Posts Tagged Robert Reich
Focus on Jobs, Not the Deficit
UPDATED NOVEMBER 8, 2012, 4:51 PM
President Obama’s victory gives him an opportunity to hit the economic reset button and alter the public’s view of America’s central economic challenge. It’s not to reduce the budget deficit. It’s to create more good jobs, grow the economy and widen the circle of prosperity.
The deficit is a problem only in proportion to the overall size of the economy. If the economy grows faster than its current 2 percent annualized rate, the deficit shrinks in proportion. Tax receipts grow, and the deficit becomes more manageable.
Any grand deficit reduction should start when unemployment is at 6 percent and growth at 3 percent growth for two quarters.
But if economic growth slows — as it will, if taxes are raised on the middle class and if government spending is reduced when unemployment is still high — the deficit becomes larger in proportion. That’s the austerity trap Europe finds itself in. We don’t want to go there.
This is why January’s “fiscal cliff” — $600 billion in automatic spending cuts and tax increases — is so dangerous. It’s too much deficit reduction, too quickly. Tax increases on the middle class would reduce their spending just when the economy needs that spending to keep growing, and cuts in government’s own spending would make the problem worse.
If we go over the fiscal cliff, we’re in another recession, according to the Congressional Budget Office and most private economic forecasters.
The way to ensure continued growth is to keep taxes low on the middle class — continue the president’s payroll tax cut and extend the Bush tax cuts for income under $250,000 — and continue government spending.
The way to increase growth is to make the payroll tax cut permanent — or, better yet, permanently exempt the first $20,000 of income from the payroll tax and make up for lost revenue by raising the ceiling on income subject to it (that ceiling is now $110,100). And increase government spending, especially on critical public investments like education, job training and infrastructure.
Any “grand bargain” on deficit reduction should contain a trigger for when it starts — and that trigger should be when the economy can safely be assumed to be back on track. I’d make that trigger 6 percent unemployment and 3 percent economic growth for two consecutive quarters, and make sure that trigger was right in the legislation.
Finally, the president needs to make it clear to the public that over the long term, the only way we can achieve a better economy is through a larger and more buoyant middle class. If we continue lurching toward widening inequality and ever more concentrated income and wealth at the top, the vast middle class — as well as all those who aspire to join it — won’t have the purchasing power to grow the economy and create more jobs.
The president’s victory doesn’t give him a clear mandate to reset the economic debate. The margin of victory was too small, and he didn’t tell the American electorate explicitly that his priority would be jobs and middle-class prosperity rather than deficit reduction. But his victory gives him the attention of the nation and the authority that comes with having won re-election, and therefore gives him the opportunity to reframe the debate.
I hope he takes it.
- Robert Reich: Obama’s Next Economy: Why He Must Take This Opportunity to Reframe the Economic Debate (huffingtonpost.com)
- FOCUS | Obama’s Next Economy (readersupportednews.org)
- Robert Reich: Obama’s Next Economy: Why He Must Take This Opportunity to Reframe the Economic Debate (guernicamag.com)
- Obama’s Next Economy (wallstreetpit.com)
- Obama’s Next Economy: Why He Must Take This Opportunity to Reframe the Economic Debate (ukprogressive.co.uk)
- The Next Four Years: Obama’s Steady, Slo-Mo Recovery (businessweek.com)
- Guest Post: The Next Four Years Won’t Be As Good As The Last (zerohedge.com)
- Fortunately, Both Candidates Will Cut Spending Not Raise Taxes: (brothersjuddblog.com)
- Federal deficit tops $1 trillion for fourth year (newsobserver.com)
- The U.S. Fiscal Cliff: Just What The Hell IS IT?? (theobamacrat.com)
5 Key Points Obama Needs to Make in the Debate
Obama needs to remind us why we liked him in the first place.
October 15, 2012
Photo Credit: Shutterstock.com
From: Robert Reich
RE: Upcoming debate
Your passive performance in the last debate was damaging because it reenforced the Republican claim that you’ve been too passive in getting jobs back and in responding to terrorism abroad.
That doesn’t mean you have to “come out swinging” this time. You need to be yourself, and one of your qualities that the public finds reassuring is your steadiness and authenticity, by contrast to Romney’s unsteady flip-flopping and apparent willingness to say and be anything. But you will need to be more energetic and passionate.
And although the “town meeting” style debate in which you’ll be answering audience questions isn’t conducive to sharp give-and-take with Romney, look for every opportunity to nail him. Indignance doesn’t come naturally to you, but you have every reason to be indignant on behalf of the American people.
Emphasize these five points:
1. Not only is the economy is improving, but there’s no reason to trust Romney’s claim he would improve it more quickly. He’s given no specifics about how he’d pay for his massive tax cut for the wealthy, or what he’d replace ObamaCare with, or how he’d regulate Wall Street if he repeals Dodd-Frank. His record to date has flip-flopped on every major issue. Why should Americans trust his assertions?
