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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“We’re All in This Together” vs. “You’re on Your Own” Government

Oct 15, 2012Elizabeth Stokes

As the Roosevelt Institute | Campus Network begins work on building a Government By and For Millennial America, Elizabeth Stokes defends the idea of government as a steward of the common good.

As the Roosevelt Institute | Campus Network begins work on building a Government By and For Millennial America, Elizabeth Stokes defends the idea of government as a steward of the common good.

Despite no specifics on how they will slash taxes and also balance budgets, it is clear that the Romney-Ryan budget plan follows an ideology we've seen before. Seeking to block grant Medicaid and voucherize Medicare, the Ryan budget, endorsed by Romney, fundamentally warps the meaning and purpose of the social safety net. This ideology views government as important not for guaranteeing the collective success of all, but for protecting the individual’s right to make his own success. It views government as important not for creating a framework that meets the needs of all citizens, but for supporting and responding to the needs of the market. And it sees government, if it must offer public provisions, as an entity that works best when its services are farmed out to the private sector.

But this view of government completely ignores its role as steward of the common good. To see why this role is so important, just take a look at the recent financial crisis. It has shown us that macroeconomics is more complex and more unpredictable than our economics textbooks would have us believe. Restricting government’s scope as the precondition of a “freely” functioning market is not enough to make the market provide effectively and justly for all. As the Census Bureau recently reported, even though GDP has grown, 2011 saw huge income gains for the top 5 percent of income distribution, declines for the middle, and stagnation at the bottom. Evidently, the market alone cannot allocate resources in a way that a just democracy demands, nor can it be relied upon to stably ensure the wellbeing of our most vulnerable.

But this is the problem with the Romney-Ryan ideology: it completely misunderstands what a just democracy demands. As Jeff Weintraub puts it, the democratic ideal requires active participation in collective decision-making, carried out within a framework of fundamental solidarity and equality. The Romney-Ryan ideology severely jeopardizes this ideal. How can democracy be fully realized if 47 percent of citizens are viewed exclusively as rapacious moochers and not as fundamental equals in a shared political community? How can self-governance be possible when we fail to guarantee a fundamental baseline for all and let market-generated inequalities distort political equality?

The fundamental equality democracy requires cannot be satisfied by a handful of political rights (not that these mean much anyway given voter suppression efforts). Rather, government must also guarantee what T.H. Marshall would refer to as the social elements of citizenship: equal access to basic essentials that relieve people from the constant struggle for survival and thus provide them with the time and energy to participate in political society as engaged citizens. These basic essentials are not simply an assortment of handouts for the destitute, but are universal and based on generally shared rights of citizenship (the 96 percent know what I’m talking about). Ensuring such a baseline enables us to do away with the artificial distinctions of makers or takers, and instead binds us in a community of mutual sacrifice and success. 

Guaranteeing these social elements of citizenship also entails containing the market and money’s influence so that a person’s life chances and engagement with democracy are not exclusively determined by market position. It is therefore important to have non-market institutions, such as government, direct the market in order to uphold the common good and redress market-generated inequalities. This does not simply mean redistribution policies that tax the rich and give to the poor – after the fact mop-ups via social spending are not enough to make up for the disempowering processes that lead to market-generated inequalities in the first place. Rather, we must also focus on predistribution, i.e. the way in which the market distributes its rewards to begin with (such as regulations that protect consumers and empower workers).

The concept of government as steward of the common good recasts its role in society, seeing it less as a third entity that runs alongside the market economy and the private household but more as a force in the service of the common good that is prior to both and directive of each. Government should act as the framework that both enables and is subject to democratic decision-making in society. It should ensure all people have the minimum they need to participate and engage as citizens and its fundamental direction should be shaped by public voice and societal goals that are collectively and consciously decided.  

Ryan lauds choice, competition, and self-sufficiency as the pillars of his social safety net, implying that marketization will enhance liberty as well as efficiency. However, these words are pure rhetoric and pretense. By putting the market in charge of the common good, he would fundamentally transform basic welfare goods, which are shared in common by all citizens, into commodities, which are bought by individual consumers in a volatile marketplace. While the ethos of social insurance is “we are all in this together, rain or shine,” marketization says to the citizen “here’s some money, you’re on your own.” The Romney-Ryan ideology not only severely undermines one of the most important pillars of government, but also bars those subsets of the population who are reliant on government benefits from the democratic community. 

