Tag Archives: Romney

It’s the Corruption, Stupid!

            The Republican and Democratic National Party Conventions are today little more than political infomercials designed to sell their party’s presidential candidate to the American voter.  Many speeches are given and many videos are played, focused entirely on presenting their candidate as an example of deified human perfection..  When the candidates’ turn to speak finally arrives, they largely discuss the problems that cripple government and have caused recent economic catastrophes.  Unfortunately, the candidates only rarely mention the disease that causes nearly all political problems: corruption.  The fact that politicians have to beg rich people and companies for campaign donations in order to have enough money to buy the advertising resources that mostly win today’s elections, and that the rich only give money when they get promises for special favors when their candidate takes office, is never mentioned.  The Party Conventions could be described as the most effective infomercials on television: they give a list of problems and advertise their product (their candidate) as the miraculous solution to those problems without ever discussing what causes such problems.  Any simple reading of the convention speeches reveals this; we can look particularly to speeches given by President Obama, Paul Ryan, and Elizabeth Warren as examples of such trickery.  The political parties and the candidates clearly believe that the American voting public is stupid enough to believe the infomercial, so the public should analyze these key speeches for content to understand what the politicians promise … and what they want to avoid discussing.

           President Obama’s speech has been hailed as powerful and inspiring, but Obama made only two small references to corruption.  “If you give up on the idea that your voice can make a difference, then other voices will fill the void, the lobbyists and special interests, the people with the $10 million checks who are trying to buy this election and those who are trying to make it harder for you to vote. . . .” (Barak Obama, Transcript: President Obama’s Convention Speech, published by National Public Radio September 6, 2012 at http://www.npr.org/2012/09/06/160713941/transcript-president-obamas-convention-speech)  Obama argued that the people can stop corruption by voting, but he refuses to lay out a program for ensuring that the rich cannot use their wealth to threaten democracy in the first place.  Obama’s indignation is righteous, but his solutions are non-existent.  Obama later advised the American people that “[i]f you reject the notion that our government is forever beholden to the highest bidder, you need to stand up in this election.” (Obama, Convention Speech)  Again, Obama refuses to give any ideas on what laws could be passed to eliminate a rich person’s ability to buy political favors through campaign donations.

           Republican presidential nominee Mitt Romney did not even imply that corruption is the main reason for most American political problems.  Instead, his vice-presidential running-mate Paul Ryan was given the task of diagnosing corruption as the central disease that must be cured.  Unfortunately, Ryan merely described the problems of corruption.  “The stimulus was a case of political patronage, corporate welfare, and cronyism at their worst.”  (Paul Ryan, Transcript: Rep. Paul Ryan’s Convention Speech, published by National Public Radio August 29, 2012 at http://www.npr.org/2012/08/29/160282031/transcript-rep-paul-ryans-convention-speech)  Ryan never described how the corruption created by campaign contributions leads to patronage, corporate welfare, and cronyism.  He described the symptoms of corruption’s disease without actually diagnosing the disease!  Ryan merely says that Mitt Romney can end corruption: “Mitt has not only succeeded, but succeeded where others could not.  He turned around the Olympics at a time when a great institution was collapsing under the eight of band management, overspending, and corruption – sounds familiar, doesn’t it?” (Ryan, Convention Speech)  Ryan alludes to a comparison between Olympic corruption and U.S. government problems, and his lack of ideas on how to solve those problems sound very similar to other basic Republican statements.  He simply wants to elect Romney and then trust Romney to solve problems that Ryan himself does not appear to understand.

