Parsing Romney’s and Obama’s middle-class pablum

By David Rohde
September 7, 2012

Throughout the last two weeks of political conventions, Barack Obama, Mitt Romney and a vast array of surrogates accused their opponents of gutting the American middle class.

Paul Ryan and Bill Clinton did it blatantly. Michelle Obama and Ann Romney did it subtly. And all speakers tried to portray themselves as in touch with the middle class, from the Romneys eating “lots of pasta and tuna fish” to Barack Obama’s proudest possession being “a coffee table he’d found in a dumpster.”

In the process, though, both parties gave politically skewed definitions of the middle class, simplistically blamed each other for its struggles and presented pat solutions for the complex problems it faces.

In Republican oratory, the middle class consists of small-business owners who are being crushed by taxes, regulation and a bloated government. In truth, only about 11 percent of American heads of household are self-employed.

In Democratic speechifying, the middle class is made up of hard-working teachers, police officers and union members being laid off by miserly Republicans. Yet those Americans, however hard they work, depend on successful businesses and banks for their prosperity.

In reality, the middle class is a dizzyingly complex demographic. It includes the 50 percent of Americans, for example, who work for large companies with more than 500 employees. And it includes drillers and farmers in North Dakota who are collecting hefty paychecks and cashing in on bumper crops in the state, which has a 3 percent unemployment rate, the lowest in the nation.

The middle class is not in free-fall, as some Republicans argued. And the middle class is not the country’s sole economic engine, as Democrats suggested. Overall, the American middle class today is struggling to surmount torpid wages, global competition for jobs, low home values and spiraling healthcare and education costs. The middle class is stagnant.

What follows is the first of several efforts to sort through Republican and Democratic portrayals, pronouncements and promises for the middle class. More will follow between now and Nov. 6.

Middle-class taxes

In his acceptance speech, Romney said Obama had raised taxes on the middle class. And multiple Obama surrogates – including Vice-President Joe Biden and Massachusetts Senate candidate Elizabeth Warren – said that Romney would raise taxes on the middle class by $2,000. All of their statements were misleading.

Since taking office, Obama has, in fact, cut middle-class tax rates. Romney, though, was probably referring to the $960-to-$1,200 annual penalty that an estimated 3 million middle-class Americans who fail to obtain health insurance will be expected to pay under Obamacare. In its ruling upholding the healthcare law, the Supreme Court declared the penalty a tax. Definitions of the middle class vary, but most experts view it as the middle 50-60 percent of Americans, or roughly 114 million working-age adults. The penalty will apply to approximately 3 million of roughly 57 million middle-class Americans.

Biden’s and Warren’s claim that Romney will increase middle-class taxes is pure speculation. Romney has promised that he will cut tax rates across the board by 20 percent but not reduce overall tax revenues in the process. Independent experts have said it will be extremely difficult for Romney to achieve this goal, and the Republican nominee has declined to give specifics. But the New York Times notes that Romney could decide, instead of increasing middle-class taxes, to add to the deficit, take away preferential rates on savings and investments or make smaller cuts to marginal tax rates. And Romney has repeatedly promised not to raise middle-class taxes.

“Crushing the middle class”
Romney blamed Obama for a decline in middle-class incomes and a rise in family expenses.

“In the richest country in the history of the world, this Obama economy has crushed the middle class,” Romney said in Tampa last week. “Family income has fallen by $4,000, but health insurance premiums are higher, food prices are higher, utility bills are higher, and gasoline prices have doubled. Today more Americans wake up in poverty than ever before.”

Romney’s figure of $4,000 includes 13 months of wage decreases that took place before Obama took office, according to FactCheck.org, a non-partisan organization run by the Annenberg Public Policy Center. Romney is right, though, about food prices, which have risen by 6.2 percent.

Gas prices have, in fact, doubled, but the global recession sparked by the financial crisis artificially lowered them just before Obama took office. Healthcare premiums are up by 9 percent, but independent experts attribute 1 percent to 3 percent of the rise to Obamacare.

And while the total number of Americans living in poverty has never been higher, that is because the U.S. population has grown over time. Today 15 percent of Americans live in poverty, a figure significantly lower than the 23 percent that did when poverty rates were first calculated in 1959. In short, the middle class has definitely suffered under Obama, but not to the extent Romney claimed.

“Tax breaks for millionaires”

In his acceptance speech, Obama said that Romney’s proposed tax cuts for the wealthy would add to the deficit and fail to spark economic growth. “I don’t believe that another round of tax breaks for millionaires,” Obama said, “will bring good jobs to our shores, or pay down our deficit.”