Elizabeth Stokes is a Working Group Fellow for the Roosevelt Institute | Campus Network's national initiative, Government by and for Millennial America, and a senior at the University of Pennsylvania.


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Beyond Big or Small: Creating a Government That Fits Millennial America

Oct 5, 2012Taylor Jo Isenberg

Millennials are eager to work toward a more effective and inclusive public sector.

Two competing visions: it’s more than just the debate frame that the media chooses to use when describing how President Obama and Governor Romney see the role of government. Rarely has there been such a stark contrast between two candidates in how they view government’s broader purpose – and how that represents fundamental American values. Wednesday’s debate was no exception. The ‘role of government’ was a topic unto itself.

Millennials are eager to work toward a more effective and inclusive public sector.

Two competing visions: it’s more than just the debate frame that the media chooses to use when describing how President Obama and Governor Romney see the role of government. Rarely has there been such a stark contrast between two candidates in how they view government’s broader purpose – and how that represents fundamental American values. Wednesday’s debate was no exception. The ‘role of government’ was a topic unto itself.

In this clash of philosophies, the over-simplified yet vitriolic debate would seemingly have us pick from two options: big government or small government. No matter your political preferences, what our leaders and current national dialogue offer us when envisioning what our democracy can achieve leaves little room for imagination. And, little by little, as the core functions of our system are undermined through money in politics, voter suppression efforts, and crippling cuts to local and state budgets, it becomes more difficult to look to government as a force for positive change. 

Yet not everyone is ready to accept this paralysis. As the National Director for the largest student policy organization in the country, my team and I work with young people across the country who are deeply committed to solving some of our most pressing challenges in a time of uncertainty, gridlock, and a breakdown in a sense of common purpose among all Americans.

And even though the question of our government’s future is being described as the ‘fight of a generation,’ our voice is the one that is woefully absent from the conversation.  

Research by organizations such as the Pew Research Center and CIRCLE has highlighted that this generation is strongly progressive and believes in an activist government’s potential to drive bold social change. Yet they’re also not blind to the challenges the system faces. Less than 30 percent of young people believe their voice is represented in government today. But rather than surrender to that reality, Millennials are instead interested in how we can create a better system – one that is more inclusive, effective, and visionary.

Over the next few months, young people are convening across the country to examine the building blocks of our democratic experiment, identify the core values that drive our system, and then suggest how we can build an ideal government that empowers all to serve as active citizens. The initiative, Government by and for Millennial America, will include over a thousand young people articulating a blueprint and action plan for 21st century governance.

Government by and for Millennial America is a bold experiment to engage a generation in first envisioning and then working toward a participatory, democratic system that serves as a problem solving force. What is possible when we empower the public sector, as the representative of our collective voice, to achieve more? What can government do in the 21st century to rival President Teddy Roosevelt’s doubling of national park land, Eisenhower’s unprecedented highway system, and Franklin Roosevelt’s Social Security Act, a revolutionary program that continues to keep millions of Americans out of poverty?

The potential is both endless and exciting. It’s also a monumental challenge. We have to identify the main barriers to achieving our ideal democracy, tackling everything from the filibuster’s stranglehold on deliberative democracy to the inherent inequities in the voting system. We already see that young people don’t accept these challenges as intractable – only affirming why it’s critical for their ideas and solutions to be a part of our national debate.

As President Franklin D. Roosevelt so eloquently put it, “let us never forgot that government is ourselves and not an alien power over us.” Government, as the manifestation of our democracy, is the only entity that has the power to represent all of our voices, no matter our background, orientation, socioeconomic status, or political leaning. So here is the question: what can happen if we build a system that empowers all of us to step up, take ownership over the direction of this country, and serve as active citizens and arbiters of our future? It’s the question we are asking in Government by and for Millennial America, and it’s the question we will put to our leaders in the debates, at the voting booth, and into the next four years.

