News Stories Expose Romney As Pioneer of Outsourcing & Vulture Capitalist

June 23, 2012 — Ron Chusid

The primary point in looking back at Mitt Romney’s career at Bain Capital is that his experience at Bain gave him no expertise regarding creating jobs or improving the economy as president. As Romney is avoiding talk of his brief career in government, it is inevitable that he will face further scrutiny regarding his years at Bain. Yesterday, The Washington Post (contradicting an earlier Post story critical of an Obama campaign ad) reported on how Bain Capital invested in companies exporting jobs overseas:

Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.

During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission.

It didn’t take long after this for Obama to call Romney an “outsourcing pioneer.”

Further in The Washington Post’s report:

For years, Romney’s political opponents have tried to tie him to the practice of outsourcing American jobs. These political attacks have often focused on Bain’s involvement in specific business deals that resulted in job losses.

But a Washington Post examination of securities filings shows the extent of Bain’s investment in firms that specialized in helping other companies move or expand operations overseas. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment.

Bain played several roles in helping these outsourcing companies, such as investing venture capital so they could grow and providing management and strategic business advice as they navigated this rapidly developing field.

The New York Times has a report today which will add to the view of Romney as a vulture capitalist, not a creator of wealth:

The private equity firm, co-founded and run by Mitt Romney, held a majority stake in more than 40 United States-based companies from its inception in 1984 to early 1999, when Mr. Romney left Bain to lead the Salt Lake City Olympics. Of those companies, at least seven eventually filed for bankruptcy while Bain remained involved, or shortly afterward, according to a review by The New York Times. In some instances, hundreds of employees lost their jobs. In most of those cases, however, records and interviews suggest that Bain and its executives still found a way to make money.

Mr. Romney’s experience at Bain is at the heart of his case for the presidency. He has repeatedly promoted his years working in the “real economy,” arguing that his success turning around troubled companies and helping to start new ones, producing jobs in the process, has prepared him to revive the country’s economy. He has fended off attacks about job losses at companies Bain owned, saying, “Sometimes investments don’t work and you’re not successful.” But an examination of what happened when companies Bain controlled wound up in bankruptcy highlights just how different Bain and other private equity firms are from typical denizens of the real economy, from mom-and-pop stores to bootstrapping entrepreneurial ventures.

Bain structured deals so that it was difficult for the firm and its executives to ever really lose, even if practically everyone else involved with the company that Bain owned did, including its employees, creditors and even, at times, investors in Bain’s funds.

The Romney campaign’s prospects come down to convincing middle class individuals to vote for Romney despite the fact that Romney’s economic plans will increase their taxes and increase the deficit, returning to the policies of George Bush which caused the current recession. This comes down to voters developing a warm, fuzzy feeling about Mittens and closing their minds to the facts. Romney’s history at Bain, however, leaves him open to criticism which might erode his support among middle class voters who currently are contemplating voting for Romney, counter to their interests and the interests of the nation. The latest example can be seen in this new ad from PrioritiesUSA:

Posted in Economy, Mitt Romney. Tags: , . No Comments »

Highlights of Obama’s Economic Speech

June 14, 2012 — Ron Chusid

Barack Obama made several important points in his economic address today (full transcript here). He began with an essential point for his campaign. This is not just a vote as to whether people are satisfied with the economy at present, as Romney would like, but a vote between two different paths to follow:

And in the coming weeks, Governor Romney and I will spend time debating our records and our experience, as we should. But though we will have many differences over the course of this campaign, there is one place where I stand in complete agreement with my opponent: This election is about our economic future.

(APPLAUSE)

Yes, foreign policy matters, social issues matter. But more than anything else, this election presents a choice between two fundamentally different visions of how to create strong, sustained growth; how to pay down our long-term debt; and most of all, how to generate good, middle-class jobs so people can have confidence that if they work hard, they can get ahead.

(APPLAUSE)

Now, this isn’t some abstract debate. This is not another trivial Washington argument. I have said that this is the defining issue of our time and I mean it. I said that this is a make-or-break moment for America’s middle class, and I believe it.

OBAMA: The decisions we make in the next few years, on everything from debt to taxes to energy and education, will have an enormous impact on this country, and on the country we pass on to our children.

Now, these challenges are not new. We’ve been wrestling with these issues for a long time. The problems we’re facing right now have been more than a decade in the making.

And what is holding us back is not a lack of big ideas. It isn’t a matter of finding the right technical solution. Both parties have laid out their policies on the table for all to see.

