Robert Reich
Patricia Mazza, left, meets job seekers during a National Career Fairs' job fair, in New York Wednesday. A small shift one way or the other from September’s jobs report has no statistical significance, Reich writes, and therefore should have no political significance. (Bebeto Matthews/AP)
Why Friday's jobs report should be taken with a grain of salt
Three times today I’ve been asked on media outlets about the likely effect on the presidential election of Friday’s jobs report, depending on what the Bureau of Labor Statistics announces.
Unfortunately, the BLS report is likely to sway some voters — and therefore have an impact on this tight race. But it shouldn’t.
The report surely will be used by one of the candidates to make a sweeping case for himself and against his opponent. An unemployment rate above last month’s 7.8 percent, or a number of new jobs below September’s 114,000, will be wielded by Mitt Romney as evidence the economy is slowing – while a rate below last month’s, and a number above it, will be used by Team Obama as evidence the economy is moving in the right direction. ( Continue… )
Republican presidential candidate, former Massachusetts Gov. Mitt Romney climbs the stairs in a light drizzle as he boards his campaign plane in Vandalia, Ohio, Tuesday. (Charles Dharapak/AP)
Romney's deceit
Over the weekend, Romney debuted an ad in Ohio showing cars being crushed as a narrator says Obama “sold Chrysler to Italians who are going to build Jeeps in China. Mitt Romney will fight for every American job.”
In fact, Chrysler is retaining and expanding its Jeep production in North America, including in Ohio. Its profits have enabled it to separately consider expanding into China, the world’s largest auto market.
Responding to the ad, Chrysler emphasized in a blog post that it has “no intention of shifting production of its Jeep models out of North America to China.” ( Continue… )
Republican presidential nominee Mitt Romney speaks at a campaign rally in Davenport, Iowa Monday. (Brian Snyder/Reuters)
Hurricane Sandy, a $4,000 plane ticket and Mitt Romney's America
Leaving New York City yesterday bound for California on one of the last flights out of JFK before the airport closed, a flight attendant told me I was lucky to already have my ticket. In light of the pending hurricane, the airlines had just hours before jacked up ticket prices on the flight to $4,000 (I had paid a few hundred dollars when I bought it last week).
As a result of the last-minute rush for tickets, the flight was oversold by 47 passengers. So the flight attendants offered money to any passengers who volunteered to switch their tickets to the next flight out of NYC, whenever that might be. The first offer of $200 wasn’t enough to elicit 47 volunteers, nor were the subsequent ones of $300 and $350. An offer of $400 finally did the trick. ( Continue… )
President Barack Obama is seen walking up the steps of Air Force One as he boards Air Force One at Orlando International Airport, Monday. Reich supports President Obama's proposal to end the tax cut for people earning more than $250,000. (Pablo Martinez Monsivais/AP/File)
Should the rich pay more?
As we go into the final days of a dismal presidential campaign where too many issues have been fudged or eluded — and the media only want to talk about is who’s up and who’s down — the biggest issue on which the candidates have given us the clearest choice is whether the rich should pay more in taxes.
President Obama says emphatically yes. He proposes ending the Bush tax cut for people earning more than $250,000 a year, and requiring that the richest 1 percent pay no less than a third of their income in taxes, the so-called “Buffett Rule.”
Mitt Romney says emphatically no. He proposes cutting tax rates on the rich by 20 percent, extending the Bush tax cut for the wealthy, and reducing or eliminating taxes on dividends and capital gains. ( Continue… )
Republican presidential candidate, former Massachusetts Gov. Mitt Romney, speaks during a campaign event at the Red Rocks Amphitheatre Tuesday in Golden, Colo. Average Americans face more economic uncertainty from the possibility of a Romney-Ryan administration than they have had in their lifetimes, Reich writes. (David Goldman/AP)
Mitt Romney's question-mark economy
As we close in on Election Day, the questions about what Mitt Romney would do if elected grow even larger. Rarely before in American history has a candidate for president campaigned on such a blank slate.
Yet, paradoxically, not a day goes by that we don’t hear Romney, or some other exponent of the GOP, claim that businesses aren’t creating more jobs because they’re uncertain about the future. And the source of that uncertainty, they say, is President Obama — especially his Affordable Care Act (Obamacare) and the Dodd-Frank Act, and uncertainties surrounding Obama’s plan to raise taxes on the wealthy.
In fact, Romney has created far more uncertainty. He offers a virtual question mark of an economy
For example, Romney says if elected he’ll repeal Obamacare and replace it with something else. He promises he’ll provide health coverage to people with pre-existing medical problems but he doesn’t give a hint how he’d manage it.
