Class Warfare and the Presidential Race

It looks like Mitt Romney’s strong suit isn’t pubic speaking.  If you haven’t heard by now, you certainly will soon, about the video in which Mitt Romney is seen downplaying the importance of the 47% of Americans who he thinks are dependent on entitlements and will never vote for him.  The video is reminiscent of the “you didn’t build that” video and I am sure the media will portray this one however they like – just as they did with the Obama comments.

I think there’s a deeper underlying battle brewing here.  It’s a poisonous and deeply destructive form of class warfare that attempts to attribute a higher degree of importance to some people than to others.  It has been seen throughout the campaigns in the form of the “job creator” debate.  And I think both sides lack balance in these discussions.  The idea of trying to attribute more importance to the labor class over the capitalist class (or however you want to describe the different classes) skews the balance and tends to result in extremist views where one side claims the “job creators” are more important than anyone else and therefore deserve the policy focus (or vice versa).  The result of this sort of ideology is misguided policy.

The reality is that consumers and producers are two sides of the same coin.  They do not live independently of one another.  And they do not survive without one another’s help.  In these debates we have to better understand the balance here and the important interconnectedness of this economic relationship.  These are two sides of the same coin and most people are intent on trying to prove how one side of the coin is more valuable than the other side.  I won’t regurgitate the conversation from a few weeks ago about the “real job creators” (see here), but where’s the balance in politics these days?   Oh, right.  centrists like myself are part of the “cult of balance” and we‘re destroying the country.  If you’re not an extremist on one side I guess you’re not contributing to the ideological discussions.  And after all, who needs balance when extremism is doing such a fine job destroying this great nation?

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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • anonymous

    Mr. Roche, what Mitt cited is THE TRUTH. They are facts. He is a businessman, what do you expect ?

    I will take this any day over “you didn’t build that” demagoguery.

    Whats the worst Mitt will do ? cut entitlements ?? That would hurt lot of people, but unfortunately its necessary as its unsustainable.

    Whats the worst current POTUS will do in future ? more .gov laws and programs ? bigger government ???

    They are both bad in their own ways. Being a trader, you have to pick the best of those worse choices, unfortunately.

  • Malmo

    Unless Obama is found naked with animals Romney is finished. It’s over.

  • Andrew P

    Romney didn’t say anything that wasn’t true. Those 47% are not going to vote for him or his party under any circumstances whatsoever. He is 100% correct about that.

  • Mike Bell

    I agree that class warfare is terrible. But how can you ignore that Obama has from the very first days in office used that tactic to garner support? He has pitted on class against another repeatedly. It’s a constant theme of the left (“tax cuts for the rich”).

    The media will blow this way out of proportion as they are so in the tank for Obama it’s nuts. Regardless, I still think it was a really dumb thing for Romney to say because obviously there are plenty of people on the right who are dependent on govt programs, and plenty of people who vote Dem who are doing just fine.

    This is Romney’s “bitter clingers” moment. lol.

  • jaymaster

    To raise money and gain votes in primaries, politicians must pander.

    None of this from either side surprises me.

  • Mike Bell

    “it’s over”. I keep reading this all over the internet (from the left, of course). It started with Bill Clinton’s speech at the convention. Since then, every time anything happens that the media can paint as bad for Romney, the shouts of “it’s over” come from the left. Pretty funny.

    There are still 6 weeks to go. The fair polls have it as being still very tight. I think Obama will win because of the electoral college. Very hard for Romney to win looking at the electoral college map.

    But I find this constant narrative “Romney farted – it’s over!” hard to take seriously.

    Hey, 4 Americans were killed in Libya and the whole ME lit up. Obama’s FP is in ruins. Notice nobody is saying “it’s over” for Obama? Yet, Romney’s STATEMENT about what the Egyptian embassy released, is somehow bigger news than Obama’s FP? Seriously?

  • CuriousLurker

    It is also poisonous and destructive when a “middle income” family pays 20% or more income tax and an “upper income” family making millions pays 13%. What a crazy country this is.

  • Cowpoke

    Good, now that we can openly discuss political ideologies on the prag cap, I am even more thankful of this site.

    However, I just wanna caution Cullen who is a bright lad that crossing the political Rubicon has immense implications on your sys admin here at prag cap because it will decrease your sleep time.. LOL

    The Irony here is that in reality, you CAN’T separate the two indefinatly. If you support one party, you have to support it’s whole policies, otherwise you should state why you do not support certain parts and explain why such and such policy will not work.

  • Old Dog

    Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other. – Oscar Ameringer

  • Cowpoke

    And by supporting the party policy, I mean how does each policy best support our political issues?
    In My Opinion, Obama has nothing to alleviate my pain from my households balance sheet suffering. Yes, he signed on to a mere 2% tax rate cut on it but it don’t really help. I need 15-20% shock investment to make me whole… Then I will be in favor of big ov on this One ISSUE

  • Old Dog

    And none of it really matters – there are no intelligent people running for any office in the US.

  • http://breedinginstability.com Mountaineer

    Yes.

  • Andrew P

    This race is a hard slog that will be won on turnout. Obama has every group that voted for him in 2008 except the youth, since he only gave them perpetual unemployment. And in compensation, he expanded the SSI Disability rolls by 400% – thus there are 10 million new Obama voters who will vote for him to protect their benefits. Romney has everyone who dislikes Obama for any reason, but virtually no one (except Mormons and Plutocrats) is actually FOR Romney. The RCP average of job approval has Obama fluctuating around the 47% line for years now, and recently the undecideds have come home and he is up to 49%.

    http://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html

    Incumbent Presidents generally pull a vote near their job approval, and from this it looks like Obama is going to win. Especially since Obama is up by so much in Ohio.

