Romneynomics

by Mike Lux

Michael Lux is the co-founder and CEO of Progressive Strategies, L.L.C., a political consulting firm founded in 1999, focused on strategic political consulting for non-profits, labor unions, PACs and progressive donors. He is also a partner at Democracy Partners, a progressive consulting firm. Previously, he was Senior Vice President for Political Action at People For the American Way (PFAW), and the PFAW Foundation, and served at the White House from January 1993 to mid-1995 as a Special Assistant to the President for Public Liaison. While at Progressive Strategies, Lux has founded, and currently chairs a number of new organizations and projects, including American Family Voices, the Progressive Donor Network, and BushRecall.org. Lux serves on the boards of several other organizations including the Arca Foundation, Americans United for Change, Ballot Initiative Strategy Center, Center for Progressive Leadership, Democratic Strategist, Grassroots Democrats, Progressive Majority and Women’s Voices/Women Vote.In November of 2008, Mike was named to the Obama-Biden Transition Team. In that role, he served as an advisor to the Public Liaison on dealings with the progressive community and has helped shape the office of Public Liaison based on his past experience working on the Clinton-Gore Transition, as well as in the White House. On January 14, 2009, Lux released his first book, The Progressive Revolution: How the Best in America Came to Be. Lux's book was published by Wiley Publishing. You can purchase The Progressive Revolution by clicking here.

It's great news for us Democrats that former Romney partner in Bain Capital -- Edward Conard -- is out with a new book on economics, Unintended Consequences: Why Everything You've Been Told About the Economy is Wrong. My first guess when hearing about the book was that some devious liberal in the publishing industry talked Conard into this timing, telling him that his arguments were so compelling that the book would no doubt help Romney win the election if it came out in the spring of 2012. However, having read more about Conard, I am now convinced that he really is arrogant enough to believe that making his case would help Mitt's cause. God bless him for it. The more attention we can give to the starkness of his celebration of Romneynomics, the better.

Conard's book is essentially Ayn Rand with more math. (He might say with more economics, but as the title of his book suggests, the theories he describes are far more theological in nature than economic, as he essentially ignores most of the well-grounded economic research of the last 70 years.) Conard believes that growing concentration of wealth is not just a good thing, but a fantastically great thing. The only problem our economy has, he suggests, is that we need a lot more of it. The mind-blowing gains in wealth over the last 30 years by the top 1 percent, the dazzling fortunes of a very few while most people's incomes and salaries have flat-lined, the fact that 95 percent of the gains in wealth the last four years have gone to those top 1 percent or that they now own over 40 percent of the wealth in this country: the only downside according to Conard is that it is not enough. Because, as he says, "It's not like the current payoff is motivating everybody to take risks." He suggests that if the wealth concentrated at the top were twice as large, more unproductive people ("art history majors," as he derisively refers to non-rich people) would be motivated to become risk-takers.

It's big of Conard to admit that this is counterintuitive (one of the few things I do agree with him on). But, he insists, only by the super-wealthy people getting rewarded (deeply, richly, extravagantly, overwhelmingly rewarded apparently) does society advance. Their investments are, he says, what makes our economy more efficient and more productive, saving money for everyone. In true Ayn Rand form, he even criticizes Warren Buffet for giving money to charities rather than investing it in new products and companies, arguing that the latter is far better for society than curing disease or feeding children or educating people. And here's a shocker: he doesn't blame Wall Street bankers at all for the financial crisis in 2008. Just bad luck, he says, one of those "run on the bank" things that happen from time to time in a capitalist economy. 