           Elizabeth Warren, the Democratic Party’s nominee for Massachusetts senator, went only slightly further than Obama and Ryan in diagnosing corruption as the central political disease that must be cured.  Warren alluded to corruption in government: “People feel like the system is rigged against them.  And here’s the painful part: they’re right.  The system is rigged.  Look around.  Oil companies guzzle down billions in subsidies.  Billionaires pay lower tax rates than their secretaries.  Wall Street CEOs—the same ones who wrecked our economy and destroyed millions of jobs—still strut around Congress, no shame, demanding favors, and acting like we should thank them.” (Elizabeth Warren, Transcript: Elizabeth Warren’s Democratic Convention Speech, published by ABCNews September 5, 2012 at http://abcnews.go.com/Politics/OTUS/transcript-elizabeth-warrens-democratic-convention-speech/story?id=17164726#.UFq_W65kG-Y)  Warren failed to indentify the campaign finance system as the source of political corruption, wasteful spending, and lopsided tax rates.  Later in the speech, she talked about how such problems had been solved in the past.  “About a century ago, when corrosive greed threatened our economy and our way of life, the American people came together under the leadership of Teddy Roosevelt and other progressives, to bring our nation back from the brink.” (Warren, Convention Speech)  However, Warren still avoided describing what the politicians did in the early 1900s, what laws were passed, how corruption was reduced, or why corruption has re-emerged so powerfully in our own time.

           Elizabeth Warren’s clearest statements on solutions to corruption are hidden within attacks against Mitt Romney and the Republican Party.  “Republicans say they don’t believe in government.  Sure they do.  They believe in government to help themselves and their powerful friends.  After all, Mitt Romney’s the guy who said corporations are people.”  This ignores the fact that the Supreme Court has enforced corporate personhood and avoids any clear statements on what she would do to end corporate personhood.  Instead, she moves on to discuss banking fraud, her specialty issue.  “I had an idea for a consumer financial protection agency to stop the rip-offs.  The big banks sure didn’t like it, and they marshaled one of the biggest lobbying forces on earth to destroy the agency before it ever saw the light of day.” (Warren, Convention Speech)  Warren correctly identified bank fraud as a giant problem that could be solved by government oversight and punishment, and even correctly revealed corporate lobbying power as the greatest threat to such protection.  However, she refused to say how we can eliminate corporate lobbying power, instead simply saying that having a good person in the White House is the key to winning such battle for government oversight.

           Are candidates such as Obama, Ryan, and Warren too stupid to understand the central role that corruption has played, and continues to play, in castrating the United States government?  No, these politicians are clearly intelligent and strategic people.  They know the American voter is angry at the government, and that politicians must give voice to that anger to win elections.  The problem is that politicians also need to avoid offending the rich in order to keep getting big donations so they have enough advertising money to get votes.  American politicians therefore play a complex tightrope-walking game of talking about American problems without discussing the role that corruption plays in causing those problems.  They are great tricksters, and their conventions resemble strange political informercials.

           Instead, American voters act stupidly when they are angered by corruption but keep voting for Republicans and Democrats that never clearly say why these problems occur and never take steps to solve these problems when in power.  Other parties exist, many of which have given stronger statements on how to end corruption.  One idea for eliminating corruption is to cut the link between rich campaign donors and political campaigns.  It can be read for free at www.machineryofpolitics.com

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The Poverty of Conservatism

As the United States moves into its presidential election in 2012, voters should review the economic plans proposed by the Republican Party and its leading presidential candidate, Mitt Romney.  The Republican Party laid out its major economic ideas last spring in its “Path to Prosperity,” (which can be downloaded at http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf) while Mitt Romney outlined his ideas in his “Plan for Jobs and Economic Growth” (available at http://mittromney.com/blogs/mitts-view/2011/09/believe-america-mitt-romneys-plan-jobs-and-economic-growth).  Not surprisingly, the two documents give very similar proposals, likely because both are based on “conservative” principles that have failed for over thirty years.  Both propose lowering income and corporate tax rates and cutting government spending down to 20% of Gross Domestic Product (GDP).  However, neither describes what programs it specifically wants to reduce, while also refusing to provide any detailed plans for saving money on Health Insurance, Social Security, Corporate Welfare, or the Military budget.  Their energy policy proposals are so unrealistic that they could lead to a national disaster.  When compared to other economic policies, particularly the “Plan for a Rational Budget” (available for review and free download at http://www.machineryofpolitics.com/budget.html), the Republican and Romney plans fall far short of anything likely to help the U.S. economy or the federal budget.  This only reminds us how desperately we need to reform the corrupt electoral system that continues to tilt government policies toward an inability to solve our major national problems.

