Tag Archives: tax policy

The long shadow of the Panama Papers

For the last few days, world news has been abuzz about the world’s as of yet largest leak of private information, which are now being called the “Panama Papers.” Publicized by a German newspaper a year after being given them, the information is from a Panama-based investment firm specialized in offshore and otherwise tax evasive practices. Major names around the world have been listed as having engaged in hypocritical and at times criminal financial transactions designed typically to avoid paying the full tax cost owed to various countries and localities.

One of the central figures in the leak was Iceland’s former Prime Minister Sigmundur Davíð Gunnlaugsson, who resigned on Sunday. Elected as a reformer who largely delivered on promises to turn Iceland’s economy back around, the revelation that he had profited from the financial reforms he oversaw through an undeclared and indirect investment essentially invalidated his political legitimacy.

2016-04-05_1414.pngCountries in which heads of state, high ranking public officials, or close associates have been named in the current leak.

Although uniquely duplicitous and corrupt, his place in the broader story of the Panama Papers actually speaks to a broader worry. His gains from Iceland’s economic restructuring weren’t just undisclosed, they were also untaxed. There’s a palpable failure of an Iceland-like series of new restrictions and standards on banks to address the ability of him and other Icelanders to strategically engage in capital flight. With Iceland facing warnings from international financial institutions over the costs of their response to the global crisis, this isn’t a trivial matter. It’s a shortfall in the millions if not billions globally, which in a political climate of widespread austerity has been felt worldwide by the classes who don’t have hidden bank accounts.

Outside of the Sanders-Clinton fight eating up US leftists’ attention, this is one of the system problems the “Warren Wing” has been hinting with growing volume. In the wake of anemic banking reforms, Elizabeth Warren’s individual focus has shifted somewhat towards addressing capital flight, even if just rhetorically. That’s just about the only ideological contingent in the US that can talk about this easily – for civil libertarians currently defending encryption this is an example of the public costs that high tech and high price secrecy can incur, for the more corporate friendly this only demonstrates the shady ethics of the economic order they defend, and for domestically-focused social democrat factions this represents the international scale of the problem which they often don’t acknowledge.

With a Democratic primary debate barely more than a week away, this is precisely the issue that both of them can and should be pressed on. Let’s see if CNN’s Wolf Blitzer brings it up.

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A tale of two capitalisms

Senators Bernie Sanders and Elizabeth Warren have kicked up quite the commotion within the Democratic Party in the past couple of weeks. I’ve mentioned before how Sanders’ presidential campaign has pushed fellow candidate Hillary Clinton into adopting more substantive promises to the liberal base, particularly when it comes to affordable access to education. More than a few observers have noted how this has stoked the less obvious competition within the Democratic Party over what economic policies the leaders of the party will advance.

That’s just what’s happening within the presidential primary, however, as Elizabeth Warren is similarly galvanizing the Democrats’ economic left in the Senate. Even while Sanders’ defense of reinstating Glass-Steagall regulations on banks has captured the media’s attention, it’s easy to see Warren’s less eye-catching work on those and other issues. In a traditional legislative dynamic, her criticisms and suggestions to the financial industry and the broader economic system both suggest she might block financial deregulation in the Senate and help inspire left-leaning Democrats in the House to directly oppose it.

Beyond opposing a conservative vision for the economy, Warren and like-minded congressional representatives have begun presenting the type of reforms that are anathema for Republicans and distasteful to the more corporate-friendly Democratic circles. She began a speech last week by deflating the calls for lowering corporate taxes, and from there moved to a progressive tax proposal arguing that “revenue generated from corporate taxes is far too low.”

As a part of that, she delivered deeply topical response to the economic conversations being had among both conservatives and centrist Democrats about lowering the taxes collected on international companies to encourage them to remain in or return to the US. As Warren explained, “Fortune500 companies proudly proclaim that they are making record-breaking profits, and then they hire armies of lawyers to make sure they don’t pay taxes on those record-breaking profits.” With Carl Icahn having openly done this, she seems to have a point. She wasn’t kidding about the armies, either, as she noted-

“In just the past ten years, the amount of untaxed, off-shore profit has increased nearly five-fold. In other words, one of the hottest investments in America in the past decade hasn’t been biotech or big oil, it’s been tax lawyers. The money sheltered overseas is now about the same as the combined total earnings of all US corporations in 2013.”


