Some of you may have noticed that I haven’t said anything about Mitt Romney’s recent gaffe, where he said he didn’t care about the poor. That’s because despite his rather poor choice of words (pun intended), what he was really trying to say was that it is the middle class he really cares about.
The media fascination with gaffes is annoying and trivializes our political discourse.
Case in point — while everyone is piling on about this gaffe, hardly anyone is pointing out the hypocrisy of Romney’s larger point, which is Romney claiming that he cares about the middle class. I mean, seriously?
According to an analysis by the Washington Post:
A quarter of the money amassed by Romney’s campaign and an allied super PAC has come from just 41 people, each of whom has given more than $100,000, according to a Washington Post analysis of disclosure data. Nearly a dozen of the donors have contributed $1 million or more.
Who are these donors? Besides executives who (like Romney) got rich at Bain Capital, there are bankers at Goldman Sachs, and — worst of all — a hedge fund mogul who made money on the housing crash.
These are the people who are supporting Mitt Romney, and to whom he will be beholden if he is elected president. And he claims his real concern is the middle class? Don’t make me laugh.
Indeed, Romney’s policies are designed to help the very richest, like his strong support for lower tax rates for “carried interest”, which is how companies like Bain Capital made most of their money — not from any investment, but from a tax loophole. How bad is this loophole? A recent survey from Bloomberg News showed that “two-thirds of money managers consider the low tax treatment for carried interest unjustified.” And that’s just the people who benefit from the loophole.
Romney supports loopholes that benefit the richest of the rich, while screwing everyone else. If he wants me to believe that he cares about the middle class, he’s going to have to do a lot more than just pretend to care. Perhaps the main significance of his “gaffe” is that maybe it shows that even he doesn’t believe what he is saying.
UPDATE: But let it not be said that Mitt Romney doesn’t care. In 1996, Romney basically shut down Bain Capital and had all the employees help find the missing daughter of one of the partners.
24 Comments
I was hoping I’d read a level-headed piece on this Romney gaffe. I don’t like Romney, but I do think his words were taken out of his intended context. But I agree that in the obsession over one part of one sentence, the bigger issue was totally lost. And I don’t buy for a second that capital gains are taxes on money that was “already taxed”. If I take $1,000 of my after tax income and invest in stock that miraculously earns me $1 million and then take that $1 million and parlay it to a $10 million fortune, all of the invested income is NEW income. It was not already taxed.
Further, the “job creation” argument is bogus as well. How is investing in gold, which is nothing more than guessing market timing, a job creator? How is day trading creating jobs? How is selling short, where an investor is betting that a company will FAIL, creating jobs? That last one is actually only a winner if jobs are eliminated.
Sammy, not that I don’t agree with you, but the preferential tax rate for “carried interest” is even worse than the preferential rate for capital gains, which is what you are complaining about.
Thank you.
Sammy – The term “Job Creators” referring to rich individuals is a lie and a fallacy and has always been nothing but that. To say that the rich create jobs is simply wrong – businesses create jobs. To say that personal income tax rates have anything to do with creating jobs is wrong. No one decides to hire people because their personal tax return was higher or lower – it’s based on the health of the business and necessity.
It saddens me that I’ve never heard anyone confront someone using this fallacy in the media.
Heard a similar piece on NPR this morning regarding the “Gotcha” character of journalism these days. It fit right in with what you are saying IK 🙂
Why is someone who made money on the housing crash considered his worst supporter? Unless that person took an active roll in causing the crash, they probably just realized what was happening before anybody else. Those are the kinds of people that we want close to our government….people who can see the impact current events will have on the future, and know how to plan for them. I don’t see why this guy is villainized in this article.
Other than that though, spot on with the point that too often gaffes receive far more coverage than the actual substance of the campaign.
Jake, when someone takes advantage of a disaster to make lots of money that is called price gouging, and it is against the law.
Where are you guys seeing this gaffe reported out of context? I’ve been very surprised that MSNBC, CNN, HuffingtonPost, ThinkProgress, Slate and all the sources I use are carefully quoting Romney in full context! Yes they all say that future political ads will remove the context but it hasn’t happened in most media yet. HuffingtonPost even used the context in their front page teaser headline: “Romney: ‘I’m Not Concerned About The Very Poor. We have A Safety Net … If It Needs Repair, I’ll Fix It.'”