Insurance companies won’t pay the higher costs of insuring these people unless they have extra funds — which is why Obamacare requires that everyone, including healthy young people, buy insurance. Yet Romney doesn’t say where the extra money to fund insurers would come from. From taxpayers? Businesses?
Talk about uncertainty.
Romney also promises to repeal Dodd-Frank, but here again he’s mum on what he’d replace with. Yet without some sort of new regulation of Wall Street we’re back to where we were before 2008 when Wall Street crashed and brought most of the rest of us down with it.
Romney hasn’t provided a clue how he proposes to oversee the biggest banks absent Dodd-Frank, what kind of capital requirements he’d require of them, and what mechanism he’d use to put them through an orderly bankruptcy that wouldn’t risk the rest of the Street. All we get is a big question mark.
When it comes to how Romney would pay for the giant $5 trillion tax cut he proposes, mostly for the rich, he takes uncertainty to a new level of abject wonderment. “We’ll work with Congress,” is his response.
He says he’ll limit loopholes and deductions that could be used by the wealthy, but refuses to be specific. Several weeks ago Romney said he’d cap total deductions at $17,000 a year. Days later, the figure became $25,000. Now it’s up in the air. “Pick a figure,” he now says.
Make no mistake. Wall Street traders and corporate CEOs are supporting Romney not because of the new level of certainty he promises but because Romney promises to lower their taxes.
Meanwhile, many of Romney’s allies who are attacking Obama for creating uncertainty are themselves responsible for the uncertainty. They’re the ones who have delayed and obfuscated Obamacare, Dodd-Frank, and any semblance of a federal budget.
“Continued uncertainty is the greatest threat to small businesses and our country’s economic recovery,” says Thomas Donohue, president and CEO of the U.S. Chamber of Commerce, which has been funneled tens of millions of dollars into ads blaming Obama for the nation’s economic woes.
That’s the same Chamber of Commerce that’s been using every legal tool imaginable to challenge regulations emerging from Obamacare and Dodd-Frank — keeping the future of both laws as uncertain as possible for as long as they can. The Chamber even brought Obamacare to the Supreme Court.
At the same time, congressional Republicans have done everything in their power to scotch any agreement on how to reduce the budget deficit. Because they’ve pledged their fiscal souls to Grover Norquist, they won’t consider raising even a dollar of new taxes. Yet it’s impossible to balance the budget without some combination of spending cuts and tax increases — unless, that is, we do away with Social Security, Medicare and Medicaid, or the military.
Business executives justifiably worry about January’s so-called “fiscal cliff”, requiring sudden and sharp tax increases and spending cuts. But they have no one to blame but Norquist’s Republican acolytes in Congress, including Paul Ryan, all of whom agreed to the fiscal cliff when they couldn’t agree to anything else.
Average Americans, meanwhile, face more economic uncertainty from the possibility of a Romney-Ryan administration than they have had in their lifetimes. Not only has Romney thrown the future of Obamacare into doubt, but Americans have no idea what would happen under his administration to Medicare, Medicaid, college aid, Pell grants, food stamps, unemployment insurance, and many other programs Americans rely on. All would have to be sliced or diced, but Romney won’t tell us how or by how much.
Romney is casting a pall of uncertainty in every direction — even toward young immigrants. He vows if elected he’ll end Obama’s reprieve from deportation of young people who arrived in the U.S. illegally when they were children. As a result, some young people who might qualify are holding back for fear the information they offer could be used against them at later date if Romney is elected.
Conservative economists such as John Taylor of the Hoover Institution, one of Romney’s key economic advisors, continue to attribute the slow recovery and high unemployment to Obama’s “unpredictable economic policy.”
In truth, Romney and the GOP have put a giant question mark over the future of the economy and of all Americans. The only way the future becomes more certain is if Obama wins on Election Day.
Republican presidential nominee Mitt Romney and President Barack Obama answer a question during the third presidential debate at Lynn University, Monday. President Obama won last night's debate not only because he knows more about foreign policy than does Mitt Romney, Reich writes, but because Obama understands how to wield the soft as well as the hard power of America. (Win McNamee/AP/Pool)
Presidential debate: Obama as Commander-in-Chief, Romney as banal bully
I thought the third and last presidential debate was a clear win for the President. He displayed the authority of the nation’s Commander-in-Chief – calm, dignified, and confident. He was assertive without being shrill, clear without being condescending. He explained to a clueless Mitt Romney the way the world actually works.
