Blog

Mike Lux
Co-founder and CEO, Progressive Strategies

I have been in politics way too long to take anything for granted in this presidential race, and I am way too superstitious to assume a victory no matter what. The strongly anti-Obama vote remains at a rock solid 45 percent no matter what ridiculous things Romney says or does, and there will be a few percent undecided right to the end, which means Romney will hang relatively close through the last weeks of this race. By everything I can tell, including both public and private polls I have seen, this is a 4 point race, and that is still close. World events, a weak Obama debate performance or some other kind of mistake, or any number of other things might still put Romney even closer before it is done.

Having said all that, Romney is in a world of hurt, primarily because of the way he has defined himself philosophically and values-wise to the American people. He has lost the essential debate in this race, and the Republican base has created a locked box that imprisons him and makes his comeback very difficult. It’s not just that he is down by a few points: the voting dynamics have solidified, and the chances for Romney’s vote to grow are severely limited because the key groups of swing voters really don’t like him. If Romney comes back and wins, it will not be because of Romney, it will be because of something big happening — a major Obama mistake, people falling asleep in the Get-Out-The-Vote operations, a huge international or economic crisis — that Romney has nothing to do with. Romney’s chances for winning are now out of his hands, so all the stories about whether the Romney campaign will ever get its act together are irrelevant. With a big Obama campaign mistake or an earth-shaking world event, Romney could still win this election, but he and his party have lost the debate over values, policy, and the future of the country.

Given that, we Democrats and progressives should — without losing focus for a moment on turning out the vote and finishing off the re-election job — begin thinking about the implications of a second term for Obama, and how we can begin working now to make it successful for most of the American people. That analysis needs to be done both on the political and economic side of things.

When it comes to politics, naturally the big story is the nature of the next Congress. Because we are winning the central debate, our numbers have gone up in competitive House and Senate races throughout the country. We need to keep driving home our winning argument about community, investing in our people, and fighting for a strong middle class — and we need to do everything possible(except in a few swing states and districts that lean Republican) to nationalize this election. (more…)

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

I’ve spent the past few days debating right-wingers — among them, Grover Norquist and Ann Coulter. This isn’t my idea of fun. I do it because apparently many Americans find these people persuasive, and it seems important to try to show why they’re profoundly wrong.

There are two major theories about why Romney is dropping in the polls. One is Romney is a lousy candidate, unable to connect with people or make his case.

The second is that Americans are finally beginning to see how radical the GOP has become, and are repudiating it.

Many Republicans — including some of the right-wingers I’ve been debating — hold to the first view, for obvious reasons. If Romney fails to make a comeback this week, I expect even more complaints from this crowd about Romney’s personal failings, as well as the inadequacies of his campaign staff.

But the second explanation strikes me as more compelling. The Republican primaries, and then the Republican convention, have shown America a party far removed from the “compassionate conservatism” the GOP tried to sell in 2000. Instead, we have a party that’s been taken over by Tea Partiers, nativists, social Darwinists, homophobes, right-wing evangelicals, and a few rich people whose only interest is to become even wealthier. (more…)

By Jared Bernstein
Senior Fellow, Center on Budget and Policy Priorities

Well, apparently “who pays taxes” is back in the news today, so who’s up for a bit of rehashing some older work by my CBPP colleagues?

The main thing, just in from the facts department, is that it’s just flat out wrong to conflate “federal income taxes” with “taxes.” You may not pay the former because your income is quite low, and thus after the standard deduction you don’t have any federal income tax liability (that’s the case for 7% of the 46% that don’t pay federal income tax). Or because you’re elderly with modest income and no earnings (10% of the 46%).

But if you draw a paycheck, you might not pay federal income tax but you’ll pay federal payroll taxes (28% of the 46%). Or if you put gas in your tank (federal excise tax) or buy something in a state with a sales tax, etc.

So pretty much everybody pays a tax in there somewhere.

For that matter, you could have very high income of a type that’s given special treatment by the tax code, like capital gains, and pay less in taxes than your typical wage earner. You can even be rich and join the group that pays no federal income taxes, again due to deductions, credits, the writing off of various losses or expenses. According to the IRS, in 2009, about 21,000 tax returns with income above $200,000 had no federal income tax liability.

The first link above provides much useful evidence of taxes paid across the income scale, including payroll, excise, and state/local taxes.

But I also find this data, from Citizens for Tax Justice, to be elucidating in this discussion. It compares the share of pretax income going to each income class to that of taxes paid, including all levels of taxation — national, state, and local — and capturing income, corporate, payroll, excise, estate, sales, et al in terms of different types.

