The Four Biggest Flaws in the Candidates' Debate Performances

Oct 22, 2012Bo Cutter

The second debate didn't do much to move the polls, but it continued to highlight some of the candidates' biggest flaws.

I'm not going to refight the second debate at any length. With these debates, we are at that well-known point most meetings and conversations reach: everything has been said, but not everyone has said it. There is no excuse to say it all again interminably.

The second debate didn't do much to move the polls, but it continued to highlight some of the candidates' biggest flaws.

I'm not going to refight the second debate at any length. With these debates, we are at that well-known point most meetings and conversations reach: everything has been said, but not everyone has said it. There is no excuse to say it all again interminably.

To dispense with the debate, Obama won. The polls all say it, and not even the Romney people contest it. He did not win overwhelmingly; the polls suggest by an average edge of about 4 percent among undecided voters. And he didn't win much. My estimate is that this debate influenced about 40,000 voters in toss-up states toward Obama; 125 million people voted in 2008, so we're talking about 0.003 percent (and I think that's an over-estimate). Clearly the biggest, most apparent victory in debate two was Obama version two over Obama version one. And the biggest effect was probably the palpable sense of relief among his own supporters.

But the debate did provide even more fuel for further rants on four topics: the future, international issues and politics, the Republican right, and "plans."

1. On the future. I continue to find President Obama and his team's failure to bring together a simple, straight narrative about the economy in the last four years and America's economic future incomprehensible. A credible narrative can be shaped, and it would work to the president's advantage. An equally credible view of a positive future could be presented. This is not a trivial omission; presenting a view of the future that allows citizens to accept and take on hard choices is a central requirement of leadership.

2. On international issues and politics. It's hard to avoid concluding that Governor Romney has been irresponsible in his approach to the violence in Egypt, Libya, and Tunisia. His grasp of the facts is weak to non-existent, his lack of understanding of the basic uncertainties involved in most of these events is deeply naive, and his sense of fundamental issues of American power and national security is, let us say, undeveloped. Not that it matters, but his political strategy is also completely wrong. Given a set of sudden and violent events about which he knows absolutely nothing, by far the best strategy is to say in a completely straightforward way that he supports the president and then shut up.

3. On the Republican far right. Governor Romney has two obvious problems in these debates and this whole campaign. The first problem is well known: he has reversed himself so completely on every major issue that to get back into the game now he has to, on the run, re-reverse himself, deny he is doing it, and somehow convince the American people that he isn't a phony. Good luck. But an equally big problem is slightly less obvious: he is tied into knots by the positions of the Republican far right, which has never missed a chance to miss a chance. Whether the subject is taxes, spending, the social contract, abortion, immigration, or guns (neither Governor Romney nor President Obama distinguished themselves there), it is very clear that there are bright lines he is not allowed to cross. My own bet now is that President Obama will win reelection and the Democrats will retain control of the Senate -- in neither case by much of a margin. In both instances, a major reason will be the revealed preference of the Republican far right to be ideologically pure losers rather than winners with a chance to govern.

4. On plans. I continue to be completely in awe of Governor Romney's five-point "plan." This "plan" has either set back the whole idea of a plan by at least 5,000 years or moved forward to a whole new definition of plan. There is literally nothing of substance to this "plan." The 12 million jobs he will create is slightly on the high side of the number of jobs a normally performing U.S. economy would create in any circumstances. The tax plan is nonsense. The rest of it is at a cocktail party level of analysis. And Governor Romney continues to advocate this "plan" as proudly as ever. Why not? If he loses, the "plan" won't matter. If he wins, it will immediately be jettisoned, and should anyone be so ungracious as to bring it up, they will be told that the Romney administration is looking to the future, not the past (a time-honored technique). So, the new rules of "plans": always have a plan, always talk a lot about your plan, be sure your plan says nothing whatsoever, and, post-election, deny your plan ever existed.

Finally, the numbers: Nate Silver gives President Obama a 67.9 percent chance of winning, with 288 electoral votes and a 1 percent popular vote margin. Intrade is offering 61 percent odds on Obama. The Iowa Election Market is also at 61 percent. And Real Clear Politics' forced choice gives President Obama 277 electoral votes. This election is awfully close to even.

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic Presidents.

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New Deal Numerology: A Second Act in Politics

Oct 19, 2012Tim Price

This week's numbers: 58%; 3%; 1; 4; 27%

58%... is a mixed number. That’s how many CNN viewers thought Romney would do a better job of handling the economy after the second debate. They heard him say “I know what it takes” so many times, they just assume he’ll tell them the secret one day.

3%... is a qualified number. According to Reuters, that’s how much higher Obama scored on appearing presidential after the second debate, which should bump him up to 103 percent, since he is literally the president.

This week's numbers: 58%; 3%; 1; 4; 27%

58%... is a mixed number. That’s how many CNN viewers thought Romney would do a better job of handling the economy after the second debate. They heard him say “I know what it takes” so many times, they just assume he’ll tell them the secret one day.

3%... is a qualified number. According to Reuters, that’s how much higher Obama scored on appearing presidential after the second debate, which should bump him up to 103 percent, since he is literally the president.

1... is a premature number. That’s how many jobs were created during the debate, as Romney promised one to his first questioner if he’s elected. Just 11,999,999 to go and he can cross unemployment off his first-term agenda.

4... is a verbose number. That’s how many more minutes Obama got to speak than Romney did, which critics cite as evidence of moderator bias. But he also spoke longer during the first debate, which suggests that it really helps to have something to say.

27%... is an unbound number. That’s how many senior staff positions were held by women by the end of Mitt Romney’s term as governor -- a 3 percent drop from when he took office. Was he collecting all those women in binders so he could trade them for a good rookie card?

Tim Price is Deputy Editor of Next New Deal. Follow him on Twitter @txprice.

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Bryce Covert: How Do We Make the Economic Case for Care Work?

Oct 19, 2012

On the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, NND Editor Bryce Covert talks to Nancy Folbre, economist at the University of Massachusetts Amherst and editor of For Love and Money: Care Provision in the United States.

On the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, NND Editor Bryce Covert talks to Nancy Folbre, economist at the University of Massachusetts Amherst and editor of For Love and Money: Care Provision in the United States. In the clip below, they discuss Bryce's main takeaway from the book, which is that there is a value to domestic care work "to everyone, to the economy, to individuals, and there's a cost when we're not valuing this care."

Bryce notes that the high-profile defeat of the Domestic Workers' Bill of Rights in California and the continued obstruction of a bill to provide paid sick days in New York City are both the result of Democrats giving in to pressure from business lobbyists. Given the challenge of taking on these powerful interests, Bryce wonders if there's a way "to make the economic case, to bring business in or at least to be able to combat their claims that, 'Oh, well, it's too much of a cost burden on us to do these things.'" She also points out research that shows that although these worker-friendly regulations are often met with initial resistance from employers, they've proven to be harmless or even beneficial once they're in place. This suggests that "maybe there's this disconnect between what small business owners or regular business owners think and their represented interests like the Chamber of Commerce, which tends to be very conservative even in policies that might actually benefit small businesses."

For more, including a discussion of how coalitions can be built to push for better working conditions and why men share away from traditionally female-oriented care work, check out the full video below:

 

Childcare worker image via Shutterstock.com.

