Relevant and even prescient commentary on news, politics and the economy.

The Real Problem With Ann Romney

My introduction (so to speak) to Ann Romney came, if I recall correctly, about two years ago, when I read an article (I can’t remember where) that profiled the Romneys in-depth.  The article discussed the Seamus matter, and the 2007 Boston Globe article in which the Romneys’ son Tagg revealed the incident to reporter Neil Swidey. 

But I had heard about that before; I read Gail Collins’ New York Times column regularly, and have reacted to the incident with as much dismay as she has.  And I had wondered before why Ann hadn’t disabused her husband of the idea that they should put the dog, rather than, say, the luggage or athletic equipment that they also were transporting on the station wagon roof.  And I wondered this again when reading the new detailed profile, which pointed out that during those long trips, Romney refused to stop for bathroom breaks at the request of any of the kids, but would do so at Ann’s request.

In fact, a strong theme of the article is that Ann pretty much calls the shots on family matters. Large and small.  Including, the article said, on the whether to enlarge their home, repeatedly, so that even in their upscale suburb—an older elegant suburb of Boston, which Wikipedia says has seen little growth since the 1950s and “is best known for the mansion-filled Belmont Hill neighborhood, although most residents live in more densely settled, low-lying areas around the Hill”—the house now dwarfs nearby ones. 

According to the article, during Romney’s run for governor, some of their neighbors complained publicly about the Romneys’ outside expansion of their home in the older, built-up suburb. Friends of the Romneys had told reporters then that it was Ann who had wanted the expansions.  When asked about it by a reporter, she said that she and her husband wanted the expansions because they wanted their house to be the one where their kids and their friends wanted to spend most of their time.

That’s right.  Ann Romney thought it wouldn’t sufficiently tug at the heartstrings of parents to simply explain that they had five children, close in age and all still at home when the expansions were done, and that they wanted more room for the family.  No, instead, her tin ear told her it was better politically to say they decided to use their larger purchasing power to buy the favor of their kids and their kids’ friends and win the competition for who’s home was most preferred as a hangout.  After all, doesn’t every parent want that?  And so wouldn’t every parent identify with their decision to grow their home in proportion to their huge income?

Well, yes, to the first question.  And, no, to the second one.  Or at least, no, to the indifference this woman showed to the interests of others—so indifferent that she thought it was a good political move to say what she said.

I thought of that article today when reading comments on another website about the news reports of Ann’s remarks last night in a radio interview in Iowa:

Stop it. This is hard. You want to try it? Get in the ring.  This is hard and, you know, it’s an important thing that we’re doing right now and it’s an important election and it is time for all Americans to realize how significant this election is and how lucky we are to have someone with Mitt’s qualifications and experience and know-how to be able to have the opportunity to run this country.

One of the commenters mentioned a statement by Ann back in May or June, shortly after her husband had secured the nomination, in which she said, “It’s our turn.”  I remember the statement well—its smugness and, even more than that, its self-absorption.  It’s all about them, apparently, according to her, I remember thinking.  I was surprised at the time that more wasn’t made of the comment, in the media.  But it probably was viewed as a one-off.  And she isn’t the candidate; she’s just the candidate’s wife.

But as more time has passed, and she’s been more prominent in the campaign, here vapidity, shallowness and utter self-absorption seem to me striking—and undeniable.  When she talks about her own (very serious) medical problems, she gives no indication at all that she’s aware that many others have very serious medical problems but no way to buy a horse for therapy.  When she talks about her family’s travails other than her serious medical problems, she lists long, rainy afternoons when her kids grew antsy and noisy in her huge home with so many amenities that the kids and their friends all wanted to spend a lot of time there.  When she talks of her husband’s generosity, with his time and his money, she talks of his kindnesses and generosity toward their friends, extended family members and members of their religious order; she gives no hint that he, or she, has ever had a generous thought toward anyone else. 