  • William Bedloe

    I think terms such as “centrist” and “balance” are poor choices to describe what many feel is the alternative to the right/left divide. It brings to mind the fallacy of the “middle ground”; if A and B are extreme positions, and C rests in between A and B, then C is the correct position. The reality is that life in America has become a complex proposition, and many seek comfort in belief systems that are easily defined – call it the “Twitter” phenomenon – an expression of one’s ideals in concise, easy to remember talking points. The victim in all of this is the truth. The goal for us should not be to seek balance, but the truth. This should be a tireless effort, for as life becomes more complex, the truth becomes harder to discern.

  • SS

    the truth usually lies in the middle.

  • http://www.pragcap.com Cullen Roche

    There’s a certain lack of tact in his comments that is disturbing. It’s not unlike the Obama comments about “you didn’t build that” although I would argue that this comes off sounding worse. To me, it just highlights the fact that Romney is not very balanced in his views. Not that Obama is any better, but we’re not talking about Obama here. The conclusion for me is, we’ve got two sub-optimal choices here. And the most important thing to me, is the fact that both men seem incapable of understanding how the monetary system works and therefore what policies should be implemented, because they’re blinded by their ideologies.

  • JK

    Cullen,

    To be fair… don’t you think your comparison of Obama’s “you didn’t build that” is a false equivalency? It’s clear that in the Obama speech he was referring to the roads, bridges, etc… making a common sense point that should be obvious to everyone: all of our successes are built on previous achievements and with the help of things that other people, including the federal government, provided in on way or another.

    What did the Republicans do? They went on a media blitz claiming Obama was saying that business owners didn’t build their business. The Republican response was outright distortion, lies, misrepresentation.

    This Romney clip, where he says that 47% of Americans are dependent on the federal government, its very clear what Romney was saying. The only wiggle-room here is “Well, he didn’t mean that literally” BUT.. he said it!… and doubled down on it with the comment “they don’t pay income taxes.” This is very different than Obama’s comment.

    Do you really think these situations are comparable?

    I’d like to add this to the debate: making false equivalencies where they are not appropriate is harmful to the dialogue. Cullen usually you seem to be after truth. I’m surprised you’re making this false equivalency.

  • hangemhi

    “it is a constant theme for the left (‘tax cuts for the rich’)” LOL, so when the Left points out that the GOP runs on getting rid of “death taxes” when the first $1M had been free, and now it is $5M free and yet only 2% of Americans even get $200,000 – they’re starting the class war???? How about the “flat tax” where lower incomes actually get a tax increase, and higher incomes get a MASSIVE MASSIVE MASSIVE tax cut? How about when they scream about the horrible deficit, while demanding that the bloated military budget be increased, and the way to pay for it is to cut entitlements?

    I mean you can’t be serious. You’re using the “he who smelt it dealt it” tactic. You “think” the left started class warfare, and ignore the obvious.

  • http://www.pragcap.com Cullen Roche

    Maybe I am being hypersensitive about the Obama comments because I am literally in the process of building a business. So it’s kind of a unique situation and an unusual one compared to Romney insulting half the country.

    Let me explain my view – I can tell you that it’s my capital that’s at risk. It’s my vision. My hard work. My time and sweat that’s going into stupid things like spending 6 hours getting the phones sorted out last Friday. These are the little things that business owners don’t get credit for that actually make up the majority of the effort. I’ve dealt with an extraordinary amount of tedious nonsense in recent months that no one except for me will ever know I worked on. We’re not just collecting profits and laughing at workers. Many of us are knee deep in BS every day working our asses off to try to offer something to society that is beneficial. So when Obama says something like:

    “It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there.”

    I totally get what Obama meant, but it still sounds to me like he’s downplaying the role of producers in the economy. Because you know what? My business exists because I am working a lot harder than other people. I barely sleep. I work tirelessly with a relentlessness that frightens some of the people I know. I cherish every moment I work and I fully accept the path I’ve chosen as an entrepreneur. I am the last one to complain about it or ask for anyone to feel bad for me at any point. But my business will succeed or die based on how much effort I am willing to put into it and if my business fails I will be out 100% of the time and capital I put into it. The govt won’t lose anything. No one who existed before me will lose anything. I am the business owner taking the capital risk and spending countless hours fiddling with little things that most people will never think I had to deal with. I accept all of it. I am loving the process of building a business. But don’t tell me that I will succeed or fail due to sheer luck or due to something that someone else built before me. Trust me, of all people, I know and appreciate all those who came before me. But this is me taking the business risk in the here and now. So when people downplay that I think entrepreneurs around the world get pissed off at some politician who has never been through the process and thinks he knows something about it.

    So yes, I do think it’s comparable. Things is, there are a lot fewer people like me to piss off than the millions Romney insulted. So the Romney comments, in my opinion, are worse. But that doesn’t mean Obama’s comments were just misconstrued and taken entirely out of context….It’s just that most people don’t relate to what he said or see why people like me might get annoyed by the comments.

  • hangemhi

    Really? I guarantee you half of the “47%” are Republicans. Not earning enough to pay federal taxes isn’t a democratic thing. Did only democrats get laid off in the recession? Are retirees only democrats? I’m sure students, who don’t pay taxes, might lean left more than right, but they are hardly 100% Dem.

    So I see zero truth in what Romney said. The actual people who he described is a very, very small segment of the population. Poor, under educated, born to zero advantage. The real “entitled” crowd are the Romney’s of the world who was given “welfare” and free education by his father, and doesn’t realize the irony of his rhetoric.

  • anonymous

    “you didn’t build that” was worse actually. It is a deliberate demagoguery, as opposed to this.

    just to be fair, we should probably wait for full context of mitt’s remarks. He asked mother jones to release full audio.

    I think he was speaking in a election punditry context..the hard facts their campaign has to consider/fight for.

    though you cant deny there is truth in his points.

  • hangemhi

    The Romney comment is worse because it isn’t ambigous. He stated it, re-stated it, clarified it, and doubled down on it again. There was no need to take a sentence out of context.