What’s holding us back is a stalemate in Washington between two fundamentally different views of which direction America should take. And this election is your chance to break that stalemate.

(APPLAUSE)

At stake is not simply a choice between two candidates or two political parties, but between two paths for our country. And while there are many things to discuss in this campaign, nothing is more important than an honest debate about where these two paths would lead us.

Obama challenged the failed  economic philosophy of George Bush and Mitt Romney:

We were told that huge tax cuts, especially for the wealthiest Americans, would lead to faster job growth. We were told that fewer regulations, especially for big financial institutions and corporations, would bring about widespread prosperity. We were told that it was OK to put two wars on the nation’s credit card; that tax cuts would create a enough growth to pay for themselves.

That’s what we were told.

So how did this economic theory work out?

(CROSSTALK)

OBAMA: For the wealthiest Americans it worked out pretty well.

Over the last few decades the income of the top 1 percent grew by more than 275 percent, to an average of $1.3 million a year. Big financial institutions, corporations saw their profits soar.

But prosperity never trickled down to the middle class. From 2001 to 2008 we had the slowest job growth in half a century. The typical family saw their incomes halt.

Obama continued to show the differences between his views and those of his opponent:

OBAMA: Now, Governor Romney and his allies in Congress believe deeply in the theory we tried during the last decade, the theory that the best way to grow the economy is from the top down.

OBAMA: So they maintain that if we eliminate most regulations, we cut taxes by trillions of dollars, if we strip down government to national security and few other basic functions, then the power of businesses to create jobs and prosperity will be unleashed and that will automatically benefit us all.

That’s what they believe. This — this is their economic plan. It has been placed before Congress. Governor Romney has given speeches about it, and it’s on his website.

So if they win the election their agenda will be simple and straightforward; they have spelled it out. They promise to roll back regulations on banks and polluters, on insurance companies and oil companies. They’ll roll back regulations designed to protect consumers and workers.

They promise to not only keep all of the Bush tax cuts in place, but add another $5 trillion in tax cuts on top of that.

Now, an independent study said that about 70 percent of this new $5 trillion tax cut would go to folks making over $200,000 a year. And folks making over a million dollars a year would get an average tax cut of about 25 percent.

Now, this is not my opinion. This is not political spin. This is precisely what they have proposed.

Now, your next question may be: How do you spend $5 trillion on a tax cut and still bring down the deficit?

Well, they tell us they’ll start by cutting nearly a trillion dollars from the part of our budget that includes everything from education and job training, to medical research and clean energy.

He brought up health care:

Not only does their plan eliminate health insurance for 33 million Americans by repealing the Affordable Care Act, according to the independent Kaiser Family Foundation, it would also take away coverage from another 19 million Americans who rely on Medicaid, including millions of nursing home patients and families who have children with autism and other disabilities.

OBAMA: And they propose turning Medicare into a voucher program, which will shift more costs to seniors and eventually end the program as we know it.

With people overly obsessed with tiny differences in tax rates these days, it is important to point out that  out of pocket health care costs will be higher not only  for seniors, but also for those in private insurance plans, if we follow Romney’s policies.Obama should be able to increase his share of votes from seniors as he explains what the Republicans plan to do to Medicare and Social Security.

Obama brought up the lack of a meaningful mechanism to reduce the deficit under Romney’s policies and the failure of Congress to act on his economic plan:

I see a future where we pay down our deficit in a way that is balanced — not by placing the entire burden on the middle class and the poor, but by cutting out programs we can’t afford and asking the wealthiest Americans to contribute their fair share.

(APPLAUSE)

That’s my vision for America: education, energy, innovation, infrastructure, and a tax code focused on American job creation and balanced deficit reduction.

(APPLAUSE)

OBAMA: This is the vision behind the jobs plan I sent Congress back in September, a bill filled with bipartisan ideas that, according to independent economists, would create up to 1 million additional jobs if passed today.

This is the vision behind the deficit plan I sent to Congress back in September, a detailed proposal that would reduce our deficit by $4 trillion through shared sacrifice and shared responsibility.

This is the vision I intend to pursue in my second term as president because I believe…

(APPLAUSE)

… because — because I believe if we do these things — if we do these things more companies will start here and stay here and hire here, and more Americans will be able to find jobs that support a middle class lifestyle.

Understand, despite what you hear from my opponent, this has never been a vision about how government creates jobs or has the answers to all our problems.

Over the last three years I’ve cut taxes for the typical working family by $3,600.

(APPLAUSE)

I’ve cut taxes for small businesses 18 times.

(APPLAUSE)

I have approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his.