“The Big Short” is, according to Warren, actually the big siphon.

She points out that the push for lowering taxes in the US to be competitive is being driven by other country’s somewhat collective efforts to “shut down tax dodges”. The main companies keeping their money perpetually between countries to avoid taxes in either are looking for a deal competitive with their current set-up that can replace the looming risk of tax litigation.

Centrists like Senator Chuck Schumer (D-NY) and business-centered Republicans like Senator Rob Portman (R-OH) have been happy to offer that kind of a deal, including deemed repatriation (one-time giveaways on sheltered companies that keeps them from paying the full cost of back taxes).

As I’ve noted before, one of the most salient differences between the parties in the coming election appears to be their distinct understandings of economics and capitalism. What Sanders and Warren seem to have done is created that, not only by pushing some centrists like Clinton further to the left, but also by making others like Schumer into obvious examples of the centrist wing, rather than just another Democrat.

It’s become common to argue that the two parties are essentially indistinguishable on economics. It’s true that they are both offering, for the most part, fundamentally modern capitalist economics. That said, the specific prescriptions within that type of economic thought have begun to notably diverge. Their common worldview isn’t as shared as one might suspect.

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Push and pull

There’s been a lot of strange back-and-forths in the news this week. Here’s a short list of some interesting forms of that which I saw crop up in the past couple days.

From Sanders to Clinton, yet again

I’ve written here before about one of the key dynamics in the current Democratic presidential primary being how further left critics of former Secretary of State Hillary Clinton have nudged her into adopting more liberal policy proposals. With Clinton largely holding her own on issues of social justice, the main part of that has been on economic policy. Most obviously, sitting Vermont Senator and fellow candidate Bernie Sanders has effectively pushed Clinton into adopting similar platforms to him on the availability of higher education.

That said, similar efforts to promote unionization and financial industry regulation haven’t (yet?) become shared policy ideas between Sanders and Clinton. On Tuesday, the Campaign for America’s Future asked if one of the most recent iterations of those economic politics from the Sanders-Warren wing of the Democratic Party might be picked up by Clinton. In this case, it’s a repeal of a “performance pay” tax exemption for larger companies in order to pay for cost of living adjustments for Social Security recipients. Fresh from having failed to assure a number of people that she wants to protect Social Security in the long term, Clinton might need to pick this battle, unless she wants to write off a large chunk of the Democratic primary vote.

The Keystone Pipeline is dead! Long live the Keystone Pipeline!

Recently, the proposal to build a new pipeline from Canada to shipping areas in the southern US was officially rejected by the Obama administration. The company that has been seeking the pipeline’s construction for years now thinks they might have another Clinton-economics-related shot at getting it done in spite of that though: NAFTA. As the Hill put it, they “could ask a tribunal to mandate compensation from the United States for rejecting the pipeline, or even require that the project be approved.” With the possibility of the Trans-Pacific Partnership looming in our future, it seems important to note how its smaller, weaker predecessor allows business interests to challenge and even overrule the decisions of a democratically-elected government.

Who will survive in America?

One of the criticisms of the Keystone Pipeline, is the displacement that it already has begun to cause within certain rural communities. Unfortunately, that upheaval is hardly unique to that specific part of the US, as artist and astrophysicist Nia Imara documented in her recent photography project about gentrification in Oakland. The East Bay Express published earlier this week a short but intriguing look into her process and relationship with the community while creating her work.

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Balmy congressional climes

Trigger Warning: racism, colonialism, climate change

President Obama began this month with a coordinated political message about climate change. Over the course of his presidency, he has emphasized the need for action on that environmental issue among others and been criticized for it. Until this point, however, he has had difficulty directly confronting the US’s responsibility for the warming climate. Instead, his most visible policy action has been inaction – his mild mannered blocking of the Keystone Pipeline. More quietly, his administration has dramatically increased federal investment in environmentally friendly power sources, but that seems like a mild alteration of policy rather than a concrete effort to change the environmental impact of the United States.

