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  • January 23, 2015
    Republicans Outsource U.S. Foreign Policy to Israel's Netanyahu

    Less than one month ago, Republican Senator and possible 2016 presidential candidate Lindsey Graham (R-SC) traveled to Jerusalem to deliver a simple message to Israeli Prime Minister Benjamin Netanyahu: "the Congress will follow your lead." Follow Bibi's lead, that is, on policy towards Iran. And now, just as the U.S. and its international partners enter the final, difficult stage of negotiations to prevent Tehran's development of nuclear weapons, Graham and his GOP allies are inviting Netanyahu to address Congress for a third time to blow up any agreement, and with it, perhaps the entire region.

    Last week, UK Prime Minister David Cameron, leader of America's closest and most dependable ally, used his joint press conference in Washington to support President Obama's call for Congressional restraint. "It's the opinion of the United Kingdom that further sanctions, or further threat of sanctions, at this point won't actually help," Cameron said, warning passage of the Kirk-Menendez sanctions bill now "could actually fracture" the international coalition now in talks with Tehran.

    Nevertheless, House Speaker John Boehner gave the President of the United States the finger and declared Israel's PM would be invited to dictate America's foreign and national security policy:

    "You may have seen that on Friday, the president warned us not to move ahead with sanctions on Iran, a state sponsor of terror," Boehner said in the Republican meeting. "His exact message to us was, 'Hold your fire.' He expects us to stand idly by and do nothing while he cuts a bad deal with Iran. Two words: 'Hell no!' ... We're going to do no such thing.

    "I am specifically asking him to address Congress on the threats posed by radical Islam and Iran," Boehner said in the meeting. "America and Israel have always stood together in shared cause and common ideals, and now we must rise to the moment again. Let's send a clear message to the White House -- and the world -- about our commitment to Israel and our allies."

    If only that commitment ran both ways. Boehner's announcement comes just days after Israel turned to the Obama administration to block Palestinian moves on statehood and war crimes at the United Nations and the international Criminal Court. Yet Bibi, who says "the U.S. has no better friend than Israel," has repeatedly embarrassed the U.S. over settlement, expansion in Jerusalem and the John Kerry's peace process. It's no wonder Israeli settlers pelted American officials with stones during a recent West Bank visit. (Who's calling who "messianic?") And it's entirely understandable why Obama administration officials would called Netanyahu "chickenshit."

    Nevertheless, Republicans have made it clear for years that they take their marching orders from Likud and its far right allies. During the 2012 campaign, GOP presidential nominee Mitt Romney said of his old buddy Bibi, "We can almost speak in shorthand...We share common experiences and have a perspective and underpinning which is similar." President Romney, he made clear, would turn to his former Boston Consulting Group colleague to set American policy in the region:

    "I've also known Bibi Netanyahu for a long time. We worked together at Boston Consulting Group. And the last thing Bibi Netanyahu needs to have is not just a person who's an historian, but somebody who is also running for president of the United States, stand up and say things that create extraordinary tumult in his neighborhood...Before I made a statement of that nature, I'd get on the phone to my friend Bibi Netanyahu and say, 'Would it help if I said this? What would you like me to do?'"

    No doubt, what Bibi would want him to do is precisely what Governor Romney promised American voters: "The actions that I will take will be actions recommended and supported by Israeli leaders." And as he put it on September 20, 2012, Romney's red line towards the Iranian nuclear program wouldn't have been the one set by President Obama, but the one drawn by Prime Minister Netanyahu:

    "With regards to the red line, I would image [sic] Prime Minister Netanyahu is referring to a red line over which if Iran crossed it would take military action. And for me, it is unacceptable or Iran to have the capability of building a nuclear weapon, which they could use in the Middle East or elsewhere. So for me, the red line is nuclear capability. We do not want them to have the capacity of building a bomb that threatens ourselves, our friends, and the world."

    But the world crossed that point years ago. The P5+1 negotiations now underway are hoping to reach an agreement that would limit Tehran's ability to quickly manufacture a nuclear device by limiting its stockpiles of enriched uranium and the capacity of its nuclear infrastructure to produce more. American and Iranian officials will resume talks in Geneva next week, with the hope of reaching a framework in March for a final agreement by the June 30 deadline.

    But in Jerusalem, Benjamin Netanyahu wants carte blanche to strike Iran's nuclear facilities when and if he deems it necessary. And the draft of the Kirk-Menendez bill that would automatically impose new sanctions on Iran if the nuclear talks fail also gives Bibi that and more. Even as the U.S. and Iran are helping their common ally Iraq fight the Islamic State, the legislation's commitment to support an Israeli preventive strike against Iranian nuclear facilities that almost ensures the Washington and Tehran will come to blows. As Section 2b, part 5 of the draft mandates:

    If the Government of Israel is compelled to take military action in legitimate self-defense against Iran's nuclear weapon program, the United States Government should stand with Israel and provide, in accordance with the law of the United States and the constitutional responsibility of Congress to authorize the use of military force, diplomatic, military, and economic support to the Government of Israel in its defense of its territory, people, and existence.

    Now, the lack of an explicit AUMF in the "Nuclear Weapon Free Iran Act" doesn't mean its supporters aren't giving Prime Minister Benjamin Netanyahu de facto carte blanche to hit Iranian nuclear facilities. Senators Graham, Rubio and their GOP allies have stated their support for such an authorization. Regardless, the ensuing Iranian retaliation against Israeli and American interests would almost certainly trigger the commitment of U.S. forces anyway.

    Even if the Israelis alone launched a strike against Iran's atomic sites, Tehran will almost certainly hit back against U.S. targets in the Straits of Hormuz, in the region, possibly in Europe and even potentially in the American homeland. Israel would face certain retaliation from Hezbollah rockets launched from Lebanon and Hamas missiles raining down from Gaza.

    That's why former Bush Defense Secretary Bob Gates and CIA head Michael Hayden raising the alarms about the "disastrous" impact of the supposedly surgical strikes against the Ayatollah's nuclear infrastructure. As the New York Times reported in March 2012, "A classified war simulation held this month to assess the repercussions of an Israeli attack on Iran forecasts that the strike would lead to a wider regional war, which could draw in the United States and leave hundreds of Americans dead, according to American officials." And that September, a bipartisan group of U.S. foreign policy leaders including Brent Scowcroft, retired Admiral William Fallon, former Republican Senator (now Obama Pentagon chief) Chuck Hagel, retired General Anthony Zinni and former Ambassador Thomas Pickering concluded that American attacks with the objective of "ensuring that Iran never acquires a nuclear bomb" would "need to conduct a significantly expanded air and sea war over a prolonged period of time, likely several years." (Accomplishing regime change, the authors noted, would mean an occupation of Iran requiring a "commitment of resources and personnel greater than what the U.S. has expended over the past 10 years in the Iraq and Afghanistan wars combined.") The anticipated blowback?

    Serious costs to U.S. interests would also be felt over the longer term, we believe, with problematic consequences for global and regional stability, including economic stability. A dynamic of escalation, action, and counteraction could produce serious unintended consequences that would significantly increase all of these costs and lead, potentially, to all-out regional war.

    If this all sounds like the hypothetical scenarios of a bunch of doves in the Pentagon and the State Department, it is worth recalling the America reaction to the 1996 bombing of the Khobar Towers in Saudi Arabia which killed 19 U.S. servicemen and wounded hundreds of others. As former Clinton and Bush counter-terrorism chief Richard Clarke recounted in his book, Against All Enemies, President Clinton and the Joint Chiefs contemplated a massive U.S. invasion of Iran in response to the involvement of its agents:

    In our meeting with the Pentagon in 1996, Shali was talking about al-out war. The military had a plan for almost any contingency. The plan on the shelf for war with Iran looked like it had been drawn up by Eisenhower. Several groups of Army and Marine divisions would sweep across the country over the course of several months.

    (Ultimately, President Clinton opted against the invasion of Iran, in part because of the difficulty in proving the U.S. intelligence case against Tehran to the international community. In the end, the U.S. launched a large-scale covert action campaign against Iranian intelligence assets worldwide. Apparently, the message was received with zero distortion; Iran has not targeted United States interests since.)

    The Pentagon's 2012 war-gaming in a simulation called "Internal Look" served to reinforce for U.S. military officials "the unpredictable and uncontrollable nature of a strike by Israel, and a counterstrike by Iran." As for the impact on the global economy, in November, the Federation of American Scientists estimated that a U.S. campaign of air strikes would cost $700 billion; a full-scale invasion could have a total impact of $1.7 trillion.

    During the 2012 presidential campaign, long-time Middle East diplomat Martin Indyk expressed concern over Mitt Romney's proclamation that there should be "no daylight" between the President of the United States and Israel. Mitt Romney's statements about his BFF Bibi, Indyk warned, suggest that he would "subcontract Middle East policy to Israel," adding "that, of course, would be inappropriate." But now, Congressional Republicans seem content to do just that. The American decision about war and peace shouldn't be made in Washington, but in Jerusalem. And if he survives the elections in March, Israeli Prime Minister Benjamin Netanyahu will be the one making it.