2. Our problems require we pull together, but Romney and his party want to pull us apart. Romney has praised Arizona’s draconian anti-immigration law profiling Hispanics, and has called for “voluntary deportation” by making life intolerable for undocumented workers. He is against equal marriage rights. He wants to ban abortions, and his party and running mate want to ban them even in the case of rape or incest. He’s determined to make the rich richer and the rest of us poorer. Romney is beholden to a radical right-wing Republican party that is out of step with most of America.
3. Romney’s “reverse Robin Hood” agenda is inappropriate at a time when the wealthy are taking home a larger share of total income and wealth than they have in a century, and when the middle class is still struggling. He wants to cut taxes on the rich by almost $5 trillion – which inevitably means higher taxes on the rest of us; and over 60 percent of its budget cuts come out of programs for the poor and working middle class. He’s determined to turn Medicare into vouchers whose value won’t keep up with rising healthcare costs, and turn Medicaid over to cash-starved states. His comment about “47 percent” of Americans not paying taxes and taking government handouts was not only wrong (every working person pays payroll taxes, and every consumer pays sales taxes; and the biggest so-called “entitlements” are Social Security and Medicare, which are insurance programs that Americans pay for during their working years). The comment also reveals a callousness and divisiveness that’s the opposite of what we need now. Romney wants to set Wall Street loose again when the Street’s greed got us into the mess we’re still trying to get out of.
4. Romney views America as if it was one huge corporation, but we’re not a corporation; we’re a nation. He says corporations are people; touts his years at Bain as if making companies profitable qualifies him to be president; wants to deregulate corporations and Wall Street; and assumes CEOs and the wealthy are “job creators,” and if we cut their taxes they’ll have more incentive to create jobs. None of this is true. The nation exists to make lives better for all its people – making sure that corporations treat their workers as assets to be developed rather than as costs to be cut. Companies have been slow to create jobs not because of insufficient profits but because of inadequate customers. The vast American middle class are the real job creators, but they don’t have enough money in their pockets because too many companies have broken the basic bargain linking wages to productivity.
5. On foreign policy, Romney wants to rush to judgment, blaming the administration for not acting quickly enough in Libya on scant information. But that rush-to-judgment mentality is exactly what got us into Iraq eight years ago on the pretext of “weapons of mass destruction.” Two days ago we marked the 50th anniversary of the Cuban missile crisis. Had John F. Kennedy rushed to judgment as Romney wants to, humankind would have been obliterated in a nuclear holocaust.
Be indignant, but measured and steady – as you naturally are. Practice your closing (your last closing was listless) so the nation can see clearly the choice: We’re all in it together, or we’re on our own.
- 5 Key Points Obama Needs to Make in the Debate (alternet.org)
- 7 Best Jokes About Romney’s Threat to Off Big Bird | Alternet (mbcalyn.com)
- Forbes 400 List Reveals Why the Greedy Rich Fully Deserve Your Contempt – And Jesus’s | Alternet (mbcalyn.com)
- 10 Rankest Hypocrisies of Mitt Romney and the Republican Party | Alternet (mbcalyn.com)
- Memo to the President: Your Next Debate (blogs.berkeley.edu)
- FOCUS | Memo to the President: Your Next Debate (readersupportednews.org)
- Alternet Debunks Romney’s 10 Biggest Debate Lies (pensitoreview.com)
- In second debate, Obama faces challenges on key issues – Reuters (reuters.com)
- In second debate, Obama faces challenges on key issues (reuters.com)
- Tied US race raises stakes for debate (bigpondnews.com)
Romney’s Lying Machine
I’ve been struck by the baldness of Romney’s repetitive lies about Obama — that Obama ended the work requirement under welfare, for example, or that Obama’s Affordable Care Act cuts $716 billion from Medicare benefits.
The mainstream media along with a half-dozen independent fact-checking organizations and sites have called Romney on these whoppers, but to no avail. He keeps making these assertions.
Every campaign is guilty of exaggerations, embellishments, distortions, and half-truths. But this is another thing altogether. I’ve been directly involved in seven presidential campaigns, and I don’t recall a presidential candidate lying with such audacity, over and over again. Why does he do it, and how can he get away with it?
The obvious answer is such lies are effective. Polls show voters are starting to believe them, especially in swing states where they’re being repeated constantly in media spots financed by Romney’s super PAC or ancillary PACs and so-called “social welfare” organizations (political fronts disguised as charities, such as Karl Rove and the Koch brothers have set up).
