No There There

By James Kwak

On the one hand, over in Romney headquarters, they can take heart from the fact that the economy continues to sputter, as evidenced by the latest jobs report. On the other hand, as the election draws near, people will only ask more questions about what President Romney would actually do. For months now, the campaign has whispered one thing to the base (e.g., “severely conservative”) while being purposefully vague to everyone else, hoping that independents will assume he is still the moderate who introduced universal health care to Massachusetts. Now that strategy is breaking down.

Exhibit A is yesterday’s comical back-and-forth-and-forth-and-back on the Affordable Care Act. But the more important Exhibit B is the Romney “tax plan”—you know, the one that cuts rates for everyone by 20 percent, yet does not reduce revenues, does not increase taxes on the middle class, and achieves this miracle by eliminating tax expenditures, but without touching the preferences for investment income or the mortgage interest tax deduction.

Back in February I wrote that this is a mathematical impossibility. The Times recently reported that it is still impossible, citing both Tax Wonk in Chief William Gale of Brookings and an Alan Viard of AEI(!).

Romney’s campaign continues to refuse to fill in the details, which isn’t surprising, since they can’t. But they can’t avoid the subject, either, since they want to make this an election about the economy—and their plan to improve the economy is, to a first approximation, their plan to cut tax rates.

Coupled with Romney’s refusal to release more details of his own taxes, including the magical IRA, the impression one gets is that he doesn’t want to talk about details; he’s just hoping that people dislike President Obama enough and trust him enough to get him through the election. The problem with that is Mitt Romney is no Ronald Reagan. He has no charisma, and the basis of his pitch is that he’s a skilled businessman. It’s also doesn’t make sense to play a prevent defense when you’re behind. But there’s no getting around the laws of arithmetic.

27 responses to “No There There

  1. Back in February I said Romney didn’t even see the linear, i mean, fiscal cliff coming, and here is again charging forward with the same message as the ones before him. Sometimes I wonder if he listens to himself, or is just repeating someone else’s lines. Either way it is just the same old republican kudlow cheerleadin story.

  2. and there is also Romney’s continuing refusal to show documents that prove he is not really a citizen of the Caymans Islands.

  3. Politics takes a human touch that Mitt lacks.
    Like a lot of pols, he’s seen that you can get away with an extraordinary amount of lying to the voters and the media, but he does it with so little finesse that it’s become obvious even to the genuinely stupid media.

  4. Again, I would leave these judgements to accomplished economist, James. Martin Feldstein has contributed, as well as others, on Greg Mankiw’s blog. You really should broaden your circle of contacts!

  5. All Mitt needs now is a 13-percent inflation rate and a lot of Americans being held hostage in Iran and he’ll be a shoo-in.

  6. Del… The problem with Martin Feldstein’s reply to the critics of Romney’s budget is well described by Ezra Klein: “It might be mathematically possible to make Romney’s plan work by sharply increasing taxes on people making between $100,000 and $200,000 so you could cut them on very rich taxpayers. It’s not possible to make the numbers add up if you refuse to raise taxes on people making less than $200,000.”
    Feldstein also relies on a supply-side rosy scenario by assuming high growth resulting from the Romney tax cuts, something we have very little historical data to support.

    http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/10/is-romneys-tax-plan-mathematically-possible-after-all/

  7. i know the liberal blogosphere has gone apeshi** over this, but on politico.com and the times, there doesn’t seem to be a whole lot about this story.
    imo, the story in the times this weekend about how millions of people, in near bondage to student debt, are being hounded by debt collectors for the gov’t guarenteed part, hounding that has to have at least the tacit approval of obama, that is affecting a lot more people

    also, todays nyt, front page story by C Rampell, about how many retireres have to go back to work cause interest rate so low – bet those people are not to happy with obama right now.

    don’t get me wrong, I yield to no one in my dislike of romney, just gotta stope living in the liberal blogoselfcircle sphere

  8. Mitt’s business experience does not appear to be building anything.
    A lot of profitable capitalists have made a lot of money by capitalizing on the rest of America. Yes I know LImbaugh thinks the Koch brothers built oil in the bath tub and we can just build a new earth but still.

    I believe we need someone who all American can trust and will show he wants to help all America. So far Mitt has not built much trust.

  9. A lot of American capitalists have built a lot of wealth by taking advantage of the rest of America. I don’t see that Mitt has really built a darn thing on his own. Yes yes what has taken over for the republican mantra is the Koch brothers build oil in a tub and surely we can build a new environment when some profit is attached. Hopefully so, but one guy ain’t gonna do it.