The economic history you have to ignore to believe all this is pretty extraordinary. You have to ignore that of the three most prosperous decades of the last century, two (the 1950s and '60s) were in an era with tax rates on the wealthy between 70 and 90 percent, and that the third (the 1990s) started with two rounds of tax increases on the rich. You have to ignore that the massive concentrations of wealth and tax cutting for the rich of the last three decades seem to have produced very little of the job creation or income enhancement for the middle class Conard says would come, as well as the fact that the last two periods of great wealth concentration in this country produced the worst economic depressions in our history (in 1929 and 1894). You would have to ignore the fact that there were no major financial collapses in the years between the passage of Glass-Steagall in 1933 and its repeal in 1999, and only nine years later we get one almost as big as those previous two. You would have to ignore the massive amounts of research that have shown the huge economic gains that resulted from investments in people's education like the GI Bill, Head Start, school lunches and Pell Grants -- as well as the huge impact that private charitable programs have had in turning people's lives around and making them productive citizens.

In addition to ignoring history and research, Conard ignores common sense and simple facts. In the Adam Davidson article, he goes on and on extolling the investment he made that saves a fraction of a penny on every can of soda. He brags, "It makes every American who buys a soda can a little bit richer because their paycheck buys more." Really? I'm sure the companies make a little more money because of that, but I haven't noticed the price of soda dropping. And if paychecks keep losing ground, grocery bills keep going up, people keep getting laid off or having their hours cut, the company makes a little more on every can but the rest of us aren't helped at all. But none of that bothers Conard at all, because to him if the rich are getting richer, all is well. As Davidson puts it, "Conard says that the merciless process of economic selection has assured that they have somehow benefited society." 

What does all this have to do with Romney, besides their close personal ties and the fact that Conard is one of Romney's biggest supporters (he was the one that set up the phony corporation to funnel money into a pro-Romney Citizens United slush fund)? These views are at the core of Romney's -- and Paul Ryan's, and the entire Republican Party's -- economic philosophy. One of Romney's chief economic advisers, Glenn Hubbard, admitted that Romney and Conard share "beliefs about innovation and growth and responsible risk-taking." The entire Romney-Ryan budget is a document built on these kinds of ideas: structure society so that the rich make more and more money, and everyone will benefit forever after.

This is bad economics, as history -- including the recent history of the Bush years -- has clearly demonstrated to us. But the values of this thinking are even worse. Here's Conard's summary of his philosophy: "God didn't create the universe so that talented people would be happy. It's not beautiful. It's hard work. It's responsibility and deadlines, working until 11:00 at night when you want to watch your baby and be with your wife. It's not serenity and beauty." No, it certainly isn't. I prefer the thinking of another wealthy man whose family made lots of productive investments in the private sector, and who was part of an administration that presided over the most prosperous decade in American history, but who also knew there were other things that mattered in life:

"Too much and too long, we seem to have surrendered community excellence and community values in the mere accumulation of material things. Our gross national product ... if we should judge America by that -- counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for those who break them. It counts the destruction of our redwoods and the loss of our natural wonder in chaotic sprawl. It counts napalm and the cost of a nuclear warhead, and armored cars for police who fight riots in our streets. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

"Yet the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage; neither our wisdom nor our learning; neither our compassion nor our devotion to our country; it measures everything, in short, except that which makes life worthwhile. And it tells us everything about America except why we are proud that we are Americans."



That was Bobby Kennedy, and I will take his view of life over the ugliness of Romneynomics every day of the week.

