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Reflections on Herman Cain

Herman Cain hopes to be something more than the latest flavor-of-the-month righty challenger to Mitt Romney.
Herman Cain hopes to be something more than the latest flavor-of-the-month righty challenger to Mitt Romney.

Heading into tonight’s umpteenth Repub debate (this one is in Vegas, sponsored by CNN and others, broadcast on CNN at 7 p.m. Minnesota time, and the increasingly desperate Jon Huntsman has decided to boycott it as a statement of his devotion to New Hampshire, seriously), the big story is Herman Cain and his bid to be something more than the latest flavor-of-the-month righty challenger to Mitt Romney.

Cain is being “vetted” by the media at the speed of pixel. It’s pretty amazing to see how quickly the information elite can take a man from being known for one or two things (in Cain’s case, I’d say that a month ago the two things were “he’s black” and “Godfather’s Pizza”) to a man with a series of provocative ideas, a complicated life story, a network of connections and a challenge to various elements of conventional political wisdom.

The Cain moment is fascinating and bizarre. I’m not prepared to write him off until we see more, both of how he performs as a mold-breaking candidate and of how his admirers respond to the vetting.

Political analysts have several reasons why Cain can’t last. He doesn’t have the campaign funds, for example, and his strategy is all wrong because he isn’t spending enough time in Iowa and New Hampshire. Maybe so. But the righties are not playing the game according to the old rules, and neither is Cain.

I also believe that Cain’s race (did you notice that he’s black, and by the way, he rejects the term “African-American”) is helping him. I’ve long been troubled by a lefty willingness to ascribe racist motives to righties — in general and especially during the Obama era — without the kind of direct evidence of race prejudice that should be required for such a charge. I don’t doubt that some righties are racist. But it is wrong to make a general assumption without more evidence and now, especially so among a group that has elevated a black man to top of the recent polls.

As amazing as it is to those of who go back to the 1950s that America has a black president, think how amazing it would be if both major parties had black nominees in 2012. Wow.

OK, that was a digression. You’ve heard the basics. Cain comes from a poor family and has become rich as a businessman. (You may not yet have noticed that he lived in Minneapolis in the late ’70s, working for Pillsbury.) He was part of a group that bought Godfather’s Pizza from Pillsbury. He also was chairman of the board of the Federal Reserve of Kansas City, which may cost him support with the elements of the right that hate the Fed.

He has never held elective office (although he sought a U.S. Senate seat from Georgia in 2004 and lost in the primary). He has written several books (which are now being sped-read by many journalists and opposition researchers) and worked as a radio talk show host. He is married to a shy woman who has so far not campaigned publicly for him.

As I mentioned, less-obvious information is coming to light rapidly. Here area couple of angles upon which I stumbled that you might not have seen yet.

9-9-9 is not the final tax plan
Yes, the 9-9-9 tax plan is regressive and Cain has now acknowledged that it will not cut taxes for everyone. But did you know that the 9-9-9 is not Cain’s ultimate tax plan? He is a believer in the so-called “Fair Tax,” which would substitute a roughly 30 percent sales tax for the entire federal tax code. I say roughly because there are disputes about the right way to calculate the sales tax that would be necessary to replace all existing federal revenue streams.

The Fair Tax would be mind-bogglingly regressive if not for the fact that the plan includes a so-called “prebate” in which every American would get a check from the government equal to the amount the Fair Tax would add to the purchase of a minimum amount of “essential” goods and services. My own best understanding is that the prebate could keep the Fair Tax from hitting the poor too hard. And the end of the income tax would big a big cut for the rich. So the middle class would end up paying more.

Fair Tax advocates dispute that. But, without going into the merits any more deeply, Herman Cain makes no secret of the fact that he hopes his 9-9-9 tax will be only a step on the way to the Fair Tax. Right on his campaign website, he says: “Amidst a backdrop of the economic renewal created by the 9-9-9 Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.”

I’m not in favor of either of Cain’s big tax ideas, but you have to give him credit for putting out a plan. Michele Bachmann, who would also like to be the darling of the right, has also said she wants to do away with the entire federal tax code and has played footsy with the Fair Tax for years, but has never been willing to say it is her plan.

I also believe that part of Cain’s current surge is that he — even in contrast to flaming righty like Bachmann — would rather acknowledge his attraction to a radical idea than come across as a trimmer.

Complete privatization of Social Security
For some reason, even though it is only a transitional proposal on taxes, 9-9-9 has become Cain’s signature proposal, even though his plan for Social Security is still more radical.

Again, the other leading candidates do not have honest proposals on Social Security, presumably because they know the downsides and the “third rail” gag.

Cain advocates the Chilean model to transform Social Security. This amounts to the complete privatization of the program, not just the baby-step optional 2-percentage-point toe in the water that former President Bush proposed in 2005.

He hasn’t been asked about it nearly as much. And the idea cannot be taken seriously unless and until Cain specifies a transition plan.

Here’s the problem. Social Security is currently based on a pay-as-you-go model. Every penny that the government collects in Social Security “contributions” is needed to pay benefits to those already retired or receiving other Social Security benefits, as such disability or survivor benefits. Even if current and future workers continue to pay every penny of their FICA to take care of those already receiving benefits, the system is projected to hit a shortfall in a few years.