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Despite a Strong Debate, Obama Remains Vulnerable on the Economy

Oct 18, 2012Jeff Madrick

The president found his voice in the second debate, but he still needs to make a clearer case for the progress he's made.

There has been entirely too much celebrating about President Obama’s debate performance on Tuesday. He did very well, without a doubt. He won hands down. He didn’t get into the ring cold, and he showed that he knew his stuff—and that Romney really didn’t.

The president found his voice in the second debate, but he still needs to make a clearer case for the progress he's made.

There has been entirely too much celebrating about President Obama’s debate performance on Tuesday. He did very well, without a doubt. He won hands down. He didn’t get into the ring cold, and he showed that he knew his stuff—and that Romney really didn’t.

But the economy remains the ace in the hole for Romney and Ryan. We haven’t nearly recovered in terms of jobs, and that’s a tough fact to slide by. The unemployment rate rose rapidly in Bush’s last term to around 8 percent, then peaked in 2009 at 10 percent and slowly came down to its current level. So we are only back to the start of the Obama term. No one ever won the presidency with a 7.8 percent unemployment rate. And we know, as Romney keeps reminding us, that median family income is awful and that poverty is up.

Everyone knows this, and yet Obama did not have a good enough explanation of how much progress has been made. He sounded defensive. So Obama needs a strong, non-defensive explanation of his achievements, and one way to put it is what would have happened had Romney won the presidency in 2008. You’d have a 10 percent unemployment rate with Romney as president. Poverty would be way up. He’d be blaming Social Security and Medicare for all his problems, and he’s find economists to claim he was right. They might already be cutting these programs forever “in order to save them.” It’s triage -- throw the elderly out of the boat and let everyone else eat the rations. People would be poorer. They would get less health care. Those in poverty would have fewer benefits. Is that the kind of America you want?

Odds are that Romney, if he put the Romney-Ryan plan into effect, would create a bigger deficit, too. That’s actually what we need, but a deficit based on tax cuts will create few jobs. (EPI ran some numbers based on Mark Zandi's multipliers.) And if Romney did close the many tax holes he promises to, recession is almost guaranteed even as your taxes rise.

This concept is tough to communicate in a credible way. It just sounds like economists bickering. But there is a record out there: George W. Bush’s. His central economic policy was tax cuts for the rich, and he produced the slowest job growth of any president since the Depression. Romney will do that again. Promise.

Obama has to be clear: He stopped a depression. He is getting the housing market to come back after the worst devastation since the early 1930s. Employment stopped falling. But he shows hesitation in critical areas. Will he protect Social Security and Medicare? If so, then say so. The other guys will cut it, even gut it. But is he vacillating too much here. The talk about Dodd-Frank doesn’t win him many points because most of America thinks the banks got away with murder. He needs a better way of talking about that. As for Obamacare, he is talking about its good points, but he needs to be bolder still. List them all, and list them fast.

And when he says Romney is lying, which is a deliberate motif of the Republican game plan, don’t say he lied with a smile. Say, "It makes me very sad and disheartened when the governor misleads the American people. It is unfair to you voters. And when challenged, my opponent will come back and tell you again, that’s not what his program is, or he never said that. Be proud of your claims, Governor Romney; don’t back off them to win over some in the middle of the pack. Tell them where you really stand."

Finally, it is critical to be constructive about the uses of government. Tell America the only way the country will succeed and the economy will remain prosperous is if we bring everyone with us. Every American must be able to contribute to the economy with a good education and good health. Every region must have good, dependable transportation. Every part of America must breathe clean air. Government can do that.

Unfortunately, there is no third debate about domestic matters since the next one is on international events. But I bet we get back to the economy in the third debate. I hope so. Democrats have to realize that every time Romney says "just look at the record," they are behind the eight ball. Obama needs a very clear, persuasive statement about how bad the economy was in 2009 and how much he did. He stopped the bleeding. The patient was in the hospital. Who put him there? The Republicans, with the same plan Romney is offering today. The patient is resuscitated. Jobs are coming back. The housing market has turned the corner. Everyone is still getting Social Security and Medicare. And now 30 million more will have health insurance. 

Oops, I've already said all this. Sorry, readers. But why do I have to keep repeating it?

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

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Did the Vice Presidential Candidates Have Anything to Say to Millennials?

Oct 12, 2012

The debate was certainly heated, but did it offer any solutions to the next generation? Members and staff from the Roosevelt Institute | Campus Network and Pipeline weigh in.

Grant Ferowich, Roosevelt Institute | Campus Network, Wake Forest

The debate was certainly heated, but did it offer any solutions to the next generation? Members and staff from the Roosevelt Institute | Campus Network and Pipeline weigh in.

Grant Ferowich, Roosevelt Institute | Campus Network, Wake Forest

As Paul Ryan and Mitt Romney stated in consecutive debates, one message is clear: they stand for a strong(er) military. Indeed, Paul Ryan’s supposedly ruthless and draconian Budget Plan actually increases defense spending by 20 percent. The budget-minded Republicans apparently have a tainted perception of foreign policy. Since the end of the Cold War, the percentage of our national budget devoted to security has hardly changed. We are in an arms race with ourselves.

Despite attempts to reassure citizens with promises of security and protection, it seems that the Republican mindset fails to grasp that a bigger military means a bigger government. Furthermore, as the Simpson-Bowles Bipartisan Deficit Reduction plan notes, our nation cannot afford to be the world’s police. Currently, the U.S. spends more money on the military than the next 15 countries combined. This includes China, Russia, and the U.K., and the list goes on. It simply is not coherent for the Millennial Generation to accept a platform that promises to cut Pell Grants in half while increasing the size of a bloated military. And we of course must not forget the warning of General Dwight D. Eisenhower: “The problem in defense is how far you can go without destroying from within what you are trying to defend from without.”

Dante Barry, Roosevelt Institute | Campus Network Chapter Services and Summer Academy Coordinator

We still got the standard talking points from both Vice President Joe Biden and from Congressman Paul Ryan, and we are still without answers to issues like education, immigration, money in politics, and so forth. I was disheartened to also not hear much for young people, despite Ryan's disconcerting remarks about Social Security. Politically, Vice President Biden did what President Obama should have done last week, though it was an unsuccessful appeal to undecided voters, similarly to last week's presidential debate with an aggressive Romney. I'm glad that we were able to see a well moderated debate that challenged both vice presidential candidates on their actions and their stances. 

David Weinberger, Roosevelt Institute | Pipeline, New York

While it was clear to me that Vice President Biden was able to give the more articulate, level-headed, and progressive vision for America's future last night, he could have been a bit stronger. It's great that both campaigns claim to be fighting for a "fair shot" for the middle class. Indeed, the Obama administration has made some valiant efforts to bring quality education, health care, and other social and economic services to the middle class. But the administration has also made significant progress in ensuring that all Americans, regardless of background or location, have access to the environmental services that underpin public health and economic opportunity. Low- and middle-income Americans don't have a fair shot without clean air, clean water, and access to clean and affordable energy resources. The Obama administration's environmental record is by no means an environmentalist's dream, but the air, water, and climate standards issued under it have been essential--and uncelebrated--components of the recovery. The American economy is nothing without the people who drive it, and that means that we must continue to invest in sustaining healthy communities. Environmental standards and green job investments are not points on the president's record to run away from. The Obama campaign should embrace these accomplishments as linchpins in his recovery effort. By separating the president's environmental record from his economic recovery agenda, the campaign is opening itself up to misguided accusations that the administration has sacrificed economic goals for investments in what Congressman Ryan claims is a failed green jobs program. I'll take a solar installation job and clean water over asthma and a Medicare voucher any day.

