Dear Barack: Follow the Money.

Barack Obama has been getting plenty of advice since that debate in Denver. Here’s mine, prior to tomorrow on Long Island. “Follow the money”. It’s an old maxim of journalism and it rarely leads you wrong.

Most basically, this is a variation on the adage that “if you’re not playing offense, you’re playing defense.” By zeroing in on money — who makes it now, who doesn’t, and where and how the Romney-Ryan money “plan” (sic) shifts any of those equations — is unquestionably the best line of attack on the Republicans’ central thesis. Which is: that they are better stewards of the economy than any liberal at any time and especially Barack Obama.

Definitive studies long ago proved otherwise. And otherwise. And otherwise. And so on.

While Joe Biden played offense better than the boss, in his debate with Paul Ryan, it was still exasperating to watch Ryan’s treadworn assertion that he was bringing “new ideas” to the table pass without a well-deserved smile, guffaw or spit-take. While moderator Martha Raddatz did at least press Ryan on whether he “actually had a plan”, the better response for Biden, and Obama tomorrow is to slap down the gauzy wall of “technic-y” sounding econo-babble, serious-sounding but vacuous noise designed to impress and amaze everyone who needs a graph to calculate their savings at a 50% off sale. The reality is that Ryan-speak is eye-rolling, used car lot chicanery to everyone who finally wised up to the reality that the Bush tax cuts, themselves a repeat of deficit-busting Reaganomics, did nothing for job creation or the wealth enhancement of the middle class.

And the Reagan-W* economic “miracle” (god help you if you’re not a hedge fund partner)  is all the Romney-Ryan (or Ryan-to-Romney) money scheme is, buffed up by a P90X work-out and no shortage of narcissistic delusion.

Point being, there is nothing older than a strategy to control government built around guarding the access and assets of the already enfranchised.

Obama is also encouraged to display exasperation with the patently and demonstrably false assertions that:

“The stimulus failed.”

“Obamacare will add trillions to the deficit“.

“Green pork [renewable energy] is a worse bet than established energy conglomerates with more lobbying power.”

“Eliminating the Bush tax cuts for the top-tier is harmful (primarily) to small businesses.”

Bain Capital created jobs and is therefore a model for the economy as a whole.”

… and on and on, with particular, disdainful emphasis reserved for the biggest canard of all, namely that the Bush tax cuts created jobs the last time we tried this same, very old idea.

Philosophically — the tone Obama enjoys most — the argument can be reduced to this:

“Despite all their hyperventilating about government spending and debt, neither the Governor or his running mate, who is supposed to be the braintrust of their economic thinking, can actually show how this grand scheme of their’s either reduces debt, most which was created after the Bush tax cuts of 2003, or avoids further penalizing the middle class. If they could don’t you think they’d take advantage of a TV audience of 70 million to make certain everyone understood what they were selling? But they can’t because what they’re selling has no intellectual basis other than as a sales pitch for your vote.

“And you know, I was very impressed with the Governor’s famous “47%” speech to those wealthy donors down in Florida. I thought it was remarkably candid of him, and I congratulate him for that refreshing breath of honesty. But what he should have reminded those millionaires and billionaires is that they too are “dependent on government” in that so much of their wealth is built on controlling how government responds to their needs, how it does or doesn’t tax them, how they gain unique access to government for lucrative contracts and so on. The Governor’s friends very much depend on government to keep them as wealthy as the are.

“Fundamentally every election, especially presidential elections, come down to who government is going to serve most — who is gets to be most “dependent”on government decisions. My argument is that the economy will fare best if the middle-class, the “customer class” has wealth restored that has drained away in the past generation. More customers will create more jobs faster than more tax cuts for a leverage buy out partner already living like king thanks to a 15% tax rate.”

It really is that simple.

55 thoughts on “Dear Barack: Follow the Money.

  1. Joe Loveland says:

    I like it. Barry, we know you’re reading, so take heed.

    I would need neuromuscular drugs injected into my eyeballs to prevent me from rolling my eyes in the face of “my plan bans preexisting conditions,” “I don’t have a $5 trillion tax plan,” “there are not tax incentives for moving jobs overseas.”

