Piketty fence

By Carl 

So I’m back from vacation and I keep seeing this name on my Tweeter and FacePlace feeds: Thomas Piketty.

Sounds vaguely Dickensian.

From what I gathered, Piketty wrote a book proposing a new economic theory that would put paid to many of the basic notions that support capitalism. 

Let's take a look:

Piketty's argument is that, in an economy where the rate of return on capital outstrips the rate of growth, inherited wealth will always grow faster than earned wealth. So the fact that rich kids can swan aimlessly from gap year to internship to a job at father's bank/ministry/TV network – while the poor kids sweat into their barista uniforms – is not an accident: it is the system working normally.

If you get slow growth alongside better financial returns, then inherited wealth will, on average, "dominate wealth amassed from a lifetime's labour by a wide margin", says Piketty. Wealth will concentrate to levels incompatible with democracy, let alone social justice. Capitalism, in short, automatically creates levels of inequality that are unsustainable. The rising wealth of the 1% is neither a blip, nor rhetoric.

To understand why the mainstream finds this proposition so annoying, you have to understand that "distribution" – the polite name for inequality – was thought to be a closed subject. Simon Kuznets, the Belarussian émigré who became a major figure in American economics, used the available data to show that, while societies become more unequal in the first stages of industrialisation, inequality subsides as they achieve maturity. This "Kuznets Curve" had been accepted by most parts of the economics profession until Piketty and his collaborators produced the evidence that it is false.

In fact, the curve goes in exactly the opposite direction: capitalism started out unequal, flattened inequality for much of the 20th century, but is now headed back towards Dickensian levels of inequality worldwide.

Well, at least now I know why his name sounded Dickensian.

A cursory examination of the history of the American economy... indeed, any Western economy after the 1700s... would support Piketty's theory. There are numerous instances where income inequality expands, and then contracts after an economic bubble bursts. This is usually because the investor class – you know, the 1% – milks the excess cash and assets out of an economic entity, then walks away to leave it unbalanced and unstable.

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Obama's stimulus package wasn't enough but was much better than nothing

By Michael J.W. Stickings

As CNN is reporting, Republicans are crapping all over the American Recovery and Reinvestment Act on the fifth anniversary of its passage. That's the stimulus package that President Obama was able to get out of Congress, and specifically out of obstructionist, trickle-down Republicans, early in his first term. Apparently making shit up about Benghazi and the IRS and otherwise smearing the president at every turn isn't enough. Now they're on to blaming him for... saving the economy from utter disaster.

The economy needed much more of a stimulus back then, but of course Obama wasn't about to get a bigger package from Republicans wedded to their extremist anti-government ideology and intent on trying to make him fail even at the expense of harming the country, and from Democrats who lacked either the courage or the simple common sense to embrace even this limited government intervention in the economy. But what he got was still absolutely necessary, and it was not just better than nothing but enough, it would appear in retrospect, to stabilize the economy and put the country on the road to recovery, as bumpy as it's been given how little his opponents have bothered to help.

Indeed, as Steve Benen reminds us today, "the global economic crisis had reached terrifying levels, and U.S. policymakers had to choose a direction for the nation’s future." Democrats, on the whole, demanded action and got behind stimulus, while Republicans "called for a five-year federal spending freeze." Just imagine what would have happened had Republicans gotten their way. Imagine what the unemployment level would be today, imagine how weak the economy would still be, imagine how so many more Americans would be suffering, unable to pay their bills and put food on the table, if even on a table at all.

Just take a look at the charts in Steve's post. What do you see? Significant GDP growth and private-sector job growth that is connected directly to Obama's stimulus package:

The evident details are hard to miss – the economy crashed, then Democrats approved the stimulus, and then the economy started growing, job creation picked up, and the stock market soared. I've long been curious: for Republicans, how is this possible? Was it magic? Was it a coincidence? How do they explain why every relevant economic metric showed sharp improvements immediately after the Recovery Act kicked in?

None of this would have happened with Republicans in power. Things would have gotten far worse:

Indeed, perhaps the most striking thing about GOP economic arguments is that they weren't just wrong about the efficacy of Clinton's policies, and then wrong again during the Bush/Cheney era, and then wrong once again about whether the Recovery Act would help turn the economy around, congressional Republicans also seemed to go to great lengths to impose policies – debt crises, spending cuts, sequestration, a government shutdown – that seemed almost designed to make the economy worse.

 

It's why Ben Bernanke – a Fed chairman who, up until extremely recently, was considered a fairly conservative Republican – repeatedly told Capitol Hill that the single biggest obstacle to a healthier economy has been the fiscal policies demanded by GOP lawmakers.

 

It's why Republicans are bad for America. Period.

Fed might as well have single mandate

By Frank Moraes

Matt Yglesias is very insightful about the Federal Reserve. Last year, he asked an incredibly important question, "If the unemployment and inflation rates were reversed, would the Fed do something about it?" The point is that the Federal Reserve has a dual mandate to keep both inflation and unemployment low. Yet all the Fed seems to care about is inflation. At the time he said that, inflation was 2% and unemployment was 8%. If it were the other ways around, the Fed would be working hard to cool the economy down. But they are perfectly happy with the way things were (and are).