OBAMA: And I’m implementing over 500 reforms to fix regulations that were costing folks too much for no reason.

 

Posted in Barack Obama, Economy, George Bush, Health Care, Mitt Romney. Tags: , , , . 1 Comment »

An Honest Republican On The Failure Of Republican Economic Policies

June 12, 2012 — Ron Chusid

Bruce Bartlett, who has been an adviser to Ronald Reagan, George H. W. Bush, Ron Paul, and Jack Kemp, debunks the Voodoo Economics now practiced by Republicans. He began by showing that Americans are right when “43 percent of them hold George W. Bush responsible for the current budget deficit versus only 14 percent who blame Mr. Obama.”

The American people are right; Mr. Bush is more responsible, as a new report from the Congressional Budget Office documents.

In January 2001, the office projected that the federal government would run a total budget surplus of $3.5 trillion through 2008 if policy was unchanged and the economy continued according to forecast. In fact, there was a deficit of $5.5 trillion.

The projected surplus was primarily the result of two factors. First was a big tax increase in 1993 that every Republican in Congress voted against, saying that it would tank the economy. This belief was wrong. The economy boomed in 1994, growing 4.1 percent that year and strongly throughout the Clinton administration.

As for tax cuts over the past decade:

The 2001 tax cut did nothing to stimulate the economy, yet Republicans pushed for additional tax cuts in 2002, 2003, 2004, 2006 and 2008. The economy continued to languish even as the Treasury hemorrhaged revenue, which fell to 17.5 percent of the gross domestic product in 2008 from 20.6 percent in 2000. Republicans abolished Paygo in 2002, and spending rose to 20.7 percent of G.D.P. in 2008 from 18.2 percent in 2001.

According to the C.B.O., by the end of the Bush administration, legislated tax cuts reduced revenues and increased the national debt by $1.6 trillion. Slower-than-expected growth further reduced revenues by $1.4 trillion.

However, the Bush tax cuts continued through 2010, well into the Obama administration. These reduced revenues by another $369 billion, adding that much to the debt. Legislated tax cuts enacted by President Obama and Democrats in Congress reduced revenues by an additional $407 billion in 2009 and 2010. Slower growth reduced revenues by a further $1.3 trillion. Contrary to Republican assertions, there were no additional revenues from legislated tax increases.

Bartlett concluded:

Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.

Tax cuts and slower-than-expected growth reduced revenues by $6.1 trillion and spending was $5.6 trillion higher, a turnaround of $11.7 trillion. Of this total, the C.B.O. attributes 72 percent to legislated tax cuts and spending increases, 27 percent to economic and technical factors. Of the latter, 56 percent occurred from 2009 to 2011.

Republicans would have us believe that somehow we could have avoided the recession and balanced the budget since 2009 if only they had been in charge. This would be a neat trick considering that the recession began in December 2007, according to the National Bureau of Economic Research.

They would also have us believe that all of the increase in debt resulted solely from higher spending, nothing from lower revenues caused by tax cuts. And they continually imply that one of the least popular spending increases of recent years, the Troubled Asset Relief Program, was an Obama administration program, when in fact it was a Bush administration initiative proposed by the Treasury Department that was signed into law by Mr. Bush on Oct. 3, 2008.

Lastly, Republicans continue to insist that tax cuts are highly stimulative, often saying that they add nothing to the debt, when this is obviously ridiculous.

Conversely, they are adamant that tax increases must not be part of any deficit-reduction package because they never reduce deficits and instead are spent. This is also ridiculous, as the experience of the Clinton administration clearly shows. The new C.B.O. data confirm these facts.

Andrew Sullivan, another conservative who now debunks the lunacy of those who have taken over the conservative movement, commented:

When you check reality, rather than the alternate universe constantly created by Fox News and an amnesiac press, you find that Bush had a chance to pay off all our national debt before we hit the financial crisis – giving the US enormous flexibility in intervening to ameliorate the recession. Instead, we had to find money for a stimulus in a cupboard stripped bare – its contents largely given away, by an act of choice. I’m tired of being told we cannot blame Bush for our current predicament. We can and should blame him for most of it – and remind people that Romney’s policies: more tax cuts, more defense spending are identical. With one difference: Bush pledged never “to balance the budget on the backs of the poor.”

Mitt Romney has no qualms about doing that very thing. And he will, if he is given the chance.

 

Posted in Barack Obama, Bill Clinton, Economy, George Bush, Mitt Romney. Tags: , , , , . 6 Comments »

Right Wing Claims That Obama Is A Big Spender Are No More True Than Birther Claims.

