Mass. GOP invites government intervention over private institution’s compensation practices

Really, you can’t make this stuff up.  As previously noted, the Mass. GOP is very, very upset about the fact that Harvard offers what is in fact a less generous compensation benefit to its faculty than many other educational institutions.  You see, in order to attract high quality faculty, many private colleges and universities offer their faculty free or hugely-discounted tuition if their kids choose to attend the home institution, or partial tuition if the kids go elsewhere.  As just a couple of examples, UPenn offers faculty kids a 75% discount if the kids attend UPenn, or up to 40% of UPenn’s tuition if they go elsewhere.  Columbia pays full tuition if the kids go to Columbia, or half tuition if they go elsewhere.  And University of Chicago pays up to 75% of Chicago’s own tuition rate, regardless of where the kids go to school.  That’s a lot of cash on the barrelhead.

Harvard, apparently, does not do this, to the consternation of some of its faculty.  Instead, it offers a no-interest loan for certain educational expenses, and Elizabeth Warren appears to have taken advantage of that benefit.  Here’s a 2006 Harvard Crimson story on the subject (Harvard’s actual info on tuition assistance for faculty kids appears to be password protected – let me know if you can find it).

[Harvard] Professors with children say they do not have sufficient access to daycare and do not receive the same financial support that their colleagues at other schools get for their children’s tuition….

While schools including Princeton and Yale subsidize half of the tuition costs for their faculty members’ children—at these schools or another undergraduate institution—Harvard offers no tuition discounts to professors’ progeny.

According to Lisa Martin, chair of the Faculty of Arts and Sciences (FAS) Standing Committee on Women, Harvard’s “tuition assistance” consists of interest free loans to help with education at any institution.

Princeton pays half tuition at any undergraduate institution for the children of faculty who have been employed at the school for at least five years.

And Yale offers a 50 percent tuition discount at undergraduate institutions to the children of full time employees who have worked a minimum of six years, according to the Princeton and Yale websites.

So, basically, if Elizabeth Warren had gone to teach at any other Ivy League school, she would have been handed a big pile of cash for her kids’ tuition.  Instead, having decided to teach at Harvard, she got to borrow money from Harvard, which she of course had to pay back.  Yes, the loan was interest free.  But no, it’s not an especially generous benefit – in fact, it’s a good deal less generous than what many other institutions offer their faculty.

Which brings us to the Massachusetts Republican Party.  As we know, they and the Brown campaign are terribly upset about this benefit that a private institution chooses to afford its employees.  So upset, in fact, that the MA GOP wants to get the government involved.  Here’s that email from the MA GOP again:

When consumers get taken advantage of like this, who is going to look out for them? It sounds like a job for the Consumer Financial Protection Bureau.

If you are a struggling family in need of a zero-interest loan to get through these tough times, and wonder how you can get a deal like Professor Warren, tell the CFPB your story.

Or if you are just sick and tired of politicians like Warren getting sweetheart deals at your expense, complain to the CFPB here.

Oh, the irony, the irony.  Not only does this absurd email undermine what Republicans generally, and Scott Brown specifically, claim to stand for by urging a government agency to get involved in regulating what benefits a private institution may offer its employees, it also openly acknowledges that the Consumer Financial Protection Bureau – which is of course Elizabeth Warren’s signature achievement – is a good and necessary thing, even though most Republicans hate it.

It’s also stupid.  Harvard’s no-interest loan is a far less generous tuition benefit than that offered by comparable institutions, and therefore this argument (also from the email):

students at Harvard pay interest on their student loans so that Harvard can then loan out that tuition money at zero interest to Elizabeth Warren.  Students pay more so Warren can pay nothing.

is totally wrong.  It’s in fact precisely the reverse: to the extent that faculty tuition benefits actually affect student tuition rates (and that extent is probably close to zero), Warren should be commended for teaching at Harvard, which spends far less on faculty tuition benefits than comparable institutions.

But hey, MA GOP, don’t let reality get in the way of a cheap attack.  It’s never stopped you before.

Recommended by kbusch, methuenprogressive.


43 Comments . Leave a comment below.
  1. Nice post ...

    The fact of the matter is that Harvard’s program in not as generous as other universities. Not sure about Harvard, but other universities offer the benefit to all staff, so the “Professor” moniker doesn’t even work.

    Hey, why not also list private companies here as well, many offer educational assistance if not complete coverage.

