Category Archives: Romney

Turkey Time: DB’s Nominations

It’s holiday time, and here are DB’s nominations for the Birds of the Season.  The Turkeys are (in no particular order):

Presidential candidate Mitt “47%” Romney, who managed to insult ethnic minority groups, women, moderates, independent thinkers, elders on Social Security, students getting Pell Grants, advocates of clean energy, conservationists, women’s health care proponents, Medicare enrollees, consumer advocates, social safety net supporters, and then wondered why he didn’t win the 2012 election.

Senator John McCain (R-AZ), who having defended the nomination of Condoleeza Rice to be Secretary of State (Anyone remember that Mushroom Cloud reference?) attacked U.S. Ambassador to the United Nations Susan Rice for being “stupid” and “deceitful.”   This state of affairs shouldn’t be surprising because a quick search of DB would soon demonstrate that Senator McCain was quite often the recipient of the unwanted and un-complimentary Deck Bass award of recent memory.

Senator Harry Reid’s (D-NV) nemesis Mitch McConnell, Senate Minority Leader, gets a Turkey for his statement that revenue increases are maybe kind of sort of could be OK, IF we fix the Real Problem.  The Real Problem for Senator McConnell appears to be that Social Security exists.   There’s no reason to raise the retirement age in the United States, because the Social Security system adds ZIP ZERO ZILCH to the national debt.  However, if we want to make the system more secure — how about lifting the cap on taxable earnings above the current $110,000?

Republican members of the Ohio state legislature who decided not to consider a sex education bill in favor of advancing bills to strip funding from Planned Parenthood, and to enact a “heartbeat” anti-abortion bill. [TP] Because, hey, there’s nothing like preventing kids from getting medically accurate, scientifically valid, information on human sexuality to keep unwanted pregnancies from occurring?

Senator Rand Paul (R-KY) whose definition of “compromise” means that the GOP would consider cuts to military spending and all other spending cuts to reduce the national debt — but would not consider any proposals to pay for the Bush Tax Cuts and the two wars launched during the Bush Administration.  [TP] It seems obvious that Senator Paul would like to balance the national budget on the backs of the elderly, the sick, and the poor.   There’s a real Turkey.

Energy company backed climate change deniers whose opposition to any measures to conserve our planet by reducing our dependence on fossil fuels may be precipitating a situation which the UN Environment Program, the World Bank, PriceWaterhouseCooper, World Meteorological Organization, and the International Energy Agency say is dire now and could become life threatening sooner rather than later.  [HuffPo]

Hostess/Wonder Bread, which having been sold and bought three times since the 1980s and selling off valuable company assets all along the way, piled up so much debt that it first declared bankruptcy in 2004 — after management gave themselves handsome bonuses for creating the dismal financial situation.   During the 2004 bankruptcy process the union gave back $110 million in concessions, which they were told would be spent on new technology and machinery.  The promises were never kept by the two hedge funds and a private equity firm who own the company.  Instead the management saddled the corporation with about $800 million in debts, and then asked labor for 27% to 32% in additional give-backs.  [Counter] [Forbes]  This, while senior management asked the current bankruptcy court to give them a 75% bonus for sticking around to liquidate the company. [Reuters] Somehow, “gobble gobble” sounds entirely too polite.

Faux News commentator Bill O’Reilly who is quick to tell us that single women, ethnic minorities, and African Americans aren’t “traditional” Americans, i.e. “real Americans.”   O’Reilly joins Andrea Tantaros who opined that Food Stamps could be a wonderful “diet plan.” [MMA]

The Security and Exchange Commission, which is supposed to be the nation’s watchdog agency on Wall Street, seems to have been spending an inordinate amount of time on “extra-curricular” activities. [C&L] There’s more from Rolling Stone magazine.  The article is an antidote to the tryptophan in the turkey.

Don’t take House Speaker John Boehner (R-OH) too seriously when he says the Affordable Care Act is now the Law of the Land, he walked that statement back in land speed record time.  He and his conservative allies are supporting law suits to attack the bill’s provisions, delaying the implementation of the insurance exchanges, and rejecting Medicaid expansion.   [TPM]

The GOP operatives, legislators, and strategists who are promoting Vote Suppression.  [Nation]  Phony voter identification law proposals are still on the horizon, there’s a conservative backed case headed to the Supreme Court to gut the Voting Rights Act, and last year House Republicans tried to eliminate the US Election Assistance Commission.  Voting is a RIGHT, not a privilege.  Turkey.

