Romney's Favorite Myth Exposed: Economic Growth Isn’t About ‘Makers’ vs. ‘Takers’

Romney's Favorite Myth Exposed: Economic Growth Isn’t About ‘Makers’ vs. ‘Takers’

The release of the video in which Governor Romney denigrated the 47 percent of households who don't pay income taxes has set in motion a silly debate about who pays taxes and who doesn't. This debate is a distraction from the real issues because paying taxes and receiving government benefits like Social Security and Medicare are less important in terms of income distribution than the way the government structures the economy.

In the last three decades the economy has been restructured in ways that have led to a massive upward redistribution of income. Serious public debate should be focused on these mechanisms.

The Impact of Trade Policy

To start with the most obvious, trade policy has been deliberately structured to place U.S. manufacturing workers in direct competition with low paid workers in the developing world. The predicted and actual outcome of this policy has been the elimination of millions of manufacturing jobs and wage depression of a large segment of the workforce as displaced manufacturing workers are forced to compete for jobs in retail, restaurants and other sectors of the economy.

The effect of this trade policy is further enhanced by the decision to have an overvalued dollar (aka a "strong dollar") that dates from when Robert Rubin became Treasury Secretary in 1996. An overvalued dollar hurts those in sectors that are exposed to trade, while benefiting professionals like doctors and lawyers who rely on professional restrictions to largely insulate themselves from international competition.

About Those Subsidies

While trade is a huge deal, it is far from the only story. The government gives $60 billion a year in subsidies to the large Wall Street banks in the form of "too big to fail" insurance. This means that the banks can borrow at lower interest rates because creditors assume that the government will bail them out if the bank gets into trouble.

Patent monopolies on prescription drugs transfer close to $270 billion a year from patients to the drug industry. Almost all drugs would sell for $5-$10 per prescription without this form of protection from the government.

Don't Forget About Interest Rates

The Federal Reserve Board is also an incredibly important force in redistributing income upward. As a matter of policy it will raise interest rates to slow the economy and throw people out of work, if it believes that inflation might rise above its 2.0 percent target. Higher unemployment puts downward pressure on the wages of workers in general. By contrast, inflation poses a threat to banks and other lenders, hence the Fed's obsession with ensuring that the inflation rate remains very low.

The structure and enforcement of laws around union organizing and strikes can also be very important in determining the distribution of income. While Canada is very similar to the United States in many respects, more than 30 percent of its workforce is represented by a union. This compares to just 10 percent in the United States. The main difference is that Canada's labor laws make it much easier to organize a union. Since unionized workers tend to get higher wages, the decline in unionization since the 70s has likely been an important factor in depressing wages.

The New U.S. Economy

These policies and others that have been put in place over the last three decades lie behind the enormous upward redistribution of wealth that has taken place over this period. Their impact dwarfs the impact of the tax increases on the wealthy that are being proposed by President Obama.

A presidential campaign is a great time to have a national debate over these policies. Unfortunately, we seem destined to have a silly debate over whether poor people should be paying more in taxes.

Governor Romney may have badly damaged his campaign with his videotaped remarks. Unfortunately the rest of us will be the big losers if his comments preempt a serious discussion of the upward redistribution we have seen over the last three decades.

If Romney knows so much about business and economics how come he thinks it is just 47% of the population that gets some kind of government benefits including companies like Bain.

What liberal media? CNN Lets Neo-Nazi Dinesh D'Souza Peddle Conspiracy Theory That Obama Is "Anti-American". Why is there this strong current in journalism not to call people out on the most outlandish lies.

Sen Scott Brown (R-MS) is nothing more than an ATM machine for the too big too fail banks. I guess that is what makes brown such a "nice" guy, he is so willing to bend over for special interests.

Anti-American Fanatic Dinesh D'Souza's "The Roots of Obama's Rage" rooted in lies

Anti-American Fanatic Dinesh  D'Souza's "The Roots of Obama's Rage" rooted in lies

In his new book The Roots of Obama's Rage, Dinesh D'Souza theorizes that President Obama is motivated by an "anti-colonial" ideology inherited from his father, and boasts that this theory explains Obama's actions in a way "that no rival theory can even begin to do." In reality, D'Souza's absurd "anti-colonial" theory is premised upon a series of false and misleading claims.

1. CLAIM: Obama "hadn't lifted a finger to help a destitute close relative," half-brother George

From pages 3-4 of The Roots of Obama's Rage:

    I'm a conservative, and I didn't vote for Obama. During the 2008 presidential campaign, I read an interesting article in the London Telegraph titled "Barack Obama's Lost Brother Found in Kenya." The article featured a picture of a 26-year-old man standing inside a ramshackle hut on the outskirts of Nairobi. CNN confirmed the story, reporting, "We found Barack Obama's half-brother living in a Nairobi slum." He was George Hussein Obama, the product of a liaison between Barack Obama Sr. and an African woman. "I live here on less than a dollar a month," George said. Humiliated by his poverty, he confessed he never mentioned his famous half-brother. "I say we are not related. I am ashamed." In 2006, George briefly met Barack Obama, who was then a United States senator from Illinois, but felt as though he was talking to a "total stranger." I found it remarkable that Barack Obama, who had a net worth of several million dollars and who was within striking distance of the world's highest office, hadn't lifted a finger to help a destitute close relative.

