Romney joins Ferguson as a target

A few of weeks ago, I discussed the troubles that Niall Ferguson ran into from claiming that America had become a “50/50” nation — half the people working, the other half not paying taxes and collecting government benefits.  I also noted all the ways that was an insulting, deceitful, and inaccurate portrayal of the reality of America’s distribution of income and taxation.

Gov. Romney has now encountered the same firestorm of reaction for making the same claim in front of a (previously) private fundraising audience.  One wonders if Romney discussed this with Ferguson or was just reading from the same conservative ideological script.  Of course the rich would like to believe that all their taxes go to give a comfortable life to lazy freeloaders who would be better off forced to work; that way they can be wholly moral in calling for a dramatic reduction in government spending and — not incidentally — in the taxes they have to pay.  In that world, their wealth is entirely good, while taxes and government spending are entirely bad.  [See this video of Romney to get the message:]

This view sets aside and forgets the wounded veterans, the disabled factory workers with 30 years on the job, the long-term workers who lost jobs when their company closed or downsized and can’t find work because businesses are not hiring, the working poor who are juggling minimum wage jobs to support their families, and the elderly who are retired — oh, those ARE the 46% who do not pay federal income taxes.

What is remarkable, and not yet openly said, is what Romney’s comment reveals about this ‘view from the top.’  Romney (and all conservatives) publicly make the claim that shrinking government and reducing taxes will be good for everyone because it will grow the economy and put people back to work at good jobs with rising wages.  If that were in fact true, then those who are not paying federal income taxes because they cannot find good paying jobs (either they are un- and under-employed or stuck in low-wage jobs) would be happy with Romney’s policies.  Yet Romney’s claim in front of his wealthy audience was the reverse — he said plainly that people who do not pay federal income taxes will not vote for him because his tax cutting policies have no appeal for them.  E.g., his policies will provide nothing good for them.  That is a stunning admission — can we even imagine a electing a president who admits that his keystone policy of tax cuts does not offer anything to half the population, but is strictly a benefit to the better-off half (and the higher they taxes they pay, the bigger the benefit)?.

Here the mask slipped.  The right-wing rich would much rather they did not have to bother paying social security, medicare, unemployment, and other tedious expenses that do nothing for them.  Of course, they will fight to the death the right to keep the government spending on special deductions for capital gains income, dividend income, depletion, farm supports, and other special interests for them.  (Example — Former Virginia Governor George Allen is campaigning entirely on his opposition to government waste, claiming that all government spending is wasteful.  Yet he is supporting a $6.4 million dollar give-away of Virginia state funds to the privately-owned Washington Redskins football team to rennovate their training facility in northern Virginia. So government spending is always wasteful — unless it supports a pet project of the rich!)

But they cannot run for office on the public claim that they will dismantle and withdraw funding for health care, social security, college education, and other programs whose main goal is to support the middle class and make it possible for poor and middle-class Americans to have opportunities to raise themselves up and have a secure life and retirement.  So they claim they will reduce “waste” and “excess” government spending, or “save” Medicare by restructuring it to put a hard cap on expenses.

Let me be clear — I agree that much government spending, especially certain badly-designed public pension programs, is wasteful and must be reduced.  I agree that private jobs and private business is the most powerful engine to create wealth.  But all of this needs to be underpinned with support for the health, education, and retirement of the middle and working classes — or what will they work for and pay taxes for?  And how will American renew itself across generations?  The “American Dream” was based on an agreement that workers would work hard, seek to raise their productivity, and rely on private business, not government, to guide the economy.  But in return, workers demanded a steadily increasing standard of living, universal access to the opportunities to get ahead, and a level of health care and retirement commensurate with being the richest country in the world.  The conservative rich, at this point, just want the first half of that deal, and blame everyone but themselves that the second half is eroding away.

I will repeat what I wrote a few weeks ago:  in order to win, Romney needs to convince voters that the Federal government  — which prior to 1980 cleaned up the environment, protected unions, prevented unscrupulous lending, promoted social mobility and expanded the middle class through support for college education while fighting discrimination, is the problem, while private sector CEOs — who drove down wages, offshored jobs, undermined pensions, watered down health care, shifted all benefits from productivity gains away from workers and into their own pockets, destroyed the solvency of our national banking system and then sought and gained huge government bailouts when their bets went bad — embody the solution.

This was always going to be a hard argument to make.  By getting caught admitting to his backers that what he really offers is only tax cuts for the most well off, and nothing at all to at least half of all American, Romney may have made his task impossible.



About jackgoldstone

Hazel Professor of Public Policy at George Mason University
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2 Responses to Romney joins Ferguson as a target

  1. russell1200 says:

    Romney is drinking from the conservative Koolaid punchbowl, no doubt. But you seem to be drinking from the status quo liberal (?) one yourself.

    Injured soldiers, the disabled, children, the retired all have their claims to support. But they are not working. There has to be some sort of economic production to support them. Right now the relative cost of food and production allows the basic necessities to be handled by a relatively small number of people, and allows for a lot of service type production that makes peoples lives (hopefully) better.

    But if a whole pile of people are getting set to retire, and input prices increase (presuming inputs don’t keep up with the world population growth headed to 10 billion) something is going to have to give.

    While the money (marker chip) balance matters. In the end, there has to be some underlying productivity to support everyone.

    So while I think Romeny’s remarks were made for all the wrong reasons, I do think there are concerns about overall production within the economy, and trying to get more people contributing.

    • I agree — we need to get people contributing. So have a pro-growth policy where government primes the pump to promote spending, investment, and productivity gains. But to just CUT government spending to lower taxes does NOT provide any boost to real growth.

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