Join us as we build a blueprint for 21st century governance

Taylor Jo Isenberg is National Director of the Roosevelt Institute | Campus Network.

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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 B. 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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Republicans are Pro-Choice (on Paying Taxes)

Sep 28, 2012Tim Price

Instead of establishing a fair baseline for rich taxpayers, House Republicans want to let the rich chip in whatever they want.

Instead of establishing a fair baseline for rich taxpayers, House Republicans want to let the rich chip in whatever they want.

Last October, President Obama introduced the so-called “Buffett Rule,” a tax provision that would require multimillionaires to pay a minimum 30 percent effective tax rate. It was named for the Oracle of Omaha himself, Warren Buffett, who famously complained about paying a lower tax rate than his own secretary. The idea garnered a great deal of public support, with one CNN poll from April 2012 finding as many as 76 percent of Americans in favor. Last week, bowing to popular demand, House Republicans passed the Buffett Rule Act of 2012, which naturally has nothing to do with any of that. Instead of establishing a baseline of fairness, it encapsulates the conservative notion that wealthy Americans shouldn’t be asked to contribute any more to society than they’re willing to volunteer.

The Republicans’ version of the Buffett Rule, which is not actually a “rule” in the sense that you or I or Webster’s Dictionary might understand the word, would allow taxpayers to check a box on their tax forms if they want to contribute more than they owe in order to help pay down the deficit. But, you may ask, can’t taxpayers already choose to pay more than they owe? Why yes, they’re free to send a check to the Treasury Department. So what does this bill actually do? Well, it would add a box they can check to send it to the IRS instead! The Joint Committee on Taxation projects that this bold innovation would help raise $122 million in additional revenue over the next 10 years. That’s slightly less than the $47 billion that Barack Obama’s version of the Buffett Rule would raise, but combined with more tax cuts for the rich and corporations, it puts the hard-nosed deficit hawks in the GOP on track to balance the budget some time around the heat death of the universe.

There’s a fundamental ideological divide between progressives and the modern conservative movement, and it concerns how much they buy into the concept of the social contract. That divide is reflected in the GOP’s fallback response to President Obama’s Buffett Rule proposal: “If Warren Buffett thinks he doesn’t pay enough taxes, why doesn’t he just volunteer to pay more?” Mike Konczal effectively dismantles this pseudo-logic here, and on a rhetorical level, it’s on par with “If you love the government so much, why don’t you marry it?” On the other hand, it makes a certain amount of sense if you think of society as something we can choose to opt out of once it’s outlived its use to us instead of an ongoing support system that we’ve all bought into. If you see the rich as the people who have benefited the most from our tax-funded social structure, it only seems fair to ask them to give back more in tough times. But if you think the rich are noble martyrs who are doing the rest of us a favor by choosing not to “go Galt” and withdraw from society, it’s clearly unjust to ask any more of them unless they volunteer it out of the goodness of their hearts.

Unfortunately, the GOP approach presents an obvious collective action problem, which is why it’s expected to raise so much less money than Obama’s mandatory minimum rate. The reason we have a tax code in the first place is that we determined it was impossible to fund the essential functions of government by having the president busk for tips. We don’t set the federal budget by passing a basket around and adding up the loose change we’ve collected. Congress establishes tax rates, we pay our taxes, and in exchange we get schools, roads, police, firefighters, health care, clean air, safe food, and so on. That’s how it works – except for the wealthiest Americans. With Republicans’ help, they have a few extra steps, like hiding their money in tax shelters, benefiting from all those government services anyway, and then complaining vociferously about how unfairly they’re treated.

Case in point: during last week’s Friday news dump, Mitt Romney released his 2011 tax returns, which showed that he had overpaid his taxes to avoid dropping below a 13 percent effective rate. At first blush this might seem like an example of the Republican Buffett Rule in action: look at this guy, giving until it hurts! Never mind the fact that he once said anyone who did that was some kind of moron who didn’t deserve to be president. But this was pure campaign strategy, not altruism. Having made $13.7 million last year, he paid only a 14.1 percent effective tax rate even after fixing the numbers. The problem is, he’d previously said he’d never paid less than a 13 percent rate in the last 10 years, and if he had taken all the deductions he was entitled to this year, he might have wound up paying as little as 9 percent. To put it another way, if Romney had taken full advantage of the breaks offered to him by the current tax code, he would have paid so little as to embarrass himself. And he’s not alone. According to the Congressional Research Service, one quarter of millionaires pay an effective tax rate of less than 26.5 percent, while 10 million middle-class Americans pay a higher rate.