Naomi Ahsan, Roosevelt Institute | Campus Network, University of Rochester

My greatest disappointment last night was the lack of detail on Ryan's too-good-to-be-true budget. Twenty-seven days out from an election that everyone says is about the economy, we still don't have any specifics on the proposed tax cuts. Reducing potential revenues is the opposite of paying down a debt. We do know that austerity for our social insurance programs is going to materially increase Americans' suffering. Ryan confirmed tonight that he and Romney don't understand America's struggle. It's not just about saving money and having more to spend. It's also about having a healthy economy with jobs, mobility, and the nurturing of research, education, and entrepreneurship. I do applaud the attention to American foreign policy, which historically and regrettably lacks democratic character in representing American opinions and respecting global humanitarian needs. 

Mawish Raza, Roosevelt Institute | Pipeline, University of Maryland

Vice President Joe Biden and Congressman Paul Ryan not only surprised viewers with a gripping, emotional debate, but one that was surprisingly stimulated by substance. Regardless of my personal views, both candidates presented the issues and represented their views through meaningful content. Unlike the enthusiasm, or lack thereof, during the first round of presidential debates last week, both exuded exhilaration throughout the course of the debate, from Vice President Biden’s sarcastic expressions to Congressman Ryan’s searing comebacks. Moderator Martha Raddatz also played the role of an actual moderator by pressing relevant, controversial issues, such as the war in Afghanistan, abortion, and the role of religion in policy. When discussing the tragic loss of Ambassador Stevens and the Obama administration’s reaction to the recent Middle East protests, Congressman Ryan indicated that the appropriate response to a tumultuous minority faction would have been to dismiss the film entirely and only deplore the violence that resulted. With all respect, Mr. Congressman, the glaring problem with this hard power approach -- which would apply to all international affairs -- is that it fails to create a relationship and dialogue with the resentful populations. Mr. Congressman, you probably didn’t notice, but during this misguided "Muslim rage," there were other protests going on in regions such as Cairo -- led by students occupying the American University of Cairo -- for high tuition rates. Following this was a protest by doctors, also in Cairo. This is what the Arab Spring seemed to have missed and what the Romney-Ryan campaign has blatantly ignored. By simply reducing an entire region to the heinous crimes committed by an extremely small, misrepresenting faction, we are encouraging the anti-western sentiment that caused the loss of Ambassador Stevens, continues to influence the ayatollah's negation, and triggers terrorist organizations to keep targeting American civilians. We should not defend these individuals and organizations that jeopardize and endanger our security and react aggressively. At the same time, rather than aggressively imposing our political standards and values on another culture through the presence of our military, we need to create dialogue and conversation that will stabilize a longer-lasting framework. When honoring the loss of a dearly departed diplomat, it is only just to continue the mission and values that he worked so hard to develop in Libya.

 

Tahsin Chowdhury, Roosevelt Institute | Campus Network, CCNY

The vice presidential debate between Joe Biden and Paul Ryan was indeed entertaining, and it was pleasant to see my peers who are not usually politically active to engage in a political discussion through social media. Some people were tweeting/writing statuses about Joe Biden’s use of the word “malarkey” and his laughter, and others were focused on more substantive issues. I had some issues with both candidates and their performance in the debate.

While Joe Biden was substantively the stronger candidate, consistently disproving Paul Ryan’s statements and aggressively standing his ground, it should not go unnoticed that he presented a degree of unprofessionalism in the debate. While Paul Ryan was making his arguments, Vice President Biden consistently interrupted with an argument and trying to disprove his opponent. My “left wing New York" peers were the first to criticize Mitt Romney about interrupting President Obama, but were reluctant to disagree with Joe Biden’s same tendencies. The same happened with my Romney supporter peers except vice versa. This double standard and stubborn bias is unproductive for American “political growth” of the youth and it’s sad to see that people’s objective approaches to a political discussion are waning in numbers. Joe Biden was also inaccurate on one of his statements about the fact the U.S. Embassy that was attacked in Libya did not request more diplomatic security personnel. Many journalistic sources claim they have. While I do not believe Joe Biden bluntly lied, I believe he is inaccurate and this was most likely an internal management flaw within the intelligence community. It does take government a lot of clearance to get from one end to the other. Vice President Biden should have cleared this information with his staff before the debate.That was a lack of responsibility from his end.

Paul Ryan had difficulty criticizing the opposition on foreign policy. When asked about how he’ll increase spending on the defense budget, he denied he said that and made the attempt to justify/fabricate what he said. Biden justified reallocation of defense funds elsewhere in the government by saying that America is ending its wars abroad slowly and money may not be well spent if such funding remains. Paul Ryan attempted to justify adding more to the budget by saying “we need more security” when we clearly spend more money on defense than all the other countries combined. He stumbled on the question of “what’s our current national security threat” and displayed utter weakness of his grasp of the topic. With regards to Afghanistan, they both tended to agree. However, Paul Ryan made the attempt to disagree, which showed weakness. Vice President Biden did a powerful job maintaining the argument that U.S. military was successful in training Afghani security forces.

Democrats and Republicans switched places from the first debate in the sense that Vice President Biden was playing offense and Paul Ryan was playing defense with a weak offense. He maintained accuracy of substance -- for the most part, that is -- and that makes him the “winner” in common wisdom. I look forward to the debate on foreign policy. It will be difficult for Mitt Romney to criticize President Obama on the topic, because much was accomplished in Obama’s four-year term as president: Osama Bin Laden was assassinated, Muammar Gadhafi was murdered and Libya “liberated,” Egypt democratized, and American interests in Southeast Asia were reaffirmed. And Obama continued many Bush policies while affirming the Iraq and Afghanistan troop withdrawal.

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A Painful Debate Proves the Candidates Still Aren't Answering the Real Questions

Oct 4, 2012Bo Cutter

Obama laid back, Romney reinvented himself, and neither candidate grappled with our economic future.

The debate was painful to watch. The effects are unclear but can’t be good for President Obama. I didn’t understand it, and I still don’t think the presidential campaign has grappled at all with the real issues of our economic future.

Obama laid back, Romney reinvented himself, and neither candidate grappled with our economic future.

The debate was painful to watch. The effects are unclear but can’t be good for President Obama. I didn’t understand it, and I still don’t think the presidential campaign has grappled at all with the real issues of our economic future.

There is no point in mincing around this. President Obama was nowhere near his best. He both missed an opportunity to effectively end this campaign and inflicted unexpected damage on himself. At the level of theater and tactics, the president seemed diffident and defensive, while Governor Romney came off as more dynamic and in the moment. While the debate wasn’t close to the layup the Wall Street Journal’s editorial page claimed (but then the odds are high the Journal had that editorial written long long ago), no one should kid themselves about viewers’ opinions: CBS’s poll had Romney winning 46 percent to 22.5 percent, CNN had it 67 percent to 25 percent Romney, and Google 48 percent to 25 percent. But the election prediction markets didn’t change much, and Nate Silver at the election site FiveThirtyEight puts the odds of an Obama win at 86.1 percent.

