mitt romney

Letters: Letters: Protests and Solutions

December 17, 2011 by NewsMaker Leave a Comment

In “Know What You’re Protesting” (Economic View, Dec. 4), N. Gregory Mankiw repeats the often-heard complaint that many Occupy protesters — and, in his case, students who walked out of his own course — have “no clear policy prescriptions” for our current economic mess.

But why should students in an introductory economics class, or others without economic training, be the ones to come up with solutions? The purpose of the protests is to keep the problem in the public limelight and, it is hoped, force elected officials to do something about it rather than just kick the can down the road and take political postures.

Solutions exist, but part of the problem is that we are dealing with conflicting economic theories that have been taken to extreme positions by both sides. Until Washington relearns the art of compromise, this mess will continue. Charles Repka

East Windsor, N.J., Dec. 5

To the Editor:

In the column, N. Gregory Mankiw makes this statement: “I don’t view the study of economics as laden with ideology.” He then goes on to say that “the recent financial crisis, economic downturn and meager recovery are vivid reminders that we still have much to learn.”

He seems not to understand that economists aren’t really objective and dispassionate scientists. Economics is merely a set of tools with which we build the kind of society we want to live in. Defining what that means is, of course, an ideological proposition, and thus all economic “theory” is freighted with ideological baggage.

And by treating the current economic crisis as a teachable moment, not as a result of very specific economic policies, the column pooh-poohs anyone who would hold economic ideas accountable for the mess we are in.

Indeed, to judge by the economic policies being promoted by Mitt Romney, whom Mr. Mankiw serves as an adviser, neither Mr. Romney nor Mr. Mankiw has learned anything about what caused our economy to fall off the cliff in 2007. Steven Conn

Yellow Springs, Ohio, Dec. 4

The writer is a history professor at Ohio State University.

Article source: http://feeds.nytimes.com/click.phdo?i=029207a616a20e0f07f4d9108e6963b2

Filed Under: Business News Tagged With: economic downturn, financial crisis, mitt romney

Labor Board Drops Case Against Boeing

December 9, 2011 by NewsMaker Leave a Comment

The N.L.R.B.’s acting general counsel, Lafe Solomon, said the labor board had decided to end the case after the machinists’ union — which originally asked for the case to be brought — urged the board on Thursday to withdraw it.

On Wednesday night, the union announced that 74 percent of its 31,000 Boeing workers in Washington State had voted to ratify a four-year contract extension that includes substantial raises, unusual job security provisions and a commitment by Boeing to expand aircraft production in the Puget Sound area.

Mr. Solomon, who has faced heavy criticism for bringing the case, said he was delighted that it was settled, noting that 90 percent of the cases the labor brings are settled.

“This is the outcome we always preferred, and that is typical for our agency,” Mr. Solomon said in a telephone conference call with reporters.

Mr. Solomon had filed the case against Boeing last April. Agreeing with the union’s position, he asserted that Boeing’s decision to build the $750 million plant in South Carolina constituted illegal retaliation against the union’s members in Washington for having engaged in their federally protected right to strike.

The case against Boeing enraged South Carolina officials, who saw it as an insulting blow to one of their greatest economic development successes. It also angered Republican lawmakers and presidential candidates, who asserted that federal regulators should not engage in heavy-handed regulation that tells companies where they can or cannot invest. Mitt Romney has called the labor board’s case a job killer, while Newt Gingrich has proposed cutting off the board’s funds.

The machinists’ local that asked the labor board to bring the case — Local 751 of the International Association of Machinists and Aerospace Workers, which represents Boeing workers in Washington State — was angry at Boeing’s decision to build the South Carolina plant because it feared that it would result in the loss of thousands of jobs in the Puget Sound area.

Local 751’s new contract went far to please and reassure the union and its members because Boeing pledged to build a new generation of its Boeing 737 passenger jet in the Puget Sound area, a move that will create several thousand more jobs there.

“The case was always about the loss of future jobs in the Seattle area,” Mr. Solomon said. “This agreement has resolved that issue. There is job security in the Washington area.”