The newly released climate plan builds on the expected returns from that increased federal funding of wind, solar, and other more or less carbon-neutral energy sources. The expected fruits of those investments are to be harvested with a reduction in electricity producers’ carbon outputs to just over two thirds of 2005’s levels by 2030. The regulatory system is merely an expansion of existing limits on other chemical pollutants, namely Mercury, Sulfur, and Arsenic. It also incorporates guidelines in public planning, anticipating increasingly destructive climate conditions to existing infrastructure, which will be implemented with a task force of state, local, and tribal leaders. In short, it avoids almost every major pitfall to the Republican statements on climate change during the 2012 election from the bafflingly unrealistic expectations to open disregard for indigenous communities and other specific populations particularly at risk of existing climate change impacts.

Is that enough though? The pragmatic nature of the climate plan sets distant goals, deliberately to provide the private industries significant time to comply with the announced regulations. There is a history of that sort of long term program ending up derailed, as the US’s backing out of the Kyoto Protocol (and that plan’s other failures) demonstrates. Careful, meditated action has its strengths, but on this particular issue it has a history of justifying apathy and further kicking the can down the road. While something of a defining characteristic of Obama’s technocratic style, as with other issues (such as health care reform), his measured reforms fail to damper Republican and conservative hostility to solutions on this and other problems.

Almost immediately after Obama’s announcement, former congressional representative Bob Inglis critically stated his regulation-minded program was anathema for Republicans. Instead, he floated a vague “fix” of the economics, which he finally specified would mean a carbon tax matched with a corresponding tax cut would be what Republicans could support, or at least not vote block. Alex Wagner, hosting the program he was a guest on, called him out on the duplicity almost immediately – “If we’re talking about you know poison-pills or language that is just kryptonite, do you think this President would have more success saying the word ‘tax’? Or Republicans for that matter would have more success pushing for a tax, rather than regulation?”

Inglis, who has been out of office since 2011, didn’t skip a beat and immediately had an alternative for Wagner, Obama, and anyone else motivated to address climate change. He offered, “How about this deal. [Obama or another democratic leader should say] we’ll give you the votes for pricing carbon dioxide, and you, Speaker Boehner, choose the corresponding tax cut.” Shifting the discussion from regulations to direct taxation doesn’t really make sense, especially since a commodity tax is difficult to predict the revenue of, so creating a predicted counter-revenue tax cut will actually be near impossible. Of course, that’s not the point, which is gaining leverage. In essence, what can the demand for action on climate change do for congressional Republicans?

Residents of Kiribati piling stones and sandbags to stave off rising ocean waters, from January 2015Kiribati residents have taken as of the past year to piling stones and sandbags to stave off rising ocean waters in the low-lying nation of islands in the Pacific, from here.

It’s fitting that the wealthy in the industrial world can not only economically profit from the putting of greenhouse gases into the atmosphere but also reap political capital from almost any and every plan to reduce that output. The rhetorical context that makes that possible has its own history. Any and all responses to the looming threats of climate change have to responsible, reasonable, and essentially adult. They have to emphasize, as Obama’s announcement did, that they will act on that problem while also “lowering energy bills, ensuring reliable service, and paving the way for new job-creating innovations”. There has to be no objectionable element, no cost, no difficulty, no discomfort. Even when that is promised, it won’t be believed, and another, new, slightly tweaked version of the same sort of policies can be held up as the actually feasible policy.

Inglis’ new idea is to push for other policy desires (for more tax cuts, in this case) to be fulfilled at the cost of each and every action on the threat of climate change, but expect to see that bog standard congressional Republican tactic (recall the government shutdown) increasingly applied to desperately necessary action on climate change.

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How wrong is the Heritage Foundation? Let us count the ways…

The Washington Post is usually not the best newspaper, but it’s not above some surprises. Last Monday, they printed an excellent rebuttal to the report co-authored by the obviously racist Jason Richwine, which really digs deep into three major intellectual failings in their report on the “cost” to granting undocumented immigrants amnesty and full citizenship. I don’t have the time today to do a proper post, so I’ll let this be a let-me-link-you that’s hopefully enlightening about exactly how wrong the Heritage Foundation’s report was.

To begin with, it’s not exactly a measurement of the cost of changing the millions of undocumented people’s statuses, so much as the larger macroeconomic effect. As a result, it has to at least roughly model the current economic circumstances in order to compare them with a hypothetical future where amnesty and citizenship have been granted to the vast majority of currently undocumented people. Except they make some questionable decisions about how to approximate both the current and that potential economy.

