Why the Economic Agenda of the Six Top GOP Candidates Is Truly Frightening
To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com.
Tomgram: Nomi Prins, Welcome to Panem 2016 (Starring Donald Trump But Not Katniss Everdeen)
By Nomi Prins
Posted on November 29, 2015, Printed on November 29, 2015
Here is what’s grimly fascinating in this year’s dystopian carnival of a Republican presidential primary. When it comes to what can be said in America, all bets are off. These days, the concept of “beyond the pale” couldn’t look more wan. All of a sudden, there’s nothing, no matter how jingoistic or xenophobic, extreme or warlike that can’t be expressed in public and with pride by a Republican presidential candidate. You want torture back in the American playbook? You’ve got it! Just elect Donald Trump or Ben Carson -- and our future torturers don’t even need to justify its use in terms of getting crucial information from terror suspects. Employing good old American-style enhanced interrogation techniques to inflict pain on “them” is fine and dandy in itself.
When it comes to refugees from the grim war zones we had such a hand in creating in the Greater Middle East, if you want the Statue of Liberty to hold a “Christians only” sign, welcome to the worlds of Jeb Bush and Ted Cruz. Should you prefer a registry for either Syrian refugees or American Muslims and mosque closings aplenty, you’ve got it from Donald Trump (and the closing of any facility “where radicals are being inspired” from Marco Rubio) -- and no matter how much politically correct liberals may complain, Trump’s not walking either of those proposals back far. (Where, by the way, are all those religious freedom types now that mosques are at stake? Can you imagine the uproar in this country if Bernie Sanders were to call for the shutting down of a few right-wing Christian churches?)
If you have the urge to compare Syrian Muslim refugees to “rabid dogs” and thought you had to keep your mouth shut about it, step into the universe of Ben Carson and speak out! Should you want to claim that, on September 11, 2001, crowds of thousands of Muslims cheered and tailgated in Jersey City, just across the Hudson River from the smoldering ruins of the Twin Towers, and that it was all recorded on video that only Donald Trump and maybe Ben Carson saw, then you’re in just the right exceptional nation at just the right moment. I could go on, but why bother?
In 2016 there is evidently no longer anything, no matter how extreme or offensive, that Donald Trump and the rest of the crew can say to the Republican base that will affect their popularity negatively. Quite the opposite, such statements, along with the promise to be “tough” on the Islamic State, are now the equivalent of popularity meters. In a country where public opinion not so long ago seemed down on more boots-on-the-ground interventions in the Greater Middle East, you can’t threaten to send in too many boots and planes these days. The attacks in Paris and threats of them elsewhere are clearly God’s gift to Republican extremity. And right now, Abu Bakr al-Baghdadi and his caliphate pals seem to control the electoral fate of politicians in both the United States and Europe.
In the midst of this Mr. Toad’s Wild Ride to election 2016, lest you think that the category of extreme and perverse is confined to foreign policy, and refugee or immigrant bashing, climb aboard TomDispatch’s campaign tour bus and let Nomi Prins, author of All the Presidents' Bankers: The Hidden Alliances That Drive American Power, take you on a wild, Hunger-Games-themed ride into the wilderness of Republican economic policy in the ongoing campaign from hell.-- TomDispatch Editor, TomEngelhardt
The American Hunger Games
The Six Top Republican Candidates Take Economic Policy Into the Wilderness
By Nomi Prins
Fact: too many Republican candidates are clogging the political scene. Perhaps what’s needed is an American Hunger Games to cut the field to size. Each candidate could enter the wilderness with one weapon and one undocumented worker and see who wins. Unlike in the fictional Hunger Games for which contestants were plucked from 13 struggling, drab districts in the dystopian country of Panem, in the GOP version, everyone already lives in the Capitol. (Okay, Marco Rubio lives just outside it but is about to enter, and Donald Trump like some gilded President Snow inhabits a universe all his own with accommodations and ego to match.)