My own guess is that this debate will in the end be seen as having virtually no effect on the actual presidential election. However, that’s only a guess based on past history – these debates rarely have much effect unless someone makes a horrendous mistake. But the debate will energize the Romney campaign, and it was the last-minute emergency resuscitation of a campaign on the verge of a death spiral. And it has to be said that Romney’s remarkable shifts in position and emphasis resulted in his making a better case for himself than he has come close to making in the past. That ought to worry President Obama’s strategists.

Turning now to those Obama strategists, another effect of this debate ought to be to energize them. Their public stance will necessarily combine whistling by the graveyard with denial. That cannot be their actual private conclusions. This campaign will go to the end, and President Obama has to have a better narrative than he had last night. 

There were several aspects of the debate I didn’t understand. First, why did the president appear so laid back? If the actual strategy was Muhammad Ali's rope-a-dope strategy in the "Rumble in the Jungle,” it was the wrong strategy. You cannot possibly decide in the first week of October during a presidential election that playing not to lose is a good idea.

Second, how or why did Mitt Romney get away with such a fundamental restatement of positions he has taken throughout this whole campaign? As one major example, Governor Romney put forward a while ago a tax reduction plan that has been widely criticized as making no arithmetic sense. He flatly denied any such plan at least twice during the debate. But Marty Feldstein wrote an entire op-ed piece defending “Mitt Romney’s plan” published in the Journal on September 28. I disagreed with important aspects of Professor Feldstein’s article, but he is a friend, a major figure in economics in America, and not given to writing long pieces defending imaginary policies. I cannot understand why the president did not forcefully observe that we were all watching Etch-a-Sketch in action.

Finally, why didn’t President Obama have a simple, straightforward economic narrative and story? Debates of this kind are won through clear and compelling stories, not through the recitation of program detail and statistics no one remembers.

As a final thought, neither this debate nor this campaign have come to grips with the future. This doesn’t surprise me: campaigns are rarely about issues and choices anyway. They are more often managed by political consultants and strategists precisely to avoid issues and choices. And so, at the end of this interminable campaign on November 7, the voters will have no clue what comes next. “We have met the enemy and he is us.”

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic Presidents.

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Obama Failed to Defend Government from Romney's Bluster

Oct 4, 2012Jeff Madrick

Obama failed to defend his policies or the positive role of government. But next time he'll be ready.

President Obama lost the dabate. A night’s bad sleep did not change my mind about that. But let’s be clear that, if more relaxed and clear, Romney was the same as ever. There is no new Romney. He dissimulated, did not address details, and refused to answer what few charges Obama brought up.

Obama failed to defend his policies or the positive role of government. But next time he'll be ready.

President Obama lost the dabate. A night’s bad sleep did not change my mind about that. But let’s be clear that, if more relaxed and clear, Romney was the same as ever. There is no new Romney. He dissimulated, did not address details, and refused to answer what few charges Obama brought up.

He opened with a brilliant debating tactic—really a war tactic: open a second front and retreat on the first one. Romney tacked to the middle. No, he won’t cut any taxes he can’t pay for. No, it isn’t a $5 trillion plan. Obama wasn't ready and didn't seem able to adjust. But what is the Romney policy? He never said. More upsettingly, Obama noticed but never truly pressed him on it. 
 
In fact, Romney's is the same old George W. Bush policy, and it didn’t work then. Obama got to this point, too, but didn’t bring it home strongly enough. Job growth was the slowest under Bush of any other postwar president. Obama said it. Doesn’t anyone remember his saying it? But Romney dissimulated again, because he can’t pull this grand four or five point strategy off, just like he couldn't pay off his original tax cut program. Obama could have asked him how much he plans to cut tax rates. He would have dodged it, but in dodging it he would have looked more like the old Romney than the new, bold Romney. Obama could have pressed harder on the details of closing loopholes. He didn’t.
 
Romney ignored the facts time and again, a tried and true debating technique. Obama pointed out that in a Medicare voucher program with choice, the insurance companies will steal the elderly who are healthy and raise costs for Medicare, jeopardizing its future. Romney simply ignored the point and went on to say, as if Obama said nothing, that Medicare would still be there under his voucher program and if it worked better, it would stand. 
 
In his attacks on the role of government, he persistently said the private sector can do better. But private sector health care costs have risen faster than Medicare. Why is that? He pushed the old ideological sticking points. Government is bad, private enterprise good. No facts, mind you. Just shibboleths. Keep the federal government out of health care. Give it to the states. Should we keep the federal government out of Social Security and Medicare, too—both very popular programs?
 
But if Romney’s bluster was strong, Obama lost the debate more than Romney won it. He seemed incapable of defending Obamacare. He couldn’t even counter the alleged Medicare theft of $716 billion well. He didn’t defend his green investments. Ninety billion dollars is not much when you consider Japan will probably spend nearly $500 billion on renewables. He only passingly defended his stimulus bill, repeating the error of neglect he has made for most of his administration. In fact, he hardly defended his record at all, for fear it reminds people that unemployment is stil high, as is the deficit. The point is they'd both be higher under a Romney plan.  
 
And what of the policies for 2013? Where was talk of Obama's American Jobs Act? Why not say that Romney’s policies will bring you a recession, sure as you’re sitting there?
 
And what about bipartisanship, of which Romney bragged during his governorship in Massachusetts? Could Obama have pointed out that he couldn't deal with Republicans who proclaim their first priority is to stop his reelection? Did any prominent Massachusetts Democrats threaten Romney that way?
 
Now, the media will start analyzing the Romney promises, and therein will lie some justice. He won’t be able to defend them except in the same general, non-detailed ways. The Democrats have to counter-attack. There will be plenty of room to do so. 
 
And one other point: I think Obama will be ready next time. He went into the ring cold. Every boxer knows you have to warm up and break a sweat before the first bell. I think he learned. He almost got knocked out in the first round. Not again, I don't think. 
 

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

 

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FDR's Debate Lesson for Obama: It's About Capturing Americans' Imaginations

Oct 4, 2012David Woolner

President Obama spent too much time picking apart the details of his opponent's plans instead of attacking the underlying philosophy as FDR did.

President Obama spent too much time picking apart the details of his opponent's plans instead of attacking the underlying philosophy as FDR did.

Let me warn you and let me warn the Nation against the smooth evasion which says, “Of course we believe all these things; we believe in social security; we believe in work for the unemployed; we believe in saving homes. Cross our hearts and hope to die, we believe in all these things; but we do not like the way the present Administration is doing them. Just turn them over to us. We will do all of them—we will do more of them we will do them better; and, most important of all, the doing of them will not cost anybody anything.”

But, my friends, these evaders are banking too heavily on the shortness of our memories. No one will forget that they had their golden opportunity—twelve long years of it.

Remember, too, that the first essential of doing a job well is to want to see the job done. Make no mistake about this: the Republican leadership today is not against the way we have done the job. The Republican leadership is against the job's being done. — Franklin D. Roosevelt, 1936

From the moment he took office in the New York State Senate until his death as president roughly 35 years later, Franklin D. Roosevelt relished the toss and tumult of the political arena. As he once told a reporter in the midst of his early struggle with New York’s Tammany Hall political machine, “there is nothing I love as much as a good fight” – and FDR was brilliant at it.

This passion for the art of politics—and for the basic principles that underpinned his political philosophy—served FDR extremely well over the course of his public life. In fact, few politicians in the 20th century, with the exception of Ronald Reagan, Bill Clinton, and his cousin Theodore Roosevelt, ever came close to FDR’s ability to master the nation’s political discourse.

