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Posts Tagged ‘Romney’

I periodically praise Chuck Asay for being a great political cartoonist. I’m not sure if my favorite is this one featuring the three little pigs, or this one showing why parasites shouldn’t kill their host animal.

And you’ll find some other funny ones here, here, here, and here.

But now I’m conflicted. Mr. Asay has a new cartoon that is really good and really bad. So I’m taking some liberties and showing the good part first (you get your ice cream before your spinach in this post).

Needless to say, you don’t want Obama to be your lifeguard. The details of the cartoon are what make it so effective, including the characters in the lower right of the frame.

And if you like the use of the anchor, here’s another cartoon that you’ll appreciate. It’s not by Chuck Asay, but it bashes the value-added tax, and that’s a quick way to get on my good side.

So what’s the bad part of the cartoon? Well, here’s the full image. As you can see, Romney has a co-starring role, and it portrays him as a supporter of free enterprise.

We should be so lucky. Romney is sympathetic to a VAT. Is that free enterprise?

Romney criticized personal retirement accounts earlier in the campaign. Is that free enterprise?

Romney supports corrupt ethanol subsidies. Is that free enterprise?

Romney still says nice things about the TARP bailout. Is that free enterprise?

And I don’t need to remind anybody about Obamacare’s evil twin. Is that free enterprise?

The moral of the story is that red anchors are just as ineffective as blue anchors.

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Governor Romney’s campaign is catching some flak because a top aide implied that many of the candidate’s positions have been insincere and that Romney will erase those views (like an Etch-a-Sketch) and return to his statist roots as the general election begins.

I’m surprised that anyone’s surprised.  Hasn’t anybody been paying attention to his comments and track record on issues such as the  value-added tax, healthcare, Social Security reform, budget savings, ethanol subsidies, Keynesian economics, and the minimum wage?

In any event, people should be more agitated by his recent defense of the corrupt TARP bailouts.

Here are the key sections of a report from NBC Politics.

Mitt Romney offered an unprompted defense of the 2008 Wall Street bailout on Wednesday, crediting President George W. Bush and the preceding administration for averting an economic depression. …”There was a fear that the whole economic system of America would collapse — that all of our banks, or virtually all, would go out of business,” Romney said. “In that circumstance, President Bush and Hank Paulson said we’ve got to do something to show we’re not going to let the whole system go out of business. I think they were right. I know some people disagree with me. I think they were right to do that.”

I can understand how some politicians got panicked back in 2008 by some of the reckless and inflammatory rhetoric that Bush, Paulson, and others used to build support  for their bailout plan.

But it’s now become more and more obvious that there was a much better alternative (as I explained in this post giving Cheney a kick in the pants), involving a process known as FDIC resolution.

That approach would have recapitalized the banking system without the corruption, favoritism, and moral hazard that characterized the TARP bailout.

"Which one of us is Tweedledee?"

I don’t know whether Romney doesn’t understand this, hasn’t bothered to learn about the issue, or simply thinks it is good politics to be pro-bailout, but it doesn’t matter. There is no good explanation for his actions.

This is going to be a miserable and depressing election season, revolving around whether the nation should replace a statist who calls himself a Democrat with a statist who calls himself a Republican.

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I’m not overly excited about the 2012 presidential race, especially since the major choices at this point are three candidates who don’t seem to have much commitment to economic freedom and individual liberty.

  1. Obama (Tweedledee)
  2. Romney (Tweedledum)
  3. Gingrich (hmmm…how about Tweedledoh?)

So when someone sent me this cartoon, I immediately decided it had to be my next blog post.

Too bad we can’t turn the clock back 11 years. I’m not joking when I say I would gladly go back to Bill Clinton. No, he wasn’t a libertarian, but economic freedom increased during his tenure. And I care about results.

Clinton’s track record on spending was especially good. Indeed, I even admitted on TV that I would accept Clinton-era tax rates if we could unravel all the new spending and intervention of the Bush-Obama years.

But what I’d really like is a candidate who could sincerely give these remarks. Or, perhaps even better, make this statement.

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Last night’s GOP debate did nothing to change my sour opinion of Mitt Romney.

During a discussion about tax reform, he attacked Newt Gingrich for the supposed crime of not wanting to double tax capital gains. Here’s how Politico reported the exchange.