    1. Erik says:

      Explain how it is in your world that there are tax incentives for moving jobs overseas. I mean, its the same incentive you have for not having any employees in your PR practice, right?

      1. Joe Loveland says:

        I have no idea what the tax implications of my decision to operate as a sole proprietor, because the choice not in any way influenced or informed by the tax code.

        There is an incentive in the tax code for moving jobs overseas, and Democrats want to change it so that the reward would only be for domestic operations, not international operations. I know you go into spasms when you have to read non-partisan fact-checking sources, so today I’ll go with Fox News:

        Technically, companies can claim a deduction for the costs associated with moving jobs overseas.

        However, the deduction is not a special loophole afforded only to companies moving work out of America, as the president sometimes makes it sound. Rather, the deduction is written into the tax code pertaining to any cost companies face in the course of doing business.

        That means a company can claim the deduction whether it’s moving operations to Bangalore or Boston, to Kuala Lumpur or Kansas City. ”

        What Democrats want to do is end the deduction for firms moving overseas, in order to create a disincentive to offshore. What they say, though, makes it sound like the tax code is currently luring companies out of the U.S.”

        Romney and the Republicans opposes the Democrats’ proposal.

        Read more: http://www.foxnews.com/politics/2012/10/04/fact-check-tax-break-for-shipping-jobs-overseas/#ixzz29OtnCzyc

      2. Erik says:

        Sole proprietor was a bad example on my part, but you ended up getting the nature of my question. That’s good.

        A better example would be to not allow you as a business owner to deduct the expense of a foreign made product, say a printer, if you needed one. It’s ridiculous.

        Add to that, it’s a canard, a lie for practical purposes, and a complete bullshit line of thinking constructed to allow populist Democrats to play on the jingoism of low information voters. Which you have now acknowledged. So I hardly can see how you are justified getting your undies in a self-righteous wad when Romney calls BS on it.

      3. Joe Loveland says:

        I’m lost.

        Do I think the tax code should make it financially impossible to ever locate operations outside the U.S.? Of course not. But no one is proposing that, so it’s a straw man argument.

        Do I think our tax code should give a somewhat bigger tax break for domestic operations than international operations? Absolutely. That’s the change Democrats support, and I agree with them.

        One job of the American tax code is to incent American economic activity. Economic patriotism.

      4. Erik says:

        “Technically, companies can claim a deduction for the costs associated with moving jobs overseas.”

        Taxes are levied on income, and for tax computations, income = revenue – expense. If you shut down a call center and hire a company to come in and haul away all your cube dividers, you presumably will pay them. That’s an expense. Thus there ain’t no “technically” about it. You’re use of douche language suggests it’s a loophole, and it’s not. It’s an expense that’s hardly distinguishable from anything else.

        The big appeal to companies replacing domestic operations with foreign operations is ongoing labor savings. So I’m skeptical that disallowing some expenses provides enough incentive to stop or slow down offshoring. In fact, I’m more than skeptical. I’m rock solid certain. It would be great if you can provide a link to the contrary. Point is, I think there’s no efficacy in what you support, but my guess is you support it sort of lazily and knee jerk. Economic patriotism? What kind of car do you drive?

      5. Joe Loveland says:

        The tax code is all about rewarding behavior that is in the national interest, and discouraging behavior that is not in the national interest. Incenting corporations to keep jobs in America is in the national interest.

      6. Erik says:

        If there’s no efficacy, then it’s not a real incentive. It’s a bullshit talking point.

        Insofar as that’s true, that it’s a bullshit talking point, the one who makes that point is a liar, and the one who believes it is a low information chump.

      7. Joe Loveland says:

        Of course. But we should tilt the table toward incenting investment in domestic operations, so that, all other things being equal, it’s more advantageous to invest in the U.S.

      8. Erik says:

        Can you demonstrate the efficacy of this proposal then, disallowing expenses for offshoring?

        How many jobs are lost because we don’t do this now?

        What is its total as a “tax expenditure”?

      9. Erik says:

        So you would argue that the expense deduction encountered while outsourcing is large enough to be a considerable motivator to outsource in the first place, right Joe?

        What I’m saying is for this to be a tax incentive to outsource, there ought to be some evidence that it actually incentives people to outsource. Otherwise, its not then actually a tax incentive to outsource.