As former Reagan administration official Bruce Bartlett has noted, the ineffectual nature of the GOP’s Buffett Rule is a feature, not a bug. He writes, “The political reality is that Republicans don’t really support taxation at any level. Of course, none will go on the record saying that they favor abolition of all taxation; they just support every single tax cut and oppose every single tax increase.”

In the extreme Ayn Rand-inspired worldview that Republicans like vice presidential nominee Paul Ryan have embraced, non-voluntary taxation is essentially theft. In reality, it’s the only way to provide vital public goods. As I wrote in the wake of the Aurora shootings, an equitable society depends on a strong and reliable social safety net, not the kindness of strangers. The same holds true for other government functions. If we want the services we’ve determined government can most effectively provide, and if Republicans are serious about wanting to rein in the budget deficit, we need to set rules that establish a steady stream of revenue, not hope that Bill Gates is in an especially good mood when he fills out his 1040.

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


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In the Debate Over Government, We Don't Practice What We Preach

Sep 27, 2012George Lodge
Americans hold our system of government up as a model for other nations, but we show contempt for it at home.
Americans hold our system of government up as a model for other nations, but we show contempt for it at home.
In this electoral season, the role of government in the United States has become an important issue. Surveys reveal that most Americans don’t like government, especially the federal government. (State and local governments seem more acceptable.) And yet they want the things that government provides, such as defense, law and order, safe food and drugs, clean air, pure water, education, flood relief, health care, etc.
Candidates, especially Republican ones, therefore have a hard time clarifying their own positions. Romney promises “strong leadership,” but leaves us in doubt about where he would take us or how he would get there. He shies away from his Massachusetts health care law mandating insurance for all, even though he seems to feel it was a good idea. One is reminded of the Tea Party supporter who said, “Don’t let big government take away my Medicare.”
For many years I taught about the role of government in different countries at Harvard Business School. Many of my students came from outside the United States. They were perplexed by the disdain, indeed disrespect, for government displayed by their American classmates. “It seems odd,” they said, “that you Americans loudly proclaim to the world the virtues of your political process, urging the rest of us to copy you, while at home you deplore the government which that process produces. And it’s not so much the policies that you decry as it is the institution itself.” 
It was with Jimmy Carter in the 1970s that this ambivalence became particularly noticeable. He ran for president proclaiming himself an “outsider,” unfamiliar with and uncontaminated by the ways of Washington. We loved him for it. After about two years in office, however, he realized that he was indeed the captain of the ship and he had to know how to navigate. Ronald Reagan was more forthright. After trying to shut down the EPA, he said, "Government is not the solution to our problems; it is the problem.” And speaking of the institution he had been elected to lead, he said, “Government is like a stray pup. If you feed it when it comes to the back door, it just comes back for more.” He deregulated far and wide, leading to the collapse of the Savings and Loan industry in the late ‘80s and to subsequent government bailout. This was the first of many financial catastrophes, culminating in the meltdown of 2008, spawned by the anti-government climate.
The irony is that whatever the rhetoric, the size and cost of  government have risen to record levels during the past 30 years, causing an unsustainable deficit. To reduce the deficit – which we must – requires making government more efficient and setting strict priorities. That means more and better planning. We can, however, only imagine the negative poll numbers that would flow from the question, "Do you want more government planning?" But without it, we get visionless flailing, guided by the heavy hand of special interests. With that comes more anti-government chatter, perplexing the foreigners and confusing the rest of us.     

George Lodge is professor emeritus at Harvard Business School.


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A Tale of Transitions: What Mitt Romney Could Learn from Walter Mondale

Sep 27, 2012Bo Cutter

Romney's chances of becoming president are dimming, but if he changes his message, he could still lose gracefully.

