Which political party is best for business and the economy?

Bloomberg reports:

While Republicans promote themselves as the friendliest party for Wall Street, stock investors do better when Democrats occupy the White House. From a dollars- and-cents standpoint, it’s not even close...

(O)ver the five decades since John F. Kennedy was inaugurated, $1,000 invested in a hypothetical fund that tracks the Standard & Poor’s 500 Index (SPX) only when Democrats are in the White House would have been worth $10,920 at the close of trading yesterday. That’s more than nine times the dollar return an investor would have realized from following a similar strategy during Republican administrations.

Willard's Wild Tax Scheme II

Via Progress Report:

Previous Romney Giveaways to the Wealthy

• Abolishes the estate tax — a tax paid only by the wealthiest one-quarter of one percent of Americans.
• Maintains the special low tax rates on investments put in place by President Bush that disproportionately benefit the wealthy and would otherwise expire at the end of this year. Romney himself takes advantage of these special low rates on a considerable portion of his sizable income.
• Maintains special loopholes for hedge fund and private equity managers — loopholes Romney himself takes advantage of.
• Maintains the Bush marginal tax rates for the wealthy which would otherwise expire at the end of this year.

New Romney Giveaway to the Wealthy

• Cuts tax rates on the wealthiest Americans by another 20 percent below Bush tax rates. Under President Obama, the wealthiest Americans will pay a top income tax rate of 39.6 percent in 2013; under Romney, they would pay just 28 percent.

Magic Math

• Jobs: Mitt Romney promises his expansion of the Bush tax cuts will create jobs; however, the Bush tax cuts resulted in the weakest job growth in decades. There’s no reason to think that cutting taxes on the wealthy even more will result in a different outcome.
• Deficits: The Romney campaign promises that his massive new tax cuts “do not expand deficits” because of “stronger economic growth and reductions in spending.” The Heritage Foundation promised the exact same thing about the Bush tax cuts in 2001, even going so far as to claim that the federal debt would be paid off by 2010.

Real Math

• Romney’s proposed tax cut would cost FOUR TIMES MORE than the Bush tax cuts.
• According to the Center for American Progress Action Fund’s Michael Linden, Romney’s plan would shrink tax revenues by an astounding $10.7 TRILLION over the next ten years and reduce taxes as a share of GDP to a paltry 15 percent. The only way to run the U.S. government on that level of revenue is to run massive deficits and undertake program-ending cuts in Social Security, Medicare, Medicaid, and all discretionary programs. Since Romney refuses to make cuts to defense — and indeed has proposed increasing defense spending — the deficits and the cuts would both be all the more massive as a result. All of course done in the name of giving more and larger tax cuts to the wealthiest Americans.

IN ONE SENTENCE: Instead of helping to create an economy that works for everyone, Romney’s tax plan simply quadruples down on a broken economy that is rigged for the benefit of a wealthy few.

Quote for the day - Christina Romer, former economic advisor to the Obama administration

 Romer, interviewed at The Browser:

CEA Chair Romer w/ the President

"The shocks hitting the American economy in 2008 were enormous, in terms of the destruction of wealth and the freezing of our financial system. I firmly believe that the stresses on the US economy in 2008 were much larger than those in 1929 and 1930. So why has this recession, as bad as it has been, not been a second Great Depression or even worse? I think the answer is a much better policy response.

"But this episode has also shown that policy is very hard to get right. The policy response is inherently based on forecasts, which are subject to great uncertainty. And the political process often puts constraints on what can be done. Moreover, the policy response is limited by our understanding of how policy works and our vision of possible options.

"The bottom line is that the Great Recession showed us that we have effective tools to fight a terrible downturn. But we also have much to learn about how to use those tools more successfully."

Kicking Newt Around...(this is so "last month")

"Connecting" with folks in Oklahoma.

Since his apparent devolution back into irrelevance,  we haven't paid much attention to Newt Gingrich lately.  But this, from Talking Points Memo, deserves notice - if only because it's SNL-worthy:

Speaking at a town hall-style event at Oral Roberts University in Tulsa, OK, Newt Gingrich mocked the Obama Administration's promotion of smaller, fuel-efficient vehicles.