Source: Citizens for Tax Justice

(more…)

“.. He can argue any side of a question. And sometimes you think he’s really believing his argument, but he’s not.”
- Ann Romney

By Oren Levin-Waldman
Professor of public policy at Metropolitan College of New York

Unemployment has been above 8 percent for more than three years now, but the real story has been the increase among the ranks of the long-term unemployed. On one level, long-term unemployment can be accounted for by structural changes. But on another level, the problem of long-term unemployment is really no more complicated than the absence of effective demand. The traditional approach of easing money into the economy by tinkering with interest rates and the money supply is really a top-down approach. What is needed is a grassroots bottom-up approach which affords workers the ability to demand more goods and services.

In a new study based on data from the Current Population Survey, I examine the demographics of the long-term unemployed for the years 2007 to 2010 and compares them to the years 1991 to 1994 to see what changes have occurred specifically among the long-term unemployed. It is commonplace to assume that much of the problem of long-term unemployment stems from structural change in the economy. Jobs that paid middle class wages have disappeared and what has replaced them are low-skilled and low-wage jobs in the service economy. This argument is often couched in terms of the skills mismatch thesis that holds that the U.S. has increasingly become a two tiered economy with highly skilled jobs at the top of the wage distribution and low skilled jobs at the bottom of the wage distribution. These structural changes, it is argued, have resulted in low-skilled workers being unemployed longer because their skills no longer match the needs of new employers.

The data, however, suggests something different. Structural changes occurring between 2007 and 2010 were really not much worse than between 1991 and 1994. Rather, the nature of this recession resulted in the composition of the long-term unemployed looking different. In fact, the ranks of the long-term unemployed were to be found across industrial and occupational categories. It is true that those with lower levels of educational attainment are generally more likely to be unemployed than those with higher levels of educational attainment. But when tested in a regression analysis, it was those who fell into certain income ranges who were most likely to be long-term unemployed. Blue Collar workers specifically in Installation and Repair Services earning less than $30,000, for instance, were the most likely to be long-term unemployed. On one level, this would imply these are low-wage and low-skilled workers who lack the skills required for re-employment, especially in a changing economy. But on another level, it means these jobs, especially those paying what we would call middle-class incomes, no longer exist. The key difference between the current recession and the one in the 1990s is that a wider swath of jobs no longer exists. (more…)

Four years ago, on Sept. 29, 2008, the Dow Jones Industrial Average fell 778 points, its largest single-day point loss to date.  In total, the stock market lost $1.2 trillion that day, the first one-day trillion dollar loss ever.  Shaken, investors continued to pull their money out, keeping prices low well into 2009.

Now, the stock market is recovering, and investors are becoming more confident. On Sept. 11, 2012, the Dow Jones reached its highest level since 2007.  More importantly, the market as a whole has seen sustained growth since 2010.

Steep drops in the stock market affect everyone, not just brokers and other financial professionals.  Pensions and other retirement funds are closely tied to the stock market, which means when stocks are down, retirement savings evaporate.  Declines in the stock market also hurt businesses. When investors lose confidence and pull their money out of the market, businesses—especially smaller businesses—no longer have access to resources they need to expand.

In September 2008, the financial world was in disarray.  The biggest banks were failing, and on Sept. 29, the U.S. House of Representatives rejected a $700 billion bailout, sending investors into a blind panic.  As a result, the stock market hit historic lows, and the whole economy teetered.

In 2008, Barack Obama, then a U.S. Senator and candidate for President, took the enormous political risk of endorsing the bank bailout, a measure that proved necessary for the recovery of the stock market. On Oct. 3, 2008, the House finally approved billions of dollars in funds to help troubled financial institutions. Later, under Obama’s leadership as President, the Federal Reserve pursued policies that grew the markets and restored investor confidence.

Now, thanks to billions of dollars in government rescue funds and new financial regulations that help protect investments, the economy is recovering, investor confidence is growing, and the stock market is again showing regular gains.

By Carl Pope
Executive Chairman, Sierra Club

Bob King, the President of the United Auto Workers, and Jim Tetreault, the Vice-President of Ford for North American Manufacturing, joined me at a Friday Forum at the Cleveland City Club to tell how a collaborative process involving Ford, the UAW, communities, and the government helped rescue the American auto industry. (Click to hear the podcast)

It’s a success story. If the auto industry had gone down, the number of jobs lost in the Great Recession would at least have doubled – making it worse than the Depression. And at one point the public opposed the federal intervention that was essential to save GM and Chrysler by a margin of 3-1- which unlike Ford had lacked the foresight to establish adequate lines of credit for the storm that was coming. So did many of our leaders – most notably Mitt Romney, with his famous New York Times op-ed, “Let Detroit Go Bankrupt.” So even though the forum is non-political, the issues it raises unavoidably resonate in the broader context of this election year – and I think shed some light.