Every presidential campaign reaches a moment when the two main candidates have to start their transition planning. 2012 is no different, and we've reached that moment. President Obama has to begin planning the transition to his second term. Governor Romney has to plan his return to private life. I'll focus on President Obama in several commentaries; this is a brief reflection on Mitt Romney. 

Romney's chances of becoming president are dimming, but if he changes his message, he could still lose gracefully.

Every presidential campaign reaches a moment when the two main candidates have to start their transition planning. 2012 is no different, and we've reached that moment. President Obama has to begin planning the transition to his second term. Governor Romney has to plan his return to private life. I'll focus on President Obama in several commentaries; this is a brief reflection on Mitt Romney. 

First, what's the evidence that we've reached this point? FiveThirtyEight gives President Obama a 79.7 percent chance of winning reelection. Real Clear Politics shows a widening Obama lead in the polls, with an average margin of 4 percentage points. A significant break occurred approximately around the end of August. The Iowa Election Market is currently predicting that President Obama will win approximately 54 percent of the national vote, and the Intrade prediction market is currently pricing a 76 percent chance that President Obama wins reelection.

These are all just probabilities, but it's hard to avoid the conclusion that we now mostly know where this election is headed. And no matter what gets said externally, this is what is being privately concluded by many in the Romney campaign also.

This means that Governor Romney has a difficult gauntlet to run -- one that is psychologically hard to confront. He has to run as hard as he can; he can't just stop. He will see growing dissension within his own campaign, increasing second-guessing from the Republican Party elders, public debates about his campaign strategy, and a growing lack of interest on the part of Senate, House, and gubernatorial candidates in being seen with him at all. Through this he has to act every moment as though he knows he will win. You cannot know how hard this is unless you've seen it close up. And Romney then faces the inevitable post-election ritual bloodletting and blame game, particularly because his party, in its soul, thought this election was a layup for them.

Governor Romney has to maneuver through all of this and retain his own self respect and the respect of others. But he also faces a bigger test -- one that may not yet have occurred to him. He has a genuine responsibility to show a decent respect for core elements of the American philosophy and system of governance.

It's hard to explain what I mean by this without seeming to make a partisan point, which in this case I'm trying to avoid. In my view, Mitt Romney seems to have been an admirable, effective leader with a genuine commitment to private virtue. But in his campaign he has allowed himself to be seen as an unprincipled opportunist, presented a thoroughly unpleasant caricature of conservative thought and an appalling view of his opinion of everyone less fortunate than he is, and at times shown remarkably little concern or respect for some of the complexities of American governance. He has acted as though "there is no there there," as though he sees this presidential campaign as just another campaign, just another deal to close. 

I'll quote at length from a conservative columnist I respect, Michael Gerson:

Yet a Republican ideology pitting the “makers” against the “takers” offers nothing. No sympathy for our fellow citizens. No insight into our social challenge. No hope of change. This approach involves a relentless reductionism. Human worth is reduced to economic production. Social problems are reduced to personal vices. Politics is reduced to class warfare on behalf of the upper class.

A few libertarians have wanted this fight ever since they read "Atlas Shrugged” as pimply adolescents. Given Romney’s background, record and faith, I don’t believe that he holds this view. I do believe that Republicans often parrot it, because they lack familiarity with other forms of conservatism that include a conception of the common good.

But there really is no excuse. Republican politicians could turn to Burkean conservatism, with its emphasis on the “little platoons” of civil society. They could reflect on the Catholic tradition of subsidiarity, and solidarity with the poor. They could draw inspiration from Tory evangelical social reformers such as William Wilberforce or Lord Shaftesbury. Or they could just read Abraham Lincoln, who stood for “an unfettered start, and a fair chance, in the race of life.” Instead they mouth libertarian nonsense, unable to even describe some of the largest challenges of our time.