Newt Gingrich joked about Romney’s 15 percent tax rate, saying: “I’m prepared to describe my flat tax as the Mitt Romney flat tax.” Romney jumped in to ask: Do you tax capital gains at 15 percent or zero percent? Gingrich’s answer: Zero. “Under that plan, I’d have paid no taxes in the last two years,” Romney said, alluding to the fact that all his income is from investments.

Romney’s remarks are amazingly misguided. Getting rid of the capital gains tax doesn’t result in a tax rate of zero. It simply means that there is no second layer of tax on top of the punitive 35 percent corporate income tax.

I’ve had to correct Warren Buffett when he makes this mistake. One would think, though, that GOP presidential candidates would have a better understanding of taxation.

In addition to being wrong on policy, Romney also is politically tone deaf. By demagoguing against Gingrich’s tax plan, he lends credibility to the dishonest claims that his personal tax rate is “too low.”

In a column for today’s Wall Street Journal, John Berlau and Trey Kovacs of the Competitive Enterprise Institute explain how the GOP candidates should deal with this issue.

The former Bain Capital CEO and Massachusetts governor caused a brouhaha last week when he estimated the tax rate on his investment income at 15%. “How unfair!” pundits exclaimed, noting that the top marginal rate for wage income is more than 30%. The tax rate on investors is unfair, but for the opposite reason. Our tax code layers taxation of dividends and capital gains on top of a top corporate tax rate of 35%—which even President Obama acknowledges is one of the highest in the world. …This double taxation brings the effective tax rate on investment income to as much as 44.75%. In other words, after the combined top tax rates hit $100 of corporate income, $55.25 remains for the investor. And this figure doesn’t even include various state and local taxes, or the death tax. Moreover, like the rest of us, Mr. Romney paid income taxes before investing… Mr. Romney and other presidential candidates should use the opportunity of releasing their tax returns to make an important policy statement. They should include not only their individual returns, but information about the taxes their corporations pay. …In this way the candidates can help explode the myth of the U.S. as a low-tax nation. As Cato Institute tax experts Chris Edwards and Daniel J. Mitchell write in their book, “Global Tax Revolution,” while the U.S.’s “overall tax burden . . . is lower than in many other nations,” the country “imposes more punishing taxes on savings and investment than many advanced economies.” The most popular tax reforms—from the “9-9-9 plan” of former candidate Herman Cain to flat tax proposals—all have in common the reduction or elimination of double taxation on investment. …If the traditional disclosure of tax returns is elevated into a “teachable moment” about the burdens of double taxation, all Americans could be winners.

The authors are very kind to reference the book Chris and I wrote, but I mostly like this article because it does such a good job of explaining double taxation.

I made many of the same points in my video on capital gains taxation.

And keep in mind that the capital gains tax isn’t indexed for inflation, so the rate of double taxation in many cases is far higher than these estimates suggest.

As illustrated by this chart, double taxation is a serious self-inflicted barrier to American growth and competitiveness. Too bad Republicans are too short-sighted to address this issue intelligently.

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In a recent column for the Wall Street Journal, I explained why Mitt Romney’s interest in a value-added tax is deeply troubling.

One of my key points was that the VAT is a money machine for big government.

But don’t believe me. Look at Japan, where the politicians see increases in the VAT as a way of financing a much larger burden of government spending. Here’s some of what is being reported by Bloomberg.

Noda reshuffled his cabinet last week, aiming to win support for doubling Japan’s 5 percent national sales tax by 2015… Japan’s finances are “getting worse and worse every day, every second,” Takahira Ogawa, Singapore-based director of sovereign ratings at S&P… Japan’s aging population is also weighing on Noda’s struggle to achieve fiscal health. Social-security expenses have more than doubled in two decades and will account for 52 percent of general spending for the year starting in April, according to a budget proposal the cabinet approved last month.

The key point in this excerpt is that the VAT is a substitute for entitlement reform. Without the VAT, politicians might actually reform the welfare state. But because of the VAT, they want to take the easy (but extremely destructive) route and boost the tax burden.

This is why I get so agitated about the threat of a VAT in America, as illustrated by this recent appearance on Larry Kudlow’s show.

By the way, you won’t be surprised to know that the fiscal pyromaniacs at the International Monetary Fund support a bigger tax burden in Japan. Here’s another passage from the Bloomberg story.