Starting with our world – they effectively pretend that the most regressive aspects of our tax system don’t exist. According to the Washington Post the study omits the “mortgage interest tax deduction, the charitable deduction, the employer health-care tax exclusion, the preferential treatment of capital and dividend income” among other “massive benefits” to primarily wealthy individuals. In short, they’re biasing their comparison by making it seem as though a disproportionate portion of public benefits in the US are paid for by the most wealthy in the United States.

That might seem irrelevant, but given how they presume much lower use of public resources by people who are currently undocumented, meaning that the wealthy who typically have legal residency statuses are presented as effectively covering the poor, but only those that also aren’t undocumented. In short, they’re creating the impression that our current fiscal conditions are much healthier than they actually are – with fewer people deprived of basic services or needs (by arbitrarily deciding that undocumented people don’t currently count) and more people contributed their personal reserves of wealth to public benefit (through a more progressive taxation system than we actually have).

(Unfortunately this is what’s actually happened over the past few decades, from here.)

Those deceptions alone would have probably undermined any meaningful conclusion from the comparison Heritage set up in this study. That said, they don’t leave it there – they also presume that extending legal residency status (and ideally citizenship) to currently undocumented people won’t result in them being able to access hiring paying work or more effectively lobby for better pay (among other economic benefits). The degree of ignorance that shows about how a lack of legal residency status is used to exploit people within the current economy is astounding.

The Washington Post actually points directly to one study, which points to a conservative 15 percent increase in average income and a less cautious estimate of a 25 percent increase, as a counterpoint to this categorical belief that the lots of the currently undocumented won’t be improved by amnesty or at least significant reforms. Between more immigrants reporting their incomes and those immigrants having more income in the first place, there’s a clear reasoning behind why changing their statuses would translate into some growth in the tax pool, which would potentially cover any increase in service use by currently undocumented people.

In essence, this comparison between the current economy and this hypothetical one “wrecked” by immigrants rests on three major misconceptions of how the world actually works. It’s working towards the conclusion that granting immigrants rights and privileges would be ruinous, which it can only support by presenting the status quo as healthier than it actually is and imagining amnesty as simultaneously resulting in a run on public services but no other major economic impact. My hats off to the Washington Post for actually getting into the details to how Heritage lied.

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Good governance is not a lack of governance

If you’ve been party to the on-going discussion in the US about the apparent “fiscal cliff”, you’re primarily aware of two separate takes on the issue. The expiration of numerous tax cuts either signifies an unparalleled shock the still fragile economy or a return to the Clinton era’s tax policies. If you hold to the former, you probably want an uncritical extension of the tax cuts, especially for those at the top out of some misguided faith in Reaganomics. If you hold to the latter, you actually don’t want the opposite of that – of very cautious and deliberate examination of what different plans would extend – but rather total government inaction. That is, those appear to be the options the that media is primarily presenting.

Much as it pains me to say it, but this is largely on the centrist segments of the media, although there’s plenty blame to find for the conservative factions as well. Yes, Fox News has been hyping this since the election and unapologetically demanding that we renew the tax cuts especially for the most wealthy Americans in spite of all the arguments about how now is precisely the time to return to Clinton era tax rates. In short, they’re not arguing anything based on facts. It’s about protecting their faith in inegalitarian wealth distributions as somehow being more efficient, even if that’s contrary to all the evidence.

Unfortunately, the rest of the media has gotten sucked into the vortex of debating those facts. That’s why the clear narrative has been about stressing how tax policy isn’t going to drastically change, and to the extent that it does, it’s not unambiguously negative. The problem is that fiscal cliff is about more than simply tax policy. The Reid Report has excellently covered the tensions going on within the Republican Party because of this issue, but only through coverage of the tax discussion. Charles P. Pierce’s opinion piece on the issue isn’t as factually challenged as much of the Republican analysis of the issue, but it’s still myopically attached to the issue of taxes. The Republican fixation on income taxes policy to the exclusion of all other issues has been unintentionally imported into the political mainstream, and because of it, we’re only looking at half the “fiscal cliff”.