    Meanwhile, you had to interpret Obama’s comment to mean all those things to you. My interpretation is that Obama was referring to the single working mother, or the father who works 2 or 3 so his wife can stay home with the kids. You may think you’re working harder than they are, but how can you when you both max out at 24 hours a day? And I bet you take vacations/time off that they don’t/can’t. But hey, you’re working harder than me… I spent WAAAAY too much time reading pragcap. Funny though because I’m in Romney’s 53%…. not a loser like the single mom or 2 job Dad

  • hangemhi

    the full remarks are out – go to youtube and look up MotherJones. They have the same event split up into a bunch of videos. And frankly, it doesn’t sound like you even listened to the one video since there is no need to interpret what Romney said. And I doubt you listened to the Obama speech either if you are cherry picking “you didn’t build that” which is CLEARLY taken out of context. Romney left ZERO to interpretation. He clarified it and repeated in several times.

    And did you catch what Romney said about his remarks today? He said “I could have stated it better” and “I’m sure I’ll point that out as time goes on”. OH MY GOD – like his taxes. I’m sure he’ll get around to figuring out how to deal with the fact that he thinks 47% of Americans just want the gov to take care of them. Good god

  • Anon

    With all due respect, why are drawing a parallel to the “you didn’t build that” propaganda theme, which is based on an outright lie?

    Your false comparison is exactly what people have in mind when they criticise false centrism.

    You may be hard working – and so are millions of hard working non-businessman Americans. You might be anxious about your business’s success – they are anxious about whether they can keep their jobs and their children can get proper education.

    I don’t think you have an idea what real existential fear feels like. Think of your worst trade ever, on which you lost hundreds of thousands of dollars. Apply that feeling to a period of many, many years near the bottom of society – no meals at fancy restaurants, no nice car, no smartphone and unlimited data plan wherever you go. There are capable, talented people out there living such a life, because they choose the wrong parents, the wrong job, the wrong city.

  • http://www.pragcap.com Cullen Roche

    Well, now you’re taking my comments a bit out of context. I didn’t say I work harder than everyone on the planet. My mom raised 8 of us and worked full-time. There is no way in hell I could ever work harder than she did. But a lot of us do work harder than other people. That’s just the way it is. Some people choose to work a lot and work really hard. Others don’t or can’t. My point is, don’t tell me my hard work and any success that might result from it is pure luck of the draw because there are “lots of people” who work hard. Capitalism isn’t a poker game where one guy wins and he then sits around laughing at how he beat everyone else. Lots of people win. And the ones who work the hardest tend to have the best luck at the tables.

    But yes, I agree with the rest of what you said. Romney’s comments are worse solely due to the fact that he was insensitive to a lot more people than Obama was….

  • anonymous

    yeah we humans are limited by 24 hours; but we have to consider the karma before you can compare apple-apple. Did those single mom or 2jobDad work harder in their younger years to get good education and good paying jobs ??

    I am not taking away their current hard work, but you cant say both cullen and a burger flipper working 2 jobs are comparable. They both had equal opportunity in this country. (except if they are born poor, but even then you could easily get student loans and literally no limitations for your growth compared to third world countries)

  • Very Serious Sam

    “It looks like Mitt Romney’s strong suit isn’t pubic speaking”

    What exactly is ‘pubic speaking’? :)

  • http://www.pragcap.com Cullen Roche

    That’s when you open your mouth and everything that comes out looks like something that might come from your nether region.

    I should amend that to add: It looks like Cullen Roche’s strong suit isn’t typing. :-)

  • anonymous

    i am not denying or re-interpreting romney’s words. Nobody is. Even he himself doesn’t deny it. :) . Its just the truth, hard core facts. Unfortunately.

    Consider the fact that he is a politician. I would prefer a pol who gaffe’s like this, than a smooth operator always demagoguering.

    bottom line…do you like small .gov or big .gov…relatively speaking (none of those two candidates are perfect). Pick one. All this side shows doesn’t matter really.

  • hangemhi

    Pointing out extremism in GOP rhetoric doesn’t make you an extremist. Every time someone says “Obama is a socialist” I ask them for JUST ONE example. They all point to automatic stablizers. At least in this crowd I don’t think I have to explain what that means, and why it isn’t Obama “wanting to put people on welfare and food stamps to get their vote”. Romney’s remarks are outrageous, and not even remotely comparable to a populist message about how “we’re all in this together” and “it takes a village”. Sorry, but there is simply no comparison btwn the extremism on the Right, and the Left. The imaginary Obama in Clint’s chair doesn’t actually exist. If he did, then I’d agree he was extreme. Most anger from the right is at the Obama myth the GOP has created. One “you didn’t build that” comment taken out of context changes the entire meaning of the speech in their eyes. There is no need to take anything out of context in Romney’s speech – it is clear as day. And it is extreme.

  • http://www.pragcap.com Cullen Roche

    You’re using extreme examples to prove your extreme point. You’re doing the exact thing that the politicians are both doing. And it’s intentionally misconstruing the point to mislead others into believing your view. Yes, many people don’t have jobs or cars or phones. But you know what? Most Americans have a standard of living that is infinitely higher than most other human beings. 92% of Americans have a job. 90% of Americans own cell phones. I know there are millions of people out there who don’t have jobs or are suffering to get by. I’m not some jerk in a tower sipping champagne every night laughing at the plight of the lower class. I’ve argued as loud and hard as anyone for more aid for the lower and middle class. But what you’re doing is taking a small minority of the public to misconstrue a point so you can rationalize an extreme view of the world.

  • JK

    I don’t think the comments are comparable… and it’s all about context. My interpretation of the context is that he’s dispelling the Robin Crusoe myth. This is totally different than disparaging half the electorate as dependents. But… I see your point. Obama could definitely spend more time highlighting the sacrifices that entrepreneurs make during the process of innovation.

    On pure politics, you’ve got to give him some slack though. In this kind of economy, with high unemployment, it’s politically stupid to spend too much time highlighting the importance of entrepreneurs. Millions of struggling americans, many of which are “collateral damage” in this recession, want to hear what is going to help them, not what is going to help already successful people.