The International Monetary Fund has said a gradual increase of Japan’s sales tax to 15 percent “could provide roughly half of the fiscal adjustment needed to put the public-debt ratio on a downward path.”

Isn’t it nice that we give these international bureaucrats big tax-free salaries so they can run around the world pushing for bailouts and higher taxes.

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Even vicious, reprehensible, and disgusting tyrants sometimes make wise observations. Back in 2010, for instance, Cuba’s Murderer-in-Chief confessed that communism didn’t work.

More recently, the thug expressed unhappiness with the current crop of presidential candidates in America. Here’s some of what he wrote.

Cuban revolutionary icon Fidel Castro said Monday that a “robot” would be better in the White House than President Barack Obama — or any of the Republicans candidates in the 2012 election race. …Under the title “The Best President for the United States,” Cuba’s ex-president said that if faced with a choice between Obama, a Republican rival or a robot, “90 percent of voting Americans, especially Hispanics, blacks and the growing number of the impoverished middle class, would vote for the robot.”

I imagine someone clever could come up with a good joke about Mitt Romney being a robot and Castro making a subliminal endorsement, but I’ll simply make the serious point that elections in the United States all too often feature two candidates who only differ in that one will expand the burden of government at a faster rate than the other.

So even though Castro’s thinking and my thinking are as different as night and day, I’m also less than thrilled about the likely options this November.

Though I’m not sure why Castro has soured on Obama. Has anything changed since 2010, when he endorsed Obamacare?

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P.S. Here’s a good Jay Leno joke about Cuban and American economic policy.

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Even though I did a pretty good job guessing at the outcome of the 2010 elections, I’m a policy wonk, not a political hack, so take these predictions with a bucket of salt.

Especially since I’m predicting Ron Paul will win even though the intrade.com betting shows a Romney victory, and I cited those betting markets in 2010 when predicting that Scott Brown would win the special election for Ted Kennedy’s seat by a 51-48 margin (actual results: 51.8-47.1).

So here’s my prediction, along with a few thoughts on each candidate.

Paul (23 percent)

Ron Paul’s gotten a lot of flak for having some unsavory supporters, and that will probably hurt him, but he benefits from being an anti-politician. And he appeals to all the Republicans who want less government. Simply stated, what you see is what you get – even when it’s something crazy such as being against the killing of Osama bin Laden.

Santorum (22 percent)

I’m mystified by Santorum’s rise in the polls, which I think is happening solely because he’s not Mitt Romney and voters have somewhat soured on the other supposedly conservative candidates. But I want to stress the “supposedly” in the previous sentence. The former Pennsylvania Senator is not a fiscal conservative, having supported all the wasteful spending of the Bush years. If he does well, Mitt Romney will be very happy since Santorum will split the anti-Mitt vote for a longer period of time.

Romney (22 percent)

The former Massachusetts Governor tries to be all things to all people, which means he routinely does the wrong thing on policy (i.e., his refusal to reject the value-added tax, his less-than-stellar record on healthcare, his weakness on Social Security reform, his anemic list of proposed budget savings, and his reprehensible support for ethanol subsidies). But he has a base of support among people who are Republicans because their parents were Republicans.  For what it’s worth, I’ve already predicted that he wins the nomination and loses to Obama in November.

Perry (14 percent)

The Texas economy gives Perry a strong talking point, but he did not do well in the debates. Moreover, some Americans are probably reluctant to trust another folksy Texas GOP Governor after what happened during the Bush years. He still has a chance of winning the nomination if he can survive ’til South Carolina and consolidate the anti-Mitt vote.

Gingrich (12 percent)

The former Speaker of the House enjoyed a meteoric rise because of his debate performances, but the other candidates then ganged up and reminded voters of Newt’s various sins – such as criticizing the Ryan budget, climbing into bed (or at least onto a couch) with Nancy Pelosi to advance global warming hysteria, and supporting ethanol handouts. Heck, I remember having a bitter argument with Newt back in 2003 about Bush’s terrible prescription drug entitlement.

Bachmann (5 percent)

Congresswoman Bachmann had her moment of glory last summer when she won the Ames straw poll. She’ll be out of the race after today’s results.

Huntsman (2 percent)

He is putting all his eggs in the New Hampshire basket, so his last-place performance won’t surprise anyone. As a general observation, I’m surprised he’s not pushing his rather attractive tax reform plan.