    Brown’s campaign, I noted elsewhere, Barnett might be coming unhinged (read this nonsense)

  2. Even less prestigious universities

    like Western New England offer their employees such benefits. I have students who have parents working at WNEC whose children attend Assumption for free. I know kids whose parents work at Springfield College whose kids attend that school for a sharply reduced tuition.

    Brown & Co. will be happy to know that our state-run institutions offer free tuition to the children of employees. Fees, not tuition, however, make up at least 2/3 of the costs of public college these days.

    • Yeah, we learned that the hard way

      My son got an “Abigail Adams” scholarship because he did well on his MCAS tests — “Full tuition”. Whoopee. So at UMass-Boston, the actual “breakdown reveals that of the $5,703.50/semester “tuition and fees”, tuition accounts for $857.50. So in the case of U-Mass Boston, fees make up 85% of the “tuition and fees”.

      While we appreciate and are happy to have the $1,715/year scholarship, it’s a serious mistake to think it’s a significant portion of what U-Mass/Boston actually costs.

  3. The Republican plan for Elizabeth Warren

    So if I understand correctly, to avoid charges of hypocrisy, Ms. Warren should be teaching at a less distinguished institution than Harvard, she should have turned down any educational benefits offered by that institution, and she should have contributed her remaining money to the Commonwealth or the Federal Government.

    Apparently, the only way to be the kind of Democrat a Republican will respect is to be some kind of saintly martyr.

  4. Keep spinning David...

    but please just admit that your candidate will have every aspect of her history and candidacy justified and rationalized here.

    Republicans raise lots of money… bad. Warren does it… it’s good.

    Republicans raise lots of money from out of state contributors… bad. Warren does it… it’s good.

    1%-ers are bad. Warren is a 1%-er… it’s good.

    But if you are really ok with your rationalizing the no interest loan, then I would hope you will be just as even handed with Republican’s justifying things and we can ignore the perceptions of those things… right?

    Is Warren rich? Did she make $700,000 over the last 2 years? Does she have investments worth over $3,000,000? Is her home worth $1,700,000? I really don’t care about any of these questions… I respect her success and have no problem with her getting paid by Harvard, the Feds and an insurance company… all at the same time (triple dipping). My issue would be how a similar story about a Republican might be spun by people here into them being projected as a rich 1%-er while so many people are out of work and making minimum wage or being out of touch with regular people.

    • You're wrong, again.

      When have I ever said that it’s “bad” that Scott Brown raised a lot of money? Or that being rich is “bad”? And are you denying the fact (and it is a fact) that a no-interest loan for faculty kids’ tuition is, in the relevant industry, an extremely non-generous benefit?

      See, I just can’t tell quite what your point is. Maybe you don’t have one.

      • John's point is we are

        hypocrites and have a double-standard for Republicans and our own candidates.

        • I would soften your words by saying...

          the same rules are not used here on everyone. There is a double standard here just as there is on other partisan sites. Republicans are flip-floppers, Obama changes his mind based on relevant facts. That kind of thing.

          But I would like something concrete, how do BMGers feel about the 1%-ers? Are they bad, good? Is the 1% status based on income or wealth? Does their party matter? Warren is a 1%-er by the standards I’ve heard but is anyone here ready to call her one? This answer could help clarify the idea of who has double standards… or as you say is a hypocrite.

          • "how do BMGers feel about the 1%-ers?"

            Christopher answers the question well downthread. Just to add my own 2 cents: I have absolutely no problem with someone getting rich. The guy from Holliston who just sold Instagram and is now worth $400 million? Fantastic! What a great story. My problem is with people who pursue enriching themselves regardless of the cost on others. That is basically what Mitt Romney did; that is basically what Wall Street did prior to the 2008 meltdown. That is what this guy, profiled in today’s Globe, did. That kind of thing should offend everyone.

            As for this:

            I think the no-interest loan is an extremely generous benefit, extremely generous

            In context, which is to say, compared to similarly-situated employees at comparable institutions, that is simply an incorrect statement. That’s not spin, it’s a fact, as I’ve shown in my post. So what you “think” is, I’m afraid, irrelevant, because it’s contradicted by facts. As the saying goes, people are entitled to their own opinions, but not their own facts.

            • So...