    Perrspective 10:15 AM | Permalink | Comments (0) | Share

    January 20, 2015
    Capital Gains Tax Rates Must Go Up to Lower Income Inequality

    On the eve of President Obama's 2015 State of the Union address, we have a rare bipartisan consensus on one of the greatest challenges facing the United States. Record-high income equality, President Obama, Jeb Bush and Mitt Romney all agree, presents a threat to the American Dream and American democracy. The ever-widening gap between the rich and everyone else is a disease that puts the future of the middle class at risk.

    Now, the parties disagree on their diagnosis and prescriptions for the battling the scourge of income inequality. But no serious plan to counter the dramatic upward redistribution of wealth underway since the early 1980's can ignore one of its most important causes. As it turns out, historically low capital gains tax rates haven't fueled greater investment in the U.S. economy, but instead helped fuel the biggest income gap since 1929.

    In September 2011, the Washington Post illustrated how plummeting capital gains and dividend tax rates helped bring that about. As part of the Post's series on the widening chasm between the super-rich and everyone else titled "Breaking Away," the Post concluded that "capital gains tax rates benefiting wealthy feed [the] growing gap between rich and poor." As the Post explained, for the very richest Americans the successive capital gains tax cuts from Presidents Clinton (from 28 to 20 percent in 1998) and Bush (from 20 to 15 percent in 2003) have been "better than any Christmas gift":

    While it's true that many middle-class Americans own stocks or bonds, they tend to stash them in tax-sheltered retirement accounts, where the capital gains rate does not apply. By contrast, the richest Americans reap huge benefits. Over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.

    While the "fiscal cliff" tax deal boosted the top capitals gains tax rate back to 23.8 percent (the Affordable Care Act added a 3.8 percent tax for upper income earners on top of the new 20 percent top rate), the dynamic remains essentially unchanged. Not only are America's wealthy rapidly pulling away from the rest of their countrymen. The stratospherically rich are leaving the merely rich in the dust, too.

    The impact of the nation's tax policies on income inequality has hardly been a secret on Capitol Hill. In December 2011, Thomas Hungerford of the Congressional Research Service (CRS) authored an analysis which concluded:

    Capital gains and dividends were a larger share of total income in 2006 than in 1996 (especially for high-income taxpayers) and were more unequally distributed in 2006 than in 1996. Changes in capital gains and dividends were the largest contributor to the increase in the overall income inequality. Taxes were less progressive in 2006 than in 1996, and consequently, tax policy also contributed to the increase in income inequality between 1996 and 2006.

    In January 2013, the CRS' Hungerford published another study which once again confirmed that historically low capital gains tax rates are "by far the largest contributor" to America's historically high income inequality. As ThinkProgress explained Hungerford's findings, the upward spiral of income inequality (as measured by the Gini coefficient) between 1991 and 2006 is mostly due to federal tax policy that slashed rates on capital gains and dividend income, income which flows almost exclusively to the rich:

    By far, the largest contributor to this increase was changes in income from capital gains and dividends. Changes in wages had an equalizing effect over this period as did changes in taxes. Most of the equalizing effect of taxes took place after the 1993 tax hike; most of the equalizing effect, however, was reversed after the 2001 and 2003 Bush-era tax cuts. [...]

    The large increase in the contribution of capital gains and dividends to the Gini coefficient, however, is due to the large increase in the share of after-tax income from capital gains and dividends, and to the increase in the correlation of this income source with after-tax income.

    Now, these levels of income inequality not seen since the Great Depression might be more tolerable if they served to produce faster economic growth and accelerated job creation. But as Jared Bernstein along with Troy Kravitz and Len Burman of the Urban Institute have shown, lower capitals gains tax rates (contrary to the claims of conservative mythmakers) haven't fueled increased investment in the America economy.

    As Bernstein demonstrated with the chart above, there's no evidence to support the persistent GOP claim that a low tax rate on capital spurs more investment in the U.S. economy, and thus benefits all Americans. Bernstein found that that the business cycle, not acts of Congress, drives investment in the U.S.

    Hard to see anything in the picture supporting the view that either the level or changes in cap gains taxes play a determinant role in investment decisions.

    Remember, the ostensible reason for the favoritism in tax treatment here is to incentivize more investment and faster productivity growth. But that's not in the data and the reason it's not in the data is because investors aren't nearly as elastic to cap gains rates as their lobbyists say they are (more precisely, they'll carefully time their realizations to maximize their gains around rate changes, but that's not real economic activity-that's tax planning).

    Reviewing other analyses in 2012, Brad Plumer of the Washington Post concurred with that assessment that low capital gains taxes don't necessarily jump-start investment in the economy:

    The top tax rate on investment income has bounced up and down over the past 80 years--from as high as 39.9 percent in 1977 to just 15 percent today--yet investment just appears to grow with the cycle, seemingly unaffected. ...

    Meanwhile, Troy Kravitz and Len Burman of the Urban Institute have shown that, over the past 50 years, there's no correlation between the top capital gains tax rate and U.S. economic growth--even if you allow for a lag of up to five years.

    Billionaire Warren Buffett, the inspiration for the "Buffett Rule" advocated by President Obama and his Democratic allies, couldn't agree more. As he told the New York Times in 2011:

    "I have worked with investors for 60 years and I have yet to see anyone--not even when capital gains rates were 39.9 percent in 1976-77--shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off."

    For years, Republicans have similarly claimed that higher marginal income tax rates would scare off the "job creators" House Speaker John Boehner once described as "the top one percent of wage earners in the United States ... the very people that we expect to reinvest in our economy." If so, those expectations were sadly unmet under George W. Bush. After all, the last time the top tax rate was 39.6 percent during the Clinton administration, the United States enjoyed rising incomes, 23 million new jobs and budget surpluses. Under Bush? Not so much.

    That dismal performance prompted the Times' Leonhardt to ask in November 2010, "Why should we believe that extending the Bush tax cuts will provide a big lift to growth?" His answer was unambiguous:

    Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7 ...

    Is there good evidence the tax cuts persuaded more people to join the work force (because they would be able to keep more of their income)? Not really. The labor-force participation rate fell in the years after 2001 and has never again approached its record in the year 2000.

    Is there evidence that the tax cuts led to a lot of entrepreneurship and innovation? Again, no. The rate at which start-up businesses created jobs fell during the past decade.

    The data is clear: lower taxes for America's so-called job-creators don't mean either faster economic growth or more jobs for Americans.

    The American experience since the Great Depression suggests that high income inequality does not correlate to faster economic growth. But as Jared Bernstein, Ezra Klein and Paul Krugman have been quick to explain, lower income inequality doesn't necessarily "cause" higher GDP. As Brad Plumer summed up a recent paper by Bernstein:

    His conclusion: There are compelling reasons to believe that inequality can harm growth, but it's surprisingly difficult to prove this is happening...

    In his paper, Bernstein ultimately concludes that there still "is not enough concrete proof to lead objective observers to unequivocally conclude that inequality has held back growth," although he also notes that much of the research is "relatively new" -- and there's a lot more work that could be done.

    That said, one thing is certain. Low capital gains tax rates, along with reduced estate tax levies and multiplying tax breaks for the wealth, deny Uncle Sam the revenue need to invest in the American people.

    That's why, for President Obama and his Democratic allies at least, the outlines of what must be done are clear. With ever-increasing global competition in the information age economy, the U.S. must ramp up its investments in workforce skills and education. But currently, as a percentage of the U.S. economy, nondefense discretionary spending--everything outside of military, Social Security, Medicare, Medicaid, debt interest--is plunging to its lowest level since 1950. And while studies show that the top 1 percent of earners in America captured all of the income gains since the Great Recession "ended" in mid-2009, workers have yet to see rising wages despite accelerating economic growth and dropping unemployment. Providing tax relief to middle income families, funding community college education, boosting the minimum wage and expanding overtime pay eligibility are just some of the measures that could help reverse the diminished prospects for the American middle class.

    But you simply can't pay for that and slow the rapid rise of multigenerational dynastic wealth unless you raise capital gains tax rates. And you don't have to be Thomas Piketty or Barack Obama to do the math about returning capital gains tax rates to their Reagan-era level. Jeb Bush and Mitt Romney, those born-again crusaders against income inequality, know it, too.

    Perrspective 2:20 PM | Permalink | Comments (0) | Share

    January 18, 2015
    For Romney, Income Inequality Talk No Longer Just for "Quiet Rooms"

    Speaking to an RNC audience in San Diego on Friday, potential three-time GOP presidential candidate Mitt Romney explained how version 3.0 would differ from the first two voters previously rejected. But when Governor Romney announced that he would put fighting poverty and income inequality at the center of a 2016 run, he wasn't just reversing course; he was making himself into a laughingstock. After all, it was only three years ago that candidate Romney proclaimed "I'm not concerned about the very poor" and insisted income inequality should only be discussed in "quiet rooms."

