Affordable Care Act achieves these savings by reducing Medicare payments to drug companies, hospitals, and other providers rather than cutting payments to Medicare beneficiaries. A July 24, 2012 report from the non-partisan Congressional Budget Office confirms this.
The Romney-Ryan plan, by contrast, achieves its savings by turning Medicare into a voucher whose value doesn’t keep up with expected increases in healthcare costs — thereby shifting the burden onto Medicare beneficiaries, who will have to pay an average of $6,500 a year more for their Medicare insurance, according an analysis of the Republican plan by the Congressional Budget Office.
Moreover, the Affordable Care Act uses its Medicare savings to help children and lower-income Americans afford health care, and to help seniors pay for prescription drugs by filling the so-called “donut hole” in Medicare Part D coverage.
The Romney-Ryan plan uses the savings to finance even bigger tax cuts for the very wealthy.
Spread the word. Don’t allow the GOP to get away with this demagoguery.