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Filed under abortion, ecology, labor, McCain, Politics, Romney, Securities Exchange Commission, Vote Suppression, Voting, Women's Issues

Simple Economics Made Complex: Capitalism vs. Financialism

The 2012 election at almost every level will be determined by turn out, and predicated on economics — micro and macro.  The problem for most voters is that we’re talking about two economies.  The economy of the financialists and the economy of the capitalists.  So far, the capitalists are winning.  Barely.

A capitalist believes that our economy works best when consumers have a choice of products from a variety of manufacturers or providers.  The economy expands as the demand for goods and services increases and providers seek to accommodate consumer needs.  A capitalist believes that capital should move from areas of surplus to areas of shortage, for small business lines of credit, for home loans, for student loans, for consumer credit, for business expansion, for commerce and marketing needs.

A financialist believes that the economy serves to accumulate wealth such that we create financial products and services which can be securitized and manipulated to create more wealth.   The financialists have been doing very well, thank you very much.  Not sure, then consider this chart:

That’s right, 93% of the increases in American income (wealth) in 2010 went to the top 1% of income owners in the U.S.  And the stock market has been doing quite well since 2009:

Of course, it’s not just stocks in which we find increased trading.  Other financial products, derivatives included, have been doing a thriving trade.

The traffic in derivatives hasn’t slowed much either.

So, while those whose income comes from the financial sector have been doing quite well, those in the “real” economy — the capitalist economy have been in something of a bind.

Note, Governor Romney’s complaint that the current economy means “stagnating” wages for middle class Americans he’s omitting a crucial bit of information:  When economic policies favor the accumulation of wealth in the coffers of the o.01%, it shouldn’t be the least bit surprising that middle class Americans aren’t seeing the increases in their bank accounts.

In short, the Financialists (and their presidential candidate Governor Mitt Romney) having secured a deregulated financial sector which rewards them disproportionately, are loathe to adopt any policy which might require them to pay more in taxes or to comply with any regulations on the financial product manipulation which constitutes their wealth accumulation strategy.

It’s up to the Capitalists in the 2012 election to secure a level playing field, or at least a more level field, one in which INVESTMENT is rewarded before SPECULATION.   One in which the economic reality of supply and demand means the supply and demand in REAL markets — not in esoteric “markets” for artificially concocted risk management products.

Let’s hope the Capitalists win.

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Filed under 2012 election, banking, Economy, Obama, privatization, Republicans, Romney

Nevada Political Notes

Nevada Political News:  “Organizations step up final push to get Hispanics to the polls,” Las Vegas Sun.  Plans are still on for President Obama to speak in North Las Vegas (info here) if recovery activities after Sandy permit. The race for the middle in Nevada Senate District 5; Kirk may call himself a pragmatist — if so, then why the attack on collective bargaining, which brings to mind the antics of the GOP in Wisconsin and Ohio?  Woodhouse (D) is the actual moderate in this race.

It should be remembered in Nevada District 4 that the Republican in the race has touched the third rail of Nevada politics — advocating that the Silver State become the nation’s nuclear trash dump.

Governor Sandoval may be talking nationally, but his money’s on legislative races. [RGJ] *Note that one of Sandoval’s favorites is ALEC supporter Greg Brower (R-Reno).   Senator (by appointment only) Dean Heller has received the endorsement of noted advocate of scrambling up church and state, and of pushing the  USCOCB’s version of women’s health — Rick Santorum.

Nationally, 538 shows President Obama up by 3.2% in statewide polling.  The same source reports Senator Dean Heller leading Democratic challenger Shelley Berkley by 3.6 to 4.4 depending on the measurement used.

The astroturf follies are alive and well in Nevada, and it’s not just down south.  Northern Nevada voters have been getting pro-Heller fliers in the mail from Safari International, the gun lobby, the Idaho Republican Central Committee, and Karl Rove’s Crossroads Super PAC, along with robo-calls from “Jack” and “Sandy” to get out the vote for the Republicans.  Since the fliers and calls are broadcast generally a person could wonder what happened to that carefully targeted GOP “Voter Vault” advertizing effort of recent memory — but why bother when there’s plenty of PAC money flooding the process?