Romney seemed out of his depth. His arguments were more a series of bromides than positions – “we have to make sure arms don’t get into the wrong hands,” “we want a peaceful planet,” “we need to stand by our principles,” “we need strong allies,” “we need a comprehensive strategy to move the world away from terrorism,” and other banalities.
This has been Romney’s problem all along, of course, but in the first debate he managed to disguise his vacuousness with a surprisingly combative, well-rehearsed performance. By the second debate, the disguise was wearing thin.
In last night's debate, Romney seemed to wither — and wander. He often had difficulty distinguishing his approach from the President’s, except to say, repeatedly, “America needs strong leadership.”
On the few occasions when Romney managed to criticize the President, he called for a more assertive foreign policy – but he never specified exactly what that assertiveness would entail. He wanted “tougher economic sanctions on Iran,” for example, or “stronger support for Israel” – the details of which were never revealed.
Obama’s most targeted criticism of Romney, on the other hand, went to Romney’s core weakness – that Romney’s positions have been inconsistent, superficial, and often wrong: “Every time you’ve offered an opinion,” said Obama, “you’ve been wrong.”
Nonetheless, I kept wishing Obama would take more credit for one of the most successful foreign policies of any administration in decades: not only finding and killing Osama bin Laden but also ridding the world of Libya’s Gaddafi without getting drawn into a war, imposing extraordinary economic hardship on Iran, isolating Syria, and navigating the treacherous waters of Arab Spring.
Obama pointed to these achievements, but I thought he could have knitted them together into an overall approach to world affairs that has been in sharp contrast to the swaggering, bombastic foreign policies of his predecessor.
Like George W. Bush, Mitt Romney has a pronounced tendency to rush to judgment – to assert America’s military power too quickly, and to assume that we’ll be viewed as weak if we use diplomacy and seek the cooperation of other nations (including Russia and China) before making our moves.
President Obama won last night's debate not only because he knows more about foreign policy than does Mitt Romney, but because Obama understands how to wield the soft as well as the hard power of America. He came off as more subtle and convincing than Romney – more authoritative – because, in reality, he is.
Although tonight’s topic was foreign policy, I hope Americans understand it was also about every other major challenge we face. Mitt Romney is not only a cold warrior; he’s also a class warrior. And the two are closely related. Romney tries to disguise both within an amenable demeanor. But in both capacities, he’s a bully.
In this October 2012 file photo, Republican presidential candidate, former Massachusetts Gov. Mitt Romney speaks during a campaign event in front of a barn at Ida Lee Park in Leesburg, Va. A recent New York Times article paints Romney as a details person, but Reich argues otherwise. (Alex Brandon/AP/File)
Romney the details man?
The so-called “mainstream media” (aka The New York Times) is constantly being assailed by Republicans and the right for their supposedly liberal slant. Yet another convenient right-wing lie.
Take, for example, Saturday’s above-the-fold NY Times story, entitled (in the print edition that arrived at my home this morning): “Romney Recalled as Leader Who Savors Details.”
What?
It’s mainly a puff piece, aglow with Romney’s supposed managerial prowess. Coming just a bit more than three weeks before Election Day, it attempts to confirm Romney’s central selling point – that he can run the government better than Obama.
Nowhere does the Times bother to mention that Romney’s campaign has been devoid of any detail at all — details about his economic plan, his budget plan, his plan for what to replace Obamacare with, his plan to replace Dodd-Frank, or even details about the taxes he’s paid.
When he was governor of Massachusetts, the citizens of the Commonwealth had no idea what he was doing (I can attest because I was there, and as much in the dark as most people). He kept the details of his governing to himself and his staff. And he spent most of his last two years in office laying the groundwork for his run for the presidency.
Romney has always savored details when it helps him make money. But when it comes to running or holding office he’s been a standout for avoiding all details and keeping the public in the dark.
Republican presidential nominee Mitt Romney and President Barack Obama spar over energy policy during the second presidential debate Tuesday in Hempstead, N.Y. Calling for a breakup of the biggest banks would help Obama win the election, Reich writes. (Charlie Neibergall/AP)
How Obama can defeat Romney: Break up the big banks.
President Obama should propose that the nation’s biggest banks be broken up and their size capped, and that the Glass-Steagall Act be resurrected.
It’s good policy, and it would smoke out Mitt Romney as being of, by, and for Wall Street — and not on the side of average Americans.
It would also remind America that five years ago Wall Street’s excesses almost ruined the economy. Bankers, hedge-fund managers, and private-equity traders speculated on the upside, then shorted on the downside — in a vast zero-sum game that resulted in the largest transfer of wealth from average Americans to financial elites ever witnessed in this nation’s history.