Romney’s lying machine is extraordinarily well financed. By August, according to Jane Mayer in her recent article, at least 33 billionaires had each donated a quarter of a million dollars or more to groups aiming to defeat Obama — with most of it flooding into attack ads in swing states.
In early August, “Americans for Prosperity,” one of the nonprofit front groups masquerading as a charity, and founded in part by billionaire right-wingers Charles and David Koch, bought some $27 million in ad time on spots now airing in eleven swing states.
So Romney’s lying machine is working.
But what does all this tell us about the man who is running this lying machine? (Or if Romney’s not running it, what does it tell us about a man who would select the people who are?)
We knew he was a cypher — that he’ll say and do whatever is expedient, change positions like a chameleon, eschew any core principles.
Yet resorting to outright lies — and organizing a presidential campaign around a series of lies — reveals a whole new level of cynicism, a profound disdain for what remains of civility in public life, and a disrespect of the democratic process.
The question is whether someone who is willing to resort to such calculated lies, and build a campaign machine around them, can be worthy of the public’s trust with the most powerful office in the world.
- Robert Reich: Romney’s Lying Machine (yubanet.com)
- Mitt Romney, lying machine (salon.com)
- Robert Reich on Romney’s Lying Machine (underpaidgenius.com)
- Fmr. Clinton Labor Secretary says Romney will beat ‘wooden’ Obama in presidential debates (redalertpolitics.com)
- ‘Evidence vs. Ideology’ and ‘Romney’s Lying Machine’ (economistsview.typepad.com)
- Worse than George W. Bush? Robert Reich says a Romney-Ryan ticket would destroy the economy (current.com)
- Robert Reich: The Terrible Economy and the Anti-Election of 2012 (huffingtonpost.com)
- Robert Reich: Whose Plan Destroys Medicare — Obama’s or Romney-Ryan’s? (huffingtonpost.com)
- Robert Reich: 5 Reasons Why the Ryan-Romney Economic Plan Would Be A Disaster for America (huffingtonpost.com)
- Intellectual giant Robert Reich: Paul Ryan was no match for me! (twitchy.com)
Break Up the Banks. They’re Too Big to Regulate
MAY 21, 2012
The JPMorgan Chase debacle would have been prevented if the Volcker Rule were sufficiently strict, prohibiting banks from using commercial deposits to make bets –except very specific offsetting bets (hedges) on narrow classes of trades.
JPMorgan has proven that any nuance — any exception — will be stretched beyond recognition by the big banks.
But Jamie Dimon and JPMorgan have been lobbying like mad to loosen the Volcker Rule and widen that exception to include the very kind of reckless bets JPMorgan made. And they’re still at it, as evidenced by Dimon’s current claim that the rule that eventually emerges would allow those bets.
That’s why, as a practical matter, the Volcker Rule is hopeless. It was intended to be Glass-Steagall lite — a more nuanced version of the original Depression-era law that separated commercial from investment banking. But JPMorgan has proven that any nuance — any exception — will be stretched beyond recognition by the big banks. So much money can be made when these bets turn out well that the big banks will stop at nothing to keep the spigot open.
There’s no alternative but to resurrect Glass-Steagall as a whole. Even then, the biggest banks are still too big to fail or to regulate. We also need to heed the recent advice of the Dallas branch of the Federal Reserve, and break them up.
- It’s time to break up the big banks – The Washington Post (mbcalyn.com)
- Keith Chrostowski | Banking ideas new and old (kansascity.com)
- Jamie Dimon Shows Some Love for Volcker Rule (dealbook.nytimes.com)
- Ominous Failure at “Too Big to Fail” JPMorgan Chase (blacklistednews.com)
- Fair Game: JPMorgan, Shooting Itself in the Foot – Fair Game (nytimes.com)
- Revived focus on regulation after JPMorgan loss (seattletimes.nwsource.com)
- Revived focus on regulation after JPMorgan loss (miamiherald.com)
- Revived focus on regulation after JPMorgan loss (sfgate.com)
- Richard (RJ) Eskow: JPMorgan Chase: Break Up the Big Banks Now. Here’s How. (huffingtonpost.com)
- Revived focus on regulation after JPMorgan loss (heraldonline.com)
Flat tax a flat-out fraud
Sunday, October 30, 2011
The flat tax is a fraud. It raises taxes on the poor and lowers them on the rich.
The nonpartisan Tax Policy Center estimates that Cain’s flat-tax plan (the only one that’s been set out in any detail) would lower the after-tax incomes of poor households (incomes below $30,000) by 16 to 20 percent.
Meanwhile, 95 percent of households with more than $1 million of income would get an average tax cut of $487,300. And capital gains (a major source of income for the very rich) would be tax-free.
All flat-tax proposals benefit the rich more than the poor for one simple reason: Today’s tax code is still at least moderately progressive. The rich usually pay a higher percent of their incomes in income taxes than do the poor. A flat tax would eliminate that slight progressivity.