Boeing had argued that it did not engage in any illegal retaliation against union members in Washington, and it further asserted that its new plant in North Charleston, S.C., which is producing 787 Dreamliner passenger jets, had in no way reduced employment in Washington State. Many business leaders and Republicans said it was outrageous for the labor board to seek to punish Boeing for deciding to build a new plant outside Washington State to avoid the continued labor strife there. The machinists’ union has engaged in five strikes against Boeing since 1977, including a 58-day strike in 2008 that cost the company $1.8 billion.

Boeing applauded the N.L.R.B.’s move. “We have maintained from the outset that the complaint was without merit and that the best course of action would be for it to be dropped,” said Tim Neal, a Boeing spokesman. “Today that happened. Boeing is grateful for the overwhelming support we received from across the country to vigorously contest this complaint and support the legitimate rights of businesses to make business decisions.”

But some business groups did not seem ready to turn the page on their fight with the labor board over this issue. Randel K. Johnson, senior vice president for labor at the United States Chamber of Commerce, welcomed the board’s decision to drop the case, but he added, “More needs to be done to prevent this outrageous overreach in the future.”

Calling the N.L.R.B. case “one of the great examples of pro-union activism and government overreach in history,” Mr. Johnson said, Congress should push ahead with legislation that bar cases, like the Boeing one, in which the board sought to prevent a company from locating a plant where it wanted.

In its complaint against Boeing, the labor board had asked a judge to order the company to move its three-plane-a-month South Carolina production line to Washington State.

The labor board’s case against Boeing so enraged Lindsey Graham, a Republican senator from South Carolina, that he threatened to block confirmation of any of President Obama’s future nominees to the N.L.R.B.

“This case was never about the union or the N.L.R.B. telling Boeing where it could put its plants,” Mr. Solomon said. “This was a question for us of retaliation, and that remains the law.” And, not backing down, he said that if the labor board were ever faced with a similar situation, “we might well issue a complaint.”

Mr. Solomon said it was always the board’s goal to promote — and settle matters by — collective bargaining, and he said that filing the case against Boeing helped lead to a settlement through collective bargaining.

A problem if Mr. Solomon had proceeded with the case was that the labor board will drop to two members from the current three, when the term of a Democratic recess appointee, Craig Becker, expires at the end of this month. The Supreme Court ruled last year that when the board, which has five seats, dwindles to fewer than three members, it no longer has the power to rule on any cases.

Article source: http://feeds.nytimes.com/click.phdo?i=f055f02c6f923fd980170c78b33ec3cb

Filed Under: Business News Tagged With: contract extension, general counsel, mitt romney

It’s the Economy: Can Politicians Really Create Jobs?

November 6, 2011 by NewsMaker Leave a Comment

Starting this week, I’ll be writing a regular column in the magazine that tries to demystify complicated economic issues — like whether anyone (C.E.O.’s, politicians, people running for the presidency) can actually create jobs. The fact is that creating them in a far-too-sluggish economy is practically impossible in our current capitalist democracy. No corporate leader is rewarded for hiring people who aren’t absolutely required. Most companies hire only when its workforce can no longer keep up with the demand for its products.

Even with all the attention on hiring, the government’s ability to create jobs is pretty dispiriting, no matter who is in charge. The most popular types of jobs programs involve state tax breaks or subsidies that seek to seduce a company from one state to another. While this can mean good news for “business-friendly” states like Texas, such policies don’t add to overall employment so much as they just shuffle jobs around. This helps explain Rick Perry’s claim that more than one million jobs were created under his watch in Texas while the rest of the country lost more than two million.

The federal government does something similar when it decides, for instance, to regulate oil drillers and subsidize windmill makers. Such a policy might help the environment but it just moves jobs from one sector to another without adding any. And while both Perry and Mitt Romney propose that further oil and gas drilling in the U.S. will transform the jobs picture, only 30,000 Americans work in oil and gas extraction, and about another 125,000 in support occupations. With more than 25 million Americans unemployed or underemployed, it’s unlikely that any changes in that part of the energy sector would make a real dent.

