I haven't really written anything lately and this isn't going to be a long one. Herman Cain has been accused of sexual harassment by a new accuser. Here are the details:
Sharon Bialek, who worked at the restaurant group's education foundation until shortly before the alleged groping incident, said Cain unexpectedly put his hand beneath her skirt and between her legs "toward my genitals." She also said he pushed her head toward his crotch.
If he wasn't done before, he surely is now. Why wasn't he properly vetted before he started running? Did they really expect this to not get out?
Herman Cain came under fire for his 9-9-9 plan at yesterday's debate. Cain did an extremely poor job defending the plan and I think Romney did the best job of dissembling it (at the end):
This morning, Arthur Laffer, one of the architects of the 9-9-9 plan, had an editorial defense in the Wall Street Journal:
By contrast, the three tax bases for Mr. Cain's 9-9-9 plan add up to about $33 trillion. But the plan exempts from any tax people below the poverty line. Using poverty tables, this exemption reduces each tax base by roughly $2.5 trillion. Thus, Mr. Cain's 9-9-9 tax base for his business tax is $9.5 trillion, for his income tax $7.7 trillion, and for his sales tax $8.3 trillion. And there you have it! Three federal taxes at 9% that would raise roughly $2.3 trillion and replace the current income tax, corporate tax, payroll tax (employer and employee), capital gains tax and estate tax.
While this does address the math behind the plan, it doesn't address the concerns that the sales tax will be burdensome on the poor. It's a regressive tax, meaning it's going to have less impact on you the more money you make. It will affect the poor the most because their consume a higher percentage of their income.
Laffer does have the best argument for the plan though:
The whole purpose of a flat tax, à la 9-9-9, is to lower marginal tax rates and simplify the tax code. With lower marginal tax rates (and boy will marginal tax rates be lower with the 9-9-9 plan), both the demand for and the supply of labor and capital will increase. Output will soar, as will jobs. Tax revenues will also increase enormously—not because tax rates have increased, but because marginal tax rates have decreased.
He believes that will stimulate upward mobility:
A static revenue-neutral tax change requires static winners and losers. And this 9-9-9 plan has made certain that even on static terms those below the poverty line will be better off—period. Once the dynamics take hold, many of those below the poverty line will find good jobs and thus will rise above the poverty line and start paying taxes.
I do believe he falls short on the sales tax:
Still, a number of my fellow economists don't like the retail sales component of the 9-9-9 plan. They argue that, once in place, the retail rate could be raised to the moon. They are correct, but what they miss is that any tax could be instituted in the future at a higher rate. If I could figure a way to stop future Congresses from ever raising taxes I'd do it every day of the week and twice on Sunday. Until then, let's not make the perfect the enemy of the good.
He's deflecting the focus of the argument. It's not about raising taxes. It's about creating the tax in the first place. While it may make up for the revenue, it also creates a new tax source which can be raised. Saying other taxes can be raised just as easily isn't a defense of the new tax plan.
After reading Laffer's defense of the 9-9-9, I feel better about the plan as a whole. However, I still have some very strong, lingering doubts. The sales tax is a huge concern because it's a new tax, a regressive tax, and a double tax. People often complain that capital gains are taxed twice by capital gains and by income tax. This is essentially what it's going to feel like when you have both state and federal sales tax when you buy something.
Quite frankly, I think the negatives still outweigh the positives. The sales tax being the most worrisome aspect, why doesn't Cain just ditch it and tax business and income at a higher rate (13.4%, using the numbers provided in the op-ed). It doesn't have the same ring as the 9-9-9 plan, but it certainly doesn't threaten the people's ability to consume. I expect that Cain will be further pushed on this in future debates. He's going to need a stronger defense on his own. Otherwise, he's just dust in the wind.
I already examined the key message of Herman Cain's campaign with the 9-9-9 plan, finding it to be unsustainable, unreasonable, and unfair. Now, the Pizzaman has come under fire for what seems to be his first blunder:
Cain, at a campaign event in Tennessee on Saturday, defended the idea of building a barbed-wire fence along the border, "electrified, with a sign on the other side that says it can kill you."
While he may claim to have been joking, what makes the incident worse is this follow up comment:
The Republican candidate then dismissed criticism that he's being "insensitive," saying "what's insensitive is when they come to the United States across our border and kill our citizens."