Romney’s op-ed looks even more revealing in the light of last week’s Boca Raton tapes revealing a harsh hostility to “the 47%” and suggesting that it is Mitt the Massachusetts moderate who may have been an act, and Mitt the bleak Social Darwinist the real thing. Because what Romney said about the bail-out, unequivocally and in precise detail, was that a collaborative solution to the auto industry crisis was impossible.

“Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.”

These words are eerily reminiscent of the infamous advice that Treasury Secretary Mellon gave President Hoover: “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.”

Hoover – sort of – followed Mellon’s advice. Roosevelt’s New Deal followed. Obama didn’t – in the face of public opposition he kept GM and Chrysler going, maintaining the auto supply chain that Ford required as well. So Romney’s wisdom as a CEO seeking to be Job Creator in Chief has been tested – and found wanting.

With the bailout, the Big Three did precisely what Romney said they could not. They changed course – as Tetreault and King make clear here in Cleveland. They changed; they negotiated their way out of their retiree burdens, jumped into the technological lead, started regaining market share, embraced fuel efficiency and are rebuilding jobs, shifts and factories.

But they changed because there was trust and transparency – something Romney’s version of predatory capitalism values not at all – or we would have seen his tax returns. Romney’s version of private equity posits that only a hostile “turn-around” can rescue an industry in crisis – it values only fear, not trust. But that’s not what turned Detroit around. The auto industry changed because it faced a crisis, yes, but also because it discovered that it had a reliable, predictable partner in the American people, as expressed in the investment the Obama Administration made. And it changed because its leaders – people like Tetreault and Bob King – liked each other, trusted each other, and took risks with each other. (The three of us on stage are an unlikely trio. Tetreault , who started out as an environmental clean-up specialist keeping auto plant wastes out of rivers, graciously deflects efforts to draw him into politics - “I’m working with everyone.” -but he notes that Bob is not as apolitical. King, as I discovered on a trip to Tokyo trying to rescue the NUMI plant in California, is the rare industrial union president who is a vegetarian. And I’m here because we can’t outsource the creation of a sustainable America. Without the restoration of “America the Maker” our ecological future is grim.)

Roosevelt would have understood. Romney, it appears, does not. (more…)

By Bob Cesca Author, “One Nation Under Fear”

Four years ago yesterday, John McCain and Sarah Palin were 1.9 percentage points behind then-Senator Barack Obama in the RCP poll-of-polls. Today, Mitt Romney and Paul Ryan are 2.8 percentage points behind President Obama in the RCP poll-of-polls. Romney is currently doing worse than McCain’s ill-fated attempt at the presidency.

And there’s nothing on the horizon that could really change the dismal course of events in Romney’s favor, shy of a major presidential gaffe or an out-of-the-blue scandal of some sort. (Though I hasten to warn: this thing is far from over and any number of factors could dramatically shift the outcome of the election.)

So knowing all of this, it’s astonishing to me that Mitt Romney would rewind back to the failed McCain/Palin campaign and, specifically, its big bad red-scare “redistributionist” attack against Obama. It’s not surprising given how Romney has an impulsive habit saying whatever pops into his bulbous head no matter how ludicrous, contradictory or inaccurate — anything to get him through the day, anything that might work. Why not resurrect McCain’s failed attack, too? In fact, why not indiscriminately leap onto something that right-wing propagandist Matt Drudge posted on his site: a 14-year-old piece of video in which the president said, “I actually believe in redistribution at least at a certain level…”

Shock horror!

At a fundraiser in Georgia yesterday, Romney responded by saying, “He [Obama] really believes in what I’ll call a government-centered society. I know there are some who believe that if you simply take from some and give to others then we’ll all be better off. It’s known as redistribution. It’s never been a characteristic of America. There’s a tape that came out just a couple of days ago where the president said yes he believes in redistribution. I don’t. I believe the way to lift people and help people have higher incomes is not to take from some and give to others but to create wealth for all.”

That’s a big lie. Of course Mitt Romney supports redistribution. Everyone supports redistribution to some extent. It’s literally how the government collects and spends tax revenue, regardless of whether it’s via progressive taxation or a single flat tax rate.

Elsewhere, Paul Ryan joined in, “You know, President Obama said that he believes in redistribution. Mitt Romney and I are not running to redistribute the wealth. Mitt Romney and I are running to help Americans create wealth.”

