I Get It...

I really do.  I can't believe I am typing those words, but I am.  As it says in the masthead, The Burrow is my place for truths; I'm just stunned that Mitt Romney said something which rang that particular bell.

Governor Romney's pledge to have Big Bird for Thanksgiving dinner is based on what seems to me to be a valid question:

Do you want to borrow money from China in order to pay for this?

No, I don't want to borrow money from China to pay for anything.  I, too, want a vibrant middle class filled with wage earners happy to pay their taxes for the trickle-down government the Republicans abhor.  I don't believe that President Obama appreciates the role of business in America today; read the policy pieces of Audacity of Hope and see if you don't agree.  Raising taxes has a chilling effect on economic growth, if only because investors have less discretionary cash.  It's all true. 

But there's so much more to it than that. 

I wish that Mr. Obama had made more of the fact that his deficit problems include paying for Republican war mongering financed on a purloined credit card.  The bills have come due; the difference is that, under this administration, they are actually showing up in the budget.

A vibrant middle class depends on the growth of small businesses; local folks who fix your HVAC system or create your floral arrangements and who might be interested in opening an office on the other side of town. Part of the stimulus package was an effort to increase the flow of dollars into the community by providing liquidity to the big banks ... liquidity translating into an opening of the lines of credit which the crash of 2008 had closed. 

Have I lost you?  If you can't borrow the money to expand your business, you can't hire the movers and carpenters and vendors who would benefit from your growth.  When the economy collapsed in the summer/fall of 2008, banks were hesitant to let go of any of their cash.  The risks were deemed too great.  The stimulus package eased the pinch felt by the lenders (banks) and made them more willing and able to grease the wheels of commerce by lending those stimulus dollars to credit-worthy folks.

At least, that was the plan. In reality, the banks are holding onto those dollars, for reasons fathomable only to themselves.

Governor Romney alluded to this issue when he talked about the need to streamline regulations and make penalties clear so that lenders are not paralyzed by the fear of unforseen consequences.  That's the party line - it's government's fault that the money's not flowing.  They are non-responsive so we are immobilized. I get it.... it feels logical.... everyone has experience with government bureaucrats... but then I stop and think and I see the flaw in the logic.

The banks are earning interest on these hoarded dollars.  Their balance sheets look sunny and big bonuses for top executives seem justified. That wasn't really the plan at all.  The notion was to get that cash into the hands of those who might actually use it.  Guys like Mitt Romney, who've never lived with no money, don't think there's a problem with this paragraph from the AFL-CIO’s Executive Pay Watch report (emphasis mine):

The ratio of CEO-to-worker pay between CEOs of the S&P 500 Index companies and U.S. workers widened to 380 times in 2011 from 343 times in 2010.

When the top is so far above the bottom, the middle is stretched to the breaking point.  The report goes on to make my point with facts:

Back in 1980, the average large company CEO only received 42 times the average worker’s pay.

These are guys keeping score.  The money on the bottom line means more money in their pockets and bigger bragging rights on the ski slopes.  Does that sound cynical?  I know these people; lots of it isn't very pretty at all. The fact that public policy was designed to help grow the economy is less important than the fact that all those lovely new bills were sitting safely in my ledger... on the asset side.

In no small part, this is partially the fault of the President.  He did not insist on a spending time-table, nor on an accounting of the distribution of the funds in a timely manner. Argue exigent circumstances, argue necessity, argue whatever you want. I'm going back to my original premise: our President's grasp of the inner workings of business is lacking. 

I love his references to his grandmother and her glass-ceiling-ed career, but there is more to business than the perspective of the employee. What happened to his grandmother was wrong and he learned valuable lessons (see Lily Ledbetter Fair Pay Act for proof) but it's not enough. Feet must be held to the fire, regulations must be implemented, time is of the essence.... and there I go, nearly believing the spiel.

Once again, I wish the President had made more of the fact that this Congress is not going to do anything that might make Mr. Obama shine.  I wish he had told us the committees in which his proposed regulations are languishing. I wish he had gone Bill Clinton on Mr. Romney and brought out the math in ways that everyone could understand.  I wish he had given us the numbers so that we could see at least this one piece of what is (not) going on. I wish he had done more than just stand there.

So, I get it when 67% of the people polled respond that Mitt Romney won the debate.  For a while, he had me believing it, too.