There is some talk among conservatives that the Fed should have a single mandate: keep inflation low. The idea is that the Fed shouldn't worry about employment at all. Note that this is an idea that is designed to help the rich. Inflation hurts people who have a lot of money. Unemployment hurts people who have to work for a living. By saying that the Fed should only worry about inflation, the conservatives are telling us everything we need to know about them: they are policy hacks for the rich.

But today, Minnesota Senator Amy Klobuchar asked the Federal Reserve Chairman Ben Bernanke how the Fed would act differently if it did have the single mandate. Yglesias rightly noted that after much bobbing and weaving, the Fed chair said that he wouldn't do anything differently. And that's important, if not surprising. We have long known that the Fed didn't seem to think that 8% unemployment was anything to worry about. After all, none of the members of the Fed even know anyone who is out of a job.

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Money matters

By Mustang Bobby 

The way the Republicans tell it, the economy is still collapsing, the deficit is ballooning, the tax hikes in January are killing business, and Barack Obama is a socialist bent on crushing small business under the heel of the federal government with regulations on top of regulations. Oh god oh god we're all gonna die.

Except none of that is true:

The Congressional Budget Office reported Tuesday that the federal budget deficit is declining this year compared to fiscal 2012.

For the first seven months of 2013, the deficit was $489 billion. That is $231 billion less than the budget shortfall for the comparable period last year.

The decrease is almost entirely due to revenue increases.

And we are seeing the strongest rate of job growth in eight years.

Meanwhile, the stock market is booming, the Dow having hit 15,000 earlier this week.

As for the growth of regulations from the federal government, it's a canard you always hear from the Republicans — the party of vaginal probes, by the way — but it's been debunked time and again, even when it was a campaign issue for Mitt Romney.

As I've said before, if Barack Obama is a socialist, he really sucks at it.

(Cross-posted at Bark Bark Woof Woof.)

A watery state

By Carl 

Thus goeth Marco Rubio's presidential aspirations. Apparently, Rubio can't stand the heat. 

But, as to the President's State of the Union address, all seems to be in order. It was populist, and took much more liberal stances on issues that Obama had in his first term, as it followed closely on the heels of his stemwinder of an inaugural address. 

He outlined a vision of a middle class that is healthy and growing that is in distinct contrast with the patrician and elitist views of the Republicans in Congress. His "ladders of opportunity" and support for increasing the minimum wage (a modest increase of less than 30%, to be sure) mirror my liberal libertarian views on government. 

Government ought to be levelling the playing field.

Let me take a moment to brief new readers on what I mean: I view society as a three-legged stool. There's the people, the government, and the business sector. 

When these are in balance, the country is stable. It can grow and everybody benefits to some degree.  

When one of these comes up short, the country is unstable and when two come up short, the country is set to topple over. 

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Ten ideas to fix the economy

By Frank Moraes

I have this strange idea that I don't care for Dylan Matthews over at WonkBlog. But I just looked at my writing over the last year, and I find I am always very impressed with his work. I know that from time to time, he falls into false equivalence and splitting-the-difference fallacies. But mostly he is a very good reporter who understands economics.

Last week, he wrote perhaps the best thing I have yet seen from him, "Ten Ways to Reduce Inequality Without Raising Tax Rates." He lists ways that will reduce inequality for "both sides to get what they want." That's reaching up to Ezra Klein-level adorableness. I am far too cynical to think that Republicans would ever go along with these ideas. The reason is simple: Republicans like inequality; they are as a rule against anything that is good for the country generally. (I would not have said this 30 years ago.)

  1. Make it easier to start and join unions. Oh, there's a proposal Republicans are going to jump on! This is a great idea. Unions are one of the big reasons why workers shared in the productivity gains after WWII for 30 years and their demise is one of the big reasons why workers have hardly shared at all in the gains of the last 30 years.
  2. Weaken the dollar. This is all about big dicks on both sides of the aisle. A weak dollar makes our exports more competitive. But those who already have wealth hate a weak dollar because it lowers what their wealth can buy. But this is a no-brainer: a weak dollar is good for the economy. Politicians like a strong dollar because it makes them think they are powerful. Or something.

3. Promote trade in highly-skilled professions. This is one that Dean Baker pushes. We have allowed globalization to hit low wage workers in manufacturing, but we continue to practice protectionism for doctors, lawyers, dentists, college professors, you name it. If we had a truly free market, workers would have less money, but they would need less to pay for things like healthcare and education.

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Good jobs report because Obama was re-elected

By Frank Moraes 

The jobs report was released this morning. The headline is good: 146,000 jobs were created and unemployment dropped to 7.7%. But you really can't trust the headline. I start most mornings by reading Paul Krugman, but this morning I went directly to Dean Baker. In a sense, Baker is the most important economic writer we have. He is a total buzzkill. So on the one hand, if there's bad news hidden in the jobs report, he will know it. On the other hand, if he's optimistic, it's time to sell those government bonds and buy some real estate! (Or something. Don't take investment advice from me or you'll end with my portfolio: .)