Income Tax

The Republican Party’s taxation plan has not changed since 1981: lower tax rates while broadening the tax base, which means eliminating tax loopholes and havens that the rich use to avoid paying taxes.  “[The Path] draws on the commonly held view that the key to pro-growth tax reform is lowering tax rates while broadening the tax base – that is, letting individuals keep more of the money they earn, while getting rid of distortions, loopholes and preferences that divert economic resources from their most efficient uses.”  (The Path to Prosperity: Restoring America’s Promise, page 50)  In essence, Republicans want to eliminate tax loopholes to raise more revenue, but then lower tax rates to get revenue back to where it was with the loopholes.  Mitt Romney entirely agrees, writing that “[W]e need both to lower rates and to broaden the tax base so that taxation becomes an instrument for promoting economic growth.” (Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth, page 40)  These two ideas are very similar to general Republican proposals since the 1980s.

Unfortunately, those 1980s tax reforms benefited the rich far more than anyone else in the United States.  This has been proven by repeated economic studies, most famously by Joseph A. Pechman.  “The inescapable conclusion from these figures is that the well-to-do in our society had very large reductions in tax rates in recent years, while the tax rates at the low and middle income levels have not changed much.  Since the before-tax distribution has become much more unequal in the 1980s, it follows that inequality has increased even more on an after-tax basis.” (Joseph A. Pechman, “The Future of the Income Tax,” published in The American Economic Review, Volume 80, Number 1, March 1990, page 4)  The poverty of conservative economics was already a clear and present reality by 1990.

Broadening the tax base is also unreliable for the long-term.  The loopholes closed in the 1980s were put back into place by corrupted Congresses and presidents since then, so the lower tax rates are the only thing we can expect to survive over time.  Instead of assuming that closing loopholes will have a long-term affect, we should assume that the loopholes will re-emerge due to a corrupt electoral system, and we should set tax rates accordingly.  The independent “Plan for a Rational Budget” does that, and proposes new tax rates that would reduce taxation or keep rates the same for 80% of Americans while increasing taxes on the top 15% of incomes.  This would increase federal revenues over $800 billion per year, a major improvement over the failures of conservative economic ideas.

Corporate Tax

The Republican Path to Prosperity demands a reduction in corporate tax rates: “Encourage economic growth and job creation by lowering the corporate tax rate from 35 percent, which is the highest in the developed world, to a much more competitive 25 percent.” (Path to Prosperity, page 53)  Mitt Romney proposes the exact same rates; Day One of his administration promises a bill that “Reduces the corporate income tax rate to 25 percent.” (Believe in America, page 6).  Both assume that a lower corporate tax rate would encourage growth, and both ignore the fact that corporations in general only pay half of the current 35% rate (for more on how much corporations pay today, see Robert S. McIntyre, Director of Citizens for Tax Justice, “Statement Before the Senate Budget Committee Regarding Business Tax Subsidies Administered by the Internal Revenue Service,” page 1.  The Statement was given March 9, 2011 and published by the Citizens for Tax Justice at http://ctj.org/ctjreports/2011/03/ctj_director_robert_mcinyres_testimony_on_business_tax_subsidies.php).

In reality, the largest American corporations pay an average of about 18% in corporate taxes today.  Lowering the tax rate from 35% to 25% would have little real effect on revenue, unless the 25% is actually collected in full.  It does not appear likely that a Romney Administration would seek to collect more money (25%) in corporate taxes than what the Obama Administration collects today (18%).  However, lowering the official rates to 25% might encourage corporations to pay even less than the 18% they really pay today.  It would be far better for the government to actually collect the full 35%, see what that does to federal revenue, and then make a more rational decision on where to set the tax rates.