But if you are going to divert those current FICA taxes into an individual investment account to (hopefully) grow in the stock and bond markets until the current worker needs them for retirement, you would either have to cut off current recipients or borrow several trillion dollars to pay off the system’s existing liabilities. Cain, to my knowledge, has not said how he will deal with the “transition problem.”

Cain’s other money problem
A big theme in the recent political analysis is that he may not have a chance because he isn’t doing things the way the other candidates do them and specifically because his campaign treasury is tiny, compared with the war chests of Mitt Romney and Rick Perry.

True. But, as some of the pieces note, Cain is deeply enmeshed in the political and policy organizations of the megarich Koch Brothers and their Americans for Prosperity. This is big, for raising scary flags among lefties but also because, given the sorry loophole-ridden state of the Supreme-Court-destroyed campaign finance regimen in the ear of the SuperPAC, the Kochs and their rich allies could substantially offset Cain’s campaign finance shortage if they decide he is their guy and has a chance to become president.

By the way, I did hear Cain give his pitch in person at the RightOnline conference this summer. He did not steal the show that day. That was during Bachmann’s surge and she definitely busted the applause-o-meter. But Cain generated more excitement that day than Tim Pawlenty did. Anyway, I relistened to the tape of Cain’s RightOnline presentation and found that Cain’s biggest applause line occurred when he described his response to issue of his lack of Washington experience. It went like this:

“How can you run for president when you don’t know how Washington works? Yes I do. It doesn’t.”

He also introduced himself this way. “That’s Cain. C-A-I-N. Like the Bible, but I didn’t kill anybody.”

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Comments (15)

  1. Submitted by Peder DeFor on 10/18/2011 - 02:56 pm.

    I think Obama has already shown us the limits of having a President that has no prior experience in an executive capacity. And I’m not sure that being a business exec translates all that well. A history in both would be much better.

  2. Submitted by Dean Carlson on 10/18/2011 - 03:05 pm.

    I was wondering when a local writer would bring up Cain’s time at Pillsbury. It would be interesting to hear what he did at his time in Minnesota. Where did he live, what kind of executive was he?

  3. Submitted by Jackson Cage on 10/18/2011 - 03:11 pm.

    “That’s Cain. C-A-I-N. Like the Bible, but I didn’t kill anybody.”

    To which the Middle Class responds “Not yet, anyway”.

  4. Submitted by J E Cook on 10/18/2011 - 03:58 pm.

    The statement that Cain “lived in Minneapolis in the late ’70s” is not entirely correct; he was a resident during at least part of the mid-1980s as well. I lived in the Twin Cities 1982-93 and when I visited family back east, I would often drive an Auto Driveaway car; twice I drove Herman Cain’s Oldsmobiles, once from a New Jersey suburb of Philadelphia to Minneapolis and once in the other direction a year or two later (an Omega sedan and a Cutlass Calais two-door, respectively, both with awful seats). I had worked for Pillsbury myself 1983-85 and knew he was a Burger King executive; BK was then owned by Pillsbury, which was itself independent until 1990 or so. (Cain’s name was easy for me to remember; one of my grandparents was Herman Cohen.) I met his wife at their New Jersey house when picking up or delivering an Oldsmobile.

    I hope a more complete story of Cain’s time at Pillsbury will be reported by MinnPost, and soon (in case he’s about to fade from national consciousness).

  5. Submitted by Ray Schoch on 10/18/2011 - 04:04 pm.

    I agree that Cain’s is an interesting and unconventional candidacy, and yes, were both presidential candidates in 2012 to be black, it’d be a “wow” moment, indeed. His numbers do not, of course, add up, but then, neither do the numbers of the other candidates at this point, and at least he’s willing to put a plan out there. That he has close ties to the Koch brothers might be the most bothersome of his several negatives.

    If he managed to get elected, I don’t see how his Social Security plan will get past the “transition problem.” If he’s going to cut all the current recipients off at the knees, it’ll make for interesting and entertaining television, as mobs of bald men and blue-haired ladies with canes and walkers descend on Washington Congressional offices, waving and shouting, and bearing their own banners. As usual, it’s a wealthy male who’s convinced himself – incorrectly – that he did it all on his own who’s proposing to gut programs that benefit the non-wealthy.

    Executive experience doesn’t mean all that much, since the President is a combination of cheerleader and autocrat. Dubya had plenty of executive experience, and still managed to run the economy into the ditch, lie us into one war while pursuing another one, both without exit strategies, etc. Perhaps *attentive* experience would make a difference, but Bush suffered from the political version of ADHD. Obama has managed a barely-middling record, not satisfactory to me personally, but given the relentless opposition he’s faced throughout his term, I think he gets too little credit for some of his successes, which are too few, and too much of the blame for some of his failures, which are too many.

    Jackson Cage is probably closer to the truth than many of us would like, given Mr. Cain’s “I was only joking” suggestion of a high-voltage electric fence on the Mexican border.