    I guess my feeling is this: in the past few decades public policy has increasingly favored wealthier americans and capital gains, while labor and wages have been hit hard. It seems like any time there is pushback from labor, its called class warfare… and wealthier americans complain that their scarifices are not being appreciated. Meanwhile, labor has been getting the screws for decades while those who earn capital gains have seen their economic situation improve (relative to each other).

    You’re probably being a bit oversensitive to his comments. Now, if he starts signing into law regulations that make your life difficult, then you’ve got honest room to complain (in my opinion). That’s actual substance worth complaining about, and rightfully so. Until then, I’d say allow the the President to do some verbal bidding for Labor and middle/lower income Americans. After all, the better they are doing… the more disposable income they have, the more they have to spend on what entreprenaurs want to create and sell. Remember the seed/soil/water and sun analogy I made the other day? The entreprenaurial seeds can’t properly blossom without a vibrant and growing middle class.

  • Pod

    Romney is a terrible candidate. His instincts are all wrong, and that results in comments like “47% are government dependants and will never vote for me”.

    Ronald Reagan would have said something to the effect: “47% of Americans find themselves dependant on government because of the poor economy, which is failing under President Obama’s ‘socialist’ policies of taxation, redistribution and regulation. Those 47% of Americans can do better, want to do better, and will do better when we are elected”.

    Mitt Romney is the antithesis of Ronald Reagan. I don’t mean for this post to generate a debate about Ronald Reagan and his policies. But Reagan was an extraordinary politician and communicator – probably one of the top-ten in “recorded” history, i.e. those for whom we have “tape”. Mitt Romney is simply an awful communicator, and seemingly devoid of guiding principles and convictions, i.e. he does not know what he wants to communicate.

  • http://www.pragcap.com Cullen Roche

    “signing into law regulations that make your life difficult”

    Sorry to be blunt, but regulations have made the last 2 months of my life a living hell. I’ll be frank. Starting a business in this country is incredibly hard because of the absurd amount of red tape. Granted, I am in financial services so that’s that and I understand it, but if I didn’t know any better I’d have thought they were trying to stop people from starting businesses. I mean, once the lawyers have all met with all the regulators who have shuffled paperwork between state workers you’re left holding a piece of paper that says XYZ, LLC and bills out the wazoo. I’m not complaining and I certainly don’t expect anyone to feel bad for me or anything. But you can’t talk about it unless you’ve been through it. It’s a pain staking and very expensive process (both in terms of time and money). In fact, the govt makes it pretty hard to “build that”. And I’m not just regurgitating conservative talking points. I am giving you a real-time update of what I have recently been through.

    But yes, I totally agree that Obama is right to focus on the lower/middle class. I don’t need the govt’s help. I am not asking for it. But that doesn’t mean I want the govt telling me I am the result of sheer luck and not my own hard work (at least to a large degree)….Obviously, it’s complex and I’ve benefited from lots of people who came before me. I’m just highlighting why I think Obama’s comments were somewhat insensitive.

  • JK

    On the point of regulation:

    Unfortunately the concept of Regulation gets bundled so that all regulations are seen as bad. I don’t know how it’s possible to shift the debate, but there is certainly a difference between making sure there aren’t harmful toxins in our paint or water, and what you have to deal with… complex and unnecessary bureaucracy. It’d be great if there was a way to untangle Regulation in such a way that we could move toward eliminating the BS that people who are trying to start a business have to deal with, and at the same time not let beneficial regulations that have to deal with public good and safety fall apart.

  • DJ

    So, now we are worried about class warfare. It seems to me that people worry too much these days, and about the wrong things. Incidentally, I watched the Philadelphia story this weekend (yeah, the one with Kate Hepburn in it) and I was reading up on screwball comedies. Most of them have a plot line of someone marrying someone else from a lower class. Apparently, the genre initially evolved out of the need to discuss class matters after the Great Depression, when inequality widened. A comedy situation was an easier framework to take up class matters. Anyway, people will do what they will need to do. The only thing to focus on are education, health and foreign (energy) policy, and for the long term. The govt shouldn’t go about instigating or dousing class warfare issues. They will resolve themselves, and if they won’t, we’ll have to live with them, and it won’t be so bad as long as we take care of education and health.

  • http://rodgermmitchell.wordpress.com/2010/04/06/more-thoughts-on-inflation Jason H

    Deficit hawks that ignroantly say, “Entitlements are unsustainable” & “have to be cut” are totally clueless of MR & MMT because for the US, Japan, Singapore, & other nations that control their own currency instead of EURO-using nations, their deficit spending actually SHOULD INCREASE, including ‘entitlements’ THAT ARE SUSTAINABLE FOREVER as long as their production stays up too.

    Just read the MR or MMT papers & evidence

    BOTH the Romney & Obama nuts are making the same ‘deficit-hawk’ mistakes & stupidity

  • Anonymous

    Well, here is a link to the draft of the principles of the Party of European Socialists…you tell me if these do not sound like Obama’s principles: http://www.pes.eu/sites/www.pes.org/files/draft_declaration_of_principles.pdf

  • Stephen

    “And I think both sides lack balance in these discussions”

    They are not looking for “balance”.The idea is to make messages very simplistic so that they are easy to understand by the group they are aiming the message at.”Balance” requires arguments that display shades of grey,pros and cons etc etc all too much room for error between politician and voter re the policy stance being signalled.

  • But What Do I Know?

    Amen, hangmehi. And let’s not forget that the “47% who don’t pay taxes” pay a great deal of FICA and Medicare.

  • krb

    Best comment I’ve read in this string, thanks.

