Coke Comes to Somaliland

Although Somaliland remains unrecognized--and remains substantially more stable and democratic than internationally recognized Somalia--the Coca Cola corporation has provided it with a measure of recognition.  That's right, Somaliland is the proud host of Africa's latest Coca Cola bottling plant.  NPR has the story.

Romney's 98 Page Millstone, Courtesy of Rep. Ryan

Been devoting all your time to the Olympics this week? Have you, like me, been talking less about the sports and more about NBC awful coverage?  Then maybe you missed the news that Gov. Romney selected Rep. Paul Ryan to be his running mate.  Now a lot of the smart money had been on Sen. Rob Portman of Ohio, but I'm on record thinking that if Romney went "outside the box" that would lead to Paul Ryan.  Rep. Ryan is more exciting (just barely) than Sen. Portman, less confrontational than Gov. Chris Christie, less green than Sen. Marco Rubio, and more everything else than Gov. Tim Pawlenty.

But Rep. Ryan comes with one big problem for Romney.  He's very very specific about the changes he would make to federal spending and the tax code. Like, nearly 100 pages specific.  Remember a week ago when the Brookings Institute's Tax Policy Center said Romney would have to raise taxes on the middle class to make his sketch of a tax plan revenue-neutral? Remember when Romney's campaign said the study, put out by a highly respected think tank that gave every possible positive assumption to Romney, was "a joke?" Well, Romney could bob and weave on the study because conservatives have been living to discredit studies that have anyone associated with it who once breathed on a Democrat. He could have gotten past that.

But Romney's selection of Ryan suggests that he doesn't believe he can win running as "the not Obama," as Ezra Klein wrote about on Saturday, "you don't make a risky pick like Paul Ryan if you think the fundamentals of the campaign favor your candidate." I tend to agree.  And that could be true, I mean people could figure out that a good part of the reason unemployment remains so doggedly high is because the government isn't replacing jobs it's lost. So instead of playing it safe and seeing if he can knock off an incumbent beset by poor economic performance, he decides to pick Ryan and strap a 98 page millstone around the neck of the campaign. Remember when Romney's campaign was arguing revenue neutrality? You can forget about revenue neutrality the second you say, "Paul Ryan."

Why do I describe Ryan's plan as a millstone?  Take it away Washington Post:

His proposals contain three major elements:First, the Ryan plan would overhaul the entitlement programs that have grown to consume about 40 percent of the budget, reshaping Medicare coverage for the elderly, and cutting deeply into Medicaid, food stamps and other programs for the poor. Second, he would rewrite the tax code, slashing the rates paid by corporations and the wealthy. Finally, Ryan would cut spending on other federal programs and agencies, with the exception of the Pentagon. Most controversial is Ryan’s proposal to transform Medicare so that the government, rather than paying for health care for the elderly directly, would give beneficiaries a set amount of money to shop for a private health insurance plan.

Now, without a doubt, there is a certain segment of the Republican party that will get very excited about this plan, but I don't think you'll excite too many undecided independents with that plan.  Lest we forget, Newt Gingrich said the Ryan plan was "right-wing social engineering." Of course, now that Ryan's on the ticket, Newt's position on the Ryan budget plan has evolved. The point being, Romney didn't need to tap Ryan to be VP. He could have tilted toward the Ryan plan, without totally, completely embracing it and lived in an ambiguous policy space until the election.  The math was not on President Obama's side. Romney didn't need to rile up his base, considering a fair percentage of that base believes the entire Obama presidency is illegitimate anyway, and I'm even sure Ryan does that.

But what Ryan does do it change the decision making process for discontented independents.  Until this weekend it was pretty straightforward: Do we stick it out with Obama, or do we make a change to Romney? Now the decision becomes: Do we want to gut government programs and remove safety nets for the less fortunate or do we want to keep those programs?

I was tempted at the end of last week to write up a post about how petty this presidential race has been so far.  It appears we could have the sweeping ideological debate that this country needs, provided we can all be honest about what these choices mean. And I think that's good for the country, but I'm not so sure that's good for candidate Romney. But hey, if this election doesn't go his way, maybe he can go to NBC and fix their Olympic coverage in time for Sochi.  NBC sucks.

Further reading: Jacob Weisberg at Slate says what I'm saying, only better.  Why do you think I put this link at the bottom of the post?

Romney Will Raise Taxes on the Middle Class

"[I]t is not possible to design a revenue-neutral plan that does not reduce average tax 
burdens and the share of taxes paid by high-income taxpayers under the conditions described 
above, even when we try to make the plan as progressive as possible."


With this statement, a new report from the Brookings Institution and the Tax Policy Center blows the lid of the even the scant tax plan promoted by Gov. Romney. You can read the full report here and the article in the Washington Post here, but the punchline is this: If you do what Romney wants to do to the tax code and then try and make it revenue neutral you will end up increasing the tax burden on people making less than $200,000 a year, while reducing the tax burden on those making more than $200,000.  


In order to achieve revenue neutrality we would have to eliminate the mortgage interest tax credit, eliminate tax breaks on employer-funded health insurance, tax breaks against state and local income, and child care tax breaks.  While that might be sound economic advice, all those tax breaks are very popular with the middle class.  The Washington Post reports the tax burden for 95% of population would increase by 1.2% under Romney's plan.


I'll be updating throughout the day with more analysis, but something to start your morning off.


Updated 12:02pm: From Matt Yglesias writing at Slate, "Raising taxes on the rich and middle class alike in order to afford spending on social insurance, education, and infrastructure is one thing. Raising taxes on the middle class in order to afford tax cuts for the rich is another."


Updated 11:50am: Wonkblog has a post up on the Romney tax plan and a GOP Congressional alternative, "Romney can take some solace in knowing his allies in Congress have proposed a plan that shifts the burden from high-income to middle-income taxpayers even more dramatically. A new paper by Chuck Marr and Chye-Ching Huang at the Center for Budget and Policy Priorities looks at the distributive impact of the Pathway to Job Creation Through a Simpler, Fairer Tax Code Act of 2012, the proposal introduced by Senate Minority Leader Mitch McConnell (R-Ky.) and House Ways and Means chairman David Camp (R-Mich.), and included in the 2013 House Republican budget, that would set a framework for tax reform."


Updated 11:17am: Think Progress weighs in the Brookings Report, "On several occasions, Romney has denied that his tax plan would provide a big tax break to the wealthy. But as this analysis shows, even giving him all of the benefit of the doubt when it comes to eliminating deductions, the plan is still a massive tax break for the rich." (h/t @_al_man)