Unfortunately, there is no word yet from Baker. So I went elsewhere. I knew WonkBlog would not let me down, and indeed, Dylan Matthews provides the usual competent overview of the numbers (Brad Plumer also has a good overview):

• 146,000 jobs created in November;
• Unemployment dropped to 7.7%;
• September-October jobs created revised down by 49,000 total;
• Labor force participation is generally stable at 63.6%;
• Job creation is all in the private sector, public sector losses.

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Grow the social safety net

By Frank Moraes

We need a bigger social safety net. The other day, Paul Krugman pointed this out by noting our modern economy where everyone is just supposed to get used to the fact that you will have a new job every three years and that insecurity is now normal so get over it. This kind of dynamism requires some kind of bedrock that we can all hold onto. And the only such bedrock comes from the welfare state.

I have a problem with the "new job every three years" idea, even though that has been my life. All this new economic dynamism has mostly been on the part of workers, not companies. It would be one thing if companies only lasted three years. But what happens is that companies that last 100 years no longer show any loyalty to their workers. (Even while they complain that workers don't show enough loyalty to these companies.)

What has really happened in the modern world is that the government long ago declared open season on unions and all manner of other worker rights. So now workers are in the position of beggars, hoping that some company will take pity on them and employ them for a few years.

Of course, the people who want to destroy the social safety net are the same people who want to eliminate worker rights. I was amused earlier in the year when some British Conservative MP claimed that everyone should start their own business. This is absurd, of course. If that happened, there would be no businesses, just seven billion private contractors. But what's interesting in this context is that such a claim implies that people who complain about lack of work should just be able to start their own businesses. "Just take out a loan from your parents!"

I think we are past the point where we can reasonably claim that the right in this country (or just about any other) is an honest broker. They hate the poor. They think the poor are morally deficient. They would prefer that the poor just die off, but as long as they are powerless and hidden, fine.

Krugman is right, of course: now more than ever, we need the social safety net. If companies are going to follow the Gordon Gekko model that profits are all and they owe nothing to society, the government needs to take over. But as long as these business owners have the power that goes along with their profits, they will fight hard to impoverish workers outside their business environment. The smaller the safety net, the more pliant the workers will be.

Eventually, this all ends in a feudal state, of course. So while we still have a democracy, we must fight to empower workers. And that means expanding the welfare state, not just protecting it.

(Cross-posted at Frankly Curious.)

Behind the Ad: Obama campaign touting signs of economic recovery

By Richard K. Barry

(Another installment in our extensive " Behind the Ad" series.)

Who: The Obama-Biden campaign.

Where: Colorado, Iowa, Nevada, and Virginia.

What's going on: President Obama is rightly pointing to signs of economic recovery in an ad called "Main Street." Romney has tried to say the economy hasn't improved under Obama, another of his famous lies. I am still amazed Republicans get to talk about the disastrous economy they left Obama like they have no idea how it happened or bear no responsibility for it.

Maybe not fast enough, but things are getting better. 


(Cross-posted at Lippmann's Ghost.)

Krazy Bill Kristol hates Sesame Street, liberal education, and the number 44

By Michael J.W. Stickings

Mitt Romney may have "won" last week's debate, but the larger takeaway is that he's a liar who wants to kill Big Bird. And in response his supporters are reiterating the lies and taking Romney's anti-Sesame Street line (or, rather, anti-funding for public television, including Sesame Street) beyond even what he intended, arguing that Sesame Street is fundamentally evil, the PBS equivalent to sending your children to an al Qaeda training camp in South Waziristan.

It isn't about the budget anymore. Funding for public television accounts for just 0.012 of the federal budget. It's about right-wing political correctness and paranoia. And you can find it spewing from the neocon delusions of Krazy Bill Kristol:

[T]here's something deeply revealing about Obama's blithe willingness to portray Wall Street as an enemy. Wall Street is key to American prosperity -- even to American greatness. Lots of important and impressive Americans have had careers on Wall Street. What Wall Street does is important. Wall Street matters.

I hate to tell the liberals this, but Sesame Street doesn't. It would be nice if life were "a magic carpet ride/Every door will open wide." It would be nice if happiness could be achieved by government telling us, "how to get/How to get to Sesame Street." It would be nice (maybe) if the world of Sesame Street were real.

But it's not. It's fictional. It's childish. It's as fictional and childish as the make-believe world of Obama's liberalism -- a liberalism that scorns Wall Street, and disdains Main Street... but embraces Sesame Street.

This is entirely ridiculous, of course. Obama doesn't think Wall Street is any sort of enemy. And he obviously knows that Wall Street matters. Has Kristol ever taken a look at the president's economic team? Does he remember Obama's tepid treatment of the real perpetrators of the Great Recession? Does he remember Obama's cautious approach to regulation? What the president objects to isn't Wall Street but the sort of destructive avarice that led to Wall Street's all-out assult on "Main Street." What he objects to, that is, is Wall Street run amok.

And of course he doesn't disdain Main Street. What does that even mean? The president's record has focused on salvaging what was left of Main Street from the ravages of Wall Street and uncontrolled corporate greed. The president has supported business, kept taxes historically low, and focused on rebuilding the economy out of the rubble that Republican policy had created.