Browse articles by author

More Current Affairs

Added 12.07.2018
The cabinet members who resigned this week apparently feared that politics is taking May toward a “soft Brexit,” their worst of all possible worlds........“soft Brexit,” maintains the status quo, more or less, letting Europeans freely circulate into British labor markets and allowing European firms to operate easily in the UK. The problem with “soft Brexit” is that it raises questions about why the UK is leaving at all, since it will still have the same obligations to Europe as before, it just won’t have a voice when the remaining 27 members of the European Union meet to make decisions.
Added 12.07.2018
One study on the 2010 World Cup found that there was a 37.5% rise in admission rates across 15 accident and emergency departments on England match days........Examining reports of domestic abuse in Lancashire (a county of approximately 1.5m people in Northern England), across the 2002, 2006 and 2010 World Cup tournaments, we discovered a 26% increase in reports of domestic abuse when England won or drew, and a 38% increase when England lost. Reports were also more frequent on weekends, and reached their peak when England exited the tournament.
Added 10.07.2018
If, back in the 1980s and 1990s, the US government, rather than arguing for Chinese economic opening, had prohibited any US company from investing there, China’s rise would have been significantly delayed, though not permanently prevented. Because that did not happen, China’s rise is now self-sustaining. A huge and increasingly affluent domestic market will make exports less vital to growth.
Added 10.07.2018
Comparing today’s demagogues with Adolf Hitler is almost always unwise. Such alarmism tends to trivialize the actual horrors of the Nazi regime, and distracts attention from our own political problems. But if alarmism is counterproductive, the question remains: At what point are democracies truly in danger? What was unimaginable only a few years ago – a US president insulting democratic allies and praising dictators, or calling the free press “enemies of the people,” or locking up refugees and taking away their children – has become almost normal now. When will it be too late to sound the alarm?
Added 09.07.2018
In view of such actions, expectations for Trump’s behavior at the upcoming summit have gone from prickly to dangerous. The sense of foreboding has been heightened by the announcement that, just four days after the summit ends, Trump will meet with Russian President Vladimir Putin, in Helsinki. The nightmare scenario is easy to imagine: Trump lays bare NATO’s fractures, including by questioning mutual defense, before selling his allies down the river by publicly embracing Putin. But this does not need to be the outcome.
Added 09.07.2018
After 2027 (or maybe even 2025, only 7 years from now), the number of EVs will rapidly accelerate, as virtually all new vehicles bought will be electric (an effect of rapidly falling battery and other component costs and of the fuel for electric cars being essentially free; you can power one off your rooftop solar array).
Added 03.07.2018
Most pundits interpret Trump’s outbursts as playing to his political base, or preening for the cameras, or blustering for the sake of striking future deals. We take a different view. In line with many of America’s renowned mental-health experts, we believe that Trump suffers from several psychological pathologies that render him a clear and present danger to the world.
Added 03.07.2018
In the United Kingdom, Brexit looms large, with everyone from government ministers to tabloid newspapers frothing daily about the deal that will be struck with the European Union and the effects that it will have. But the EU faces too many pressing challenges to be obsessing about Britain. The UK’s concern is understandable: evidence is mounting of the likely damage a departure from the single market and customs union will do to the UK economy. According to new research from the Centre for European Reform, the UK economy is already 2.1% smaller than it would have been had voters chosen to remain. The hit to public finances totals £440 million ($579 million) per week.
Added 26.06.2018
Nowadays, Britain’s words and actions on the world stage are so at odds with its values that one must wonder what has happened to the country. Since the June 2016 Brexit referendum, British foreign policy seems to have all but collapsed – and even to have disowned its past and its governing ideas. Worse, this has coincided with the emergence of US President Donald Trump’s erratic administration, which is pursuing goals that are completely detached from those of Britain – and of Europe generally. 
Added 26.06.2018
With each passing day, it becomes increasingly evident that US President Donald Trump’s administration cares less about economics and more about the aggressive exercise of political power. This is obviously a source of enormous frustration for those of us who practice the art and science of economics. But by now, the verdict is self-evident: Trump and his team continue to flaunt virtually every principle of conventional economics.
Added 26.06.2018
The sights and sounds of Central American children being ripped from their parents by US Border Patrol officers have, by now, spread across the globe. The experience has been traumatizing to its victims and deeply painful to watch. It has also done incalculable damage to the very idea of America. This is June when we are supposed to be celebrating "Immigrant Heritage Month". Each year, I have taken this opportunity to recall my family's immigrant story - the opportunity and freedom they sought, the hardships they endured, and the remarkable progress they made in just one generation. 
Added 24.06.2018
State terrorism comes in many forms, but one of its most cruel and revolting expressions is when it is aimed at children. Even though U.S. President Donald Trump backed down in the face of a scathing political and public outcry and ended his administration’s policy of separating migrant children from their parents, make no mistake: His actions were and remain a form of terrorism.
Added 22.06.2018
It is now clear that the twenty-first century is ushering in a new world order. As uncertainty and instability associated with that process spread around the globe, the West has responded with either timidity or nostalgia for older forms of nationalism that failed in the past and certainly will not work now. Even to the most inveterate optimist, the G7 summit in Quebec earlier this month was proof that the geopolitical West is breaking up and losing its global significance, and that the great destroyer of that American-created and American-led order is none other than the US president. To be sure, Donald Trump is more a symptom than a cause of the West’s disintegration. But he is accelerating the process dramatically.
Added 20.06.2018
Sessions quoted a line written by the apostle Paul to a small community of Christians living in Rome around 55AD to defend the Department of Justice’s approach. He said: "I would cite you to the Apostle Paul and his clear and wise command in Romans 13, to obey the laws of the government because God has ordained them for the purpose of order." Sessions used the Bible because one of the most vocal opponents of the crackdown on asylum cases has been the Catholic Church. It’s no surprise that Sessions appealed to Romans chapter 13 verse 1 in response: not only did he hope to undermine Catholic authority by using the Bible against them, he cited a statement so broad that one might use it to defend anything a government does, good or bad. Picture below St Paul writing his epistles, by Valentin de Boulogne, via Wikimedia Commons.
Added 19.06.2018
 