One reason we have so few ideas about job creation is that up until recently, the U.S. economy had been growing so well for so long that few economists spent much time studying it. (They’re trying to make up for it now. See this chart.) With no new theories, Democrats dusted off the big idea from the Great Depression, John Maynard Keynes’s view that government can create jobs by spending a lot of money. The stimulus, however, has to be borrowed, and it has to be really, truly huge — probably something like $1.5 or $2 trillion — to fill the gap between where the economy is and where it would be if everyone was spending at pre-recession levels. The goal is to goad consumers into spending again. And President Obama’s jettisoned $400 billion jobs package, hard-core Keynesians argue, is nowhere near what it would take to persuade them.

Many Republicans follow the more fiscally conservative University of Chicago School, which argues that Keynesian stimulus can’t heal a sick economy — only time can. Chicagoans believe that economies can only truly recover on their own and that policy interventions only slow the recovery. It’s a puzzle of modern politics that Republicans have had electoral success with a policy that fundamentally asserts there is nothing the government can do to create jobs any time soon.

Of course, Romney, Perry, Herman Cain and the rest won’t come out and say, “If elected, I will tell you to wait this thing out.” Instead, Republican candidates fill their jobs plans with Chicagoan ideas that have nothing to do with the current crisis, like permanent cuts in taxes and regulation. These policies may (or may not) make the economy healthier in 5 years or 10, but the immediate impact would require firing a large number of America’s roughly 23 million government workers.

How bad might that be? The U.K., as part of its austerity measures, is in the process of firing about a half-million government workers under the notion that the private sector would be so thrilled by low taxes and less regulation that it will expand and snatch up all those laid-off public servants. But this plainly isn’t happening. The British economy continues to grow slowly, if at all, and few former government workers have found new jobs in the private sector.

Article source: http://feeds.nytimes.com/click.phdo?i=ca0167319e1edcb9d824ef30e8a80a2d

Filed Under: Economy News Tagged With: mitt romney, oil and gas, windmill

The Caucus: Perry to Propose a National Flat Tax

October 19, 2011 by NewsMaker Leave a Comment

LAS VEGAS – Gov. Rick Perry of Texas said Wednesday that he would propose a flat tax next week as part of a tax overhaul program, signaling a new effort to separate himself from Mitt Romney and the rest of the Republican field.

Mr. Perry signaled his intent in a speech to Republicans on Wednesday morning after Tuesday night’s brawl of a Republican debate. He has in the past suggested support for some form of a flat tax, but has backed off from endorsing one. Mr. Perry recently recruited as an adviser Steve Forbes, who ran for president in 1996 on a pledge of implementing a single flat tax on income, without any deductions.

Mr. Perry did not offer details of how his plan would work. He said he wanted to scrap “the three million words of the current tax code and start with something simple: a flat tax.”

“I want to make the tax code so simple that even Timothy Geithner can file his taxes on time,” the governor said.

Mr. Perry said his tax plan would also advocate a “serious” round of spending cuts and endorse a balanced budget amendment.

His remarks come after one of his opponents for the nomination, Herman Cain, has gained traction with his 9-9-9 plan, which seeks to tax personal and corporate income at 9 percent, while imposing a 9 percent national sales tax.

In his remarks, Mr. Perry picked up where he left off Tuesday night in trying to differentiate himself from Mr. Romney, the former Massachusetts governor, telling an audience of Republicans that he was not a candidate “of the establishment.”

“The American people are not going to trim around the edges when it comes to 2012: They are going to turn Washington inside out,” he said. “Let me share with you one thing. I am not the candidate of the establishment. You won’t hear a lot of shape-shifting nuance from me. I am going to give the American people a huge big old helping of unbridled truth — that we can’t continue to spend what we are spending, that we can’t avoid entitlement reform because we are afraid of the third rail of politics.”

Mr. Perry did not mention Mr. Romney’s name in 15 minutes of remarks to the Republican Leadership Conference, but his target was clear. It came the morning after the two men tangled repeatedly during what was the most contentious Republican debate of the year.

Mr. Perry’s appearance also comes as his standing in many polls has fallen after a rough start to his campaign. He suggested that the establishment was writing him off too soon.

“Pundits and the establishment, they may think they choose, or it’s their responsibility, or their right, to choose our next president,” he said. “Primary voters and caucus voters haven’t got that memo yet.”

