I’m noticing one overriding fact in writing about Republicans as they leer towards the end of their convention. I feel more and more nauseated by having to watch them, listen to them, sniff their pasty souls and outrageous deceptions. As one vivid example, Republicans have spent the last year and more raising alarms about the chief problem facing our country: the deficit. We owe trillions of dollars, is their mantra, and Obama has been the most irresponsible president in history in running up that debt. But as Matt Taibbi pointed out in a hard-hitting article in Rolling Stone yesterday (Aug. 29), it is actually Republicans, and Mitt Romney in particular, who are the debt mongers. Here is what he says:
"Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth."
What Taibbi is referring to, of course, is Romney’s reign at Bain Capital, the “private equity” company he headed for years, and through which he made his big money. That’s because the way “leveraged buyouts” (LBOs) work is by the gathering of a small amount of capital (by companies like Bain) with which to borrow huge amounts of money (borrowing a lot with only a little is called “leverage”) from the likes of Goldman Sachs, so they can take over a given company. One example Taibbi uses is the buyout of KB Toys. In that case, Bain put up $18 million of its own, and then borrowed no less than $302 million from investment banks to complete the deal. Then Bain induced KB Toys to “redeem $121 million in stock and take out more than $66 million in bank loans - $83 million of which went directly into the pockets of Bain's owners and investors, including Romney.” Long story short, KB Toys went into bankruptcy (because, you see, the company is saddled with the huge debt Bain borrowed to buy it, and has to pay it off, often an impossibility, even after laying off half its workers), while Bain earned a return of “at least 370% on the deal” or up to 900% if the assertion of Big Lots, LB Toys’ former parent company, is correct. In dollar terms, that is, Bain added more than $300 million in debt to KB Toys, and took out more than $120 million in cash via fees and other perks. As usual, they managed to do this by giving big bonuses to the company’s top managers: “CEO Michael Glazer got an incredible $18.4 million, while CFO Robert Feldman received $4.8 million and senior VP Thomas Alfonsi took home $3.3 million.” Of course, mere workers were left with no jobs and no money at all when the company, formerly a successful maker of things, went belly up.
Now we have Mitt Romney, and his current attack dog, Paul Ryan (but really, doesn’t Ryan look like some bug-eyed Disney cartoon?) excoriating President Obama for piling up $5 trillion in debt. This is the Republican mantra. Debt will bring down our country. Debt is the cancer eating away at the American dream. Government simply can’t afford to spend any money on frills—by which they mean, of course, social programs like Medicare, Medicaid, Social Security, or any kind of welfare programs whatever (other than corporate welfare, of course). Austerity, that’s the only way to get out of our debt crisis. And the fact that Mitt is the great debt creator himself, or that economic history has proven that austerity fails to solve depressions, and in fact makes them worse—because the problem, as Paul Krugman has pointed out endlessly, is that austerity reduces employment, and people without jobs can’t afford to spend money, so businesses don’t invest, having no one to sell to, hence the depression—matters not a jot. Romney and most Republican movers and shakers, that is, are investors. And investors make their money by being paid back in currency that is more, not less valuable. If money that debtors pay back is less valuable, then investors lose. This is the whole story in a nutshell. The deficit becomes the prime concern of the investor class because they fear that inflation rises from it; and inflation, whether it be rising prices, or an increase in the money supply (which is what finances stimulus programs to put people back to work), cheapens the value of the dollars they have invested. Being paid back in cheaper dollars is a loss to them. What they really want is to be paid back in more valuable dollars—the result of deflation. They can’t opt for too much deflation, of course, because that would bring down the whole system. But enough deflation to bring sufficient pain to the poor bastards who have borrowed from them, and a somewhat greater return on their investments, is just right. This is the core of the “hard, courageous” choices they pretend to make as leaders: pain and deprivation for the working stiffs, the ones who borrow, so the investor class and financiers can have ever bigger cars and houses and yachts and private schools for their precious offspring.
