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Towards the end of last night's debate, Mitt Romney had to get one more Solyndra reference in, knowing he wouldn't get another chance. But in the process, he raised an odd point.
"We in this country can compete successfully with anyone in the world. And we're going to. We're going to have to have a president, however, that doesn't think that somehow the government investing in car companies like Tesla and Fisker, making electric battery cars -- this is not research, Mr. President. These are the government investing in companies, investing in Solyndra. This is a company. This isn't basic research. I want to invest in research. Research is great. Providing funding to universities and think tanks -- great. But investing in companies? Absolutely not. That's the wrong way to go.
I certainly understand the underlying point here, and it's true that this president, like all modern presidents, believes there's nothing wrong with the government sometimes investing in private companies. Romney, however, wants voters to see this as some sort of socialism run amok -- as if the very idea is too radical to even contemplate.
After all, what kind of left-wing extremist would find it acceptable for the government to invest tax dollars directly in private companies? Well, perhaps a left-wing extremist like Mitt Romney, circa 2003.
Romney's actual record in public office seems to have slipped down the memory hole, but soon after Romney became governor in Massachusetts he invested $1.5 million in renewable energy subsidies to a private company called Konarka Technologies, which later went bankrupt. He also directed millions to Evergreen Solar before it filed for bankruptcy.
As we discussed in June, as outraged as Romney pretends to be now, as governor he argued public investments shouldn't be left to free enterprise alone. Indeed, Romney loved picking winners and losers with public funds -- even when it meant loan guarantees to firms that supported his campaign.
Maybe his "Romnesia" is spreading?
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He was trying to divert the attention away from his own record of outsourcing. This would have been where the mention of Bainport would have been very useful to President Obama. In reality, Romney is really running for and in competition to be the man who sold the World. It's pure evil. If you think Dr. No is scarry, he has nothing on Romney. He's the real deal.
Romney is against the government take over of the private sector. The majority of Americans agree with him.
you said words, but they had almost no meaning. sort of like romney himself.
As opposed to the private sector taking over the government...
Roscoe, Reagan promoted that idea, but the problem is that Romney is no Reagan. As should be amply obvious to any sentient being in America, Romney is not really against or for anything. I don't mean that as a personal slight- lots of people treat life that way, it's not necessarily a bad thing
Unlike Reagan, Romney concluded long ago that convictions are not profitable. Unlike Reagan, Romney will say anything to get money and power. Roscoe, maybe to you and I who think ideas really do matter, this seems like a reprehensible trait. I'm not trying to get you to change your mind based on that. There are good reasons for you with your ideology to choose Romney.
Romney's mutability suits Grover Norquist and those who hold true to Reagan's ideals. All Norquist put it this way: "Pick a Republican with enough working digits to handle a pen to become president of the United States."
The GOP has delivered. Romney is a politician who will blow where ever the wind is blowing. We know why Fox news, RushBo and AM talk radio shows will not call Romney for his ideological sell out last night. It doesn't matter to them that Romney really has no convictions other what is necessary to get money or power. Is this is a trait that qualifies someone to be the leader of the free world?
Someone whose positions change depending on who is in the room? In a boardroom, this can be effective for making sales pitches for taking over companies.
The question is whether it is similarly effective for taking over companies.
He has BAIN DAMAGE!
And this means.....???????????
Always nice to be reminded what fools and idiots Republicans are.
What the hell's a government takeover of the private sector?
Rats. Blew that final line..
Generous people may have guessed my intent, but here it is..
"The question is whether it is similarly effective for taking over countries."
I'm not so sure you were wrong. The "Sales pitch" for taking over a company and the actual taking-over are sometimes pretty different.
But, but, Sir! Mitt Romney is a "Job Creator!"
And Obama never even ran a lemonade stand!
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@AnnaBe, from earlier today:"someone completely falls into the Sarchasm."
I am so stealing this! (Consider this the first- and only attribution)
Not only is he a "Job Creator" he will create jobs with increased wages (or some such similar wording) as he stated during the debate. Please call him out on this Mr. Benen. He himself obviously has no problem with outsourcing - and the reason for outsourcing is to reduce labor costs - so not only will he create 12 million jobs, those jobs will be high-paying jobs. Supposedly Obamacare is a job-killer because employers might have to provide health insurance (let's ignore that they get to deduct this cost) but somehow, because Romney is going to lower the tax rates of everyone, but then eliminate deductions so that there actually is no change in tax, companies will be able to hire more people and hire them at a higher wage, all because they won't have to provide health insurance. What am I missing? Let's also ignore that they already have had lower taxes and their full deductions and the ACA was not in full effect yet, so why haven't they hired? Also consider that many companies are reported to be sitting on record amounts of cash due to record amounts of profits - is this an ALEC strategy, to wait out this presidency before they put that cash to use (in the form of jobs)?