Article source: http://feeds.nytimes.com/click.phdo?i=376c79e002bacdf10382a1dca02deace

Filed Under: Business News Tagged With: caucus, mitt romney, republican debate

Economix Blog: A Closer Look at Romney’s Economic Plan

September 8, 2011 by NewsMaker Leave a Comment

Now that we’ve had a day to digest Mitt Romney’s economic plan, Matthew Yglesias looks between the lines and finds what he calls an “agenda on social welfare policy that’s basically every bit as extreme as anyone else’s.”

So although Robert Reich calls the plan “unremarkable” and “way too reasonable for the current G.O.P.,” Mr. Yglesias points out that Mr. Romney’s commitment to lower taxes will have to come at the expense of something, and that something could very well be Medicare.

In the plan, Mr. Romney says that “before President Obama exploded the size of the federal government, our existing tax rates were more or less adequate to pay for the government we needed.”

True, in 2006, the Bush-era tax rates were able to finance government spending with a much smaller deficit. But even without a financial crisis, the aging demographics of the United States population mean that in the absence of serious health care cost reform, the government will need more money to pay for Medicare and Medicaid services for the elderly, disabled and poor in coming years.

“Maintaining America’s commitment to health insurance for senior citizens is going to require higher taxes,” writes Mr. Yglesias. “When politicians try to say that we can get by with Bush-era levels of taxation indefinitely, they mean we can get by with Bush-era levels of taxation if we scrap Medicare.”

The Romney camp argues that some of the tax cuts — particularly the drop in the corporate tax rate from a high of 35 percent to 25 percent — will be offset by more companies’ bringing their operations back to the United States and more investment here by companies, generating more corporate income to be taxed at the lower rate. But many economists and tax experts say that without reforming the tax code and eliminating the many loopholes that already allow companies to pay far less than 35 percent — or less than 25 percent, for that matter — it’s hard to imagine such a corporate tax cut being that effective.

Mr. Romney’s campaign officials declined to say just how much they believed the lower rate would be offset by generation of taxable revenues in the United States by more companies. And the plan also specifically “does not promise the immediate creation of some imaginary number of jobs, because government cannot create jobs.”

Campaign officials did say that the plan, in its totality, would raise economic growth over all to an average of 4 percent on an annual basis, induce private companies to create 11.5 million jobs and reduce the unemployment rate to 5.9 percent by the end of Mr. Romney’s first term in office.

That strikes economists as hugely ambitious. “I think it’s a stretch,” said Michael Spence, a Nobel Prize-winning economist and the author of “The Next Convergence: The Future of Economic Growth in a Multispeed World.” “Nobody knows how well we’re going to respond both on the public- and private-sector side and restore competitiveness.” Acknowledging that the plan was of course an “opening shot,” Mr. Spence, a senior fellow at the Hoover Institution, said: “Does his set of policies do it? My answer would be no.”

There are several challenges for Mr. Romney, one of which he would create on his own. By calling for a shrinking of government, he is promising to shrink the federal work force. Although the private sector dominates employment, layoffs by government at all levels have weighed heavily on the labor market during the weak recovery. Mr. Romney said he planned to reduce the federal work force by about 10 percent, which works out to about 282,000 workers at current levels.

And one thing Mr. Romney did not address at all in the plan unveiled on Tuesday was housing. The recent crisis was set off by a collapse in the housing market, and millions of owners currently owe more than their homes are worth. Despite record low interest rates, home sales are still sluggish. That’s bad news for the more than 1.1 million unemployed construction workers, not to mention the millions of others in banking, real estate, retail and home improvement whose livelihoods depend at least in part on a robust housing market. It’s hard to imagine a healthy economy without some fix for housing. Mr. Romney’s campaign officials say a plan for that is coming.

Article source: http://feeds.nytimes.com/click.phdo?i=26791e61dd36c69f8635d1ff9b749bf8

Filed Under: Economy News Tagged With: lower taxes, mitt romney, tax rates

Business Briefing | FINANCE: Bank in Kansas Becomes 64th Failure This Year

August 13, 2011 by NewsMaker Leave a Comment

Opinion »

Bloggingheads: ‘Weird’ Mitt Romney

Ryan Lizza of The New Yorker and Ramesh Ponnuru of National Review debate a possible line of attack against Mitt Romney.

