Year: 2012

Yesterday I suggested that the 172,000 private-sector jobs gained in July were pretty good, considering the lengths the Republicans have gone to to keep from putting people back to work modernizing our infrastructure.  To show the progress made to date, I invited you to “click here to see it in graphic form.”

What the opposition tries to pin on Obama are the gigantic 2009 deficit (even though the 2009 fiscal year started more than a month before Obama was even elected, let alone sworn in) . . . and the job losses of his first few months, before he could realistically have had an effect on the job numbers.

As the website Political Irony has noted . . .

The next time Romney tries to blame Obama for disappointing job numbers, someone should remind him of what he said at a press conference in 2006 to reporters who were trying to hold him accountable for disappointing job creation numbers from his time as governor:

“You guys are bright enough to look at the numbers. I came in and the jobs had been just falling right off a cliff, I came in and they kept falling for 11 months. And if you are going to suggest to me that somehow the day I got elected, somehow jobs should have immediately turned around, well that would be silly. It takes awhile to get things turned around. We were in a recession, we were losing jobs every month.”

Your comments from yesterday’s post included:

Bob Sanderson:  “I’m pretty sure you’re right about the (lack of) influence of tax rates on job creators.  I own a small business, and I can’t remember ever contemplating my tax rate when considering the hiring of a new employee.”

Andrew Lees: “As a small business owner (micro biotech company), I can tell you taxes play almost no role in my business thinking, except to try to avoid doing anything that makes my (tax) life more complicated.  It’s affordable health care coverage that is at the top of my list of concerns.  Maryland is a good state because there is already something like an insurance exchange for small businesses.”

Gene Somdahl:  “The ‘job creators’ have had their tax breaks for ten years. Where are the jobs?“

Jeff Cox:  “OK, OK.  Unless someone drops me on my head between now and November, I will vote for the re-election of the President.  However, I would still like some investment insight on your website.  Maybe you could approach environmental concerns, jobs and politics all in one stroke.  What is the best way to play the growing supply of natural gas?“

I don’t know — but I hear you.

Hitting bookstores this month, The NEW New Deal:

In a riveting account based on new documents and interviews with more than 400 sources on both sides of the aisle, award-winning reporter Michael Grunwald reveals the vivid story behind President Obama’s $800 billion stimulus bill, one of the most important and least understood pieces of legislation in the history of the country. Grunwald’s meticulous reporting shows how the stimulus, though reviled on the right and the left, helped prevent a depression while jump-starting the president’s agenda for lasting change. As ambitious and far-reaching as FDR’s New Deal, the Recovery Act is a down payment on the nation’s economic and environmental future, the purest distillation of change in the Obama era.

The stimulus has launched a transition to a clean-energy economy, doubled our renewable power, and financed unprecedented investments in energy efficiency, a smarter grid, electric cars, advanced biofuels, and green manufacturing. It is computerizing America’s pen-and-paper medical system. Its Race to the Top is the boldest education reform in U.S. history. It has put in place the biggest middle-class tax cuts in a generation, the largest research investments ever, and the most extensive infrastructure investments since Eisenhower’s interstate highway system. It includes the largest expansion of antipoverty programs since the Great Society, lifting millions of Americans above the poverty line, reducing homelessness, and modernizing unemployment insurance. Like the first New Deal, Obama’s stimulus has created legacies that last: the world’s largest wind and solar projects, a new battery industry, a fledgling high-speed rail network, and the world’s highest-speed Internet network.

Michael Grunwald goes behind the scenes—sitting in on cabinet meetings, as well as recounting the secret strategy sessions where Republicans devised their resistance to Obama—to show how the stimulus was born, how it fueled a resurgence on the right, and how it is changing America. The New New Deal shatters the conventional Washington narrative and it will redefine the way Obama’s first term is perceived.

That’s all I’ve read so far — the flap copy.  Being a glass half-full kind of guy, I’m going to try to find time to read the whole thing.  With all the challenges we face — including the polarization that automatically keeps nearly half the country from even considering positive news — we’re entitled to enjoy the gains from time to time.