              “compared to similarly-situated employees at comparable institutions” is narrowly framing her benefit relative to other similar circumstances, not the entire workplace. So, when we talk about Wall St bonuses, why don’t we rate them in the context of “compared to similarly-situated employees at comparable institutions”? Is the $200M bonus acceptable since it is comparable to the $180M bonus plus stock options of the guy at the other bank? Have you ever worked for a place that gave out no-interest loans? I haven’t!

              So Romney got rich regardless of the cost on others? Give me a break! Business is dog eat dog, read the newspapers. Companies are always responding the economy and cutting, hiring, expanding, contracting… that’s life. Some companies do a terrible job of this and they expand their companies during times when they should contract with the result being going out of business. In those cases, VCs or other companies move in and implement policies (layoffs, plant closings, pay cuts, benefit reductions…) which will save the company. And these do this for one reason, to make a profit for their risk and these deserve it. I know you will concentrate on cases where Bain bought assets and sold them off making a profit (which I also have no issue with) but it the majority of the cases, Bain saved companies from the abyss.

              • Interesting points.

                On your first point: what you are leaving out is very important, which is the reason universities offer tuition benefits in the first place: their base salaries are much lower than the people they want to attract could make in the private sector. People like Elizabeth Warren, Larry Summers, and a whole host of people you’ve never heard of could make a fortune in private law firms or businesses. They go to academia for a combinations of reasons: (1) they like teaching; (2) they like doing research; (3) it’s prestigious; (4) there are good benefits that compensate for the salaries. So your Wall Street bonus example is off point, because those people are already earning a ton of money – probably the most they are capable of earning. That’s not the case in academia. And yes, Elizabeth Warren has done pretty well for herself. Rest assured, she could have made much, much more money in private practice.

                On your second point: Romney pioneered a fairly new method of making a lot of money fast, namely, the private equity leveraged buyout. Having worked in commercial bankruptcy law, I can tell you that the consequences of these LBOs can be pretty devastating, because the basic LBO model is fundamentally unsound: you saddle the target company with enormous debt that it cannot handle, and use the proceeds of the debt to pay off the investors. The investors make a fortune quickly; the company struggles along under its crushing debt load and, as often as not, eventually collapses – but the investors have long since cashed out. It’s a nasty business, and this country will be poorly served if the media does not take a long, hard look at Bain Capital’s practices while Romney was running it. This is not just a case of someone having developed a better widget and put the other widget makers out of business. This is a case of someone figuring out a legal (because the law hasn’t caught up with it) means of bleeding good companies dry.

                • Same basic math as a Ponzi scheme

                  It’s a con-game similar to the Ponzi scheme and the countless (illegal) pyramid schemes setup since then — suck a ton of money from a victim, use it to pay back (the initial) investors, and move on to the next mark.

                  My only quibble with your analysis is the “good companies” part. I’m under the impression that healthy companies with solid balance sheets don’t generally draw the attention of LBO vultures and aren’t generally receptive when they do. I could be wrong about that, though — it’s just an impression.

                • So it sounds like careful analysis must be done on the "facts" we hear...

                  about before a proper conclusion should be made. I agree. Sort of like when people(including Republicans) attacked Mitt Romney for wanting to “fire people”. It was great fodder for many. Even though his words in context were…

                  “I want individuals to have their own insurance,” Romney said on Monday. “That means the insurance company will have an incentive to keep you healthy. It also means if you don’t like what they do, you can fire them. I like being able to fire people who provide services to me.

                  “You know, if someone doesn’t give me a good service that I need, I want to say I’m going to go get someone else to provide that service to me.”

                  Does anyone disagree with Romney on this? Really, do you enjoy get substandard service or would you rather get your service someplace else (fire them)?

                  So I agree that your analysis puts her benefit in the proper context and this should be donr for all politicans. Thanks.

                  As for LBOs, I’m afraid I am a babe in the woods compared to your knowledge of them. Sounds like they should change the law so this doesn’t happen. Any idea why the Obama administration, with a Democratic Congress didn’t change this law or were they too busy with Obamacare or closing Gitmo? Did they even try to change them?

                  How many Bain deals ended up with “saddle the target company with enormous debt that it cannot handle, and use the proceeds of the debt to pay off the investors.”? 10%, 30%, 90%… Was Staples an LBO?

                  • Staples was a venture deal

                    Staples was pretty much the only classic venture deal that Mitt Romney did.

