Wednesday, October 12, 2011

I Was Wrong About Herman Cain at the Debate

I guess I have to write this one. My pre-debate post over at Plum Line noted that Herman Cain was going to receive a lot of attention at the Bloomberg/WaPo debate, and that "This isn’t apt to go well." The reviews, however, wound up just fine, ranging from mildly negative to solidly positive (see Sullivan's roundups here and here). So I'm inclined to say that I got it wrong, and need to deal with it.

And I look at the debate performance, I just can't help thinking that I was basically right. I mean, first of all there's his praise for Alan Greenspan, which is both bizarre on the face of it and, beyond that, a choice that might really cost him support from whatever Paulites are open to voting for him. Then there's the business of secret advisers, which certainly invited plenty of questions and added to the air of Not Ready for Prime Time. And his general defense of 9-9-9 was really just limited to repeating how great it was, over and over again, which beats whatever Rick Perry is doing and perhaps even what Newt or Bachmann are capable of, but still it wasn't exactly impressive.

Which I think gets to what's going on here. It's not that Cain was any good; it's just that everyone else (other than Mitt Romney) is really that bad. Including, for those who attempted to attack him, a real lack of ability to even manage that. After all, Bruce Bartlett did them the favor of giving a roadmap yesterday morning in the Times, beginning with a very obvious question: if 9-9-9 is so great, why is Cain planning to eliminate it when he gets to "Phase 3" of his own tax plan? In other words, part of what went right for Cain is the same thing that's gone right for Mitt Romney, who has somehow managed to get through a half-dozen debates without having to deal with a single effective shot over flip-flopping.

The other part of this is that I think reporters have actually learned something over the course of the year, and most of them don't really need to be reminded (as Kevin Drum does anyway, and it can't hurt) that "Herman Cain is not going to win the 2012 Republican presidential nomination." That is, Cain is still being graded on the crank candidate scale rather than on the serious contender scale, and as a crank candidate he's way better than Gary Bauer or Alan Keyes!

But I should have known all of that in advance, along with the point that Cain is more likely to completely melt down the farther the questions stray from tax policy, and he was going to be on relatively safe ground in a debate devoted to the economy. So while I do think that he didn't help himself last night, I think I have to admit that I got this one wrong, and at the very least I should have been a lot more careful about the factors that would affect the reaction to what he did.


  1. It seems highly improbable that Cain can win the nomination. Then again, it seemed highly improbable that the Republicans would nominate the man who passed the prototype for "Obamacare" given their 2009-2010 rhetoric. At some point, we just have to admit that the current contest just makes no sense. Right now, Pawlenty regrets pulling out, and both Thune and Barbour (and possibly Daniels) are regretting sitting out. (Yes, Jonathan, we know that you consider all of these people to have actually run, but even you need to acknowledge the difference between what Thune, Barbour and Daniels did, and what Pawlenty did).

  2. Well, I've never agreed that Romney was an improbable nominee, so I won't agree with that. I don't really agree that this cycle doesn't make sense.

    I do agree that there's a difference between Thune/Daniels and Pawlenty, although I'd put Barbour on the Pawlenty side of things.

  3. Bartlett's column is curious, in that he opens by noting that Cain's tax plan is an opaque mess, but Bartlett proceeds on a quixotic quest to hack away at the weeds anyway. Maybe its easier to see what's going on if you take a step or two back from the fine points (if indeed there are any).

    Re '9-9-9': first of all, everyone will eventually pay a flat tax of 9%, excluding some folks in as-yet-unindentified favored opportunity zones. Let's say the net impact of the opportunity zones would be a blended flat rate of 8.5%. Today, we all pay 7.62% payroll tax on the first $100 K+ of income, but we are pretty sure that amount isn't enough given entitlement commitments and stubborn unemployment. What is the 'right' number? Hard to know for sure, but hard to believe its gonna be less than 8-something percent.

    But Cain, importantly, is going to abolish the payroll tax. Considering GOP political loyalties, its pretty safe to assume that essentially all personal income tax would then go to entitlements in Cain's 9-9-9 plan, with discretionary spending left to corporate or sales tax.

    That corporate tax of 9% is a huge decline from the mid-30s most companies are paying today, with the added benefit of free repatriation of foreign profits. On top of all that, the dreaded "double taxation of dividends" will be removed, allowing corporations to write off dividends in their P&L. Guess what corporations will pay a lot more of to shareholders in such a system?

    So corporate tax receipts, which will essentially be primarily responsible for discretionary spending, will drop precipitously. Sales taxes might go up, a bit, from the current 6 or 7% a lot of us pay, to 9%, but that can't be more than a drop in the bucket against the massive decline in corporate revenues.

    People think Cain is a novelty even as they acknowledge that the coordinators of the invisible primary are currently deciding the winner. It is assumed that the rise of Cain occurs on a separate track from the rise of the soon-to-be-revealed nominee.

    Wouldn't it be something, though, if the "little-federal-spending-aside-from-entitlements" world, easily seen from Cain's tax plan, was animating GOP movers, and in fact his rise was consistent with the invisible primary? That might be hard to believe, but probably not for a lot of readers of a blog like this one.

  4. I just crunched Cain's numbers, that he finally released today, and he's juicing the numbers an incredible amount. He overestimates sales by 25% and business profit by a whopping 600%. Why am I not surprised? Let's bust him.

  5. Wait...I thought the 9% sales tax was a national sales tax IN ADDITION to state sales taxes (a la Canada, with GST and PST)?

    Is Cain talking about somehow banning state sales taxes?

  6. Matt, your comment made me nervous that I was confused again, so I went over to Cain's website, and while I am surely still confused, the website didn't clear up the state tax question.

    Cain's website did explain a lot though. On the linked page, about halfway down are four bullet points explaining the all-important Fair Tax. The fourth is that "The Fair Tax makes our exported goods and services the most competitively internationally than any other tax system".

    Being a bit confused by Cain's explanations put me in mind of that beautiful, too-quickly-forgotten Sophia Coppola film "Lost in Translation". In particular, the best scene in that movie, where a forlorn Bill Murray in the Tokyo karaoke bar sings that Roxy Music classic: "Most Than This".

    (Kind of understandable that Lost in Translation would be too-quickly-forgotten; it just wasn't competitively enough at the Academy Awards that year).

  7. You all may be taking Cain lightly, but I can assure you that at Romney and Obama HQ's, they're not. That guy will kill both, if it breaks right. I think Obama's finished no matter who he faces, in fact, but particularly if he faces Cain, who may very well bring on an electoral armagedon for him.

    Nobody listening to Cain right now, and those listening are only the geeks, believes that 2 terms of President Herman Cain would even be long enough for him to pull off constitutional amendments, and that's what it'd take to enact his 999 business.

    You can't push policy prematurely. That's why ObamaCare is destroying the Left... it was premature and poorly conceived, and politically destructive for those who pushed it prematurely.

    Cain can participate in the tax restructuring, and flattening and removing exemptions will certainly be part of that, which is the whole implication of his schemes. That's what the Congress will take a crack at this Fall, in fact.


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