What fueled FDR was his fundamental belief in the power of government to create a more just and equitable society, and his deep knowledge—from personal experience—of the forces of wealth and privilege that had little if any regard for the plight of millions upon millions of Americans who struggled day by day to provide for their families. FDR never forgot that it was these “malefactors of great wealth,” as his cousin TR labeled them, who brought the country to ruin in 1929, and he spent the better part of his presidency in battle against the forces that wanted to return the United States to the so-called Gilded Age of unfettered capitalism.

The American people understood this, in part because they had lived through the economic collapse that brought on the Great Depression, but also because of the clear and unequivocal message that FDR delivered time and time again about the nature of struggle between those who sought to exploit the free-market system for their own ends, and those who believed, as he did, that the only way to make capitalism work in the long run was to make sure that it provided a basic measure of economic security and opportunity to all Americans, not just those at the top.

It was this conviction that led the Roosevelt administration to initiate Social Security and unemployment insurance, to guarantee bank deposits through the FDIC, or to protect investors—both small and large—through the establishment of the Securities and Exchange Commission.

The aim here was not to create “trickle-down government,” or a generation of dependents, as Governor Romney would have us believe, but rather to use government to ensure that the millions who toiled in the nation’s farms and factories might receive a decent wage and a small measure of economic security against what FDR called “the hazards and vicissitudes of life,” such as the loss of a job or poverty-ridden old age.

We now take many of these programs for granted, but in FDR’s day they aroused fierce opposition, particularly from the well-heeled conservative elite, who did everything they could to try to discredit both the president and his ideas. In their view, FDR’s philosophy of government was tantamount to socialism, an un-American attempt to subvert the Constitution and rob the nation of the individual initiative that stood at the core of its—and their—success.

But FDR would have none of this, and in a series of withering attacks on what he called “a generation of self-seekers” he implored the American people to join him in abandoning “our tolerance of the abuse of power by those who betray for profit the elementary decencies of life.” Indeed, as he reminded the American people in the summer of 1936, it was critical that the nation reject a system of governance where “for too many of us the political equality we once had won was meaningless in the face of economic inequality,” where “a small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor—other people's lives.”

For Roosevelt, the great issues of his day were not simply about whose “plan” might deliver more jobs for the American people, or provide a greater chance at reducing the deficit, but about the fundamental moral and economic structure of our society -- a society where government must remain determined “to make every American citizen the subject of his country’s interest and concern; and [where] we will never regard any faithful law-abiding group within our borders as superfluous.”

Like FDR in 1936, President Obama now faces the same sort of “powerful influences” that in Roosevelt’s words “strive today to restore that kind of government with its doctrine that that Government is best which is most indifferent.” But judging from last night’s debate, one would hardly know it. Instead of attacking the underlying philosophy behind Governor Romney’s call for the restoration of the types of policies that led to the Great Depression and the Great Recession—policies that in Romney’s words would rid the country of what he calls “the web of dependency” among the “47 percent”—the president spent too much time trying to explain the differences between the two men’s various “plans.” Given Governor Romney’s penchant for leaving out the details of his various proposals to reduce the deficit and grow the economy, perhaps this is understandable, but in doing so the president failed to capture the imagination of the American people.

This is unfortunate, for Governor Romney is correct when he says this election is about choosing very different paths for our nation. Will we embrace the type of society that was built in the New Deal? A country where the reforms of the 1930s helped the middle class flourish in the decades after World War II? Or will we embrace the philosophy of government that has become increasingly dominant in the past 30-plus years -- a philosophy of government where, as the Census Bureau recently reported, the average male worker is making the same hourly wage adjusted for inflation that he was making in 1978, while the average CEO’s pay over the same period has sextupled and the income of the people in the top 1 percent has grown by 600 percent?

For Roosevelt, the answer was obvious, and he was not afraid to state it “boldly and plainly.” As he said in his speech to the 1936 Democratic Convention:

The defeats and victories of these years have given to us as a people a new understanding of our government and of ourselves… It has been brought home to us that the only effective guide for the safety of this most worldly of worlds, the greatest guide of all, is moral principle…

We cannot afford to accumulate a deficit in the books of human fortitude.

In the place of the palace of privilege we seek to build a temple out of faith and hope and charity…

Governments can err, presidents do make mistakes, but the immortal Dante tells us that Divine justice weighs the sins of the cold-blooded and the sins of the warm-hearted on different scales.

Better the occasional faults of a government that lives in a spirit of charity than the consistent omissions of a government frozen in the ice of its own indifference.

There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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Roosevelt Reacts: At the Presidential Debate, Mitt Misleads and Obama Omits

Oct 4, 2012

After the first presidential debate last night, which focused entirely on domestic policy, Fellows and staff from the Four Freedoms Center, Campus Network, and Pipeline weigh in with what was said, what was left out, and what was just an outright fib.

After the first presidential debate last night, which focused entirely on domestic policy, Fellows and staff from the Four Freedoms Center, Campus Network, and Pipeline weigh in with what was said, what was left out, and what was just an outright fib.

Thomas Ferguson, Senior Fellow, Roosevelt Institute; Professor of Political Science, University of Massachusetts, Boston; Contributing Editor, AlterNet:

My first reaction is simple: These guys have some nerve talking so cavalierly about teachers. Virtually from their first words, both the president and Governor Romney got lost in a fog of details. They begged questions, frequently argued from different premises, tossed off too many details without context, and rarely held a focus long enough for many in the audience to discern what they were talking about. The effort was a case study in how not to illuminate very much.

So what? I’d guess that Romney’s endless talk about “jobs” may persuade a few of his listeners that somehow his arithmetic actually does add up, but that number probably will not be large. I suspect, too, that the president’s highlighting how Romney’s voucher plans might change Medicare even for Americans now in their fifties probably was widely understood, too, and will work in the opposite direction. Possibly Romney, by not looking wooden, might pick up some tiny increment of public support. But my guess is that this debate changed few minds for all the talk of a Romney “victory.” My own takeaway is that both candidates’ harping on the genius of the American people and the virtues of the market system made it easy to lose sight of virtually all the important points at issue. I’d say the candidates battled to close to a draw, while America lost.

Dorian Warren, Fellow, Roosevelt Institute; Associate Professor of Political Science & School of International & Public Affairs, Columbia University:

Debates are rarely game-changers in presidential elections, and last night's debate was no different. The quick assessments of Romney's more aggressive performance compared to President Obama's weak and sleepy responses are correct, as far as they go. But we should remember that incumbents always do poorly in the first debate. As political scientist Sam Popkin argues, sitting presidents don't have time for debate prep, and they aren't used to being challenged the way Romney challenged Obama last night. Clearly, the Obama team's strategy was for the president to play it safe and not come across as an angry black man. We also know that Obama has never been a good debater -- recall the 2007 Democratic Primary debates where both Hilary Clinton and John Edwards put in consistently better performances. Obviously, we know who won the nomination despite his weak performance relative to his adversaries. What will happen now through the next debate will be fact-checking the claims made by both candidates followed by obsessive poll watching to see if and how the numbers move. In the end, of the small number of voters uncommitted, last night's debate wasn't decisive nor did it sway potential voters one way or the other. 