Line of the Week: “Reid repeatedly said he has “nothing personal” against Romney, but nonetheless delivered a harsh political attack. “He’s multiple choice on everything,” Reid said. “He doesn’t stand for anything. He’s the plastic man of American politics.”   Yes, the “Plastic Man” of American Politics.  Yes, “plastic” in the sense of be capable of being molded or modeled, and “plastic” in the sense of being synthetic or processed materials that are mostly thermoplastic or thermosetting polymers of high molecular weight. AKA artificial.

The Sin City Siren is decked out for Halloween, complete with Creature Features which describe the Jekyll and Hyde (plastic) capacities of one Willard Mitt Romney.

Read the labels!  About all a person needs to know about the trade and economic policies of the Romney and the Obama campaigns is illustrated by Vegas Jessie who helpfully posts pictures of the labels on campaign gear. Guess whose is made in China?  Blue Lyon posts the GOP “Rape Advisory Chart,” along with some very compelling reasons why this election matters.

There’s another good graphic from On My Blotter concerning why a middle class tax cut is a sound economic idea.

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Filed under 2012 election, Nevada legislature, Nevada politics, Obama, political polls, Politics, presidential polls, presidential race, Reid, Romney, Rove

Compounding A Disaster

There’s a place for ideology in the spectrum of political thought.  However, it’s NOT in the midst of a disaster zone.   There are people in Middlesex County, NJ who will be waiting for electricity until next Monday; friends called about an hour ago — they are OK, and counting themselves lucky the storm damage didn’t take out more than just the railings on their deck.  There are people around this part of the country who are looking at the brown and blackened remains of range fires which consumed more than a half million acres in the region in August.  We’ve something in common.  Disaster management is not best organized on the local level.   Nothing so well wipes out mythology than wind, water, and fire.

# Myth Number One:  Local government is best able to manage disasters. Wrong.  (1) Local disaster relief assets, including local government operations like the sheriff’s department, police officers, and fire departments are staffed and equipped to handle local emergencies.  A fire such as the Holloway blaze which consumed some 461,000 acres, including vast  acreage  in Humboldt County, Nevada was completely beyond the capacity of local volunteer fire departments to manage.  Nor should we imagine that the law enforcement and public safety officials in Middlesex County, New Jersey are able to cope with all the needs in their country associated with coping with the damage from Hurricane Sandy.

It should also be noted that local disaster management can only be accomplished IF the assets aren’t themselves subject to the disaster.  It doesn’t take too long a junket down memory lane to recall the situations in which the local police and fire departments found themselves during Hurricane Katrina and the related flooding.

On the best days, local disaster management and assets are part of the total response, but the idea that a local sheriff’s department or local firefighting department could “manage” all the communication, logistic, and personnel  involved in a major catastrophe is pure fantasy.  What would we think of a local Emergency Management division telling FEMA officials where to pre-position equipment and supplies?  Surely the decisions are made with local input, but having New Jersey, Connecticut, New York, Pennsylvania, Delaware, Virginia, North Carolina, and Rhode Island all “determining” the positioning of assets and supplies is asking for chaos and not coordination in advance of Sandy’s landfall.

(2) States may coordinate some public safety needs but the idea that situations the magnitude of the Holloway Fire or Hurricane Sandy can be addressed by state and local officials is ludicrous.  (a)   Again, consider the potential for mis-allocation of resources if all the states involved in Hurricane Sandy’s path were to position them on their own, and not in coordination with their neighbors.  (b) Consider the problem of determining which state would share what with whom? And, when? (c) Consider the question of how to coordinate disaster management and relief operation if states not immediately involved are not subject to federal management plans?  FEMA can authorize the pre-clearance of power company resources for use in restoring electricity to areas affected by disasters.  Power crews from around the country will be available to the East Coast — compliments of federal coordination. Similarly, fire crews from at least five western states were available to fight the Holloway Fire — and they were ready thanks to planning by the National Interagency Fire Center which does long term forecasts and had already determined that northern Nevada, because of weather, natural vegetation growth, and drought conditions was ripe for major fires.