        Any link would be impressive Joe.

      10. Joe Loveland says:

        You want to know why I don’t like having conversations with you some days, Erik? Because you follow this all too predictable pattern:

        1) Pose a long series of straw man arguments and ask a long series questions to create a wild goose chase for the commenter.
        2) Insist that every answer be backed up, though you almost never do so yourself.
        3) Mock whatever source is cited, even non-partisan sources that have much more credibility than the source of your talking points.
        4) Assert that if a policy change doesn’t fix the entire problem, it is worthless and not worth pursuing.
        5) Drop in some “douche” type personal attacks as your end zone dance. (Granted, on your mellow days, I’m merely an “earnest douche,” and not a full-fledged “obsequious douche.” I take pride in that.)
        6) Repeat ad nauseum.

        I doubt you’re aren’t like this when not hiding behind an Internet alias, but some days I’m just not up for it.

        In parting, here are thoughts from a group called Business (douches) Against Tax Havens. http://businessagainsttaxhavens.org/wp-content/uploads/2010/07/TaxHaven.pdf

        Have a nice day.

      11. Erik says:

        Your link is a total non-sequitor Joe.

        You’re right, I’m not as big an ass as this in person. But my interest here tends to be the assumptions liberals make and the memes they believe in, you know… as the ‘smart set’. And because of that assumption of inherent correctness, it’s very hard to penetrate a conversation without a certain amount of assertiveness. Or let’s just call it being a prick.

        It takes a bit of duplicity and insincerity to call a P/L, I/E expense deduction a tax incentive. You’re not correct on this topic. It should be fairly easy to acknowledge that, but this is one of those things in which you’re emotionally tied to the idea of being correct, so you can’t admit that.

  2. Haha. Follow the money….where to? To Mr. Obama and all his millionaire and billionaire friends who are funding his campaign? What a farce, as if the president doesn’t have his grubby fingers in big money and crony capitalism. Oh, but he wants to tax the millionaires and billionaires who have poured ships of money into his campaign. Hmmm, wonder how many of them are making a couple hundred grand a year.

    Sure, there are some Buffets who have millions and billions tied up in stock and capital assets, who pay nothing until they sell, and they may be reporting a small income. But many earning $200k to $250k are far from millionaires.

    I don’t think libs are always going to like where the money trail leads. Take Solyandra and its fiasco, where last week the IRS itself alleged tht the company’s “reorganization” under Chapter 11 amounts to “tax avoidance.”

    Yep, seems Mr. Obama’s billionaire friend who dumped money into his campagaign and was one of the biggest investors in the company is now trying to claim tax credits that would offset any income the company has…esimated at $350 million.

    The rancid stink coming from this sorrid affair is that not only have we pissed away taxpayer money in government loans to the company, but it might get rewarded for its massive failure with tax credits.

    Wow. Follow the money indeed. And Mr. Obama did get caught with his pants down on the tax breaks to move offshore. Parse it any way you like. Romney’s accountant did miss anything. Don’t fire him..or her.

  3. Bubba got kicked dragging and screaming into submitting responsible budgets and welfare reform and compromising on a host of issues that bascially turned him into a moderate just left of center president. The current occupant is a far cry from Bubba. And I’ll take Romney’s plan over adding trillions to the debt and raising taxes on people in a slow, creepy crawling recovery.

    Funny thing is I truly believe the Clintons, for the most part, despise Obama and don’t think he’s all that. Mrs. Clinton throwing herself in front of the bus is going to sour relations in the long run, especially if the lid blows off this thing, which I think it easily could do.

    OK. So back to the debate. I loved it. The punch for punch thing was great, until the moderator inserted herself into the exchange on Libya and tried to break them up. Let them have at it…..Mr. Obama is a big boy. Let him defend himself.

    I love the format, even though by showing up and being aggressive, Mr. Obama gets the nod in the debate, albeit a small one.

    Romney often gets hammered on not being specific enough on his plans. Well, when it comes to Mr. Obama, I would say, what plans? Zero specifics on his next four years, except to raise taxes on millionaires and billionaires….blah blah blah.

    We all know and the numbers clearly prove it. Mr. Obama can’t possibly spend the massive amounts he wants and only raise taxes on the well to do without blowing an even bigger hole in the deficit.