Considering the way Romney doubled down on defending his ads quoting Obama but leaving out that Obama was quoting McCain, I’m not sympathetic to Romney. He’s being treated with a fairness that he has denied his opponents.
Journalism is in a very sorry state and our media deserves harsh criticism but not on this one. On the whole they played it straight and fair this time. This gaffe demonstrates Romney’s detachment from needy people without any need of editing because he can’t see that the social safety net has already unraveled.
I understand your general point, IK, (and have been annoyed by past gaffes that were mangled by the media for shock value) but on this matter I think it has nothing to do with twisting his words. The problem isn’t at all about the “I don’t care about the very poor,” it is why he says he doesn’t care about them. The implication is that somehow the very poor are doing great because of the “nets”, but the middle class is having real problems. I guess all we need to do is to make the middle class very poor, and the mostly rich very rich. Problem solved! 🙂 Again I go back to this notion amongst conservatives that being poor is somehow good, or fun, or easy, etc. It bugs the hell out of me.
I don’t have a link handy but check out Jon Stewart’s take on it.
I view this in this context, “I drive through and by cow pastures, does this mean the cows should get together and vote me as there representative farmer? Truth be known I do like a medium rare steak once in awhile but that doesn’t exactly mean I relate to the cows well being” This how I see Romneys view of the middle class, he see them as a CASH COW and little else.
DAVE TN — LOL — that’s hitting the nail on the head! 🙂
I did a 2-week temp stint at Bain Capital in June of 1996 before Romney “left” the company. Universally, the employees I met thought he was the nicest person in the executive suite. They found him compassionate, hopeful, and helpful when personal issues were on the table. This was shortly before the incident involving Mr. Gay’s daughter.
Equally universal, and the reason for my temp position, was the consensus that he was a lousy manager of people. He came across to his staff as condescending and nitpicky in the worst of micromanaging ways; I was covering two openings in the administrative staff left by mid-level admins who departed unhappily after particularly egregious dressings down by Mr. Romney. Their error? Accomplishing a task ahead of schedule and under budget but not doing so the way he would have had he done it himself. I heard similar things from friends who worked in the Massachusetts Governor’s office while he served.
In the interest of full disclosure, I never met him – he was on vacation while I was at Bain.
No pass for romney. This was not a gaffe and shows how insensitive and out of touch he is. The only group of people he shouldn’t be worried about are the rich. Moreover the safety net is kept up by federal spending. How on earth is he planning to cut federal spending if he expects the net to stay in place? His aim should be to move people up the ladder not keep them down.
Also wanted to comment on something Sammy’s said about this “capital gains have already been taxed” notion. I’ve heard this frequently from people who want the tax eliminated. If it is true or untrue, I’m not really sure about the relevance. I’m unaware of any laws or statutes preventing money from being taxed more than once. In fact, as far as I can tell money is taxed more than once all the time. When I go to the store and make a purchase, I pay state sales tax using money that has already had state income tax taken out of it.
I know Sammy wasn’t advocating for it, but just wanted to toss that out there since I’ve heard it come up before.
I have found that the government isn’t taxing “money”, it is taxing “transactions.” Just go ahead and assume that any time money changes hands the government wants a cut.
Thank you, 1032! The “you can’t tax money twice” argument has always annoyed me.
I really don’t like the implication of phrases like, “the government wants a cut.” Specifically, “wants a cut” means that that entity wants a part of that money to enrich themselves. E.g., the NFL wants a cut of every game broadcast in order to line their pockets further.
Government is inherently different. The revenue received from taxing transactions is used to provide services to us. You know, things like maintaining interstate highways, world-class scientific research, a military to provide for the national defense (though we can debate how much of that is really needed…), food and drug safety, national parks, social safety nets for those in need, and many, many other things.
While, yes, there are many in public service who do well and those tax revenues do provide their salaries and benefits, it’s not like government work turns people into billionaires. In fact, if you really look closely at the recent CBO report (http://www.cbo.gov/doc.cfm?index=12696)–which has its flaws, by the way–you’ll see that those at the top of the wage scale earn less than their private sector counterparts.