May 22, 2012 — Ron Chusid

As I’ve pointed out many times before, including here, here, and here, conservative Republican presidents, especially George W. Bush and Ronald Reagan,  have been responsible for the major increases in government spending in recent years and the deficit. The frequent right wing claims that Barack Obama is a big spender are no more true than the right wing claims that Obama is a Muslim born in Kenya. Rex Nutting at Market Watch has posted essentially the same findings which I had in the previous posts on this subject, updating them through the 2013 budget

Nutting found that  “under Obama, federal spending is rising at the slowest pace since Dwight Eisenhower brought the Korean War to an end in the 1950s.”

He also found that, after years of growth, federal spending has leveled off under Obama and in fiscal year 2013,  “spending is scheduled to fall 1.3% to $3.58 trillion.”

Note that one way that conservatives falsely inflate Obama’s spending is by attributing the 2009 budget to Obama, but the 2009 budget was passed before Obama took office.

It is also notable that much of the spending under Obama was based upon policies from George Bush, including two wars and Bush’s unfunded Medicare D program. Even the stimulus spending was necessitated by the recession caused by Republican policies. In terms of the deficit, matters were made worse by the Bush tax cuts, and by decreased tax revenues due to the Bush recession.

A couple other conclusions from Nutting:

After adjusting for inflation, spending under Obama is falling at a 1.4% annual pace — the first decline in real spending since the early 1970s, when Richard Nixon was retreating from the quagmire in Vietnam.

In per-capita terms, real spending will drop by nearly 5% from $11,450 per person in 2009 to $10,900 in 2013 (measured in 2009 dollars).

Update: Michael Linden responded to the criticism of this data here. Bottom line is that it is valid to attribute most of the fiscal year 2009 spending to Bush rather than Obama as the spending for fiscal year 2009 was already planned and would have occurred regardless of who was president.

Even if the 2009 spending were incorrectly attributed to Obama, note that we still see spending level off and drop under Obama, which also contradicts the right wing claims about spending under Obama.

Posted in Barack Obama, Economy, George Bush, Ronald Reagan. Tags: , , , . 10 Comments »

Republicans Show What They Really Think About Deficit Reduction

May 1, 2012 — Ron Chusid

Republicans once again show what their top priority is. During the Bush years, Republican such as Dick Cheney claimed that “deficits don’t matter.” Once Obama took office, the Republicans have repeatedly tried to blame the Bush deficit on Democrats and have demanded offsets for the costs of everything from emergency disaster relief to unemployment benefits and tax cuts for the middle class. However, there is now one exception. House Republicans are now saying that they want to continue the Bush tax cuts on the wealthy without any offsets:

While President Obama and congressional Democrats want to extend only the Bush rates for middle-income earners, Republicans have long argued that the entire slate of tax rates should be kept in place until Congress can agree to a complete overhaul of the tax code.

But moving to extend the Bush tax rates without offsetting spending cuts or revenue increases could leave the GOP vulnerable to attacks on the deficit, particularly for a party that has spent years accusing Democrats of bankrupting federal coffers and used their House majority to insist on controlling the exploding debt.

It is Republican Party orthodoxy that tax cuts do not need to be offset because of the additional tax receipts they spur through economic growth. And in interviews, even House Republicans who have broken with the party leadership on taxes told The Hill they do not believe the extension of the Bush-era rates needs to be paid for.

Of course the evidence over the years has been that in most cases lower taxes means decreased government revenue without causing economic growth. This was seen again with the Bush tax cuts. The Laffer Curve shows benefits for tax cuts in situations with high tax rates. On rare occasions, such as when Democrat John Kennedy lowered taxes, economic benefits were seen. Even the Laffer Curve demonstrates that economic stimulus will not  result from tax cuts when tax rates are at historically low levels, such as at the present. Republicans just want to lower taxes for the ultra-wealthy, and do not really care about the deficit or the consequences for the country.

Posted in Barack Obama, Congress, Economy, George Bush, Republicans. Tags: , , , . 3 Comments »

Obama on the Economy At The University of Michigan

January 28, 2012 — Ron Chusid

One reason Republicans are often successful in getting people to vote counter to their interests (as well as counter to the interests of the United States) is by promoting a false impression of the views of others.  Republicans have been mischaracterizing Democratic objections to their policies to transfer wealth to the ultra-wealthy as class warfare, when it has actually been the Republicans who have been practicing (and winning at) class warfare. Therefore I was happy to see that Barack Obama is directly responding to these false Republican arguments, such as at his recent speech at the University of Michigan.