    Nevertheless, Friday's RNC gathering abroad the USS Midway provided the latest example of the Romney Uncertainty Principle in which Mitt's positions change when observed. There, he laid out the "three principles I think should form part of the foundation."

    "First we have to make the world safer. Second, we have to make sure and provide opportunity for all Americans regardless of the neighborhood they live in. And finally, we have to lift people out of poverty."

    But Mitt felt differently after winning the Florida primary on February 1, 2012:

    "I'm not concerned about the very poor. We have a safety net there. If it needs a repair, I'll fix it."

    At the time, no one doubted Romney's "let them eat cake" attitude. But the "I'll fix it" part immediately got him into trouble. After all, his economic plan didn't just include a massive tax cut for the wealthy, but would have repealed the Affordable Care Act and slashed Medicaid spending by almost 40 percent, costing as many as 40 million Americans their health insurance coverage. And with his huge increases in defense spending, Romney would have to tax an axe to almost everything else. That's why under President Romney, America's record-setting income inequality would have inevitably gotten much worse.

    Which is why in 2012, Mr. 47 Percent didn't want to talk about it. When NBC Today Show host Matt Lauer (around the 0:55 mark above) asked whether criticism from President Obama or anyone else about Wall Street and the distribution of wealth was legitimate, Romney insisted all such talk should be left to Americans' betters.

    LAUER: Are there no fair questions about the distribution of wealth without it being seen as envy, though?

    ROMNEY: You know, I think it's fine to talk about those things in quiet rooms and discussions about tax policy and the like, but the President has made this part of his campaign rally everywhere we go, or where he goes.

    Ultimately, Mitt Romney can talk about anything he wants in 2016 and he will still lose. Not because voters don't know the real Romney, but because they do.

    Perrspective 10:50 AM | Permalink | Comments (0) | Share

    Conservatives Learn an Important Lesson for Religious Freedom Day

    OnEvery year on January 16th, the United States marks Religious Freedom Day. Coming as it does in the immediate wake of the Charlie Hebdo massacre in Paris, the timing could not be better for Americans to commemorate this day, as President Obama declared, "with events and activities that teach us about this critical foundation of our Nation's liberty, and that show us how we can protect it for future generations at home and around the world."

    As it turns out, some of Obama's fiercest critics on the right are helping do just that. In "Blasphemy for Me, But Not for Thee," Matthew Continetti defended the "the right to offend" and accused liberals of failing to support it. National Review editor Rich Lowry offered a corollary in "The Crisis of Free Speech," proclaiming that there is no right not to be offended. In so doing, both men have done a great public service by highlighting the shameful hypocrisy of the phony "religious liberty" crusade now being waged by the Republican Party and its religious right allies.

    Lowry, whose primary claim to fame was "sitting up straighter" in response to Sarah Palin's "starbursts," put his latest epiphany this way:

    Domestically, we should foster a robust culture of free speech that forswears the insidious logic of "your right to free speech ends where my right not to be offended begins."

    Unfortunately for Lowry and his fellow travelers, that "insidious logic" is at the very center of the campaign by the religious freedom frauds of the Republican Party.

    Consider this recent statement by 2016 GOP White House hopeful Jeb Bush on a recent court decision recognizing marriage equality in Florida. Bush, who 20 years ago declared that "sodomy be elevated to the same constitutional status as race and religion," tried out a new formula earlier this month:

    "I hope that we can show respect for the good people on all sides of the gay and lesbian marriage issue - including couples making lifetime commitments to each other who are seeking greater legal protections and those of us who believe marriage is a sacrament and want to safeguard religious liberty."

    But Bush's statement, which one Republican praised as "a new way to talk to about same-sex marriage," flies in the face of the Lowry standard. It is also antithetical to the American concept of religious liberty enshrined in the First Amendment. The Constitution's is a negative liberty. Congress (and, by application of the 14th Amendment's application in many cases, the states) is prevented from doing something:

    Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

    While Americans' freedom of religion is constituted protected from encroachment by the government, there is no concomitant right to abridge others freedoms of speech or religion. Many of those now enjoying Charlie Hebdo's cartoons of the prophet Mohammed also protest a supposed "war on Christmas" or demanded prohibitions on the likes of Robert Mapplethorpe photography or Andres Serrano's Piss Christ. With only very narrow exceptions for public safety and malicious libel, Americans' free speech rights are not subject to the veto of either their government or other Americans.

    Yet the simultaneous claims of "freedom from" and "freedom to" is at the center of the religious liberty battles now being waged on the right. I may be offended by your decision to have an abortion or marry your same-sex partner, but my discomfort is not the basis of my right to prevent from doing either.

    Consider, for example, laws under consideration in Texas, Florida and Wyoming that would allow county clerks to refuse to perform wedding for gay couples. As ThinkProgress reported, a Texas legislator is turning to nullification to protect some of its residents from potential offense by others' exercise of their constitutional rights:

    State Rep. Cecil Bell Jr. (R) has introduced HB 623, the "Texas Preservation of Sovereignty and Marriage Act." It would prohibit the use of taxpayer funds (including governmental salaries) for the licensing of same-sex marriage, and any employee who violates this restriction would no longer be allowed to collect "a salary, pension, or other employee benefit." The bill also prohibits public funding to "enforce a court order" requiring the issuance of a same-sex marriage license. In other words, if a federal court ruled that it was unconstitutional to deny same-sex couples marriage licenses, this law would still prohibit the only people empowered to issue those licenses from doing so.

    The right's religious liberty sham is even more shocking when it comes to abortion and women's reproductive rights. The Party supposedly dedicated to the sanctity of "the doctor-patient relationship" demands Congress and the states substitute their moral judgment instead. As I noted last February:

    The GOP mantra about protecting "doctor-patient" isn't just demagoguery of the basest kind. It is a cruel and vicious hoax. Even as the nation's abortion rate has dropped to a 40 year low, dozens of draconian restrictions enacted in Republican-controlled states are mandating that physicians lie to their patients, perform unnecessary procedures in needlessly regulated facilities and even withhold potentially life-saving care. Now, Republicans aren't just standing over the shoulders of American doctors who put their patients' health first; they want to put them in prison, too.

    With this unprecedented conservative expansion of religious liberty, Republican lawmakers are mandating medical malpractice and abridging free speech rights. Doctors must be forced to tell their patients some things and prevented from saying others. In some states, physicians must warn women of mythical abortion-breast cancer links and/or supposed "post-abortion syndrome." Some states are seeking to provide legal immunity to doctors who refuse to inform their patients about serious fetal disorders. Others state will make it a crime for doctors and patients alike when fetuses with Downs' Syndrome or other grave genetic conditions are aborted. Even life-saving procedures are being banned in states like Ohio. (As the Daily Show recently highlighted, Alabama may not have resources to provide legal counsel for indigent defendants, but lawyers for fetuses are no problem.) Apparently, some Americans' right not to be offended trumps the health and safety of the mother and the free speech rights of her doctor.

    Unfortunately, the Supreme Court has aided and abetted the cynical reinvention of religious liberty. In the Hobby Lobby case, the Supreme Court ruled that the Religious Freedom Restoration Act of 1993 (RFRA) prohibits the federal government from requiring privately-held businesses to provide birth control as part of their workers' health insurance coverage. Despite their victory in Hobby Lobby and other cases involving sectarian prayer at town council meetings, publicly-funded vouchers for religious schools and safety zones around abortion clinics, the Republicans' best and brightest warned of the grave and gathering threat to religious liberty:

    At Liberty University in April, Texas Senator Ted Cruz cautioned, "Religious liberty has never been more under attack." Ben Sasse, the Nebraska GOP Senate candidate, went even further in declaring that "the free exercise of religion is co-equal to our right to life," adding "government cannot force citizens to violate their religious beliefs under any circumstances." Competing with Cruz in the 2016 Falwell primary, Louisiana Governor Bobby Jindal used his Liberty University commencement address to similarly warn his audience. "Make no mistake," Jindal said, "The war over religious liberty is the war over free speech and without the first there is no such thing as the second."

    Unsurprisingly, Rich Lowry was with Jindal and Cruz. You can read about it in his column, "Hobby Lobby and the War on Religious Liberty."