Chances are, he (if not she) has, but apparently neither of them realizes that kindnesses, love and emotional support, or at least empathy, toward people with whom they can’t quiet identify may be important for someone in high public office to have.  And, conversely, that being, say, a parent who wants the best for her kids at the expense of other parents isn’t a public policy position.  Or at least isn’t one that will endear you to others.  And, for that matter, that being a parent who wants the best for her kids, period, hardly distinguishes you from others, and that it isn’t a public policy position.  I’d say she needs a new schtik, but I don’t think this is a schtik.  I think there’s just nothing more to her.  No discernible depth whatsoever. Unless you count her promise during her convention speech that “this man will not fail!”

By now, anyone who hasn’t noticed this woman’s vapidity, shallowness and bald cluelessness hasn’t been paying much attention or is just blinded by partisanship. Nor is my view a partisan one. It’s absolutely impossible for me to imagine Cindy McCain, Laura Bush or Barbara Bush (none of whom were political personalities in their own right, as was Elizabeth Dole) making such hollow, shallow comments, much less doing it incessantly, uninterrupted by anything thoughtful.  Then again, those three women had actual brains. And some substance.

I don’t begrudge Ann Romney her moments of public frustration and anger.  These last two weeks surely have been an emotional ordeal for her, it’s been a long, long, trying campaign, and she is, after all, just the candidate’s spouse, not the candidate.  And there’s a limit to the snarkiness that I want to employ against the spouse of a candidate.  But after months of trying to like her, then to tolerate her, even if I couldn’t stand her husband, I’ve found it, well, hard.

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Cactus and his merry band of madmen…and Megan McArdle

I googled the title phrase and ‘Behold!’, here are the three links.  Mike also sent them.

Cactus and his merry band of madmen and Megan McArdle

Megan McArdle has a question

Megan McArdle has a question:

What happens to the cottage industry among Democratic-leaning armchair economists grinding out analyses proving that Democratic presidents are, like, totally awesome for the economy? Presuming that we’re stuck–as seem very likely–in at least a couple of years of really grinding low-to-no growth, Obama is going to destroy their figures. Are we in for a resurgence of belief in exogenous growth factors?

Question answered

Now, of course, it may be that the economy starts growing like gangbusters in the next year.  In which case I expect that Cactus and his merry band of madmen will continue with their arguments.  But if, as most people expect, growth continues to stall for the next few years,  it seems I can look forward to more explanations of why Democrats–and only Democrats–can be thrown out of the sample if they have low growth and betray The Faith; and why the economic results of Democratic presidential administrations–and only Democratic presidential administrations–are sensitive to exogenous starting conditions.

Response to Megan McArdle again

“Going back to 1952 at least, every Democrat, every single one, has increased the tax burden. Every single Republican lowered them.”-McArdle

I had some posts after that, perhaps time to revisit them, that showed that not only did the change in the tax burden correlate with growth, the change in the tax burden in the first two years of an administration’s term correlated with the growth rate in the final six years. And not in the direction McMegan likes to see. Sure, correlation does not imply causality, but it just so happens that Presidents under whom growth in years 2 – 8 was fastest also were the Presidents who found a way to go back in time to years 1 & 2 and raise the tax burden. Or something like that. Go figure.   

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More New Books Highlight Plight of Middle Class

by Kenneth Thomas

More New Books Highlight Plight of Middle Class

The situation of the middle class is a hot topic these days, and rightly so. In addition to James Carville and Stan Greenberg’s recent book, It’s the Middle Class, Stupid, new books are out by Donald Barlett & James Steele, Jeff Faux, and Mike Lofgren.Together, they advance our understanding of middle class issues significantly.

Barlett and Steele have been sounding the alarm about middle class decline since they wrote the first newspaper articles forming the core of 1992’s America: What Went Wrong?  In The Betrayal of the American Dream, they tell the stories of everyday Americans, many of whom they kept up with after interviewing them for previous books. They date the beginning of the decline of the middle class to the 1970s, which I think is correct since that is when real wages for production and non-supervisory workers began their forty year decline. They emphasize the central role of Congressional and Presidential decision-making that has given us tax rules favoring the 1%, laws allowing private equity and other corporate raiders to raid pension funds and break contracts with unions and retirees, trade agreements, industry deregulation (which they see as highly destabilizing for the middle class), the destruction of retirement via the assault on pensions and their replacement with 401(k)’s, and the devastation of offshoring.