    Phony math anyone? Indeed. He’ll have to raise taxes on the …..gasp…middle class. But hey, if he gets re-elected, why not?

  4. Newt says:

    The problem – the real problem – is that Obama has a track record now (vs. clean slate-Obama in 2008), and it’s a horrible one.

    What Obama stands for hasn’t worked. That’s what swing voters have come to learn.

    Anyone with a brain knows that multinationals are sitting on tons of idle cash because investing it domestically means taking a huge tax hit.

  5. Lambo:

    I’m not outraged at all, simply making the point that Bubba was forced to deal with a Republican Congress and he did, giving up much of his lefty agenda on health care, welfare and capital gains taxes. Yes, he did get a tax increase passed, but there is serious debate about what effect it had on the economy….your link shows it. Furthermore, the $5 trillion dollar math is amusing, considering that Mr. Obama has added close to that (give or take a trillion) all by himself.

    At least we are clear. Obama has no viable plan for addressing the debt because his tax increases won’t do it. What’s his long term answer, again tax millionaires and billionaires……well, they aren’t paying their fair share not because the tax rates are too low but because there are easy wasy to avoid them with all our credits, deductions and write offs, charitable and otherwise.

    Obama derides Mr. Romney for only paying 14 percent in taxes, clueless about why, under existing tax laws, someone can do that. Hello? Wake up and smell the…..whatever. The facts are clear…raise taxes without any reform and the wealthy find more ways to avoid them.

    Repeat after me…two plus two equals four, but not in Obamaland.

  6. Joe Loveland says:

    In the post-debate spin, there is some really bad false equivalency reporting related to “following the money.”

    MPR and others are going with fact checking segments that include analysis that goes something like this: “Obama criticized Romney on outsourcing jobs to China. But Romney came right back at himand exposed the hypocrisy of the criticism by pointing out that Obama’s retirement fund probably included investments in China.”

    Let’s get real. Is being a leader of a multi-billion dollar vulture capital company that focuses heavily on outsourcing jobs overseas, and citing that as your primary credential as a “job creator,” really the substantive equivalent of owning a stock mutual fund that includes companies with international holdings?

    Think of it this way. Imagine if someone was criticizing me for being an unethical PR hack who enabled Client X do horrid things to people. Imagine that I responded with “Oh yeah, well you’re just as guilty, because your mutual fund includes investments in a global PR company.” Would you classify that rebuttal as an equivalent “zinger,” or a pathetic attempt to change the subject to something almost entirely irrelevant to the original subject.

    If fact checkers want to delve into the whole “was Romney really a central figure at Bain” question (see link below), that’s fair. But going along with the logic to say that owning a mutual fund is equivalent is lame. If you buy into that, then no one who owns of a mutual fund can ever criticize anything that corporate America does.

    http://www.politifact.com/truth-o-meter/statements/2012/jul/13/barack-obama/were-romneys-companies-pioneers-outsourcing/

    1. Erik says:

      I do submit that indignation over false equivalence here is only possibly by having misinterpreted Romney willfully or just sort of instinctually.

      Romney’s point is that his assets are in a blind trust, and are not reflective of his career at Bain, and that there are no conclusions to draw from his current holdings. Romney demonstrates this by saying look at the President’s assets, which are in a blind trust, and also have overseas / Chinese investments. It’s fairly common these days to have funds with overseas investments. We probably all have them.

      This still allows for an argument about what Romney did at Bain, but Romney is probably prepared for these arguments. He is essentially noting that rather than argue the facts, the President is engaging in ambiguous / superfluous jingoist protectionist populism. That’s what’s hypocritical, given that the President has overseas investments.

      1. Joe Loveland says:

        When Bain Founder Romney took his leave in 1999, it was reported in the Boston Globe that he would provide Bain “input on investment and key personnel decisions.”

        Maybe I need better mutual funds, because mine don’t allow me input on investment and key personnel decisions of the companies in the fund.

        These are not equivalent levels of involvement.

      2. Erik says:

        His assets have been in a blind trust since 2003. You’re conflating that time period since when his assets have been in a blind trust with that period when he was on leave during the Olympics, for which there is ambiguity and controversy.