Michael, I agree with your comments on the CBO report. It should also be pointed out that although the lower grades of Federal service are paid more than their private sector counterparts in a majority of cases, that crux of that comparison sits squarely on the benefits end of the equation. Federal employees get reasonable sick leave – up to 10 days a year (this never increases). Federal employees start with the ability to earn 10 days annual leave and this amount increases as the employee spends more time in Federal service. Federal employees are able to participate in the Federal Employee Health Benefits program – that’s health insurance. I personally believe that all worked should receive benefits similar to a Federal worker, not that Federal workers receive too much in benefits. I’m saddened by people throwing darts are Feds because of their benefits when they should be demanding similar benefits from their employers!
Sammy is confused between Capital gains and dividends. The purpose of the lower rates on the Capital gains makes a bit of sense. My great Aunt bought the procurer of PNC in the 1950s. My shares have a basis of $2 to sell, but PNC is worth a lot more than that today. The money my Aunt paid in the 1950s probably has the same buying power (or more) as what PNC is worth today so a break is given because of inflation.
As far as dividends goes, I don’t understand the break. Supposedly the company has already paid tax on the dividends before it is distributed to us. I’ve tried and tried to see that, but I don’t.
Reagan put in that stock only needed to be held a year to get the break on the profit (benefit for the rich) and someone put in Qualified dividends if stock is held over a year. I believe that was Baby Bush. I know I’ve railed against it for a long, long time. No dividends should be “qualified”
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Don, I am in complete agreement. During my teen and college years, I did the typical part-time jobs (restaurants, grocery stores, retail, etc.). In every job I worked, there were a number of (non-student) adults working 30 hours per week. They all had a second job working another 30 hours per week. Neither job would let them work full-time. Full-time meant full-time benefits. 30 hours meant part-time benefits. If you work part-time, you have to pay more for health insurance than a full-time employee does (at least that’s the way it was…and I haven’t seen any news that this has changed…), despite the fact that you had less pay. So paying for benefits on a part-time wage was simply not feasible. The end result is that they had to work 60 hours to make enough money to break even with what would be a full-time wage.
My point is that the private sector knowingly (and lawfully) takes advantage of low-wage workers in highly unethical ways. It’s easy to say that those workers should just quit and find a better job, but when every single employer is doing it, that’s an absurdly naive suggestion.
…and it’s flat out cruel to suggestion that the not-for-profit government should follow the same practices.
1032 and Sammy –
Look at it this way. There are 2 types of IRA’s. The traditional you do not pay tax on now, but do pay on withdrawal. The Roth you pay tax on now, but do not on withdrawal. Depends on when you need the tax relief, now or later.
For the money, if you can live without the tax relief now a Roth is better. Pay tax on 100k now vs 1 million later.
Don and Michael – I work for the Fed as well, but I do see the other side from my 20 years in the private sector running businesses. Who is the Feds competition? How do they measure success in determining wages and benefits? In the private sector it’s a P&L statement and sales that determine if you are successful.
Now there could be a whole class on how to best boost revenue and keep costs in line with projections. There are 2 choices for business; fewer , highly motivated and better compensated individuals, VS more lower skilled lesser compensated individuals. You look at your competition decide how best to make a better widget and your revenue/profit will tell you if you’re right. Who tells the gov’t if they’re right, (besides us as voters because we don’t seem to know if they’re right or not)
For the record, the government is not in the business of making widgets. Government exists to provide services that free markets will not. At the advanced degree level, the government has plenty of competition. It is fairly straightforward to compare a climatologist at Oak Ridge National Lab with one employed by BP or Shell. And the general results show that the government delivers similar results for less money; government employees often derive some satisfaction and incentive from the feeling that they are contributing to a better society, rather than exclusively out of rational self interest.
What you haven’t said anything about (but you’re right, and you’ve said it before) is that there is a problem with the “spend it or lose it” government philosophy about funding. That philosophy would go away if it were actually possible to ensure that departments received the funding and support when they really need it.