Joelle Gamble, Deputy National Field Director, Roosevelt Institute | Campus Network:

What was noticeably absent in last night’s debate was the mention of the role of everyday Americans in the economy, health care, and governance. Candidates talked about making strong investments in the future, but they did not elaborate on the role future Americans play in making their promises a reality. The bottom line for both campaigns was essentially this: “Vote for me and everything will be (or continue to be) better. Nothing bad will happen to people who are comfortable with their lives. Those who are unhappy with things will only see immediate benefits because of my policies.”

But this is a quintessential flaw in our current electoral political system. Citizens are simply voters and nothing more. We show up to the polls and mark our calendars for the next major election. For this reasons, political candidates have resigned themselves to only telling us what we want to hear before an election instead of what we need to hear to be invested in their policies afterwards. For either candidate to execute their plan well, a fully engaged citizenry is needed throughout their entire four years in office. Their success is dependent upon our continued participation on November 7th.

This participation requires a shared responsibility for the efficacy of our economic recovery. Some people will have to waste less gas or change their habits if we want to be more energy-efficient in the future. Others will have to adjust to a new system of health care if we want to be healthy as a country in the future and lower costs. The fact of the matter is, in order to keep moving in a positive direction, things will change for everyday Americans. The presidential candidates need to make it clear that we will have to be participants in that change if we want to be a better nation.

Jeanne Tilley, Roosevelt Institute | Pipeline, Greater Boston:
 
Millennials, if you went to bed after the debate feeling disheartened, that’s okay. You weren't alone. That debate was not for us. I love that Dodd-Frank got so much play, but President Obama and Governor Romney each missed the mark on talking to younger generations -- particularly on education.
 
President Obama mentioned twice that he wants funding to hire “100,000 math and science teachers,” and Governor Romney gave schools here in Massachusetts a mostly deserved tip of the hat for being among the best in the country. But while these statements came during a discussion of the role of the federal government, they failed to drill down on the role of education and thus the role of educated citizens in the American social framework.
 
I was disappointed that the candidates avoided discussing two key aspects of education policy last night. First of all, I wish that the DREAM Act had been raised. It’s plausible that this will come up as part of the foreign policy debate in the coming weeks, and I try to maintain hope that eventually we can have a comprehensive immigration reform debate. But the DREAM Act is not really about foreign policy and national security. It is about creating opportunity for young, undocumented Americans to enter the hallowed demographics of “small business owners” and “middle-income families” that everyone courts so strongly during election season. American demographics are changing, and in order to remain competitive on the global stage, we need to embrace the talented, committed young people who are already here and give them every opportunity to succeed.
 
Teachers’ unions were also roundly ignored -- perhaps not surprising given recent controversies, but still unfortunate. (In fact, unions as a whole were not mentioned once, and even the ever-popular auto industry got but one brief line.) Millennials are teaching in droves, typically through structured service programs, before graduate school or entering the broader job market. This teaching bent is mainly temporary, however; most programs last only two to three years. 
 
I think President Obama’s idea to hire 100,000 STEM teachers is a great one. But once schools have recruited and trained all these teachers, the trick is to keep them in the classroom working their magic with American school children and to make sure they feel supported by their parents, schools, and government outside the classroom. The unions may well have a powerful and positive role to play in striking this balance. The time to talk it over and find out is now. American education statistics no longer top the world. For candidates who talk about global competitiveness and making sure small businesses have someone to hire, leaving education out of this debate is a huge oversight.
 

Rahul Rheki, Roosevelt Institute | Campus Network Senior Fellow for Health Care; Senior, Rice University: 

To me, the philosophical difference between the president and Governor Romney -- the visions they put forth for the role of government in America -- could not have been more stark. The barbs traded over healthcare were particularly emblematic of this dichotomy. Whereas Romney lambasted the ACA's "unelected board" for rationing care -- the IPAB is only advisory, mind you -- while distancing himself from his own signature health reform achievements in Massachusetts and proposed Medicare voucherization, President Obama embraced the provisions of the ACA that provided universal coverage, ended pre-existing conditions clauses, and ensured a thriving American social safety net for the coming decades. The competing choice, in my mind, was evident: the challenger's "every man for himself" versus the incumbent's "we're all in this together."

Tim Price, Deputy Editor, Next New Deal:
 

Given how much time the candidates spent talking past each other last night, it’s odd that some of their biggest flubs came in areas where they actually agreed, or at least claimed to. For Romney, it was health care reform – his most significant achievement as governor, and the one he’s barely been able to mention during this campaign for fear of conservative revolt. Though he was able to dodge most of the president’s criticisms throughout the debate by adopting new policy positions on the fly, his hair-splitting about whether Romneycare should be a model for national legislation was the least convincing part of his performance. Pressed to explain why he’d repeal the Affordable Care Act given that it’s essentially a scaled-up version of the plan he adopted in Massachusetts, Romney seemed to argue that Romneycare might be an appropriate model for every state, but not all of them at the same time. If states are the laboratories of democracy, he apparently wants Massachusetts to keep a tight hold on its patents.

As for President Obama, when he wasn’t wandering through a fog of obscure policy details, he was conceding far too much ground to conservatives. One of the most eyebrow-raising moments of the night was when Obama began the discussion of entitlements by declaring that he and Romney share a similar position on Social Security. Do they really? If so, progressives have a lot more to worry about than we thought, since Romney’s running mate is the author of a plan that would privatize it. Then there was the question about the need to cut deficits, where instead of rejecting the premise and making the case that we need a bigger deficit to create jobs, Obama defended his budget plans as Bowles-Simpson with a cherry on top. Instead of articulating a bold progressive vision for the economy and a strong defense of the social safety net, he often sounded like a moderate running in a Republican primary.

Rajiv Narayan, Roosevelt Institute | Pipeline, California:

We bring as much of our own perception to the debates as the presidential candidates add with their responses and rebuttals. Having recently landed my first job out of college, I understand the importance of building a labor force with diverse skills and an economy rich with opportunities. But what I understand to be even more important is the community of support that got me from my diploma to my first paycheck. That means teachers. Tonight I saw one candidate who praised teachers, but was unwilling to keep intact those programs supporting classrooms for political reasons. Likewise, I was disappointed by the political “strategery” at work on health care reform. When we reach a point where Governor Romney is threatening to dismantle the (unspecified, seemingly unpopular) parts of a health program cloned from his health program, in order to reinstate from the states, where "democracy's experiments take place," the most successful version of that program, I'm afraid we've become audience to Dadaist political theater.

Hannah Locke, Roosevelt Institute | Campus Network Senior Fellow for Energy and Environment; Senior, Goucher College:

C-SPAN, Fox News, Twitter, Facebook---tax policy, Big Bird, educational vouchers, zingers. The Internet was alive with puns, expressions of disgust, tired and overused commentary, and the usual spin. Is this what the battle for the soul of our country looks like? Boiled down to cherry-picked numbers, to stuttering sentences of little substance, to talking over the moderator? What does our Millennial generation garner from such a discussion? We laugh and point and tweet and snark, but I’ve started to wonder whether that level of  “political engagement” is worth bragging about.

Meanwhile in Venezuela, the people are taking to the streets, risking their own lives to demand a fair and transparent democracy. The challenger, Henrique Capriles, heads a coalition of opposition groups who contest not only the continuation of Chavez’s isolating economic practices, but the proliferation of violence and fear in Venezuela. What started as state-sanctioned Robin Hood behavior quickly bred into a festering, sprawling disease of chaotic violence where anyone—poor, rich, liberal, conservative—runs the risk of getting in trouble with the street gangs or the military.

