Impromptu Speech Topics: About Making Money

Quiz: What's responsible for the lousy economy most Americans continue to wallow in?

A. Big government, bureaucrats, and the cultural and intellectual elites who back them.

B. Big business, Wall Street, and the powerful and privileged who represent them.

These are the two competing stories Americans are telling one another.

Yes, I know: It's more complicated than this. In reality, the lousy economy is due to insufficient demand -- the result of the nation's almost unprecedented concentration of income at the top. The very rich don't spend as much of their income as the middle. And since the housing bubble burst, the middle class hasn't had the buying power to keep the economy going. That concentration of income, in turn, is due to globalization and technological change -- along with unprecedented campaign contributions and lobbying designed to make the rich even richer and do nothing to help average Americans, insider trading, and political bribery.

So B is closer to the truth.

But A is the story Republicans and right-wingers tell. It's a dangerous story because it deflects attention from the real problem and makes it harder for America to focus on the real solution -- which is more widely shared prosperity. (I get into how we might do this in my new book, Aftershock.)

A is also the story President Obama is telling, indirectly, through his deficit commission, his freeze on federal pay, his freeze on discretionary spending, and his wavering on extending the Bush tax cuts for the rich.

Most other Washington Democrats are falling into the same trap.

If Obama and the Democrats were serious about story A they'd at least mention it. They'd tell the nation that income and wealth haven't been this concentrated at the top since 1928, the year before the Great Crash. They'd be indignant about the secret money funneled into midterm campaigns. They'd demand Congress pass the Disclose Act so the public would know where the money comes from.

They'd introduce legislation to curb Wall Street bonuses -- exactly what European leaders are doing with their financial firms. They'd demand that the big banks, now profitable after taxpayer bailouts, reorganize the mortgage debt of distressed homeowners. They'd call for a new WPA to put the unemployed back to work, and pay for it with a tax surcharge on incomes over $1 million.

They'd insist on extended unemployment benefits for log-term jobless who are now exhausting their benefits. And they'd hang tough on the Bush tax cuts for the wealthy -- daring Republicans to vote against extending the cuts for everyone else.

But Obama is doing none of this. Instead, he's telling story A.

Making a big deal out of the deficit -- appointing a deficit commission and letting them grandstand with a plan to cut $4 trillion out of the projected deficit over the next ten years -- $3 of government spending for every $1 of tax increase -- is telling story A.

What the public hears is that our economic problems stem from too much government and that if we reduce government spending we'll be fine.

Announcing a two-year freeze on federal salaries - explaining that "I did not reach this decision easily... these are people's lives" -- is also telling story A.

What the public hears is government bureaucrats are being paid too much, and that if we get the federal payroll under control we'll all be better off.

Proposing a freeze on discretionary (non-defense) spending is telling story A. So is signaling a willingness to extend the Bush tax cuts to the top. So is appointing his top economic advisor from Wall Street (as apparently he's about to do).

In fact, the unwillingness of the President and Washington Democrats to tell story B itself promotes story A, because in the absence of an alternative narrative the Republican story is the only one the public hears.

Obama's advisors explain that the president's moves are designed to "preempt" the resurgent Republicans -- just like Bill Clinton preempted the Gingrich crowd by announcing "the era of big government is over" and then tacking right.

They're wrong. By telling story A and burying story B, the president legitimizes everything the right has been saying. He doesn't preempt them; he fuels them. He gives them more grounds for voting against raising the debt ceiling in a few weeks. He strengthens their argument against additional spending for extended unemployment benefits. He legitimizes their argument against additional stimulus spending.

Bill Clinton had a rapidly expanding economy to fall back on, so his appeasement of Republicans didn't legitimize the Republican world view. Obama doesn't have that luxury. The American public is still hurting and they want to know why.

Unless the President and Democrats explain why the economy still stinks for most Americans and offer a plan to fix it, the Republican explanation and solution -- it's big government's fault, and all we need do is shrink it -- will prevail.

That will mean more hardship for tens of millions of Americans. It will make it harder to remedy the bad economy. And it will set Republicans up for bigger wins in the future.

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

RNC Chairman Candidate Mike Duncan: ‘There Is Not Enough Money’ In Politics

The Republican National Committee will soon hold elections to potentially replace its gaffe-prone chairman Michael Steele, and today, FreedomWorks held a forum for those vying for the job. All the candidates present — Steele was conspicuously absent — touted their fundraising ability, but Mike Duncan, a former chairman running for another term, took the opportunity to wax poetic about campaign finance. Despite the recent troubling and unprecedented explosion of money in politics, Duncan called money “the mother’s milk of politics,” and argued, “there is not enough money” in politics:

DUNCAN: Money is the mother’s milk of politics. There is not too much money in politics, there is not enough money. When you consider that we spend $7 billion in this county a year on potato chips. We spend $4 billion, a little over $4 billion, according to the National Retailer Association on Halloween — on costumes and candies.

Watch it:

Thanks to the Supreme Court’s Citizens United decision, this year’s election saw a flood of money into politics, with corporations, special interests, and wealthy individuals spending like never before. Nearly $4 billion was spent on the 2010 cycle, making it the most expensive midterm in history, with more spent by outside groups this year than during all the midterms since 1990 combined. A disturbingly large portion of this was secret money spent by front groups like the U.S. Chamber of Commerce and Karl Rove’s American Crossroads, which do not have to disclose their donors. This system allows a tiny group of individuals to have an outsize impact on American democracy. For example, in August, an astonishing 91 percent of the millions American Crossroads raised came from just three billionaires. And while the Chamber claims to represent hundreds of thousands of businesses large and small, the vast majority of their funding comes from just 45 mega-corporations.

But it’s not surprising that Duncan would support this flood of special interest money in politics, as Republicans benefited most from secret money, and spent more than Democrats overall. According to a New York Times analysis, eight of the top ten outside political groups were GOP-aligned, including the top four.

However, the American people do not agree with Duncan that there should be more money in politics, especially when it comes to corporate money. A PCCC poll from last week showed that by a double-digit margin, voters would support a constitutional amendment to overturn Citizens United and once again restrict corporations from directly spending on elections. Meanwhile, a People for the American Way poll from June found that 85 percent believe that there is too much corporate money in politics. And a poll from the 2008 presidential campaign found that “Americans by 3-1 think too much money is” spent on politics.

eric seiger do

Wednesday, December 1, 2010

About Making Money

RNC Chairman Candidate Mike Duncan: ‘There Is Not Enough Money’ In Politics

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