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Byron York writes
STOCKBRIDGE, Ga. – Herman Cain’s handsome glass-walled office overlooks the first fairway of the Eagle’s Landing Country Club in this exurb of Atlanta, about 20 miles south of Hartsfield Airport. It is here that the 65-year-old Cain planned to spend what he calls his “cruise control” years — time spent not exactly in retirement, but at an easier pace than a business career that included stints as CEO of Godfather’s Pizza, president of the National Restaurant Association, and chairman of the Kansas City Federal Reserve Bank.
“Cruise control” it’s not. These days, or at least this moment, Herman Cain, long a favorite of Tea Party activists, is one of the hottest names in the Republican primary race. For most of the party, Cain wasn’t even a blip on the radar until the May 5 GOP debate in Greenville, South Carolina — or, more accurately, the moments after the debate, when Republican pollster Frank Luntz conducted a focus group on Fox News and found near-unanimous agreement that Cain was the winner. “I’ve done maybe 35 or 40 of these debates for Fox, and I’ve never had this kind of reaction,” Luntz said. “Something very special happened this evening.”
Many political insiders viewed the debate mostly as an opportunity for former Minnesota governor Tim Pawlenty to move up into the first tier of GOP candidates. Instead, people left Greenville’s Peace Center talking about Herman Cain — a result that few participants, including Cain himself, could have predicted.
“I was just stunned, shocked,” Cain says of the moment he saw, on a green-room television, that Luntz’s group declared him the winner. When his staff hurried to take him to the media room for an interview with Sean Hannity, Cain asked for a few minutes to sit down, catch his breath, and collect his thoughts. Although he has had some success as a talk-radio host in recent years, he had no idea of the impression he would make on viewers. “You know how fickle people’s perceptions can be,” he says.
To call Cain an unlikely candidate is an understatement. He is black, southern, a survivor of a fairly recent and very serious bout with cancer, a failed candidate for U.S. Senate, and a man best known as the chief executive officer of a mid-size national pizza chain. Yes, Republicans are drawn to captains of industry — but the pizza industry?
And yet Republican audiences listen to Cain and walk away saying he makes a lot of sense. Last week I attended a Cain fundraiser at a private home north of Atlanta. (To call it a private home doesn’t quite do it justice; it was a 42,000 square-foot Italianate mansion complete with its own lifesize replica of main street in cowboy-era Tombstone, Arizona, with Cain standing in the recreated Oriental saloon to greet big donors.) I was there on the agreement that I not quote anyone, but what the attendees told me about Cain was very similar to what the Fox focus group members said. They find him genuine, like his plainspeaking manner, and believe he has commonsense solutions to the nation’s problems.
A conversation with Cain doesn’t go very far before he gives you his prescription for the current economic mess. “Number one: stimulate the economy with direct stimuli,” he says. “Lower corporate tax rates, lower personal income tax rates – they work. Take the capital gains tax rate to zero. Suspend taxes on foreign repatriated profits. Provide a real payroll tax holiday — 6.2 percent for the employee, 6.2 percent for the employer. That’s the Social Security piece. Do it for a year. Then put a bow around it and make those rates permanent. You do that and you remove the veil of uncertainty — businessmen will go crazy. They will start investing again.”
Cain is also a devotee of the Fair Tax, a proposal popular with some Tea Partiers that would replace the current tax system with a federal retail sales tax. He doesn’t care if a lot of policy experts, including conservative policy experts, say it won’t work. At the debate, when Fox’s Chris Wallace brought up those expert opinions, Cain shot back, “Well, Chris, with all due respect, your experts are dead wrong.”
In the same debate, Cain also showed what appeared to be a startling lack of engagement in key foreign policy issues when asked why he has not put forth his plan for U.S. involvement in Afghanistan. “I’m not privy to a lot of confidential information,” Cain said. If elected president, Cain continued, he would gather the generals and the experts, talk it over, and then come up with a policy. “The experts and their advice and their input would be the basis for me making that decision,” he said.
Some observers and analysts saw that as evidence that Cain hadn’t grappled with the issue. But supporters saw it as a refreshing evidence that Cain is prepared to admit that he doesn’t know everything, and that he will take a businessman’s approach to solving problems like Afghanistan.
Watusie // May 16, 2011 at 8:07 am
“Number one: stimulate the economy with direct stimuli,” he says. “Lower corporate tax rates, lower personal income tax rates – they work. Take the capital gains tax rate to zero. Suspend taxes on foreign repatriated profits. Provide a real payroll tax holiday — 6.2 percent for the employee, 6.2 percent for the employer. That’s the Social Security piece. Do it for a year. Then put a bow around it and make those rates permanent. You do that and you remove the veil of uncertainty — businessmen will go crazy. They will start investing again.”