"Let me start from a simple premise that Oklahomans will understand: you cannot put a gun rack in a Volt," Gingrich said.

Rick Santorum's Higher Ground

"With what judgment ye judge..."

Apparently Rick Santorum has his sights set higher than the Presidency. From his words one can only infer that he aspires to be our theologian-in-chief, rhetorically excommunicating millions of American Protestants from, in his view, "the world of Christianity."

               Visit msnbc.com for breaking news, world news, and news about the economy         Clip from Up w/ Chris Hayes

Santorum has followed that humble judgement up with the earnest accusation this week against President Obama that he adheres to "some phony theology.  Oh, not a theology based on the Bible, a different theology, but no less a theology."

In this spirit of theological inquiry, our Bible lesson for today comes from the Gospel According to St. Matthew, HERE.

Stubborn facts about the GOP's spending cuts "austerity agenda"

Paul Krugman at NYTs:

Pain Caucus peddling failed ideas from Europe

(I)n early 2010 austerity economics — the insistence that governments should slash spending even in the face of high unemployment — became all the rage in European capitals. The doctrine asserted that the direct negative effects of spending cuts on employment would be offset by changes in “confidence,” that savage spending cuts would lead to a surge in consumer and business spending, while nations failing to make such cuts would see capital flight and soaring interest rates...

Now the results are in — and they’re exactly what three generations’ worth of economic analysis and all the lessons of history should have told you would happen. The confidence fairy has failed to show up: none of the countries slashing spending have seen the predicted private-sector surge. Instead, the depressing effects of fiscal austerity have been reinforced by falling private spending.

George Romney's Prodigal Son II

"Up w/ Chris Hayes" is the best "news-talk" show on television. Far and away. Check out this segment on the stark contrast, both as a businessman and a political figure, between Willard Mitt Romney and his father, former chairman of American Motors and Michigan governor George Romney.

Visit msnbc.com for breaking news, world news, and news about the economy

George Romney's Prodigal Son

An informative article at Motoramic by Justin Hyde on "What Mitt Romney Gets Wrong" re: the auto industry "bailout":

Young Willard with his father in better days.

Republican presidential hopeful Willard Mitt Romney renewed his opposition to the Obama administration's bailout of General Motors and Chrysler today in several Michigan newspapers, contending President Obama's rescue made the companies worse. I wish I could leave politics to the professionals, but Romney's take just doesn't square with the facts as I lived them...

 Let me explain, point by point (Romney's words excerpted in bold quotes):


"Three years ago, in the midst of an economic crisis, a newly elected President Barack Obama stepped in with a bailout for the auto industry."

In fact, the bailout began with President George W. Bush, who was forced to lend GM and Chrysler $17.4 billion in December 2008 after Senate Republicans blocked a rescue plan in Congress. Bush told reporters just last week that he was warned by Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson that if he didn't act to shore up GM and Chrysler, up to 1 million jobs could vanish. Knowing what we know now, says Bush, "I'd do it again."

"The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better."


The crux of Romney's argument: If Obama had not acted, private companies would have stepped in and run a "managed bankruptcy." What this ignores is that in the fall of 2008, before Obama was even sworn in, no one on Wall Street or anywhere else was willing to lend GM and Chrysler a penny — let alone the $81 billion they and their financial arms eventually needed.

What's The Matter With Red States? The "Entitlement" Hustle

Paul Krugman at NYTimes describes the almost absurd predicament of much of "red state" America. They're hooked on so-called "entitlements" while the GOP's  "severe conservative" pols are angrily pointing their fingers at some imagined class of moochers who are bleeding the government dry, immersed in a "culture of dependency." 

(What Krugman doesn't mention is that there's often a racial sub-text to the opportunistic political rhetoric, which explains the willful blindness and hypocrisy that drives this version of anti-government white populism within the GOP.)  Krugman:

Rick Santorum declares that President Obama is getting America hooked on “the narcotic of dependency.” Mr. Romney warns that government programs “foster passivity and sloth.” Representative Paul Ryan ... requires that staffers read Ayn Rand’s “Atlas Shrugged,” in which heroic capitalists struggle against the “moochers” trying to steal their totally deserved wealth, a struggle the heroes win by withdrawing their productive effort and giving interminable speeches.