    Two thing really scare me. The way MItt wants to build his our trust and that he just out and says he can’t tell or we won’t vote for him.

  10. Opps. I thought I disappeared.

  11. Go to my website jacksgreatblog.blogspot and tell me what you think.

  12. Since Romney, that nazi Ryan, and the entire gop are pathological liars, there shouldn’t be any surprise at the Romney campaigns forkedtongued jibberish. This is the cheney, rove, wingnut radio, and gospel according to fox well worn tactic. Fill the air with a steaming pile of ca ca, and naked lies, so that there is no way to decipher any shred of truth and eve the relentlessly repeated lies have plausible deniability. These fiends operate is the shadows and the cloak of darkness, so that no fixed position is possibly unearthed. All that exists is different flavors of redmeat heaped upon this or that wingnut constituency. Anyone with any knowledge of facts, or even a rudimentary understanding of current events -viewing with an open mind the pathetic parade of carnival characters the gop trotted out during the primary before reluctantly settling on Romney. – is either insane, or a racist redneck, mormon, or predatorclass to imagine voting for a flipflopping, forked tongued, snake oil salesman like Romney, and that fascist ryan.

  13. Romney has managed to evade giving details about his money being in offshore banks (Cayman Islands, etc). He did say that someone else was managing his money, and implied that he didn’t know where his money was (the “blind trust” line), and that he wasn’t trying to evade U.S. taxes. If not tax evasion, why would he need or want to put money in offshore banks? If the interest rates are so great offshore, then why isn’t he recommending it to all of us?

  14. There is only one thing sure with the Romney fiscal plan: the rich will get a big tax break!

  15. Ryan is in thick with the John Birch Society, based in Wisconsin, while Romney is tied in with Mormons, who are tied in the Birchers, to no small extent.

    I agree with Tony’s epithet, referring to Ryan as a Nazi. If the glove fits, we’ve got to convict.

  16. There can be no question Obama has failed in a lot of ways and I have been trying very hard to find some reason to support Mitt. And I can’t find any!! The one single thing that bothers me the most is his house in LaJolla. With 23 million Americans unemployed, or underemployed, (Mitt’s number), destroying a $12 MILLION house just NOW is incomprehensible to me. It is his money, I don’t care about that. It is the timing. He could do it in December and nobody (except his neighbors) would care.

    So when a guy has spent 8 or 12 years getting ready to run for president and still has such an incredible tin ear to the country, this is a guy with extremely limited judgement skills.

    And it is not just the house. It is the tax returns, the money in Switzerland, the money in the Cayman Islands, the horse in the Olympics, the 13% income tax rate (his claim). If he had any judgement at all, all the money would be in U.S. government bonds and he would have rented out the house in LaJolla. If I can figure that out, why can’t Mill?

    So there you are. The devil you know, or the devil you don’t know, but have serious doubts about.

  17. I will vote for Rocky Anderson. It doesn’t matter which one of the two parties wins. It will matter when, at last, neither one does. I’m not throwing away my vote again.

  18. It’s impossible to understand employment without having a better understanding of economic growth. Alex Gheg has a new consumer theory that gives us a scale for growth that measures previously hidden thoughts. We can measure utility growth using the body clock. Quantity, quality, variety and convenience in one equation. http://www.youtube.com/watch?v=u6tFLGpcOpE

  19. Mr. Kwak says: “The problem with that is Mitt Romney is no Ronald Reagan. He has no charisma, and ….”

    Gosh James, don’t be so hard on the man. He has this “uncanny” ability to communicate with people. See here:

    I’m sure whatever this gentleman Romney is talking to was doing in the military, Romney’s work for his church was “just as worthy” (and wasn’t a “cop out” on entering the military). A church which at the time Romney was doing his “service”, wouldn’t allow blacks in the Priesthood. From the time Brigham Young took over leadership in 1848 to decades after Brigham’s death in 1978 (“only” 130 years, not “that” long) blacks weren’t allowed into the Mormon Priesthood. It wasn’t until 1978 that the Mormons finally allowed blacks (Mormon texts called them Lamanites, which you can kind of think of as the Mormon word for ni**er) into the priesthood.

  20. The term “class warfare” should be used and applied properly. As Lenin taught us, class warfare has two sides – proletarians and capitalists engaged in a perpetual struggle. In most cases it is when capitalists attack the other side. Therefore, in strict terms of Marxist-Leninist lingo used by attacking Republicans it is Mr. Romney who is class warmonger, not the President.

  21. @Nikolay – what elevate liars, thieves and murderers to some idealogical, monkey brain high on imagination status?

    USA classifies people into two categories – CRIMINAL and law-abiding.