Their proposed solutions include raising taxes on the rich, and to consider instituting a financial transactions tax (also known as a Tobin tax, after its first proponent) or a gross receipts tax, which would be harder to dodge than the corporate income tax. Barlett and Steele argue further that we need to rebuild manufacturing and reduce the trade deficit, with high tariffs if necessary. They propose massive investments in infrastructure and education, including job training. Finally, they argue that the financial fraudsters who caused the 2008 financial crisis need to be prosecuted. Surprisingly, they say little about getting money out of politics, though they do mention it in their prologue as well as the well-funded corporate propaganda machine.

Jeff Faux, founder of the Economic Policy Institute, was fighting trade agreements long before mainstream economists were willing to admit that maybe free trade isn’t always good for everybody, especially workers in the United States. His book, The Servant Economy, is a dystopian vision of the future of the middle class if present trends are not reversed. His basic argument is what he calls an “end-of-empire story,” that the U.S. can no longer sustain subsidized capitalism, global military dominance, and middle class prosperity. He argues that the country’s former economic and military dominance gave it a “cushion” that was able to sustain the middle class, but that the pressures of international trade and global competition have eroded that cushion along with the nation’s ability to achieve all three of the goals mentioned above.

For Faux, much of the problem stems from the increasing U.S. trade deficit, which figures in prominently throughout the book. The rise of finance relative to manufacturing is a key problem as well, one which has made the Democratic Party more dependent on Wall Street Money, which led to Clinton ending Glass-Steagall and Obama treating bankers with kid gloves after he came into office. Worse, as we saw in the 2011 debt negotiations and other instances, the President has made it clear that he thinks there needs to be cuts to Social Security.

“Hope is not a strategy,” according to Faux, and he devotes an entire chapter to what he calls “the shaky case for optimism.” He foresees a “politics of austerity” that will mean cuts to middle class programs, the continuing loss of good jobs to the trade deficit, and slowly declining living standards and economic security for the vast majority of Americans for decades to come.. He calls cuts to Social Security and Medicare “a done deal.” To me, perhaps the single most depressing statistic in the book relates to the much hyped “onshoring” phenomenon: GE has moved some production from China to Louisville, but the workers there make $13/hour compared to the $22/hour they formerly made.

What, then, is to be done? In a talk Faux gave at the Economic Policy Institute August 15th, he explained that he didn’t see the need to give a laundry list of policy proposals because, first, he had done so in previous books, and second, there was no point in it unless we change government decision-making. Thus, it is essentially a one-point program, a constitutional amendment that ends corporate “personhood” permanently. This would also have the effect of overturning Citizens United. Without that, he argues, there is no hope.

Lofgren’s book, The Party Is Over, is a Republican-eye view of what went wrong, beginning with Newt Gingrich’s takeover of the Republican Party. While highly critical of the rightward, anti-science turn of his party, he argues that the Democrats are not much better, and have suffered from extremely bad messaging (he says the stimulus act should have been called the “jobs bill,” for example). Interestingly, his major recommendation is to cut trillions from defense spending and redirect it to infrastructure. Of course, he wants to get the money out of politics, too, but cutting defense is his most distinctive policy proposal.

Taken together, these books are largely complementary, though each has its own distinct emphasis. Faux’s book, in my opinion, is the best of the three, though also the most depressing. His vision of a likely future is far too plausible to take lightly.

cross posted with Middle Class Political Economist

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Health Care Thoughts: PPACA Penalty/Tax

by Tom aka Rusty Rustbelt

Health Care Thoughts: PPACA Penalty/Tax

The Congressional Budget Office predicts in 2016 up to 6 million largely middle income workers will pay the PPACA “tax” or “penalty” or whatever we decide to call it, averaging about $1200. This is about 50% higher than previous estimates of impacted taxpayers. A weak economy plays into the increased estimate.