Good grief – why are reporters such lame brained stenographers that they never think to ask the obvious follow up question ? If all this is true, then why was it that during the GWB administration the only “growth area” was finance and construction, fueled entirely by the subprime bubble, not by genuine demand?
Bill Clinton raised taxes. GWB cut them. Why was the economy so much better under Clinton? Why was the budget in surplus back then, only to turn into record deficits under GWB?
If “uncertainty” is so evil and “certainty” is such a panacea, which are the Republicans, at this very moment, threatening to wreck the financial system and start a second Great Depression?
jerseychix // May 16, 2011 at 8:50 am
no kidding! And after all this tax cutting where businessMEN will go crazy and invest….in what?? What are they going to do that is going to create jobs for men with a reasonably poor high school education? They’ll invest in paper wealth that now due to no capital gains tax will create even bigger bubbles.
Who is going to pay for the roads, schools, and sidewalks? Or is that all going to be privatized and I’ll need and easypass on the stroller?
CentristNYer // May 16, 2011 at 8:16 am
Cain shot back, “Well, Chris, with all due respect, your experts are dead wrong.”
Sounds like George W. Bush, the Sequel. He relies on truthiness instead of actual data. If his gut says something is right, that’s all that matters. I think we all know how well that worked out the last time.
balconesfault // May 16, 2011 at 10:31 am
“Number one: stimulate the economy with direct stimuli,” he says. “Lower corporate tax rates, lower personal income tax rates – they work. Take the capital gains tax rate to zero. Suspend taxes on foreign repatriated profits. Provide a real payroll tax holiday — 6.2 percent for the employee, 6.2 percent for the employer. That’s the Social Security piece.
These are actually all indirect stimuli.
A direct stimulus is government spending money – purchasing goods and services.
An indirect stimulus is government putting more money into people’s pockets (via tax cuts) and hoping that they spend the money on purchasing goods and services (as opposed to, say, bidding up the price of gold even further, or investing in Chinese factories, or buying high value real estate).
This guy was a regional Fed Reserve Bank Chairman? Sheesh.
Although my guess is that Cain certainly knows the difference … but that he also knows that the average GOP voter doesn’t.
bacyclone // May 16, 2011 at 2:25 pm
“These are actually all indirect stimuli.
A direct stimulus is government spending money – purchasing goods and services.
An indirect stimulus is government putting more money into people’s pockets (via tax cuts)…”
It seems you have your economic view upside-down, which is probably why you don’t understand the difference between “direct” and “indirect” in this context. This is laid bare by your comment “government putting more money into people’s pockets…”
The government does not put money into people’s pockets by not first taking it away. Money gets into the pockets of a person by them first creating and selling a good or service through their time and effort.
The government gets zero funding without first taking a portion of this creative event away from the creator.
Thus, direct stimulus is allowing this creator to keep what they earned. As a result, the person or group of persons invests or spends their money as they see fit. Direct stimulus.
Government spending is indirect stimulus, as the government must first take it away from said creators, employ other people who then give a portion of this money to someone else. It might appear “direct” but in truth it is quite indirect — considering the source of the funds was your neighbor, but it had to be funneled through the Washington, D.C. filter before it could be spent where they think is best…rather than your neighbor’s choices.
My guess is that Mr. Cain has forgotten more about public financing and macroeconomic policy than you have learned.
balconesfault // May 16, 2011 at 3:47 pm
Thus, direct stimulus is allowing this creator to keep what they earned. As a result, the person or group of persons invests or spends their money as they see fit. Direct stimulus.
Stimulus of … what?
Certainly it’s not a guaranteed stimulus of economic activity that would create jobs in America and put Americans back to work is it?
Whereas government taking tax dollars and spending it on goods and services produced in the US without question will create jobs in America and put Americans back to work.
Now … there are plenty of ancillary arguments as to whether indirect simulation of the economy via increasing the money supply (which is really what you’re doing when you cut taxes without concurrent cuts in government spending) or direct stimulation of the economy by directed government spending is the best answer, either in the short or long term.
But you don’t really make those. You just throw around bumper sticker slogans.
Pressed on this point, I am sure that Mr. Cain would agree with the technical definitions the way I lay them out.
But as I said – he knows his audience. Rooms full of people where you can scream something as abjectly stupid as “Obama’s a Socialist!” without being roundly mocked by anyone with a functional definition of Socialist that doesn’t include every US President in the last 80 years.
Rabiner // May 16, 2011 at 9:51 pm
Bacyclone:
That is some convoluted thinking. Of course tax cuts are indirect stimulus versus Government spending being direct stimulus.
Please show me a real text book on economics that states your version of reality?