                    The LBO’s came later — Accuride, Dominos, others. The Globe ran a piece on it in January (emphasis mine):

                    For example, in the same year that Romney invested in Staples, he led the firm in its $200 million acquisition of Accuride, a wheel rim maker that was part of Firestone. Bain put down only $5 million and borrowed the rest, using junk bonds from Drexel Burnham Lambert. Eighteen months later, Bain resold the company and reaped $121 million in its first taste of the big time in the go-go 1980s.

                    Soon after, Romney steered Bain Capital more toward debt-driven buyouts. There was more money at stake and less risk for Bain than betting on untested technology.
                    Take a giant deal like Domino’s Pizza Inc. Bain led the $1.1 billion deal in 1998, putting down about $385 million in cash. The rest of the money was borrowed. Then, as Bain wanted to get its money out over the years, it had Domino’s borrow more to pay it back. Bain reaped a 500 percent return. Domino’s has $1.5 billion in debt on its books.
                    In a 1994 deal to acquire Dade International, an Illinois medical equipment company, Bain invested $27 million and made roughly eight times its money. But it also loaded up the company with $1.6 billion in debt; 1,700 people would lose their jobs, and the company briefly filed for bankruptcy protection in 2002.

                    Meanwhile, don’t you find it ironic to be complaining that Mitt Romney’s “I like to fire people” was taken out of context (it was)? This is the same guy whose first ad flagrantly wrenched Barack Obama’s words out of context, and whose campaign manager (Eric Ferhnstrom) was proud of it:

                    I agree that pulling sound-bites out of context is wrong. I don’t like it when any candidate does it. In Mitt Romney’s case, a careful and honest appraisal of the facts is more damning than the distortion that you rightly object to.

                  • You're certainly right

                    that Romney’s “I like to fire people” comment was taken out of context and used for political attacks. It was a gaffe – he should have seen it coming a mile away – but that doesn’t change the basic facts.

                    Tom’s comment has some good info on Bain’s LBO deals – there is more at wikipedia and elsewhere. As for the laws, LBOs went out of fashion after they started failing in large numbers, and they aren’t nearly as common now as they were in Romney’s heyday at Bain. However, the bankruptcy laws are still struggling with what to do with them once the company fails. I’ve worked on cases where we try to apply fraudulent conveyance laws that are literally centuries old to these transactions in an effort to “unwind” them and recover some of the profits. It’s not easy.

          • If not... what, then, is the purpose of this conversation?

            But I would like something concrete, how do BMGers feel about the 1%-ers? Are they bad, good? Is the 1% status based on income or wealth? Does their party matter? Warren is a 1%-er by the standards I’ve heard but is anyone here ready to call her one? This answer could help clarify the idea of who has double standards… or as you say is a hypocrite.

            I feel strongly that the very idea of 1% of the population controlling so much of the economy and the political discussion (up to and including this particular discussion) is an inherently anti-democratic, certainly toxic and perhaps even ‘evil’, mix of the tribal and the oligarchic. I feel this way because the actual 1%, that is to say the people who make up the 1% are far more likely to be greedy and cutthroat, when not simply the scions of the greedy and the cutthroat, and are thus likely to make cutthroat decisions from that greed.

            That’s how I feel about the 1%. It’s a high bar to pass and, to date, only a few members of the 1% have met that bar and even fewer consistently: FDR, the Kennedys and Oprah. They did so by relentlessly, consistently, working on behalf of the 100% to make the whole world a better palce. Warren Buffett doesn’t seem particularly greedy, it seems more like a game to him, but he also doesn’t seem particularly aware outside the confines his attentions to his immediate circle, like his secretary.

            Elizabeth Warren was not born to the 1%. What entry she has to the 1% comes directly from her efforts on behalf of the 100%. She and Oprah are the anomalies here. Can you name one other living person, born to either poverty of lower-middle class penury, who rose to such wealth and did so by directly confronting issues of wealth, inequality, esteem and self-consciousness? Sure, Oprah does (did?) it in a rather squishy touchy-feely individualist way by way of media and EW does it by a rather dry examining of bankruptcy laws and their affect upon people, championing legal protections for consumers and generally caring more than about money by caring about what money does to people, but the arc of their story is roughly similar and distinctly unique.

            Most other members of the 1% prefer to protect their standing, and their piles of cash, without regard to the demonstrated deleterious affect upon the population as a whole, preferring not to ‘re-distribute wealth’ through the government, and instead proffering a more meager kind of re-distribution filtered through their bladder first, that ‘trickles down.’