Let's also not forget that his party's agenda is to eliminate the minimum wage and let the free market figure that out and let's not forget that minimizing the cost of labor (to maximize profits) has been their goal for decades. Non-CEO's used to actually have some benefits - pensions, health ins., etc. - not any more - that's why they can demonize public employees (and unions) who still receive some benefits. I wonder if their medicare voucher and privatized social security plans include employer payroll taxes or if only employees will contribute. Who's willing to place bets on it ($10,000 to open)?
Brewer-
You are driving exactly at the central issue. It is not investment policy, it is employee- consumer policy. What needs to be recognized, and what neither candidate is addressing is that the purchasing power of the US consumer is headed into a death spiral that will be exceptionally difficult to pull out of the longer it is unrecognized.
Like the natural resources like fisheries and river levels, government establishes levels beyond which companies may not overexploit a resource to unsustainable levels.
Global businesses are extracting more wealth from consumers than they are returning in the form of low cost products and middle class wages. So we must establish not just minimum wages, but minimum payroll levels for a company. If the company is extracting X dollars from consumers in the US economy, then the economics are that they need not return all of X dollars in the form of wages. New wealth is generated and so only a fraction of X needs to be returned in the form of wages in order to keep the consumer economy sustainable.
However, beyond that minimum level, the wealth of the middle class goes down, and with it their purchasing power, and with it, the fate of the US economy.
This is discussed in the context of complaints about outsourcing and automation, but those who make a systematic complaint are either dismissed as luddites or misinformed about economic principles. This resistance to innovative thinking about economic policy constitutes a malaise of intellectuals on the left. No one wants to be branded a marxist, or naive, as if that is the only critique possible of the beltway "wisdom" about which economic thoughts are permissible for discussion.
Call it what you want- the "conventional thinking"- the "group think", the "cognitive circle jerk" going on in the US intelligentsia both on the left and the right is that this is a question about investment.
Citigroup's chief economist Willem Buiter explained it this way to Chrystia Freeland (her paraphrase) "Part of the reason the financial crisis happened is the entire intellectual establishment, not just people inside investment banks, but regulators, academic economists, financial journalists, had all been captured by the financial sector's vision of how the economy should work. And in particular, light touch regulation. And I think there is a broader cognitive capture of, you know, you might call it the intellectual class, the public intellectuals, around maybe the inevitability of plutocracy." (source)
That is the cognitive capture that both Romney and Obama are imprisoned by. They have some very smart guys advising them, but it is an echo chamber.
Even our terminology imprisons the way we think about the issues. The Right has gotten us to think of one issue as "Income inequality". If you accept that cognitive framing, then the opposing viewpoint is to advocate some kind of income equality, but most Americans feel that hard work should be rewarded, so there is great resistance to any solution to "income inequality"
Take a look at what economics writers like Taibbi and Freeland are saying. Their point is an extension of the adage that "It takes money to make money" They point out that this is an exponential progression. If you have twice as much money as a typical middle class family to invest you don't get twice the returns, you get much more. And this goes all the way up the scale. The top 1% received 93% of the income earned in the first year after the recovery. Chrystia points out that the top .01% made 37% of that. So the same exponential income stratification happens in the 1%.
This principle has long been recognized. The conventional response to the exponential returns problem that submerged the US into the corruption of the Guilded age was addressed by compensating tax policy that corrected for the inordinate distribution of rewards to the very wealthy. The GOP was ready for this with disqualifying language about "redistributive" tax policy.
Obama could have addressed the issue head on by pointing at the loss of wealth by the middle class. But he did not. He did not take the standard approach to the problem and merely says the rich need to pay "a little bit more". Nor did he take the tack of addressing fundamental financial system dysfunction. His approach was simply to get Wall Street back firing on all cylinders. There would be no dismembering the banks and sending thousands to jail as in the S&L meltdown.
So what does Obama offer? We will invest in people and infrastructure.
The trouble is that none of these solutions address the problem that our economy status quo is cannibalizing the wealth of the US consumer, and that the US consumer economy is slowly collapsing into a death spiral due to its workers being unable to compete for wages against machines and Chinese workers.