That just comes across as generalizing and ignorant. Hispanics are unhappy with his remarks:
"Whether or not he made his comments in jest, Mr. Cain's words show a lack of understanding of the immigration issues our country is facing and a staggering lack of sensitivity. Surely, Mr. Cain understands the duty that candidates have to offer responsible policy proposals," he said in a statement. "Leave the comic routines to the professional comedians."
I don't know how many Latino voters Cain has alienated, but this is a significant slip up. Whether you're Latino or not, you're going to have questions about Cain's character and ability to have diplomatic relationships with the Latin countries.
It isn't just the Hispanics who are unhappy with Cain. African Americans are not fans, to say the least:
Largely located on the lower rungs of the American socioeconomic ladder, most black Americans appreciate sources of opportunity and power that Cain despises: unions, governmental support for the needy, a robust, government-supported full-employment policy, the public provision of health care. His worry, remarkably, is that America is too egalitarian. His signature policy -- the 9-9-9 tax reform proposal -- would institute a regressive consumption tax nationally and starve Social Security and Medicare. It would redistribute income upward. No wonder blacks overwhelmingly repudiate him and his tea party allies.
And he thinks he can win a third of the black vote. Doesn't this reek of ignorance? You can't just bank on anti-Obama sentiment. His policies and plans are going to be detrimental to that community. As a result, Cain seems out of touch.
“The problem is not the responsible drinker,” Cain wrote in one letter to the editor.” It is the alcohol-abuser who gets behind the wheel of a car. In fact, according to the National Highway Traffic Safety Administration, two-thirds of all alcohol-related fatalities are caused by drivers with a BAC of 0.15 or higher.”
I'm sure there are plenty of families who have lost loved ones that would repudiate that statement.
Herman Cain has done a lot to emerge as a contender, but there are still many things that keep him from being a legitimate candidate for President. I think the number one thing is his electability and his complete alienation of certain segments of the voting public. This is an election that the GOP could easily win, especially with this struggling President. However, you can't take chances in being represented by a controversial candidate. To win this election, you need someone that will appeal to those that are frustrated with Obama. Herman Cain is not that guy.
Since I made this post, introducing Herman Cain as a potential to Romney and Perry, Cain has skyrocketed up the GOP presidential polls:
The public is doing just that. In recent national polls, following impressive debate performances and straw poll wins that caught the political establishment by surprise, Cain has suddenly risen to the top of the pack, running almost even with former Massachusetts governor Mitt Romney.
But as I suggested before:
If he really wants to make a run for this, he will aim for the transparency necessary to be a viable candidate. Until then, Herman Cain will be a bump in the road for the front runners. You cannot ignore potential skeletons in your closet and run for president. You will have people make you reveal that information as you rise a legitimate candidate. You should do your best to be prepared.
In the most recent debate, the pizzaman's 9-9-9 plan came under fire, and the media has started taking a deeper look into it:
But note that we said the “9-9-9” would happen eventually — and then only temporarily. That’s because it is only the second step of a planned three-step process. The first step would cut individual and corporate tax rates to a top 25 percent rate (down from a current high of 35 percent). Then the final step would replace all of the taxes — even the 9s — with a national sales tax, known by proponents as a “Fair Tax.”
(As denizens of Washington, we find this three-step process to be highly dubious. It takes years, even decades, to fundamentally overhaul the tax code. Herman Cain is going to do this three times in his presidency? But we digress.)
Other than the clear difficulties that he would have in trying to overhaul the tax code, there are other issues involved with revenue, but particularly in the tax rate of the people who can afford it the least:
On top of that, Cain would introduce the new sales tax, which would affect lower and moderate-income people who spend most of their income on purchases, not savings and investments. Depending on how you do the math, people now paying zero or negative taxes might be faced with a 27 percent tax on income.
In other words, while on paper Cain is promising a tax cut, in reality tens of millions of lower-income Americans would face tax increases.
His proposal seems unsustainable, unreasonable, and unfair. He's essentially going to cut into pockets that have nothing in them. There's a lot of danger in fiddling with the numbers and it seems as though his numbers are vastly different than those of others who've looked at his plans. On the whole, it looks like a plan that would reduce taxes on many individuals, but the his plan would also negatively affect those that have the least and have been most affected by the financial crisis and the consequential recession.
Then, why he's been so high in the polls? This has been his one draw, his one big plan, and it just doesn't add up. How are people saying that they're going to vote for him?
I'm not going to just write off Cain. He's clearly polling well and there's reason to believe he's a legitimate contender to Romney with those numbers. I just look at the actual facts, what he actually brings to the table, and I just don't see what his supporters see. I just don't see him being able to accomplish effectively what he's promising to bring forth.