The six candidates chosen here (based on composite polling) have remarkably similar, unoriginal, inequality-inducing, trickle-down economic recommendations for the country: reduce taxes (mostly on those who don’t need it), “grow” the economy like a sprouting weed, balance the budget by cutting as yet not-delineated social programs, overthrow Obama’s health-care legacy without breaking up the insurance companies, and (yawn)... well, you get the idea. If these six contenders were indeed Hunger Games tributes, their skills in the American political wilderness would run this way: Ben Carson inspires confusion; Marco Rubio conveys exaggerated humility; Ted Cruz exudes scorn; Jeb Bush can obliterate his personality at a whim; and Carly Fiorina’s sternness could slice granite. This leaves Donald Trump, endowed with the ultimate skill: self-promotion. As a tribute, he claims to believe that all our problems stem from China and Mexico, as well as Muslim terrorists and refugees (more or less the same thing, of course), and at present he’s leading the Games.
When it comes to economic policy, it seems as if none of them will ever make it out of the Capitol and into the actual world of American reality. Like Hillary Clinton, blessed by Wall Street’s apparently undying gratitude for her 9/11 heroism, none of the Republican contestants have outlined a plan of any sort to deal with, no less break the financial stronghold of the big banks on our world or reduce disproportionate corporate power over the economy, though in a crisis Cruz would “absolutely not” bail them out again. Stumbling around in the wilderness, Carson at least offered a series of disjointed, semi-incomprehensible financial suggestions during the last Republican “debate,” when asked why he wouldn’t break banks up. "I don't want to go in and tear anybody down,” he said. “I mean that doesn't help us, but what does help us is to stop tinkering around the edges and fix the problem."
Rubio, already in top Hunger Games form, swears that it’s recent regulations (not legacy elite decisions) that did the dirty deed. “The government made [the banks] big by adding thousands and thousands of pages of regulations," he said of Dodd-Frank legislation (which doesn’t actually alter Wall Street structurally in any way). In fact, in recent decades every major power grab or consolidation in American business, from banks to energy companies, resulted from bipartisan deregulation.
None of these big-money-backed candidates seem particularly concerned that another economic crisis could ever cripple the country, or have evidently even noticed that most Americans have yet to experience the present “recovery.” None seem to realize that when the Federal Reserve winds down its cheap money policy and banks and companies are left to fend for themselves, more economic hell could break loose in the style of the 2007-2008 meltdown. Jeb Bush recently summed up the general 2016 Republican position on the economy in a single what-me-worry-style sentence: “We shouldn't have another financial crisis.” ‘Nuff said.
In the 2012 presidential election, Mitt Romney’s chances dwindled after he disparaged 47% of the country as so many leeches. Today’s Hunger Gamers have learned from his experience. Optics spell opportunity, so as a group they’re shuffling the usual Republican-brand tax cuts for corporations and the wealthy in with selective recognition of the broader population and promises to kill all loopholes in some future utopian tax bill. None of them, of course, would consider raising the minimum wage to put more money in the pockets of workers before tax-time hits. Even old Henry Ford knew the power of wages when, early in the last century, he strengthened his car empire by doubling the then-prevailing minimum wage for his workers to $5 a day -- enough for them not only to save up and buy his Model-Ts, but also boost productivity.
The present set of Hunger Gamers could invoke Republican President Teddy Roosevelt’s trust-busting ire, or President Dwight D. Eisenhower’s willingness to fund vast national construction projects, or even (to reach into the distant past) President Herbert Hoover’s initial attempts to pass what became, under Democrat Franklin Delano Roosevelt, the 1933 Glass-Steagall Act that separated deposit-taking from speculation at banks. But to be realistic, none of them belong to the Republican Party as it once existed. They all live in an American Panem and so feel no compunctions about promoting the idea that corporations contributing ever less to the federal till would Make America Great Again.
Now, let’s send those six candidates into that wilderness, weapons in hand, one at a time, and while we’re at it, examine their minor differences by checking out their campaign websites to see what kind of games we can expect in a coming Republican era of “good times.”
If you look through the index of Ben Carson's latest bestseller, A More Perfect Union, you won’t even find the words “economy,” “banks,” or “Wall Street.” Instead, his campaign slogan, “Heal, Inspire, Revive,” could headline a yoga retreat. His position as the Republican co-frontrunner or runner-up (depending on which polls you look at) relies on his soft-spoken, non-politician persona, not his vague economic ideas that flash by in a chameleon-like fashion.