    Of course, the question has always been whose religious liberty? (Or, to paraphrase Matthew Continetti, "religious liberty for me, not thee.") As Justice Ginsburg warned in her Hobby Lobby dissent, the Court's wasn't just a "decision of startling breadth," one which will be the harbinger of even more sweeping faith-based assaults on civil rights than its opponents fear and the rationale for minority religious rights its supporters will doubtless oppose. When a Scientologist-owned business refuses to cover psychiatric care or when a Muslim firm decides it cannot abide by paid maternal leave laws for single mothers, the religious liberty crowd on the right will be silent. Or not. After all, when Muslim organizations like their Christian counterparts sought to open prayer centers in commercial districts in Minnesota and Georgia, the anti-Sharia law extremists protested. Just as they did to prevent the building of a mosque in Murfreesboro, Tennessee and the so-called "Ground Zero" mosque in lower Manhattan. All because, like Rich Lowry, they were offended and demanded "special sensitivity."

    As President Obama proclaimed in recognition of Religious Freedom Day on Friday:

    The First Amendment prohibits the Government from establishing religion. It protects the right of every person to practice their faith how they choose, to change their faith, or to practice no faith at all, and to do so free from persecution and fear. This religious freedom allows faith to flourish, and our Union is stronger because a vast array of religious communities coexist peacefully with mutual respect for one another.

    And when it comes to the freedoms of religion and speech, in the United States it is not the case--and must never be the case--that some religions are more equal than others. Even if some people find that prospect offensive. It's nice to know that conservatives and liberals can agree on this point, if only for a day.

    Perrspective 10:45 AM | Permalink | Comments (0) | Share

    January 16, 2015
    Sorry, Mitt: The Presidency is Not Your "Destiny"

    Across the political spectrum, pundits, press, money-men and media strategists seem genuinely puzzled by Mitt Romney's apparent decision to seek the presidency for a third time. Even some of his closest supporters and biggest donors think a third Bush since 1988 would be a breath of fresh air compared to the putrid stench of the rotting carcass of a Romney candidacy twice rejected by American voters.

    So why is the Romney clan going to subject their patriarch to a White House run matriarch Ann Romney only three months ago declared was "done, done, done?" Simply put, it's because Mitt Romney, the same man who warned Barack Obama would transform America into "an entitlement society," believes he himself is entitled to the presidency.

    That, at least, is the word from Ann Romney. As Irin Carmon documented in August 2012:

    "I truly want Mitt to fulfill his destiny, and for that to happen, he's got to do politics," Ann told the Los Angeles Times on the eve of the 2002 Salt Lake City Olympics. In his book "Turnaround," Mitt says he initially resisted the offer to take over the games until Ann changed his mind. "There's no one else who can do it," he remembers her saying. Last year, when Mitt entered the presidential race, Ann told Parade, "I felt the country needed him ... This is now Mitt's time." In a March radio interview, Ann declared, "He's the only one who can save America."

    Just days after that article appeared in Salon, Mrs. Romney explained to Natalie Morales of NBC News that her husband would fulfill his destiny in 2012:

    "We have a reason why we're running and it's because I believe in my heart that Mitt is going to save America, that economically we are in such difficult times and that he is the person that's going to pull us through this."

    As she bluntly put it to Diane Sawyer that April, "It's our turn now."

    Of course, it wasn't the Romneys turn then, and God willing, never will be. Tellingly, exit polling showed that President Obama mauled Mitt by 81 to 18 percent on the question of which candidate "cares about people like me."

    In the general election of 2012 as in the 2008 GOP primaries four years earlier, voters clearly sensed that Mitt Romney only cares about himself. Then as now, the truth did not Mitt free. Instead, it drove him crazy. After John McCain blew him out of the 2008 race in which Romney blew $45 million of his own money, Mitt was fixated on his rejection by voters. As the New York Times explained:

    From the moment that Mr. Romney ended his first bid for the Republican nomination, he complained to friends, advisers and family that he had felt cheated out of a chance to explain himself to the country. He had emerged from his debut on the national political stage, he told them, as a caricature he did not recognize: emotionally uncaring, intellectually inauthentic, ideologically malleable.

    Over the next three years, a little-examined period in his life, he sought to reclaim his public identity with the self-critical eye, marketing savvy and systematic rigor of the corporate consultant that he once was.

    If that sounds familiar, it should. After all, the Boston Globe published virtually the same message in December 2012:

    In the coming months, Romney, ever the data-driven analyst, plans to contemplate how his political life came to an end.

    Of course, Mitt Romney's political career did not come to an end. It continued full-speed ahead, despite son Tagg's comical claim that "He wanted to be president less than anyone I've met in my life." (Even more laughable, as Mitt has repeatedly put it since 2007, "I don't have a political career.") As the hagiographic 2013 documentary Mitt revealed, Governor Romney is tormented not by what might have been, but what should have been:

    Romney's camera-at-all-times plan, however, reflected his own limitations as a candidate. By the same token, it was quite an indictment that "Mitt" -- made by a little-known filmmaker on a shoestring -- created a more palatable rendering of Romney than his campaign, which spent hundreds of millions on genius operatives and image makers. Romney, for his part, seemed to understand this. No matter how content he appeared, when the conversation turned to his disappointment in losing, his voice dropped. "It really kills me," he said. "It really kills me." He became inaudible, and it seemed as if he might tear up.

    Might tear up, because he--like his father George before him--never made it to the Oval Office.

    That, of course, is the albatross that hangs around the neck of pretty much every failed presidential candidate. After Walter Mondale was drubbed by Ronald Reagan in 1984, he sought wisdom from fellow sufferer George McGovern.

    "I said, 'Tell me how long it takes to get over a defeat of this kind.' He said, 'I'll call you when it happens.'"

    To put it another way, as Romney himself did in Mitt:

    "I have looked at what happens to anybody in this country who loses as the nominee of their party...They become a loser for life," he said, holding finger and thumb in the shape of an "L" on his forehead.

    Get used to it, Mitt. After all, it's your destiny.

    Perrspective 11:20 AM | Permalink | Comments (0) | Share

    January 14, 2015
    October Gift to Charity Was a Sure Sign of 2016 Romney Run

    "I want to be president." With that statement to his deepest-pocketed donors, Mitt Romney pretty much put an end to the phony Hamlet role he's been playing ever since Barack Obama beat his ass over two years ago. But despite Ann and Mitt's repeated declarations that "we're not doing that again," since October 13, 2014 there has been no doubt that Romney 2016 was a certainty. Because it was on that date that the Romneys--for the first time--engaged in a very public act of charity towards people who were not members of their hermetically sealed circle of family, friends, co-religionists and business associates.

    Now, that may be an incredibly cynical statement to make. But Mitt Romney is an incredibly cynical man. And when your indelibly etched public persona is that of a chronically "out of touch" private equity parasite incapable of hiding your disdain for the "47 percent", what better way to make amends than to give a "substantial gift" to fight diseases afflicting millions of Americans? As the Los Angeles Times reported last October:

    On Tuesday at Brigham and Women's Hospital in Boston, the Romneys are launching the Ann Romney Center for Neurological Diseases, a research facility that will focus on finding cures and new treatments for Alzheimer's disease, multiple sclerosis, Lou Gehrig's disease (known as ALS), Parkinson's disease and brain tumors.

    Fresh off a presidential effort that raised nearly a billion dollars, Ann Romney hopes to raise $50 million to lay the groundwork for the center's research into the five diseases that affect about 50 million people in the U.S.

    To be sure, Ann Romney, who has fought her own battle against Multiple Sclerosis since 1998, has done a great deal to draw attention and resources to MS, ALS and other neurologic diseases. Nevertheless, Mitt's open love letter on October 13 to "the 15 year old girl I fell in love with almost 50 years ago" should have made clear to all that the Romneys' private act of charity was meant for public consumption.

    That's why it's important to put the Romneys' donation (they are not disclosing the amount) into context. For starters, that undisclosed substantial gift was almost surely less than the $10 million Ann and Mitt gave their son Tagg to start up his own company, Solamere Capital. (Romney was only living his advice to college students, whom he told in 2012 to "take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.") The Ann Romney Center could have been almost fully funded by the $45 million of his own money Mitt Romney spent in his failed 2008 bid for the Republican presidential nomination. And if Romney, who is now no doubt worth far more than the $250 million estimated almost a decade ago, had succeeded in eliminating the estate tax, he could have funded Ann's pet project from his pocket change.

    Now, as anyone who saw the hagiographic documentary Mitt can attest, Romney seems like a devoted family man and shrewd numbers guy with a deep religious faith. But as voters clearly understood in 2008 and 2012, Romney's empathy ends where the world outside his family, church and businesses begins. Almost all of the "7 incredible personal stories about Mitt Romney you may not know" dutifully laid out by his right-wing stenographers--his compassion for a terminally ill child, his rescue of a friend's missing daughter, his helping a dying, 14 year old boy write his will, his support for , quadriplegic church members--occur within the ranks of his co-religionists and close business associates.

    But when it comes to giving back to the country, Mitt Romney has tried to give as little as possible. And the less said about it, the better.

    That starts with the Romneys' tax returns. While Mitt have John McCain 23 years of his returns as part of his failed quest to secure the VP nomination in 2008, the American public only got two. How and why Ann and Mitt pay a lower share of their income in taxes to Uncle Sam that many working families may have something to do with it.