Many readers of The Times were, therefore, surprised to learn, from an excellent article published last weekend, that the regions of America most hooked on Mr. Santorum’s narcotic — the regions in which government programs account for the largest share of personal income — are precisely the regions electing those severe conservatives. Wasn’t Red America supposed to be the land of traditional values, where people don’t eat Thai food and don’t rely on handouts? ...

The GOP's Stampede Toward Lunacy

Garry Wills at NYRB:

By a revolting combination of con men and fanatics, the current primary race has become a demonstration that the Republican party does not deserve serious consideration for public office. Take the controversy over contraceptives. American bishops at first opposed having hospitals and schools connected with them pay employee health costs for contraceptives. But when the President backed off from that requirement, saying insurance companies can pay the costs, the bishops doubled down and said no one should have to pay for anything so evil as contraception. Some Republicans are using the bishops’ stupidity to hurt the supposed “moderate” candidate Mitt Romney, giving a temporary leg up to the faux naïf Rick Santorum; others are attacking Barack Obama as an “enemy of religion.”...


The Phony Religious Freedom Argument

The bishops’ opposition to contraception is not an argument for a “conscience exemption.” It is a way of imposing Catholic requirements on non-Catholics. This is religious dictatorship, not religious freedom.

Who's "entitled"?

Center on Budget and Policy Priorities:

Some conservative critics of federal social programs, including leading presidential candidates, are sounding an alarm that the United States is rapidly becoming an “entitlement society” in which social programs are undermining the work ethic and creating a large class of Americans who prefer to depend on government benefits rather than work.  A new CBPP analysis of budget and Census data, however, shows that more than 90 percent of the benefit dollars that entitlement and other mandatory programs[1] spend go to assist people who are elderly, seriously disabled, or members of working households — not to able-bodied, working-age Americans who choose not to work.  (See Figure 1.)  This figure has changed little in the past few years.

CBPP continues:

In a December 2011 op-ed, former Massachusetts Governor Mitt Romney warned ominously of the dangers that the nation faces from the encroachment of the “Entitlement Society,” predicting that in a few years, “we will have created a society that contains a sizable contingent of long-term jobless, dependent on government benefits for survival.”  “Government dependency,” he wrote, “can only foster passivity and sloth.”[2]  Similarly, former Senator Rick Santorum said that recent expansions in the “reach of government” and the spending behind them are “systematically destroying the work ethic.”[3]

Obama's "War on Religion": Stewart takes on The Crazy

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The Difference...

More on Charles Murray's "Coming Apart: The State of White America, 1960-2010" from the New York Times review by Nicholas Confessore:

A Libation Gap?

One of its overriding themes is that economic insecurity doesn’t have much to do with eroding civic values, so we shouldn’t bother using government to tackle inequality. You will learn about working-class laziness, but you will find little discussion of the decline of trade unions or the rise of a service economy built on part-time work without benefits.

Murray dismisses research by scholars who have found that people in bankruptcy court usually end up there because they lost a job, got divorced or faced catastrophic medical bills, pointing to a contrary study of a single year’s worth of bankruptcy filings in Delaware, home to many of America’s credit card companies but very few of its citizens.

Though a self-described libertarian, Murray is not immune to the rage of the 99 percent. He lashes into bloated C.E.O. pay, but chiefly as a symptom of collapsing codes of behavior and propriety. And he is also skeptical that working-class whites are employed less because they can’t find decent jobs. How can the economy have anything to do with it, he asks, when the decades in question have included periods of rapid economic growth? 

Perhaps because not everyone has shared in that growth. While Murray’s new upper class was taking home an ever greater share of national wealth, incomes for almost everyone else were stagnating. During the decade preceding the 2008 bust, according to the Census Bureau, median family income in the United States dropped from $61,000 a year to $60,500. 