Article source: http://feeds.nytimes.com/click.phdo?i=1619569772cf2e065539e1a8b9b4352e

Filed Under: Business News Tagged With: failure, mitt romney, ramesh ponnuru

Economix: The Legend of Margaret Thatcher

July 5, 2011 by NewsMaker Leave a Comment

Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul.

Former Prime Minister Margaret Thatcher of Britain, here in 2008, is venerated by many conservative Republicans in the United States.

Republicans have always admired former Prime Minister Margaret Thatcher of Britain. Her 1979 election excited them enormously; Republicans viewed it as proof that their views were on the upswing and greatly increased their confidence that Ronald Reagan would be elected president in 1980 as part of a worldwide conservative trend.

Mrs. Thatcher’s stature among the American right has only increased since she was ousted by her own party in 1990. This is especially true now. Benjy Sarlin of Talking Points Memo says Mrs. Thatcher “has always been a popular figure in Republican circles across the pond, but she seems to have taken on a new relevance in recent years for the party’s leading lights.”

Mr. Sarlin cites a blog post on Mitt Romney’s Web site that draws a parallel between economic conditions in Britain in the late 1970s and those in America today. He reports that Newt Gingrich and Rick Santorum also invoke Thatcher’s name frequently in their quest for the Republican presidential nomination. And last month, Sarah Palin publicly requested a meeting with Thatcher that fell through because of Mrs. Thatcher’s physical condition.

While Mrs. Thatcher is a towering figure in British political history, well deserving of admiration, the conservative legend about her time in power is at odds with the facts. In this legend, she was even more aggressive than Reagan in cutting taxes and the welfare state. But that is not true.

As this table shows, taxes as a share of the gross domestic product in Britain actually increased sharply during Mrs. Thatcher’s first seven years in office before falling in the later years. Even at the end, they were significantly higher than they were when she took office. Spending also rose during her first seven years before falling in Mrs. Thatcher’s later years.

Institute for Fiscal Studies

To those familiar with Mrs. Thatcher’s tax policies, these data are not surprising. Although she cut the top personal income tax rate to 60 percent from 83 percent immediately upon taking office, the basic tax rate was only reduced to 30 percent from 33 percent. And in 1980, the 25 percent lower rate of taxation was eliminated so that 30 percent became the lowest tax rate.

More importantly, Mrs. Thatcher paid for her 1979 tax cut by nearly doubling the value-added tax to 15 percent, from 8 percent. Among those who thought Mrs. Thatcher was making a dreadful mistake was the American economist Arthur Laffer. Writing in The Wall Street Journal on Aug. 20, 1979, he excoriated her for taking with the one hand while giving with the other.

“The Thatcher budget lowers tax rates where they have little economic consequence and raises tax rates where they affect economic activity directly,” he complained.

In the 1982 forward to the British edition of his American best-seller, “Wealth and Poverty,” George Gilder was also highly critical of Mrs. Thatcher for failing to cut either taxes or spending: “The net effect of the Thatcher program has been a substantial increase in taxation on virtually all taxpayers.”

Although Mrs. Thatcher privatized many British industries and businesses that had been nationalized after World War II and sold off much of Britain’s public housing, in which the bulk of the working class lived, she did little to reduce the size of the nation’s welfare state.

In particular, Mrs. Thatcher, like all the members of her party, strongly supported the National Health Service, which provides national health insurance for every Briton.

A review of long-term spending trends in Britain by the Institute for Fiscal Studies shows that Mrs. Thatcher basically flattened a trajectory that had been rising since the war. That took a lot of political effort even though her party controlled Parliament and the prime minister of Britain has far fewer constitutional constraints than an American president. But at the end of the Thatcher era, the welfare state was still intact.

As Martin Wolf, a columnist for The Financial Times, told me, “Like all great politicians, Thatcher was a pragmatist, not an ideologue, who picked her fights carefully. She recognized that any head-on attack on the welfare state would have destroyed the party’s electability.”

Mr. Wolf said Mrs. Thatcher was far more concerned about fiscal stability and deficit reduction than lower taxes, and the idea that a debt default “would have been sensible would, to her, have been insane.”