As for Sesame Street... does it matter? Of course it does. It's an educational institution that without proselytizing teaches children the values that any modern liberal society should value. It's not about government telling you this or that, it's about learning in a fun, entertaining setting. You can fairly criticize its methods, just as you can fairly criticize the use of television as an educational tool, but if you really object to its values you're basically a monster.

Of course it's make-believe! It's a television show populated mostly by muppets! And of course it's idealistic. It presents a comforting world for children away from the ugliness and violence of so much of modern life. (But it's also very much rooted in the real world, and if you don't get that, you've either never seen the show or are an ignorant right-wing bigot. Or both.)

But to say that it therefore doesn't matter is just plain stupid.

And if Bill Kristol, an educated and supposedly smart guy, insists on criticizing "Obama's liberalism," and therefore to such things as marriage equality, access to affordable health care, and dignified care for seniors, what he's really saying is that he objects to the values of toleration, inclusion, opportunity, and hope, which is what you find on Sesame Street and in the hearts and minds of Americans who want a bit more from life than the retrograde dystopia of the conservative -- and neoconservative -- imagination.

Biden misspeaks, Romney and Ryan -- desperate and dishonest -- pounce

By Michael J.W. Stickings

Vice President Biden clearly misspoke, or rather spoke with a lack of clarity, when he said yesterday that the middle class has been "buried the last four years."

As he said later in the day, with a bit more clarity, if with a lack of elegance, "[t]he middle class was buried by the polices of Romney and that Ryan supported. What they're proposing is Bush economic policies on steroids -- that's what this is. But folks, the middle class is coming back. It's coming back like Americans always do."

Obviously, what he meant to say initially was that the middle class has been buried during the Obama presidency, just as it was buried long before that, because of Republican policies.

But of course one thing we know is that Romney and Ryan, who prefer blatant dishonesty to talking about what they actually stand for and would do in office, never pass up an opportunity to take a line out of context in order to score some cheap political points, screaming bloody "Gotcha!" and preying on the presumed ignorance of voters.

Yes, Biden served this one up for them, but their response was typically shameless:  

A tweet from Romney's account read: "Agree with @JoeBiden, the middle class has been buried the last 4 years, which is why we need a change in November."

A spokesman for his campaign went further.

"Vice President Biden made a stunning admission today and we couldn't agree more: the middle class has been 'buried' under the last four years of this President's policies," wrote Curt Cashour, the Virginia Communications Director for the Romney campaign.

"Under President Obama, the middle class has suffered from crushing unemployment, rising prices and falling incomes. They can't afford to be 'buried' for four more years. Mitt Romney and Paul Ryan will take our nation in a new direction and are offering exactly what hardworking families need – real reforms for a real recovery."

At a campaign event in Iowa, Romney's running mate, Rep. Paul Ryan, also pounced on his counterpart's comments.

"Of course the middle class has been buried. They are being buried by regulations, they are being buried by taxes... they are being buried by borrowing, they are being buried by the Obama administration's economic failures," Ryan said. "You see the Obama economic agenda failed not because it was stopped, it failed because it was passed."

Basically, just the usual propaganda, easily dismissed:

-- Biden never said that the middle class was buried because of Obama's policies. In fact, quite the reverse. (So, no, there was no "stunning admission." What a pile of shit.)

-- Obama inherited a disastrous economy and launched the road to recovery. Jobs have been created, net jobs, and while many are still struggling, the situation is not nearly as dire as it would have been had Republican policies prevailed.

-- The Romney-Ryan plan for "real recovery" involves massive tax cuts for the rich, tax increases for the middle class, taking access to affordable health care away from tens of millions of Americans, and slashing the programs upon which so many Americans, including the middle class, depend.

-- Tax rates are currently at historically low levels.

-- Under-regulation, not over-regulation, was one of the main causes of the economic crisis that the president inherited from Bush.

-- And if Ryan wants to talk about "economic failures," maybe he should actually answer some fucking questions for a change instead of doing everything possible to avoid having to get into the ugly details of his extremist right-wing budget plan.

The fact that Romney and Ryan pounce so quickly on any and every gaffe, and even on anything that can possibly be taken out of context, shows not just how desperate they are at this point but just how vapid their campaign is, how unwilling they are to engage Obama and Biden, not to mention the voters generally, on anything of substance.

They're just hoping their lies stick, that voters are too stupid to see through their transparently stupid campaign.

Needless to say, their opponents hold the American electorate in much higher regard.

The revenge of the Carters

By Richard K. Barry

Thanks for listening, thirty years later. 

We are getting to the point in this presidential campaign where it's hard to have new thoughts. One of the ideas that a lot of us have had for a long time is about the extent to which the outcome would depend on the shape of the economy. Many said that it's very hard for an incumbent president to survive with an economy as weak as we are experiencing.

Many others, me among them, have said that this is only true if people are willing to take the leap and blame the incumbent for the weak economy even though, in this case, the crisis he stepped into was, let's be kind, presided over by a president from the other party.