After a call out to Denard Robinson and going for the easy applause line (“Go blue”) Obama talked about education and reviving the economy. The end of his speech presents a strong response to all the nonsense on the economy we have been hearing at the Republican debates:

THE PRESIDENT: Now, in the longer run, we’re also going to have to reduce our deficit.  We’ve got to invest in our future and we’ve got to reduce our deficit.  And to do both, we’ve got to make some choices.  Let me give you some examples.

Right now, we’re scheduled to spend nearly $1 trillion more on what was intended to be a temporary tax cut for the wealthiest 2 percent of Americans.

AUDIENCE MEMBER:  That’s not fair.

THE PRESIDENT:  That’s not fair.  A quarter of all millionaires pay lower tax rates than millions of middle-class households.

AUDIENCE:  Booo –

THE PRESIDENT:  Not fair.  Warren Buffett pays a lower tax rate than his secretary.  I know because she was at the State of the Union.  She told me.  (Laughter.)  Is that fair?

AUDIENCE:  No!

THE PRESIDENT:  Does it make sense to you?

AUDIENCE:  No!

THE PRESIDENT:  Do we want to keep these tax cuts for folks like me who don’t need them?  Or do we want to invest in the things that will help us in the long term — like student loans and grants — (applause) — and a strong military — (applause) — and care for our veterans — (applause) — and basic research?  (Applause.)

Those are the choices we’ve got to make.  We can’t do everything.  We can’t reduce our deficit and make the investments we need at the same time, and keep tax breaks for folks who don’t need them and weren’t even asking for them — well, some of them were asking for them.  I wasn’t asking for them.  (Laughter.)  We’ve got to choose.

When it comes to paying our fair share, I believe we should follow the Buffett Rule:  If you make more than $1 million a year — and I hope a lot of you do after you graduate — (laughter) — then you should pay a tax rate of at least 30 percent.  (Applause.)  On the other hand, if you decide to go into a less lucrative profession, if you decide to become a teacher — and we need teachers — (applause) — if you decide to go into public service, if you decide to go into a helping profession — (applause) — if you make less than $250,000 a year — which 98 percent of Americans do — then your taxes shouldn’t go up.  (Applause.)

This is part of the idea of shared responsibility.  I know a lot of folks have been running around calling this class warfare.  I think asking a billionaire to pay at least as much as his secretary in taxes is just common sense.  (Applause.)  Yesterday, Bill Gates said he doesn’t think people like him are paying enough in taxes.  I promise you, Warren Buffett is doing fine, Bill Gates is doing fine, I’m doing fine.

AUDIENCE MEMBER:  Koch Brothers.

THE PRESIDENT:  They’re definitely doing fine.  (Laughter.)

We don’t need more tax breaks.  There are a lot of families out there who are struggling, who’ve seen their wages stall, and the cost of everything from a college education to groceries and food have gone up.  You’re the ones who need that.  You’re the ones who need help.  And we can’t do both.

There have been some who have been saying, well, the only reason you’re saying that is because you’re trying to stir people up, make them envious of the rich.  People don’t envy the rich.  When people talk about me paying my fair share of taxes, or Bill Gates or Warren Buffett paying their fair share, the reason that they’re talking about it is because they understand that when I get a tax break that I don’t need, that the country can’t afford, then one of two things are going to happen:  Either the deficit will go up and ultimately you guys are going to have to pay for it, or alternatively, somebody else is going to foot the bill — some senior who suddenly has to pay more for their Medicare, or some veteran who’s not getting the help that they need readjusting after they have defended this country, or some student who’s suddenly having to pay higher interest rates on their student loans.

We do not begrudge wealth in this country.  I want everybody here to do well.  We aspire to financial success.  But we also understand that we’re not successful just by ourselves.  We’re successful because somebody started the University of Michigan.  (Applause.)  We’re successful because somebody made an investment in all the federal research labs that created the Internet.  We’re successful because we have an outstanding military — that costs money.  We’re successful because somebody built roads and bridges and laid broadband lines.  And these things didn’t just happen on their own.

And if we all understand that we’ve got to pay for this stuff, it makes sense for those of us who’ve done best to do our fair share.  And to try to pass off that bill onto somebody else, that’s not right.  That’s not who we are.  (Applause.)  That’s not what my grandparents’ generation worked hard to pass down.  That’s not what your grandparents and your great-grandparents worked hard to pass down.  We’ve got a different idea of America, a more generous America.  (Applause.)