Yes, he was a brilliant neurosurgeon, but the tenacity and skills required to become a gifted medical practitioner have not translated well into presidential-style economic policies. To the extent that he has a policy at all, it’s a shopworn version of the twenty-first-century Republican usuals: ratifying a balanced budget amendment to the Constitution “to restore fiscal responsibility,” introducing a flat tax, not raising the minimum wage, yada, yada, yada. In a Washington Post op-ed last year, he recounted his mother’s days as a “domestic in the homes of wealthy people who were generous to her” and would slip young Carson and his brother “significant monetary incentives” in return for good grades. One even loaned him a luxury convertible. With such employers -- and the incredibly rich are a well-known generous bunch, at least when it comes to supporting Republican presidential candidates (just 158 families have contributed more than half the money to this election so far, mostly to Republicans) -- who needs a government-declared minimum wage?
Regarding taxes, Carson considers the 74,000-page tax code “an abomination.” And who would argue otherwise? But like his various opponents, he's not about to point out that it was largely crafted by the representatives of mega-corporations, not Wal-Mart workers at meet-ups with senators. He’s for a flat tax of 10% with no exemptions for the poor, based on biblical economics 101. Maybe people who don’t produce bumper crops should just pray for a better lot.
He would conveniently cut the official corporate tax rate from 35% (the average effective tax rate is 27.9% but the biggest, brightest companies don’t even approach that amount) to between 15% and 20%, the definition of corporate manna from heaven. He would also allow companies to bring their foreign profits back to the U.S. completely tax-free if they would even... pretty, pretty please... consider allocating 10% of them to “finance enterprise zones” in major cities. And so it goes in Carsonland.
Best bet on his campaign website: A $25 bumper sticker that says #IAMACHRISTIAN, proof that he’s eager to channel his inner evangelical Katniss.
Trump actually brought up President Dwight Eisenhower recently, but only for Operation Wetback, his grim Mexican immigrant deportation program. No I-like-Ike mention was made of his funding of the interstate highway system or the way he strengthened banking regulations.
The Donald lists five core positions on his site, including the two economic pillars of his campaign: “U.S.-China trade reform” and “tax reform,” both of which would, of course, “make America great again.” This may already sound a bit repetitively familiar to you, but he wants to reduce the corporate tax rate to 15% because it “would be 10 percentage points below China’s and 20 points below our current burdensome rate that pushes companies and jobs offshore.” Given that our biggest companies already pay far less than that “burdensome” rate, can there be any question that lowering it further would produce more generous CEOs and slay dreaded China at the same time?
Like President Snow, Trump would start aggressively and only get more so, economically speaking. He would “attack” the national debt and deficit by eliminating government waste, fraud, and abuse, and “grow” the economy xenophobically by doing in local Mexicans and distant Chinese, and all of this cutting and slashing would, like a Chia Pet, make the economy sprout even as tax revenues were savaged. Or, even if it isn’t one of his five core positions, he could pull a genuine Snow and get rid of old-fashioned-style government, leaving Americans officially beholden to an oligarch.
In another piece of (black) magic, his campaign website assures readers that cutting the deficit and reducing our debt would also stop China from “blackmail[ing] us with our own Treasury bonds.” No matter that China actually lent us money to run our government and bolster our financial system, and that a thank-you note might be in order (on paper made in China, of course).
When it comes to tax reform, Trump’s “populist” program would remove 75 million households from the income tax rolls and provide them, so he claims, with a simple one-page form to send the IRS, saying “I win.” Though he would cut the current seven tax brackets to four -- 0%, 10%, 20%, and 25% -- it’s his 15% corporate tax rate that trumps the field. Rubio would only chop it to 25%, Bush to 20%, Cruz to 16%, and Carson... who knows? Various estimates suggest that Trump’s plan would lead to a staggering federal revenue loss (so lucky for us that, in a Trump presidency, the rich would undoubtedly be so grateful that their generosity would soar beyond imagining). The nonpartisan Citizens for Tax Justice computed the cost of his plan at $12 trillion over 10 years. So don’t expect any Eisenhower-esque national building campaigns (other than that “beautiful” wall on the Mexican border).