P.S. I’m also surprised that Gary Johnson didn’t attract more support. And I’m baffled that the GOP establishment kept him out of the debates. That decision drove the former New Mexico Governor to bolt for the Libertarian Party. I suspect he will do surprisingly well, assuming Romney is the GOP nominee.

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Last January, I identified five things that worried me for 2011. Here’s what had me concerned, along with some ex post facto analysis about whether I was right to fret:

1. A back-door bailout of the states from the Federal Reserve – Thankfully, I was way off base with this concern. Not only was there no bailout, but Congress even got rid of Obama’s wretched “build America bonds.”

2. A front-door bailout of Europe by the United States – The bad news is that there have been bailouts of Greece, Ireland, and Portugal via the clowns at the IMF. The good news is that the bailouts haven’t been as big or extensive as I originally feared.

3. Republicans getting duped by Obama and supporting a VAT – I was needlessly concerned about a VAT sellout, but I was right to worry about tax increases. GOPers repeatedly expressed willingness to surrender, notwithstanding their anti-tax hike promises.

4. Regulatory imposition of global warming policy – The EPA has been busy imposing lots of costly regulation, but it appears that my fears on this issue were misplaced.

5. U.N. control of the Internet – As far as I can tell, the statists did not make any progress on this issue, so my concerns were unfounded.

This year, I’m not going to put together a list of things that should make us worry. After all, we should always be concerned. As Thomas Jefferson is reported to have warned, “eternal vigilance is the price of liberty.” And Gideon Tucker correctly noted that, “No man’s life, liberty, or property are safe while the legislature is in session.”

Instead, I’m going to come up with a list of predictions. But I won’t try to predict the economy. As I already have explained, economists are lousy short-term forecasters. If we actually knew what was going to happen, we’d be rich.

So here are some policy and political predictions for 2012.

1. Obama will win reelection – Unless I’m wildly wrong, Romney will be the nominee, and he is a very uninspiring choice. That gives Obama somewhat of an advantage. More important, I think the unemployment rate will continue to drift downwards (even if only because workers get discouraged and drop out of the labor force) and that will allow Obama to claim – with lots of help from the media – that his policies have started to work.

2. Greece will drop the euro – Politicians have three ways of financing government spending. They can tax, they can borrow, and they can print money. Nations such as Greece already impose stifling tax burdens and further tax increases probably would reduce revenue because of the Laffer Curve. Nations such as Greece already are so indebted that nobody will lend them money, especially since they’ve already defaulted on existing debt payments. This means Greece has to go with the final option and drop the euro so it can print lots of drachmas.  (Greece could solve its problems by cutting spending, of course, but let’s not engage in ridiculous fantasy).

3. At least one major European nation will default – Yes, the Baltic nations have shown it is possible to make real spending cuts and restore fiscal stability, but I don’t expect other European nations to learn from those success stories. So the only question is whether nations such as Spain and Italy default right away, or whether they get additional bailouts that set the stage for even bigger defaults in the future. The answer probably depends on Germany, and I’m guessing Merkel will finally do the right thing (if only for political reasons) and reject additional bailouts.

4. China and Japan have major problems, but will survive 2012 without crisis – I’ve already written that I’m not overly impressed by China and that I think there’s a bubble in the Chinese economy. And I’ve commented on the enormous debt burden in Japan. But even though I think both nations are very vulnerable to economic trouble, I’m going out on a limb and predicting that they’ll make it through this year without a major problem.

5. The Georgia Bulldogs will win college football’s national championship, demonstrating that there is justice in the universe.

P.S. I have been somewhat accurate in my election predictions and I’ve been getting some requests to predict what will happen in Iowa. If I get motivated, I may do that on Tuesday morning.

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There’s been a lot of discussion about Mitt Romney’s appeal – or lack thereof – among supporters of limited government.

To put it mildly, many libertarians and conservatives are underwhelmed by his less-than-stellar record on healthcare, his weakness on Social Security reform, his anemic list of proposed budget savings, and his reprehensible support for ethanol subsidies.

Notwithstanding this dismal track record, some advocates of free markets argue that anybody would be better than Obama.

But that’s not necessarily the case. Economic history shows that the burden of government often expands the most under Republicans, with Nixon and Bush (either one) being obvious examples.

On the other hand, even a skeptic like me has admitted that Romney’s record in Massachusetts is difficult to assess because he was governor of a very left-wing state and he had to deal with a state legislature with heavy Democratic majorities.