Everybody here is only here because somebody somewhere down the road decided we’re going to think not just about ourselves, but about the future.  We’ve got responsibilities, yes, to ourselves but also to each other.  And now it’s our turn to be responsible.  Now it’s our turn to leave an America that’s built to last.  And I know we can do it.  We’ve done it before and I know we can do it again because of you.

When I meet young people all across this country, with energy and drive and vision, despite the fact that you’ve come of age during a difficult, tumultuous time in this world, it gives me hope.  You inspire me.  You’re here at Michigan because you believe in your future.  You’re working hard.  You’re putting in long hours — hopefully some at the library.  (Laughter.)  Some of you are balancing a job at the same time.  You know that doing big things isn’t always easy, but you’re not giving up.

You’ve got the whole world before you.  And you embody that sense of possibility that is quintessentially American.  We do not shrink from challenges.  We stand up to them.  And we don’t leave people behind; we make sure everybody comes along with us on this journey that we’re on.  (Applause.)

That’s the spirit right now that we need, Michigan.  (Applause.)  Here in America, we don’t give up.  We look out for each other.  We make sure everybody has a chance to get ahead.  And if we work in common purpose, with common resolve, we can build an economy that gives everybody a fair shot.  And we will remind the world just why it is that the United States of America is the greatest nation on Earth.  (Applause.)

Posted in Barack Obama, Economy, Michigan News. Tags: , . 1 Comment »

Andrew Sullivan’s Defense of Barack Obama

January 17, 2012 — Ron Chusid

Yesterday I referred to Andrew Sullivan’s article on Barack Obama in Newsweek. It is worth repeating more of what he wrote in response to the common attacks from the right wing:

The right claims the stimulus failed because it didn’t bring unemployment down to 8 percent in its first year, as predicted by Obama’s transition economic team. Instead, it peaked at 10.2 percent. But the 8 percent prediction was made before Obama took office and was wrong solely because it relied on statistics that guessed the economy was only shrinking by around 4 percent, not 9. Remove that statistical miscalculation (made by government and private-sector economists alike) and the stimulus did exactly what it was supposed to do. It put a bottom under the free fall. It is not an exaggeration to say it prevented a spiral downward that could have led to the Second Great Depression.

You’d think, listening to the Republican debates, that Obama has raised taxes. Again, this is not true. Not only did he agree not to sunset the Bush tax cuts for his entire first term, he has aggressively lowered taxes on most Americans. A third of the stimulus was tax cuts, affecting 95 percent of taxpayers; he has cut the payroll tax, and recently had to fight to keep it cut against Republican opposition. His spending record is also far better than his predecessor’s. Under Bush, new policies on taxes and spending cost the taxpayer a total of $5.07 trillion. Under Obama’s budgets both past and projected, he will have added $1.4 trillion in two terms. Under Bush and the GOP, nondefense discretionary spending grew by twice as much as under Obama. Again: imagine Bush had been a Democrat and Obama a Republican. You could easily make the case that Obama has been far more fiscally conservative than his predecessor—except, of course, that Obama has had to govern under the worst recession since the 1930s, and Bush, after the 2001 downturn, governed in a period of moderate growth. It takes work to increase the debt in times of growth, as Bush did. It takes much more work to constrain the debt in the deep recession Bush bequeathed Obama.

The great conservative bugaboo, Obamacare, is also far more moderate than its critics have claimed. The Congressional Budget Office has projected it will reduce the deficit, not increase it dramatically, as Bush’s unfunded Medicare Prescription Drug benefit did. It is based on the individual mandate, an idea pioneered by the archconservative Heritage Foundation, Newt Gingrich, and, of course, Mitt Romney, in the past. It does not have a public option; it gives a huge new client base to the drug and insurance companies; its health-insurance exchanges were also pioneered by the right. It’s to the right of the Clintons’ monstrosity in 1993, and remarkably similar to Nixon’s 1974 proposal. Its passage did not preempt recovery efforts; it followed them. It needs improvement in many ways, but the administration is open to further reform and has agreed to allow states to experiment in different ways to achieve the same result. It is not, as Romney insists, a one-model, top-down prescription. Like Obama’s Race to the Top education initiative, it sets standards, grants incentives, and then allows individual states to experiment. Embedded in it are also a slew of cost-reduction pilot schemes to slow health-care spending. Yes, it crosses the Rubicon of universal access to private health care. But since federal law mandates that hospitals accept all emergency-room cases requiring treatment anyway, we already obey that socialist principle—but in the most inefficient way possible. Making 44 million current free-riders pay into the system is not fiscally reckless; it is fiscally prudent. It is, dare I say it, conservative.

