Romney says 47% of US voters are "dependent" and will never vote for him

Secret video reveals Republican candidate describing 47% of voters as "victims" who will always vote for Obama.

If you're running for president of the United States, it's advisable not to dismiss 47% of the electorate as scroungers who will never vote for you, especially if you're a multi-millionaire who paid just 13.9% in tax in 2010. But that's exactly what Mitt Romney has done. Mother Jones has just released a secretely recorded video in which the Republican candidate is shown telling a private donor dinner that 47% of US voters are "dependent upon government" and will vote for Obama "no matter what".

Asked by one donor how he could win in November, Romney replied:

There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax ... [M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives.

It's compassionless conservatism in its purest form.

You might reasonably argue that those offended probably wouldn't vote for Romney anyway (one often hears this sort of rhetoric from the Tea Party) and, therefore, that the tactless Republican had a point. But it's likely that the video will alienate many of the floating voters he needs to win over if he's to catch Obama in the polls, while also motivating disillusioned Democrats to vote. Among those who pay no income tax, for instance, are millions of pensioners (the most likely group to vote), whom one assumes won't take kindly to being described as "victims" and dependents, as well as students and the disabled, none of whom can be described as scroungers. At a time of economic stagnation, it's also unwise to imply that the unemployed, many of whom will have paid tax in the past (often at a higher rate than Romney), simply chose not to work.

With some success, the Democrats have portrayed Romney as a candidate with little concern for anyone but the wealthy - now they have all the proof they require. Worse, the video suggests he is an insincere man who says one thing in public and another behind closed doors, a fatal impression for any politician to create.

Here's how the Obama campaign responded tonight:

It’s shocking that a candidate for President of the United States would go behind closed doors and declare to a group of wealthy donors that half the American people view themselves as ‘victims,’ entitled to handouts, and are unwilling to take ‘personal responsibility’ for their lives. It’s hard to serve as president for all Americans when you’ve disdainfully written off half the nation.

Update: Mother Jones has just released another secret Romney video, this time featuring a series of ill-advised comments from the "former presidential hopeful" on the Israeli-Palestinian conflict.

Asked by one donor how the "Palestinian problem" could be solved, Romney replied that the Palestinians had "no interest whatsoever in establishing peace, and that the pathway to peace is almost unthinkable to accomplish". He added: "I look at the Palestinians not wanting to see peace anyway, for political purposes, committed to the destruction and elimination of Israel, and these thorny issues, and I say there's just no way."

Republican presidential candidate Mitt Romney said 47% of US voters "believe that they are victims". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation