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News Thursday, Oct 25 2012

Romney Adviser: Income Inequality Doesn’t Matter Because The Poor Own Microwaves

Oct 25, 2012

WASHINGTON — Romney economic adviser and American Enterprise Institute Senior Fellow Kevin Hassett wrote an op-ed in today’s Wall Street Journal criticizing those concerned with the growing gap between the rich and the poor because many low income households own basic appliances, such as microwaves.

Hassett’s views echo those of Mitt Romney, who has criticized Americans concerned with inequality as being driven by “envy,” and said that discussions about the topic do not belong in public, but instead be reserved for “quiet rooms.”

“Growing income inequality is a major issue in this election, and a major issue for our economy. What Mitt Romney doesn’t understand is that improving the fortunes of low income Americans would expand the middle class and serve as a booster shot for our economy.” said American Bridge president Rodell Mollineau. “Video has shown us that when Mitt Romney speaks about inequality in his ‘quiet rooms,’ he does it not to address the problem, but to mock and attack his fellow Americans who are struggling. That’s not just wrong — that’s straight up mean.”


Romney Said Discussions About Inequality Are Driven By “Envy” And Should Be Confined To “Quiet Rooms”

Washington Post: Romney Said Questions About Wall Street And Inequality Were Driven By “Envy.” According to the Washington Post, during an interview on NBC, “[Romney] was pressed specifically — twice — on the question of whether any concerns about Wall Street, inequality, and economic unfairness are legitimate and are about something more than ‘envy.’” Romney said, “You know, I think it’s about envy. I think it’s about class warfare. When you have a president encouraging the idea of dividing America based on 99 percent versus one percent, and those people who have been most successful will be in the one percent, you have opened up a wave of approach in this country which is entirely inconsistent with the concept of one nation under God. The American people, I believe in the final analysis, will reject it.” [Washington Post, 1/11/12]

Romney Said Distribution Of Wealth Should Be Talked About In “Quiet Rooms.” According to the Chicago Tribune, during an interview on NBC’s “Today Show,” Romney was asked by Matt Lauer, “Are there no fair questions about the distribution of wealth without it being seen as envy, though?,” after Romney said questions about wall street and the distribution of wealth were driven by envy. Romney responded, saying “You know I think it’s fine to talk about those things in quiet rooms and discussions about tax policy and the like. But the president has made this part of his campaign rally. Everywhere he goes we hear him talking about millionaires and billionaires and executives and Wall Street. It’s a very envy-oriented, attack-oriented approach and I think it’ll fail.” [ Chicago Tribune, 1/12/12]

Romney Adviser Kevin Hassett Rejects “Left-Wing Narrative” Of Inequality, Citing Increased Access To Household Appliances

Hassett: “Left-Wing Critique Of Capitalism” That Emphasizes Inequality “Is Wrong.” According to Kevin A. Hassett and Aparna Mathur: “Blasting a caricature of his opponent’s economic policies, Mr. Obama has said, ‘it’s the same philosophy that’s been squeezing the middle class for more than a decade.’ Massachusetts Senate candidate Elizabeth Warren made inequality a theme in her speech at the Democratic National Convention in September. ‘The system is rigged,’ Ms. Warren said, ‘for many years now, our middle class has been chipped, squeezed and hammered.’ These statements echo a standard left-wing critique of capitalism: Economic growth does not serve all classes of society. In the mid-19th century, socialists of various stripes asserted that capitalists grow richer while exploiting workers, who grow poorer. Today we hear that the gains from economic growth accrue to the highest-income earners while the standard of living of the poor and middle America stagnates and the gap between the richest and the poorest grows ever wider. That portrait of the country is wrong.” [Wall Street Journal, 10/25/12]

Hassett: Consumption Is “More Relevant” Than Income. According to Kevin A. Hassett and Aparna Mathur: “Another way to look at people’s standard of living over time is by their consumption. Consumption is an even more relevant metric of overall welfare than pre-tax cash income, and it will be set by consumers with an eye on their lifetime incomes.” [Wall Street Journal, 10/25/12]

Hassett: Consumption Gap “Has Remained Remarkable Stable.” According to Kevin A. Hassett and Aparna Mathur: “Our recent study, ‘A New Measure of Consumption Inequality,’ found that the consumption gap across income groups has remained remarkably stable over time. According to data from the Bureau of Labor Statistics’ Consumer Expenditure Survey, if you sort households according to their pretax income, in 2010 the bottom fifth accounted for 8.7% of overall consumption, the middle fifth for 17.1%, and the top fifth for about 38.6%. Go back 10 years to 2000—before two recessions, the Bush tax cuts, and continuing expansions of globalization and computerization—and the numbers are similar. The bottom fifth accounted for 8.9% of consumption, the middle fifth for 17.3%, and the top fifth for 37.3%.” [Wall Street Journal, 10/25/12]

Hassett: “Left-Wing Narrative” Is Incorrect Because Low-Income Americans Own “Devices That Are Part Of The ‘Good Life’” – Like Air Conditioning And Computers. According to Kevin A. Hassett and Aparna Mathur:  “If the standard left-wing narrative is correct, then a typical poor American would trade his current circumstances for those of the past in a heartbeat. Yet the access of low-income Americans—those earning less than $20,000 in real 2009 dollars—to devices that are part of the “good life” has increased. The percentage of low-income households with a computer rose to 47.7% from 19.8% in 2001. The percentage of low-income homes with six or more rooms (excluding bathrooms) rose to 30% from 21.9% over the same period. Appliances? The percentage of low-income homes with air-conditioning equipment rose to 83.5% from 65.8%, with dishwashers to 30.8% from 17.6%, with a washing machine to 62.4% from 57.2%, and with a clothes dryer to 56.5% from 44.9%. The percentage of low-income households with microwave ovens grew to 92.4% from 74.9% between 2001 and 2009. Fully 75.5% of low-income Americans now have a cell phone, and over a quarter of those have access to the Internet.” [Wall Street Journal, 10/25/12]

Hassett: Notion That American Society Is “Rigged Or Fundamentally Unjust” Is “Ludicrous.” According to Kevin A. Hassett and Aparna Mathur:  “The data suggest the following picture. Over time, Americans have constructed a vast safety net that has adequately served the poor and helped them—as well as the middle class—to maintain significant consumption growth despite the apparent stagnation of cash incomes. The notion that a society that has accomplished such a feat is rigged or fundamentally unjust is ludicrous. It is true that the growth of the safety net has contributed to massive government deficits—and a larger government that likely undermines economic growth and job creation. It is an open question whether the nation will be able to reshape the net in order to sustain it, but reshape it we must. We might make significant progress in that regard if those on the left would stop seeking political gain by inflaming class hatreds with misleading statistics.” [Wall Street Journal, 10/25/12]

Kevin Hassett Is A Romney Adviser

Kevin Hassett Is American Enterprise Institute Senior Fellow And Director Of Economic Policy Studies. [, accessed 10/25/12]

Hassett Defended Romney’s Tax Plan On Campaign Conference Call With Reporters. According to the Boston Globe: “Mitt Romney’s campaign fiercely defended his tax plan Thursday, a day after anindependent study concluded it would offer big tax cuts to wealthy Americans while heavying the burden on middle- and lower-class families. On a conference call with reporters, Romney advisers ripped the study — conducted by the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute — as ‘biased’ and ‘a joke.’ ‘The study doesn’t take into account important aspects of Governor Romney’s plan, which will have a positive, pro-growth impact on the economy,’ senior adviser Eric Fehrnstrom said. Kevin Hassett, an economic adviser, contended Romney’s plan to lower income tax rates for people at all income levels would boost the nation’s economic growth by about 1 percentage point per year.” [Boston Globe, 8/2/12]

NPR: Romney Adviser Hassett Criticized President Obama’s Approach To Poverty. According to NPR: “But Republicans say one only has to look at the high poverty rate to see that Obama’s approach has not worked. ‘If someone’s in poverty, what do you do about it?’ asks Kevin Hassett, an economist with the American Enterprise Institute and a Romney adviser. ‘What you do is you fix the economy.’ Hassett says Obama’s plan is largely to expand government aid, but he says it’s this spending that’s helping to keep the poor in poverty.” [, 10/15/12]

Romney Campaign Previously Cited Heritage Scholar Robert Rector, Who Denies Poverty Because Poor People Have “Modern Amenities” Like Air Conditioning.

Romney Campaign Cited Robert Rector To Support Claim Welfare Attack On Obama. According to Mother Jones: “Romneyland didn’t whip up the bogus welfare attack on its own. It relied instead on the work of Robert Rector, a senior researcher at the conservative Heritage Foundation think tank in Washington, DC. Few Americans outside the Beltway will recognize Rector’s name. But it’s worth knowing that, for a national campaign spot, Team Romney turned to a man who holds controversial, and in some cases inaccurate, views of poverty and economics. Rector has claimed that poverty doesn’t impact children, that you’re not really poor if you have air conditioning or a car, and that the very idea of welfare lifting Americans out of poverty is ‘idiotic.’” [Mother Jones, 9/13/12]

Rector Report: Most Americans Living “In Poverty” Are Not Actually “Poor” Because They Have Air Conditioning And “Other Modern Amenities.” In 2011, Robert Rector and Rachel Sheffield co-authored a Heritage Foundation report titled, “Air Conditioning, Cable TV, and an Xbox: What is Poverty in the United States today?” According to the report: “For decades, the U.S. Census Bureau has reported that over 30 million Americans were living in ‘poverty,’ but the bureau’s definition of poverty differs widely from that held by most Americans. In fact, other government surveys show that most of the persons whom the government defines as ‘in poverty’ are not poor in any ordinary sense of the term. The overwhelming majority of the poor have air conditioning, cable TV, and a host of other modern amenities. They are well housed, have an adequate and reasonably steady supply of food, and have met their other basic needs, including medical care. Some poor Americans do experience significant hardships, including temporary food shortages or inadequate housing, but these individuals are a minority within the overall poverty population.” [, 7/19/11]

Read more of Rector’s controversial statements on poverty here.

Published: Oct 25, 2012

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