Wednesday, July 18, 2012

Mitt Romney, Class Warfare, and The Rosetta Stone of Taxes


It isn't true that Romney "owes it" to voters to release more tax returns than he has and has said he would. In politics only two things rule: the law (a very forgiving standard) and your image. If Romney doesn't release more than two years of federal tax returns and he wins, ergo, he didn't owe anybody anything. And if he loses it will be difficult to impossible to assess the extent to which opaqueness contributed to defeat.

But Romney has a bigger problem. Emphasis on the word "Big."

Clearly, Romney has calculated that — at this moment in time, anyway — it is better to hold his ground than to give way. This may change, of course, which would present new challenges (is Romney, yet again, cowering to pressure in a very unpresidential way? Is this just another head-spinning flip-flop?). A host of conservative commentators and at least one two elected officials have urged Romney to just do it. The most recent is the National Review, whose editorial, "Release The Returns," leaves nothing to the imagination. (The National Review also believes that Romney should make a full-throated defense of capitalism, including outsourcing, something that would, of course, be political suicide, but perfectly illustrates the box the candidate is in.)

On the other hand, should Romney stick to guns the two-year standard might very well inform his choice for a running mate in an unanticipated way: How awkward would it be for the Veep candidate to have a history of being more transparent than Mitt?

The irony is, of course, that Romney has almost certainly done nothing wrong, as in, he broke no laws. There are what sound like adequate reasons for him to have filed documents with the SEC as chief executive and sole shareholder during the period when he was rotating out, or considering rotating out, of Bain (whichever you choose to believe was going on between 1999 and 2002). It's plausible that this would have taken years given the complexity of his role, his own hard bargaining to make the most of leaving his baby and the precedent of his exit package — Bain's very first — would have on the expectations of other partners who might subsequently leave. And there is certainly enough in the record of Bain during Romney's stewardship to portray him as a soulless capitalist and thus not the kind of nuanced leader the presidency arguably requires. Team Obama doesn't need for Romney to have technically been in charge when outsourcing was going on to support this narrative.

The real problem for Romney isn't the devil in the details he fears will give Obama opposition reseachers a field day. It's the Big Picture. It's not the micro, but the macro. Releasing this data will show exactly how the other half manipulates — and creates — the tax code to benefit themselves. We now have bumper sticker data on Swiss Bank accounts and offshore tax havens, but without the context of previous years the picture is incomplete. This is why when you are audited the IRS looks back three years as a matter of course, six if there is a suspicion of significant underpayment and forever if there is evidence of fraud.

The scandal here isn't that Romney is a scofflaw, but that he doesn't even have to be one to do much better than the 99%. Being taxed at a staggeringly lower rate than the average American isn't a crime (even if that rate is zero), but it is an inconvenient fact that those who enjoy it would like to discuss as little as possible.

The scandal is that the tax code and related laws enable the rich and powerful to shield their wealth in a way that the average American simply cannot. And because Romney is seeking the presidency, he has exposed himself to a tradition of tax-return transparency which would open a very exclusive rope line. Unless Rupert Murdoch and Warren Buffet settle that bet this would be the best lesson in the practical exploitation of the complicated tax code by a rarified person, and why certain provisions that benefit the few are so obscure and well defended.

So this is class warfare, after all. The ruling class of which Romney is a member not only exploits loopholes, but writes them into law and would rather not spotlight the unfairness in particular while it broadly calls for tax reform and simplicity (also code for we pay too much). How Romney has moved his money around to make the best use of tax provision which favor him would be a gold mine to forensic accountants.

There would be silly "GOTCHA" reporting, of course. But silly headlines fade. What won't go away as easily is the deeper narrative of tax unfairness. Romney's tax returns would be a Rosetta Stone explaining the babble that is the US tax code.

Romney's finances are fair game because his key economic proposals would reduce his own tax bill — inoculating himself against the self-interest charge alone would be wise enough. But Romney needs to hold fast for as long as he can because this isn't about envy by the 1%, rather the fear of the 99%.