So next time we bemoan our elections, let’s take a step back and put things into perspective. We aren’t on a black list for going to an opposition leader’s website. We aren’t risking a bullet in the head every time we step out to a rally, stump speech or fundraiser. We aren’t risking our families’ future on the hope that our country can be something better than one of the most violent nations on this planet.

We go to the polls, and we vote. Sometimes, we should take a moment to recognize how much we’ve got, just as much as we recognize what we don’t have yet.

Kyle Shepherd, Roosevelt Institute | Pipeline:

My favorite passage of the night came from the candidates' back and forth on federal regulation of the economy. "You couldn't have people opening up banks in their garage and making loans," Romney said. "Every free economy has good regulation. At the same time, regulation can become excessive."

I love imagining people loaning money out of their garage. For all the talk of the American people's ingenuity, it seems like someone on the right must think this is a good idea. But this statement also points to the key differences between the two candidates on regulation, albeit in broad strokes. And as a progressive, this is a big deal to me, because Romney wants to eliminate important financial protections that don't have enough teeth to begin with.

Dodd-Frank, like much government oversight of the economy, can be easy to criticize. Detractors say it’s unwieldy, opaque, and brings unintended consequences. It's also not immediately apparent how it has solved the problem of banks being "too big to fail." Romney played on this by saying he wants to repeal and replace it with more intelligent regulation that will create jobs. This was a somewhat new proposal from him, as he has previously stated he just wants to repeal it, but it's also important to note he remains characteristically vague on the subject, making deeper analysis of his policies difficult. It's safe to say, however, that it would probably involve decreases in regulation on derivatives and relaxing the restrictions that have been imposed on the large, systematically important firms. This would debatably result in more jobs, but would certainly result in more banking profits.

Obama didn't do much to advance any new policy initiatives. He instead defended Dodd-Frank, mentioning the "reckless behavior" of Wall Street and touting the capital requirements and bank "living wills" imposed by the legislation he supported. There are some good things in Dodd-Frank, and it's much needed legislation that will hopefully strengthen over time as regulators adapt and enforce its stipulations.

The discussion of the role of government in regulating financial institutions is a vital one. These are important issues that get to the heart of inequality, corporate welfare, and consumer protection in our country. We need people to be able to borrow money with confidence they are not being taken advantage of, and the banks need to understand their risk is real and can't be passed over to someone else along the financial daisy chain. The debate on this issue needs to more fully acknowledge the risks inherent in the economy, who should assume responsibility for those risks, and what policies can make that happen.

Unfortunately, the debate as framed last night presented only two options. Either Dodd-Frank, a bill mercilessly attacked by lobbyists, only supported by key financial interests in order to prevent a stronger bill from passing, and only partially enforced -- or weaker regulations and restrictions as offered up by Romney.

Lydia Austin, Roosevelt Institute | Campus Network Senior Fellow for Economic Development; Senior, University of Michigan:

It seems that the hype surrounding this debate -- the numerous news articles and coverage dedicated to it -- was greater than the actual event. Both candidates held their own, both threw out a lot of facts related to tax policy and Medicare, and both were on the defensive for some amount of time. Romney had the most at stake coming into tonight: he desperately needed to rebrand himself as someone who understands the middle class and is responsive to Americans' frustrations. I think he effectively did that. Not an outstanding performance by either candidate, but in terms of who shifted the public discourse, it was definitely Romney (though now the Internet is blowing up with Big Bird photos).

Ken Lefebvre, Roosevelt Institute | Campus Network member; Senior, University of Massachusetts:

Last night we witnessed two opposing narratives clash, unmitigated in their stances, and mostly unmoderated in their discourse. We saw a president tired from four years of entrenchment in the daily minutiae of national politics, and we saw an ever-eager opponent going into this fight with the gloves off. It could be said that Mitt Romney won this debate through his writers and an ability to look presidential. At the same time, Obama did what he had to to maintain his steady ground and consistent policies. Little was accomplished in this debate, and both candidates made the same talking points together that they had for months before. No new details were offered. You really could take segments of their commercials and edit them as if they were the debate. Emotional responses may tip the polls toward Romney for the time, but voters learned little from either candidate in this display.

Jean-Ann Kubler, Roosevelt Institute | Campus Network member; Senior, Skidmore College:

After sifting through the talking points and empty rhetoric of last night’s debate (we get it, 5 trillion is a big number), the American public is left with very little substance on which to compare the incumbent Obama and challenger Romney. The two candidates made bold attempts, particularly during the economic segment of the debate, to appear as if they were presenting facts and specifics about tax plans, the deficit, and creating jobs. But in the end, what did viewers learn other than that Romney and Obama have starkly different opinions on how theoretical math works? Can Obama decrease the deficit by spending more and taxing more? Romney said no, but demonstrated no evidence other than his lack of faith. Can Romney spend $2 trillion extra on defense without raising taxes on the middle class to pay for it? Obama said no, and the math seems to back him up, but he was unable to present his argument in a manner that would be digestible by a common viewer. What the common viewer could easily discern, however, was that two presidential candidates with four Ivy League degrees between them, who both claim that the key to their governing style is bipartisan leadership, were unable to put aside polarizing, partisan rhetoric long enough to provide the American people enough information to make an educated decision about the future of our country.

Michelle Tham, Roosevelt Institute | Campus Network member; Sophomore, American University:

The presidential debate had a lot more number-crunching than I expected. However, this didn't mean that all the numbers were correct. One ironic rhetorical point Romney has been using throughout his campaign (and continued at the debate) was "disregard the fact-checker and studies." Yet Romney's tax plan is defended by the Heritage Foundation. Furthermore, Romney mentioned clean coal. Since 2009, clean coal has already been identified as more of a misleading political frame than actual clean energy. Currently, there's no economical way to capture and eliminate carbon emissions from coal itself -- dirty or clean. On the same note, as Romney praises the idea of clean coal, he also misunderstands the collapse of the solar company Solyndra. There is no Solyndra scandal. Solyndra was simply a startup solar-power equipment manufacturer that was funded under the Bush administration. Solyndra fell because of the lack of demand and overseas competition. It has nothing to do with Obama's initiative for higher clean energy funds. Finally, the idea of investing in Solyndra itself adheres to Romney's idea of economic growth. 

Mawish Raza, Roosevelt | Institute Campus Network member:

The start of the presidential debates last night had stirred up much more excitement than the debate itself was able to offer. Governor Romney presented an aggressive side that clamored over President Obama’s passiveness, but aside from the candidates' demeanor, the debates didn’t touch on many key issues, including women’s rights or immigration reform. Even during the dialogue on education and health care, neither candidate even mentioned the right for a woman to make her own decisions with her body or education being a right for all individuals. 

Governor Romney repeated his commitment to education several times, along with his plan to allow parents to choose where to send their children. That’s great, but what about kids coming from broken families and being raised in poverty? What about human trafficking victims who are sold to the streets until disposed of? What about the failing education systems in inner cities? Because commitment to the education system doesn’t provide kids in these communities with instantaneous financial support, education often isn’t an answer for them. In these environments, the only plausible option for them may be to turn to drugs or crime. And when we focus on the family, where the emphasis on education will be placed on the parent’s engagement with their child, we are neglecting entire populations of youth around the country. This creates a cyclic culture of poverty for young people.