Ooga-booga! Be afraid! By the way, yes, they’re absolutely running to redistribute the wealth. Everything from their military spending position to their support for charter schools is about redistribution. Paul Ryan’s Medicare plan is about redistributing Medicare trust fund money to private insurance companies.

The reason a well-known and accepted function of government has become a rhetorical boogie man was chiefly due to McCain/Palin’s relentless demonizing of the word itself, accompanied by McCain’s over-used “dick-quote” finger gestures every time he said “spread the wealth around,” thus allowing slack-jawed ignoramuses to assign their own fear-induced, uninformed definitions to the term. Mainly, the Obama government is plotting to abscond your hard-earned money and give it to lazy, shiftless brown people. Secondarily, as I noted earlier, more than a few McCain supporters assigned a 1950s red scare collectivist/communist usurper definition to the word. Sean Hannity and a characteristically unhinged Michelle Malkin in particular leaned on the red scare McCarthy button the other night, even though the president, in the 1998 video, specifically pitched the capitalist ideas of decentralized competition in the marketplace, “How do we pool resources at the same time as we decentralize delivery systems in ways that both foster competition, can work in the marketplace, and can foster innovation at the local level and can be tailored to particular communities.” (more…)

By Dave Johnson Fellow
Campaign for America's Future

Workers facing outsourcing by Bain Capital are camping outside the Sensata factory in Freeport, Ill. They are asking Mitt Romney to show up and help save their jobs. They say they will stay camped there until Romney shows up and stands with them – or with Bain.

Mitt Romney can can use this to show us if he wants to be president of the whole United States, or just president of, by and for the outsourcing 1 percenters.

Sensata

The private equity firm Bain Capital put together Sensata Technologies in 2006 to make and sell sensors and controls to car makers and other manufacturers. The company is closing the Freeport, Ill. plant and outsourcing the 165 jobs to China. The workers have to train their Chinese replacements before they are laid off.

Sensata is making plenty of money. According to the company’s website:

• Second quarter 2012 net revenue was a record $504.6 million, an increase of 10.9% from the second quarter 2011 net revenue of $455.0 million.
• Second quarter 2012 net income was $26.1 million, or $0.14 per diluted share, versus second quarter 2011 net (loss) of $(34.6) million, or $(0.20) per diluted share.
• Second quarter 2012 Adjusted net income1 was a record $97.5 million, or $0.54 per diluted share, versus second quarter 2011 Adjusted net income1 of $92.2 million, or $0.51 per diluted share.

Sensata explains that Chinese workers cost less.

Mitt Romney started Bain Capital in 1984. He left the company in 1999, or 2000, or 2001, or 2002, or later, or earlier, depending on which year is best. In 2012 he is clearly no longer with Bain, while receiving only approximately $440,000 a week from the company.

Efforts To Get Sensata To Reconsider

The Freeport, Ill., City Council unanimously passed a resolution on July 16 asking
Romney to come and help save the workers’ jobs.

Two Republican members of Congress, Don Manzullo, R-Ill., and Bobby Schilling, R-Ill., sent a letter to Sensata’s CEO asking him to keep the jobs in Freeport. Manzullo is a co-sponsor of the House “currency” bill, the Currency Reform for Fair Trade Act (H.R. 639) that would crack down on China’s currency manipulation. Though he is a co-sponsor, Manzullo refuses to sign a discharge petition that would bring the bill to the floor for an actual vote.

Rep. Jan Schakowsky (D-Evanston) has joined workers in asking Romney to show up and help.

Illinois’ Governor Pat Quinn has visited the workers in Freeport, and asks Congress to pass the Bring Jobs Home Act. The Bring Jobs Home Act would eliminate the tax breaks that encourage companies like Bain and Sensata to close factories here and send the jobs and the work to countries like China, with the cash stopping off in the Cayman Islands for a quick tax cleansing. The Bring Jobs Home Act was recently filibustered by Senate Republicans.

Sensata workers collected 35,000 petition signatures, asking Romney to come to Freeport to help save the workers’ jobs. This video shows what happened when they tried to deliver these petitions and a letter at a Romney campaign office in Madison. Instead of accepting the letter and petitions, the campaign locked them out and called the police.

President Of All Of US Or President Of 1 Percent?

Many Americans are asking, if elected, will Romney be the pPresident of the United States or really just the president of, by and for the 1 percent? Visiting the camp at “Bainport” and helping the workers keep their jobs would give Romney a chance to distance himself from the outsourcing and “vulture capitalism” practices of his former company, making a break and standing with the rest of the country, by asking Sensata not to ship these jobs to China. (more…)