            • A Few Other Outstanding 1%ers

              Can you name one other living person, born to either poverty of lower-middle class penury, who rose to such wealth and did so by directly confronting issues of wealth, inequality, esteem and self-consciousness?

              Yes. A few: President Obama; Deval Patrick; Bill Moyers; Jon Stewart; Norman Lear

              And there are others that don’t come to mind right now. Oprah and Warren are impressive but hardly unique.

            • So how do you fix the problem, as you define it, in a free society?

              How do you decide who gets to keep some, most, all of their wealth? Will you penalize those who were born with money (as Obama said “silver spoon” people which I assume he was referring to the Kennedy family? Or will you give bonus to those who “were not born to it” which I assume you mean Scott Brown.

              How do you decide or do you punish all of them for the “sins” of some of them?

              So let’s get money back from those evil 1%ers starting with George Soros, then we’ll rob it from Jennifer Anniston and Robert DeNero, the 2011-2012 top paid athletes starting with Tiger Woods, Kobe Bryant, LeBron James, Roger Federer… what’s their hourly rates?

              • You tax progressively, ...

                …fund a safety net (that works), instill fairness and public interest into regulations (might need major campaign finance reform before this is possible), and ensure that Government invenstment ensues at a pace that can compensate for when free market demand slumps.

                These steps are necessary in order to ensure the sufficient income mobility that defines a healthy economy.

                Also, I think it’s important to point out here that you asked about 1% hatred, but you’re the one using the word ‘evil’. If you have a real concern about rhetoric, I’d advise you to look at what the left is actually saying and not what you think it’s saying (‘evil’). If you keep convincing yourself that we keep saying ‘evil’, you immunize yourself to dialogue.

                Fairness in regulations might need to be preceded by an SEC and IRS with teeth. Also it’d help if the Fed took the ‘dual’ in their ‘dual mandate’ seriously.

              • Strident rhetoric

                You mentioned Scott Brown. Please admit that Elizabeth Warren also made her own wealth. The preference in favor of those who make their own wealth and against those who inherit their wealth is older than America — it had a great deal to do with why America was created in the first place.

                If you could stop hyperventilating for a few moments, the answers to your questions aren’t that hard to find and discuss. America managed to do it for a long time, most especially during our most prosperous period in history (and during the time that we were the most prosperous nation in human history).

                We might do things like structure estate/gift taxes to discourage the creation of the kind of aristocracy that plagued the UK and Europe during the formative years of the US. We might structure taxes on total income (as measured by, for example, annual growth in personal net worth) to maintain the GINI coefficient of family income at something closer to the 30 of the EU or the 27 of Germany instead of the 45 of the United States.

                Here’s an exercise. Try naming “first world” countries that seem to reflect prosperity, culture, lifestyle, personal liberty, and attitudes similar to the US. My own list includes nations like Germany, Canada, the UK, Austria, and so on. Try naming countries that oppress their people, have crushing poverty, horrible human rights records, and generally reflect what we DO NOT want America to be. My own list includes nations like Haiti, Columbia, Bolivia, China, Panama, most of Africa, and so on.

                Now, with your two lists in hand, look at the figure in the link and find the US (we are number 41). Are the countries you like above or below us in the list? Are the countries you don’t like above or below us in the list?

                We are hurtling down a path that takes us further and further away from the kind of nation where most of us want to live. When you use words like “evil”, “rob”, “penalize” and so on, you sink into strident rhetoric that distracts you and us from the crucially important question of how we get our economy on track so that it benefits ALL of us.

                Finally, I hope you’ll allow me to distinguish between those born to wealth who acknowledge their privilege and use their wealth to improve the world around them as best they can and those who “were born on third base and think they hit a triple”.

              • What mr-lynne said

                How do you decide who gets to keep some, most, all of their wealth?

                Also, you stop using terms like ‘their wealth’ and ‘punishment’.

                You refuse to begin with the ratiocination that all that wealth can ever be attributable directly to one person. It is not ‘their wealth’. Bill Gates is not personally responsible for 60 billion dollars of productivity. Warren Buffett did not shoulder 40 billion dollars of productivity all by his lonesome. They are not, in a word, many billions of times stronger, faster, smarter or even luckier than the rest of us.

                It is not punishment to recognize that they are part of the fabric of the economy and have benefitted greatly by their involvement in it. It is recognition that they didn’t do it alone and recognition that they owe a debt to the nation.