Don't pay US workers good wages, they don't buy. They don't buy and no one, including the top 1% makes any more money. Ruin. It is market failure.
The trouble with investing in people theme is that the high tech, highly trained work is valuable and commands high salaries because of the "productivity"- that one of these workers can generate the income returns of dozens, or hundreds of conventional workers. This didn't use to matter because those displaced workers could find work elsewhere because the technology at the time was labor intensive.
That is no longer the case. Just read Reich's book about how as labor secretary he was taken to a high tech factory that signalled the new economy where high US investment in intellectual capital would deliver our competitive edge. To his horror, the company has devoid of workers.
The solution has nothing to do with more investment. The dynamic is that given current market forces, having large numbers of well paid US workers is no longer necessary for the success of individual companies. The trouble is that at the macro level, it is very necessary to the continuation of the US consumer economy.
The general proposal I outlined at the beginning of this note recognizes that economies are dynamic, and that when macro level intervention is required, the macro level intervention must alter the rules of the dynamic, rather than become a player that picks winners and losers. Dynamic systems will adapt to a player and subvert it.
Changing the fundamental rules- like the minimum percentage a company must devote to payroll, does not. It doesn't tell companies which industries will generate the most profit, it doesn't say which technologies will win. It just says- you make money as you please subject to laws of the land, but you must not eat the consumer economy's seed corn. You must return sufficient wealth back to the middle class in the form of wages so that our consumer economy will not be cannibalized.
I would have liked to hear the candidates get at this issue, but sadly from the first debate we have been engaged in combat using insubstantial communication mechanisms.
Can we have a real discussion on economics prior to the election? Or is that asking too much of the candidates, the media, and engaged voters?
You may be asking too much of the candidates to discuss economics - Romney, if he understands it, would have to explain, or even apologize for, his party's economic policies, if he is being honest about it and if Obama were to honestly attack those policies, he would be made out to be demonizing capitalism (and let's face it, the Democrats are a bit two-faced when it comes to Wall St.). Of course that doesn't excuse the media - unfortunately Rolling Stone is not a big enough platform for Taibbi, who has had some good columns on this.
I have a minor in economics, but that was 25 years ago and I should be working right now, so I can't go in to much length about it, but I would like to point out the obvious for the death spiral - greed coupled with the pressure to produce short-term gains for investors.
Apple manufacturers all or most of its products at Foxconn in China. They could easily make iphones here for decent wages, but then they would be sitting on a smaller mountain of cash than they currently are. It would be one thing if this outsourcing was done to reduce the cost of their products, but they sell at a premium compared to their rivals, so it's not as if paying 3rd world wages makes them more competitive. I'm not against a company being profitable, but it used to be a virtue for an American company to proudly state "Made in the USA." Why isn't X profit enough; why do they need to have 3X?
Seems to me the republican plan to end outsourcing is to reduce the American standard of living to that of the 3rd world - reduce the wages and benefts, get rid of child labor laws and eliminate regulation (the EPA must go!) and then multinationals will be able to afford American workers again. Unemployment will be low (just ask Bachmann) as everyone will need to work 2 or 3 jobs, which will be a blessing because we'll all be living in toxic neighborhoods, ala Love Canal. Then the collapse will be complete and the 1% will be oblivious (read: shrugging) as they jet to their next playground.
Interestingly, the COGs on an iphone is only 20% more if made by domestic workers. The problem is there there is no direct economic incentive to like Henry Ford, "do the right thing" for macro system health.
The technocratic solution would be to negotiate some complex regulatory mechanism which inevitably would subject to regulatory capture.
My proposal is simple math about net revenue and measurement of payroll for workers earning 100k or less. If the corporation does not meet the minimum, they face confiscatory taxes.
The cost of doing business is a little higher, but it is a level field. All it is doing is saying that the reason your business model is lucrative is not based on cannibalizing the conumer economy.
Brewer Patriot—This is one of the frustrations I have with the standard conservative arguments about, as a starting point, higher taxes for the wealthy. What right do we have to take away their hard-earned money? Well, what right do they have to decide how much our labor is worth relative to theirs? Who decides how much profit is enough or too much? Those who have the most get to make the rules; they are the only ones with an actual capability to petition the government, because money is speech.
As for unemployment...the higher it goes, the easier it is to keep it artificially inflated. For example...my mom just quit her job because she was expected to work 60 hours a week or more (on salary, no overtime). She did it for a year and then walked off the job; she's never done anything like that before in her life. All across the country there are people like her. And plenty waiting to take their places.