Best gimmick on his campaign website: A $15 Trump dog sweater modeled by the saddest damn wiener dog ever. Perhaps its mother was a deported Chihuahua.
Rubio’s slogan “a new American century” couldn’t be grander, perhaps to compensate for the lackluster version of economic policy at his campaign website. It’s certainly not the sort of thing you’d expect from someone aspiring to be president of the world’s largest economy. Despite that, rest assured that he’s had economics and success on his mind 24/7. After all, Goldman Sachs is now his top contributor and his super PACs are on a run, too, including the rap-inspired “Baby Got Pac” just launched by multimillionaire John Jordan.
And in true Hunger Games fashion -- when the “odds” head in a tribute’s favor, the patrons and gifts begin rolling in -- Rubio just bagged Republican mega-donor billionaire Frank VanderSloot. Mitt Romney’s former national finance co-chairman, VanderSloot joins a growing roster of Rubio billionaires, including hedge-fund moguls Paul Singer and Cliff Asness.
“Marco Rubio is the brightest and most capable candidate," wrote VanderSloot of his new political buddy. Of the others he and his brain trust considered, he added, "Jeb simply does not have the leadership skills necessary to unite the people behind him"; Carson lacks “the international knowledge or skill set"; Cruz and Trump are “simply not electable in a general election" (no billionaire-envy there); and Fiorina, his second choice, “simply isn’t resonating with the voters.”
Rubio’s tax plan, the “cornerstone” of his economic policy, would -- you won’t be surprised to learn -- reduce the number of tax brackets from seven to three and eliminate taxes in ways particularly beneficial to the billionaire (especially hedge-fund billionaire) class, including the estate tax and taxes on capital gains and dividends. For the broad population, Rubio includes family tax cuts. According to an analysis by the Tax Policy Center, his plan would be a bargain compared to Trump’s, costing federal government coffers a mere $2.4 trillion or more in receipts over the next decade. As a byproduct, his program is essentially guaranteed to spark a new round of financial speculation, but don’t for a second let the 2007-2008 meltdown cross your mind since, as every Republican knows, with a Marco Rubio, Donald Trump, or Ben Carson in the Oval Office that can’t happen.
Best gimmick on his campaign website: You can “fall into campaign season” by ordering a “Marco Polo” made-in-the-USA shirt for $48 in patriotic red, white, or blue naturally! For a mere $500 extra, you can personally have the honor of buying Rubio a “plane ticket” (perhaps to meet and greet his next billionaire).
The Cruz campaign website offers a hodge-podge of semi-incoherent economic salesmanship. His tax plan, or what he likes to call (without the slightest justification) the “next American revolution,” promises to “reignite growth in our economy.” His “simple flat tax” (yep, another of those!) would abolish the Internal Revenue Service as well. Personal income tax brackets would go from seven to... count ‘em!... one at a 10% rate across the board and the corporate income tax would be replaced by a flat tax of 16%. And it should be taken for granted that the American economy would soar into the stratosphere!
Cruz’s tax code would be so “simple with a capital-S” that it would make Donald Trump’s look complicated. A postcard or phone app would suffice for individual and family filings. There would be no tax on profits earned abroad and it almost goes without saying that Obamacare taxes would die a strangulated death. Loopholes for businesses would apparently go, too.
Cruz claims his simple flat tax will elevate the gross domestic product, increase wages by 12.2%, create nearly five million new jobs, and undoubtedly fill the world with unicorns. It would also wipe out between $768 billion and $3.6 trillion in federal tax receipts over 10 years.
Best gimmick on his campaign website: For $55 you can get a bad-boy poster of Cruz sporting a Sons of Anarchy look (tattoos, cigarette in mouth, etc.) captioned “Blacklisted and Loving It.”
Jeb! has by far the sleekest web page. He and his donor entourage took the “presidential concept” seriously with a look that seems to have been stolen directly from “the Capitol” in the Hunger Games.