This makes the upcoming election starker than any in recent memory. If the Republicans manage to convince the benighted American public of the rightness of their deficit analysis, and win this election to put Romney in the driver’s seat, with a Republican congress to allow him to implement his austerity program (austerity for you and me, that is, not for the investor class who can count on lower tax rates and bigger loopholes in which to hide their money), watch out. The nation will be even more the plaything of the moneyed class, while the so-called “entitlement” programs that keep the unemployed from falling off the edge entirely, will be decimated. We simply can’t afford them, will be the Republican rationale. Which is to say, we simply can’t afford the poor.
What we will be able to afford are even more and bigger mansions for the likes of corporate raiders like Romney, and even better financial deals for his backers—the Goldman Sachses, the Morgan Stanleys, the Citigroups, and dear old Sheldon Adelson. I may need a whole blog to cover the latter—the most foul, scabrous creature that has appeared on a national scene since Charles Dickens was portraying them in his novels—but here, suffice it to say, this is the guy who earns his money running a gambling empire, the Sands Corporation, that is even now under investigation by the Justice Department for allegations of bribery (in China) and money laundering (everywhere). Nice fellow. And Adelson has said in no uncertain terms, that he will personally spend at least $100 million to get Republicans elected not just to the presidency, but to Congress as well. If he succeeds, of course, there will be a new Attorney General, and (he no doubt hopes and intends) his legal problems will go away. There will also be a more generous and cooperative (read ‘obsequious’) policy towards Israel’s Likudniks, as well as a more aggressive policy towards Iran and other Israeli “enemies” like Syria, Lebanon, the Palestinians, and just about the whole middle east.
In short, a disaster. So while earlier I had suggested that it might be time for progressives to start thinking in terms of third-party candidates, the situation has become too dire for that. Obama must win a second term. Otherwise, we will be buried beneath a deluge of corporate money and power the likes of which we haven’t seen since Rockefeller, Carnegie, Morgan and their fellow robber barons ran the government as their own private fiefdom—though not even then would they have dared put one of their own, nakedly proclaiming his greed, in the White House.
Lawrence DiStasi
Showing posts with label Romney. Show all posts
Showing posts with label Romney. Show all posts
Friday, September 14, 2012
Monday, August 27, 2012
GOP to Akin: Abort! Abort!
Some use science for certain
While others use guesses
To open the curtain
On life’s many messes
But Missouri’s Todd Akin
Spit out a new theory
That I guess he had taken
From a man old and weary
Uttered without fact
By a misguided quack
The spinning continues;
The safety net unravels
And the poor have no menus
While the leaders bang gavels
Wow. I knew that the GOP was entertaining some extreme positions on issues, but I had no idea that they did not know where babies come from. First, Akin was off the GOP reservation when he spoke of “legitimate rape.” The preferred party language is “forcible rape.” His theory, taken from a physician (no joke) is that under the stress of “legitimate” or forcible rape, a woman’s reproductive system shuts down and she will not become pregnant. The idea behind all this is that the GOP wants no exceptions to allow for abortions, even for rape or incest. In fact, Jack C. Willke, the physician who proposed this bizarre 14th century theory was a surrogate for Romney in his 2007 presidential bid. Don’t laugh just yet. GOP insanity may be deliberate.