Indeed, in comparison with the early 1960s, American workers today are less likely to have pensions, less likely to be able to support a family on a single income and, until the much-reviled ObamaCare law kicks in, less likely to be able to afford health insurance if their employer doesn’t provide it. 

Working-class whites are different from the cognitive elite in at least one way: They have less money.

Quote of the Day

Paul Krugman, at the New York Times, on the state of contemporary conservatism: "tinfoil hats have become a common, if not mandatory, G.O.P. fashion accessory."  Read the rest HERE.

Income Inequality & The Education Gap

Sabrina Tavernise at The New York Times:

Education was historically considered a great equalizer in American society, capable of lifting less advantaged children and improving their chances for success as adults. But a body of recently published scholarship suggests that the achievement gap between rich and poor children is widening, a development that threatens to dilute education’s leveling effects.

It is a well-known fact that children from affluent families tend to do better in school. Yet the income divide has received far less attention from policy makers and government officials than gaps in student accomplishment by race. 

Now, in analyses of long-term data published in recent months, researchers are finding that while the achievement gap between white and black students has narrowed significantly over the past few decades, the gap between rich and poor students has grown substantially during the same period. 

“We have moved from a society in the 1950s and 1960s, in which race was more consequential than family income, to one today in which family income appears more determinative of educational success than race,” said Sean F. Reardon, a Stanford University sociologist. Professor Reardon is the author of a study that found that the gap in standardized test scores between affluent and low-income students had grown by about 40 percent since the 1960s, and is now double the testing gap between blacks and whites. 

In another study, by researchers from the University of Michigan, the imbalance between rich and poor children in college completion — the single most important predictor of success in the work force — has grown by about 50 percent since the late 1980s. 

White America Coming Apart?

Murray, center, is worried about "White America"

Charles Murray, the right-wing think-tanker most notorious for the "Bell Curve" thesis asserting racial differences in intelligence, has come out with a new book focused on the apparent decline of white people in the US: “Coming Apart: The State of White America, 1960-2010."

Murray - true to form - blames liberal "elites" for what he interprets as moral disarray among the white working class. Most of this concern relates to declining labor force participation and declining rates of marriage among lower income white people.

Paul Krugman, reviewing Murray's case, suggests the real causes of increasing stress on working class individuals and families:

Most of the numbers you see about income trends in America focus on households rather than individuals, which makes sense for some purposes. But when you see a modest rise in incomes for the lower tiers of the income distribution, you have to realize that all — yes, all — of this rise comes from the women, both because more women are in the paid labor force and because women’s wages aren’t as much below male wages as they used to be.

"Those were the days..."

For lower-education working men, however, it has been all negative. Adjusted for inflation, entry-level wages of male high school graduates have fallen 23 percent since 1973. Meanwhile, employment benefits have collapsed. In 1980, 65 percent of recent high-school graduates working in the private sector had health benefits, but, by 2009, that was down to 29 percent.

So we have become a society in which less-educated men have great difficulty finding jobs with decent wages and good benefits. Yet somehow we’re supposed to be surprised that such men have become less likely to participate in the work force or get married, and conclude that there must have been some mysterious moral collapse caused by snooty liberals...

The Catholic Contraception "Controversy"

98% of Catholics use birth control proscribed by the hierarchy

The current heat over requirements that employers such as universities and hospitals that are affiliated with churches provide full health insurance coverage, including access to contraception is based on some misinformation regarding who supports the Affordable Care Act regulations and who is raising a ruckus claiming the Obama administration is engaged in a "war on religion" as some sort of secularist plot. While the Catholic hierarchy set off this controversy, the shock troops against the administration are mostly coming from elsewhere.

The graph below shows current polling on public support, broken down into denominational factions ("white evangelicals" is an unfortunate-but-necessary separate race-based category, because the right-wing white populism that has infected many self-defined evangelicals among the GOP's largely lily-white base is a more defining characteristic than their asserted Christian values - values which are interpreted quite differently among very traditionalist or fundamentalist Christians who are also informed by the real-world experiences of African-Americans.)

