Posted Wednesday, Oct. 17, 2012, at 3:33 PM
Obama and Romney shake hands at the end of the second debate
Photo by TIMOTHY A. CLARY/AFP/Getty Images.
Moderator Candy Crowley's best efforts to maintain order couldn't survive the testosterone battle last night. It was not only great TV, but a superb debate. The key takeaways: Barack Obama is back and moderate Mitt Romney can't withstand careful scrutiny.
While Romney's economic agenda has a superficial appeal to a lot of folks who are still suffering from the aftermath of the 2008 cataclysm and the evisceration of middle-class wealth that has been ongoing for over two decades, his plan is old wine in new bottles, flawed conceptually and arithmetically. Romney plays on the discontent of a public desperate for better economic times, but he offers up merely tax cuts and a passive government when much more is needed.
The auto bailout disagreement perfectly encapsulates the intellectual conflict between the two candidates. The results of the experiment could not be more telling: The bailout really did save an entire sector, and a million jobs, while Romney's claim that there was an alternative is simply false. There was no private financing available. None. The capital markets were frozen and had the government not stepped in, the entire sector would have shut down. Romney's one-dimensional view of when government must intervene is belied by the reality of what happened. Let Ohio take note.
Second, Romney's tax plan really doesn't add up. A $5 trillion hole can't be filled by the less than a trillion raised by capping deductions, and his overarching claims are simply inconsistent. He says the plan is revenue neutral; the rich will still pay the same percentage of the tax bill that they have been paying, and the middle class is getting a tax cut. Those pieces don't add up. It is simple arithmetic.
Third, Romney tried to capitalize on the festering anxiety about the tragedy at Benghazi, but has no answers or ideas when it comes to Libya, Syria, or Iran. Bellicose language does not a foreign policy make.
Finally, with respect to guns, both candidates failed us. A simple "I have caved to the NRA and am doing what I know to be wrong," would have been much better than their bobs and weaves.
I am still confident that the resurgent president will win this re-election campaign. But I hope that between Nov. 6 and Jan. 20 somebody on his staff comes up with a second-term agenda. We haven't heard it yet, but whatever they cobble together with will surely be far better than anything the Romney camp has conjured.
Posted Tuesday, Oct. 16, 2012, at 12:24 PM
Daniel Tarullo, a Federal Reserve Board governor, speaks in January in Washington
Photo by Alex Wong/Getty Images.
There is a funny convergence, not sufficiently remarked upon, in recent thinking about bank regulation. It began with Mitt Romney’s rather surprising attack on Dodd-Frank during the first debate. Dodd-Frank, he said, was too kind to the major financial institutions because it essentially provided a federal guarantee. This swipe at Dodd-Frank was viewed initially, and possibly properly, as merely a part of Romney’s clever political jujitsu: moving to the middle and even outflanking the president from the left on the banking issue.
Whatever the motive, Romney touched a nerve and channeled the populist sentiment within the Republican Party that has always been hostile to the major banks and is willing to see them capped with respect to both size and power. If the Republicans really want simplicity in banking regulation, then a simple cap on size might give them an opportunity to set out an alternative to Dodd-Frank, which they love to critique.
More recently, Federal Reserve governor Daniel Tarullo has raised the possibility that nondeposit liabilities of banks should be capped at a specific percentage of GDP. His point is rather clear: We haven’t yet solved the problem of “too big to fail,” and an explicit set of boundaries might be necessary. And, from the more traditional progressive world, Sen. Sherrod Brown, D-Ohio, has been pushing for a cap on bank size for some time.
These three strands—the conservative, the technocratic, and the progressive—are now converging on a common conclusion: Big is not better in banking; the risk of scale has still not been properly addressed; and some more structural approach to the issue may be appropriate.
None of this suggests that there will be movement any time soon on the issue. With Dodd-Frank still being implemented and myriad pressing issues awaiting both the lame-duck Congress and the next president, revisiting this issue is not on anyone’s to-do list. Yet the terms of engagement have perhaps shifted. The idea of capping size was viewed as outside the range of polite conversation before the crash. Even before Dodd-Frank, raising explicit size limits that would require downsizing was never a real option.
