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August 7, 2012

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Latest Posts from Economist's View


Posted: 16 Jul 2012 12:24 AM PDT
Cutting through the "political and media fog":
Policy and the Personal, by Paul Krugman, Commentary, NY Times: A lot of people inside the Beltway are tut-tutting about the recent campaign focus on Mitt Romney's personal history ... at Bain Capital... Some of the tut-tutters are upset at any suggestion that this election is about the rich versus the rest. Others decry the personalization: why can't we just discuss policy?
And neither group is living in the real world. First of all, this election really is ... about the rich versus the rest.
The story so far: ... taxes on the very rich are currently the lowest they've been in 80 years. President Obama proposes letting those high-end Bush tax cuts expire; Mr. Romney, on the other hand, proposes big further tax cuts for the wealthy. ... Realistically, those big tax cuts for the rich would be offset, sooner or later, with higher taxes and/or lower benefits for the middle class and the poor.
So as I said, this election is ... about the rich versus the rest, and it would be doing voters a disservice to pretend otherwise.
In that case, however, why not run a campaign based on that substance, and leave Mr. Romney's personal history alone? The short answer is, get real. ... Perhaps in a better world we could count on the news media to sort through the conflicting claims. ...
So how can the Obama campaign cut through this political and media fog? By talking about Mr. Romney's personal history, and the way that history resonates with the realities of his pro-rich, anti-middle-class policy proposals.
Thus the entirely true charge that Mr. Romney wants to slash historically low tax rates on the rich even further dovetails perfectly with his own record of extraordinary tax avoidance — so extraordinary that he's evidently afraid to let voters see his tax returns from before 2010. The equally true charge that he's pushing policies that would benefit the rich at the expense of ordinary working Americans meshes with Bain's record of earning big profits even when workers suffered — a record so stark that Mr. Romney is attempting to distance himself from part of it ...
The point is that talking about Mr. Romney's personal history isn't a diversion from substantive policy discussion. On the contrary, in a political and media environment strongly biased against substance, talking about Bain and offshore accounts is the only way to bring the real policy issues into focus. And we should applaud, not condemn, the Obama campaign for standing up to the tut-tutters.
Posted: 16 Jul 2012 12:06 AM PDT
Posted: 15 Jul 2012 04:05 PM PDT
Larry Summers argues that the key to solving the inequality problem is to equalize opportunity, and that "By far the most important step that can be taken to enhance opportunity is strengthening public education." I agree we should try to improve public education, but it will take much more than that to solve the inequality problem (the kinds of things he mentions elsewhere in his argument are a start). We've been trying to improve education for decades and it hasn't solved the inequality problem yet, and it's folly to think some magic education bullet is just around the corner:
Changing focus to inequalities in opportunity, by Lawrence Summers, Commentary, Washington Post: Even if the process proves protracted, the U.S. economy will eventually recover. When it does, issues relating to inequality are likely to replace cyclical issues at the forefront of our economic conversation. ...
The global track record of populist policies motivated by inequality concerns is hardly encouraging. However, passivity in the face of dramatic economic change is equally unlikely to be viable. Perhaps the debate and policy focus needs to shift from inequality in outcomes, where attitudes divide sharply and there are limits to what can be done, to inequalities in opportunity. ...
By far the most important step that can be taken to enhance opportunity is strengthening public education. ... Over the past 40 years, with the strong support of the federal government, the nation's leading universities have made a major effort to recruit, admit, support and graduate minority students. These efforts will and should continue.
But as things stand, a minority youth with strong test scores is considerably more likely to apply and be admitted to a top school than a low-income student. The leading U.S. institutions must make the kind of focused commitment to economic diversity that they have long mounted toward racial diversity. It is unrealistic to expect that schools that depend on charitable contributions will not be attentive to offspring of their supporters. Perhaps though, the custom could be established that for each "legacy slot" room would be made for one "opportunity slot."
What about the perpetuation of privilege? Parents always seek to help their children. But there is no reason the estate tax should decrease relative to the economy at a time when great fortunes are increasingly dominant. Nor should we continue to permit tax-planning techniques that are de facto tax cuts only for those with millions of dollars of income and tens of millions in wealth.
These are just a few ideas for advancing equality of opportunity. There are many more. It is an aspiration those of every political stripe should share.
Posted: 15 Jul 2012 06:03 AM PDT
Paul Krugman:
No Bain, No Gain, by Paul Krugman: There is, predictably, a mini-backlash against the Obama campaign's focus on Bain. Some of it is coming from the Very Serious People, who think that we should be discussing their usual preoccupations. But some of it is coming from progressives...
This is remarkably naive. I agree that the awfulness of Romney's policy proposals is the main argument against his candidacy. But the Bain focus isn't a diversion from that issue, it's complementary. ...
The first point is that voters are not policy wonks. ... Nor, alas, can we rely on the news media to get the essentials of the policy debate across to the public... The sad truth is that the cult of balance still rules. If a Republican candidate announced a plan that in effect sells children into indentured servitude, the news reports would be that "Democrats say" that the plan sells children into indentured servitude, with each quote to that effect matched by a quote from a Republican saying the opposite. ...
So running on the real policy issues by itself isn't going to work. By all means, run on the real issues — but do so by creating a narrative, a pattern that registers with the public.
And Romney's biography offers a golden opportunity to do just that. His policy proposals amount to a radical redistribution of income away from the middle class to the very rich; he's also being highly dishonest about budgets and just about everything else. How to make those true facts credible? By associating them with his business career, which involved a lot of profiting by laying off workers and/or taking away their benefits; his personal finances, which involved so much tax avoidance that he's afraid to let us see his returns before 2010; his shiftiness over when exactly he left Bain.
You could criticize the biographical focus if it were being used to convey a false impression of where Romney stands, but that's not what's going on here; instead, it's being used to get the truth about the candidate past the noise and the media barrier. The truth is that the Obama campaign would be doing the American people a disservice if it didn't make the most of Bain.

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