                Warren Buffett made his money in insurance during a time when New Deal policies raised the living standards of millions of Americans to the extend that they could afford insurance and banks were reined in from reckless investments. Warren Buffett owes a great deal of ‘his wealth’ to FDR. No New Deal, no Warren Buffett.

                Bill Gates made his money on the cusp of massive defense and National Science Foundation spending on computers and computer networks. Bill Gates owes much of ‘his wealth’ to Al Gore. No government spending, no Bill Gates. The same is true for Larry Ellison, Sergey Brin, Larry Page, Jeff Bezos, Elon Musk and Mark Zuckerberg.

                The Koch Brothers owe their wealth to their father, an MIT trained chemical engineer, who developed more efficient processes for turning oil into gasoline at a time when the personal automobile was gaining ground and much of transportation infrastructure (ships, trains, etc) wer moving from steam/coal power to gasoline/diesel. The creation of a national highway system in the 50′s didn’t hurt either…

                You can play this game all day, and you’ll come to the same conclusion about ‘their wealth’… it is not solely attributable to them. They are in debt to the nation for their wealth. They should give more because they got more.

          • I wouldn't personalize the

            question as you are here. The issue is not how we feel about 1 percenters. The problem with the GOP and perhaps you is that issues are always phrased as us vs. them. Who is most like me? I don’t really care if I vote for someone who is a gajillionaire or lives on his senatorial salary. I care about what she does in office. The one percent is shorthand for an issue, not individuals. It’s easier to say and catchier to say than the top 1/10 of the one percent. Sometimes we have to play with the language we are dealt.

            The issue is the concentration of wealth in the hands of a small percentage of people. Krugman has noted that it’s actually a small fraction of the one percent (1/10 of 1 percent) that is rapidly accumulating wealth. The problem we have with Brown is not that he is in the one percent, but that he shares the Republican desire to continue to redistribute wealth to those people.

            How do I feel about people getting rich? I think it’s fine as long as they fairly share the burden of our society. I don’t have a problem with Mitt’s wealth. I have a problem with his wealth redistribution policies. I don’t have a problem with Elizabeth Warren having money. I care what policies she’ll work on.

            Personally, I wouldn’t mind making a lot of money, but I’m not into wealth for wealth’s sake or passing on a fortune to my children. To me, accumulating vast sums of money is crass. I respect the right for people to do so, but I think its crass when there are so many things that can be done to improve the lot of others.

      • I may be wrong, it happens.

        Other than your spinning, I was not referring to you but BMGers/Democrats in general. The true test will be if after this race, how will BMGers comment on “how much money is raised” or “where does it come from”. Here’s a thread from 2010…

        I think the no-interest loan is an extremely generous benefit, extremely generous… which I have no problem with.

        • It's funny that you point to that thread,

          which I went back to peruse. I found it an excellent read. Nobody was saying that it was “bad” that Brown raised a lot of money out of state. People did object – and rightly so – to the Brown campaign’s refusing to be transparent about where their money came from, perhaps because they were embarrassed about it, but of course all of that has come out by now.

          Also of interest was stomv’s highly prescient observation:

          If Scott Brown relied on a surge of cash from out-of-state, he’s going to be struggling in 2012 to raise the same cash — not only will there be 33+ senate races and 465 house races, but also a POTUS race. He won’t be the only thing going on, and so he won’t get the moneybombs.

          The flip side, of course, is that Dems in MA won’t be able to export their campaign financing to other parts of the country as we usually do on POTUS years; instead, we’ll keep more of it in MA funding the Dem senate challenger to Brown.

          So Brown’s got about 18 months to raise serious cash before the 2012 election heats up. After that, he’ll lose ground big time.

          Stomv was exactly right about Brown’s fundraising difficulty. We’ve already seen that Brown is raising a good amount of money, but that his cause does not have nearly the national caché that it did in 2010, so Elizabeth Warren is gaining ground quickly and, if things keep going the way they’ve been going, Warren will likely catch up by the end of this quarter. Stomv also correctly anticipated that MA Democrats would enthusiastically rally behind the Democratic Senate candidate, which we are also seeing. He did not anticipate the extent of national enthusiasm about this race on the Democratic side, but that’s because Warren was not on anyone’s radar screen at the time.

          I actually think that is a great thread – the kind of thing that makes BMG an interesting place.