I know it's hard to fully explain to voters how George W. Bush "created" the Great Recession, but he had been in office for nearly 8 full years when it happened and the economy had been in pretty great shape the last time a Democrat was in office. One can talk about the Republican penchant for tax cuts for the wealthy and deregulation, but the fact is most people look at things in far more simplistic ways. When a Republican was in the White House four years ago things were crashing and burning. And, sure, President Obama hasn't "fixed" things as fast as we might have liked, but is it fair to blame him for that?

Most voters don't really think in policy terms. They think in matter-of-fact human nature terms. Even though Mitt Romney has done everything possible to distance himself from George W. Bush, everyone gets that they are basically the same kind of animal. And, as for Obama, everyone understands what it means to have to clean up someone else's mess and maybe even what it feels like to get criticized for not doing it fast enough.

In other words, a bad economy is hard to overcome, but it was never that simple, much as Mitt Romney wanted it to be.

Another point, which is interesting given that Romney's people have tried to tie President Obama to Jimmy Carter, is that Carter was skewered for suggesting Americans might have to lower their expectations. True as that was, Reagan came along and said that Americans would never do that and he won.

Obama is too smart to even hint at what Carter said, but Americans are starting to come around to the message. They're getting it all by themselves. The world economy is in trouble. The kind of expansion the American economy saw in the twentieth century will never be seen again. And emerging economies will now demand at least a taste of the kind of affluence that had previously been allowed only to developed nations. They'll take our jobs and ask for less to do them.

In other words, Jimmy Carter is having his revenge and, as much as Mitt Romney is trying to be Ronald Reagan, Americans won't be fooled again.

On these points, here's Ross Douthat at The New York Times this weekend:

But Barack Obama would win if the election were held today, and probably by a relatively comfortable margin. My wintertime prediction, Mitt Romney's campaign strategy, the assumptions of Republicans and Democrats alike — all have been confounded by voters' refusal to lean the way the unemployment rate suggests they should.

Why is this? In part, it's the hangover from the Bush years, and the fact that Americans don't yet trust the Republican Party given how little the party seems to have learned and changed since 2008. In part, it's Romney himself, a deeply flawed candidate whose "47 percent" remarks look like the rare disastrous sound-bite that actually turns the polls against the candidate who uttered it.

But something deeper is going on as well. Remember that the economy is growing, however slowly, and most working-age Americans do have jobs. (A Bureau of Labor Statistics reassessment just found that there are now — finally — more Americans employed than when Barack Obama took office.) It turns out that dreadfully slow growth isn't nearly as politically damaging as decline, because voters can adapt to stagnation, and approach it as a kind of grim "new normal" rather than a disaster requiring an immediate response.

Isn't it rich that a Carter family member had a hand in getting the "47 percent" video released, just as Americans are coming to realize they understand we are going to have to live with a "new normal," like Jimmy Carter told them over 30 years ago.

The ballot question in this election may well be, "Who do you want in the White House as you adjust to the reality that life won't ever be as good as it once was?"

(Cross-posted at Lippmann's Ghost.)

Romney gets one thing right

By Frank Moraes

Ed. note: I'd like to welcome a new guest blogger to The Reaction -- Frank Moraes of the always insightful Frankly Curious. I first came across Frank (and Frank's writing) when I was doing the round-up at Crooks and Liars a while back, and immediately I knew this was a guy I needed to be reading regularly. His blog is eclectic, but his focus is politics and often economics, and it's always clear and well-written. I encourage you to check it out. Meanwhile, hopefully this, a look back at the 60 Minutes interviews of Obama and Romney on Sunady, will be the first of many appearances here. -- MJWS

Frank Moraes is a freelance writer and editor with much too much education. He lives in the San Francisco Bay Area, where it is really hard to be a liberal, and writes the blog Frankly Curious.

**********

Once upon a time, 60 Minutes did actual journalism. Sunday night, they devoted their episode to interviews with President Obama and Mitt Romney. It wasn't terrible. I thought that the Obama interview was the more aggressive of the two. But it was clear why this was: Romney isn't up to a probing interview. I don't think that Republicans realize just how much affirmative action they benefit from in the form of false equivalence, softball questions, and low expectation.

I thought that Steve Kroft asked some good questions of Obama. In particular, he went after the president on the mortgage refinance program that has beeen disappointing. What was not so great was Kroft's dismissive attitude. His reaction shots seemed very disrespectful to me -- like it was another Bill O'Reilly interview.

Although Scott Pelley's interview of Mitt Romney went very easy on the candidate, Romney still came off badly. I thought the most telling exchange occurred when Romney explained that he was going to cut tax rates 20% across the board but somehow make these cuts revenue neutral by closing loopholes and deductions. He went on to say that there would be a net tax cut for the middle class. Pelley pushed on this point, although he never brought up the Tax Policy Center that showed that Romney's plan could not work as he claims. Instead, Pelley asked what specific deductions Romney would end. Romney replied:

It's very much consistent with my experience as a governor which is, if you want to work together with people across the aisle, you lay out your principles and your policy, you work together with them, but you don't hand them a complete document and say, "Here, take this or leave it."