Releasing his taxes will spark a real debate on tax reform by unmasking the platitudinous battle cries of the right as nothing more than rote stammer to protect their own, not the US economy.

Friday, July 13, 2012

Romney & Uniform-Gate: He Can't Win For Losing

Lost in the Shocked Shocked outrage over the outsourced order for US Olympic opening ceremonies uniforms (Really? THIS is what animates bi-partisanship in Congress?) is the fact that these garments were made in China even though an American company got the order.

Nobody thought to ask Calvin Klein where the clothing would be made, probably because it occurred to nobody that "Made in the USA" was more important than price. Or because virtually none of the clothing Americans wear is made in America, or has been for a long, long time.

And this is why the attack on capitalism, as the Romney folks put it, will redound to Obama's benefit.

Capitalism is not patriotism. Capitalism is not social engineering. Capitalism is not about national boundaries. Capitalism is about making money by providing goods and services for which there is a demand. If you are good at it, lots of people get jobs. If you are bad at it, lots of people lose their jobs and you (and perhaps lots of others) also lose a lot of money.

Defending capitalism requires acknowledging that there is no obligation to hire your neighbors, or even your fellow citizens. It is an inconvenient truth at best for politicians who, like Romney, wrap themselves in the flag only to discover that it was made in China.

Romney has no role in Uniform-Gate, of course, and surely falls on the side of the outraged (though he appears to have taken no position at this writing.)

But this sideshow puts him in a bind, for two reasons: The more that 21st century economics becomes part of the civics lesson of the 2012 election the worse it is for the image of business in general, and it also puts a bigger spotlight on his own innocent utilization of legitimate, legal — but politically toxic — business decisions.


Like Romney's tax returns, the reality of capitalism for him is best kept hidden under a basket. One made in the USA, of course.

Tuesday, July 3, 2012

The World That Could Have Been According To Andy Taylor

I used to live in Mayberry. For the dozen years we were there our Virginia hometown epitomized the feel of that fictional TV hamlet, a place where people stopped to talk, treated each other right and everything always just seemed to be okay. It was actually Reston, but we joked about the similarities.

Like lots of kids in the 1960s, I also grew up in Mayberry, at the knee of a quiet hero.

Andy Griffith's sleepy southern town was an island in the storm. There was little strife or crime. There was a mayor (his boss) and successful businessmen who controlled commerce. But Griffith's Sheriff Andy Taylor was the glue which held it all together, the one person everyone relied upon and turned to. And they were correct to defer to him: Taylor invariably prevented idiocy and excess while promoting common sense, all the while speaking softly and carrying no stick.

Taylor was a lawman who never carried a gun or raised his voice. He was a single father whose son's upbringing meant more to him than anything. Taylor didn't have to wear this on his sleeve, because the opening credits of The Andy Griffith Show reminded us every week, as Taylor and son Opie (future filmaker Ron Howard) sauntered, fishing poles in tow, to the creek (on what must have been a work day, since Taylor was in uniform). Sheriff Taylor was a faithful mentor to a ridiculous apprentice — Don Knotts' Barney Fife — whom nobody else took seriously and from whom Taylor invariably hid the truth of his own ineptitude in an effort to bring out the best in his well-meaning deputy.

Before we knew what a samuri was — and against the backdrop of shoot'em up Westerns which dominated the big and small screens — Taylor exemplified the restraint and wisdom of these swordmasters, who sought to offend no one and to prove their extraordinary abilities only when necessary. Taylor had no swagger, but he managed to keep the peace, solve every one of the few crimes committed in Mayberry and was masterfully persuasive using only simple, southern tones and words of one syllable. He never lied and never said too much. He was never wrong and never made an issue of it. He was Vulcan before Mr. Spock.

More than any of the matriarchs and patriarchs of the other big 1950-era family dramas — Leave It To Beaver, Father Knows Best, The Donna Reed Show — Taylor showed men that men could be men without being MEN. It was a great metaphor for post-war America, but sadly did not become the cultural template for our male heros, which became more Clint Eastwood than Zatoichi.