        There’s not any real controversy about the blind trust…. Except that the President would like to make a point about foreign holdings. But this point is immaterial… because he doesn’t administer his blind trust.

      3. Joe Loveland says:

        In 2000, my understanding is that Bain was involved in outsourcing jobs to Mexico for Modus Media. In 2001, it was involved in a similar Mexican outsourcing deal for SMTC.

        So, was Romney connected to Bain in 2000 and 2001? The Atlantic reports “Romney was listed as Bain’s “sole stockholder, chairman of the board, chief executive officer, and president” on Securities and Exchange Commission filings until 2002, the Boston Globe’s Callum Borchers and Christopher Rowland report Thursday. Further, Massachusetts state documents show that Romney owned 100 percent of Bain in 2002, and that he earned at least $100,000 as an executive of Bain in 2001 and 2002.

        In my world, if I am the sole stockholder, chairman of the board, chief executive officer and president of an entity…if I am the sole owner of that entity…if I am paid $100,000/year as an executive of that entity, then I can’t get away with blaming others for the actions of the entity.

      4. Erik says:

        There’s a lot of nudge nudge wink wink stuff there with trusts, so I’m sure that point is perfectly valid, if a bit esoteric. The reason it’s esoteric is because the President is going to lose. He’s ceded FL, VA, NC, and is constructing a firebreak campaign around NV, CO, OH, and NH. Thing is he’s down 6 points in Gallup, and if you are down 6 points in Gallup, you’re going to lose OH and the election, no matter what you think the snapshot polls tell you now.

        At this point I think we’ll be ahead of the curve here at SRC if we start working on the post mortem. So why is it that MPR is coming to a conclusion of false equivalence that causes Obama to lose the election? Racism?

      5. PM says:

        Erik:

        Why is it that when you are losing the argument you attempt to change the subject (to counting your eggs before they are hatched, again?)?

        😉

        Seriously, all of the polls show Obama solidly in control of Ohio, and Rasmussen (of all people) shows him leading Romney nationally in his tracking poll.

      6. Erik says:

        Yeah but…. Romney’s over 50%, now with a 7 pt lead. A Gallup lead like this, this late, has always resulted in a Presidential victory.

        I assume you folks will never actually make peace with the notion of President Obama’s overriding mediocrity, so I’m just curious what the excuses will be. There’s no reason we can’t start now. Lets have them.

        It’s interesting… Seamus and Romney’s weirdness don’t seem to be the problem everyone thought….

      1. Joe Loveland says:

        I don’t disagree that Obama’s retirement fund has foreign investments. What I said was 1) being a decisionmaking principal of a company and 2) holding an investment fund that you don’t control are not equivalent. Not even close.

        Romney was the primary decision maker in Bain. Obama had no decisionmaking authority in the Illinois State Board of Investment. Therefore, the culpability for the actions of the two respective entitities cannot be said to be equivalent.

    2. True, but Obama’s ads about Romney’s investments were totally misleading at best…given he does the same thing. That’s all I’m saying. Again, I have no problem with the so called issue of “outsourcing.”

      1. Joe Loveland says:

        Disagree about “(Obama) does the same thing.”

        Serving as chief operational decisionmaker of a company is not equivalent to having money in a fund where you are not a operational decisionmaker.

        Again, if I do something unethical in my PR practice, you are not equally culpable because you have PR agencies in your mutual fund.

      2. And Romney has no “pension.” His wealth is his own. Obama is the one with a pension that will pay him nearly $200,000 for the rest of his life…that doesn’t include any personal investments or assets he has, estimated to be between $8 million and $10 million. His income will come from the public trough. Romney’s, so far, will come from private gains.

      3. Joe Loveland says:

        Again, Mike, as I have all along, I agree with the point Poltifact addresses — Romney is correct that Obama’s pension fund contains foreign investments. All hail Politifact. That makes you correct about that narrow point, so take a bow. All hail Mike. And I’ll take one with you, because my original post stated as fact that Obama has foreign investments in his fund. All hail Loveland.

        So now can we please stop arguing over the fact that we agreed upon since the original message?