    As it turns out, the same man who said that his required contributions to his LDS church shouldn't be politicized has also repeatedly claimed they make his paltry tax rate "really closer to 45 or 50 percent."

    Mitt's on-again, off-again reticence regarding his church donations resurfaced in a pre-Republican convention fluff piece published by Parade. As the Salt Lake Tribune reported:

    Mitt Romney says in a new interview that one of the reasons he's distressed about disclosing his tax returns is that everyone sees how much money he and his wife, Ann, have donated to the LDS Church, and that's a number he wants to keep private.

    "Our church doesn't publish how much people have given," Romney tells Parade magazine in an edition due out Sunday. "This is done entirely privately. One of the downsides of releasing one's financial information is that this is now all public, but we had never intended our contributions to be known. It's a very personal thing between ourselves and our commitment to our God and to our church."

    Make that a personal thing between the Romneys, their God, their church and the millions of Americans who think the Bain Capital tycoon doesn't pay nearly enough in taxes to Uncle Sam.

    In January, Mitt Romney reluctantly admitted that he paid under 15 percent in federal taxes, a share smaller than many middle class families. Given the horrible appearances for a man who claims to be part of "the 80 to 90 percent of us" who are middle class, Team Romney set out to polish Mitt's tax turd. As Romney spun it to Jorge Ramos of Univision on January 25:

    Well, actually, I released two years of taxes and I think the average is almost 15 percent. And then also, on top of that, I gave another more 15 percent to charity. When you add it together with all of the taxes and the charity, particularly in the last year, I think it reaches almost 40 percent that I gave back to the community. One of the reasons why we have a lower tax rate on capital gains is because capital gains are also being taxed at the corporate level. So as businesses earn profits, that's taxed at 35 percent, then as they distribute those profits as dividends, that's taxed at 15 percent more. So, all total, the tax rate is really closer to 45 or 50 percent.

    Romney restated the point during a GOP debate in Florida. He did the math for Wolf Blitzer and Newt Gingrich:

    "My taxes plus my charitable contributions this year, 2011, will be about 40 percent."

    To drive the point home, the Romney campaign web site proclaims that "a number of key points should be kept in mind." Among them:

    Second, the Romneys take to heart "to whom much is given, of him shall much be required." Accordingly, they have been extraordinarily generous in their charitable giving, donating over $7 million from 2010-2011, averaging over 16% of their income.

    Put off by the "small-minded" 63 percent of Americans who believe he should release more of his tax returns, just last week Romney announced that he never paid less than 13 percent in taxes (which ones he didn't say) over each of the last 10 years. Once again, Mitt insisted that get credit for the dollars donated to the LDS:

    "Every year, I've paid at least 13 percent, and if you add, in addition, the amount that goes to charity, why the number gets well above 20 percent."

    Not to the U.S. Treasury it doesn't.

    Now, millions of Americans give to their houses of worship each year. Religious donations represent far and away the largest share of Americans' charitable giving. (It also explains why red-staters give a larger share of their income to charity. But if faith-based donations are excepted, blue-state Americans are the bigger donors.) But Mitt's squeamishness about his sizable donations isn't so much about who is receiving them, but what they contain.

    For the former bishop and Boston "stake president," most of his charitable giving is in the 10 percent tithe required by his church. As the AP explained:

    Romney reports he will give a total of $4.13 million to The Church of Jesus Christ of Latter-day Saints over two years as part of his overall charitable donations. The former Massachusetts governor reported income of about $43 million for the two years. Separately, over the past decade, Romney and his wife, Ann, have given more than $4.7 million to the denomination through the Tyler Charitable Foundation, a multimillion-dollar trust the couple leads.

    But as ABC News documented earlier this year, "the private equity giant once run by the GOP presidential frontrunner carved his church a slice of several of its most lucrative business deals, securities records show, providing it with millions of dollars worth of stock in some of Bain Capital's most well-known holdings." In its article "In Bain deals, Romney gave stock to Mormon church," Reuters explained the massive savings Mitt likely reaped on his tax bill as a result:

    Tax analysts said the donation method used by Romney and Bain generally worked like this:

    Romney was eligible to invest in the stock of companies that were being restructured by Bain. Romney and other Bain investors usually were able to purchase the stock at very low prices.

    Through the years, such stock may appreciate in value, sometimes considerably.

    The analysts said that if Romney and others at Bain got a stock cheap and eventually donated it to a church or charity without cashing in the stock, then they could get two tax benefits.

    First, they would not have to pay capital gains tax on the appreciated value of the stock, which they would have to do if they sold the stock and either pocketed or donated the proceeds.

    Second, they might be able to deduct all, or at least part of, the value of the donated stock from their taxable income.

    Such a move can save wealthy donors millions of dollars, the analysts said.

    Now, Mitt Romney is hardly alone among the wealthy in relying on this device. But he is alone in both running for President in 2012 and claiming he deserves public credit for "giving back to the community" in ways that he refuses to discuss. (Regardless, that is no substitute for paying your fair share to the government of all the people in the United States, especially when your campaign slogan is "Believe in America.") He can't have it both ways. Besides, his wife Ann already said that "you should really look at where Mitt has led his life and where he's been financially" and boasted that "you have to understand is that Mitt is honest, his integrity is, is just golden."

    You'll have to take Ann's word for it. Because while Hillary Clinton has released 30 years of her tax returns, neither Ann nor Mitt will let you see their numbers for yourself. As Mrs. Romney put it on the campaign trail in January 2008:

    "I understand Mitt's going to release his tax forms this week. I want to remind you where our riches are: our riches are with our families," Ann Romney said. "Our riches, you can value them, in the children we have and in the grandchildren we have. So that's where our values are and that's where our heart is -- and that's where we measure our wealth."

    As ThinkProgress noted at the time, Mrs. Romney was none too happy about Mitt having to follow in the footsteps of every modern presidential candidate (including his father) and release his tax returns:

    At an event at Freedom Tower in Miami this afternoon, Ann Romney said "unfortunately" the world now knows how "successful in business" Romney has been.

    By August 2012, she insisted that "you people" had seen enough:

    "Have you seen how we're attacked?" Mrs. Romney said, leaning forward in her chair. "Have you seen what's happened?...We have been very transparent to what's legally required of us," she said. "But the more we release, the more we get attacked, the more we get questioned, the more we get pushed. And so we have done what's legally required, and there's going to be no more tax releases given."

    If the Romneys don't want to reveal how much the give back to the federal government, they still wanted to assure Americans that the Romney clan serves the nation by serving itself.

    Asked during his first run for the White House why sons why his boys were campaigning in the corn fields of Iowa instead of on the front lines in Iraq, surge supporter Mitt Romney explained in2007 that the Five Brothers had a higher calling--their father. As CBS News recalled:

    "My sons are all adults and they've made decisions about their careers and they've chosen not to serve in the military and active duty and I respect their decision in that regard." He added: "One of the ways my sons are showing support for our nation is helping me get elected because they think I'd be a great president."

    That attitude also explains why in December 2007 Romney could only imagine the loss of one of his sons on the battlefield. Just one day after getting emotional recounting his 1978 reaction a radio report of his church's belated decision to allow African-American members of the clergy ("I pulled over and literally wept, even to this day it's emotional"), Governor Romney described the hardest part of watching the coffins of U.S. soldiers arriving at Boston's Logan Airport. As CNN reported Romney's story from a New Hampshire town hall meeting:

    "The soldiers that I was with stood at attention and saluted," Romney told the crowd. "And I put my hand on my heart, and tears begin to well in your eyes, as you can imagine in a circumstance like that. I have five boys of my own. I imagined what it would be like to lose a son in a situation like that," said the former Massachusetts governor, whose voice quivered noticeably.

    Apparently, his sons lack their father's imagination. While Tagg Romney wanted to fight Barack Obama in the fall of 2008, real combat was always another matter for the five brothers. During a 60 Minutes interview in May 2007, the late Mike Wallace asked the assembled Romney sons, "Not one [of you] agreed or thought about serving in the military?" Josh Romney, then the 31-year-old middle son, claimed, "I feel guilty not having done it." His baby brother Ben seemed relieved to admit, "I've seen a lot and read a lot that has made me say, `My goodness, I hope I never have to do that.'" Matt Romney, who four years later would resort to Birther jokes on the campaign trail, made a promise of sorts:

    "I hope to be able to make a sacrifice of that caliber at some point in my life."

    We're still waiting.

    To be sure, the Running Romneys were not the Fighting Sullivans. And as Election Day approached in 2012, Ann Romney explained why to Whoopi Goldberg. Her family's faith does not prevent its adherents from military service. That is a choice, one her husband and sons simply decided against. As she explained:

    "He was serving his mission and you know my five sons have also served missions. None served in the military. But I do have one son that feels that he's giving back to his country in a significant way, where he is now a doctor and he is taking care of veterans. We find different ways of serving. My five boys and my husband did serve missions, but did not serve in the military."