  5. On being the 1%

    I don’t believe anybody has stated the 1% in terms of income/wealth is inherently evil per se. For me at least, it’s a 1% attitude that is concerning. FDR and JFK were in the top tier in their day, but also pursued policies to lift up the rest of us. Warren Buffet is well within the 1% but also has a social conscience. There is also the matter of how they came to their wealth. Mitt Romney, through Bain Capital, came by much of his wealth by consolidating businesses and costing a lot of jobs. When he says that nobody should begrudge success, I feel like saying, “Actually Mr. Romney, I DO have a big problem with your kind of success!” Elizabeth Warren is pulling down a healthy salary as a Harvard professor, and made some money in the government, neither of which I have a problem with. As for sources of campaign money, both are getting some from out of state. There are bragging rights for how much is local as a sign of support from your would-be constituents, but nobody should be expected to unilaterally disarm. I’m much more concerned about the interests behind the money than the geography, but even then look at the statements and records of the candidates.

    • johnd just doesn't want to listen ...

      and it’s been covered with him many times before, but he just doesn’t want to accept basic facts. It’s easier for him to vote for Scott Brown when he lives in his own fantasy world.

      • Why do you have to go there JohnK?

        Basic facts? Funny how opinions become facts to zealots. But I’m sure we’re all guilty of this on occasion.

    • Maybe the more thoughtful people think about 1%ers as you define it...

      but I think many other are simply mad at the people who are successful. I sense the partisan influence causing the Occupy groups and liberals in general (not all) to take issue with conservative or Republican 1%ers while they give passes to Democrats.

      As for Buffet, his words mean little to me. I discount people who were slave drivers their whole life but think differently when they are older or have made their billions. How did he feel about paying taxes 30-40 years ago when he was building his empire?

      So I’m glad we are in agreement about stopping this insane attack “on the rich”. As for the “how they make their money”, let’s face it, people who make a lot of money have to get that money from someone. The housing market is in the toilet… buyers are buying houses at dirt low prices… those buyers may sell those houses in a few years and make tons of money… are they bad people for making money off the backs of home owners who are underwater?

      Could you please tell the Washington Democrats to stop dividing our country by demonizing Americans as the “haves” vs. the “have nots”, starting with the President.

      • "...other are simply mad at the people who are successful."

        I think this is a misperception. Pointing out that there are “have’s” and “have not’s” is to point out something axiomatic. The ‘outrage’ on the left isn’t derived from the existence of the 1%, it’s derived at the imbalance in our system that embodies the unfairness of how the 1% are treated economically. The system and the unfair ways in which the 1% can (and do) leverage a wealth position to change rules. Simply put, in a ‘natural’ free market system, wealth stratifies (to the point of absurdity actually). In a regulated market, this tendency is ameliorated. In a regulated market combined with a social safety net, the harm that stratification can cause at the lower end wealth classes are ameliorated even more. This amelioration is actually very very important if what you want to create is a merit based market.

        The situation we see ourselves in right now is one in which moneyed interests not only don’t want to play in a well regulated economy with a safety net, but they also leverage their position to change the rules of game. Regulatory capture is a real problem. Note that (especially from the perspective of liberals) the ‘well regulated’ and ‘safety net’ are characteristics that keep the system fair. So its easy to see how 1) the current position of the 1%, 2) how they got there, and 3) how the select 1% actors leverage their wealth in unfair ‘rule capture’ to further their position can be offensive. Nobody likes a butcher (or tax collector) who puts their thumb on the scale.

        So all this being said, I can’t blame the 1% for taking advantage of the unfair tools that have been left for them. I absolutely can be offended that those tools persist and do so because of the actions of the 1%. People should absolutely be able to act in their interest to enhance their position, but the system in which we all participate to do so must remain fair. Extreme wealth stratification is a symptom that the rules in place to not sufficiently mitigate the ‘natural’ stratification effect. If you like oligarchy and dislike meritocracy, then by all means don’t be offended.

        • When it is demonstrable...

          … that pretty much all income gains went to a tiny few, even though we all participated in creating those gains, it’s pretty clear something went wrong in the amelioration mechanisms.

          • well said...

            … that pretty much all income gains went to a tiny few, even though we all participated in creating those gains, it’s pretty clear something went wrong in the amelioration mechanisms.

            A good part of (my, at least) frustration derives from the outright mendacity it takes for someone like Mitt Romney or John Boehner, or whomever, to make their case on the implied notion that we all DID not participate in creating those gains: as though the job you have was bequeathed to you by the ‘job creators’, you are lucky to have it, and that the government, by interfering with their wealth, interferes with their ability to bequeath unto you a job.

