We’re All Feeding at the Trough

In a week in which Peggy Noonan—Wall Street Journal columnist and former Reagan staffer—said that Mitt Romney looked like Nixon when grimacing under pressure, and high-profile conservatives bemoaned the dearth of details in a promised Romney/Ryan plan to eliminate tax loopholes, there wasn’t much room left for Romney to stumble. Then tiny liberal-leaning Mother Jones magazine posts  a secret video of a well-heeled fundraiser—in which Romney characterizes nearly half the voting public as deadbeats, freeloaders and mama’s boys—and Mitt is off-message once again.

It’s unclear if Romney truly believes GOP talking points about the growth of an entitlement society or if he’s mainly pandering to baser aspects of one wing of Republicanism. Rich Lowry—editor of the National Review—maintains that Romney sounds uncomfortable making these arguments: “[H]e sounds like the English-speaking German in a World War II movie who’s infiltrated American lines and is asked who won the World Series.” His responses aren’t natural or convincing. But like running mate Paul Ryan’s gross exaggeration of his marathon time, they do reveal something about character and world view. Noonan accused Romney of sounding like a shallow campaign operative and not like a sophisticated man seeking to lead a nation: “We are a big, complicated nation. And we are human beings…We are complex. We are not data points.” Both Noonan and Lowry—desperate to have a real national conversation about the entitlement society—each fear that Romney and his camp can’t deliver. And the rest of us watch with disgust as a bloc of very rich, out-of-touch Republicans transform the GOP into something that looks more like the Dixiecrats than the party of Lincoln.

His off-base and off-putting comments aside, there’s something else fundamentally wrong with Romney’s remarks about who gets government hand-outs. Like Shakespeare wrote in the 1590s, “…a rose by any other name would smell as sweet.” What matters is what something is, not what it’s called. We are all on the dole.

A genuine discussion about American taxes and entitlement programs would be both illuminating and revealing. Although we are loath to admit it, one way or another, we all benefit from government programs or tax advantages.  It’s disingenuous to discuss entitlements—and take aim at the poor and the elderly—without admitting that the government hands over cash in the form of the bloated and unfair farm bill, college loans and grants, and huge ethanol subsidies. Fold in the Earned Income Tax Credit and home mortgage interest deductions, and the picture becomes clearer. As USA Today contributor, Kelly Phillips Erb, asserts, “subsidies come in many guises” and we don’t think of “our” tax breaks or special programs as hand-outs. Erb points out that the home mortgage deduction costs taxpayers four times as much as public housing assistance—and includes mortgage deductions on second homes and yachts. You can continue to take the mortgage deduction even if your income makes you subject to the Alternative Minimum Tax. Yet the home mortgage deduction doesn’t take a public drubbing. Similarly, the expanded first time homebuyer program didn’t come under attack, despite the $12.6 billion price tag. Clearly, in the entitlements game, what’s important is who’s getting the hand-out.

Now, there are entitlements and then there is Entitlement. A friend of mine—a wealth manager at a major multinational financial services firm—told me she thinks many of her clients believe that they “earned” their money from investments because they were willing to “take the risk” with their money. “What they don’t get,” she explained, “is that if they can afford to lose a million dollars or more on an investment, then it isn’t really a risk for them. They’ll still be able to house their family and feed their kids. Where’s the true risk in that?” In our wide-ranging conversation, she said that her clients play a game that most Americans don’t get to play: “There are all sorts of ways to legally shield their money, and there are investments they make that poorer investors get shut out of. The investment world is two-tiered.” She also told me, as she walked to her top-of-the-line Mercedes coupe, that she knew she wasn’t taxed enough.

Romney, like my friend’s clients, believes he made his money on a level playing field that did not involve entitlement. Although clearly a doer and a savvy investor, he is completely unaware of privileges received from his wealthy and politically connected father: “Everything I earned I earned the old-fashioned way.”  But put aside all the advantages he’s long-forgotten, including his elite prep school education and the fact that he had no college loans; let’s focus on today. If he popped his head up from the lobster salad at his tony fundraisers, he might be able to catch the news. Real wages, according to the Economic Policy Institute, have been stagnant for a decade. And ABC News reports that Americans work longer hours, take fewer vacation days and retire later than workers in the rest of the developed world. The jobless recovery means that most Americans are working harder, but it isn’t doing them much good. And by comparison, Romney’s measly 14% tax rate isn’t hitting him where it counts.

Not all the poor are noble, nor all the rich wicked, and the entitlement discussion should not be off-limits in this election. But  it should be both honest in tone and sweeping in scope, and it must do more than re-hash hackneyed notions about the poor taking “our hard-earned” money.

Now pass me some of that lobster salad.

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