Its economic section excoriates the tax code for being “rigged with multiple carve-outs for favored industries.” He blasts Obama’s economic policies for leading to “low growth, crony capitalism, and easy debt.” Yet, under Jeb’s governorship, Florida's debt escalated from $15 billion to more than $23 billion. After his term, the housing-bubble that had inflated the state’s coffers burst big time, and Florida's economy under-performed much of the country during the financial crisis. While homeowners statewide went underwater, he landed a multi-million dollar consultancy gig with... gulp!... Lehman Brothers.
By now, you won’t be shocked to learn that Bush’s plan would cut tax brackets from seven to three: 28%, 25% and 10%, and that he would cut the corporate tax rate from 35% to 20%, five points below China’s. (These days, if you’re a Republican, you’ve got to stick it to China.)
While Jeb would not rein in Wall Street (for all the obvious and already well-documented reasons), right now it looks as if he’s not going to have a chance to not rein in anything. While his PR team maintains “Jeb can fix it,” invigorating his wilting campaign will require more than a bow and arrow and a mockingbird.
Best gimmick on his campaign web page: “The Guaca Bowle” for $75 because who doesn’t need one? (Bush family guac recipe not included.)
Fiorina’s web page doesn’t offer a lot of economic anything. It’s more like a personality infomercial. For her official positions, you need to watch video clips of her TV appearances from CBS This Morning to late night talk shows and -- if you’re starting to get bored -- just imagine Stanley Tucci as Hunger Games host of festivities Caesar Flickerman narrating.
Fiorina calls for “zero-based budgeting” because “zero” sounds so much cleverer than “balanced” and touts ad nauseam a three-page tax plan (perhaps the current one in a microscopic font, since we don’t actually know the details). The repetition of simple concepts to the masses seems to be her modus operandi.
Best gimmick on the Carly for America Super PAC website: For only $26 you can get a “Hillary Who?” infant one-piece, the perfect gift for any Republican baby.
How Corporations Really Pay Taxes
Despite the prominence of tax cuts in the policies of the top six Republican candidates, even the venerable Brookings Institution found that they have a minimal effect on economic growth. In addition, when you consider all the promised corporate cuts, you should know that corporations already don’t contribute much.
According to Citizens for Tax Justice, between 2008 and 2012, 26 of the 288 Fortune 500 firms (consistently profitable in those years) managed to pay nothing, nada, zero in federal income tax. The 288 firms collectively paid an effective federal income tax rate of 19.4%, and a third of them paid an effective rate of less than 10%. Five companies -- Wells Fargo, AT&T, IBM, General Electric, and Verizon -- also bagged over $77 billion of the $364 billion in tax breaks doled out in those years. Extra jobs didn't follow. Think of this crew as the real winners of the American Hunger Games in this period.
For 2014, for instance, Goldman Sachs avoided forking over federal income taxes on almost half of its $6.8 billion in U.S. profits, paying an effective tax rate of 18.6%. Between 2010 and 2012, due to tax breaks associated with executive pay, Fortune 500 companies saved an extra $27 billion in federal and state taxes. That’s a lot of dosh to use for Super PAC support.
In 2012, the Democrats blasted candidate Mitt Romney’s tax plan as a giveaway to the rich. This time around, our six tributes-cum-candidates are taking no such chances. They’re making sure to throw crumbs to the middle and working classes, even as they offer more caviar to the wealthy and corporations. Depending on the candidate and plan, the overall loss of national revenue will range from an estimated $1.6 trillion (even factoring in growth that may never happen) to $12 trillion, but will be a stunning amount.
Perhaps with such a field of candidates, the classic Hunger Games line will need to be adapted: “Let the games begin and may the oddity of it all be ever in your favor.” Certainly, there has never been a stranger or more unsettling Republican campaign for the presidential nomination or one more filled with economic balderdash and showmanship. Of course, at some point in 2016, we’ll be at that moment when President Snow says to Katniss Everdeen, "Make no mistake, the game is coming to its end." One of these candidates or a rival Democrat will actually enter the Oval Office and when that happens, both parties will be left with guilt on their hands and all the promises that will have to be fulfilled to repay their super-rich supporters (Bernie aside). And that, of course, is when the real Hunger Games are likely to begin for most Americans. Those of us in the outer districts can but hope for revolution.