Small might eliminate some systemic issues in banking, but it will not necessarily solve every problem in banking. As opponents of size limits properly love to point out, Lehman Brothers was systemically dangerous even though it was not big by some standards. But if the issues of scale and too big to fail are still challenging us, at least the range of options is growing.
Posted Monday, Oct. 15, 2012, at 4:56 PM
Photograph by Chip Somodevilla/Getty Images.
Last week it was timeshare magnate David Siegel whining about his taxes and sending a letter to his employees threatening to downsize if President Obama is re-elected.
Now it’s the Koch brothers following suit: sending a letter to all 45,000 employees of Georgia Pacific, the Koch-owned paper company, listing the parade of horribles that will descend on them if the president is returned to office.
We all know the Koch brothers as super PAC kings, happy to use their vast wealth to proselytize in the political arena. And I don't begrudge them their full-throated exercise of their First Amendment rights, even in the form of letters to their employees.
But it would be nice if the wild claims of the Koch brothers were tethered to facts. It is a sad reality that the wild assertions of those who have a deep-seated animus for the president are taken as seriously as those long-debunked birther claims once were. (Think former GE CEO Jack Welch and his conspiracy theory about the latest job numbers.)
The Koch brothers warn that the president wants to subsidize a few favored cronies to the tune of several hundred billion dollars. What in the Dickens are they talking about? Are they still smarting over the auto bailout that rescued an entire sector, saved an estimated 1 million jobs, and stands in marked contrast to the Romney approach of letting the industry go bankrupt? Or maybe it’s the fact that the oil and gas industry, in which the Koch brothers are major players, did not receive the same federal assistance as the auto sector.
Here's another so-called warning from the Kochs: They say the president is placing "unprecedented regulatory burdens" on business. Such as what exactly? Dodd-Frank? Some simple principles to prevent another cataclysm such as the one we lived through? Or have Charles and David Koch forgotten the near-depression caused by the financial sector's grotesque avarice?
How about their claim that the president is "excessively hindering free trade"? Hindering free trade by doing what Romney has been calling for for years—bringing unfair trade charges against China?
What is their evidence or proof? None—not even a scintilla.
And finally, they raise the specter of "runaway inflation." Really? Interest rates are at historic lows because there is insufficient demand within the system. Many economists are asking the Fed to ignite inflation on the theory that it might spark consumption. The simple fact is that there is no meaningful evidence of inflation on the horizon.
I wish the Koch Brothers would pay attention to what the great Sen. Daniel Patrick Moynihan so wisely once said: “You are entitled to your opinion. But you are not entitled to your own facts.”
Posted Thursday, Oct. 11, 2012, at 1:08 PM
Photograph by Lauren Greenfield/Magnolia Pictures.
That's my message for David Siegel, the founder and CEO of Westgate Resorts (and the subject of the recent documentary The Queen of Versailles). He is one of the largest resort developers in the world, and I usually have enormous respect for him. Siegel started a business out of his garage and created a timeshare company that operates more than 10,000 units at 28 resorts. For that I congratulate him.
But on Monday, Siegel sent the thousands of employees at Westgate a long letter saying that if Barack Obama is re-elected, Siegel might be forced to lay many of them off.
Mind you, he says he's not threatening anyone, or telling them for whom to vote.
But, he adds, "If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company."
The crux of his complaint? He thinks he is paying too much in taxes, that the 1 percent are being unfairly burdened. "They want you to believe that it somehow makes sense to take more from those who create wealth and give it to those who do not, and somehow our economy will improve. They don't want you to know that the '1%,’ as they like to label us, pay more than 31% of all the taxes in this country."
But he is dead wrong. The top 1 percent paid 21.6 percent of the taxes in 2011. And here is the key: They earned 21 percent of all the income! The middle 20 percent earned 11.4 percent of the income, and paid 10.3 percent of the taxes, and the bottom 20 percent earned only 3.4 percent of the income and paid 2.1 percent of the taxes. In the end, it all pretty much evens out: Americans pay the same percentage of the taxes as they earn of the income. Sounds pretty darn fair to me, David. No redistribution there—just carrying one's fair share.