This is a highly misleading claim. As Jonathan Chait notes, "How about handing them a complete document and saying, 'I am willing to negotiate'?" What I thought when he said this was, "What about the 20%?" Romney cannot be specific about which deductions he would end or reduce, but he is very specific about how much he would lower the tax rates. I've never seen anyone call him on this.
There was one part of interview where I thought Romney was right. And it isn't new. If you push him hard enough, Romney will admit that he is a Keynesian. He understands that cutting government spending will hurt the economy. This is perhaps the most frustrating thing about Romney: he's smarter than the candidate he plays on television.

Here Pelley asks Romney why shrinking the federal government on a large scale wouldn't hurt the economy:

Well, the -- the plan I have to -- to go after the deficit and to shrink federal spending is metered out in a very careful way, such that we don't have a huge drop off with an austerity program that puts people out of work in government. But instead, through attrition, over time, we scale back the number of federal workers so I'm -- I'm very careful in the way I do this.

This is the correct answer! Ding ding ding! Romney wins a prize!

But there is a dark side to this. One of Romney's big talking points is that the government can't create jobs. Given that he understands that losing government jobs will hurt the economy, he must know that adding government jobs will help the economy. So even when Romney provides an honest and well-thought-out economic policy idea, it only shows how willfully ridiculous the rest of his policy ideas are.

The 60 Minutes interviews contained no new information. I suppose they are good to have because most people haven't been following the campaign over the last three years. But the episode allowed Romney especially to give talking points that were never countered. The old 60 Minutes that I remember would have cut away after Romney stonewalled on the deductions in his tax plan: "However, the Tax Policy Center has shown that there are not enough deductions to cut that would leave the taxes on the rich unchanged. What's more, this study found that far from lower taxes on the middle class, Romney's plan would raise them."

Those were the days.

Update:

There were several other things that were repellent about Romney in this interview. One was that he claimed that the uninsured do have health care -- all they have to do is wait for a heart attack and then go to the emergency room. What were you thinking, Mitt?! You left your top hat and monocle at home! He also noted that he should only pay a 15% tax rate because his money has already been taxed at the corporate level. This is wrong; I hope to write about it later.

(Cross-posted at Frankly Curious.)

If Romney and Ryan are to have a chance, it's on the economy. And they're still stupid.

By Richard K. Barry 

That is so beautiful.

BuzzFeed ran an interesting and potentially very important story over the weekend. Not that we didn't know it, but it's still good to understand the implications. I'm referring to the point that the Romney-Ryan campaign seems to have abandoned its attempt to make everything in their campaign about the economy:

Mitt Romney's campaign for president appears to have quietly abandoned its guiding assumption, that the election would center on the struggling economy, and has visibly begun to feel for a new message.

According to a top Romney aide, this is where they are going:

No one in Boston thinks this can only be about the economy anymore. The economy narrows the gap and puts us in contention, but we have to bring more to the table.

You may recall that on the Friday after the DNC, a jobs report came out that was anemic at best, yet Obama has continued, since then, to gain strength in the polls. GOP speaking points during the convention were largely focused on the fact that no matter how strong a convention the Democrats had, a poor jobs report would be a major buzzkill.

Well, things didn't work out that way so the Romney campaign has had to reorient itself:

Romney and — particularly — his running mate Rep. Paul Ryan, have spent a week road-testing alternatives, going positive and going negative, swinging at the president on everything from faith to foreign policy. The new efforts mark a shift from a summer of fruitless discipline and a convention in which attempts to present a friendly, moderate tone trumped any policy substance.

I suppose this is what desperation looks like if Romney thinks he can fight this election on social conservative ideas or on a more hawkish foreign policy.

Maybe someone needs to remind Mitt that this election will be won by appealing to swing voters. The new strategy is unlikely to do that.

(Cross-posted at Lippmann's Ghost.)

A new poll in Virginia, Obama's advantage, and the three keys to Republican success in 2012

By Michael J.W. Stickings

A new PPP poll has Obama up by five over Romney in Virginia, 51 to 46. (A recent NBC/WSJ/Marist poll has him up by five, 49 to 44, among likely voters, and seven among registered voters.) And things appear to be relatively stable there:

Obama's lead is unchanged from a month ago when we found him leading 50-45 in the state. He may not be seeing a bump from the convention in the state at this point, but he was in a pretty good position to begin with.

Virginia continues to look like it may be something of a firewall state for Obama. PPP has now polled it 9 times this cycle, and President Obama has led by at least 4 points on all 9 of the polls. He's been ahead by 5 points, 5 points, 8 points, and 8 points over the course of the four surveys we've conducted in 2012.

And this is particularly interesting:

One thing playing to Democrats' advantage in Virginia is that their voters are actually more excited than Republicans about the election now, contrary to the conventional wisdom for most of this cycle. 73% of Democrats say they're 'very excited' about voting this fall compared to 63% of GOP voters. Women (64%) are more enthusiastic about voting than men (60%), African Americans (85%) are more excited than white voters (57%), and  young voters (72%) are more excited than seniors (62%).

Behind in the polls, Romney has had a few things in his favor throughout the campaign, namely a) the still-struggling economy; b) voter enthusiasm on the right; and c) voter suppression (with Republicans all across the country trying to disenfranchise likely Democratic voters, or at least trying to make it as difficult for them to vote as possible).