According to the CBO, most of the payers will be in the middle income workers. Does this constitute a middle class tax increase?

In this political season hot rhetoric is flying from both sides. Expect the charges and counter charges to continue.

More info: http://www.nytimes.com/2012/09/20/us/more-expected-to-face-penalty-under-health-law.html

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Project S.H.A.M.E. on Megan McArdle…

Angry Bear has had a history of disagreement with Megan McArdle via her Atlantic magazine posts (starting in 2007), at one point being called Mike and his merry madmen in print by Megan McArdle (in exasperation?). Still. the madmen included Mike, Dan Crawford, Spencer England, Ken Houghton, Robert Waldmann, and other notables brought in to help. I will have a history up later when I can sort them out.

It is with feeling some real vindication publicly when I saw Yves Smith post an entire column from Project Shame on Megan McArdle well worth reading. It begins:

Megan McArdle is a Koch-trained conservative activist working as a business journalist and pundit. She earned her MBA from the University of Chicago, received journalism training at the Kochs’ flagship libertarian think-tank, the Institute for Humane Studies, and has used her position at The Atlantic and, most recently, Newsweek/The Daily Beast, to run cover for and promote Koch interests and the Republican Party agenda. In early 2009, a GOP outfit backed by the Kochs hailed McArdle for her “leadership role in … re-branding the Republican party.” McArdle continues to conceal the extent of her deeply conflicted relationships with the Koch influence-peddling machine.

Read more at Naked Capitalism.

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A (Very Big) Problem With Robert J. Samuelson’s Political Advice to Romney – [Corrected]

Earlier this week, before the, um, video-recording news broke, it was reported that Romney planned to bring one of those debt clocks to his campaign rallies.  Hmmm, I thought; Obama should return the favor; he should bring a debt clock to his own rallies. A clock that shows what the debt will be under Romney’s “I’ll cut taxes by 20%, and then I’ll cut them more, and then I’ll …”, as he told the Detroit Economic Club last February. 

Or maybe Obama should take two debt clocks to his rallies: one showing the likely debt under Romney’s plan, the other showing the projected debt under the Ryan serious-about-debt-reduction plan.

Sounds like a (campaign) plan, to me!

But, of course, now that the video-recording news has broken, Republicans are scrambling to figure out how Romney can salvage his campaign.  The solution?  Turn it into a plus by illustrating how unmanageable the debt will become—and how awful it will be for later generations to have to handle—if we don’t get entitlements under control!  Y’know, by reversing the savings in Medicare under Obamacare!  And by reducing by 205, rather than raising to Clinton-G.H.W. Bush levels, income tax rates on people with incomes above $250,000!

Yup.  Conservative Washington Post columnist Robert J. Samuelson* uses his column today to join that chorus.  He urges Romney to turn that video-recording lemon into lemonade by claiming that what he (Romney) really meant when he said he knows “some believe that government should take from some to give to the others,” and that he thinks “that’s an entirely foreign concept,” was that the 47% of people who make too little money to pay income taxes as the current tax code is structured should be required to pay income taxes in order to negate some of the revenue loss from the 20% reduction in the tax rate for people with incomes above $250,000, some with incomes way above $250,000.  Like Romney.

Er … I mean … he should turn the discussion into one that shows how serious a challenge it will be for younger generations of people who will take personal responsibility for themselves by forgoing, say, college-tuition loans because those loans no longer exist—oh, or by asking their parents to pay the tuition, and then to lend them the money to become entrepreneurs, like Tagg Romney—to pay down that national debt that by then will be trillions of dollars larger, courtesy of the Romney/Ryan income tax reductions.

Sounds like a (campaign) plan, to me!  Go for it, Mitt!