    A statement of fact in public is now too offensive and politically costly. This unfortunately is the state of our politics, and why we can’t get anywhere in solving our problems. Everyone’s knee jerk reaction to both Obama and Romney comments is directly linked to whether they leaned republican or democrat beforehand. We can’t begin to address our problems if we filter everything through a democrat or republican lens…..our problems are not democrat or republican….they are both polluted…..we need REFORM policies in a variety of industries out of our govt at this time in history. I’ve often wondered how often there are effective reform solutions proposed inside an obscure office in Washington DC, but because they were proposed by a member of the other party 50% of DC couldn’t go along…….as a result, 100% of what passes for “solutions” are that in name only…….Dodd Frank to reform wall street, Obamacare to reform healthcare…….laughable. DC has mastered the skill of sustaining the status quo through perception management….and it works because people like us can’t get beyond our own electoral biases. krb

  • krb

    Good comments, I agree.

  • http://pragcap Michael Schofield

    The quality of the comments proves your point Cullen. Too many idealouges. Too few who can see both sides.

  • Vikram Bandit

    Very well said sir. The 1% has waged war on the lower classes for the last 35 years. Wealth inequality is a serious problem and with it comes more social problems and eventually revolution. And I’m afraid at this point a revolution seems inevitable unless some change their thinking.

  • Vikram Bandit

    Right again. I agree the problem is extremism, but the truth isn’t in the middle. All the extremism is from the right wing.

  • ES71

    Ah, I love the smell of class warfare in the morning. I made a discovery today – I am rich. Always has been , it turns out.
    As somebody already pointed out, only top 2% get 200K PER HOUSEHOLD, that is 100K per person working.
    While the middle class in America is defined as 35k-70K income per household.
    It is funny to me that when I first cam from collapsed USSR to work here I was making 70k from the start. It turns out I was never a middle class I beleived myself to be. An irony of that is pretty funny. I belonged to the “worker” class in the USSR but in USA I am “rich”.
    I am feeling like an Alice in Wonderland, frankly. Where I am from , the rich are people who are independetly wealth, i.e. you could quit your work and live on your welath if you wanted to because they actually own “means of production” (to put it in communist terms). Most people with 70K income cannot do that. There is something very wrong in US with the defintion of the middle class, that is for sure.

  • ES71

    Basically, Roeny is a businessman not a poltician. A good poltician is a smooth talker attuned to the audience mood. There is no way around that in politics. You have to please 20 different groups at the same time. Each has to hear what they want to hear and everyone hears different things. It is a skill to talk for hours and not say anything.

  • EconFan

    I too was puzzled by CR’s readiness to accept Republican propaganda about Obama’s sentence instead of spending a minute to look at the context from which that sentence was extracted.
    But Romney’s assertion here is very clear; extending his logic, anyone who reduces their taxes by making use of their deductions and credits is a grifter. By that standard he and many of the corporate persons (e.g. GE) would be alpha grifters.

  • Malmo

    Romney is using similar verbiage found in the Randite rantings. He comes off as an elitist, who is completely out of touch with the real world living conditions of a large portion of the electorate. His generalizations of this 47% really defies political logic. Hell, half these folks are likely swing or Republican voters. In a tight election a gaffe of this magnitude is surely political suicide. Like I said above, from a purely political standpoint this event will follow and hound him all the way to November. In my view, barring any crazy stuff out of Obama, Romney should pack it up and head to one of his European villas. For all intents and purposes this election is over for him. What a clueless idiot this man is.

  • http://timsopinionblog.blogspot.com/ Tim

    This is why I’m glad Cullen generally avoids partisan politics here. It’s obviously unavoidable at times due to overlap between politics, economics, business, and monetary policy. It doesn’t matter which was worse between Romney’s 47% comment or Obama’s, “You didn’t build that,” comment because both were terrible. What it shows us is that both of these candidates, on an absolute basis, simply don’t get it in these matters. One may outperform the other slightly on a relative basis, but absolute performance matters.

  • Malmo

    The comments are not comparable. Romney literally dismissed 47% of the electorate. Obama did not such thing. That doesn’t mean Obama didn’t hurt himself with his comments, but they did not rise even remotely to the level of Romney’s. From a purely political standpoint, Romney’s gaffe will go down in history as likely the greatest foot in the mouth moment of all time in a presidential race this far along.

  • DR

    Labor and capital are always at each others throat when the pie is shrinking..

  • tom

    Whether you vote D or R, the question is does anyone truly believe that the policies of Obama/Bernanke have been or are going to be positive for this country? I surely couldn’t make a convincing argument for their case even if I was being paid to come up with one. And very likely, the 47% that Romney referred to will be the biggest losers in a 2nd Obama term. Oh the irony.

  • JK

    A statement of fact? Which statement… that 47% of Americans don’t pay income taxes? Supposing that number is correct, which I haven’t looked up, wouldn’t it be more FACTUAL to say federal income taxes? Do those same people pay state income taxes? Isn’t his ‘statement of fact’ a bit misleading, and therefore derogatory, for leaving out the word federal?

    Meanwhile, isn’t Obama’s statement the actual factual statement…. that no one person “built” all the infrastructure and the education of the workforce to provide the conditions for which all current entreprenaurs find themselves in?

    Obama made a grammatical mistake (saying ‘you didn’t build THAT’ when he meant to say ‘you didn’t build THOSE’), whereas Romney made a barely factual comment that disparages nearly half the electorate. Further, as a commenter above noted, if not paying federal taxes is so terrible… what does that say about the Republican platform year after year.. Cut Taxes? What does that say about corporations that have loopholes that allow some of them to effectivelypay no income taxes?

    The Doublespeak among commenters here is interesting.

  • PedroCPAGuy

    Why do people get so hung up on the individual, and inane, comments of Obama and Romney. After all, each is a mere human being, and none of us are immune to an occasional misplaced remark. One comment does no define the true essence of a human being.

    Far better to focus on what really counts.

    The Federal government’s main responsibilities are to protect and defend the Constitution (defense), address and manage sound relationships with other sovereign states (foreign policy), establish conditions that allow citizens to pursue their individual affairs (business and personal) founded upon free and equal opportunity (regulation), and to raise funding necessary to accomplish those ends.