Most of us lost big — including over $7 trillion of home values, a $700-billion-dollar bailout of Wall Street, and continuing high unemployment.
But the top 1 percent have done just fine. In the first year of the recovery they reaped 93 percent of the gains. The latest data show them back with 20 to 25 percent of the nation’s total income — just where they were in 2007.
The stock market has about caught up to where it was before the crash. The pay and bonuses on the Street are once again sky-high. So are the pay and perks of top corporate executives. The Forbes list of richest Americans contains more billionaires than ever.
And the tax rates of the top 1 percent are lower than ever — courtesy of their armies of lobbyists.
Mitt Romney, private equity manager and financier — well within the top one-tenth of 1 percent, collecting more than $20 million a year yet paying 14 percent in taxes because of tax preferences for capital gains and for private-equity — is the avatar for all that’s happened.
Just like the rest of the Street, Romney used other peoples’ money to make big bets, leveraging like mad, pumping and then dumping companies regardless of the human costs.
Worse, Romney wants to cut taxes even further on the top 1 percent — giving them them lion’s share of a $4.7 trillion tax cut — while shredding safety nets the rest of us rely on.
And he wants to repeal the Dodd-Frank Act that goes some way to preventing the worst excesses of the Street.
And this man has an almost 50-50 chance of becoming president?
The President should counter Romney’s extraordinary solicitude toward the Street with a proposal to cap the size of the nation’s biggest banks so that no bank is ever again too big to fail. And to resurrect the Glass-Steagall Act, which once separated commercial from investment banking.
In the 1980s the ten biggest banks had less than 30 percent of bank depositary assets. Now they have 54 percent. And the four biggest now dominate the Street almost completely. Because lenders and investors know they’re too big to fail, the four biggest banks have a competitive advantage over smaller rivals that pose larger financial risks. That means they’ll only get bigger.
Breaking up the biggest banks and capping the size of all banks is hardly a radical suggestion these days. The Dallas Federal Reserve Board, which has never been accused of excessive liberalism, has called for it. So has Sanford Weill, the creator of Citigroup, one of the biggest of the big. So has Daniel Tarullo, the Federal Reserve governor charged with bank regulation. So have conservative commentators such as George Will.
It’s not too late for the President to advocate these measures. In fact, now may be the perfect time. Besides, it’s not as if Wall Street is going to pour campaign contributions into Obama’s coffers anyway; the Street is going with Mitt.
Calling for a breakup of the biggest banks and a resurrection of Glass Steagall would smoke out Mitt Romney — revealing clearly and decisively he’s not on the side of most Americans.
President Barack Obama smiles onstage after the conclusion of his debate with Republican presidential nominee Mitt Romney in the second US presidential debate Tuesday. The president's performance in the debate will almost certainly stop Romney's momentum, Reich writes. (Lucas Jackson/Reuters)
Presidential debate: Obama is back
He’s back.
Last night our president was articulate and forceful — in sharp contrast to his performance in the first presidential debate. He stated his beliefs. He defended his record. He told America where he wanted to take the nation in his second term.
And he explained where Romney wanted to take us.
For example: “Romney says he’s got a five-point plan. Governor Romney doesn’t have a five-point plan; he has a one-point plan. And that plan is to make sure that folks at the top play by a different set of rules. That’s been his philosophy in the private sector; that’s been his philosophy as governor; that’s been his philosophy as a presidential candidate. You can make a lot of money and pay lower tax rates than somebody who makes a lot less. You can ship jobs overseas and get tax breaks for it. You can invest in a company, bankrupt it, lay off the workers, strip away their pensions, and you still make money.”
And:
“Governor Romney … was on ‘60 Minutes’ just two weeks ago, and he was asked, is it fair for somebody like you, making $20 million a year, to pay a lower tax rate than a nurse or a bus driver, somebody making $50,000 a year? And he said, yes, I think that’s fair. Not only that, he said, I think that’s what grows the economy. Well, I fundamentally disagree with that.”
Obama told voters what Romney’s plan was for women (take away their freedom of choice), and for Hispanics (allow police to stop them and demand proof of citizenship, as in the Arizona law “that’s his [Romney’s] policy, and it’s bad policy.”)
He took responsibility for the security lapse in Libya, but made sure Americans understood the danger in Romney’s shoot-from-the-hip, rush to judgment approach to foreign policy.
And the President explained why the way to create more jobs and to get the economy back on track is to strengthen the middle class, in sharp contrast to Romney’s trickle-down redux.
Romney was as combative as in the first debate, but our newly-invigorated president made Romney’s combativeness look like that of a child in a tantrum rather than a principled adult with facts and detailed proposals to support his position.