On foreign policy, the right-wing critiques have been the most unhinged. Romney accuses the president of apologizing for America, and others all but accuse him of treason and appeasement. Instead, Obama reversed Bush’s policy of ignoring Osama bin Laden, immediately setting a course that eventually led to his capture and death. And when the moment for decision came, the president overruled both his secretary of state and vice president in ordering the riskiest—but most ambitious—plan on the table. He even personally ordered the extra helicopters that saved the mission. It was a triumph, not only in killing America’s primary global enemy, but in getting a massive trove of intelligence to undermine al Qaeda even further. If George Bush had taken out bin Laden, wiped out al Qaeda’s leadership, and gathered a treasure trove of real intelligence by a daring raid, he’d be on Mount Rushmore by now. But where Bush talked tough and acted counterproductively, Obama has simply, quietly, relentlessly decimated our real enemies, while winning the broader propaganda war. Since he took office, al Qaeda’s popularity in the Muslim world has plummeted.

Sullivan also responded to attacks from the left which can be seen in the full article. Sullivan does respond to the most vocal opponents, who make up a tiny minority. The Obama administration is also bracing for further criticism from the left over  his proposed budget. While there are reasons to object to some of Obama’s policies, most liberals seem to understand the limitations of what Obama can accomplish in our political system. Plus we realize that no matter what objections we have to Obama’s policies, none of these issues would be made better by having a Republican in the White House.

Posted in Barack Obama, Economy, Education, George Bush, Health Care, Mitt Romney, National Security, Newt Gingrich, Terrorism, Torture. Tags: , , , , , . 7 Comments »

Obama’s Critics

January 16, 2012 — Ron Chusid

The above cover of Newsweek, asking “Why Are Obama’s Critics So Dumb?” seems unnecessarily provocative. It does not even portray Andrew Sullivan’s article accurately, which is more about how smart he believes Obama to be than directly insulting his critics. Still, we could see where conservatives would object, but one would think they might want to use a little intelligence in their response.

The most amusing thing about this cover is how John Hinderacker unintentionally showed that this cover might be right, repeating all the false claims which are common in the right wing echo chamber but totally false:

Well, sure. We who are unhappy that unemployment has increased on Obama’s watch, that over-regulation has stymied economic growth, that our children now owe a $15 trillion debt that we can’t pay–hey, we’re just dumb! We obviously aren’t smart enough to understand how devastating our economy, unemploying millions of Americans and burdening our children with trillions of dollars in debt is really a great idea.

I had several previous posts debunking such conservative claims, but Sullivan also did so in his article. He pointed this out in a blog post:

As I note in the piece, the worst month for job losses in this recession happened to be Bush’s last month. At that point, we were losing something like 750,000 jobs a month, with an annualized drop in GDP approaching 9 percent! Within a year of that, the US had gone back into job creation. Since then, we’ve added 2.4 million jobs or so – almost all in the private sector. As for debt, the notion that Obama gave us $15 trillion of it is something most Republicans seem now to believe. This is the truth:

Under Bush, new policies on taxes and spending cost the taxpayer a total of $5.07 trillion. Under Obama’s budgets both past and projected, he will have added $1.4 trillion in two terms. Under Bush and the GOP, nondefense discretionary spending grew by twice as much as under Obama. Again: imagine Bush had been a Democrat and Obama a Republican. You could easily make the case that Obama has been far more fiscally conservative than his predecessor—except, of course, that Obama has had to govern under the worst recession since the 1930s, and Bush, after the 2001 downturn, governed in a period of moderate growth. It takes work to increase the debt in times of growth, as Bush did. It takes much more work to constrain the debt in the deep recession Bush bequeathed Obama.

The conservative movement is based upon visceral opposition to Obama but no longer really stands for anything meaningful. If you support a market system, lower taxes for most Americans, fiscal responsibility, and economic recovery, the facts overwhelmingly support Obama over his conservative opponents.  If you believe the right wing rhetoric blaming Obama for the deficit or the state of the economy, at the very least you are misinformed. I’ll leave it to Newsweek to be more explicit regarding such people.

Posted in Barack Obama, Blogs & Social Media, Economy. Tags: , , . 2 Comments »

Republicans Out of the White House vs. Republican Presidents on Taxes and the Deficit

January 2, 2012 — Ron Chusid

The Republicans have moved far to the right of both Barry Goldwater, who opposed the religious right and considered himself a liberal in his later years, and even Ronald Reagan would not get along with today’s conservatives. Eric Cantor was confronted with this fact when interviewed on Sixty Minutes last night (video above):

Stahl: But you know, your idol, as I’ve read anyway, was Ronald Reagan. And he compromised.