As it stands now, while a) is still a problem for the president, Romney lags behind Obama in terms of who is perceived by voters to be better on the economy, this despite Romney slamming the president on the economy and playing himself up as the sort of business-savvy manager the country apparently needs at this challenging time. Romney just doesn't have all that much credibility on the economy, and voters seems to understand that Bush left Obama with a disaster of economy that takes a lot more than four years to fix.

Meanwhile, b) appears to be reversing, or at least equalizing, particularly in the wake of the extremely successful Democratic convention in Charlotte earlier this month. Democrats are enthused now, and rightly so.

That leaves c), meaning that Romney's best chance to win may rest with ongoing Republican efforts to strip the vote from as many people as possible, claiming that fraud is widespread (it isn't) and that non-citizens are on the rolls (they aren't in significant numbers, and the people being targeted are U.S. citizens). Understandably, Romney has distanced himself from these efforts by not commenting on them -- wink-wink, nudge-nudge -- but of course he stands to benefit immensely from them, as do Republicans generally.

Yes, Republicans, Romney included, seem to think that the best way to win is to thwart democracy. They may very well be right.

It's the economy, stupid -- sort of

By Richard K. Barry

Greg Sargent noticed an interesting trend in recent polling for the presidential election. For quite a while, polls have been showing that voters thought Mitt Romney would do a better job handling the economy than President Obama. But not so much anymore.

He writes:

Well, we now have four national polls that show Obama and Romney tied on the question — perhaps suggesting a potentially signfiicant shift in the race's dynamics:

• The new Fox News poll shows Obama and Romney exactly tied at 46-46 on who would better improve the economy and create jobs.
• This week's CNN poll finds Obama and Romney in a statistical tie, 50-49, on who would better handle the economy.
• This week's Post poll finds Obama and Romney in a statistical tie, 47-45, on the same question. 
• A Rasmussen poll on Tuesday found Obama and Romney at 47-45 on who is more trusted on job creation.

As Sargent states:

This again raises the question of whether Romney's basic theory of this race — that it's inevitable that Obama will lose, because voters will conclude that he failed on the economy and will opt for an alternative that clears the most basic threshold of acceptability — is fundamentally flawed. As I keep saying here, it's possible that the true undecided voters may not be concluding Obama failed and are merely disappointed that Obama has not been able to make the recovery go faster but find that understandable, given the severity of the crisis and the depth of our problems.

No one has a magic wand that is going to fix things and, as Sargent concludes:

[Voters] may be open to the argument that Romney doesn't have the answers and that Obama’s approach — despite their disappointment — has at least as good or even a better a chance of working over the long haul.

Sounds reasonable, and the polling trend would seem to support it.

(Cross-posted at Lippmann's Ghost.)

Behind the Ad: Romney still wants to blame Obama for not fixing Bush's mess fast enough

By Richard K. Barry

(Another installment in our extensive "Behind the Ad" series.)

Who: The Ryan-Romney campaign.

Where: Wisconsin.

What's going on: According to CNN, Mitt Romney's campaign released a new ad on Saturday aimed at Wisconsin voters. It's part of a series of state-specific ads that are being released in battleground states.

In fact, shortly after President Obama's speech at the DNC, the Romney campaign announced 15 new television ads as part of what it's calling "A Better Future" series. The Wisconsin ad brings the total to 16 in nine states.

The theme is the question Romney posed as part of his RNC speech, asking voters if they are better off now than when Obama took office:

"This president can ask us to be patient. This president can tell us it was someone else's fault. But this president cannot tell us that you're better off today than when he took office," said Romney to supporters at the Republican convention.

It is an interesting question. Romney hopes people will simply forget that when Obama was elected, the country was in economic free-fall under the watch of the previous president, who just happened to be a Republican. It seems fairly obvious that we are in better off now than when the Bush presidency put the country in the worst economic shape we'd seen since the Great Depression.

We all understand the question. And we also understand that Romney hopes people will punish President Obama for not fixing fast enough the mess a Republican administration and GOP policies created in the first place.

As a strategy, I just don't think it's a winner.



(Cross-posted at Lippmann's Ghost.)

Stimulus works

By Carl 

Finally, we may be seeing the renewable energy debate ending, and the renewable energy era beginning:

U.S. solar-panel installations more than doubled in the second quarter from a year earlier led by demand in California, according to the Solar Energy Industries Association.

Installations totaled 742 megawatts in the quarter, up 45 percent since the first quarter, and may reach 3.2 gigawatts by year end, the Washington-based trade group said today in its quarterly market report. California led installations with 217 megawatts, followed by Arizona with 173 megawatts.

The U.S. now has 5.7 gigawatts of installed solar capacity, enough to power 1 million homes, according to GTM Research, a Boston-based consulting company that prepared the report with SEIA.

The boom was driven by large projects that sell power to utilities, with little growth in residential installations and declines in non-residential projects, Shayle Kann, vice president at GTM, said in an interview Sept. 7. "It's an indicator that the utility market will be the main story this year and probably for the next few years."