    As Mitt Romney prepared to accept his party's nomination for President at the Republican National Convention in Tampa, Parade asked, "How has tithing [the Mormon practice of giving 10 percent of one's income to the church] shaped your view of how we treat each other?" Mrs. Romney responded:

    "I love tithing. When Mitt and I give that check, I actually cry."

    "So do I," Mitt joked, "but for a different reason."

    But when Ann and Mitt Romney wrote that big check in October 13, 2014 to start the Ann Romney Center at Brigham Women and Children's Hospital in Boston, it was no joke and no accident. For the man who had mocked the 47 percent of voters bought by "gifts" from the Obama administration, it was all part of the Mitt Romney rehabilitation project for 2016. For Romney, who now says he will base his next campaign on fighting poverty, that gift to someone with whom he didn't share a name, a prophet or profits had to been seen and heard. Just not yet as a declaration of candidacy for 2016. As Ann Romney put it that day:

    On another matter that has been the subject of much political babbling lately -- a potential third run for president by her husband -- Ann Romney was happy to wave off the possibility.

    "Done," she said. "Completely. Not only Mitt and I are done, but the kids are done," she said, referring to her five sons. "Done. Done. Done."

    Now, less than three months later, Ann and Mitt Romney are done pretending.

    Perrspective 3:20 PM | Permalink | Comments (0) | Share

    January 13, 2015
    How John McCain and Mitt Romney Show Their Support for France

    On Sunday, an estimated one million people in Paris marched in solidarity in response to this week's terror attacks. They were joined by German Chancellor Angela Merkel, UK Prime Minister David Cameron, Israeli PM Benjamin Netanyahu, Palestinian Authority President Mahmoud Abbas and other world leaders. But while Attorney General Eric Holder and the American ambassador represented the United States, President Obama did not attend. Predictably, conservatives went on the attack, declaring "By not attending the unity rally in Paris on Sunday, President Obama has missed an opportunity to show leadership."

    If only, Obama's right-wing critics are no doubt asking themselves, John McCain or Mitt Romney was now president of the United States. As it turns out, that might not have worked so well for Franco-American relations. After all, it was Senator McCain who compared France to "an aging movie actress" and candidate Romney who was planning to print "First, Not France" bumper stickers.

    As President Bush prepared to pull the trigger on the Iraq war in February 2003, John McCain was at the forefront of those browbeating France for its refusal to back the U.S. at the United Nations. On February 10, 2003, McCain declared on MSNBC's Hardball:

    "Look, I don't mean to try to be snide, but the Lord said the poor will always be with us. The French will always be with us, too."

    McCain's venom toward the French was on full display two days later during a speech at the Center for Strategic and International Studies. On February 13, 2003, McCain warned of "new threats to civilization [which] again defy our imagination in scale and potency" portrayed Iraq as "threat of the first order." He proclaimed that "the United States does not have reliable allies to implement a policy to contain Iraq" and pointed the finger squarely at France:

    "Compare our great power allies in the Cold War with those with whom we act today in dealing with Iraq.

    France has unashamedly pursued a concerted policy to dismantle the UN sanctions regime, placing its commercial interests above international law, world peace and the political ideals of Western civilization. Remember them? Liberte, egalite, fraternite."

    Then on the 18th, the Australian Broadcasting Corporation's Lateline program highlighted McCain's antipathy toward France:

    Here's how influential Senator John McCain sees the French.

    JOHN MCCAIN, REPUBLICAN SENATOR: They remind me of an aging movie actress in the 1940s who is still trying to dine out on her looks but doesn't have the face for it.

    NORMAN HERMANT: Many in Washington are now saying relations with France have been a problem going all the way back to the end of World War II.

    SENATOR JOHN MCCAIN: Perhaps Churchill and Roosevelt made a very serious mistake when they decided to give France a veto in the Security Council when the United Nations was organized.

    As for Mitt Romney, who spent his Vietnam War years as a missionary in Paris instead of the rice paddies of Southeast Asia, France is a symbol of everything the United States should never be. And during his 2008 and 2012 presidential campaign, "France" was the reason he claimed neither Hillary Clinton nor Barack Obama should be in the White House.

    Throughout 2012, Governor Romney assailed President Obama for supposedly wanting to create "an entitlement society" in which "government should create equal outcomes." As he put it in Iowa, "I think he believes America should become a European-style welfare state." Then after his victory in New Hampshire, Romney repeated that Obama "wants to turn America into a European-style entitlement society" and "takes his inspiration from the capitals of Europe."

    And during his failed 2008 effort to secure the GOP nomination, Romney made no secret of which European capital he meant. In February 2007, the Boston Globe obtained a 77-slide Powerpoint presentation laying out the Romney campaign's approach for the challenges and competitors he would face in 2008. The document detailed strategies for overcoming his reputation as a "flip-flopper," addressing his Mormon faith, defeating his GOP rivals and, most of all, beating presumed Democratic nominee Hillary Clinton in the general election. If the language drafted by his consultant Alex Castellanos sounded familiar (the same Alex Castellanos who continued to serve as a CNN regular despite calling Hillary Clinton a "bitch" on the air), it should:

    The plan, for instance, indicates that Romney will define himself in part by focusing on and highlighting enemies and adversaries, such common political targets as "jihadism," the "Washington establishment," and taxes, but also Democratic presidential candidate Hillary Clinton, "European-style socialism," and, specifically, France. Even Massachusetts, where Romney has lived for almost 40 years, is listed as one of those "bogeymen," alongside liberalism and Hollywood values...

    Enmity toward France, where Romney did his Mormon mission during college, is a recurring theme of the document. The European Union, it says at one point, wants to "drag America down to Europe's standards," adding: "That's where Hillary and Dems would take us. Hillary = France." The plan even envisions "First, not France" bumper stickers.

    Luckily for citizens on both sides of the Atlantic, neither John McCain nor Mitt Romney finished first. That's why the people of France can rest assured that President Obama means it when he says the United States "stands with you today, stands with you tomorrow." Sadly, would-have-been Presidents McCain and Romney never stood with our first ally at all.

    Perrspective 10:20 AM | Permalink | Comments (0) | Share

    January 12, 2015
    Democrats Saved the Economy. Republicans Tried to Kill It.

    Four years ago, Republicans led by then -new House Majority Leader Eric Cantor (R-VA) began taking credit for the economic progress made since the Bush recession began in December 2007. Just 19 days after the GOP had assumed control of the House, Cantor issued a statement declaring, "THERE ARE THE JOBS: Republicans Prevent Massive Tax Increase, Economy Begins to Improve." In February 2012, then Virginia Governor and future convicted felon Bob McDonnell assumed the role of GOP mythmaker, explaining, "Look, I'm glad the economy is starting to recover, but I think it's because of what Republican governors are doing in their states, not because of the president."

    Now, the arsonists are once again taking credit for putting out the fire.

    During his holiday break from drowning government in a bathtub, Grover Norquist comically demanded Republicans take credit for the strengthening Obama recovery. Less than 24 hours after he picked up the Majority Leader's gavel, Senator Mitch McConnell (R-KY) dutifully complied:

    After so many years of sluggish growth, we're finally starting to see some economic data that can provide a glimmer of hope; the uptick appears to coincide with the biggest political change of the Obama Administration's long tenure in Washington: the expectation of a new Republican Congress.

    Of course, McConnell isn't just wrong about the timing of the accelerating Obama recovery which in the second and third quarters of 2014 had ramped up long before a GOP takeover of the Senate seemed likely. As it turns, the Republican Party deserves zero credit for the improving American economy. Make that less than zero. After all, from their opposition to the stimulus, the auto industry rescue and the Fed's "quantitative easing" to their debt-ceiling hostage taking and draconian austerity policies in Washington and the states, Republicans have been sabotaging the economic recovery from the moment Barack Obama first took the oath of office.

    The Stimulus

    When President Obama was inaugurated on January 2009, there were two things his White House did not know. First, the economy he inherited from George W. Bush was in far worse condition than anyone realized. "Output in the third and fourth quarters fell by 3.7% and 8.9%, respectively, not at 0.5% and 3.8% as believed at the time," The Economist reported in August 2011. "Employment was also falling much faster than estimated...In January, total employment was already 1m workers below the level shown in the official data."

    But what Team Obama also didn't know is that Republicans were secretly planning total opposition to what would become the $787 billion American Recovery and Reinvestment Act (ARRA)--and just about everything else he would propose. As author Robert Draper documented in 2012, a gathering of GOP leaders on the night of Obama's inauguration resolved to "challenge them on every single bill and challenge them on every single campaign." By early February 2009, Weekly Standard editor Bill Kristol was publicly counseling Republicans to stonewall the Obama stimulus, just as they had done to Bill Clinton's health care law in 1993. Days later, the stimulus passed with just three Republican votes in the Senate and zero in the House.