# Myth Number Two:  Localizing or privatizing emergency management is always better than federal government interference.  Wrong.   The “private is always better” component of the conservative ideology is a lovely ethereal academic argument.  It doesn’t work when the wind hits the beach or the fire touches dry brush.   If capitalism works, and the profit motive is the core of personal incentive toward productivity — then where is the profit in coping with emergency shelters? Firefighting? Distribution of drinking water? Patrolling devastated areas?  Coordinating the restoration of power?

There is a profit to be made if individuals are to be charged for the cost of the emergency management services.  Unthinkable.  Or, there is a profit to be made if the costs of providing these services are billed to state and local governments.  Why pay any amount above the actual cost of the services?

All that is accomplished in a billing for services system is that the taxpayers are called upon to pay not only for the emergency management services provided but also a margin of profit for the companies providing those services.  This seems like a most cynical form of corporate welfare.

And all this is why Governor Romney’s proposal to cut disaster relief is so horribly out of touch:

“We cannot afford to do those things without jeopardizing the future for our kids. It is simply immoral, in my view, for us to continue to rack up larger and larger debts and pass them on to our kids, knowing full well that we’ll all be dead and gone before it’s paid off. It makes no sense at all.” [BusInsid]

He was talking about disaster relief.  He is touching upon Rep. Eric Cantor’s (R-VA) notion that any disaster relief appropriations should be offset by cuts in other non-defense discretionary spending.  It would be sad if it weren’t so silly.

For a party which continually tries to frame revenue and spending in terms of a family budget this doesn’t pass the laugh test.  According to the conservative ideology, families are supposed to plan and save for exigent circumstances.  However, when a government plans for and appropriates funding for disaster relief that’s somehow wasteful?

There’s nothing immoral about planning for natural disasters and their consequences, but there is something immoral about suggesting that it is not the place of our national government to offer protection and provide the necessities of life to our fellow citizens in times like these.

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Filed under 2012 election, conservatism, Disasters, FEMA, Republicans, Romney

Hurricane Willard: Updated

June 2011

“During a CNN debate at the height of the GOP primary, Mitt Romney was asked, in the context of the Joplin disaster and FEMA’s cash crunch, whether the agency should be shuttered so that states can individually take over responsibility for disaster response.

“Absolutely,” he said. “Every time you have an occasion to take something from the federal government and send it back to the states, that’s the right direction. And if you can go even further, and send it back to the private sector, that’s even better. Instead of thinking, in the federal budget, what we should cut, we should ask the opposite question, what should we keep?”

There’s video of this:

May 2012

“House Republican appropriators on Tuesday revealed that they have decided to ignore GOP budget guru Rep. Paul Ryan (R-Wis.) on the controversial issue of disaster relief, spending over the discretionary levels set in the 2013 budget.  Ryan’s Budget Committee, in nonbinding report language attached to the House-passed 2013 budget, called for all disaster relief to “be fully offset within the discretionary levels provided in this resolution.” [The Hill]

October 2012

Ron Bonjean, GOP Strategist: “Most people don’t have a positive impression of FEMA and I think Mitt Romney was right on the button. But I don’t think anybody cares about that right now. I think people care about whether or not their power’s on, whether or not their basement’s going to be flooded. And I think that if the president gets too far in front of this and something goes wrong, people are going to remember, hey, my power’s not out, and the president’s talking about FEMA. I’m not a real big fan of FEMA. That could sway their vote.”

The Romney campaign issued this ‘clarification’ ahead of Sandy’s landfall:

“Gov. Romney wants to ensure states, who are the first responders and are in the best position to aid impacted individuals and communities, have the resources and assistance they need to cope with natural disasters.” [Stir]

Remember the Romney-Ryan budget proposal calls for 20% cuts across the board in non-defense discretionary spending.  Their previously issued statements also call for transforming emergency funds into Block Grants for states.  So, whatever disaster strikes the ‘resources and assistance’ would come from the state — not federal resources.   The state of Louisiana would have had to pick up the bill for Hurricane Katrina from its ‘block grant.’  The state of Missouri would have been responsible for paying all emergency services bills associated with the Joplin/SW area tornadoes.  Western states would have to pay for emergency services during wild land fires from their ‘block grants.’