The latest GOP debate on the economy took place in New Hampshire earlier tonight. It displayed a change from the direction of previous debates. Herman Cain played a much larger role. The Pizzaman has seen his poll ratings rise rapidly in the wake of his performance in the previous debate and his victory in the Florida straw poll. His larger role seems to have come at the expense of Texas Governor, Rick Perry, who has fallen from the graces. Perry underwhelmed again and seemed widely ignored by the other candidates. He also made no attempts to take control of the debate or issues, which may or may not have been a bad thing, given his previous mediocre performances.
The key thing about Perry is that he still hasn't fully released his economic plan:
Mr. Perry is set to deliver his first major policy speech of the campaign on Friday in Pittsburgh, on energy and jobs. When pressed for specifics, he said, “I’m not going to lay it out all for you tonight.” Asked about Mr. Romney’s lengthy economic plan, he said, “You know, Mitt’s had six years to be working on a plan. I’ve been in this for about eight weeks.” Asked if he might accept a budget compromise that could involve raising revenue, as President Ronald Reagan did, Mr. Perry suggested that he would not.
The problem with this is that he comes across as unprepared. This was a debate on economics and Perry is withholding his plan for campaign speeches? Please. You're on a national stage in an important primary state, you have to deliver the goods. I have no idea who is running Perry's campaign, but they have failed miserably.
In the meantime, Cain has received the most attention from the other candidates:
Later, when Jon M. Huntsman joked that Mr. Cain’s 9-9-9 tax plan — which calls for reducing the individual and corporate income taxes to 9 percent and introducing a 9 percent national sales tax — sounded more like the price of pizza, Mr. Cain shot back that it “didn’t come off a pizza box, no.”
Bachmann said Cain’s plan wasn’t a jobs plan, but a proposal that would give Congress “a pipeline in a sales tax.”
“When you take the 9-9-9 plan and you turn it upside down, I think the devil is in the details,” she said.
Cain is convinced that his simple tax code will spur economic growth, but there are just too many concerns with it. It's also the only thing he has brought to the table thus far in terms of getting this economy going. As I've said in the past, the flat tax won't work because it'll put an immense burden on the poor who can barely make ends meet as things stand now. A flat tax will reduce their purchasing power and they will have to make tougher decisions about their consumption. Broadening the tax base has a similar effect.
Simple can be good, but simple won't necessarily work.
“I have had the experience in my life of taking on some tough problems,” Romney said. “And I must admit that simple answers are always very helpful but oftentimes inadequate. And in my view, to get this economy going again, we’re going to have to deal with more than just tax policy and just energy policy, even though both of those are part of my plan.”
His approach seems much more pragmatic and with a stronger expectation of what Washington is going to be like. Cain, Perry, and Bachmann have all portrayed themselves as somewhat of Washington outsiders, but their problem is that they don't know how Washington works. Romney has the experience of working with liberals in Massachusetts and had to work with them to accomplish some of his initiative, which is what it's going to be like in DC. This is not even getting into his private sector experience.
We've already had like 4-5 debates and doesn't appear like a new candidate is going to enter nor does it appear that further debating is going to change the landscape of the primaries. Right now, it's pretty clear who should be the nominee and it isn't even close. In the long term, you have to look at the person who makes the most sense; this time it's Mitt Romney.
Over the last week, we've seen increased speculation and encouragement for New Jersey Governor, Chris Christie, to enter the GOP race. We've also seen the emergence of Herman Cain after his win in the Florida Straw Poll. We also had this drop this week: Once again, the poll numbers are in and Rick Perry has dropped:
Among announced candidates — without Christie or Palin in the race — Romney leads with 25 percent, which is identical to his support from a month ago. Perry and Cain are tied for second with 16 percent, numbers representing a 13-point drop for Perry and a 12-point rise for Cain since early September.
What may be worse is that his core support seems to be eroding:
The falloff for Perry against other announced candidates has been particularly steep among those aligned with the tea party movement. In early September, Perry had a 3-to-1 advantage over any other candidate among those “strongly” backing the tea party, but his supported has plummeted from 45 percent to 10 percent in this group.
Conservatives aren't happy with the Texas Governor either:
Among all conservatives, Perry’s support has been sliced in half, from 39 to 19 percent. Some of his decline may stem from shaky debate showings: A majority of Republicans and GOP-leaning independents who have watched recent debates say the more they hear about Perry, the less they like him.