    On January 6th, 2009, New York Times columnist and Nobel Prize winner Paul Krugman presciently predicted what would come to pass politically:

    I see the following scenario: a weak stimulus plan, perhaps even weaker than what we're talking about now, is crafted to win those extra GOP votes. The plan limits the rise in unemployment, but things are still pretty bad, with the rate peaking at something like 9 percent and coming down only slowly. And then Mitch McConnell says "See, government spending doesn't work."

    Krugman was certainly right about the politics--and the perception--of the ARRA. The media largely swallowed the output of the GOP mythmaking machine which declared that "Obama made the economy worse" and his stimulus program "did not create a single job." As recently as February 2014, Florida Senator and 2016 White House hopeful Marco Rubio declared:

    "If you recall five years ago, the notion was that if the government spent all this money--that, by the way, was borrowed--that somehow the economy would begin to grow and create jobs. Well, of course, it clearly failed."

    Not according to the overwhelming consensus of economists, including the nonpartisan Congressional Budget Office (CBO). At its peak in 2010, CBO concluded, the American Recovery and Reinvestment Act added up to 3.3 million jobs, cut unemployment by as much as 1.8 percent and boosted GDP by up to 4.1 percent. (It's also worth pointing out that the CBO repeatedly confirmed that aid to the states and purchases by the federal government delivers the biggest bang for the buck, while upper income tax cuts provide the least.) As the Washington Post reported in June 2012, the House Budget Committee heard testimony from CBO chief Douglas Elmendorf and demanded his answer to a simple question: did the $787 billion Obama stimulus work? Unfortunately for Republican propagandists, Elmendorf clearly refuted Mitt Romney's claim that the American Recovery and Reinvestment Act (ARRA) was "the largest one-time careless expenditure of government money in American history."

    Under questioning from skeptical Republicans, the director of the nonpartisan (and widely respected) Congressional Budget Office was emphatic about the value of the 2009 stimulus. And, he said, the vast majority of economists agree.

    In a survey conducted by the University of Chicago Booth School of Business, 80 percent of economic experts agreed that, because of the stimulus, the U.S. unemployment rate was lower at the end of 2010 than it would have been otherwise.

    "Only 4 percent disagreed or strongly disagreed," CBO Director Douglas Elmendorf told the House Budget Committee. "That," he added, "is a distinct minority."

    And as I noted last year, you don't have to take CBO's word for it:

    Douglas Holtz-Eakin, a former CBO director who later served as an economic adviser to John McCain in 2008, agreed with his successor. "The argument that the stimulus had zero impact and we shouldn't have done it is intellectually dishonest or wrong," he explained in August 2011. "If you throw a trillion dollars at the economy it has an impact, and we needed to do something." (That "something", by the way, was over 40 percent tax cuts, making the Obama stimulus the largest two-year tax cut in American history.) Mark Zandi, also an adviser to McCain's 2008 campaign, was adamant on the positive role of the stimulus. Federal intervention, he and Princeton economist Alan Blinder argued in August 2010, literally saved the United States from a second Great Depression. In "How the Great Recession Was Brought to an End," Blinder and Zandi's models confirmed the impact of the Obama recovery program and concluded that "laissez faire was not an option."

    "We find that its effects on real GDP, jobs, and inflation are huge, and probably averted what could have been called Great Depression 2.0." Blinder and Zandi concluded of federal intervention to save the economy. "For example, we estimate that, without the government's response, GDP in 2010 would be about 11.5% lower, payroll employment would be less by some 8┬Ż million jobs, and the nation would now be experiencing deflation."

    The Rescue of the American Auto Industry

    The stimulus wasn't the only federal intervention that helped stave off economic disaster. Another was the rescue of the American auto industry. Started by President Bush and expanded by President Obama in March 2009, Uncle Sam's bailout of GM and Chrysler saved an industry that today employs 500,000 more people in the U.S. than it did five years ago.

    Ultimately, the federal government spent almost $80 billion to save the two companies. But after selling off its remaining shares, the price tag was much lower at $9.3 billion. But as the Center for Automotive Research documented in December 2013, that sum may have been the best investment Uncle Sam ever made:

    Had GM and Chrysler failed altogether, the result could have been 4.1 million jobs lost across the U.S. economy in 2009 and 2010, with federal transfer payments and $105 billion in lost income and payroll tax revenue for the U.S. Treasury.

    And none of it would have happened if Republicans had their way.

    In December 2008, Vice President Dick Cheney beseeched his GOP allies to back the Bush administration's plan to shift dollars from the Troubled Asset Relief Program (TARP) to save Detroit from collapse. "If we don't do this, we will be known as the party of Herbert Hoover forever." Luckily for the American economy, the next month Barack Obama and his Democratic majority took over.

    After blocking legislation in December 2008, the leading lights of the Republican Party blasted President Obama over the auto bailout the following spring. While Senator Richard Shelby branded the administration's lifeline "the road to socialism," Arizona Rep. Trent Franks proclaimed "the disaster that follows is predictable." Speaker-to-Be John Boehner grumbled, "Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multi-national corporation to economic viability?" And while Texan Lamar Smith called the GM and Chrysler rescues "the leading edge of the Obama administration's war on capitalism," RNC chairman Michael Steele said it was all a political favor for Democratic constituencies:

    "It is nothing more than another government grab of a private company and another handout to the union cronies who helped bankroll his presidential campaign."

    And despite warning that the collapse of GM alone could cost the federal government up to $200 billion in unemployment insurance and other programs, once-and-future Republican White House hopeful Mitt Romney declared, "Let Detroit Go Bankrupt." Then again, the son of American Motors magnate George Romney warned Michigan primary voters in January 2008 that he didn't want to raise "false hopes that somehow we can bring back lost jobs." As he famously put it in that infamous op-ed:

    "If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won't go overnight, but its demise will be virtually guaranteed."

    Four years later, Romney the GOP presidential nominee was singing a different tune about the auto industry rescue, declaring "I'll take a lot of credit for the fact that this industry's come back."

    The Federal Reserve and Quantitative Easing

    When President Reagan was facing 10 percent unemployment in 1982, the U.S. had a crucial tool at its disposal that the Obama administration lacked in the wake of the financial crash of 2008. As Paul Krugman recently reminded readers, having first jacked up interest rates to crush inflation and wage growth in 1981, Paul Volcker's Federal Reserve could then slash the double-digit interest rates to incentivize borrowing and investment. But with interest rates essentially at zero, the federal government in January 2009 simply did not have that monetary policy as an option. So, Krugman explained in 2012, Ben Bernanke's Fed had to find another approach:

    The Fed's response to this problem has been "quantitative easing," a confusing term for buying assets other than Treasury bills, such as long-term U.S. debt. The hope has been that such purchases will drive down the cost of borrowing, and boost the economy even though conventional monetary policy has reached its limit.

    The response from Republicans, as always prioritizing inflation-fighting over expanding employment, was fury. Mitt Romney called quantitative easing (QE) a "sugar high" and argued "we should be creating wealth, not printing dollars." In 2011, Romney's future running mate Paul Ryan warned that "the inflation dynamic can be quick to materialize and painful to eradicate once it takes hold." Despite core inflation running well below two percent at the time, the New York Times reported:

    Mr. Ryan all but accused Mr. Bernanke of devaluing the dollar, saying, "There is nothing more insidious that a country can do to its citizens than debase its currency."

    Ryan had plenty company among the, um, best and brightest of the GOP. In November 2010, Sarah Palin demanded the Fed chief "cease and desist" his "pump-priming," warning the United States "shouldn't be playing around with inflation." Texas Governor Rick Perry, the GOP's temporary 2012 White House frontrunner, went a step further:

    "If this guy prints more money between now and the election, I don't know what you all would do to him in Iowa, but we would treat him pretty ugly down in Texas. I mean, printing more money to play politics at this particular time in America history, is almost treacherous, treasonous in my view."

    Sadly for the Republican doomsday prophets, their predicted "massive inflation holocaust" did not come to pass. The inflation bogeyman didn't even rear its ugly head. Markets didn't fear the Fed's QE rounds, but instead that they might "taper" them too soon. As Matt O'Brien pointed out this week, "The inflation chicken littles were so wrong: The dollar is on a tear." In June 2013, Paul Krugman wrote about "The Always-Wrong Club":

    Aha. Floyd Norris reminds us of the 23-economist letter from 2010, warning of dire consequences -- "currency debasement and inflation" -- from quantitative easing. The signatories are kind of a who's who of wrongness, ranging from Niall Ferguson to Amity Shlaes to John Taylor. And they were wrong again.