    The products of substantial governmental growth relative to population growth have proven o be (1) less efficient conduct of defense efforts, (2) more complex and convoluted management of foreign policy, (3) greater limitations on the ability of individuals to freely conducted their affairs unimpeded by government regulation, and (4) a need for ever increasing levels of funding via taxation, debt, or inflation.

    It seems to this old beancounter that what people should be focusing on is which candidate has the ability to best manage and/or control the size of government, regardless of the occasional slip of the tongue.

    Vote wisely and vote often, good people. :)

  • okl

    i think your best point is that everyone is both a producer and consumer; arguments like this are political and only serves to distract on the important things- like the title of this website suggests; pragmatism. to me, that means what works best for everyone- give and take a little… heck maybe even put aside the disagreements to focus on the points of agreement and work from there.

    it’s just not healthy and quite silly to be honest… keep stirring the political soup and things can get ugly. do we really need more strikes? do we really want more crazy elites messing up the economy?

    imho focus on what the problem is and solve it, leave the politicking to the politicians.

  • okl

    and kudos to your mom, Mr. Cullen.

    8 kids… really… *sweat*

  • http://timsopinionblog.blogspot.com/ Tim

    As demonstrations of economic ignorance by political candidates and contempt for the American people, they most certainly are comparable. Both comments are clear proof that neither has a clue and neither thinks very highly of the American people.

    From a strictly political perspective, neither comment really matters in the grand scheme of things. These generally have a very short life in the media due to their short attention spans and general case of selective memory. Realistically speaking, a negligibly small number of voters would be persuaded to change their vote (or non-vote) because of either comment.

  • Windchaser

    The polls may show the popular vote as very tight, but Obama’s got a big lead in the important swing states right now.

    Check out the two polls that Barry R. discusses here:
    http://www.ritholtz.com/blog/2012/09/political-polls-data-analysis-and-outliers-discuss/

    The first is a composite of all the other polls, while the latter has been the most accurate at predicting the last few elections, and puts the electoral college counts right now at:

    Obama: 306
    Romney: 232

    Ouch.

  • Dismayed

    Lies, damn lies, and statistics.

    So let’s talk about Romney’s “truth”. First off, over 60% of the 47% pay federal payroll taxes (not to mention sales taxes). That leaves 18% of households that pay neither federal income taxes nor payroll taxes. And guess what? About 50% of those households are senior citizens. So what does Romney want to do? Tax those blood sucking leaches?

    I’d love to pay as much in taxes as Romney pays (for now I’ll have to take comfort in the fact that I pay at a higher effective rate).

    Hey, I’m from Massachusetts and there’s no way that I’d ever vote for Romney. His lurch to the right is disturbing.

  • Windchaser

    Well, it surprises me just how impolitic Romney is. It’s sad that this is considered to be the best the Republicans have to offer. =\

  • Matt

    You’re way over-thinking this. The point is simple: you would not start up this business in Rwanda. The U.S. legal system, infrastructure, etc. are all necessary for you to build your business. Obama’s point is that you should recognize the advantages that exist in the U.S. that are dependent on government spending and thus, taxation.

  • krb

    I rest my case.

  • Paul Milenkovic

    Mitt Romney may lose the election about his remarks regarding the 47%.

    But will win the election for him is the ‘tude shown by some on the Left. Remarks like “propaganda”, “lie”, and “distortion.”

    Similar to the ‘tude shown on the Right with remarks about “looters”, “parasites”, and “moochers”, the “propaganda”, “lie”, and “distortion” remarks aren’t winning and friends and influencing people either.

    And I think that was the gist of Rand’s original remark.

  • http://www.pragcap.com Cullen Roche

    Anyone who starts a business recognizes that they’re standing on the shoulders of a lot of other people. No one built the world or society on their own. I get that. But what some people don’t seem to appreciate or understand is the fact that when an entrepreneur invests their time and capital into a venture they really are taking a huge risk that entails inordinate detail, arduous work, and tons of time and planning. If the vision isn’t seen as valuable to the rest of society then the business fails. And who loses? Not society. Not the govt. Not the people who built the roads and the phones and the internet. THE ENTREPRENEUR LOSES. He/she loses 100% of his investment and time. His/her workers just lose jobs. They don’t lose equity or all the pain staking hours that went into building the business. So yes, there’s an enormous element of skill, ambition, vision and execution that goes into building a business. It’s not just pure luck of the draw and the hard work that goes into building it shouldn’t be downplayed by lifelong politicians who proclaim “lots of people work hard”. It’s not just pure luck of the draw or where you live. But most people have never started a business so they don’t know the mundane details that go into running one. So they’re quick to agree with Obama’s comments and say he was being taken out of context. I don’t think so.

    And if I lived in Rwanda I’d most likely be trying to add value to society in some other less advanced entrepreneurial fashion.

  • http://onlypricesmatter.wordpress.com/ B Ferro

    GIVE ME A BREAK…

    How quickly we forget!!

    Does nobody remember Obama’s comments from a 2008 fundraiser whereby he described rustbelt folk like me who grew up in a small town as…

    “bitter religion and gun clingers”

    Romney spoke truth to power and now all of a suddent it’s class warfare.

    What he said is true!

    What Obama said in 2008 was a critique of a value structure he disagreed with – opinion – and FAR, FAR more incendiary.

  • http://onlypricesmatter.wordpress.com/ B Ferro

    GIVE ME A BREAK…

    How quickly we forget!!

    Does nobody remember Obama’s comments from a 2008 fundraiser whereby he described rustbelt folk like me who grew up in a small town as…

    “bitter religion and gun clingers”

    Romney spoke truth to power and now all of a sudden it’s class warfare.

    What he said is true!

    What Obama said in 2008 was a critique of a value structure he disagreed with – opinion – and FAR, FAR more incendiary.

  • freemarketeer

    Let’s not pretend this battle is anything new. In a developing country, the focus is upward mobility from the lower class. When the middle class is established, the focus is on maintaining the middle class. This can be at the detriment of the lower class (see the Thai protests between the red shirts and yellow shirts).