Nowadays, most low-income households pay no federal income tax at all – a fact that sends many regressives into spasms of indignation. They conveniently ignore the fact that poor households pay a much larger share of their incomes in payroll taxes, sales taxes and property taxes (directly, if they own their homes; indirectly, if they rent) than do people with high incomes.
Flat-taxers pretend a flat tax is good public policy, for two reasons.
First, they say, it would simplify paying taxes. Baloney. Flat-tax proposals don’t eliminate all deductions. People with families will still be able to deduct their dependents while single people will pay a higher rate, businesses will deduct their expenses, and, in most plans, people with homes will still be able to deduct interest on their mortgages.
That means most taxpayers would still have lots of paperwork.
Second, proponents of a flat tax say it’s fairer than the current system because, in Cain’s words, a flat tax “treats everyone the same.”
The truth is, the current tax code treats everyone the same. It’s organized around tax brackets. Everyone whose income reaches one bracket is treated the same as everyone else whose income reaches that bracket (apart from various deductions, exemptions and credits, of course).
For example, no one pays any income taxes on the first $20,000 or so of income. People in a higher bracket pay a higher rate only on the portion of their income that hits that bracket – not on their entire incomes.
So when President Obama calls for ending the Bush tax cut on incomes over $250,000, he’s only talking about the portion of people’s incomes that exceeds $250,000. He’s not proposing to tax their entire incomes at the higher rate that prevailed under President Bill Clinton.
Republicans have tried to sow confusion about this. They want Americans to believe, for example, that if the Bush tax cut ended, small-business owners with incomes of $251,000 a year would have to pay 39 percent of their entire incomes in taxes rather than 35 percent. Wrong. They’d only have to pay the 39 percent rate on $1,000 – the portion of their incomes over $250,000.
Get it? We already have a flat tax – flat within each bracket.
The real problem is that the top brackets are set too low relative to where the money is. The top-most bracket starts at $375,000 a year. People with incomes higher than that pay 35 percent – again, only on that portion of their incomes exceeding $375,000.
This means a doctor who’s making, say, $380,000 a year pays the same income-tax rate as a plutocrat pulling in $2 billion or $20 billion.
Actually, it’s worse than that because the plutocrats get most of their income in the form of capital gains, which are taxed at only 15 percent. That’s why America’s 400 richest people – who earned an average of $300 million last year, and who have more wealth than the bottom 150 million Americans put together – now pay at a 17 percent rate (according to the Internal Revenue Service).
The Republicans’ push for a flat tax masks what’s really going on.
Remember: The top 1 percent is now raking in over 20 percent of the nation’s total income and owns over 35 percent of the nation’s wealth. Under almost anyone’s view of fairness, these are grotesque portions. They’re especially large relative to what they were as recently as 30 years ago, when the top 1 percent raked in under 10 percent – and paid a top marginal tax rate of more than 70 percent. And these huge portions at the top continue to increase.
Simple fairness requires three things: More tax brackets at the top, higher rates in each of those top brackets and the treatment of all sources of income (capital gains included) exactly the same.
Not only fairness demands it, but also fiscal prudence. A truly progressive tax would bring in tens of billions of dollars a year from the people at the top who are in the best position to afford it.
Regressives are pushing the flat tax as a smokescreen. They’d rather not have anyone talk about the unfairness and fiscal absurdity of the current system.
Rather than merely oppose the flat tax, sensible people should push for a truly progressive tax – starting with a top rate of 70 percent on that portion of anyone’s income exceeding $5 million, from whatever source.
Robert Reich, former U.S. secretary of labor, is professor of public policy at UC Berkeley and the author of “Aftershock: The Next Economy and America’s Future.” He blogs at www.robertreich.org. To comment, go to www.sfgate.com/chronicle/submissions/#1.
- Flat Tax a Flat-Out Fraud (americanpeoplesplatformblog.com)
- “The Flat-Tax Fraud” (economistsview.typepad.com)
- We Are All Neoconomists Now: (brothersjuddblog.com)
- Robert Reich: The Flat-Tax Fraud, and the Necessity of a Truly Progressive Tax (huffingtonpost.com)
- Rick Perry’s uphill battle for flat tax – Politico (news.google.com)
- Perry’s uphill battle for flat tax (politico.com)
- The Flat-Tax Fraud, and the Necessity of a Truly Progressive Tax (robertreich.org)
- Flat Tax Proposals Are Perpetual Fount of False Promises: View – BusinessWeek (news.google.com)
- Flat Taxes Do Not Simplify The Tax Code (tuitionpaidlessonslearned.com)
- Rick Perry’s Flat Tax Isn’t Flat (usnews.com)