The Congressional Research Service’s report on the “fiscal cliff” isn’t even all that concerned either, as they’ve left discussion of the numerous other expiring tax credits to a final, short section. It’s honestly a horror story of how disastrously mismanaged government in the US has been over the past decades. Education is so chronically underfunded, we simply provide deductions to grade school teachers who purchase supplies for their classes. Investment in cleaner energy sources is so devalued, we simply offer a few tax holidays to wind energy production. Community renewal in the District of Columbia, American Samoa, and other chronically impoverished areas is so politically toxic that the government has simply provided small incentives to private charities and community organizers to help sort out the myriad issues facing those communities. We are suffering from a maddening lack of governance on these and other issues, and now each of those tax credits are set to expire. Even what little good has been done through willful inaction is likely to be reneged.

(The real victims of the fiscal cliff? From here.)

Yes, the argument that we must do everything possible to avoid a return to Clinton-era income taxes is silly, and largely dependent on counterfactual beliefs. But almost every major voice in discussion on this issue is refusing to talk about the rest of tax policy, in spite of their being so much to say. Inaction on the questions those additionally expiring credits raise is precisely the problem that created them as “solutions”. Now, that same cavalier attitude towards governance is legitimizing ignoring them once again.

So far, Lucia Graves seems to be the lone voice in the wilderness on any part of those other expirations.

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The GOP: we alienate everyone because we almost can

You may have heard some the talk recently in the US about how the blowout re-election of President Obama was due to the Republican Party alienating every voter they could, and there’s a lot to say on that issue. Election night was full of animated analysis of the gender gap, and particularly the marital dimension of it. The past few weeks, discussion of how that occurred for Black and Latin@ voters has been a common theme in political media. In more recent days, analysis of the stark movement of Asian electoral support from the Republican to Democratic Party has been the newest item of the on-going discussion.

(Various Asian voters historically favored Republicans, but the past twenty years of neo-nativist rhetoric have stunningly reversed that, making other shifts, like Bush’s gains with Latin@s look inconsequential in comparison. From here.)

The last bastion of Republicans strength outside of a narrow subculture of straight, cisgendered, White, Christian, wealthy patriarchs seems to be among the middle class, as Romney’s campaign strategist recently wrote in a Washington Post opinion piece. The facts are, however, that Romney only won the range of voters with yearly personal incomes greater than $50,000 when viewed all together. There isn’t data specific the “middle class” segment of that, however we might define it.

But of course, it comes as no great shock to note, as Paul Krugman has, that the Republicans have tried to push through a compromise on the expiration of the Bush tax cuts that would have sacrificed the current rates of many of those making between  the not-really-middle-class-anymore-right? $250,000 and a shocking $400,000 yearly, to keep the current low rates on income greater than that bracket. So, for those with income within that bracket, the message from Republicans is clear: the political demands of even the rich are irrelevant compared to those with those of the astounding wealthy.

(From Krugman’s article.)

How long will those who fit into the Republic pigeonhole in every way other than class keep voting for them? Did we just see the straw that broke the camel’s back?

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“Family Values” need a check

In the past decade or three, the United States has seen massive growth in organizations with “family” in the name. Generally speaking, these groups frequently emphasize the need to protect “the Family”, which is spoken of as if it were a delicate platonic ideal subject to shattering if even modestly questioned. While it’s obvious that I disagree with their working definition for which people constitute families and which don’t, it seems like we should all be able to agree that support for families, platonic or otherwise, is a social good.

It would seem that way, sure, but there’s a point where that sort of logic becomes an apologetic for nepotism (or as some have called it along with associated behaviors, “amoral familialism“). The culture in the US certainly seems to favor family in an abstract sense but there’s some indications that this valuing of family reaches a pathological level that threatens the larger social safety net. No one exemplifies this more than Republican Candidate for President Willard “Mitt” Romney. Our inability to notice this specific flaw in him is a worrisome indicator of our capacity to address the need to balance a valuing of family with protecting and investing in society as a whole.

At least three generations of Romneys
(Mitt Romney, his wife Ann Romney, their three sons and their wives, and 15 grandchildren – originally from here.)