    What we are discussing in the U.S. is upward mobility of the upper class. That’s ludicrous. Extreme inequality does not bode well for a society. The fact that there is even a debate makes me sad for humanity (not that I’m a nihilist, I just don’t understand how no one is pointing out reality).

  • krb

    Thanks for making my point……re-read my comment….I didn’t reference either candidate when saying how disappointing it is that a candidate can’t state factual information anymore……and both candidates do it, and followers of both sides make the opponent pay a price for simply stating facts……global warming, unsustainability of worker recipient ratios in SS, unsustainability of medicare, unsustainability of defense outlays, etcetc…sacred cows from both the left and right.

    You dove into your rant on an assumption YOUR candidate was being slighted. Cullen clearly chose a good topic…..reaction has been vicious, and there’s been as much pollution in the comments as any political campaign stop or advertisement. My son is at that age where he wants to fight every battle, he is college age and said he had an interest in pursing politics…..to which I answered, he’d no longer be welcome home for holidays! I was kidding of course, but barely. We need problem solvers…..politicians and political cheerleaders are part of the problem, not the solution. krb

  • William Bedloe

    “The truth usually lies in the middle” That is a common logical fallacy

  • JK

    krb,

    My mistake.. I replied to you. I meant to reply to the anonymous that you were responding to. I stand by my comment.

  • JK

    by the way krb, while I do prefer Obama… I’m not enthusiatic about it.

    of course both parties engage in distortion and lies, but the crticicism here is specific: I don’t see an equivalency between Obama’s “you didn’t build that” comment and this recent Romney comment on 47%.

    If you want to chalk it up to “both parties can’t be factual” …that’s fine, but it’s uninteresting. It’s like sayng why’s the sky blue? And answering, “because it is”

  • Greg

    See both sides? Or agree that both sides have some things right?

    I can “see” both sides. I understand very well the arguments form the Romneys of the world. I just see them as wrong.

    We have been a successfully mixed economy for decades. We have usually used our govt to make large investments in things, develop them and then spin them off for private sector distribution. The govt investments have made a lot of people very rich and have pretty much given us everything related to nuclear power, most everything related to high tech communications and they have made unbelievably large investments which have benefitted and made profits for millions of people with dams for power and irrigation of farmlands. Our road system was directly responsible for making the trucking industry as profitable as it is. Our postal service and mail order commerce have profited many merchants.

    Where we have gone badly wrong is adopting this absolutely ignorant paradigm where we look at the govt with the same balance sheet analysis that we do of say IBM. This modern right wing obsession with using the profit making paradigm to assess the efficacy of our govt has led us way off track. We used to understand the relationship between a govt and its investments and how a smart private sector would profit from it.

    Almost all of Cullens dangerous myths revolve around this flawed notion of govt. We have to end this so we can get back to an America old in a new way.

  • Greg

    America “of” old in a new way.

  • Malmo

    In a tight election as this one is shaping up to be a gaffe of this magnitude will have enormous ramifications on the outcome. I’ve been active politically since Nixon in 68. I can think of only a few rivals six weeks out from a general election to the stupidity that came out of Romney’s mouth. Dumb, dumb, dumb….

  • krb

    They are absolutely equivalent. They are both facts, when considered in the context the speaker meant them…..and one segment of the electorate is offended by one, and vice versa. The fact you view them as NOT equivalent is only a product of your own bias……a conservative could quite easily argue the opposite “equivalency” viewpoint from yours…..and you’d both cite “facts”. Which is my point……we can’t hear words from politicians and evaluate them at face value….we’re always dissing the messenger, when in reality our dissing reflects more poorly on us than on who we’re trying to diss. By playing in the mud with each other like we all do, we’re only enabling these rubes to sustain the status quo.

    Seriously, do you think if we enacted 100% of the liberal agenda, all our problems would be resolved? You know better, if you’re honest. And the same holds true when the question is posed to a conservative. Both parties would throw 50% of the population right over the cliff if they were able. We seriously need reform all over the place, and like most things in life, the real solutions will be found somewhere in the middle. krb

  • krb

    Welcome to the US ES71! And great lines…….”Ah, I love the smell of class warfare in the morning. I made a discovery today – I am rich.” Made my day, thx! :) krb

  • http://timsopinionblog.blogspot.com/ Tim

    Here’s why, on a more specific level versus my general view of verbal gaffes, I don’t view this one as a big deal in the end. Basically, I view it as largely a draw that will merely entrench voters in both camps, but not really draw anybody new into either camp. I just see a quick boost to both bases, and little more. There are two key questions to address. The first is timing and the second is the GOP reaction.

    Romney didn’t actually say this six weeks out. We’re hearing of it six weeks out, but the fundraiser was actually May 17. That means the Democrat machine has likely been sitting on this ace in the hole for weeks, if not months, and chose now to play it. There’s almost always a reason for just about everything political operatives do. Accidents and coincidences are rare events here.

    My theory here is two-fold. One, it’s because Obama’s post-convention bounce is stalling/fading. Democrats will say the former and Republicans will say the latter. Either way you slice it, the bounce has failed to continue higher because it clearly peaked and backed off. They wanted something to try to give that a jumpstart. Two, last week’s violence worldwide at US embassies probably hurt Obama and they needed something to not only shift negative attention away from Obama for all that, but to either give Obama positive attention or shift negative attention to Romney. This video is perfect for that. It’ll give a quick shot in the arm to the Democrat base.

    Now, look at the GOP response. Romney more or less embraced the comments, and certainly didn’t deny them. I think Romney more or less embracing these comments perks his base. The ‘makers versus takers’ narrative is a very popular one among the GOP base. Thus, I think it’s a quick shot in the arm for the GOP base.

  • Greg

    I will take issue with the “92% of Americans have a job” comment Cullen. You know as well as anyone how our metrics miss the mark. There is no way one can say that 92% of Americans who wish to work are able to. Many are earning far less than they deserve and working less hours than they are willing to.