About a decade ago, I was part of a conversation with former Vice President Walter Mondale, a man I worked for a long time ago and greatly admire. Vice President Mondale said that while he was still bothered by the extent of his loss in 1984, he had to his surprise also come to a parallel realization: the role of presidential nominee of one of the two major parties is a distinct public role and job by itself, one that brings both substantial privileges and real responsibilities. The role cannot simply be a political campaign in that way that almost all other campaigns can be. A presidential candidate is given the right to speak to the American people, and they care what a presidential candidate says in a way they care about no other campaign.

Mitt Romney is almost certainly not going to have a presidential legacy, but he could still have a good presidential candidate legacy. Sometime soon, in the quiet of the night, he might want to call Walter Mondale.

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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The War on Crime as a Conservative (and Progressive) Assault on Liberal Philosophy

Sep 21, 2012Mike Konczal

In case you didn't see, Aaron Schwartz just had an absurd level of felony charges brought against him for allegedly trying to mass download JSTOR by prosecutors. You can support him here. Meanwhile Twitter turned over the account records of Malcolm Harris to the New York criminal justice system.

In case you didn't see, Aaron Schwartz just had an absurd level of felony charges brought against him for allegedly trying to mass download JSTOR by prosecutors. You can support him here. Meanwhile Twitter turned over the account records of Malcolm Harris to the New York criminal justice system.

How can we theorize innovations in criminal justice policy over the past decades as a reaction to liberalism? Not liberalism like the New Deal or the Great Society, but liberalism as in the philosophical theory of the modern era. Let's start with the policy innovation driven by neoconservatives, and then examine how the progressive assault on classical liberalism also functions in the war on crime.

The Conservative Assault

One part of liberalism is about formal equality--liberty to participate as well as equal freedom from government interference. The War on Drugs and aggressive quality of life initiatives, beyond filling our jail cells, are about getting a lot of low-level charges and convictions on as many people as possible. From 1994-2000, arrests for smoking marijuana in public view (MPV) were up 2,670%. Why does this matter? They interact with three-strike laws to build to large sentences out of minor charges. This also allows for the creation of hierachy through a law ostensibly dedicated to equality and liberty. Once people have been prisoners, they face serious legal impediments, such as limits on access to voting, public housing, public employment, and public assistance. Tens of thousands of legal restrictions regulate the ability of ex-convicts to function and exist in society. There are also certain presumptions against individuals, especially felons, that deny any type of formal equality before the law. When Michelle Alexander talks about a New Jim Crow system of segregation through the legal code and policing, this is the dynamic she is discussing.

Another part of liberal philosophy is that if the state wants to use its power to act against an individual, say for violating a crime, they need to make their case through an institution that is skeptical of that power. In the United States, that means trial by jury, under the supervision of a judge. The judge and a jury of one's peers are supposed to be the key agents in a court.

Another key policy innovation of neoconservatives is attacking the relative independence and power of judges. There have been a host of conservative policies designed to reduce the power of judges, of which mandatory minimums are one of the most important. As judges lose power, prosecutors gain it. Prosecutors are now the major presence in the courtroom, overseeing the overwhelming majority of cases that are run through plea-bargains.

When the evangelical Harvard law professor William J. Stuntz writes that the American criminal justice system has collapsed, this focus on the prosecutor as the arbiter of justice in the courtroom, rather than the judge and the jury, is what he means. Stuntz: "Prosecutors now decide whom to punish and how severely...To a degree that had not been true in America's past, official discretion rather than legal doctrine or juries' judgments came to define criminal justice outcomes....criminal law does not function as law. Rather, the law defines a menu of options for police officers and prosecutors to use as they see fit."

Notice how the prosecutor overseeing Aaron Schwartz's case just decided to charge him with 13 felonies, mostly for violating the Terms and Services "terms of service" of a website. At 13 charges, it looks like the prosecutor is trying to stack the deck on overreaching and arbitrary charges so they can have as much leverage as they can get when it comes time to go to court. That isn't a rule of law, it's a rule of prosecutorial discretion as justice. This is what a collapsed criminal justice system looks like.