Mrs. Thatcher, like Reagan, moved her country in a conservative direction. But Mrs. Thatcher’s fiscal accomplishments were much more modest than many of today’s Republicans think.

The lesson they should learn from her is that it is very hard to shrink the size of government even when a strong leader has complete control of the legislature, that it takes many years of arduous work to do so and that at the end of the day it won’t shrink very much.

Article source: http://feeds.nytimes.com/click.phdo?i=b83f58f36d9952196e9a51b162abe40a

Filed Under: Business News Tagged With: jack kemp, mitt romney, republican presidential nomination

Boeing Labor Dispute Is Making New Factory a Political Football

July 1, 2011 by NewsMaker Leave a Comment

That is, unless the federal government takes it all away.

In a case that has enraged South Carolinians and become a cause célèbre among Republican lawmakers and presidential hopefuls, the National Labor Relations Board has accused Boeing of illegally setting up shop in South Carolina because of past strikes by the unionized workers at its main manufacturing base in the Seattle area. The board is asking a judge to order Boeing to move the Dreamliner production — and the associated jobs — to Washington State.

Companies can generally move a plant anywhere they choose, although federal law bars them from doing so if a move involves punishing employees for exercising their federally protected right to unionize or strike. On several occasions, Boeing executives mentioned past strikes as a reason for the move to South Carolina — most directly, when one told the Seattle Times that the “overriding factor” in the decision was “we can’t afford to have a work stoppage every three years.”

The unusual legal action, filed in April at the behest of Boeing’s principal union, has grown into a political conflagration, fanned by deep resentments between North and South, Democrats and Republicans, union and nonunion workers, and fans and foes of Big Government.

Republican presidential candidates have denounced the case as a symbol of President Obama’s liberal agenda because he appointed the labor board’s top officials. This week, Mitt Romney called the labor board’s case a job killer. Newt Gingrich has proposed terminating the board’s funding, and Tim Pawlenty said the case evokes “the Soviet Union circa 1970s.”

At a time of great economic anxiety, the case raises questions about the federal government’s role in promoting — or impeding — corporate investment and job creation.

Facing so much heat, Mr. Obama said on Wednesday that he did not want to discuss details of the case because the N.L.R.B. was an independent agency.

However, “as a general proposition, companies need to have the freedom to relocate,” he said. “We can’t afford to have labor and management fighting all the time, at a time when we’re competing against Germany and China and other countries that want to sell goods all around the world.”

Business and government leaders in the South argue that the labor board is undermining Boeing’s competitive advantage, and they are particularly incensed that officials seem to be favoring unionized workers and plants.

“This is a huge issue because economic development in the South has really been accelerated by the growth of nonunion plants,” said Merle Black, a political science professor at Emory University. “This case directly threatens the Southern model of economic development.”

For South Carolina, the Boeing plant means far more than just the thousands of jobs it will create directly and indirectly. Boeing is a marquee company, and state leaders hope its presence will help erase South Carolina’s lingering image as an industrial backwater.

“Boeing was a dream come true for South Carolina,” said Gov. Nikki R. Haley in an interview. “They came in and brought the hope of the American dream to this state to create real, good-quality jobs.”

Those kinds of jobs are hard to come by in the Charleston area.

“Everybody I talk to here is excited about this plant,” said one worker, Wayne Gravot. On a recent day at the plant, which is the size of 12 football fields, he and five co-workers were practicing drilling through carbon fiber — a lightweight composite material, as hard as metal, used for much of the Dreamliner’s body.

“It’s a good job, a secure job,” said Mr. Gravot, 45, an Air Force veteran and father of two. Not long ago, he was laid off from a medical devices company and he does not want to end up unemployed again.

The outcome of the case may not be certain for years, as it winds through N.L.R.B. proceedings and likely court appeals. If Boeing loses, it could be ordered to move its three-a-month Dreamliner assembly line from South Carolina to Washington State.

As Ms. Haley and South Carolina’s members of Congress see it, federal bureaucrats have no right to snatch away the state’s prize or tell a global company where to locate a factory.

Article source: http://feeds.nytimes.com/click.phdo?i=e0d8bc584f7ed6a8ce12bba5f34b2efc

Filed Under: Business News Tagged With: democrats and republicans, mitt romney, national labor relations