            I wholeheartedly agree with you and endorse your viewpoint. I daresay, however, that one of the problems of the 1% is that they would dispute the notion that “we all participated in creating those gains” This inability to see, or at least acknowledge, the possibility this simple truth is at the heart of the issue.

            • I also dispute the use...

              … of the term ‘job creators’. Certainly people with wealth can turn it around to create jobs, but weather they do or not has more to do with context than wealth. If you are making a decent profit in a declining market, you don’t expand. Similarly, if you’re running tight margins in a successful business and short on cash in an expanding market, you find credit to expand through the cycle. It is not axiomatic that if one has wealth one is a job creator. The economic context is more important actually and that makes the amelioration and safety net that much more important that tax cuts for the rich.

              • People with successful businesses need a reason to invest more.

                If the curve is bent so they don’t make more by investing more, why would they do it. I know it sounds wonderful and romantic, but stop thinking businesses do “anything” for philanthropic reasons, they need a financial reason to invest.

                I agree with you that wealthy people are not necessarily job creators, we are seeing this with trillions of dollars in the banks (on the sidelines) while millions of Americans are out of work.

                • What drives...

                  …successful business (in aggregate) is customers. The bank money has nowhere to invest because customers aren’t there. Of course stimulus is a mitigation to this problem that has been taken off the table, neverminding the overwhelmingly great interest rates the government could take advantage of here for short term stimulus. The point is, in a recession, tax cuts for the rich don’t do anything but create dead weight liquidity. The party of ‘tax cuts always help’ needs to get its head out of its ass.

      • mad at people who are successful

        This has already been argued to death with you many, many times.

        Short answer: it might be true of populist liberals. We have a sprinkling of the them here.

        It’s not true of wonky liberals. Most of the liberals here are wonky. Wonky liberals don’t regard tax policy as a form of punishment. You do. That doesn’t mean we do.

  6. Difference in attitudes in a nutshell.

    Upthread JohnD says that Romney got rich at the expense of others, and that business is “dog eat dog”. He goes on to say “That’s life!” while I say “That’s Unacceptable!” My philosophy of government is that is precisely government’s role to rein in and check the natural tendencies to make a profit at any cost.

    • leash laws

      are precisely why dogs aren’t eating dogs in the street right now.

      He goes on to say “That’s life!” while I say “That’s Unacceptable!” My philosophy of government is that is precisely government’s role to rein in and check the natural tendencies to make a profit at any cost.

      Well said, I repeat it and I agree wholeheartedly.

    • Christopher, we've danced around this issue before wrt Wal Mart...

      show me a company (one that doesn’t have a temporary lock on a market) who does not act in a dog eat dog manner and I’ll show you someone on their way to bankruptcy.

      Change the laws if you want, but don’t criticize businesses for taking advantage of the laws our leaders wrote.

      • This is an excellent argument for a liberal regulatory regime

        1. Companies must compete as viciously as allowed else they go under.
        2. Vicious competition has morally bad consequences.
        THEREFORE, companies must be restrained from vicious behavior.

        I can conclude you are voting for Ms. Warren, then?

        • A few months back,

          JohnD notably expressed some openness to Warren’s candidacy in the early going. But I don’t know where he is on that now. John?

          • Vert smart, that JohnD is still here.

            I am still very much in favor of consumer protections, things to protect regular people from being “raped” by banks… My remedy may be different but I would love some innovative inititives to help distressed homeowners as well (no principle reduction but reset mortgage rates to 4% or extend loans for 30+ years…).

            I also said I was pro-capitalism and EW seems to be pandering to her base by calling out businesses (GE).

            My issues with this thread are about her bending the truth, as all pols seems to do. America invests plenty of money in education, far more than we ever have in the past. Is that money invested wisely or as prudently as we did in the past… not even close IMO.

            You’ll also note I asked the following…

            US Senators have a wide variety of responsibilities so it would be useful to know your positions on issues such as Illegal immigration, the National debt (and how to reduce it), Healthcare costs, Afghanistan, bringing jobs home to the US, Renewable Energy, Unions and jobs, jobs, jobs…

            So, I’m reading her opinions on her website and will comment later (off to a fundraiser for Pancreatic Cancer).

  7. Are we to believe

    that Senator Snotnose would turn down an interest free tuition loan for his children? Really?
    How many race horses does Warren own?

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