UPDATE: Oh my, the political winds must be shifting because the Romney campaign is out with yet another clarification:

“Gov. Romney believes that states should be in charge of emergency management in responding to storms and other natural disasters in their jurisdictions,” Romney spokesman Ryan Williams said in a statement. “As the first responders, states are in the best position to aid affected individuals and communities, and to direct resources and assistance to where they are needed most. This includes help from the federal government and FEMA.” [Politico]

Now he doesn’t want to eliminate FEMA, he simply wants the states to take over — with, one should assume, those block grant funds.

Whose Disaster?

No one has quite managed to clarify how the funds for these block grants would be distributed?  Does Florida get more because it is prone to hurricane devastation?  Does the money sent to Florida mean that less could be sent to Connecticut in the wake of  Nor’easters?  Does money sent to Connecticut and Florida mean there is less available for California in the event of an earthquake?  Does money allocated for Florida, Connecticut and California mean less money in the pot for Indiana and Illinois tornado disaster relief? How much money would we need to assist with emergency services during a Minnesota or North Dakota blizzard?

Governor Romney began his 2011 remarks by saying that the federal government should send as much as possible “back to the states,” and sending it back to the private sector would be even better.

When asked directly about disaster relief he said:

“We cannot — we cannot afford to do those things without jeopardizing the future for our kids. It is simply immoral, in my view, for us to continue to rack up larger and larger debts and pass them on to our kids, knowing full well that we’ll all be dead and gone before it’s paid off. It makes no sense at all.” [Slate]

Yes, “think of the children…” We are thinking of children.  Children made temporarily homeless by fires, floods, hurricanes, and earthquakes, and their parents aren’t thinking of the ‘national debt’ … they are seeking relief.  As immediately as possible, from a government which  pledges in its Constitution  to promote their general welfare.

So, Governor Romney and Rep. Ryan would remove this pledge and replace it with block grants, the rationale for awards thereof remaining unclear, and with the amounts cut by 20%, to be allocated to states which may or may not need emergency funds immediately, and this is supposed to benefit whom?

Answer: The millionaires and billionaires who don’t want their taxes to be increased from 35% to 39.6%?

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Filed under 2012 election, Disasters, FEMA, Politics, Romney

Playing Percentages With Grandma? Romney-Ryan Medicaid Budget Cuts in NV

The median annual household income in Nevada is $55,726. [Census]  The total population estimate for 2011 is 2,723,322 and of these approximately 12.5% are over 65 years of age.  Some simple arithmetic shows that about 340,415 Nevadans are over 65 years old.   So what?

The question is important because some of these individuals will need home care services to deal with infirmities, some will need assisted living to remain independent, and others will require institutional care, aka nursing facilities.

As we can see from the Kaiser Family Foundation graph above,  more Medicaid resources have been allocated for home and community based care since 1995.  Long term care, which prior to 1995 meant institutional care for the most part, is now 43% home/community based health care services.   The issue now becomes do we want to fund the Medicaid program at a level which will allow more low income  Nevada residents over the age of 65 to remain at home, or do we cut program services such that we cope with only the most medically fragile?

The family issue, for that household earning the $55,726 annually, is how to provide care for an elderly relative who requires medical assistance beyond the financial capacity of the family to provide but who doesn’t need institutional care?  There is no answer to this inquiry from the Romney/Ryan budget.

In fact, if as Senator Heller and some of his colleagues recommend,  we repeal the Affordable Care Act (Obamacare) and do what the Republican ticket suggests — transform the Medicaid program into a block grant scheme — we cut approximately 38% from Medicaid services. [KFF pdf]  If we drill down into state by state statistics, if Obamacare were repealed and the Ryan Budget was adopted our Medicaid program in Nevada stands to lose about 44% of its funding. [KFF pdf]

No one would (or should) be so callous as to suggest we slash funding for those with the most serious medical needs, especially those who need nursing facility care.  However, if we’re looking down the line at a 44% reduction in Medicaid funding for state services then the obvious cuts would come “at the margins.”

Who’s marginal?  Are low income single mothers with two dependent children under the age of 6 marginal?  Are low income elderly persons who can still function — albeit barely —  independently marginal?

The Medicaid program in Nevada* is an insurance program which pays servicers to perform some or all of the following tasks:

-Adult Day Care
-Assistance Shopping for Essentials
-Caregiver Respite
-Case Management
-Companion Care
-Homemaker
-Housekeeping
-Laundry
-Meal Preparation
-Personal Care
-Personal Emergency Response System (PERS)

* In order to qualify for the Nevada Home and Community Based Waiver as of 2012, the applicant’s monthly income must be less than $2,094.  Their countable assets must be valued at less than $2,000.