Experts generally agree that the more educated a workforce, the higher its earnings, according to the Washington Post. But economists are divided over tax cuts for the wealthy. There is broad agreement that reducing taxes for the wealthy has led to increased deficits in the past, but there is disagreement over whether tax cuts for the rich spur economic growth. Some economists say it does not, while others insist that it does.

“So what’s the job score?”

Bill Clinton declared that 24 million private-sector jobs had been created during the 28 years Republicans held the White House over the period since 1961. But, he said, Democrats produced nearly twice as many private-sector jobs – 42 million – in the 24 years they were in power during that 52-year period.

Clinton’s figures are accurate, according to Bloomberg Businessweek. But other experts have found that if job creation starts being counted one year after a president takes office – and his policies take effect – the numbers are more even. And many economists argue that the U.S. economy is so large that short-term government policies enacted by any president have a limited effect. Administrations are given too much credit for a growing economy, they say. And too much blame for recessions.

***

With low TV ratings and the vast majority of voters having already made up their mind, the conventions are unlikely to decide the election. The unimpressive jobs report issued on Friday – only 93,000 new jobs in August – could blunt any momentum the Democrats gained.

In the end, both candidates stayed disappointingly true to form. Romney was cautious and vague. Obama was cautions and incremental. The middle class heard some debate, but mostly got pandering.

PHOTO: Confetti bursts following the speech of President Barack Obama during the final session of the Democratic National Convention in Charlotte, North Carolina, September 6, 2012.  REUTERS/Jonathan Ernst

10 comments

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“…other experts have found that if job creation starts being counted one year after a president takes office – and his policies take effect – the numbers are more even.” So the GOP needs to reassess its view of Jimmy Carter, and Bush is responsible for both getting us into and beginning to get us out of this current recession? Oh, and do these “experts” kind of lean Republican?

Posted by PCScipio | Report as abusive

“…other experts have found that if job creation starts being counted one year after a president takes office – and his policies take effect – the numbers are more even.” So the GOP needs to reassess its view of Jimmy Carter, and Bush is responsible for both getting us into and beginning to get us out of this current recession? Oh, and do these “experts” kind of lean Republican?

Posted by PCScipio | Report as abusive

“But other experts have found that if job creation starts being counted one year after a president takes office – and his policies take effect – the numbers are more even.” Nothing like being fair and balanced. I guess Bush is then responsible for both the swoon as well as the 2009 beginnings of recovery from the current recession.

Posted by PCScipio | Report as abusive

“But other experts have found that if job creation starts being counted one year after a president takes office – and his policies take effect – the numbers are more even.” Nothing like being fair and balanced. I guess Bush is then responsible for both the swoon as well as the 2009 beginnings of recovery from the current recession.

Posted by PCScipio | Report as abusive

This election won’t make much difference who wins, because the “big choices” are not before the voters. These are ever on the “back burner” because leaders of both major parties want to preserve their existing power and influence with little, if any, accountability.

Elected politicians have historically placed their own interests above those of “we, the people” they purportedly serve, living lives of ever-inceasing wealth and privilege. We see this same trend in unelected unionized government workers, whose lealders have brought state and local governments increasingly to bankruptcy.

More and more politicians at the federal, state and local level come from the legal field. They “look after their own”. Today I have heard it argued that our adopted laws mean nothing until interpreted by a judge, and every judge comes up with their own interpretation. These are the same people who look down from “the bench” on ordinary citizens in their courts and lecture them “ignorance of the law is no excuse”. One or the other, not both!

America is one of a small minority of nations whose economic productivity can provide it’s citizens everything they need. But our politicians have seen fit to have our government create more and more unsecured (backed by NOTHING) dollars from mere paper and ink, regularly increasing the national “debt limit” in the futile expectation that America can thus provide it’s citizens everything they want.

No country in the history of the world has succeeded in doing that. No country ever will; although each party understands all too well that when government takes money from Peter and gives it to Paul, that government can always depend upon the support of Paul. The “tipping point” has already been reached where, in America today, we have more Pauls than Peters. This does not bode well for America’s future.

This great country has lost it’s “common vision” as to the purpose of federal, state and local government. Only an honest “national debate” that defines a new “majority consensus” as to precisely WHAT government services “we, the people”, can afford in the long term can restore that “common vision”. Only then can “we, the people” together decide WHO gets HOW MUCH, WHEN and for HOW LONG from available government revenue.

If we then make the radical presumption that America can no longer spend more than it “makes”, the next step is one every politician HATES: agreement as to how much sustainable revenue America has. From that elected “representatives” must look at all continuing expenditures and separate “wants” from “needs” and prioritize associated funding. Of course that has been their job from the beginning, but, somewhere along the way they have completely lost sight of that fact.