They seem to wait for a reaction and, if it is too negative, they back away and offer up reactive disclaimers; “Akin was way off base and should drop his bid for the Senate.” Nobody has disclaimed Willke, the quack physician who offered the “theory,” or Paul Ryan who co-wrote extreme social engineering legislation with Todd Akin. Akin and Ryan are upset that their anti-woman bills are being described as anti-woman. One of those bills they co-wrote specifically attempted to narrow the definition of rape; hence the very careful use of ”forcible rape” by the GOP to propel the notion that rape is more acceptable as long as it is not forcible. This would mean that statutory rape or rape of anyone unable to give consent would be treated differently in order to forbid all abortions. It also creates the subordination of the raped woman to the GOP “small government” and even to the fetus in cases of pregnancy through rape. There are approximately 32,000 reported pregnancies due to rape in the United States each year. The actual pregnancy rate for rape victims is 6.4%, incidentally, and that is more than twice the rate of pregnancy due to consensual sex despite the unscientific proclamation by Akin, a member of the House Science Committee. The rationale: rape victims are usually younger and in their more fecund years. Nonetheless, this feigned GOP horror at Akin’s screw-up is questionable. The only difference is Akin’s deployment of “legitimate.” Otherwise, the GOP position is identical with both Ryan and Akin. The original version of H.R. 3 would have narrowed that exception to cases of "forcible rape." Perhaps the GOP doth protest too much, especially while advocating small government.
Hypocrisy abounds in this fertile climate. Not only are the leading Republicans throwing Akin under their bus, but they are silent on a related issue of healthcare. If I were to ask you for the only major difference between the Affordable Care Act and Romney’s Massachusetts healthcare bill, would you know that Romneycare pays for abortions while Obamacare does not? Yet we now see Cardinal Dolan (top US Catholic prelate) ready to speak out at a right wing rally headlined by Paul Ryan. That hypocrisy is difficult to understand since Ryan has been outspoken in support of Ayn Rand (the atheist egoist) who condemned government but applauded abortion. Not incidentally at all, Rand, staunch opponent of the common good and powerful advocate for individualism and the free market took Social Security in her latter years although she condemned it in her writings. Aid for the poor? Never. Let them fend for themselves. This is the Ryan offering with a sprig of vouchers thrown in for color in the presentation to the people. Will Cardinal Dolan condemn Ryan for taking the safety net from under the poor? Right! That is why Ryan invited him, of course. And if you think that Dolan has the guts to do so, then I would ask why he has not already done it since the Conference of Catholic Bishops has already condemned the GOP platform planks that threaten the poor. We already have a poverty rate so severe that 30% of children in these United States go hungry every day. Let the poor be better shoppers, then they won’t be hungry. Think of it like Ryan’s vouchers for healthcare. If they are good shoppers, then they can pocket what they don’t spend on food. Hmm, thought for food. That is a new approach. Even the New Testament implies that that we need bread since “Man does not live by bread alone….” Ryan is billed as the thinker for the GOP and he credits Ayn Rand as the biggest influence on his life, so we begin to know what he is thinking. So now we await his rationale for the trickle down theory that has never worked. Economic Darwinism. I can’t wait. Maybe we simply did not give enough to the top tenth of the top 1% to fill their money reservoir. They need more to start the trickle. Surely, that will do it if the government they love to hate can control the riots from the losers in the new economic model, or is it the old and failed economic model of the 20s?
In the meantime, we suffer through pseudo-science and Science R Us research purchased by the Koch brothers. There is no global warming. There is no harm to pollution. Carbon is a vegetable? This would be humorous if only it were not true. It would be harmless if our citizens did not believe it. Alas, we have FOX News quoting the same purchased “scientists.” One of the bought scientists recently rebelled. Richard A. Muller, physicist of the University of California stated: "Three years ago I identified problems in previous climate studies that, in my mind, threw doubt on the very existence of global warming. Last year, following an intensive research effort involving a dozen scientists, I concluded that global warming was real and that the prior estimates of the rate of warming were correct. I’m now going a step further: Humans are almost entirely the cause.” The Koch’s probably won’t hire him again, and FOX won’t quote him.