Yet Siegel says he's so frustrated that his motivation to work may be destroyed altogether, because of the current system. "If that happens," he says, "you can find me in the Caribbean sitting on the beach, under a palm tree, retired, and with no employees to worry about."
He blames it all on what he calls "a system that penalizes the productive and gives to the unproductive." But again, he is wrong. Government has to take from all for the good of all—including for the good of Siegel himself.
Just one example: Westgate's property at the Smoky Mountain Resort and Spa in Gatlinburg, Tenn. People go there and pay Siegel a whole lot of money so they can appreciate the beauty of Great Smoky Mountains National Park, the first national park for which the federal government spent its own money to buy land.
No national park, no big resort that people will pay for. You also wouldn't want to build a resort there without reliable public fire services. Or public roads to enable people get there. Or a safe water supply.
Here's the point, David: This country is a community, in which we have to rely on each other. We all give something, and we all get something back. As President Obama said about so many of the things that make it possible to succeed in business here, "You didn't build that."
He was right.
Posted Tuesday, Oct. 9, 2012, at 5:20 PM
Vapid Mitt Romney returned with a foreign policy speech that was all hat, no cattle. Behind the bellicose language hid nary a meaningful policy suggestion. It was merely a series of bromides, designed to make him look tougher than the incumbent.
But here is an ironic twist. Gov. Romney repeatedly praised Gen. George Marshall—the former secretary of state and secretary of defense and a graduate of VMI, where Romney delivered his speech—for the vision, wisdom, and leadership that gave birth to the eponymous Marshall plan. We all know that the bold series of expenditures by the United States, $13 billion during the period from 1948 to 1951, and another $13 billion spent by the U.S. in direct aid to Europe between the end of the war and the initiation of the Marshall plan, rebuilt Western Europe. What was in total shambles at the end of the war became a vibrant and renewed economy that soon joined us in NATO and became, today, in aggregate, the largest economy in the world.
Why is Romney’s praise for the Marshall Plan odd?
What was the Marshall plan? It was the 2009 stimulus in a different name at a different time—and large enough to do the job. How can Mitt Romney praise the Marshall plan if he is so disdainful of the stimulus? If the Keynesianism of the Marshall plan was so necessary and brilliant, what was wrong with the same concept in 2009? The Marshall Plan was about 2 percent of our GDP. The stimulus, excluding the tax portion, was just a bit more. Given the $2 trillion dollars in economic output lost during the 2008 crisis, the $787 billion stimulus should have been even larger.
Romney is smart enough to understand that just as the Marshall Plan was critical to the recovery of Europe, so too the stimulus was critical to our bouncing back from the depths of the 2008 economic crisis. If Romney had a better plan for what to do back then, I would sure love to hear it.
Posted Monday, Oct. 8, 2012, at 3:48 PM
Photo by Jason Merritt/Getty Images.
Thinking about something other than the presidential race will probably be a healthy emotional break. Last week on my Current TV show, there were two separate segments about justice gone fundamentally awry and remedied in the end only by the perseverance of courageous lawyers, who time and again stood up against the long odds of overturning a conviction, sustained by the powerful sense that justice had been violated.
Damien Echols of the West Memphis Three told of the horrors of spending 18 years on death row, wrongly convicted because of a town’s anger and need for vengeance. And then Vanessa Potkin from the Innocence Project recounted how that organization’s efforts have now freed 300 inmates using the power of DNA evidence.
What can we learn from Echols and Potkin? First, our criminal justice system is fallible. We know it, even though we don't like to admit it. It is fallible despite the best efforts of most within it to do justice. And this fallibility is, at the end of the day, the most compelling, persuasive, and winning argument against a death penalty.
Second, technology helps. Technology is neutral: It convicts and finds innocents. We must make it a regularized part of the system, giving defendants access to DNA testing and evidence whenever it might be relevant.