    For helping fend off the right-wing's "hard money mob," Krugman concluded last week, President Obama deserves a lot of credit:

    There is, however, another sense in which Mr. Obama has arguably made a big difference. The Fed has had a hard time getting traction, but it has at least made an effort to boost the economy -- and it has done so despite ferocious attacks from conservatives, who have accused it again and again of "debasing the dollar" and setting the stage for runaway inflation. Without Mr. Obama to shield its independence, the Fed might well have been bullied into raising interest rates, which would have been disastrous.

    Draconian Spending Cuts and Layoffs by State and Local Governments

    Barack Obama encountered another obstacle that neither Ronald Reagan nor any modern president has faced during an economic recovery. Steep spending cuts and layoffs of public employees at the state and local level undermined stimulus efforts at the federal level. Call it the "Anti-Stimulus."

    It's bad enough, as Krugman noted, that "federal spending adjusted for inflation and population growth is lower now than it was when Mr. Obama took office; at the same point in the Reagan years, it was up more than 20 percent." After slashing 900,000 teachers, policemen, firefighters and other government workers by 2012, states and municipalities has only now returned to pre-recession spending levels.

    But as the New York Times reported last week, that fiscal drag is finally starting to end:

    For a long stretch, government spending cutbacks at all levels were a substantial drag on economic growth. Now, finally, relief is in sight.

    For the first time since 2011, local, state and federal governments are providing a small but significant increase to prosperity.

    "There's not a lot of positive contribution coming from the government sector, but when you're talking about economic growth, less of a negative is a positive," said Chris Varvares, senior managing director and co-founder of Macroeconomic Advisers.

    The Times' first chart above does not fully capture just how big of a negative the public sector contraction has been on the U.S. economic recovery.

    The tragedy is that what might be called the Obama Economic Miracle could have been even more miraculous if Republicans on Capitol Hill and in state and local governments hadn't stood in his way. DC Republicans didn't just block Obama initiatives like the American Jobs Act and infrastructure investment that could have boosted employment when unemployment was mired at 9 percent. They didn't just strangle job creation and consumer confidence with their debt-ceiling hostage-taking. The destructive austerity policies of state and local governments created an "anti-stimulus," with layoffs of public sector workers and cuts to spending that only served to undermine the gains from ARRA (see the second chart above). By May 2013, the Hamilton Project estimated those austerity policies cost 2.2 American million jobs and resulted in the slowest recovery since World War II. In April 2012, the Economic Policy Institute explained:

    The current recovery is the only one that has seen public-sector losses over its first 31 months...If public-sector employment had grown since June 2009 by the average amount it grew in the three previous recoveries (2.8 percent) instead of shrinking by 2.5 percent, there would be 1.2 million more public-sector jobs in the U.S. economy today. In addition, these extra public-sector jobs would have helped preserve about 500,000 private-sector jobs.

    That March, Paul Krugman expressed the same point, but with some inconvenient historical context for the Party of Reagan. "In fact, if it weren't for this destructive fiscal austerity," Krugman explained, "Our unemployment rate would almost certainly be lower now than it was at a comparable stage of the 'Morning in America' recovery during the Reagan era."

    We're talking big numbers here. If government employment under Mr. Obama had grown at Reagan-era rates, 1.3 million more Americans would be working as schoolteachers, firefighters, police officers, etc., than are currently employed in such jobs.

    And once you take the effects of public spending on private employment into account, a rough estimate is that the unemployment rate would be 1.5 percentage points lower than it is, or below 7 percent -- significantly better than the Reagan economy at this stage.

    Yet even with all those barriers erected by his political opponents, Barack Obama is still "out-Reaganing Reagan." And Obama didn't triple the national debt while doing it.

    Mercifully, state and local governments are finally getting rid of the economic albatross around their necks. A big driver has been increased spending on construction projects by states and municipalities, which as the New York Times also reported last month, "is finally on the rise again."

    Threatening Default over Raising the Debt Ceiling

    What's also on the rise is the threat of a new round of debt-ceiling hostage-taking by congressional Republicans. And refusing to raise the debt ceiling, as both parties routinely did until 2011, will trigger a U.S. sovereign default and with it a global economic cataclysm. And as shattered consumer confidence and stalled job growth when House Republicans first resorted to the unprecedented extortion in the spring and summer of 2011 showed, the American economy paid a heavy price just from the threat of the GOP's debt-ceiling blackmail.

    You don't have to take my word for it. Just ask Republican leaders like Rep. Paul Ryan (R-WI), Sen. Lindsey Graham (R-SC) and House Speaker John Boehner. In 2011, Ryan acknowledged that "you can't not raise the debt ceiling." Graham warned "the consequences for the entire global economy" resulting from a first-ever American default "would be catastrophic." Four years ago, Speaker-elect John Boehner issued this dire assessment if Congress did not increase Uncle Sam's borrowing authority to pay bills the federal government had already incurred:

    That would be a financial disaster, not only for our country but for the worldwide economy. Remember, the American people on Election Day said, 'we want to cut spending and we want to create jobs.' And you can't create jobs if you default on the federal debt.

    New House Budget Committee Chairman Tom Price's (R-GA) new extortion scheme doesn't just fly in the face of Mitch McConnell's promise that "there will be no government shutdown or default on the national debt." Price's debt-ceiling threat is all the more irresponsible given the steep reduction in federal budget deficits that even Boehner admitted means "we have no immediate debt crisis" and non-defense discretionary spending as a percentage of the U.S. economy is already down to levels not seen since the 1950s. Worse still, even threatening default, as the experience from the summer of 2011 showed, costs the government money and undermines economic growth.

    The GOP's unprecedented debt-ceiling brinksmanship that began four years ago didn't just cost the Treasury billions of dollars in higher borrowing costs. American consumer confidence nose-dived during standoff in the summer of 2011:

    As Reuters and the Christian Science Monitor explained, the GOP's debt-ceiling debacle was the main culprit for sagging confidence and job creation:

    Why has the job market cooled so much? An important factor, many economists say, is that signals from government lately have been hurting rather than helping confidence. The protracted talks over the nation's debt ceiling this summer appeared to dampen the spirits of consumers and businesses alike.

    On that point, S&P left little doubt in pointing the finger at the kamikaze conservatives in Congress:

    A Standard & Poor's director said for the first time Thursday that one reason the United States lost its triple-A credit rating was that several lawmakers expressed skepticism about the serious consequences of a credit default -- a position put forth by some Republicans. Without specifically mentioning Republicans, S&P senior director Joydeep Mukherji said the stability and effectiveness of American political institutions were undermined by the fact that "people in the political arena were even talking about a potential default," Mukherji said. "That a country even has such voices, albeit a minority, is something notable," he added. "This kind of rhetoric is not common amongst AAA sovereigns."

    Such voices are indeed uncommon--except among congressional Republicans. That's why former Bush Treasury Secretary Paul O'Neill in 2011 came up with a more appropriate term to describe the clear and present danger presented by his GOP allies:

    The people who are threatening not to pass the debt ceiling are our version of al Qaeda terrorists. Really. They're really putting our whole society at risk by threatening to round up 50 percent of the members of the Congress, who are loony, who would put our credit at risk.

    -------------

    That is not all Republicans have done to put the U.S. economy and the American people at risk. The decade-long budget sequester Republicans extorted as the ransom for releasing their debt-ceiling hostage is taking a bite out of the economy. The financial analysis firm Macroeconomic Advisers put the damage for fiscal year 2014 at 1.2 million jobs lost, or a 0.8 percent bump in the unemployment rate. Steep reductions in the IRS budget over the past five years have cost the Treasury tens of billions of dollars in uncollected tax revenue. (The "tax gap" due to tax evasion, cheating and fraud is now roughly $500 billion per year chasm between what American individuals and businesses owe Uncle Sam and what they actually pay.) The GOP's penny-wise, pound-foolish approach to the IRS guarantees needlessly large budget deficits and unnecessarily painful spending cuts. With their furloughs and funding delays, Republican government shutdowns only make matter worse.

    All of which is why Mitch McConnell and his Republican co-conspirators not only shouldn't get any kudos for America's improving economic outlook. The president and the Democratic Party should get all the credit--and then some--for what could rightly be called "the Obama Economic Miracle." After all, Obama and his Democratic allies in Congress didn't just bring the nation back from the greatest financial crisis since the Great Depression. He rescued the American economy despite unprecedented Republican opposition on Capitol Hill and draconian austerity policies in the states. And Obama achieved all this in the face of an ongoing conservative disinformation campaign, propagating the myth that he "made the economy worse."

    For his part, Paul Krugman explained why neither Obama nor any other president can ever fully claim full credit for an accelerating economy. But as he rightly concluded:

    Can we nonetheless say that we're doing better than we would be if the other party held the White House? Yes. Do those who were blaming Mr. Obama for all our economic ills now look like knaves and fools? Yes, they do. And that's because they are.
    Perrspective 10:55 AM | Permalink | Comments (0) | Share

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