We have a recent study from the non-partisan Tax Policy Center that shows, if GOP/Romney policy is implemented, that he would keep the current Bush tax cuts and cut rates an additional 20%. He would eliminate investment taxes completely for households making less than $200,000 and abolish the alternative minimum income tax. There are no details as to how the budget would be balanced given this clear decline in revenue. The study shows that eliminating tax breaks to offset the drop in rates would hurt the middle class. Elimination of deductions such as mortgage interest will reduce home ownership. The net effect is a tax cut for high-income households coupled with a tax increase for middle-income households. The study assumes that the GOP will not change its policies, although if voters catch on, they may be forced to modify their policies on the run.
We have the Religious Right preaching that we have dominion over the earth, but largely forgetting good stewardship of this earth. They also preach obedience, but that lesson may be hard to hear by the hungry over the growling of their empty stomachs. I do see a possibility of repeating the harsh government of the 20s with violence in demonstrations and enforcement and possibly even sanctioned repression. I hope that never happens, but the mechanisms are there and so are the developing conditions of providing people less and less to lose. In a 22 August Pew report this year, the share of income for the middle class had fallen from 62% to 45% from 1970-2010. Net worth fell to $93,150 from $129,582. Good jobs were outsourced overseas by Bain, GE and others and most recently some medical services are being outsourced to India and China through our own high-tech communications systems. With tax incentives for investment and for out-sourcing work, what jobs will remain or be created? Can China both fill our pot-holes and the holes in the stomachs of the poor?
How long can this go on without seeing it play out in the streets? The GOP wants Akin to abort his run for the Senate, but that has not changed their agenda as they continue to pound the House gavel and to restrict voting by the old, young and the poor, as in PA. A GOP leader has guaranteed a Mitt victory.
Peace,
George Giacoppe
24 August 2012
Thursday, July 19, 2012
He is Not One of Us
He acts kind of funny
And has scads of money
He doesn’t have hooves
But puts dogs on car roofs
He has homes everywhere
And sports perfect hair
His laughs seem so forced
And he’s not even hoarse
And he won’t drink or cuss
He’s not one of us
As we exit the Republican primary circus and enter the face-off between a black incumbent president and a white opponent, we are forced to encounter ourselves along the way. It is interesting on so many levels that I know that many of you readers will tell me how many factors that I have missed during the journey. When we compare the two major candidates on a personal basis as happened during the electioneering for the GW Bush presidency where lots of folks simply went on their gut reaction “I’d like to sit down and have a beer with W.” Somehow, I don’t think that any of us would qualify to sit in the same beer tent with the non-drinking Romney. While I can afford a beer, I cannot afford getting into a $10,000 bet, or a fund raising event in the Hamptons. I will attempt to compare the candidates to each other as well as the candidates to you and me. I am going to make a non-monetary wager right up front, however. I’ll bet that you have more in common with Mr. Obama than you do with Mr. Romney. I hope that does not spoil your day.
Ann Dunham, Barack Obama’s mother moved several times in childhood. She lived in California, Oklahoma, Texas, Kansas and Washington. Obama was born into the middle class and had a single parent mother whose husband left her and Barack to fend for themselves after 4 years. Stanley Ann Dunham was only 18 when Barack was born. She and her family valued education highly and sacrificed for it. Stanley (“Ann” in college) moved between the US and Indonesia as an adult as she studied and raised her son. She married a second time (to Lolo Soetoro) and divorced him in 1980. Barack’s father went to Harvard for his Master’s degree while his mother received her PhD in Anthropology from the University of Hawaii in 1992. Her 20 year study covered blacksmithing in Indonesia and both her M.A. and PhD degrees were awarded by the University of Hawaii. The Obamas were dependent upon public education for some schooling although Barack spent eight years at the Punahou (prep) School in Honolulu. Although Punahou is heavily endowed, Barack’s family sacrificed to provide tuition. Mitt Romney, on the other hand, was born into wealth in Michigan and never attended a public school after grammar school, nor did he send his children to public schools. George Romney chose to surround his children with other kids of privilege, as did his son Mitt. Both Barack and Mitt are distinguished Harvard JD graduates although Barack was elected President of the Harvard Law Review.