Third, as the Echols case makes so clear, coerced interrogations continue to be the bane of fair trials. Here too, technology has an answer. As one who was a prosecutor for many years, I can tell you that having a tape recording of interrogations would help everybody. It would make clear if there had been improper pressure exerted on a defendant or witness, and it would also protect the interrogating officer from false claims that such pressure had been brought to bear. The audio or video would record what had actually had been said, eliminating so many of the arguments on both sides about coercion.
The cost of recording interrogations is too insignificant to worry about. Every cell phone practically has the capacity to serve as a recorder. Jurisdictions as different as the state of Montana and the city of Los Angeles have in recent years moved to require recordings, and the results have been almost entirely positive, for prosecutors, for defendants, for the courts, for justice.
Posted Friday, Oct. 5, 2012, at 3:47 PM
Photograph by Joe Raedle/Getty Images.
Anything but good news! That could be the mantra of the Republican Party right now—they’re hoping for gloom and doom from now until Nov. 6. Keep the flow of negative news that will reinforce the desire, they desperately hope, for Mitt's magic wand to replace the hand of President Obama at the tiller of the ship of state.
So it must have been devastating for them to see a good jobs report this morning—we just had the 31st straight month of private sector job growth, bringing the total number of private sector jobs created under the president to more 4.6 million, and the unemployment rate dropped by three-tenths of a point to 7.8 percent! The rate is now below where it was when Obama took over as the George W. Bush cataclysm was gaining steam. Shouldn't we all be overjoyed?
Well, not if you are a hyper-partisan voice of the corporate plutocracy like Jack Welch. The former CEO of GE found himself squarely in the first stage of grief—denial—and tweeted the following message: "unbelievable jobs numbers …these Chicago guys will do anything … can't debate so change numbers."
Shame on you, Jack. The notion that the Department of Labor plays games with these numbers for political reasons is silly, ludicrous, and insulting to government workers who have reported new figures—good and bad—faithfully for many decades. It strikes me, Jack, that there have been more cases of corporate gamesmanship with financial numbers in the past few years than cases in which the government wasn't honest. In fact, didn't your company, GE, have an accounting issue that led to a big SEC settlement not so long ago? So, Jack, now that you have made this outlandish claim, where is your proof—your evidence, any facts—to substantiate your assertion? Or is it just a partisan screed? You might recall that when my office charged GE—then under your leadership—with a range of impropriety, we had the proof, and a judge forced your company to take out full-page ads admitting your wrongdoing. The key, Jack? Evidence and facts.
But more importantly, why should anybody be surprised that we are finally digging out of the trough? I know, the corporate titans want to believe that until their taxes are cut to zero, nothing good will happen. But here's the thing. Over the past four years, the steady effort at a Keynesian stimulus, monetary policy that has cut interest rates to near zero, and smart government investments in the auto sector and yes, even in green energy, have begun to have an impact. So while Mitt Romney thinks he can solve our fiscal problems by firing Big Bird, the White House has actually begun solving our problems by focusing on a jobs agenda.
Posted Thursday, Oct. 4, 2012, at 6:00 PM
Photo by Chip Somodevilla/Getty Images.
Too much has been said already about the debate, but let me add this short thought. What was lacking most fundamentally from the president was passion—passion for the job he has done, the accomplishments he can fairly claim, and the belief that the tough decisions he has made are correct for the American people.
There is a difference between being passionate in defense of the job he’s done and being aggressive in attacking his opponent. At no point did the Barack Obama turn to Mitt Romney and say:
Quite frankly sir, from the comfort of the economic recovery my policies have begun to create, you are now second-guessing the tough choices I made that have brought this nation back from the precipice of economic collapse—an economic collapse that was created by the very policies you want to embrace once again, a precipice that was far deeper than anyone appreciated when I entered the door of the White House, an economic threat that was the direct result of the disregard my predecessor showed for the warnings he was given by those who understood the cataclysm that would result from his policies—and from your policies. So, sir, while I will not claim that your comments about 47 percent of the American public merely wanting to be dependent upon government reflects a callous disregard for these folks on your part, I do suggest that it reflects a fundamental misunderstanding of the American people, of how our nation was built, of how we have all reached for a helping hand at some point, how we all strive to succeed, how we are not all born with the financial wherewithal to find that success, and how those who have succeeded have always recognized the mutuality of our obligations to one another. We see the world very differently—and the choice we present to the American public could not be more dramatic.