  • krb

    Nice comment. I think that’s a fair, down the middle, and accurate assessment. krb

  • Greg

    “Romney spoke truth to power and now all of a sudden it’s class warfare.”

    WHAT?? Truth to power? Taking on “The man”?

    He spoke truth while he was AMONGST the powerful…… Country Clubbers.

    He was dissing the non country clubbers as needy little grubbers, yeah what a brave guy!

  • Greg

    A few thoughts on the class warfare cries.

    What answers are there that dont involve placing some blame somewhere?

    Once you blame something or someone and you resolve to correct it how does one avoid class warfare? Who ever is “blamed” will scream class warfare. Will anyone go “Yeah your right it was our fault” ? Will anyone accept the blame and not accuse the blamers of demagoguery?

    No one thinks they should have to suffer for the financial collapse. Many workers are saying ” I can still do my job, Ive been paying my bills, why lay me off?” Many bankers are saying “I didnt force any mortgages on anyone”

    We may not like it when we are in the middle of it but with our war on terror, war on drugs, war on (fill in the blank) a war mentality is in our DNA. Its a little too late to be lamenting it now

  • http://rodgermmitchell.wordpress.com/2010/04/06/more-thoughts-on-inflation Jason H

    The current Republican/Tea party would never vote for Reagan:

    REagan was a MR or MMT person, LOL -he increased DEFICIT SPENDING by about 300%, going from about $700 billion to almost $2 TRILLION in deficit spending

    Reagan increased civilian gov employees by 250,000 AND increased military active duty by 750,000 members to 2.2 MILLION active duty (Obama has only 1.4 million active duty soldies)

    Reagan actually INCREASED nominal social spending on social programs while cutting cutting taxes

    Reagan also increased defense spending Keynesianism by $440+ BILLION to defense contractors

  • Gus

    What is true? The 47% claim or that those who pay no federal income tax are necessarily Obama supporters?

    If you suggest it is the latter, you are wrong.

    Only 40% of both the two lowest quintiles of income level (earning less than $40K in 2009 dollars) are registered democrat, with the overall majority registered republican (~15%) or independent (~35%). Virtually anyone making under $40K is paying little or no income taxes, and anyone making less than $20K is definitely not paying federal income tax. Therefore, it seems highly likely that a significant portion of those who pay no federal income tax are natural Romney supporters and another significant group are potential Romney supporters.

    To me, it is a phenomenon similar to that of the greatest support for Romney coming from the largest welfare queen states (like Alaska, Mississippi, Alabama, etc.) which receive the greatest amount of federal largesse, i.e., the taker class is worried that the budgetary situation endangers their free ride so they rally against “big government” in hopes that someone else’s budget gets cut before their own.

  • Nils

    A lot here are of course assuming that everyone who is dependent on the federal government would even connect the dots that far. Think of the Tea Party protest sign “Get your government hands of my medicare”. I think there were actually some polls, people just didn’t see Social Security or Medicare as being on benefits.

  • JK

    Saying 47% percent of people don’t pay income taxes is not factual. It is misleading at best. What he talking about is federal income taxes. By omitting the word ‘federal’ it gives the impression that a segement of the population pays no income tax, and that is not true.

  • krb

    I said……”They are both facts, when considered in the context the speaker meant them…”……and that is accurate. I’m sure a conservative could split hairs and discredit Obama’s gaffe as well as you are discrediting Romney’s.

    My view……neither man is qualified for this job. My focus is economic and financial…..I feel less strongly about the other issues. And in the areas of economy and financial….Obama now has an established track record of fostering or sheltering the cronyism and capture between wall street and govt, allowing Bernanke and Geithner to allocate almost all our nation’s resources to the support of a handful of tbtf banks, and allowing atty gen Holder to ignore the fraud and law breaking that has gone on within said banks……both of which will keep uncertainty high, widen the income gap between the upper and middle/lower classes, and keep our economy in a persistent state of stagnation. Wall street is in desperate need of reform…..and republicans in all their wisdom, choose for a candidate someone who comes from the very industry most in need of reform! God help us! This is an election between two TERRIBLE candidates. Cheer-leading for either one is unseemly. krb

  • JK

    I agree with what you just said.

  • Ted

    Amazing quote, hope you don’t mind if I steal this.

  • krb

    I agree with Ted. Hope you don’t mind if I steal it too! krb

  • Anon

    Exactly.

    There’s the “sucky work tax” which beyond being uninspiring, still takes up 24/7 of your time. It’s not like tens of millions of borderline employed Americans can snap their fingers and break out of it.

    There’s no social network built via the right boarding school and right family connections, giving you interesting (and no doubt hard working) job opportunities. There’s only a damaged resume, a family to support and a very narrow set of opportunities.

    Yet people in that position don’t feel like victims – they are struggling and hoping and are trying to make the best of it.

    It’s the lack of knowledge and lack of empathy with such life outcomes that is the biggest intellectual failure of the conservative world view.

  • DVWilliams

    I believe that some on the right believe that if you abadonned all regulation, consumers would find out the information about whether the paint were toxic or not themselves and the market would sort itself out.

    It is their claim that regulation is worse because people rely on regulation to keep them safe, rather than checking things for themselves.

    The question is, are the costs that fall on the person who starts a business acceptable to avoid the costs of unscrupulous or fraudulent companies starting? Ultimately the heavy burden of regulation did not stop Allen Stanford or Bernie Madoff, but will have deterred other fraudsters.

  • DVWilliams

    Hard work is a necessary but not a sufficient condition for success.

    Success will have some element of fortune, coupled with a huge amount of hard work. Luck is probably less than 5%, but I would also think that it isn’t 0.

    It would be wrong to discount the huge amount of work that goes into a business and I hope you are successful in your venture.

  • http://make300aday.com Steve

    Mitt is very wrong in his statement that those 47% won’t vote for him. There are a LOT of retirees and social security recipients in that 47% which typically vote Republican… except when a dweeb like Mitt reminds them of how much the GOP detests those “free-loaders”.