Obama’s grandparents were interesting in their own right. Stanley Ann’s father, Stanley Armour Dunham, volunteered and served in the US Army during WW II. He is related to six presidents (James Madison, Harry Truman, Lyndon Johnson, and both George H. W. Bush and GW Bush). Obama’s great-uncle Ralph Dunham also served in WW II and landed on Omaha Beach on D +4. Stanley Dunham never was quite able to open a furniture store as he had hoped, but Barack’s grandmother Madelyn Dunham worked in a Honolulu bank and ended her career as vice president of the bank. Ralph Dunham was especially proud of his service under General Patton in Europe. The Dunham family seemed solidly middle class and patriotic Americans who did their duty and served when called as did millions of others. They participated in the economy and did the best they could with the resources they had including educating Barack. They intermingled with others as part of the American melting pot.
Romney’s parents and grandparents were interesting as well. Mitt’s actual first name is Willard; named for J. Willard Marriott, the hotel magnate. When the US government made it clear that the Mormon practice of polygamy was going to be outlawed, Mitt’s grandfather moved his family to Mexico in 1885 where George Romney was born later. Mitt’s grandfather moved back to the United States in 1910 to escape the Mexican Revolution. In that sense, the Romneys faced some obstacles due to polygamy, but George Romney became monogamous and a successful businessman who entered politics as a Republican in Michigan. Mormon polygamist colonies in Mexico were assisted by the US government with transportation and payments to return from Mexico about 20 years after renouncing polygamy as a tenet of the Mormon religion. Later, Mexico paid reparation, although many Mormons remained in colonies there. George Romney was eligible for dual citizenship due to his birth in Mexico. By Mexican law, Mexican citizenship eligibility extends to Mitt Romney. He could be a reverse “anchor baby.”
Mitt’s family faced little deprivation in the US and his father George Romney became a successful automobile executive in Michigan although he was criticized for moving American Motors to Wisconsin almost as a precursor to Mitt’s practice with Bain; moving jobs and shrinking employment to increase profits. George Romney did become the Governor of Michigan and served three two-year terms. He ran for the Republican nomination for president, but was seriously hampered by his statement that he was “brainwashed” by the military over the Vietnam War. His opposition to the war put George Romney in direct conflict with Barry Goldwater who was far more conservative. Mitt, however, strongly defended the war during his thirty-month missionary tour in France and was surprised by his father’s opposition to it when he returned home. Mitt had a total of four deferments matching the achievement of Dick Cheney, another advocate for the Vietnam War, as long as war was not personal.
There has been little discussion of an odd similarity with the two families in that both were polygamist at some point; Mitt’s great grandfather and Barack’s grandfather and perhaps even his father, were polygamists. Ooh, small world.
Ironically, days ago, on 17 July 2012, John Sununu set up our situational questions with his campaign conference call: “I wish this president would learn how to be an American.” That has been the GOP talking point since before Obama took office. “He is not one of us.” We have endured “birthers” and pundits from the right shouting how Obama just does not act like the rest of us. “He had foreign training in a Madrassa?” “I don’t believe he can be a Christian.” Putting aside the obvious question as to whether Mormons can be Christians for the moment, can we change this flow and ask a few questions that let us examine similarities among Romney and Obama and us.
How many of you have elevators for your three Cadillacs? How many of you have made public $10,000 bets? How many of you have never put your kids into a public school? How many of you have mansions scattered across this nation and overseas? How many of you never had to fight for work or shelter(s) or education? How many of you have been able to avoid income taxes? How many of you got draft exemptions for the Vietnam War? How many of you outsourced jobs? How many of you assaulted an effeminate classmate; forcibly cut his hair and humiliate him using other classmates to hold him down? How many of you raided pension plans to increase your profits (and had the government make up pension shortfalls)? How many of you have tax shelters in the Caymans? How many of you have Swiss bank accounts? How many of you have not had to provide tax returns to get a home loan? How many of you agree “Corporations are people, my friend?”