MORE GOOD NEWS

We added 172,000 private-sector jobs in July, the 29th consecutive month of gains, for a total of 4.5 million.  It would have been more if the stimulus package Michael Grunwald writes about had been larger; more still if the Republicans hadn’t blocked the American Jobs Act the President proposed to a joint session of Congress 11 months ago.

Still, it’s amazing how much progress has been made, given the mess the Administration inherited and the unprecedented level of obstruction.

Click here to see it in graphic form.

The idea that the way to accelerate growth is to slam on the brakes (the Ryan/Romney budget) . . . is bizarre.  The idea that at a time of high unemployment and zero real borrowing costs we should let our infrastructure crumble still further rather than put people to work moving forward . . . is bizarre.  The idea that “job creators” are rich people who don’t create jobs because their tax rates — slashed to the lowest rates in modern times — were not slashed enough . . . is bizarre.  Let me tell you about job creators: if they see a way to make more profit by hiring someone, they will do it, regardless of their tax rate.  If they don’t, they won’t, even if their tax rate were zero.  Why would they?

Friday’s column noted that $10,000 invested solely in those years from 1929 to the present when a Republican held office would have grown to not quite  $12,000, versus $415,000 if invested only under Democratic administrations.

Some wrote in to say it was unfair to start the comparison in 1929, just before the crash.  (The Times graphic does show a still-stunning difference even if you remove Hoover from the comparison.)  But note this: the eight years of increasing inequality and speculation leading up to the crash and the Great Depression were also years of Republican stewardship.

Sound familiar?

Instead of George W. Bush it was Warren Harding and Calvin Coolidge.

I favor the Party that invests in the future and puts people to work and believes billionaires should pay a higher proportion of their income in taxes than their secretaries.  I favor the Party under whose leadership over a lifetime $10,000 grows to $415,000, not $12,000.

If you’re a business guy, or any other kind, why wouldn’t you?

Here’s one who doesn’t:

UP IS DOWN, DAN LOEB STYLE

Dan Loeb: “…U.S. consumers and business owners alike [are] frustrated by the Obama Administration, which is openly hostile to most businesses and unable to articulate or implement policies to spark growth and reduce unemployment.”

Such nonsense. This “hostile” environment for business has seen the Dow double from three years ago and corporate profits as a percentage of GDP reach a record 11%.  How record-breaking a share of GDP do profits have to reach before Mr. Loeb would call the current environment something other than hostile?

And the President was more than able to “articulate policies to spark growth and reduce unemployment” — he did so with complete clarity addressing a joint session of Congress last year when he called for passage of the American Jobs Act — “right away.”  Loeb is right that he was unable to implement that policy – the Republicans have blocked anything that, by helping the economy, might hurt their chances to take back power.  But that would seem to me a knock on the Republicans, and reason to vote them out of office, not the President.

The selfish reason to give  is the global depression we’ll have if the Republicans win.  Better to give 2% of your net worth now than lose 50% or 80% of it later.

“Sorry, not buying it,” a hedge fund pal smiled as he turned me down last week: “I’m net short.”  He’ll do just fine, he thinks, no matter what.  And maybe he will.  But depressions lead to wars and fascism and all kinds of awful things.  I have not given up on him.

When the 2005 edition of my investment guide was going to press in November, 2004, I wrote: “I am dismayed by the reelection of George Bush.  . . . I see [our economic] problems getting worse . . .  As I write this, stock and real estate prices do not seem to me to reflect all the challenges.”

I may not be right twice (and hope not to find out!) but I know this much:

Historically, the stock market and economy have done much better under Democrats.  “You can look it up,” as they say.  Or just click here. 

Had you invested $10,000 in the S&P 500 under just Republican presidents for the 40 or so years that they controlled the White House since 1929, that $10,000 would have grown to . . . $11,733.  Whoop-de-Tea-Party-doo.  Had you invested that same $10,000 for the 40 years since 1929 that DEMOCRATS controlled the White House prior to the election of President Obama, it would have grown to $300,671.