Moreover, Romney said this in his infamous "Let Detroit Go Bankrupt" op-ed (emphasis mine):
"It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers."
If anything, isn't it more socialistic for the government to invest in non-profit and public universities?
The real problem with investing in companies is that there's a temptation to invest politically rather than pragmatically. Generate a positive talking point even if the investment isn't likely to generate a return or to lead to any significant advances. If Governor Romney can make that attack, I think it sticks, except that it also rebounds because he's done the exact same thing.
More strongly worded than I was going to put it but -- yeah, wait, what? The line went by me last night, because I figured it was just the usual excuse to say "Solyndra" again. But isn't this Romney floating a trial balloon for a position way, way to the left of Obama?
As a progressive, I've always found Obama's embrace of the "public-private partnership" consensus annoying. Every time I hear the phrase "public-private partnership," I assume I'm being ripped off, and I'm usually right. So yes, I would rather that US technology subsidies and research subsidies went to universities and non-profit research organizations than to for-profit companies, because the multiplier is higher. More of the money goes to basic science instead of finding ways to extend expiring patents, if nothing else.
If I thought he meant it, I'd say that made Romney the more progressive of the two candidates. Knowing Romney's record, I know that there's no reason to believe anything that he says, that he's just thrashing around for some lie that I'll want to believe. But still, isn't that one a really weird stretch, even for him?
oops- error post
These people really don't know what Socialism means... it's just another word to them they were taught to repeat without comprehension.
Like parrots. Silly, conservative parrots who only understand the world in so far as they want to see it.
One at a time.
One of the most right-wing people I know was ranting a few years ago about "socialism" and I pointed out to him that he was a socialist. He of course flew off the handle. I then pointed to the dictionary definition of "socialism" (look it up) and asked whether he thought city water should be handled by the city or by competitive private entities, and he said "the city, of course."
And each time he replied, I told him "so you're a socialist, too." I swear, I've never seen a 40+ year old man get so totally stressed out over a conversation. Poor dude was almost in tears.
Alas, cognitive dissonance doesn't last unless reinforced. Still, worth trying.
"...as outraged as Romney pretends to be now,..."
He didn't appear to show any of that outrage as he (thru Bain) was loading companies up with debt and sucking on the teet of government to help him out! Now he wants to feign outrage, if it wasn't such an obvious character flaw I might be able to laugh at him!
Yep, I get a lot of mileage out of reviewing the history of how we ended up with socialized fire protection, because it shows that we really did, as a nation, try the volunteer route first, and then two entirely different models for for-profit fire fighting, and our cities didn't stop burning down until we socialized it - because the externalities of letting people opt out of fire protection are too expensive for society.
Then, once I have their mind blown, I trot out the counter-example of privatized policing to show them that it doesn't have to be either/or, it can be both. In the US, 3/4ths of the "police" are private security officers who only patrol, and protect, the property of corporations and rich people. But because the externalities of letting any person (or worse, neighborhood) "opt out" of law enforcement are so horrifically expensive to society, even after three-quarters privatization we still provide a minimum level of socialized policing.
Apparently, Mr. Romney is unfamiliar with the military procurement process too. The reason things like fighter jets and new nuclear submarines cost so much is because the DOD rolls in the cost of development of cutting edge tech. Sometimes, like the XB-70, it doesn't quite work out. The Boeing X-32 lost out to the Lockheed X-35 in the JSF competition like their predecessors the General Dynamics YF-16 beat out the Northrop YF-17(though that became the Navy/Marine F/A-18). The Bell XV-3, Hiller X-18, Curtis-Wright X-19, Bell X-22 of the late '50s - early-mid '60s eventually begat the '70s Bell XV-15 which gave us finally the '90s MV-22 Osprey.
Way, way back when, the government invested in the oil industry so that we could convert our navy to oil instead of coal. Which when mixed with Romney's favorite president, Harding's laissez-faire government begat the Teapot Dome scandal...
Anybody notice Romney saying that the President was attacking him?If the President say's anything about Romney's policies or work record, it's boo hoo he's attacking me.What a whining snotbubbling baby.He's as thin skinned as Sarah Palin,and know's about as much as she does about foreign policy.
When Sketchy made the "attack" statement I thought 'back at you', almost expected Obama to say something to that effect but saying such could have taken the debate down a rabbit hole.