I pretty much said the same exact thing in a recent blog post. It's worth checking out this graphic that shows how fast Perry's support is finding its way to other candidates, mainly Herman Cain. However, it's probably most relevant to see how he compares to Mitt Romney, the current front runner:
Romney has big – 20-point – advantages over Perry on two important questions: experience and electability. When asked who has the better experience to be president, Romney wins 50 to 30 percent.
Perry's struggles are being documented by the media. Some have questioned the Drudge effect:
Drudge's editorial decisions replace Perry's message of solid, inspirational, conservatism with an inept, flagging candidate. And while Drudge doesn't exert the broad influence over the scattered media landscape that he did over a more concentrated media five or 10 years ago, he still wields immense power, particularly in shaping the narrative of the right. He has helped chip away at Perry's image to hundreds of thousands of conservative readers daily, just for starters.
Blogs definitely have a big say in shaping narrative, but Drudge has to be one of the biggest. Many people go to his site as a source to finding links to news articles. Sometimes people just read his headlines without reading the articles. It's definitely been a factor, but hasn't Perry just done poorly himself?
Christian Science concludes what we've already heard about Perry, he doesn't wear well:
What happened in mid-September? That’s when debate season got rolling. Whether voters watched the debates or not, they appear to have heard much about Perry’s poor performances. It is also possible that publicity about Perry’s description of Social Security as a “Ponzi scheme” has taken a toll on his support.
The hits keep coming.
My interest in Perry sputtered rapidly since he entered the race. His first speech was open, honest and spoke to the ideals that America should live up to. Unfortunately, he has shown that he might not have the qualities to be the President of the United States. We have already elected a great orator into office. We need someone who will get things done. It's not the flubs which have undone Perry, it's his ability to achieve. I think people have realized that his potential is much lower than initially expected and the voters are flocking to other candidates.
Rick Perry is done as far as I'm concerned, and I would like to see Herman Cain get more feature time in the debates. We deserve to see more of a candidate that actually has broad appeal through out the party.
I've been meaning to write about Herman Cain for a while. As a black Republican businessman, he seemed out of place in the Republican Presidential race, but he always spoke with precision and confidence. Even before his Florida straw poll victory, I thought he was making a strong run as a potential Vice Presidential candidate. Needless to say, I learn more about an issue or a person when I write about them and I have to do the research.
So let's start off with a little background; unlike the rest of the candidates, Herman Cain has no experience in political position. He's a career businessman:
Cain, 65, grew up in Georgia and graduated from Morehouse College. He became a turnaround artist, rescuing the Burger King outlets of Philadelphia. From there, he went to Omaha, where in 1986 he took over and stabilized Godfather’s Pizza with clever advertising and aggressive downsizing.
By the early 1990s, Cain had started to transition out of day-to-day management at Godfathers and delve into politics. In 1992, he was appointed to the Federal Reserve Bank of Kansas City. In 1994, he became head of the National Restaurant Association, a post he held for five years.
He's a turnaround specialist, something he's highlighted in all the debates. The US is in need of a turn around, and he feels he's the best man for the job. This isn't the first time he's run for office. He ran for President in 2000 and he ran for Senate in 2004. Despite those failures, he left an impression:
But despite his lack of political success, he managed to attract the notice of a radio executive with his rich, booming voice. His campaign manager became his producer. He trademarked the expression “The Hermanator Experience.”
The two main talking points of his campaign have been the 9-9-9 tax plan he wants to institute and the Chilean social security model he wants to implement.
Most economists agree that a national sales tax would raise the relative tax burden on low- and middle-income earning taxpayers. "The main reason is that low- and middle-income households consume more of their income than high-income households do," said William Gale, senior fellow for economic studies at the Brookings Institution. "Another way of saying that is high-income households save more of their income than low-income households do."
Basically, if all people consume the same amount of taxable goods and services, if you have a lower income, whatever is taxed is going to be a higher percentage of income.
His whole system will make the lower classes pay more while the upper classes pay less. Now, I've already said that taxes need to be lower for the US to be competitive, but I don't think it makes sense to increase taxes on people who already are having trouble making ends meet. Yes, you want a society that encourages economic advancement, but you also need a minimum standard of living across the board. This is the United States where we tout our economic opportunity and high standards of living. Instituting a national sales tax is a straightforward attack on the lower classes.
But while the reform's supporters argue it has been a major success story, officials both inside and outside Chile now increasingly question whether the high costs and modest investment returns have doomed Piñera's original promise: a decent retirement income for workers at a savings for the government.