Even though I can imagine that the president was told to avoid being aggressive, he was unfortunately stripped of the passion that the public always wants to see in a leader. Here's hoping he finds it by the next debate.
Posted Wednesday, Oct. 3, 2012, at 7:10 PM
Eliot Spitzer (left) and Glenn Beck in New York City in September
Photo by Kris Connor/Getty Images for Dish Network.
Tuesday night at the Fillmore Auditorium in Denver, I had the unique experience of debating Glenn Beck. This was like wading into the belly of the beast. Of the several hundred people in the audience, a not insubstantial number were devout Beck fans, many of them devoted members of the Tea Party. What I realized, talking to them and listening to and engaging with Beck both over the course of the formal debate and before and afterward, was that these folks operate in a fact-free zone.
The passion they summon for their anti-government rhetoric is based on a strong emotional need to channel a visceral anger against the state of the world—and the government has become the perfect target for their ire. What transforms their anti-government views into a form of bizarre patriotism is the way they turn the founders of the nation into paragons of virtue. They say that if only we had remained true to the virtues of the founders, things today would be all right.
I tried to counter their views in three ways. First, by disagreeing with their underlying and pervasive pessimism about the state of the world with what I think is a well-founded view that things, when viewed in the grand arc of history, are actually pretty good. At an ideological level, we are winning the larger global battles, and even if things are tough economically now, it is primarily because a greater and greater percentage of the world is participating in a market-based capitalist system that will create economic growth and relative peace in the long run. Second, by using facts, I tried to show that their attacks on President Obama’s policies are simply wrong—their rather bizarre libertarian views about the role of government and the economy simply don’t hold up under the slightest scrutiny. And third, I tried to show how our current politics and even the individual mandate for health insurance do in fact fit neatly into the vision of the nation as embodied by the Founding Fathers and our Constitution.
The result, quite frankly, was to convince not a single member of their camp. Perhaps that is not surprising, given the rather fractured and polarized nature of our politics, but it was troubling to me. Facts simply bounced off those who are in need of the psychological support offered by the Beckian world view.
Beck’s arguments wandered from the bizarre to the irrelevant. In his camp, random quotations from the Founding Fathers pass as deep historical knowledge, and absurd claims about the role of the government passes as an ideological construct. Just about all we could agree on: Thank goodness for the First Amendment!
Posted Tuesday, Oct. 2, 2012, at 4:42 PM
Our nation is divided in two. Not red vs. blue, not North vs. South, not NASCAR vs. NFL. I mean swing state vs. non-swing state. Life in one of these Americas has almost nothing to do with life in the other. Having been pulled to Colorado—a swing state—to participate in a debate with Glenn Beck tonight, I am getting to experience what it feels like to have the presidential race overrun all media outlets. The campaign ads are predictable, vapid, and useless.
But in the midst of the clutter, one amazing ad cut through. It is called "Demand a Plan" and is a simple plea by Stephen Barton, who was shot in the face and neck during the Aurora attack, to confront the plague of gun violence. The presidential candidates will be here tomorrow, just miles away from the scene of that incident. Barton asks us to demand that they explain their views on gun violence. As he points out, he was one of the lucky ones who survived. There will be 48,000 deaths by gun violence over the next president's term if the current trend continues—enough victims to fill more than 200 movie theaters.
Two thoughts: Why hasn't the string of gun violence generated continuing pressure to push back against the NRA? And second, even though the topics of the debate have been carefully pre-screened by the candidates, why doesn't the moderator, Jim Lehrer, throw a curve ball at the candidates? He should ask them directly what they would say to the victims of the Aurora shooting. They owe an answer to the victims, especially here in Colorado.