Government Spending

The Republican “Path to Prosperity” gives many dire predictions about U.S. government spending over the next few decades and promised to cut that spending to 20% of GDP.  “With responsible spending cuts now and structural reforms of government spending programs going forward, this budget ensures government spending remains on a sustainable path.  Government spending will fall below 20 percent of the economy by 2015.” (Path to Prosperity, page 56)  However, the Republicans never say which programs they will cut or give any major details on how they will reduce government spending overall.  Romney’s claims, and his lack of detail in what he wants to cut, are eerily similar.  “As president, Mitt Romney will immediately move to cut spending and cap it at 20 percent of GDP.  As spending comes under control, he will pursue further cuts that would allow caps to be set even lower so as to guarantee future fiscal stability.”  (Believe in America, page 141)  He offers few details on how to accomplish such spending reduction, outside of suggesting a balanced budget Amendment to the Constitution and a plan to reduce the federal workforce through retirements.  Neither of these fiscal theories proposes ways of saving money; they only set goals for cutting and capping government spending.

The Plan for a Rational Budget, however, proposes to save money by making adjustments to Health Insurance costs and Social Security while cutting unneeded spending on Corporate Welfare and the Military.  These suggestions would immediately balance the federal budget and save about $1 trillion by altering the government systems that Republican proposals almost totally ignore.

Health Insurance

Republicans largely admit that the U.S. health insurance system is a national disaster, and it is a disaster that is costing far too much money.  The Republican proposal is to continue spending nearly the same amount of money, but give that money to individual states to allow the states to create their own individual insurance systems.  They want to “[s]ecure the Medicaid benefit by converting the federal share of Medicaid spending into a block grant tailored to meet each state’s needs, indexed for inflation and population growth.”  (Path to Prosperity, page 39)  Mitt Romney proposes almost the exact same thing: “As president, Romeny will push for the conversion of Medicaid to a block grand administered by the states.” (Believe in America, page 143)  Despite the fact that Republicans constantly accuse President Obama of pushing the United States toward socialism with his demands for health insurance reform in 2009-10, Republicans themselves continue advocating for taxpayer-funded health insurance that is undeniably socialist.  The major difference is that the Republicans want to pass responsibility for administering health insurance off on the states by creating the “block grants.”  The Republican Party, in effect, is socialist without any solutions on how to run the system to make it work well.

The best answer, given in the Plan for a Rational Budget and advocated by many consumer and physician groups, is to convert to a “single-payer,” universal health-insurance system modeled on the Spanish, Japanese, or Italian systems.  Converting to such universal coverage would actually save the United States budget over $300 billion per year while covering all people in the U.S. with far better care.

Social Security

The Republicans’ lack of solutions for Social Security is even more striking.  The Path to Prosperity gives no suggestions for stabilizing Social Security for the short- or long-term future.  It only demands the President “to put forward specific ideas on fixing Social Security” and for Congress “to offer legislation to ensure the sustainable solvency of this critical program.” (Path to Prosperity, pages 48-49)  Romney’s ideas are hardly more detailed.  He vaguely offers “a number of options that can be pursued to keep the system solvent—from raising the eligibility age to changing the way benefits are indexed to inflation for high-income retirees.  One option that should not on the table is raisin the payroll tax or expanding the base of income to which the tax is applied.” (Believe in America, page 142)  Romney is only willing to take a strong stand against one policy: broadening the base of income subject to taxation.  Instead, he demands to avoid the one policy proposal that would actually solve the long-term funding problem because he does not want people making over $106,000 per year to pay any more taxes.  However, raising the payroll tax limit from $106,000 to $200,000 per year would easily fund Social Security until the 2080s, as the Rational Budget clearly proves.  The Republican lack of leadership in such a fundamental part of American society is shocking, and that shock is only surpassed by their refusal to even consider the best solutions.