        As you know, THIS was my gripe: Reporters are acting as if 1) founding and running a vulture capital company, and having executive decisionmaking power over that company for many years, is the functional equivalent of 2) having foreign investments as part of a diversified pension fund, a fund which allows you no operational decisionmaking power.

        Those two types of connection to vulture capaitalism are in now way qualitatively equivalent. To state the obvious, a CEO and founder of a company is much more responsible for the operating decisions of a company than anyone who has a pension with money invested up in a company.

        With that, let’s end perhaps the least productive conversation in the history of the blogosphere. I’m giving you the rest of the day off. Have a beer, and enjoy your weekend.

      4. Joe: How about vodka……with club soda and a lime? Beer doesn’t seem to agree with me anymore. I did take the weekend off, but the weather sucked so bad that I decided to return. Finally, arguing about a point, I don’t think, is a waste of time. If so, 80 percent of what passes for debate on this site is useless…..but I digress.

      5. PM says:

        Mike:

        Say it ain’t so! Beer disagrees with you?!?!

        (Does that mean that, on the off chance I might end up owing you some, i get to drink it anyway?)
        😉

      6. PM: Haha. You might have to. I don’t know what’s with me lately…think I’m just out of practice. Too much flying, not enough drinking. I hope I’m not allergic to something in beer…now that would be a tragedy.

  7. Joe: The fact is that most of those jobs did go overseas after Mr. Romney left Bain. Obama was wrong. Plain and simple. However, I agree with your point above. I think the whole thing about investing is China is idiotic. I have a whole mutual fund that is a China mutual fund…only invests in companies there.

    I happen to believe in open trade, comparative advantage and all the benefits that go with it. I don’t even remember what the original subject was to begin with other than Mr. Obama trying to change the subject of his record to how evil Mr. Romney is.

    He has a record to defend and will be asked to detail how the next four years under him will be different than the last. So far, he has little substance.

  8. Joe: Romney took a leave in 1999 and was not active in Bain. Liberals go goo goo over fact checking organizations….check it out. Most fact checking organizations find that the Obama compaign (and Mr. Obama himself last night) have exaggerated the claim that Bain and Romney were pioneers in outsourcing jobs. Was there outsourcing through Bain held investment companies? Absolutely. Was Romney directly responsible. No evidence.

    That leaves separate the argument whether outsourcing is good or bad or neither, but just a fact of global economics. I choose to think it is the third. Some jobs need to be outsourced because we don’t want to do them.

    Others are outsourced because business climates are more favorable in other places. We need to decide how important it is to keep certain jobs here and what kind of incentives make it worthwhile versus who can do it cheaper and more effectively….the comparative advantage principle.

    Obama’s attempts to paint Romney as some job destroyer are weak and feeble and are becoming more shrill and desperate as his own record is held up to scrutiny.

    1. Joe Loveland says:

      Re: “Obama’s attempts to paint Romney as some job destroyer are weak and feeble”

      Let’s take a stroll down memory lane and consult with some sources you deem more credible:

      1. Nice try, Joe. First, you have to be joking. These are politicians running for office trying to body slam their opponent and demonize him….think HC did the same to BO in the primary and vice versa. What about your vaunted Slick Willie saying BO would be carrying their bags or some such observation. Come on. You ain’t got nothing better than this?

        Four years into his administration, Mr. Obama’s record is abysmal. It is the slowest economic growth (GDP) of any first year president since the 1930s. You can deflect all you want, but the record speaks for itself.

  9. Bruce Benidt says:

    I so wanted Biden to use this line with Ryan: “Now Rep. Ryan, I want to understand this. Your trust fund is based on taxpayer money. Your family fortune was founded on your construction company building parts of the interstate highway system, a huge government program (started under a Republican president, Dwight Eisenhower) funded by the taxpayers. Now, does that make you a maker or a taker?”

    1. Erik says:

      Mind you, as a RW crank I don’t find the makers vs. takers wedge all that compelling. It’s getting tiresome. But it does fairly explicitly presume that the makers engage in commerce, have incomes, and pay taxes. And that the takers receive entitlement payments and don’t pay taxes.

      Ryan Co. ostensibly fulfills its contracts to both its corporate and governmental customers, has an income, and pays taxes.

      I don’t think this one is a stumper, Bruce.

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