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Yes, he has been attacking Obama since day#1, suddenly its non productive.
The best nonverbal "so you can dish it out but can't take it" I know is the drawn out, silent Hairy Eyeball.
Wingers always complain that they're being 'attacked' whenever they get even the slightest amount of pushback or criticism. I think it's partly meant to put others off balance; but partly also I think they are deeply in love with the idea of being persecuted, so they try to make it true by asserting that it is true. It's a tactic, but one with a big dollop of masochism on top.
Romney from 2007, arguing that high gas prices could ultimately be beneficial, as well as advocating:
“joint public-private partnership to invest in new technologies related to fuel efficiency as well as new sources of energy".
Now Dave, there ya go with those facts again....how do ya expect the refubs to ever get a guy elected to POTUS if ya keep stating facts. Now apologize and go to your room, lol.
Mitt is into research as long as it does not involve climate change, women's reproductive health or any mathematics that does not agree with his budgetary voodoo.
Let's not even talk about Bain Capital being bailed out by the FDIC on Romney's watch.
Classic Romney -- with the Olympics, we see a certain pattern -- socialize the debt, privatize the profits...
Romney opens his mouth, and like all Republicans, nonsense flows out.
Lets be fair, i think its 1/2 nonsense and 1/2 lies.
To the "undecideds": If you want your pensions ripped off, get back ten cents on the dollar and have that dumped on the taxpayer, Mitt's your boy. If you want taxpayer subsides for corporations, and the losses absorbed by the taxpayer, Mitt's your man. If you wanna follow him to the Bahamas after he crashes this country, I'll help you build the raft you'll be using. Bon voyage, Gilligan.
get back ten cents on the dollar
Are you referring to Social Security?
You know what I'm talking about 'lil buddy. Or are you Mary Ann?
I'm so glad Mitt decided to get rid of all those tax breaks for big oil....
I wonder if Romney has ever heard of the First Bank of the United States. This was a company that the government invested in way, way back in 1791. It turned out to be pretty useful.
As I recall, the government granted a loan guarantee to Solyndra, which Romney (retroactively) disapproves of.
Now, in the discussion about Detroit, didn't Romney try to argue last night that his plan involved not government funding of the bailout, but government loan guarantees of privately-funded bailout/investment money? And if this is what he truly proposed, how is that different from Solyndra?
I am so tired of both candidates referring to my city, Fremont, only as the home of Solyndra and Tesla. Solyndra, like quite a few other solar panel companies could not compete with the Chinese dumping of cheap panels here. Tesla Motors is a flourishing electric car company that has reemployed many people who lost their jobs when the NUMMI plant closed. If anything I would like to see Tesla applauded for reopening a closed factory and rehiring my neighbors. Also, Fremont is the number one city in the US for startups, that's never mentioned. The candidates need to respect us in order to get our votes.
The only research Romney is interested in is screwing over the middle class...
I watched this scene and to me he really looked like he was killing time by combining stuff he had memorized for his rally speeches and that he somehow remembered from his debate prep... just to avoid talking about the issue and the question. I really had trouble following him, and first I thought that maybe my English is still pretty bad, but no: It just did not make sense at all, climaxing in the quote that you mention above.
I have to admit - I watched a portion of the 1st debate, and became so weary of listening to Mitt Romney's voice that I just couldn't watch the other two debates. However - if you take his statement at face value - that government should not be in the business of contributing to private businesses, then you need to take ALL of the government money back from any business that has ever received government money. I'd be curious to see just how many businesses would still be in existence if that were to happen!
More than a decade ago, Ernie Boyer and Eugene Rice of the Carnegie Foundation wrote an important think piece about research. Since WWII, we have emphasized basic research to the exclusion of all other kinds of scholarly activity. Boyer and Rice argued that scholarship actually has four dimensions: the scholarship of discovery (so-called basic research); the scholarship of synthesis and integration (building over-arching theories from basic research); the scholarship of application (what you learn when you try to apply basic research and build a functional product); and the scholarship of teaching. Most scholars have adopted some version of this formulation. The government's investment in renewable energy companies is a kind of support of applied research, not particularly unlike their parallel support of basic research. For many years, NSF (National Science Foundation) has supported through specialty programs all four kinds of scholarship, although most of the money goes to "basic research". Mitt Romney's separating funding applied research by cutting edge technology companies from funding basic research at Universities may well be based on a too superficial understanding of research. This is reminiscent of his too superficial understanding of a great many things.