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Are Mitt and Newt channeling their inner progressives?

Robert Reich, professor of public policy | December 13, 2011

Two important reforms are stopping the revolving door between Washington and the nation’s financial giants, and preventing financiers from flipping companies(making short-term profits by borrowing big sums to buy them, then squeezing payrolls and firing employees, and reselling the stripped-down companies at a profit — unless the debt-laden firms fall into bankruptcy first).

Remarkably, the frontrunners for the Republican nomination for president seem to agree. At least, that’s the clear implication from what they’ve said today.

During a morning appearance on Fox News, Mitt Romney said Newt Gingrich should return the $1.6 million in payments he received from mortgage financial giant Freddy Mac.

Gingrich has tried to defend himself by saying Freddy paid him as a “historian,” but anyone with half a brain knows Freddy wasn’t interested in history. It coughed up the money because they wanted Newt to influence his former House colleagues, so they wouldn’t take steps to reduce Freddy’s financial risk or reach.

In effect, Romney is taking a swipe not only at Gingrich but at the well-oiled revolving door linking financial giants to former congressional leaders, Treasury officials, and their staffs. That revolving door is one of the reasons the Street and its auxiliaries (like Fannie and Freddie) took the risks that caused the financial crisis, and have still never paid the price.

What’s Gingrich’s response? He said this morning ”if Governor Romney would like to give back all the money he’s earned from bankrupting companies and laying off employees over his years at Bain than I would be glad to then listen to him.”

Newt is criticizing not only Romney but also the pump and dump practices of Wall Street that have caused hundreds of thousands of Americans to lose their jobs, put countless companies in jeopardy, and earned a fortune for private-equity managers and others.

If this goes on much longer, the Mitt and Newt Show will get a slot on MSNBC.

Cross-posted from Robert Reich’s blog.

Comments to “Are Mitt and Newt channeling their inner progressives?

  1. I am kind of disappointed that some Americans are disappointed with Obama. It was clear that he collected around him some very good people to form his administration but in the circumstances what more could he do. I would like an answer on this. A global financial crisis, a house of reps that became predominantly Republican, and furthermore the US economy and unemployment rate seems to be on the way back. Europe seems to be fairing far worse and please don’t tell me that all the politicians in Europe are useless.

  2. Dear Huggly,

    Yes, you are absolutely right. Conditions in the United States are deplorable. And they are getting worse…

    The thing is, elections in modern times are not about voting for the best man – they are about stopping the worst man from getting elected!

    Yes, President Obama has failed so far. He has not kept his promises. He is a slick black politician. (Which implies that he is a ‘jive’ talker.) He worships money. He likes to hang out with the rich and famous. And, in all probability, he will probably get very little done in his next term of office.

    That having been said, there are worse things in this world than people who are full of hot air. Namely a Republican President, who thinks the answer to this country’s problems is cutting social welfare programs and giving more tax breaks to the rich. This would mean the doubling of your statistics on poverty and hunger in the United States.

    The ultimate answer, as Leo Isaac so eloquently put it, is American Socialism. But, that is a whole different issue. First we have to stop ‘Newt Romney’ from leading this country to disaster. After that, we have to get deadly serious about our politics, and form a United Front for Progress.

    Unity is our greatest challenge….

  3. Well Huggly, by taking aim at President Obama, you are taking aim at the wrong institution. What’s wrong with America is blatant hatred of socialism. The USA was once the greatest advert for capitalism, but now it is all to easy to see that the extremist laissey-faire idealogy of certain political elements in the US is NOT the way forward for advanced civilisations of our planet. The large and getting larger disparity between the rich and the poor can only lead to civil strife in the long run. Unless the population of the world can grow babies of equal intelligence and ability, there will always be a situation where the strong must look after the weak, rather than prey on them and bleed them of life essence.

    Instead of taking aim at Obama, you should more carefully consider whether any decent nation can keep on reducing taxes for the well-off and wealthy. The obsession of American people for “low taxes” will inevitably give rise all the bad things you talked about in your comment.

    If Americans simply “don’t get it” at the moment, they soon will. Globalisation will ensure a continued rise in the standard of living in the developing world and a continual decline in the prosperity of the USA.

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