I find it exceptionally irritating when I hear liberals worry about whether Israel will be able to remain a "Jewish and Democratic State" if it retains control of occupied Palestinian lands.

Added 18.06.2018
Daniel Wagner: "My prediction Korean War will be formally ended, the peninsula will be denuclearised, and a lasting peace will be the result."
Added 14.06.2018
Extract: PiS [ the ruling Law and Justice party] has established the most significant addition to the Polish social safety net since 1989: the Family 500+ program. Launched in 2016, Family 500+ embodies the nationalism, traditional family values, and social consciousness that the PiS seeks to promote. The program pays families 500 złoty ($144) per month to provide care for a second or subsequent child...........The program has been enormously popular. Some 2.4 million families took advantage of it in the first two years. The benefit, equivalent to 40% of the minimum wage, has almost wiped out extreme poverty for children in Poland, reducing it by an estimated 70-80%........... Liberal pro-European politicians and policymakers are not convinced. They complain that such a generous family benefit will weaken work incentives and blow up the government budget. But initial evidence suggests that Family 500+ has actually increased economic activity. It has also reversed the post-communist decline in fertility, increased wages (particularly for women), and enabled families to buy school materials, take vacations, buy more clothes for their kids, and rely less on high-priced credit for basic household needs. And, thanks to rapid economic growth, the government deficit has steadily fallen, not grown.
Added 12.06.2018
The depths of hypocrisy of the Republican Party in supporting Trump’s meeting with the North Korean dictator in Singapore are hard to plumb. This is a party whose leading members adopted the Ostrich Foreign Policy Principle for decades. If you don’t like a country’s government or political and economic system, pretend it does not exist.
Added 12.06.2018
US Defense Secretary Jim Mattis has spoken out against China’s strategy of “intimidation and coercion” in the South China Sea, including the deployment of anti-ship missiles, surface-to-air missiles, and electronic jammers, and, more recently, the landing of nuclear-capable bomber aircraft at Woody Island. There are, Mattis warned, “consequences to China ignoring the international community.” But what consequences?
Added 12.06.2018
With a general election approaching in September, Swedish voters are being warned that now it’s their turn to be targeted by Russian interference in the democratic process. According to Sweden’s Civil Contingencies Agency (MSB), which is leading the country’s efforts to counter foreign-influence operations, such interference is very likely, and citizens should be on the lookout for disinformation and fake news.