Romney was also an automaton — moving robot-like across the stage, repeating the same scripted paragraphs in answers to different questions as if he had been programmed with a limited number of options.
Obama, by contrast, seemed steady and relaxed.
The debate left me relieved — the President’s performance will almost certainly stop Romney’s momentum, and may turn the tide — but also left me perplexed. Where was this Barack Obama in the last presidential debate? Was it the altitude in Denver, a failure of preparation, exhaustion, a temporary emotional glitch?
Mostly, though, I’m glad Barack is back.
Stand-ins for Republican presidential candidate, former Massachusetts Gov. Mitt Romney, left, and President Barack Obama, right, run through a rehearsal with moderator Candy Crowley, back to camera, ahead of Tuesday's presidential debate, Monday at Hofstra University in Hempstead, N.Y. (David Goldman/AP)
A memo to the president re: the next debate
To: POTUS
From: Robert Reich
RE: Upcoming debate
Your passive performance in the last debate was damaging because it reenforced the Republican claim that you’ve been too passive in getting jobs back and in responding to terrorism abroad.
That doesn’t mean you have to “come out swinging” this time. You need to be yourself, and one of your qualities that the public finds reassuring is your steadiness and authenticity, by contrast to Romney’s unsteady flip-flopping and apparent willingness to say and be anything. But you will need to be more energetic and passionate.
And although the “town meeting” style debate in which you’ll be answering audience questions isn’t conducive to sharp give-and-take with Romney, look for every opportunity to nail him. Indignance doesn’t come naturally to you, but you have every reason to be indignant on behalf of the American people.
Emphasize these five points:
1. Not only is the economy is improving, but there’s no reason to trust Romney’s claim he would improve it more quickly. He’s given no specifics about how he’d pay for his massive tax cut for the wealthy, or what he’d replace ObamaCare with, or how he’d regulate Wall Street if he repeals Dodd-Frank. His record to date has flip-flopped on every major issue. Why should Americans trust his assertions?
2. Our problems require we pull together, but Romney and his party want to pull us apart. Romney has praised Arizona’s draconian anti-immigration law profiling Hispanics, and has called for “voluntary deportation” by making life intolerable for undocumented workers. He is against equal marriage rights. He wants to ban abortions, and his party and running mate want to ban them even in the case of rape or incest. He’s determined to make the rich richer and the rest of us poorer. Romney is beholden to a radical right-wing Republican party that is out of step with most of America.
3. Romney’s “reverse Robin Hood” agenda is inappropriate at a time when the wealthy are taking home a larger share of total income and wealth than they have in a century, and when the middle class is still struggling. He wants to cut taxes on the rich by almost $5 trillion – which inevitably means higher taxes on the rest of us; and over 60 percent of its budget cuts come out of programs for the poor and working middle class. He’s determined to turn Medicare into vouchers whose value won’t keep up with rising healthcare costs, and turn Medicaid over to cash-starved states. His comment about “47 percent” of Americans not paying taxes and taking government handouts was not only wrong (every working person pays payroll taxes, and every consumer pays sales taxes; and the biggest so-called “entitlements” are Social Security and Medicare, which are insurance programs that Americans pay for during their working years). The comment also reveals a callousness and divisiveness that’s the opposite of what we need now. Romney wants to set Wall Street loose again when the Street’s greed got us into the mess we’re still trying to get out of.
4. Romney views America as if it was one huge corporation, but we’re not a corporation; we’re a nation. He says corporations are people; touts his years at Bain as if making companies profitable qualifies him to be president; wants to deregulate corporations and Wall Street; and assumes CEOs and the wealthy are “job creators,” and if we cut their taxes they’ll have more incentive to create jobs. None of this is true. The nation exists to make lives better for all its people – making sure that corporations treat their workers as assets to be developed rather than as costs to be cut. Companies have been slow to create jobs not because of insufficient profits but because of inadequate customers. The vast American middle class are the real job creators, but they don’t have enough money in their pockets because too many companies have broken the basic bargain linking wages to productivity.
5. On foreign policy, Romney wants to rush to judgment, blaming the administration for not acting quickly enough in Libya on scant information. But that rush-to-judgment mentality is exactly what got us into Iraq eight years ago on the pretext of “weapons of mass destruction.” Two days ago we marked the 50th anniversary of the Cuban missile crisis. Had John F. Kennedy rushed to judgment as Romney wants to, humankind would have been obliterated in a nuclear holocaust.
Be indignant, but measured and steady – as you naturally are. Practice your closing (your last closing was listless) so the nation can see clearly the choice: We’re all in it together, or we’re on our own.
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