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*CORRECTION:  Welllll, commenter rjs informed me that Samuelson is not an economist.  He just sorta masquerades as one.  Ooooops.  Sorry about my gullibility there, folks.

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Romney in Boca Raton meets Quantitative Easing

OK just to bring it all together, in Boca Raton Mitt Romney demonstrated that he didn’t know the very latest news about quantitative easing.

Kevin Drum reads the transcript so we don’t have to

On May 17 2012

Romney: Yeah, it’s interesting… the former head of Goldman Sachs, John Whitehead, was also the former head of the New York Federal Reserve. And I met with him, and he said as soon as the Fed stops buying all the debt that we’re issuing—which they’ve been doing, the Fed’s buying like three-quarters of the debt that America issues. He said, once that’s over, he said we’re going to have a failed Treasury auction, interest rates are going to have to go up.

He is discussing QEII and how interest rates will shoot up when it ends.  It ended in July 2011.

Mitt Romney does not keep up with the latest news what monetary policy has been for the preceding 10 months.

But he will bring us recovery not dependency.  Of course.  He undependable.

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Dwight Eisenhower, That Damn Foreigner!

I know some believe that government should take from some to give to the others. I think that’s an entirely foreign concept.

— Mitt Romney, yesterday

Might Romney consider checking what the income tax rates on the wealthy were during the 1950s and ‘60s?

Nah.

What was that funny line that Texas Governor Ann Richards used about George H.W. Bush at the Dem convention in 1992?  Stick a fork in him; he’s done?

Yeah.  That was it.  Stick a fork in him.  He’s done.

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The link from “a fork,” above, is to Washington Post columnist Dana Milbank’s hilarious Romney takedown today.  Enjoy.

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Romney’s Dependency on Rightwing Cliché and Errors of Historical Fact Won’t Deliver Him (Political) Recovery

My experience has taught me that government works best when it creates the space for individuals and families to pursue success and achieve great things. Economic freedom is the only force that has consistently succeeded in creating sustained prosperity and lifting people out of poverty. It is why our economy rose to rival those of the world’s leading powers — and has long since surpassed them all.

The dreamers and the entrepreneurs, not government, built this economy, and they can once again make it strong.

My course for the American economy will encourage private investment and personal freedom. Instead of creating a web of dependency, I will pursue policies that grow our economy and lift Americans out of poverty.

My five-point plan will deliver the economic recovery we’ve all been waiting for and the jobs millions of Americans still need. This can be more than our hope; it can be our future. And it can start this November with your vote.

Romney: I’ll deliver recovery, not dependency, Mitt Romney, USA Today op-ed, today

Of all the many oddities of Romney’s cartoonish campaign and cartoonish campaign persona, the strangest, I think, is his penchant for stating loopy conclusions based upon a single fact that does not even conceivably support the conclusion.  This tactic (if that’s what it is) has been the hallmark, the very essence, of his campaign.  

Last week I questioned whether Romney was a habitual liar or, instead, simply God-awful stupid.  In light of the events of this week—the infamous surreptitiously-filmed fundraising address about the 47% of Americans whom Romney will never be able to convince should take personal responsibility for their lives and their care and who correlate precisely with the 47% of the electorate who are Obama supporters, and his “doubling down” on those comments since release of the video—I think it’s clear that while some of Romney’s incessant wild extrapolations and conflations are part of bizarre campaign tactic, some of the most important ones are not.  They are, rather, the result of jaw-dropping stupidity—an apparent genuine inability to understand the meaning of single facts and to distinguish between entirely separate concepts. 

Not least of these, of course, is that Americans whose income is too low under the tax code for them to owe income tax necessarily don’t take personal responsibly for their lives and for their care, and that since the percentage of Americans who don’t pay income tax is about the same as the percentage of voters who, polls show, support Obama, virtually all people who don’t pay income taxes are Obama supporters, and virtually no Obama supporters pay income taxes.  Warren Buffett must have an income too low to require him to pay income taxes.