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Is Taxing Capital Income Fair?

Sep 28, 2012Mike Konczal

In light of Mitt Romney's recent tax returns, the economic blogosphere has been kicking around the issue of capital taxation. Ryan Chittum at Columbia Journalism Review has an excellent overview of what people have been writing with "The capital gains preference." This is a response to Dylan Matthews and Matt Yglesias, who each present arguments from economists that capital gains taxes should be lower than other taxes, even potentially set at zero percent.

Many economic arguments are about tradeoffs, but the argument for the zero tax rate of savings, also similar to the arguments for a consumption tax, is usually phrased as an argument about fairness. In order to frame the fairness argument, economists bring up a story of two similar individuals with one as a saver and one as a spender. Yglesias has the framework in his post:

You imagine two prosperous but not outrageously so working people living somewhere—two doctors, say, living in nearby small towns. They're both pulling in incomes in the low six figures. One doctor chooses to spend basically 100 percent of his income on expensive non-durables. He goes on annual vacations to expensive cities and eats in a lot of fancy restaurants. The other doctor is much more frugal, not traveling much and eating modestly. Instead, he spends a lot of his money on hiring people to build buildings around town. Those buildings become houses, offices, retail stores, factories, etc. In other words, they're capital. And capital earns a return, so over time the second doctor comes to have a much higher income than the first doctor. [...]

In the world where investment income is taxed like labor income, the first doctor says to the second "man you're a sucker—not only are you deferring enjoyment of the fruits of your labor (boring) but when the money you've saved comes back to you, it gets taxed all over again. Live in the now.  And the thinking is that world number one where people with valuable skills take a large share of their labor income and transform it into capital goods is ultimately a richer world...

Taxing savings by having an income tax punishes the Saver Doctor relative to the Spender Doctor. If you just taxed what they consumed, they would be treated equally.

Yglesias leans on the idea that we'll be a richer world without taxing savings, because people will respond to the incentives against savings here. I don't believe the research bears this out. I'm not an expert, but I believe the impact, if any, is small. In their excellent summary book on taxation, Taxing Ourselves (2004, 3rd edition), Joel Slemrod and Jon Bakija conclude that a "large number of studies have attempted to address these problems to some degree, and they generally come to the conclusion that saving is not very responsive to incentives."

But if the efficiency argument is weak evidence, the fairness argument is assumed to make the case, and make it for zero percent taxation. It is unfair to tax the Saver Doctor even a penny more than the Spender Doctor. Scott Sumner gives a similar example at The Economist: "The proper tax rate on capital income is zero [...] To see why this is so, consider twin brothers who each make $100,000 in wage income. Most people would regard these two people as equally well off, even if one freely chose to consume his income now, while the other chose to consume later. But not advocates of the income tax. They insist the more patient twin brother is 'richer' and deserves to be taxed at a higher income tax rate." Gilles Saint-Paul argues in the same forum that fairness requires that we shouldn't "penalise future consumption relative to current consumption."

In Joanathan Gruber's popular undergraduate textbook Public Finance and Public Policy, the two people are actually Homer Simpson and Ned Flanders!

Consider two individuals, Homer and Ned, who are identical except for their preferences for saving. Both live for two periods, earning $100 in the first period and nothing in the second period. Homer is impatient: he wants to consume his entire income in the first period and nothing in the second period. Ned is more patient; he wants to consume in both periods. Initially, they are both subject to an income tax, which taxes all labor earnings and interest income at 50%.The interest rate earned on savings is 10%. [...]  In present discounted value (PDV) terms, Homer pays only $50 in taxes across both periods, but Ned pays $51.11. Thus, savers such as Ned are penalized in an income tax regime.This tax treatment of savings is both horizontally inequitable (because Ned is taxed more simply for making a different choice) and inefficient because it may reduce the incentive to save (because savings leads to higher tax payments).

Let's stick with Homer and Ned. Is this fairness argument against the "inequitable" treatment of Ned either impressive or conclusive? I'd argue no. I'm going to rely on arguments from Barbara Fried's excellent "Fairness and the Consumption Tax" for the following to identify some problems, and I'd recommend her essay if you are interested in learning more.

The first issue is the assumption that Homer and Ned should pay in accordance with their consumption, or that equal spenders should have equal tax burdens, or, technically, that the present value of their tax burdens should be identical. This presupposes what is up for debate, which is what the appropriate tax base is. If the tax base is explicit wealth, then income from savings should also be taxed. There are significant advantages to owning wealth, including security, peace of mind, power, the ability to direct private investment, political control, and much more. It isn't clear why these shouldn't be part of the tax base.

A second issue is that it assumes that all income from savings is the result of delayed compensation, when much of it doesn't even come from the individuals themselves. We don't know how much of the United States' capital stock comes from the gifts, bequests, or inheritance that constitute intergenerational transfer, though averages of studies say about 50 percent. Fairness arguments become a lot more complicated here.
 
A third issue is the assumption that, since Homer and Ned are equally ranked in well-being in a no-tax world, they should be equally ranked after any tax comes into play. This equal ranking is the engine behind a lot of the fairness arguments -- as Gruber says, we don't want to penalize Ned for "making a different choice." Since a tax on savings would fall on Ned the Saver but not Homer the Spender, they would no longer be equally ranked, as Homer would end up better off than Ned with an income tax. It isn't clear how much savers would be disadvantaged relative to spenders, as some of that tax will fall to borrowers. But the general point remains.
 
But even granting this, a new question arises: why do we care about maintaining equal ranking from a "no-tax" world, and why would it be unfair to change it? This is only a claim to fairness if Homer and Ned, or savers and spenders more generally, have a claim to their relative ranking in a "no-tax" world. It's not clear that they do. They certainly don't under an entitlement theory, as the value the saver gets in this example is just the random quirk of his or her preference structure. It also presumes that the ranking in a "no-tax" world was just in-and-of-itself and thus worth preserving, which requires a lot of libertarian heavy lifting.
 
It also presumes a myth of ownership, or the idea that you can conceptualize the economy without the government or that tax policy isn't just one of many ways that the government affects interest rates. Sumner and Yglesias, for instance, believe the Federal Reserve should do some major things to raise nominal GDP, which would have a dramatic effect on the relative ranking of savers and spenders compared to a non-Federal Reserve world. How are they any different from this tax policy, other than the fact that they justify it within a larger set of social institutions, especially ones that produce the patterned world of full employment?
 
fourth thing to consider is the issue of generalizing this critique to other examples. Another way of reading the fairness issue in the example is that since both Homer and Ned start off equal, and had equal capability to generate wealth, they should have an equal tax burden, akin to an endowment or faculty tax.
 
If a tax on savings is removed, taxes on wages would have to go up. Now imagine that, in addition to Homer and Ned, there's Barney at time zero. Barney hates working but loves leisure, so he doesn't work at all but enjoys just as much utility as Homer and Ned when they consume their net present value of $100. Raising taxes on wages leaves Homer and Ned equally well off but punishes them both relative to Barney. Should taxes on wages therefore be set to maintain their ordering? Would we have to abolish taxes on consumption then? If so, then it isn't clear we can have a coherent tax policy period.
 
But we could have a coherent tax policy, especially if we focus on what kind of economy we want to build and use tax policy as one of many levers, working in concert with all the others, to create it.
 
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Simpsons images used without permission from 20th Century Fox.

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