The Progressive Assault

Part of the progressive assault on the laissez-faire of classical liberalism was creating the idea that there is no pre-political distribution in the economy. Property is a creation of government, and therefore the distribution of that property is also created by the government. Governments must balance conflicting boundaries of property, and must do so democratically, because appeals to "natural rights" or "economic liberty" will ultimately be empty. Matt Bruenig has several recent posts - one, two, three - spelling out this "myth of ownership" argument over distribution and property rights that are worth checking out.

This progressive approach to property and the state is absent in contemporary talk on economic policy, but it is being theorized and applied in the most avant-garde ways when it comes to criminal justice policy. Let's talk about dogs that do drug searches. If the police wanted to search your suitcase, or look through it with hypothetical x-ray goggles, they'd need a warrant. That would be an illegal search of your property, which is protected by the Constitution. However if a drug dog sniffs your suitcase and smells drugs, that doesn't count as a search.

Why? As Justice Stevens argued in United States v. Jacobsen (1984), "Congress has decided -- and there is no question about its power to do so -- to treat the interest in 'privately' possessing cocaine as illegitimate; thus governmental conduct that can reveal whether a substance is cocaine, and no other arguably 'private' fact, compromises no legitimate privacy interest." Since the dog can only "see" contraband such as cocaine when it sniffs, that sniff doesn't count as a search of your property, because you have no right to contraband.

You have a legitimate privacy interest in your property, except when you don't, because the government doesn't recognize your property as "property." Even though drugs are excludable, rivalrous, and have their price determined in large part by supply and demand, they aren't property the government recognizes, so the bundle of rights that go with property don't apply. The distribution of property outcomes is overwhelming determined by the government here.

People have talked about property this way in the past, but less so now. We talk about inheritance as almost a right now, but John Stuart Mill, for instance, argued in Principles of Political Economy that while "the right of bequest, or gift after death, forms part of the idea of private property, the right of inheritance, as distinguished from bequest, does not." Your right to receive inheritance doesn't exist outside of political framework, which can be held democratically accountable. (For those who think the war on drugs should be stopped and that you receiving an inheritance should be thought of as a type of quasi-contraband, the current policy framework is very backwards.)

There's not enough space here to really dive into it, but there's a mind-blowing legal realist seminar on the "Myth of Ownership" taking place in the realm of "asset forfeitures" criminal justice policy right now. The government sues property and money for being illegitimate under civil law; the government can seize the proceeds of the trade of contraband as well as property instrumental to that transaction. If you drive a car solely to sell contraband, and use the surplus of those sales to buy a home, what property claim can you have to own that car or that house? Here the government is actively creating and policing the boundaries and relationships of property through denying its existence as legitimate "property," all done under criminal law.

This brings us to Malcolm Harris' Twitter account. Who owns a tweet? Who has the ability to turn it over to a third party, and who has the ability to block it? The property claim of a tweet is now being determined through the ability of the government to take it for criminal justice purposes.

A New York criminal court had demanded Twitter hand over Malcolm Harris' tweets, and Twitter did so last week under extensive pressure. The court argued that "Here, the defendant [Malcolm Harris] has no proprietary interests in the @destructuremal account’s user information and Tweets between September 15, 2011 and December 31, 2011...While the Fourth Amendment provides protection for our physical homes, we do not have a physical 'home' on the Internet." They are determining that Harris has no legitmate property claim on the tweet and no right to prevent a search of his account on Twitter's mainframe.

It is fascinating, though problematic, to see the idea, boundaries and relationships of online "property" being determined through the criminal justice system. Here the "property" of online records are carved out and created based on where it will be easiest for cops and prosecutors to access them. Hence all the more reason to have Congress re-establish baselines on what our privacy expectations are online, in the opposite way it has been dissolving privacy and property claims under the banner of the War on Drugs.


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Making Telecom Central Again: Our Economic Future Depends on High-Speed Internet For All

Sep 20, 2012Susan Crawford

Expanding high-speeding Internet access to all Americans is as essential now as the Rural Electrification Act was in the 1930s.

Expanding high-speeding Internet access to all Americans is as essential now as the Rural Electrification Act was in the 1930s.