Most reporting on Romney’s seemingly infinite tax scandal has focused on his personal power of deception (in refusing to release the normal number of returns) or the web of professional relationships surrounding his likely lies (namely the role of his lawyers and other legal associates in tightly containing and selectively releasing the information). The few reports on his finances that look at how he seems to have both legally and  “extra-legally” accrued massive funds to pass on to his children typically focus on the technical details. The driving concerns are what financial methods he’s used and what their legal statuses are. In the one thorough explanation of his use of family-oriented tax deductions and loopholes that I’ve found, it was noted:

Romney’s individual retirement account, which he said in a financial statement filed in June is worth between $18.1 million and $87.4 million, may be used to benefit his children […] When beneficiaries inherit an IRA, they are required to take distributions based on IRS tables that use life expectancies. The younger the beneficiary, the less they have to withdraw each year from the account. That can benefit children or grandchildren because assets in the IRA can continue to grow tax-deferred […] Senate Finance Committee Chairman Max Baucus, a Montana Democrat, proposed in February to require younger beneficiaries who inherit IRAs to pay taxes over five years instead of spreading them over their lifetime, which would raise an estimated $4.6 billion for the Treasury over the next decade. The plan didn’t advance.

If not legally questionable, this practice is at least ethically questionable. As a candidate Romney has equated paying income taxes with social responsibility. Sheltering what is for all intents and purposes his income, so that his children and grandchildren can live in luxury, regardless of the larger social cost, fails his own moral test. It’s a clear sign that just as he has been accused of proposing government by his socio-economic class for his socio-economic class, he prioritizes “people like him” over others. In this case, he wants to shield generations of his family from the “burden” of contributing to the entire rest of the United States in the form of modest taxation.

Tellingly, this is not one of the loopholes that Romney has specified wanting to eliminate to make his proposed tax cuts revenue neutral. Undeniably, Romney is a man who values “the Family”, but when that’s a value placed above all else, there are clear social costs that we need to realize.

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Is class consciousness back in style?

Earlier today, Paul Krugman mused on the unexpected reversal of fortunes in the current presidential election. He noted that enthusiasm and unity have been shown on the Democratic side while decidedly lacking among Republicans, a bit of a contradiction of political stereotypes. But furthermore, he recognized a slow but steady shift in public attitudes:

Among other things, while we weren’t looking, social issues became a source of Democratic strength, not weakness — partly because the country has changed, partly because the Democrats have finally worked up the nerve to stand squarely for things like reproductive rights. […] The right is already set up to blame poor Mitt, claiming that he lost because he wasn’t conservative enough. But that’s not what we’re seeing; it looks as if voters are rejecting the right’s whole package, not just the messenger. As I said, not the election anyone was expecting — but a happy surprise for some, and a nasty shock for others.

There’s clear evidence on this point – as majorities of people in the United States now support same-sex marriage  and other progressive policy changes the Republicans oppose. I subtly suggested yesterday that the distinction between “social” and “economic” issues is a bit more fluid that usually acknowledged – economic protection from gender discrimination interacts with social policies towards women who either live independently or only with other women. I think it’s worth looking at issues of economic populism holistically – not just as political and economic issues but also as potential contexts of pop culture. From The Hunger Games to In Time, economic inequality has become a common topic in entertainment in the United States and elsewhere. Suzanne Collins, the author of the original Hunger Games trilogy, clearly called the trend as she planned out the books over the course of 2008 and published the first on September 14, 2008, a day before panic would break out on Wall Street after Lehman Brothers filed for bankruptcy.

For much of the following year, political debate in the United States would focus on class. It’s hard to deny the mingled forces of popular culture and economic populism in the following election. But even afterwards, a focal question at the time was whether deficit reduction (as suggested by the Tea Party protests) or unemployment (as suggested by the President’s and Congress’ stimulus plans) was the  greater danger for the poor and middle class. Ultimately, the discussion between restrained Keynesian approaches from the federal government and ostensibly grassroots protests from deficit-hawk conservatives was joined by the on-going Occupy protests of all forms of economic inequality. In spite of all these clearly economic issues being discussed, the national conversation couldn’t help remarking on the perceived hippie-ness of Occupy and the confederate undertones of the Tea Party. The protests were at once about common cultural values and economic policies. But as these movements’ influence continues to be felt through this election year, economic issues have seemed to be among the most salient of the issues making this election so “ideological” (as Krugman called it).

May 2011 protests in Madrid, Spain. (Photo from here.)