Corporate Welfare

The Republican refusal to address Corporate Welfare is yet another glaring gap in their fiscal proposals.  The non-profit Citizens for Tax Justice estimated that U.S. corporations were given at least $365 billion in subsidies in 2011.  (Robert S. McIntyre, “Statement Before the Senate Budget Committee,” page 2)  The Republican Path to Prosperity merely complains about political favoritism in the giving of such funds, while Mitt Romney does not discuss Corporate Welfare at all!  Most companies that receive Corporate Welfare do not actually need the money to run their businesses; instead, they are simply favored by politicians that took campaign donations from those companies.  Corporate Welfare is clearly a corrupt system and should be targeted for elimination if Americans are serious about balancing the budget.  Eliminating 90% of that $365 billion in subsidies would save the United States Budget at least $329 billion per year in spending.  The Plan for a Rational Budget proposes to cut that much waste from the budget.

Military Spending

Republicans are equally silent on the need to cut military spending that has grown out of control.  Their Path to Prosperity wants to keep military budget at “$692.5 billion for national defense spending in Fiscal Year 2012, an amount that is consistent with American’s military goals and strategies.”  (Path to Prosperity, page 28)  Republicans want to later cut inefficient spending by $178 billion per year, but reinvest $100 billion of that into “combat capabilities,” so that the budget will only save $78 billion per year.  Such insignificant savings are an insult to anybody that has studied the long-term history of U.S. military spending, and such a tiny amount will only cut the U.S. budget deficit by about 7%.  Mitt Romney’s plan could only be more short-sighted if he refused to even mention the need to reduce military spending . . . which he fulfills by refusing to discuss military spending at all in his economic plan.

The Rational Budget, though, demands that the United States only keep a military strong enough to defend its own territory.  This can be accomplished by spending as much on our military as the next two largest powers combined, which would continue to make the U.S. military the largest and best-funded in the world.  We can defend U.S. territory, and probably most important allies, even if we reduce military spending by virtually half in order to save $384 billion per year.  That is far more than the Republican plan to save a paltry $78 billion per year, and will go much further toward solving the U.S. deficit.

Energy

Of course, the major reason the U.S. spends so much money on its military today is that it relies on foreign oil sources for energy.  In order to control those sources, the U.S. military has invaded, conquered, corrupted, or otherwise pressured foreign governments to sell oil to the U.S. at prices below normal market value.  The American obsession with controlling foreign oil is one of the biggest factors bankrupting the government.  The Republican Path to Prosperity implies its continuing support for this fiscal madness by demanding that military spending stay constant in order to fulfill its foreign “goals and strategies.”  Republicans want the American economy to continue its reliance on oil and natural gas, most of which does not sit on U.S. territory.  Mitt Romney completely agrees with reinforcing the status quo.  His major energy proposals are “significant regulatory reform, support for increased production, and a government that focuses on funding basic research instead of chasing fads and picking winners.” (Believe in America, page 90)

The Republican/Romney strategy for U.S. oil independence is to drill for more oil in U.S. territory.  This is a weak plan because the U.S. uses 25% of world oil but has at most 5% of world oil reserves in its own territory.  Therefore, even if the U.S. drilled every drop of oil out of its land, it would only produce one-fifth of what its economy actually uses.  The U.S. must find, fund, and build alternative energy sources if its economy is to survive the long-term future.  Many studies have shown that rebuilding the electricity grid to focus on wind, water, and solar power would produce more than enough electricity for predicted future usage rates.  (Mark Z. Jacobson and Mark A. Delucchi, “A Path to Sustainable Energy by 2030,” published in Scientific American, November 2009, page 60)  The U.S. could convert its current gasoline automobile fleet to a combination of hydrogen and electric vehicles to break the current reliance on oil.  U.S. plastic production could largely be replaced by green plastics and production methods.  The U.S. can break its reliance on oil, convert to clean and renewable energy sources, stop polluting its territory and population, and break its ridiculously high amounts of military spending within the next few decades.  The initial investment would carry a high price tag, but would easily be worth the spending in the long run and the overwhelming need for new infrastructure would create an employment boom.