The basic facts are familiar: of a nation of 314 million Americans, 100 million of us lack high-speed access to the Internet. We're behind 15 other countries when it comes to that high-speed access; none of top city hubs for fast, affordable access are in the United States. Speeds are slow, prices are high, and a third of us are being left behind. Most people who make less than $20,000 a year don't have access; everyone who makes more than $75,000 a year does. Almost every part of life today, and every policy area you care about, depends on a reliable, affordable, high-speed connection. For everything from finding a job to accessing online classrooms, those without access are at a distinct disadvantage. And our country as a whole is at a disadvantage, as new developments that require working collaboratively with massive amounts of data will happen elsewhere.

Why did this happen, and why do I care?

It happened because of policy. We're being squeezed by a deregulated and enormously powerful industry that has no incentive to build a fast, affordable, level digital playing field for Americans.

This narrative is really just like the electricity story. In 1920 in America, unregulated private companies controlled electricity. The result? 90 percent of farmers didn't have it, at the same time that all rich people in New York City did. And it was wildly expensive in many places. Although it's now considered an essential input into everything we do, at the time electricity was seen as a luxury; the companies served the rich and big businesses, and left everyone else out. The electricity business, after all, involved very high up-front costs. If you could make that initial investment, it served as an extraordinarily effective barrier to entry -- who needed two electrical lines? -- and you could pick off the rich customers, making life difficult for any second comer, because they'd be stuck with serving people who were more spread out and not as wealthy. Then, once your lucrative business was in place, you could raise prices with impunity. You didn't have to expand. You could just harvest.

We did something about that problem at both the local and national level. It took tremendous leadership by Franklin Roosevelt, who went to swim in Warm Springs, Georgia and was horrified by the expense of the scarce electrification there. Although a rich and privileged man, he instinctively understood that the success of the entire nation depended on having a large marketplace for electricity -- both for people to thrive and for American industry to sell new goods to. And so he mounted enormous rural electrification efforts in the 1930s and regulated these companies, making sure that they received a fair profit for a world-class and universally provided service.

Today, the U.S. is falling far behind when it comes to the 21st century version of electrification: the country's upgrade to fiber connectivity, the global standard. Although our U.S. telephone system was the envy of the world when it was built, and served every American at a reasonable price, we're apparently unable to think of fiber as a utility. We've seen enormous consolidation and monopolization of both wired and wireless access in America by the companies to which we've entrusted our daily lives of information. This isn't good for any part of American society, and it is, or should be, a truly bipartisan issue.

It's also, like electricity, both a local and a national issue. There are bright spots across the country where communities are coming together to commission fast, cheap fiber networks. We need to make it possible for every community to make that choice. That will require federal legislation to block state laws that lock up localities and keep them in the incumbents' hands. We need to make sure that there are rules in place to protect competition and allow for oversight at the federal level as well.

Finally, it's an urgent issue. Right now, a tsunami of state-level deregulation is sweeping the country. Right now, Verizon is telling the D.C. Circuit that it is a First Amendment "speaker" and that therefore any regulation of its activities is unconstitutional. Right now, the regional cable monopolies are buying up former competing telecom companies, strengthening their grip on wired access across the country.

I care because I think we face a choice between two fundamentally different visions of the future. Today's free marketers seem to be content with a second-class network that only rich people can afford. They're pushing for even fewer regulations on the giant telecommunications companies who have the power to control everything we learn and create. Think about that: they want to give the richest and most powerful companies in our country even more riches and more power to serve as gatekeepers over everything we do. To harvest us. And at the same time, they want to make sure that basic high-speed infrastructure isn't a priority for the country. Their vision is simple: "Communicating is a luxury for the rich." I don't think that's right, and most of our peer nations don't either.

I'm thrilled to be invited to be a Fellow at the Roosevelt Institute. One of the high points of this year for me was meeting members of the Roosevelt Institute | Campus Network at their summit at Hyde Park. They are so smart, so focused, and so energetic. This generation understands how essential fast online access is, and how important it is for local communities to protect their ability to communicate at a reasonable cost. What's unique about Roosevelt is that it operates on both a local, decentralized level and on the national level -- just like the Internet itself. I'm looking forward to taking on this issue with the Roosevelt team. 

Susan Crawford is a Fellow at the Roosevelt Institute.

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