Note that support for the contraception coverage is even higher among Catholics than the general population, while "white evangelicals" - i.e. demographic terrain for a major "usual suspects" segment of the hard-core GOP base among resentment-driven white cultural populists - are the predictable locus of dissent  :

 Via Wonkblog.

The fallout of this episode - wherein the President is supported not only by most citizens but by most Catholics - is that in service of the GOP's desperate last-ditch partisan wars of cultural and racial resentment, we get nutty stuff like this coming from the mouth of Rick Santorum:   "This is a very hostile president to people of faith. He’s a hostile president, not just to people of faith, but to all freedoms." 

Santorum, true to form, is some combination of irresponsible and perverse in his mendacious mudslinging.  In fact, Santorum himself is hostile to freedom in that he has expressed opposition not just to a woman's right to choose as regards abortion, but to all forms of birth control. He is on the extreme wing of the anti-gay equality crusades. Santorum is shouting from the gutter. That he cloaks his hate and lies in high-volume religiosity makes them just that much more disgusting.

"How Romney would tax us"

Tax expert, David Cay Johnston, has it:

President George W. Bush cut taxes for almost everyone who paid income taxes. Romney would make the Bush tax cuts permanent. But that’s only a first step.

He would also raise taxes on poor families with children at home and those going to college. Romney does this by reducing benefits from the child tax credit and the earned income tax credit and by ending the American Opportunity tax credit for college education.

Without these tax breaks, the poorest fifth of taxpayers would pay $157 more in taxes in 2015 than under current policy, the Tax Policy Center says in its analysis of Romney’s plan. The second poorest group would pay $82 more, according to the center, whose past work has been praised by Republicans and Democrats alike.


TAX CUTS
While Romney would make these two groups — the poorest 125 million Americans — pay higher taxes, the top 60 percent all would get tax cuts. The top tenth of one percent would save, on average, $464,000 a year, the Tax Policy Center’s analysis says.

His plan gives one third of his tax cuts to the top tenth of one percent of taxpayers. By comparison, Bush gave this group only one eighth of his cuts.

Romney would also eliminate estate and gift taxes, a policy that I believe would damage the spirit of striving that has served us so well until now, replacing it with a new era of dynastic wealth.
Romney’s campaign did not answer specific questions about his tax proposals, referring me instead to the plan itself.

Tax Fairness - eliminate lower rates for capital gains

Mark Schmitt at "New Deal 2.0":

The special rate for capital gains and dividend income is the first problem to fix in tax reform, and not just for millionaires or those over $250,000. It creates enormous distortions in economic activity — all the complicated-sounding loopholes you hear about, like the “carried-interest loophole” or the “founders’ stock loophole,” are really just scams to redefine ordinary income as capital gains to get the preferred tax rate. Eliminate the special rate and the loopholes disappear.

Nor do lower rates for capital gains, in the long-term, promote growth or encourage investment that wouldn’t otherwise occur. Economist Alan Blinder pointed out in 2007 that after the Tax Reform Act of 1986 eliminated the special rate for capital gains, the economy continued to boom. The better “Buffett Rule” should be simply, “All income should be taxed in the same way, regardless of whether it comes from work or investment.”

Note: It's useful to remind ourselves of who was President when the Tax Reform Act of 1986 was passed, eliminating special lower rates for capital gains income.  Ronald Reagan championed this reform, which raised taxes on capital gains by thirty percent with no apparent impact on investment or GDP growth. The rates were eventually lowered under both Bushes.

Who benefits from this tax loophole?  According to Forbes editor Robert Lenzer (via Eric Alterman), "The top 0.1 percent—about 315,000 individuals out of 315 million—are making about half of all capital gains on the sale of shares or property after one year; and these capital gains make up 60 percent of the income made by the Forbes 400."

SuperBowl Surprise: Clint Eastwood endorses Obama... I mean, uh... the US auto industry

The hard Right will hate Clint for becoming a spokesman on behalf of Detroit's revival driven by President Obama's reaching out to an industry in distress, but I'm certain that he could care less. He's Clint Eastwood...and they're not.