Taylor was an early example of what is sadly not the norm in leadership: He brandished wisdom rather than physical strength, valued temperance over reflex, did not take himself seriously and proved that if you wanted to be heard, you whisper.

Heros based on these traits are still written, though as ironic exceptions to the rule. We prefer — and thus emulate on some level — heros with hair-trigger tempers, a shoot-first-ask-questions-later mentality and the death — literally or figuratively — of one's adversaries. Taylor was measured: Rather than once and for all making an example of the recalcitrant town drunk by putting him away for a long time Taylor always just let Otis Campbell sleep it off the safety of a jail cell. When a con man was wooing a gullible Aunt Bee, Taylor spoke to the suitor in unthreatening language on the front porch after a lovely home-cooked meal. With an unrelenting smile and that easy drawl, he left no doubt that there would be a marriage, and isn't that a wonderful thing. All the while cleaning his shotgun.

The one flaw in Taylor's character? He was marriage averse. He dated a schoolteacher for years, and his young son could have benefitted from having a step-mother (no offense to Aunt Bea). Taylor hardly a bachelor's life, but he was drawn in the old school manner which treats marriage as a state to which women must aspire, and men studiously avoid.

That's too bad. But the flip side was that Taylor showed a father could be a hands-on parent without compromise, a nurturer whose professional and personal live were entirely in sync.

 

Monday, July 2, 2012

SCOTUS Sings. Who's The Leaker (And Does It Matter)?

Felix Salmon makes a great observation about the deterioration of the Supreme Court: if they start leaking self-serving secrets under the cover of anonymity, aren't they lowering themselves to worst levels of the political branches? Isn't SCOTUS supposed to be above it all, oblivious to criticism or how the citizenry regards how they do what they do? Isn't that the point of lifetime appointments?

It's interesting that some Justice (at least) is singing, so soon after the event. Both the ruling and the makeup of the majority in Sebelius was surprising, the latter far more so than the former since conservative Chief Justice Roberts looked for and found a way to uphold the Affordable Care Act.

I don't think it's unprecedented, though I may be confusing retired Justices who've been source material for books about the Court. Either way, I'm struggling to figure out the motive since I take the reporting of CBS's Jan Crawford as accurate.

Salmon was as harsh on the Court as he was effusive about Crawford:
Instead, it seems, the Supreme Court has become infected by exactly the same partisanship which has corroded civic life everywhere else in DC. Maybe that was inevitable. But this story is still a signal journalistic accomplishment — and it was written at law-geeky length by a TV reporter. Crawford deserves all credit for getting this scoop — and for showing that there is life yet in broadcast journalism.
Leaks at the other two branches is designed either to take someone down or burnish your own view. What the three patently conservative judges — Scalia, Thomas and Alito — and Justice Kennedy believe is a matter of public record. Nobody in its constituency is assailing the Court's conservative wing. They need not promote the idea that they struggled to convert Roberts which, in such matters, goes without saying.

So if Roberts' three natural allies wouldn't speak out of school, who else might be motivated to weaken the Chief Justice or burnish his image?

The only outlier in dissent was Justice Kennedy. But what would his motive be? Could it be that
being on the "wrong" side of a 5-4 decision is a worse PR problem for him than for Roberts? Would he have been less vulnerable to criticism among his constituency if the ironic contrast with Roberts' decision wasn't the story?  

The leaker could be Roberts himself, though the picture Crawford paints of the Chief Justice would seem to do nothing to temper the anger of some conservatives (one of whom actually posits that Roberts has literally lost his mind).

I'm not sure I mind knowing more about the inner workings of the court, though the prospect of overtly politicized Justices would be disastrous. 

It's also ironic that this exposé comes from a TV journalist, since the Court's lack of transparency — a positive if it shields them from influence — could be improved by televising oral arguments.

They may be leaking like cheap pols, but I can't imagine any of them changing one little thing about how they comport themselves for the camera.