The puff piece by David Brooks in today’s New York Times, The Wealth Issue, seems a clear attempt to elevate and reframe the Romney candidacy with a good old-fashioned pioneer story, just at a time when he is having a new set of big problems with his tax profile and his work as a so-called vulture capitalist. It describes the Romney family beginnings and the family’s attempts to reach the Mormon promised land during the 1800s. The actual wealth issue was visited with some genuine thoughtfulness and factual support on the other side of the op-ed page in a piece by Paul Krugman titled, Taxes at the Top. In some ways, the two articles define where tug of war been Obama and the GOP sits at the moment. On the one side, Krugman shows us just why the debate between the one percent and the ninety-nine percent is worth having. On the other, you have a wild-west narrative by David Brooks about why it really doesn’t.
Other opinion writers have been very consistent in their writing about why the low tax and prosperity model is weak. The main point (which has been substantiated ad nauseam) is that there is no conclusive connection been lower taxes and economic prosperity. In fact, economic prosperity coupled with higher effective taxation seems more often to be the winning combination. It certainly was during the Clinton era and also during the phenomenal prosperity of the 50s. With Bush, tax cuts gave us only stalled growth, big government debt, and no payback from the investing class who were supposed to deliver new jobs and enhanced production with the money that didn’t go to the government. Those savings, at least some of them, seem to have gone to the Cayman Islands and other havens around the world as well financial instruments designed to mask tax liability.
Often, deals in Congress happen through trades for impending legislation. One of the deals Krugman mentions is telling. During the second Clinton Administration, the Democrats traded a tax cutting measure (put forward by Republicans) for passage of the Children’s Health Insurance Program—you guessed it, the Democrats. The trade-off was a stark reminder that, while Democrats continue to be concerned with health care and safety net issues, the Republicans continue to be concerned with their money. The tax cut was for capital gains, an area in which the rich more often figure prominently. The issue with capital gains tax has come home to roost again and the Romney’s of this world are being pressed to explain why their mostly unearned prosperity should get a big tax break. We’re still waiting for an answer.
In the meantime, you would think that Romney might simply opt to pay the maximum tax available on his hefty income. His campaign demonstrates he has money to burn so why not pay the real tab and join the tax debate from a position of strength. Instead he has chosen to play the capital gains and carried interest card and go for the discount tax option which puts Mr. One Percent and his Cayman Island holdings, in the thirteen percent tax category. It is unclear why the working class of the Republican base goes for this. It clearly makes something of a mockery out of those who slug it out on assembly line or in low paying blue collar jobs who may be paying a higher effective tax rate on money they actually work for. No doubt, Romney’s 2011 taxes will be tailor made for the age of intense scrutiny which is exactly why earlier returns should also be part of his campaign disclosure. We may also want to see his long form birth certificate as well, to make sure he was born where “the trees are the right height” and not in Mexico like some of his relatives, including his father George, who also ran for the Presidency, but in a kinder, gentler age.
Of course, claiming that Romney’s wealth doesn’t matter (which is what Brooks concludes) is delusional thinking. The only reason he is still in the race is because of his deep pockets, his own and those of business associates, who have endured now through two election cycles. Tenacity will get you only so far. It’s the only real explanation why a tepid, uninspiring candidate like Romney who has already been beaten once has lasted this long. The others, who were also tepid and uninspiring but lacked the long-haul cash, are now gone. When Santorum goes, who is going to say that his lack of money didn’t make a difference?
Brooks tries to make out of Romney, the hard-edged, homesteading pioneer that he isn’t. I guess he thinks that the family narrative will play out like the Kennedy saga and set the tone generations of political success. But it was his ancestors who walked to Utah from Illinois, not him. Brooks points out that the trip took them four years. Even with some setbacks, and making a minimum of ten miles a day, you should be able to cover the thirteen hundred miles in about five months. These people were apparently spectacularly poor hikers. Their desperation was fastened on Mormonism, Mitt’s, on the Presidency. I think he would have made a lousy pioneer.
January 20th, 2012