Pop quiz:  which is more?

And that $300,671 was BEFORE President Obama took office and restored our nation’s standing in the world and decimated Al Qaeda and rescued the auto industry and so on.  The S&P is up 38% since then – which turns that $300,671 into $415,000.

[UPDATE:  Some of you wrote to say it was unfair for the New York Times to start its comparison in 1929, just before the crash.  But note this: the eight years of increasing inequality and speculation leading up to the crash and the Great Depression were also years of Republican stewardship.]

So even if global depression weren’t the alternative, investing in the President’s reelection – and the kind of big Democratic turn-out that will give him a more cooperative Congress – is very much in our self-interest.

In 2000, we strove mightily to fund a Gore win.  But not quite enough, as it turned out.  The result?  The war in Iraq, the destruction of our national balance sheet, and the Court that gave us Citizens United.

So here we go again . . . because if we don’t get it right this time, the Court will be definitively lost for 20 years.  And this time, as I say, we will have a global depression.

Governor Romney would go along with the Ryan budget that he’s already endorsed, sucking hundreds of billions of dollars of demand OUT of the economy at exactly the time we should be injecting demand, and at exactly the time Europe and the rest of the world can’t afford to have us pull back.  He would find himself out-Hoovering Hoover (another successful businessman).

Governor Romney may REALIZE the Ryan austerity budget is exactly wrong — that in the short run it’s not austerity we need but, rather, massive infrastructure spending.  He may REALIZE that with the market eager to lend Uncle Sam long-term money on the cheap, and with so many unemployed, this is the perfect time to revitalize our infrastructure.  And that doing so would jump start the economy in the bargain (just as the massive ramp up of World War II ended the Depression).

But even if he does realize these things, and it’s not clear that he does, the Grover-Norquist/Rush-Limbaugh-controlled Republican Congress is so deeply committed to drastic cuts he would never be able to buck their will.

Forward this post to friends or relatives who plan to vote for Governor Romney, no matter what the S&P 500 has done under Republican presidents.  Tell them: Listen, if you can’t bring yourself to vote for the President for some reason, at least STAY HOME November 6.  Because if you think things are tough now, slamming on the brakes at exactly the time we should be stepping on the gas would be like slashing the military budget in 1943 to rein in our exploding deficits.  Can you imagine if we had done that?  Can you imagine how insane that would have been? The result would have been a very different world.  The “beauty part” of investing heavily to win THIS “war,” 70 years later, is that it’s a war not against people but, rather, a battle to get out of the ditch the Republicans drove us into after taking over from Bill Clinton.  So instead of investing to build things that blow up, we’ll be investing in things that last for 50 and 100 years.

Finally: the Court.  Citizens United lets corporate interests control legislators with the mere threat of a $10 million negative ad buy.  The mere threat – they don’t even have to spend the money – is enough to pretty much kill democracy as the Founders envisioned it.  Not to mention all the social issues.  And the separation of church and state that Justice Scalia rejects.

So look.  It doesn’t really help to give the day before the election.  We have just 95 days left.  It’s show time.  For some of us, $500 is a huge stretch.  For others, $50,000.  Whatever represents a huge stretch for you, if you’ve got any capacity left, PLEASE click here.  And if you don’t have any capacity left, take an hour to inspire someone else to.

Rush Limbaugh gets red in the face listing what he calls “the four pillars of deceit.”  They are, he says: “Academia, government, science, and the media.”  PLEASE don’t let his side, the anti-science side, take control of all three branches of government and shape the future for the generations that follow.  Click.

Have a great weekend.

MITT’S TAXES

Joe Devney: “Mitt Romney seems proud of the fact that he doesn’t pay ‘a dollar more’ in taxes than he has to. I came across this quote on The Hill’s website yesterday: ‘I don’t pay more than are legally due and frankly if I had paid more than are legally due I don’t think I’d be qualified to become president. I’d think people would want me to follow the law and pay only what the tax code requires.’ I’m puzzled by this attitude. Mr. Romney seems to be saying that those of us who don’t pay accountants and lawyers to find every possible tax avoidance mechanism are [not qualified for leadership roles].”