Social Security has come under fire because of the uncertainty surrounding its future. The government has misappropriated funds, so this would be another way of protecting individuals. The problem is that it doesn't provide enough income for the retired:
A recent report by the Chilean government brought more grim news, forecasting that as many as half of all workers won't be able to save enough to receive the minimum pension when they retire—even after paying into their accounts for 30 years—and will therefore rely on government subsidies. More than 17 percent of Chile's retirees now continue working because they can't afford to live on their pensions, according to that study, and another 7 percent want to work, but can't find jobs.
Despite this, the model has been praised and used as the basis of models in other countries. I think it is important that someone takes a greater look into this and challenges Cain in the next debate. He can't tout a program that doesn't get real results. Praise is one thing, results is the real thing.
Here’s the problem: To finance benefits at promised levels for those 55 or older, we would need to continue to collect payroll taxes from today’s working-age population. However, we would also propose to divert a significant share of those payroll tax into personal accounts. In effect, we would be trying to spend the same dollar twice, and we would do it trillions of times.
This doesn't seem like a worthy endeavor considering our country's tricky financial situation.
One thing is for certain, he is very confident: And he'll need it because his Florida win has brought him under fire as people begin to think whether he is a viable candidate for Presidency or not. It's uncertain whether his tax plan will work:
"I don't understand how the 9-9-9 plan -- which includes both a national sales tax and an income tax while purporting to repeal the 16th Amendment at some point -- can be taken seriously by anyone who feels we are already overtaxed," said Andrew Nappi, director of the Florida 10th Amendment Center.
And has it been vetted:
Zimmermann, a Romney supporter, said, "I don't know anyone who has vetted the 9-9-9 proposal and confirmed it as a viable plan."
Top aides in Iowa and New Hampshire quit earlier this year, saying Cain wasn’t taking the early states seriously. One former staffer recently alleged that staff members tried to cover up the role of a gay campaign adviser. He refuses to name the economic advisers who helped come up with his plan. In May, Cain said he couldn’t talk about foreign policy until elected.
That makes me believe that he hasn't taken himself seriously up to this point. If he really wants to make a run for this, he will aim for the transparency necessary to be a viable candidate. Until then, Herman Cain will be a bump in the road for the front runners. You cannot ignore potential skeletons in your closet and run for president. You will have people make you reveal that information as you rise a legitimate candidate. You should do your best to be prepared.
Now that Cain has one Florida, he best be prepared. He's been shooting for the stars; now the stars will be shooting back.
When I heard him talk about this last night, I wasn't sure he understood how what he was saying was coming across. He keeps referring to it as "sex" but I thought he meant to say "sexual orientation" given the context of what he was saying.
GOProud said in a statement that Santorum "disrespected" men and women in uniform with his response to Stephen Hill's question about whether any of the presidential candidates would "circumvent" the repeal of the "don't ask, don't tell" policy.
He seems to be the only one that's still against DADT:
What's remarkable about Santorum's position on "don't ask, don't tell" -- which formally ended this past week -- is not necessarily his keenness to judge the post-DADT environment for formerly closeted soldiers. It's that, on this matter at least, he is increasingly the lone culture warrior in the GOP presidential field. Following the debate, no other candidate or campaign offered support for a reinstitution of the law.
Herman Cain said this:
On a personal level, Cain added: "I have no problem with [gays serving openly]. The first order of business should be to do their job. As long as they do their jobs I think people in the military will be fine with that. It is when it becomes a distraction and you have got to spend a lot of time creating special situations, this is what I disagree with."
“That brave gay soldier is doing something Rick Santorum has never done -- put his life on the line to defend our freedoms and our way of life,” the group said in a statement attributed to Christopher R. Barron, the group’s chairman of the board, and Jimmy LaSalvia, its executive director. “It is telling that Rick Santorum is so blinded by his anti-gay bigotry that he couldn't even bring himself to thank that gay soldier for his service. Stephen Hill is serving our country in Iraq, fighting a war Senator Santorum says he supports. How can Senator Santorum claim to support this war if he doesn't support the brave men and women who are fighting it?”
Santorum has tried to paint himself as the top supporter of the military in this race. He had to differentiate himself from the rest of the candidates. However, as he fired that gun, it appears the recoil has caused him to hit himself in the face. I still think he somewhat misspoke, but you have to watch what you say in the public setting and you can't be as aggressive as he was in trying to take a stand when you're not sure of your words.