Now, how many families can afford privately financed adult day care, companion care, housekeeping help, meal preparation, personal care, and shopping assistance? On $55,726 a year?  On an income of approximately $2,000 per month?

The obvious conclusion is that perhaps the Republicans are advocating for Crowded Housing?  If they bemoan the fact that recent college graduates are staying home with parents in a tight economy, think how much more familial the entire living situation becomes when the grandparents — or Uncle Festus or Aunt Minerva — move in?  Especially when the elderly relatives are simply in need of the kinds of home or community based services likely to be declared marginal in cost cutting binges?

While this might all sound a little facetious, the fact is that most houses in the U.S. ( some 67%) have two or three bedrooms. [Census] Every parent’s dream for when the offspring depart, be it the new guest room, the man cave, the sewing room — whatever — fails when a no long total independent older relative needs a safe place to live.

A modicum of concern for middle income families who are struggling to maintain their standard of living might be in order.   If we can assist middle income families with the costs associated with the care of a low income elderly relative; if we can chip in a bit so that a low income  elderly person can remain independent as long as possible — then why is is necessary to cut 44% of the Medicaid program in Nevada so that millionaires and billionaires won’t have to revert to paying the income taxes they were paying back in the Clinton years —  39.6%.  (They are current paying 35%.   All this for 4.6%. )

Let’s guess that the hedge fund managers and Wall Street wizards won’t be decimated by a 4.6% tax increase, but a 44% reduction in Medicaid funding in Nevada will have a profound effect on the other 99.99%.

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Filed under 2012 election, Health Care, health insurance, Heck, Heller, income tax, Medicaid, Nevada economy, Nevada politics, Romney, Taxation

A Map For the Geographically Challenged

 

Got it?

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Filed under 2012 election, Foreign Policy, Romney

Romney’s China Bashing Hot Air Trial Balloon

The latest offering on the campaign trail from the right appears to be a surfeit of China Bashing — with another First Day item added to Governor Romney’s to-do list: Declare China a currency manipulator.  Sounds rather ‘forceful’ doesn’t it? Sounds all ‘leadershippy?”  It’s a bad idea and here’s why — from a bastion of conservative print, Barron’s:

“To declare China officially a currency manipulator risks launching the 21st century equivalent of the Smoot-Hawley protective tariff passed in 1929, one of the key factors that made the Great Depression “great” in the worst sense of the word.”

In other words, if you advocate protectionism then a declaration of China as a currency manipulator is your policy of choice.  Why? Because the Chinese, rather than allowing  surplus dollars from its exports to the U.S. to push up the value of the yuan, buys the dollars and re-invests them in the U.S.   When did Governor Romney decide that foreign investment in the U.S. was a bad idea?

Secondly, it’s not that the yuan isn’t appreciating.  In fact, the value is going up.  The Chinese currency is currently trading at 6.254500 [CET] as of October 21, 2012.  There’s a graph indicating the trend upward for American currency in the past year:

Click on the graphic for additional information.    How about a two year perspective? What would that illustrate?  There’s also a graph showing the appreciation of the Chinese currency relative to the American dollar for the last two years.

Perhaps someone in the Romney campaign would care to explain WHY, when the yuan is appreciating relative to the American dollar — and has been generally for the past two years — it’s time to declare China a nefarious currency manipulator?  This makes absolutely no sense whatsoever, unless Barron’s is correct, and the Governor wants to risk  a Smoot-Hawley Tariff protectionist brawl in foreign trade.

Yes, the Chinese have the reins on the value of their yuan, but as the second graph illustrates they’ve been allowing it to steadily appreciate relative to the value of the dollar.   When did Governor Romney decide this was an unhelpful trend?

There’s another problem with China Bashing as it is currently being practiced. They are also importers.   The following graph from FRED (Federal Reserve) shows the increase in Chinese imports — which in case we’d forgotten means American JOBS.

So, when did Governor Romney decide that facilitating policies intended to  increase our exports TO China was a bad idea?   Returning to the issue of the relative value of the two currencies, the yuan and the dollar, for a moment — the chart above doesn’t indicate that the yuan is as significantly undervalued as previously believed.