    You do the math.

    Now, globally, of course, that same CRIMINAL “class” find themselves in the 1% elite – and using a civilization “average” for today – DARK AGES by EU’s history timeline – they are classified as WAR/Drug/Slave Lords.

    You think the Middle Class in USA can’t get Afghani-tough against the delusional Federal Reserve Board?

  22. sorry – WHY elevate liars thieves and murderers into the language of “isms”…

  23. bayardwaterbury

    By my reconning, Mitt and Tonto (Paul Ryan) are inextricably tied to Friedmanomics (you know, the trickle down Reaganomics which destroyed several South American countries, and has since, with its neoliberalism, taken the developed – and much of the undeveloped – world by storm, wreaking havoc everywhere, including the Eurozone austerist world). No wonder Mitt can’t offer a rational explanation of his “plan” which makes sense or adds up. As you so cogently point out, even Doug Henning or David Copperfield would be hard pressed to convince even the astute observer that it could work with what we know. If Mitt is elected, gosh, we are in seriously deep crap. But, if Obama is elected and the Republicans continue to control the House, we are no better off.

  24. Trickle Down Theory…One Last Time…Hopefully!!!

    They are at it again. Cut the taxes on the richest of the rich and the corporations, and they will spend their riches creating new jobs, and the resulting wealth will trickle down to the rest of us.

    A quick review is in order here. Jack Kemp, then a Congressman had lunch with Arther Laffer, then an economist. The story is that Laffer drew a curve on a napkin to promote the theory that tax cuts for the rich produce economic growth and new jobs. That curve will forever be know as the Laffer Curve. Of course, the joke here is unintended.

    So here is your assignment. Take a look at corporate profits. They are high as they have ever been. Corporations are sitting on record amounts of cash and have been doing so for a number of years now.

    The 1% now have more money than they have ever had and their share of the wealth of the country is staggering.

    So where are all the new jobs that should have been trickling down to us since, oh say, the Bush tax cuts?????????????

    Even Mitt says that 23 million Americans are unemployed or under-employed, and nothing much has changed for five years now. Record numbers of people have been unemployed for over a year now.

    And yet there are still fools in Washington trying to sell us the Laffer Curve!! It is indeed a Laugh Curve, but the results ain’t funny. Tell them to stop trying to fool you. It ain’t pretty!!

  25. And, today out of Washington, Ben Bernanke announces QEIII. What he doesn’t tell you is that it won’t work. First, the bonds that the FED buys are all bought, not from the US Treasury directly, but through the largest banks (read Goldman, Chase et al). Sure, the money goes to Treasury, but the banks make billions in commissions, and Treasury won’t be able to use the money constructively (like say for infrastructure, college grants, expanded health care, low interest student loans, retraining, etc.). Why, because our appropriation mechanism for spending the Treasury’s money is done exclusively through the House, and the Republican austerists in control won’t authorize it. End of story on QE actually achieving something. Trickle down, my butt. Friedman and Hayek and Laffer were either idiots, or had a Randian plan to bilk us all. I vote for number two.

  26. @bayard – QEIII is for perpetual war in the Middle East.

    Abort the FRB, you abort Armageddon.

  27. The creature from Jekyll Island, all the central banks have no other options. They either keep printing money out of the myst and funnel into the offshore accounts of the predatorclass den of vipers and thieves in the finance oligarchs or the entire criminal Ponzi scheme – I mean global financial system crashes and burns . Personally – the latter option is better for the 99%, but none of us have any say or influence in these matters. The sad reality is that eventually math which is apolitical and incontrovertible will eventually rear it’s terrible head. Cankicking is the only option for the fascists, – I mean the den of vipers and thieves – I mean the finance oligarchs and their spaniels in the socalled governments .

    There is no growth anywhere. Even China is slowing. Wall Street can cheer QE3 to their cold hard hearts content and price in profits for select oligarchs, but recent history proves that all these government giveaways – I mean largess, – I mean interventions have proved worthless in the past (note QE1 and 2, and numerous other ‘interventions and get back to me )! The predatorclass is superricher, but the rest of humanity is in dire peril. This horrorshow will not end well no matter how far down the road the can is kicked.

    There is no trickledown, there is no growoth anywhete on earth, there is no justice, there is no law, there is no balm in Gilead. The end is slavery and extermination, or violent revolt, or some combination thereof.

    Get stocked, locked, cocked, and ready to rock, because some day this horrorshow is going pearshaped, and all the king horses , and all the kings men cannot put this fascist horrorshow back together again . Ashes, ashes, all fall down .

    Burn it all down . Reset!!’ It’s the only viable option!!!’