Meanwhile in the rest of the world, austerity policies and subsequent anti-austerity protests spread across Southern Europe, as the economic downturn reached around the world. Spanish and Portuguese protesters (called “los indignados”) marched across much of the Iberian peninsula, through a very perturbed France, and into the center of the European Union’s administration – Brussels, Belgium. Just as in the United States these sorts of protests were highly visible cultural events as much as political statements – with Portugal nominating a protest song to the massively popular Eurovision musical contest. Protests are only growing in intensity in Greece, so it seems clear that demands for retaining or augmenting redistributive economic policies will only get louder, and perhaps more embedded in popular culture.

Even in less directly affected countries throughout the Middle East, poor economic conditions stimulated mass protests. The original Arab Spring, in Tunisia and Egypt, was explicitly a reaction of the combination of economic as well as political malaise. Likewise, there was an explicitly cultural and artistic component to it, from the street art in the Arab world to the few gallery artists whose careers in other countries were launched by it. The protests elicited creative responses the world over, including reactions by Arabs living in other parts of the world [TW – police violence]:

It seems clear: culturally-resonant demands for economic populism are increasing their influence in much of the world, and it shouldn’t be a surprise to see it, along with other factors and issues, driving electoral choices in the United States and elsewhere in the near future.

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Romney has been one of the neediest of the 47%

TW: vilification of lower income people, corporate welfare

A few days ago, Rachel Maddow excellently pointed out that Republican presidential candidate Romney’s private statements about the 47 percent of US citizens who pay no income taxes were not only a tactical blunder, but were also patently hypocritical, as he hasn’t paid much if anything in income taxes. Maddow predicted that this scandal would pull national discussion back towards his secret tax returns and his history of lying about what earlier returns have said. While she’s been proven right that this has resurrected past attacks on Romney, it’s been ones slightly different from discussions of his returns. For instance, I’ve seen this image start circulating around Facebook in the past days, since Romney’s misstatements were verified as true:

(Originally from here, typos and all.)

Not only does Romney belong the group he maligned, but he’s received an astoundingly larger amount of financial support than the average member of that group.

Of course, this has already elicited a few complaints that the facts here are being misrepresented. I’ve already seen one Facebook comment complaining that this was a falsehood invented and promoted by Vice President Joe Biden, naturally with no evidence provided. The most substantial investigation of the $10 million bailout that I could locate was penned by the previously mentioned Glenn Kessler. In the style of Tom Raum and Calvin Woodward, he complained about the Obama campaign’s explanation of this event on several notes. He argued their video failed to explain that Romney was not at fault for the losses (which they didn’t say anything about), that there was a bailout of Bain and Company not Bain Capital as “implied” (when the sentence before the one he quoted specified that), that Romney minimized the size of the bailout as much as possible (when this is irrelevant), and that the government funds weren’t taken from tax payers (when that also wasn’t stated, only that they were federal funds). So even some one quite sympathetic to the Romney camp couldn’t exactly spin this one.

Bringing us back to the earlier discussion about the dependency of businesses on the government but in a context of economic redistribution actually only strengthens the argument that Romney is hypocritical. The funds for the Bain and Company bailout were in part provided by fees placed on all banks and other financiers (as a fee for federal protection of their funds). If viewed as a tax (like income taxes), Bain and Company under Romney had a negative effective tax rate – essentially what he chided 47 percent of the United States for allegedly having.

To head off any claims about the assistance in the form of welfare or financial aid for students, I’ve looked into those figures as well. Pell Grants’ limits are well known, and at a maximum of $5550 per semester (which is being threatened with being reduced), that works out to roughly 1802 semesters. Welfare is a bit trickier to answer, since it’s more of a collection of programs. The largest is the federal program for Temporary Assistance for Needy Families (TANF) which has an assortment of state-based counterparts. According to their own records, in 2006 they together sent out about $9.9 billion in benefits (table TANF 4) to almost 2 million families (table TANF 3), which works out to about $5048.92 per family for the year, which alone would need to be doled out for almost two thousand years to equal the bailout to Bain and Company.