Sadly, the Republican Path to Prosperity ignores all these factors and refuses to make the national investment.  Its only major statements on green technology are to demand that the U.S. only fund high-speed intercity rail lines when “they can be established as self-supporting commercial services.” (Path to Prosperity, page 33)  In effect, Republicans only want to build efficient public transportation when some company has already built them and proven that they are profitable.  Mitt Romney also falls into the trap of declaring energy usefulness only according to profit.

[W]ind and solar power, two of the most ballyhooed forms of alternative fuel, remain sharply uncompetitive on their own with conventional resources such as oil and natural gas in most applications. . . .  As for job creation, studies show that “green” jobs might actually hurt employment more than they help it.  Green energy is capital-intensive and tends to displace labor. (Believe in America, page 90)

Romney wants to focus on oil and natural gas production because they are more profitable today, even though those resources are becoming increasingly scarce, which means they will be more costly to develop in the future.  The growing cost of oil and gas, combined with the technology leaps in green energy that will reduce their cost, will flip current costs in the next ten years, making green technology half as costly as “conventional resources” by 2020. (“Path to Sustainable Energy by 2030,” page 64)  Romney ignores these facts, and instead wants to focus on the dirty, dangerous, and destructive oil economy.  Anyone looking for evidence of those facts can consider the effects of invading Iraq, attempting to conquer Afghanistan, and the inability to stop the BP oil volcano in the Gulf of Mexico in 2010.  If the definition of insanity is to do the same thing over and over again but expect different results, the Republican/Romney plans for energy production rely on a short-sightedness that is truly insane.

The Rational Budget combines a large reduction in military spending with a smaller investment in green technology resources.  Even the most skeptical of environmentalists argues that we can solve the energy and climate problems by investing only $100 billion per year in research (Bjorn Lomborg, editor, Smart Solutions to Climate Change: Comparing Costs and Benefits.  Cambridge: Cambridge University Press, 2010, page 396).  Other scientists argue that we can build an entirely clean, renewable, and safe electricity grid for the U.S. by investing only $17 trillion over two decades.  This would free the U.S. from foreign wars based on the need for increasingly rare oil reserves, from the pollution that currently clogs our major cities and rural communities, and from the high energy prices that Americans pay today.  After considering these possibilities, we realize that Republicans like Romney can only talk about continuing the status-quo because they refuse to discuss or debate anything else.

Conclusions

The Republican Path to Prosperity and Mitt Romney’s Plan for Jobs and Economic Growth reveal a disturbing refusal to admit past mistakes and make desperately needed changes.  They refuse to increase taxes on the wealthiest Americans to help reduce the national deficit.  In fact, they want to lower taxes on the rich while forcing the rest of us to pay, an idea that has proved disastrous since George W. Bush and the Republican Party cut taxes for the rich in 2002.  Today’s Republicans want to go a step further by reducing the corporate income tax, which could likely lead to further fiscal disasters.  They want to balance this by cutting and capping government spending, but they refuse to specify exactly what programs they want to cut.

Strangely, their ideas only grow vaguer from there.  Republicans in general, and Romney in particular, offer zero details on how to fix health insurance, Social Security, corporate welfare, or military spending for the long-term.  They refuse to even discuss the details of these programs, just as they refuse to discuss the details of renewable energy.  They love to debate some of the short-term costs, but never the much more impressive and important long-term benefits of transitioning to a renewable, clean electricity grid.  As American voters turn away from their ideas for economic investment and growth, the public should be reminded that the Plan for a Rational Budget can be read and downloaded for free at http://www.machineryofpolitics.com/budget.html!  Unfortunately, many of these ideas have little chance of becoming real policy until we change our electoral system to eliminate the corruption that keeps these ideas from being considered in Washington, D.C.

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