What does this all mean? It means that commercial developers are finally hooked on being both energy independent and turning what had been a cost into a profit center. It means that the cost per megawatt to install solar panels is going to start coming down. The 3.2 gigawatts installed this year is the tip of the iceberg, as the US has about 13 gigawatts in planned solar installations under contract, with 3.4 gigawatts slated to go online in 2013.

Developers are the mission-critical market in terms of getting acceptance of solar energy in the United States. By deploying solar energy in office buildings, retail spaces, and condo complexes, word of mouth at the consumer level will begin to build, and soon you and I will be at The Home Depot augmenting or even replacing our worn-out furnaces.

And we have President Obama to thank for all this. If he hadn't made a firm commitment to weaning the nation off foreign oil and backed that up with stimulus funding for the renewable energy industry (which has been growing in a nation where industries have taken a hard hit over the past thirty years), this would not be happening.

(Cross-posted to Simply Left Behind.)

Obama's Republican Convention bounce

By Carl 

A startling column was released this morning by Nate Silver:

Polls that are published during the party conventions can be anticlimactic, representing old news since they won't fully reflect the effects of the convention bounce. And none of the surveys that came out on Wednesday were that newsworthy to begin with – although there was one, in Ohio, that had encouraging news for Barack Obama, and another, in Nevada, that was slightly favorable for Mitt Romney.

The Ohio survey was conducted by the automated-polling firm Gravis Marketing, which had Mr. Obama ahead of Mr. Romney by less than 1 full percentage point.

A one-point lead isn't much, and Mr. Obama has gotten some better numbers than that in Ohio. So why does this qualify as good news for him? Because this firm has had Republican-leaning results in the other states that it has polled, putting Mr. Romney up by 2 points in Florida, 1 point in Colorado and 17 points in Missouri, making it several points more Republican-leaning than the consensus of surveys in those states. Once the model adjusts for the firm's "house effect," it treats Mr. Obama's nominal 1-point lead as being the equivalent of a 4- or 5-point lead instead. Thus, Mr. Obama's chances of winning Ohio rose somewhat based on the survey. 

Now, his first point, about polling during conventions, is an interesting one, and one I'd dispute. The Romney camp has played up the convention heading into Tampa and if anything, should have received a pre-bounce from the naming of Paul Ryan as Veep candidate and the twin stump speeches the two have delivered practically in unison.

That Ohio has shown itself inured to the bullshit says a lot about this poll. Here's why:

By two-to-one (44% to 22%), the public says that raising taxes on incomes above $250,000 would help the economy rather than hurt it, while 24% say this would not make a difference. Moreover, an identical percentage (44%) says a tax increase on higher incomes would make the tax system more fair, while just 21% say it would make the system less fair.

Interestingly, the country is about split between the two men with respect to who would do a better job of handling the economy in the next four years -- Romney 48%, Obama 44% (MoE 3.9%).

So that's the box Romney has painted himself into. He can bash the President over the economy, but that flies in the face of public perception. He already has a monumental task in front of him with regards to firming up his own image, so to try to juggle both of these balls is near impossible.

This is why he's been hesitant to really go after President Obama on the issue of jobs and the economy, which would normally be a strong point for the challenger in a lackluster nation. People get that Obama was handed a heaping plate of crap, one that's only been piled higher and deeper by Republican mayors and governors across the nation who have gone out of their way to destroy jobs in the public sector.

Add to that an openly hostile Republican House, and few people can seriously blame Obama for the jobs problem. He's tried. He's been, if anything, too cooperative with the Republicans... remember the debt ceiling agreement that Weaker Boehner hammered out with the president? Turned out, Tanned Man couldn't even deliver a pizza.

It's safe to say, I think, that the Romney candidacy, quixotic from the outset, is floundering on the reefs of common sense.

In one respect, we should probably be grateful to Mitt Romney's ego in running in 2012, because it saves us the trouble of ever having a Romney presidency, with all its concomittant screw ups. He won't run in 2016, and we can go out and destroy Chris Christie's political career in that election.

(Cross-posted to Simply Left Behind.)

Jeb Bush wants Barack Obama to quit picking on his brother

By Richard K. Barry

Stop picking on my brother or I'll tell our ma.
And you really don't want that.

Jeb Bush said on Sunday that President Obama should stop blaming the poor economy on his brother, George W. As reported by CNN:

While conceding that Obama did inherit a tough economy when he took office in 2008, Bush said that Obama’s policies have hindered the country's economic growth.

"I think it is time for him to move on," said Bush said on NBC's "Meet the Press."

"His policies have failed," said Bush. "And rather than blame others -- which I know we were taught that that was kind of unbecoming, over time you just can't keep doing that -- maybe offer some fresh new solutions to the problems that we face. But that's not going to happen between now and Election Day."

I have a few questions for Jeb:

Could you tell us all how Mitt Romney's policies differ from the policies that got us into so much trouble in the first place, i.e., your brother's policies?

If they are different, and I don't believe they are, could you tell us how your brother could have screwed up so badly?

And if they're not different and Mitt Romney is likely going to pick up where "W." left off, can you tell us why "W." isn't campaigning with Romney and doesn't have a featured spot at the convention?

Just wondering. 

(Cross-posted at Lippmann's Ghost.)