Adding in the Supplemental Nutritional Assistance Program (SNAP), the second largest program typically labeled as “welfare”, that only adds a maximum of $668 (page 9) to the monthly benefits for a given household, which is still inadequate to reach $10 million in some three hundred years, as quoted by Think Progress. Clearly, they must have combined smaller additional assistance programs’ maximum benefits into their total, ultimately reaching the figure of 328 years. Most of those programs specialize in helping specific subgroups of lower income people, like the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which requires recipients to be pregnant women, nursing women, or women with children under the age of five, or Supplemental Security Income (SSI) which is reserved for the physically disabled and elderly.

Part of this is, of course, illusory – not only are there new restrictions on how long a household can receive financial assistance, but many programs have strictly enforced stipulations on how the funds can be spent (WIC in particular is known for state-specific “restrictions on the types of foods (brands, package sizes etc) that can be purchased” that often seem arbitrary). Effectively, there’s no way for the average family to ever receive the amount of government assistance that Romney received in the 1990s while at Bain and Company. Hopefully that will return as a topic of national discussion given Romney’s clear contempt for poor people with effectively negative tax rates.

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The first sign we shouldn’t trust a word from Romney about Ryan

Potentially you’ve already seen the political advertisements, or read the CNN article on the leaked memos, or in one of any number of other ways found out the secret: Obama’s already cut Medicare by as much as the Ryan plan! And this isn’t the Heritage Foundation or another right wing think tank claiming this, but the Congressional Budget Office (CBO) – the non-partisan, government-run body that everyone trusts to explain fiscal details. Cat’s out of the bag everyone:

Unless of course you actually bother to fiddle around on the Congressional Budge Office’s website looking for whatever article it is they wrote in late July that credited Obama with cutting $716 billion from Medicare. The first obstacle to this, as near as I can tell, is that CBO has since updated the number to correct for some mistake or other, so you better not search based on that specific dollar amount alone. (This seems to have happened as the article in question still comes up when searching for the $716 billion figure but has been corrected in the article itself). Interestingly enough, this promo was uploaded to Romney’s account on Tuesday, so either he’s been sitting on this for some time and not bothered to double check his sources or the CBO only just recalculated this. Given Romney’s history with financial figures, I’m leaning towards him being the incompetent one here.

In any case, the actual number cited by the CBO is $711 billion – so the Romney campaign’s not pulling this entirely out of thin air! At least that’s what you’ll think until you realize that the CBO article is actually a public letter to John Boehner explaining what the fiscal impact would be a legislative attempt to repeal the Affordable Care Act (or ACA, also colloquially known as “obamacare”). The letter explains that taking such a course of action would in fact increase rather than decrease the federal deficit for many reasons including that-

The ACA also includes a number of other provisions related to health care that are estimated to reduce net federal outlays (primarily for Medicare). By repealing those provisions, H.R. 6079 [the bill repealing the ACA] would increase other direct spending in the next decade by an estimated $711 billion.

In other words, the ACA makes cuts in Medicare in the context of a massive investment in preventative care – which should ultimately make up for the lower expenditure on Medicare, but until then are explicitly to be made up by a structural overhaul of inefficiencies. The figure of $711 billion (or however many) is the amount of funds needed to cover Medicare recipients effectively, assuming that the necessary reforms packaged into the ACA are repealed. In contrast, Ryan’s plan would retain those cuts but without the systemic reorganization designed to make those cuts socially and economically feasible. Or rather, it relies on an unrealistic surge of economic growth as a result of its restructuring of tax policy to make its cuts reasonable. As one detailed analysis of Ryan’s budget and candidacy noted,

the most confusing aspect of the Ryan budget is that assumes these new tax policies will raise revenue above the 30-year moving average of 18.2% of GDP, from roughly 15% where it presently sits. […] the plan presupposes massive economic growth causing more taxable income from the populous.

Any one with a cursory knowledge of the past decades has seen precisely the same claims and how they’ve fallen disastrously short. As previously noted, Romney’s campaign narrative is built on falsities that are practically routine at this point, and Ryan doesn’t change the overall mood of the ticket but instead parrots it. Now they’ve even gone so far as the claim that the costs which would be needed to be made up during a hypothetical repeal of the ACA by John Boehner are integral to Obama’s health care plan, misquoted the dollar amount, and are ignoring that the ACA is constructed to manage without those funds while theirs assumes a historically unprecedented event to justify the lowered spending on Medicare. In spite of all of the problems raised by this, one of the most recent polls has these candidates leading nationally.

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