  6. Submitted by Eric Ferguson on 10/18/2011 - 04:40 pm.

    Here we go again. The next flavor of the month. Like the other candidates, once achieving current flavor status, the press starts scrutinizing, and scariest of all, what the candidate says gets reported. Between finding electrocuted Mexicans a joke and selling his books to his campaign, even the question of how the flavor will flame out this time is being answered.

    That last story just broke today and may be unfamiliar.

  7. Submitted by Paul Brandon on 10/18/2011 - 05:20 pm.

    Or at least two Oreos.
    Cain definitely qualifies for the Clarence Thomas award.

  8. Submitted by Paul Brandon on 10/18/2011 - 06:29 pm.

    I think that Cain is the candidate in spite of himself.
    The most likely reason that he entered the race is that it was wide open enough to give him instant publicity which would help him sell books and would increase his motivational speech take (which I believe is his main current source of income). If he were elected he’d probably take a pay cut, and would have to work (but see Bush, G.).
    Think that he’s just starting to take himself seriously, and, more to the point, if Koch et al take him seriously they’ll pour whatever megabucks it takes into his campaign.

  9. Submitted by Jon Kingstad on 10/18/2011 - 08:04 pm.

    Thanks for spotlighting Herman Cain and his politics, Eric.

    I’d only like to add a small quibble about your description of Social Security. It is true that “even if current and future workers continue to pay every penny of their FICA to take care of those already receiving benefits, the system is projected to hit a shortfall”. But it’s not “in a few years”. It’s like 25 years which is more than a few. I think it’s becoming more important these days to stress the fact that Social Security is not going bankrupt which is what some irresponsible political leaders falsely claim. Maintaining the solvency of Social Security is not the impossibility which pundits try to make it.

    But I agree with your point about Cain’s Cain’s problem in not having a transition plan. This problem is the same problem anyone is going to have in trying to “privatize” Social Security. Somebody’s going to have to pay more than other people. All to eviscerate a program that has worked well for 75 years at modest cost and can continue to work well for future generations well into the next century without any radical overhaul.

    If by some miracle we get political leadership that is not intent on selling the middle class down the river, we’ll see a radical overhaul of the NYSE and the other corrupt public exchanges before we see any further effort to “privatize” Social Security. Turning people’s only safety net for old age over to the charlatans in the financial services industry would be the final straw in the total impoverishment of the nation.

  10. Submitted by Dennis Tester on 10/19/2011 - 07:43 am.

    “Turning people’s only safety net for old age over to the charlatans in the financial services industry would be the final straw in the total impoverishment of the nation.”

    I take it you don’t have a 401K plan.

  11. Submitted by Jon Kingstad on 10/19/2011 - 08:56 am.

    #10. Mr. Tester. I have a self funded pension plan which is an equivalent. The only reason it has value today is because of the 2008 TARP bailout, which happened because of said charlatans and which also happened to enrich said charlatans thousands of times more than it did my measly pension plan. You just don’t get it do you?

  12. Submitted by Paul Brandon on 10/19/2011 - 09:37 am.

    401’s and 403’s are not safety nets; they are investments, and inherently risky.
    Social Security was implemented as a safety net; a floor under retirement savings that was guaranteed by the faith and credit of the United States government; not by Goldman Sachs et al.

  13. Submitted by Rachel Kahler on 10/19/2011 - 02:37 pm.

    I have TWO 401k’s, similarly invested. One took a 25% hit in the last year and one increased by about 8%. The larger of the two was the one that took a hit. I certainly wouldn’t call that a safety net. Someone profited off of those losses, but it makes my retirement less than viable.

    Also, this “Fair Tax” plan… So, we’re going to pay people up to the poverty line so they can spend it on stuff? Why in the WORLD would anyone who has bothered to bust their butts to even come close to the poverty line continue to bust their butts? Also, I don’t think the people who call for the “Fair Tax” plan have actually paid typical taxes. When I’m told that not having to pay in for Medicare or Social Security will make up for a 25% sales tax, I had to chuckle. Social Security and Medicare takes out a maximum of about 15% of earned dollars, and doesn’t affect a dime of any income above about $106k. For people that live from paycheck to paycheck, the “Fair Tax” would almost double their taxes. For people like me, it would modestly increase my taxes. For people making more than me, taxes would remain the same or, as income goes up, drastically reduce taxes.

    If Cain advocates such a “Fair Tax,” why would I believe that his 9-9-9 plan would be any less stupid?

  14. Submitted by Lance Groth on 10/19/2011 - 05:17 pm.

    If Mr. Cain did somehow become the nominee, you can expect Dem commercials endlessly replaying his statement: “If you don’t have a job, blame yourself.” Which will go over like a lead balloon with all the folks struggling to survive in this miserable economy.

    That and his plan to totally privatize Social Security (without a transition plan to pay for it) would be enough to sink his candidacy.

    The man has no chance.

  15. Submitted by Paul Brandon on 10/19/2011 - 09:03 pm.

    Apparently Mr. Cain’s math doesn’t extend to subtracting the number of available jobs from the number of people seeking work.

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