You get the point. Yes, Obama is black. Is that what makes him “less American?” Think about it. When was the last time you traveled with a live dog on the top of your car? Finally, how many of you agree: Mitt Romney said he finds "it hard to disagree with Rush Limbaugh on topics?"
Definitely, Romney is not one of us. This is just the opposite of what the noise machine has blared since before Obama was elected. It is time to consider whom you are most like. It may make a huge difference when decisions are made on jobs and taxes and privileges versus rights and responsibilities. Come to think of it, wouldn’t you also rather have a beer with Obama?
Peace,
George Giacoppe
18 July 2012
And has scads of money
He doesn’t have hooves
But puts dogs on car roofs
He has homes everywhere
And sports perfect hair
His laughs seem so forced
And he’s not even hoarse
And he won’t drink or cuss
He’s not one of us
As we exit the Republican primary circus and enter the face-off between a black incumbent president and a white opponent, we are forced to encounter ourselves along the way. It is interesting on so many levels that I know that many of you readers will tell me how many factors that I have missed during the journey. When we compare the two major candidates on a personal basis as happened during the electioneering for the GW Bush presidency where lots of folks simply went on their gut reaction “I’d like to sit down and have a beer with W.” Somehow, I don’t think that any of us would qualify to sit in the same beer tent with the non-drinking Romney. While I can afford a beer, I cannot afford getting into a $10,000 bet, or a fund raising event in the Hamptons. I will attempt to compare the candidates to each other as well as the candidates to you and me. I am going to make a non-monetary wager right up front, however. I’ll bet that you have more in common with Mr. Obama than you do with Mr. Romney. I hope that does not spoil your day.
Ann Dunham, Barack Obama’s mother moved several times in childhood. She lived in California, Oklahoma, Texas, Kansas and Washington. Obama was born into the middle class and had a single parent mother whose husband left her and Barack to fend for themselves after 4 years. Stanley Ann Dunham was only 18 when Barack was born. She and her family valued education highly and sacrificed for it. Stanley (“Ann” in college) moved between the US and Indonesia as an adult as she studied and raised her son. She married a second time (to Lolo Soetoro) and divorced him in 1980. Barack’s father went to Harvard for his Master’s degree while his mother received her PhD in Anthropology from the University of Hawaii in 1992. Her 20 year study covered blacksmithing in Indonesia and both her M.A. and PhD degrees were awarded by the University of Hawaii. The Obamas were dependent upon public education for some schooling although Barack spent eight years at the Punahou (prep) School in Honolulu. Although Punahou is heavily endowed, Barack’s family sacrificed to provide tuition. Mitt Romney, on the other hand, was born into wealth in Michigan and never attended a public school after grammar school, nor did he send his children to public schools. George Romney chose to surround his children with other kids of privilege, as did his son Mitt. Both Barack and Mitt are distinguished Harvard JD graduates although Barack was elected President of the Harvard Law Review.
Obama’s grandparents were interesting in their own right. Stanley Ann’s father, Stanley Armour Dunham, volunteered and served in the US Army during WW II. He is related to six presidents (James Madison, Harry Truman, Lyndon Johnson, and both George H. W. Bush and GW Bush). Obama’s great-uncle Ralph Dunham also served in WW II and landed on Omaha Beach on D +4. Stanley Dunham never was quite able to open a furniture store as he had hoped, but Barack’s grandmother Madelyn Dunham worked in a Honolulu bank and ended her career as vice president of the bank. Ralph Dunham was especially proud of his service under General Patton in Europe. The Dunham family seemed solidly middle class and patriotic Americans who did their duty and served when called as did millions of others. They participated in the economy and did the best they could with the resources they had including educating Barack. They intermingled with others as part of the American melting pot.