Until America’s NEEDS are known, there can be no limit to the size of government and no limit to the amount of revenue government will seek from us. When a pipe breaks, most of us call a plumber. If then two fellows arrived, and proceed to squabble between themselves as to how to fix the break, we’d fire them immediately.

That’s precisely what we must do to our “representatives” in Washington. We have for too long allow them to divert our attention, like carnival magicians. They do not WANT us to decide, once and for all, what kind of country we want (that we can afford).

Instead, they get citizens squabbling endlessly over second or third-tier subjects like birth control, legislating success instead of access to opportunity, and providing ever more incentives for things America does not need. Specifically, America does NOT need more illegal immigrants.

It does not need more of the uneducated, the unmotivated, the unskilled, and the unproductive; and yet our tax “system” rewards ALL parents by the head for having more and more children. Guess which demographics win the “race” to produce more and more of themselves?

If “we, the people” do not insist on some say in what OUR country’s future will be, the future that arrives will be a “crap shoot” no one can predict. I don’t find that acceptable. Do you?

Posted by OneOfTheSheep | Report as abusive

Summary of Rohde’s argument: some people say it is, some people say it isn’t. Where is the journal in your journalism?

Posted by commun5 | Report as abusive

Birth control, among many other social issues, are rammed down our throats as an important issue because the large corporations that own the media don’t want the citizens to have the discussion that OneOfTheSheep refers to above. Problem is that the USA needs to decide if it wants to police the world still. Either that, or just go to a single payer health care system and become solvent in one fell swoop.

as for this disgrace:
“There is broad agreement that reducing taxes for the wealthy has led to increased deficits in the past, but there is disagreement over whether tax cuts for the rich spur economic growth. Some economists say it does not, while others insist that it does.”

Journalism is not supposed to be he said/she said. Find the truth and REPORT, rather than just scribbling down what powerful people pronounce as though it means anything at all.

When politicians say “jobs” they are pronouncing an unspeakable word, spelled p r o f i t s. They are not the same thing, but these business/commerce degree hacks all drank the kool-aid long ago. How much more proof do we need that corporate profits DO NOT translate into jobs for working people any more, and that perhaps corporate taxes are, in fact, the answer – and not the problem? (thanks Noam Chomsky for pointing out that jobs=profits in poli-speak, the single best analysis I have ever heard: one sentence makes the entire political system perfectly understandable)

Posted by Benny27 | Report as abusive

Birth control, among many other social issues, are rammed down our throats as an important issue because the large corporations that own the media don’t want the citizens to have the discussion that OneOfTheSheep refers to above. Problem is that the USA needs to decide if it wants to police the world still. Either that, or just go to a single payer health care system and become solvent in one fell swoop.

as for this disgrace:
“There is broad agreement that reducing taxes for the wealthy has led to increased deficits in the past, but there is disagreement over whether tax cuts for the rich spur economic growth. Some economists say it does not, while others insist that it does.”

Journalism is not supposed to be he said/she said. Find the truth and REPORT, rather than just scribbling down what powerful people pronounce as though it means anything at all.

When politicians say “jobs” they are pronouncing an unspeakable word, spelled p r o f i t s. They are not the same thing, but these business/commerce degree hacks all drank the kool-aid long ago. How much more proof do we need that corporate profits DO NOT translate into jobs for working people any more, and that perhaps corporate taxes are, in fact, the answer – and not the problem? (thanks Noam Chomsky for pointing out that jobs=profits in poli-speak, the single best analysis I have ever heard: one sentence makes the entire political system perfectly understandable)

Posted by Benny27 | Report as abusive

Tax cuts to the wealthy do lead to greater employment in China and Mexico. Many of the companies we think of as american (there really are no american companies, you can’t have a country unless you are a human being) are investing huge amounts of capital in China. This is really good for the shareholders, at least in the short term, which is typically all anyone really cares about.

Posted by brotherkenny4 | Report as abusive

Let’s do a little fact check on Rohde to calibrate his slant and rant here. Quote he “In truth, only about 11 percent of American heads of household are self-employed.” This is not fact at all from his source, the Federal Reserve which said “income from businesses, farms, and self employment accounted for only 12.2 percent of income in 2010, down from 13.6 percent in 2007″. The Fed paper addresses incomes not quantity of groups, this is apples and oranges.
What is the implication for the “in truth”, that these people don’t count, that we should tax them out of existence like the Jews during WWII since they are a minority? Rohdes is intellectually bankrupt and he thinks others should be financially bankrupt.

Rohdes is a prime example of not being able to trust the messenger. The messengers have become criminal co-conspirators to Obama’s campaign of disinformation and propaganda.

PS From the Fed, income was down for the group on Ohama’s watch. (psst, blame Bush)

Posted by JP007 | Report as abusive