Cantor: He never compromised his principles.

Stahl: Well, he raised taxes and it was one of his principles not to raise taxes.

Cantor: Well, he — he also cut taxes.

Stahl: But he did compromise —

Cantor: Well I —

Steve Benen comments:

At that point, Cantor’s press secretary, off camera, interrupted the interview, yelling that Stahl was lying when she said Reagan raised taxes. As Stahl told “60 Minutes” viewers, “There seemed to be some difficulty accepting the fact that even though Ronald Reagan cut taxes, he also pushed through several tax increases, including one in 1982 during a recession.”

Let’s call “some difficulty” a dramatic understatement.

Unfortunately for Cantor and his press secretary, reality is stubborn. The facts are indisputable: in Ronald Reagan’s first term, he signed off on a series of tax increases — even when unemployment was nearing 11% — and proceeded to raise taxes seven out of the eight years he was in office. The truth is, “no peacetime president has raised taxes so much on so many people” as Reagan.

Of particular interest is the “Tax Equity and Fiscal Responsibility Act of 1982,” the largest of Reagan’s tax increases, and generally considered the largest tax increase — as a percentage of the economy — in modern American history. In fact, between 1982 and 1984, Reagan raised taxes four times, and as Bruce Bartlett has explained more than once, Reagan raised taxes 12 times during his eight years in office.

Last year’s irresponsible actions by the GOP, under pressure from the Tea Party, also highlights another difference. Reagan never had a problem with increasing the debt ceiling.

This is all really part of a pattern. Republicans out of office support tax cuts and cuts in government spending. Once in office, Republicans run up big bills and deficits, and in the case of Reagan, also raised taxes. When out of office they blame the Democrats for the bills which the Republicans have run up (and last summer the Tea Party even opposed paying the bills already run up by Republicans, causing a drop in the nation’s credit rating). Conservatives realize that George Bush was a big spending, but they retain their myths about Ronald Reagan.

 

Posted in Barry Goldwater, Economy, Ronald Reagan. Tags: , , . 1 Comment »

Another Conservative Talking Point On The Economy Debunked: Government Regulations Under Economy Have Had Minimial Cost

October 26, 2011 — Ron Chusid

Once again reality clashes with right wing claims about Obama and Democrats. While the right wing claims Obama is a socialist who has increased their taxes and increased the deficit, the reality is that Obama is protecting capitalism against the anti-capitalism, pro-oligarchy policies of the Republicans, Obama has cut taxes, and the bulk of the deficit was caused by the policies of George Bush with the consent of Republicans. It has been ignorant and irresponsible actions by the uninformed sheep who make up the Tea Party movement which have undermined our economy, causing a downgrading in our credit rating. Today Bloomberg shot down another myth spread by the right that Obama is responsible for a huge expansion in government regulations:

Obama’s White House has approved fewer regulations than his predecessor George W. Bush at this same point in their tenures, and the estimated costs of those rules haven’t reached the annual peak set in fiscal 1992 under Bush’s father, according to government data reviewed by Bloomberg News.

The average annual cost to businesses under Obama is higher than under his predecessors, the Bloomberg review shows. The increase is estimated to total as little as $100 million or as much as $4.1 billion, or at most three one-hundredths of a percent of the total economy…

Republicans say that the number of high-cost regulations are up, damaging an already weak economy, and more rules are on the way. The House Committee on Oversight and Government Reform released a report on Sept. 14 alleging a “tsunami” of new federal rules.

“I don’t think there is a measure by which there has been a regulatory tsunami,” Cass Sunstein, the head of the Office of Information and Regulatory Affairs at the White House, said in an interview Oct. 19. “The costs are not out of line by historical standards.”

Those numbers, which do not include independent agencies such as the Securities and Exchange Commission, encompass the expense of new regulations, and do not take into account the economic benefits of healthier children, safer roads or fewer industrial accidents, which Sunstein argues can dwarf the initial costs.

Considering the problems created by relaxing of regulations in many areas under Bush, we might have expected a far greater number of regulations under Obama compared to Bush. The data in the full report showing how minimal the cost of Obama’s regulations have been debunk any claims that government regulations under Obama are in any way responsible for the poor performance of the economy and the persistence of the Bush Recession.

Posted in Barack Obama, Economy, George Bush. Tags: , , , . 7 Comments »
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