Romney’s parents and grandparents were interesting as well. Mitt’s actual first name is Willard; named for J. Willard Marriott, the hotel magnate. When the US government made it clear that the Mormon practice of polygamy was going to be outlawed, Mitt’s grandfather moved his family to Mexico in 1885 where George Romney was born later. Mitt’s grandfather moved back to the United States in 1910 to escape the Mexican Revolution. In that sense, the Romneys faced some obstacles due to polygamy, but George Romney became monogamous and a successful businessman who entered politics as a Republican in Michigan. Mormon polygamist colonies in Mexico were assisted by the US government with transportation and payments to return from Mexico about 20 years after renouncing polygamy as a tenet of the Mormon religion. Later, Mexico paid reparation, although many Mormons remained in colonies there. George Romney was eligible for dual citizenship due to his birth in Mexico. By Mexican law, Mexican citizenship eligibility extends to Mitt Romney. He could be a reverse “anchor baby.”
Mitt’s family faced little deprivation in the US and his father George Romney became a successful automobile executive in Michigan although he was criticized for moving American Motors to Wisconsin almost as a precursor to Mitt’s practice with Bain; moving jobs and shrinking employment to increase profits. George Romney did become the Governor of Michigan and served three two-year terms. He ran for the Republican nomination for president, but was seriously hampered by his statement that he was “brainwashed” by the military over the Vietnam War. His opposition to the war put George Romney in direct conflict with Barry Goldwater who was far more conservative. Mitt, however, strongly defended the war during his thirty-month missionary tour in France and was surprised by his father’s opposition to it when he returned home. Mitt had a total of four deferments matching the achievement of Dick Cheney, another advocate for the Vietnam War, as long as war was not personal.
There has been little discussion of an odd similarity with the two families in that both were polygamist at some point; Mitt’s great grandfather and Barack’s grandfather and perhaps even his father, were polygamists. Ooh, small world.
Ironically, days ago, on 17 July 2012, John Sununu set up our situational questions with his campaign conference call: “I wish this president would learn how to be an American.” That has been the GOP talking point since before Obama took office. “He is not one of us.” We have endured “birthers” and pundits from the right shouting how Obama just does not act like the rest of us. “He had foreign training in a Madrassa?” “I don’t believe he can be a Christian.” Putting aside the obvious question as to whether Mormons can be Christians for the moment, can we change this flow and ask a few questions that let us examine similarities among Romney and Obama and us.
How many of you have elevators for your three Cadillacs? How many of you have made public $10,000 bets? How many of you have never put your kids into a public school? How many of you have mansions scattered across this nation and overseas? How many of you never had to fight for work or shelter(s) or education? How many of you have been able to avoid income taxes? How many of you got draft exemptions for the Vietnam War? How many of you outsourced jobs? How many of you assaulted an effeminate classmate; forcibly cut his hair and humiliate him using other classmates to hold him down? How many of you raided pension plans to increase your profits (and had the government make up pension shortfalls)? How many of you have tax shelters in the Caymans? How many of you have Swiss bank accounts? How many of you have not had to provide tax returns to get a home loan? How many of you agree “Corporations are people, my friend?”
You get the point. Yes, Obama is black. Is that what makes him “less American?” Think about it. When was the last time you traveled with a live dog on the top of your car? Finally, how many of you agree: Mitt Romney said he finds "it hard to disagree with Rush Limbaugh on topics?"
Definitely, Romney is not one of us. This is just the opposite of what the noise machine has blared since before Obama was elected. It is time to consider whom you are most like. It may make a huge difference when decisions are made on jobs and taxes and privileges versus rights and responsibilities. Come to think of it, wouldn’t you also rather have a beer with Obama?