One writer at Forbes opines that the declaration of China as a currency manipulator will be on Governor Romney’s list of things to drop like a hot rock on his  Day One.   It probably wouldn’t be a bad idea to drop it immediately, and to release the hot air from this thoroughly political hot air balloon.

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Filed under 2012 election, Economy, Foreign Policy, Romney

A Very Un-Average American Family: Romney and the Plutocrats

Let’s look at this graph again.   The average family income of those in the top 0.01% is $23,846,950.   The average family income for families in the top 0.10% is $2,802,020.  An average family in the top 1.0% has $1,019,089 in income.   The “recovery” has been very good to the people in these economically elite categories:  During the 2009-2010 recovery period 93% of the gains were captured by the top 1%.  That would be the three columns on the left hand side of the graph.

Of these gains 37% went to the top 0.01% — that would be the 15,000 Americans with incomes of $23.8 million annually. There are 314,583,369 people in this country.

So why would this happen?

(1) The individuals in the top 0.01% have the resources to hire battalions of accountants, and the wherewithal to utilize offshore accounts, tax havens, and to keep production and profits off shore to minimize tax obligations.  Sound familiar?  Could this be part of the reason we’ve not seen the Romney tax returns for the past 12 years?  The partial information released to date indicates the use of off shore accounts in Bermuda and the Cayman Islands, the investment in offshore industries, “gifting” of stocks in offshore companies for tax reduction purposes, and the use of “blockers” to manipulate tax liabilities.

(2) The individuals in the top 0.01% avail themselves of “carried interest” accounting treatment to reduce the tax liability on their income by calling it “capital gains.”   Former Reagan Administration adviser Bruce Bartlett remarks:

“A key reason for Mr. Romney’s low tax rate is that a very substantial amount of his income comes from capital gains – 51 percent in 2011 and 58 percent in 2010. Capital gains, no matter how large, are taxed at a maximum rate of 15 percent, whereas wage income can be taxed as much as 35 percent by the income tax plus taxes for Medicare and Social Security. The latter two are not assessed on capital gains.”

The way the loophole works relates to the peculiar method in which money managers are compensated. Typically, they receive a fee of 2 percent of the gross assets under management, much of which comes from employee pension funds, plus 20 percent of any increase in value.

Thus, on $1 billion of assets the managers would automatically get $20 million that would be taxed as ordinary income. If the assets increased 10 percent to $1.1 billion, they would get another $20 million. For tax purposes, this additional $20 million would be treated as a capital gain and taxed at 15 percent.  [NYT]

Little wonder the hedge fund managers were often among the top 0.01%.   Equally, little wonder that money management corporations like Bain Capital were among the Winners.

(3) The financialist plutocrats defend their loopholes, like the carried interest loophole and the reduced rates on capital gains and dividends, quite well in the halls of Congress.   Note that the Romney Campaign is NOT calling for the restriction of these loopholes and preferential treatment.  In fact, they are calling for the maintenance of low capital gains and dividend rates, and the elimination of the estate tax.

What would a potential Romney Administration do to reduce loopholes?  There’s always the home mortgage interest deduction?  The educational expense deduction? Deductions for medical expenses?  If it were suggested these be eliminated there would be significant opposition.  So, they aren’t being suggested — however, they are the only ones “large” enough to make a dent in the federal debt.

In short, what candidate Romney is suggesting is a government of the plutocrats, by the plutocrats, and for the plutocrats.  It is a financialist’s wet dream. An average American family’s nightmare.  It is, indeed, the Bush policy on steroids: Deregulation, Globalization, and Trickle Down Supply Side Voodoo Economics.

What happened the last time we tried de-regulation of the financial markets? What happened when we tried Trickle Down economics from 1980 to 2007?

The financialist plutocrats did well — the rest of us not so much.  The 2012 election clearly delineates  the interests of the top 0.01% and the other 99.99% — Governor Romney is doing a good job of representing the interests of his cohorts in the 0.01%.  Perhaps we’d like a President for the remaining 99.99% of the U.S.

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Filed under 2012 election, Economy, Republicans, Romney

What Does Romney Have In His Own Safe?

 

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Filed under 2012 election, presidential race, Romney