Also not least is Romney’s inability to distinguish between a plan—specifics, supported by empirical evidence—and ideological clichés that consist entirely of generic declarations and supposed results.  Placing bullet-point indicators in front of five such declarations doesn’t transform them into a plan.  If he actually has a plan—specifics, supported by empirical evidence—then he should disclose it.  Economic plans are, after all, not tax returns, although it’s no longer surprising that Romney can’t distinguish the two.

But most disconcerting is Romney’s out-of-nowhere, patently false insistence, repeated time and again, that “our economy rose to rival those of the world’s leading powers — and … long since surpassed them all” during a period of lower taxes on the wealthy than we have now—a period of a less-progressive tax code and more inequality.  In other words, during a time when we had, according to him, more economic freedom, than we do now.

It’s long past time for the Obama campaign to educate the public about 20th century American economic and political history.  And to challenge Romney’s intellectual capacity to recognize what facts he needs to know before making important assertions, proposals and decisions, and to understand what those facts indicate or don’t.

Until very recently, I had presumed that Romney was only pretending to think that ideological bromides were actual facts.  I know better now.  And the most effective ads that the Obama campaign can run will show Romney for the intellectual lightweight that he is.  

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What is the Economic Middle Class?

My lovely wife shared this link with me on Facebook.  I got into a discussion in comments there with a right winger who suggested that $250,000 was a very reasonable estimate for median income in Boston.

As it turns out, median household income in Boston is $51,914, close to the national average, and way below the Mass. State average of $67,950.  But right wingers live in a data-free world, so this is no surprise.

Another contention in comments at that site is that the middle class is undefined and undefinable. Not so.  I define middle class household income as the middle quintile.  This range includes the median and a band around it wide enough to hold 20 percent of the population.  You might wish to concoct your own definition with a wider spread, but you’d better not be asymmetric around the median.  Feel free to use the middle three quintiles, if that is your preference.  But if your of concept of middle class gets very far beyond 50% of the population, you really ought to give more thought to what the word “middle” actually means.

Thinking about all this prompted a look at the various income quintiles.  The data, through 2009, is available at the Census Bureau web site, table 694.  This table provides historical data from 1967 through 2009 on the top income limit for the bottom 4 quintiles, and the bottom income limit for the top 5%, expressed in constant 2009 dollars.

Graph 1 presents this data.  The 3rd quintile – my definition of the middle class – is between the orange line and the yellow line.

In 1967, the threshold for the middle quintile was $32, 848.  By 2009, it had increased by 17% to $38,550.  This is a compounded annual growth rate of 0.38%

In 1967, the top limit for the middle (and threshold to the 4th) quintile was $46, 621.  By 2009, it had increased by 33% to $61,801. This is a compounded annual growth rate of 0.68%.

The threshold value for the fifth quintile increased from $66,481 in 1967 by 80% to exactly $100,000 in 2009.  This is a compounded annual growth rate of 0.98%.

To reach the top 5% required an income of 106,684 in 1967.  By 2009, this had increased by 69% to $180, 001.   This is a compounded annual growth rate of 1.25%.

So my comment sparring partner and the current presidential challenger he seems to support are a bit off base.  $250,000 in household income puts a family well above the 95th percentile.  In fact, that is just enough household income to crack the top 2%.

My ongoing hobby of debunking right wing nonsense aside, the point of this post is mainly to inform.
There are two main observations:
1) While the bottom two quintiles haven’t changed much over the decades, entry to the third quintile has crept up a bit; and into higher categories it’s moved up a lot.  We recognize this as stagnation in the bottom half and growing inequality in the top half, skewed powerfully to the top.
2) This data set stops in ’09, so Obama is outside the discussion.  But we can see that all the way up to the 95th percentile, income growth was dead flat during the Bush administration.  No wonder the 95% percentile feels so poor.

But — surely, some wealth was generated during those 8 years.  GDP growth was positive at least some of the time.  I wonder where it all went?

Cross posted at Retirement Blues.

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