Steve Rattner on CNN:

I will tell you that as a private equity guy, I’m familiar with many of the things that he did. And I know many people who have done many of the things that he did. I do not know anyone who did everything that he did.

Some of what he did, like the [up to $100 million] IRA, I have asked fellow private equity guys . . . none of us had even known this was a possible trick, if you will. He has pushed the envelope all the way to the edge, to his benefit, and I think that Americans would find that pretty distasteful.

Sam Stein provides context: “Rattner, who hails from the world of private equity, has occasionally served as a voice of sympathy for Romney as his business career has come under heavy attack. His comments, then, carry a bit more weight than the average criticism from an Obama ally.”

MITT’S TAX CUTS

Would lower the burden on the rich but raise the burden on the not-rich, as explained here.

MITT’S HEALTH CARE

Look Who’s Praising Socialized Medicine. Even though, of course, he’s against it.

Paul Krugman in the New York Times:

Mitt Romney’s inability to stay on script is really getting surreal. Today he lavished praise on the Israeli health care system, which has indeed done a fine job of controlling costs while maintaining high quality. But as everyone who knows anything about it quickly pointed out, the secret of Israel’s success is … intense government involvement. It’s a single-payer system; but unlike Medicare, it also sets a budget per capita (adjusted for health status), so that the nonprofit plans are in effect forced to set priorities for treatment and also negotiate hard over provider payments; think of it as price controls plus death panels. . . .

People used to mock John Kerry for “being for it before I was against it.” Terrible thing to change one’s mind when circumstances change or new evidence is presented or, in that case, to make a statement of principle.

Mitt Romney has the ability to be strongly for and against something simultaneously. Romneycare in Massachusetts? A proud achievement. Romneycare for the nation — an atrocity in need of immediate repeal. Not in need of thoughtful adjustment, as its implementation unfolds — complete repeal. Maybe so we can adopt the Israeli model? Socialized medicine? I don’t think that’s where Mr. Romney plans to take us.

A MODEST PROPOSAL

Stewart Dean: “Jump-starting our economy has focused on badly needed restoration of America’s infrastructure. But let’s do something more, something new: let’s extend fast cheap Internet service to all America’s homes and business to re-invigorate America and make us globally competitive, to bring us together and into the 21st century. It took me 8 years of prodding and follow-up to get Time-Warner’s Roadrunner extended to our stretch of road. Even then it was a near thing. So now I have an ‘up to’ 10 Mbps service that’s often half that with a going rate of $52 a month, while Japan’s largest cable company was offering 160Mbps for $60! in 2009! Americans suffer from third-rate broadband at high prices. Moveon.org has created a new site for citizen petitions, Signon.org, so I created a petition there calling on Congress and the President to take this initiative . Take a look and sign it if you feel so moved.”

BOREALIS

From the Royal Aeronautical Society comes this report.  I hadn’t known about the Israeli “taxibot” competition.  Seems as though ours is the more elegant solution.  Take a read and see which approach you think is more likely to win the day.

MITT

This former Bush 41 Treasury official has some questions about Mitt’s tax returns.  If you can’t get an SBA loan without submitting three years of returns; if Tom Daschle’s appointment to head HHS was scuttled over his failure to report as taxable income the value of his limo perk; and if the nation spent years considering the propriety of the Clintons’ $30,000 loss on a land deal; then perhaps it’s not inappropriate to ask questions about Swiss accounts, Cayman accounts, $100 million IRAs, and the related taxes paid or not paid.

BARACK

A couple of points about the President who is allegedly anti-business:

> In the last three years or so, the stock market has doubled.

> Corporate profits are at record levels as a percentage of GDP.

Is this consistent with the notion that the Obama Administration has been bad for business?  Is it common knowledge among Romney supporters?

Do they know that more net private-sector jobs were created in President Obama’s first three-and-a-half years than in all Bush’s eight?

Spread the word . . .