That being said, there’s a new development that suggests Romney may be an unacceptable alternative to Obama. In an interview with the Wall Street Journal, he basically said he is willing to consider a value-added tax for the United States. Here’s the relevant passage.

He says he doesn’t “like the idea” of layering a VAT onto the current income tax system. But he adds that, philosophically speaking, a VAT might work as a replacement for some part of the tax code, “particularly at the corporate level,” as Paul Ryan proposed several years ago. What he doesn’t do is rule a VAT out.

For those who are not familiar with a VAT, it is a version of a national sales tax, but imposed at every stage in the production process and embedded in the price of goods and services. Perhaps more important, it is despised by everyone who wants to limit the size of government. This video explains how it works and why it is a money machine for big government.

Simply stated, this is an awful tax. If it ever gets implemented in the United States, the battle will be over. America will descend to European-style stagnation, eventually leading to fiscal crisis.

Any politician that supports a VAT (or even hints at supporting a VAT) should not be allowed anywhere near the White House. That applies to Mitt Romney. And it should be the rule for Paul Ryan as well.

But what about Barack Obama, you may be asking. Hasn’t he said nice things about a VAT?

Not surprisingly, he has been sympathetic, appointing VAT sympathizers to high office and remarking that a VAT is “something that has worked for other countries.”

But there’s no way a VAT will happen if Obama gets reelected. Republicans will be overwhelmingly opposed, even if only for shallow reasons of partisanship.

But if Romney wins and decides to push a VAT, many Republicans will say yes because of loyalty (much as many GOPers went along with Bush’s statist agenda) and many Democrats will say yes in order to get a new source of revenue to expand government.

The consequences, as explained here, would be disastrous.

P.S. For a humorous – but accurate – perspective on the VAT, take a look at these clever cartoons (here, here, and here).

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I don’t mind sharing political humor that includes not-safe-for-work words and images, but I try to give fair warning and turn images into thumbnails so that nobody can grouse that they’ve been inadvertently exposed to something inappropriate.

So with that caveat, feel free to enjoy this image.

Obama’s the target of this joke, but don’t be surprised if you get the same result if Romney or Gingrich win the election.

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I’ve dinged Mitt Romney for his less-than-stellar record on healthcare, his weakness on Social Security reform, and his reprehensible support for ethanol subsidies, but I haven’t bothered to address his budget plan – in part because it seemed rather underwhelming.

Sounds like I haven’t missed much. Jacob Sullum has done the tedious work of reading through Romney’s plan, and he is unimpressed.

Mitt Romney said he wants to “eliminate every government program that is not absolutely essential.” That sounds good until you realize that Romney’s goal of cutting $500 billion from projected federal outlays in 2016 would, at best, leave the budget about 8 percent higher than it is now and only 11 percent lower than it would be without any attempt to restrain spending. The implication: Mitt Romney thinks 89 percent of what the federal government does is “absolutely essential.” And that’s what he says when he is trying to appeal to the fiscally conservative Republicans whose votes he will need to win his party’s presidential nomination. Who knows what he really thinks, assuming he has any firm convictions at all on this crucial question. …By contrast, the plan outlined by Rep. Ron Paul (R-Texas), one of Romney’s rivals in the race for the Republican nomination, would balance the budget by 2015. Clearly, Paul’s idea of “absolutely essential” government programs is a bit narrower than Romney’s. But whose isn’t?

Jacob’s analysis is on the mark, and he doesn’t let Romney get away with the business-as-usual Washington scam of claiming that a reduction in the projected growth of spending is actually a spending cut. Using honest math rather than DC math, Romney’s budget plan (assuming he is serious) would increase spending by 8 percent over the next four years.

To be fair, a budget that allows federal spending to jump by 8 percent over the next four years would satisfy Mitchell’s Golden Rule. Barring an unexpected downturn, the private sector would be growing faster than the government.

The problem is that even good politicians usually fail to fulfill their campaign promises. So if a politician today is saying that he will let spending climb by about 2 percent each year, that probably means it will increase 5 percent each year.

And if he isn’t proposing to eliminate a single cabinet-level department, that doesn’t suggest a strong commitment to fiscal responsibility.

It also means Mitt Romney thinks the Department of Housing and Urban Development is “absolutely essential.”

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