    Seeing from the article that George Obama aspired to be a mechanic, I started the "George Obama Compassion Fund." On a daily blog I wrote for AOL at the time, I invited people to make small contributions to help George move out of his hut and get some training to realize his dreams. We raised a couple of thousand dollars, and a Christian missionary promised he would deliver the money in person to George. Then I was contacted by a reporter for a large newspaper in Kenya who told me that the Obama family had refused the money. Evidently they had consulted with the Obama campaign and been told to go into hiding. My attempts to locate George proved unavailing. So I tore up the checks, figuring that perhaps I had jostled Obama into doing something for George, if only to save himself from political embarrassment.

REALITY: George Obama is a community organizer, chooses to live among poor

The Associated Press reported on June 14, 2009, that George Obama had signed a deal with Simon & Schuster to write a book detailing his "fall into crime and poverty as a teenager and his eventual embrace of community organizing -- a passion shared by the president -- and of advocacy for the poor, an identification so strong that he chooses to live among them." As Media Matters documented, after conservatives (like D'Souza) used the initial reports of George Obama's living conditions to attack President Obama, George called the reports "exaggerated" in an interview with CNN, saying: "I was brought up well. I live well even now." George added: "I think I kind of like it here. I'm Kenyan, so definitely I'd really love to live in Kenya."

2. CLAIM: Obama initiated financial, auto industry bailouts

D'Souza twice indicates that Obama initiated the Troubled Asset Relief Program (TARP) and the federal bailout of the automobile industry. From page 5 (emphasis added):

    As Obama launched his spending spree -- a bailout plan followed by a stimulus plan followed by an automobile industry rescue plan followed by a national health care plan and then new environmental and financial regulations -- I became alarmed.

From pages 17-18 (emphasis added):

    At the same time, Obama has transformed the relationship between American citizens and their government. He has passed the most significant raft of laws since the Great Society: the bank rescue plan, the auto industry bailout, the stimulus package, sweeping regulation of Wall Street, a complete remaking of the health care system.

REALITY: Both programs were begun under Bush

The Emergency Economic Stabilization Act of 2008 (commonly known as the bank bailout) was signed into law -- as its name indicates -- on October 3, 2008, by then-president George W. Bush. In December 2008, Bush announced that $13.4 billion of the funds allocated by Congress for the bank bailout would be loaned to General Motors and Chrysler to prevent the companies from collapsing. Bush said at the time: "In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action. The question is how we can best give it a chance to succeed."

3. CLAIM: Obama started going by "Barack" to adopt his father's "African identity"

On pages 26-27, D'Souza writes that Obama "is his father's son, and his dreams are derived from his father's aspirations and failures." Expanding on this claim, he writes:

    Obama even took his father's name in order to cement his explicit identification with him, and they way he did so is even more revealing. Young Obama's parents named him Barack, after his father. But from birth until his young adult years, he was known as Barry. Actually, Obama's dad was also called Barry; Barry was the name he adopted when he came as a student from Kenya to America. While the father went from Barack to Barry, however, the son went in the opposite direction. As a young man, Obama asked people to stop calling him Barry and instead to call him Barack. For Obama's father, the switch from Barack to Barry was no big deal; he was just doing what many immigrants do in order to fit in. For the son, by contrast, the move from Barry to Barack was a very big deal. He didn't just take his father's identity; he self-consciously rejected his father's American name in favor of the senior Obama's African identity.

REALITY: Obama on name switch: "It was not some assertion of my African roots"

D'Souza sourced his claim to a March 22, 2008, Newsweek article titled "When Barry Became Barack." According to that article:

    Obama wanted a clean slate. "Going to New York was really a significant break. It's when I left a lot of stuff behind," he says. "I think there was a lot of stuff going on in me. By the end of that year at Occidental, I think I was starting to work it through, and I think part of the attraction of transferring was, it's hard to remake yourself around people who have known you for a long time." It was when he got to New York that, as he recalls it, he began to ask people to call him Barack: "It was not some assertion of my African roots ... not a racial assertion. It was much more of an assertion that I was coming of age. An assertion of being comfortable with the fact that I was different and that I didn't need to try to fit in in a certain way."

4. CLAIM: Obama's push for a "nuclear-free world" is evidence of his "anti-colonialism"

D'Souza claims on page 38 that Obama "must constantly translate his ideology into terms that are accessible and palatable to the American people," adding:

    He cannot say that he hates the rich, so he has to talk about fairness and equality. He cannot say America is a nuclear menace to the world, so he has to say that he wants a nuclear-free world. He cannot say he thinks Wall Street is evil, so he must accuse the investment firms of not looking out for the interests of Main Street. Obama sometimes blows it; he doesn't always succeed with his anti-colonial marketing. Even his attempt, however, is impressive; this is a skill he has been honing for many years.

REALITY: If this is true, then Ronald Reagan was also "anti-colonial"

Obama, in his April 5, 2009, speech in Prague, called for a world free of nuclear weapons:

    OBAMA: So today, I state clearly and with conviction America's commitment to seek the peace and security of a world without nuclear weapons. I'm not naive. This goal will not be reached quickly -- perhaps not in my lifetime. It will take patience and persistence. But now we, too, must ignore the voices who tell us that the world cannot change.

In his second inaugural address, Ronald Reagan also called for a world without nuclear weapons:

    REAGAN: There is only one way safely and legitimately to reduce the cost of national security, and that is to reduce the need for it. And this we are trying to do in negotiations with the Soviet Union. We are not just discussing limits on a further increase of nuclear weapons. We seek, instead, to reduce their number. We seek the total elimination one day of nuclear weapons from the face of the Earth.

Many delusional anti-American conservatives are eating this up like crack addicts given a fix of all the loony unsubstantiated urban myths they believe. hey its is a book it must be true and since they want all these falsehoods to be true, of course they do not perform any fact checking. Fact checking requires energy and integrity, something sorely lacking in the radical anti-American conservative movement.