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Home Publications Blogs Beat the Press Since Romney Raised the Issue of Freeloaders, What Is Erskine Bowles?

Since Romney Raised the Issue of Freeloaders, What Is Erskine Bowles?

Tuesday, 18 September 2012 04:42

Since we seem destined to have a national debate on the topic of government freeloaders in the wake of the Romney fundraising video, it might be worth asking how we think about someone getting hundreds of thousands of dollars a year for sitting on a corporate board for which they did little obvious work. Erskine Bowles, a possible future Treasury Secretary, is of course the poster child for such people.

Mr. Bowles has earned millions of dollars sitting on corporate boards over the last decade. The stock prices of the companies on whose boards he sat have mostly plummeted. Since 2003 the Erskine Bowles stock index has lost more than one third of its value. By comparison, the S&P 500 has risen by more than 50 percent. If Mr. Bowles was trying to serve shareholders, he has not done a very good job.

If people think that this is a private matter, with Mr. Bowles just ripping off shareholders while Governor Romney's freeloaders are ripping off taxpayers, think again. One of the companies on whose board Mr. Bowles sat, General Motors, went bankrupt with substantial costs to the government. Another, Morgan Stanley, would have gone bankrupt without extraordinary assistance from the Fed and Treasury, which continues to this day in the form of implicit too big to fail insurance.

So, if we want to have a debate about people who freeload on the rest of the country, we should have folks like Erskine Bowles at center stage. Of course he is in a much higher income bracket than the folks who get Social Security or unemployment insurance from the government, but that fact should not be allowed to color the debate. 

Comments (6)Add Comment
Why Wasn't Erskine Bowles Means Tested and Drug Tested?
written by Last Mover, September 18, 2012 5:37
It seems this would be routine under the Romney plan to root out freeloaders like himself whose "success" depends on welfare from the government in the form of enabled market power designed to shield them from competition in free markets they preach for everyone else, along with ordinary welfare handouts like tax loopholes.

Another useful test would be a lie detector test to identify those declaring themselves as "victims" to qualify for government largesse.

Line up the upper 1%, strap them in the chair and ask these two questions:

Are you or have you every been a member of the Rent Seeking, Bailout Seeking, Subsidy Seeking Party?

Does your economic survival depend on victims of this party?
written by bmz, September 18, 2012 6:34
"Of course he is in a much higher income bracket than the folks who get Social Security" Oh really? I'll bet you dollars to donuts that my "social security" marginal income tax rate blows his off the board. I am 71 years of age, and am self-employed part time. My AGI is ~$55,000/yr. At that income, I must pay, in addition to my regular tax, a tax on 85% of my SS benefits( for every marginal dollar of income, I pay a tax on $1.85). My total marginal income tax rate is: 25% X 1.85 = 46.3% +12.4%(self-employment tax) +7.5%(state income tax) = 66.2% total marginal income tax rate.
Identifying the Freeloaders
written by Ron Alley, September 18, 2012 9:23
We should take a moment to identify the freeloaders -- well, if that's to difficult maybe we should start with a simple observation. The freeloaders are not the corporations who offshore both jobs and corporate profits to avoid taxation. They are not found among the 1% who offshore their savings and investments to avoid taxes. They are not the people who avoid federal student loans by asking their parents for help with tuition.

The are the people who use the standard deduction on their tax returns. They are the people who file their tax returns and get a refund via the Earned Income Credit. They are the senior citizens who have little taxable income and enough medical deductions to reduce their taxable income to zero. They are people who took out student loans and are deducting student loan interest payments.

In short, they are a very large portion of the 99%.
For Real?
written by James , September 18, 2012 12:59
Many people are shocked at why would reasonable folks like Dean be upset at Board memebers.

If there's such a thing as a do-nothing post, it's being a Board member. Starting with great compensation including fees, health, and life insurance coverage (need to protect your best assets), then come the incredible perks - use of corp assets including jets, lux. retreats at exotic places, and drivers, etc.

Of course, they will say these have to go through the Compensation Committee. No kidding.

Did those board members whose companies failed or almost failed (Enron, Global Crossing, etc.) suffer pesonally?
written by urban legend, September 18, 2012 5:07
I'll bet Bowles is one of the DC VSPs who are all hearts for high-stakes testing for teachers -- but not high-stakes quantitative evaluation of performance for himself. I'm sure he has lots of explanations for his horrid performance that are a lot less convincing than having to "add value" teaching low-income inner-city kids with few back-up resources.

I love the Erskine Bowles Stock Index. Obama should be hit over the head with it at every opportunity so he can see the political damage such an appointment will cause.
Romney Family Welfare Freeloaders
written by Thomas Dooley, September 20, 2012 6:53
Wikipedia reports that "The (Romney) family subsisted with other Mormon refugees on government relief in El Paso, Texas…" after Mitt's foreign born Dad, George, was chased out of Mexico with the rest of the Mormons by the Mexican Revolution.

This means that while it's absolutely crazy to believe that anywhere near 47% of Americans are on welfare at any one time it isn't crazy to name Romney's own family as an example of welfare freeloaders who once existed on government relief.

What the hell is wrong with Mitt? Hard times do happen to people and they sometimes need help. That happen to his own family, to his very own father, grandfather and grandmother and his own aunts and uncles.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.