Peace,
George Giacoppe
18 July 2012
Thursday, February 09, 2012
The Human Side of Enterprise: Redux
Back in the time of Dickens
Slim were the pickins
As enterprise owners
Enforced a servitude
Without benefit or bonus
For the emerging multitude
By trimming the wages
For workers in cages
While claiming piety
So that they held the wealth
And much better health
And we had anxiety
Back in 1960, there was a brash business professor at MIT who looked at the world of work and saw something fundamentally wrong with the assumptions often made by those in power as managers and owners of enterprise in the developed world. Douglas McGregor wrote The Human Side of Enterprise mostly as a cautionary tale of motivation gone wrong. He postulated that the assumptions made by those leaders in business (or politics or the military) were critical in enabling the motivation of the followers and workers. Essentially, he said that if you make “Theory X Assumptions” about workers; that they are lazy and untrustworthy and must be coerced or coopted into working, then motivation is largely extrinsic and fleeting at best. By demonstrating a lack of trust in workers, the leader risks failure and potentially increasing costs for doing business. On the other hand, if the leader adopts “Theory Y Assumptions” that work is as natural as play and that people can enjoy their work and can be trusted to complete tasks and be productive, then motivation becomes more intrinsic and less monitoring and enforcement is required. Trust is exhibited in specific ways, including how rewards are applied and how decisions are made. A manager who appears to be playing favorites erodes motivation and a manager who constantly monitors employees and demonstrates distrust destroys motivation.
Fast-forward to the 1990s and the ability of mega-firms to create and destroy organizations without input from employees and you have the perfect brew for anxiety. Romney and Bain Equity, through its equity management have repeatedly entered organizations and stripped assets including pension funds and have cut jobs or shipped jobs overseas as the employees were merely onlookers to the process. Protective unions were long gone and even management was helpless in the downsizing and seizure of assets. Clearly, the first casualty of the process was trust, but close behind that injury was the generation of anxiety in workers losing, not only their jobs, but their dignity, self worth and optimism for life. Men or women responsible for providing nourishment and shelter for their families were then subject to the whims of an arbitrary system where they were made to feel bad by applying for unemployment compensation or even food stamps. Remember that the cause of their predicament is not of their doing, but imposed by a legal form of enterprise that immediately sets up winners and losers and creates stress and pain in powerless workers.
Picture the typical layoff. “This is nothing personal. You have been a good and loyal employee, but because of circumstances beyond my control, we have to let you go.” Immediately, there is nothing more personal. Your hopes, dreams, your way of living and concept of self are smashed and your very life is threatened by a legal but destructive ploy over which you had no control. Many of us have had this experience, and frequently, it was due to mismanagement by senior executives who gambled with your security and future and lost. I recall heading the training department for a bank that suddenly decided to enter international lending. They threw out all the safeguards of domestic lending and opened an office in London that quickly lent money to international shipping. Worse, they lent money for oil tankers. Still worse, all the tankers were from one country, Greece. Soon, the oil market collapsed and my employer was stuck with a bunch of tankers sitting in the port of Athens. I got the “nothing personal” speech along with my entire department and my bank was purchased by a bigger bank that soon met the same fate for similar mismanagement. I am certain that bank conveyed the same “nothing personal” speech.
Have we changed materially since the days of Dickens? No, not really, but the methods have morphed and the stakes have become higher since people believed the rhetoric about becoming participants in this ownership society and invested in homes when prices were high and banking treachery was higher. So now, being laid off also means losing your home instead of being kicked out by your landlord. If you call that progress, you have a high threshold for pain. Bain or its counterpart just ate your lunch by confiscating your pension, but it was nothing personal, thank god. You are reduced to standing in line to get unemployment compensation and soon you are further embarrassed to show your food stamp card at the supermarket. In a few states, you also have to pee in a bottle to prove that you are not on drugs before you qualify for food stamps because you are getting “government” money (much like the conservative politicians on the government payroll except for the peeing in a bottle part). So far, only 2% of these recipients have tested positive for drugs while 9% of the general population tests positive for drugs, yet the assumption continues that people are lazy and that they WANT to get food stamps to avoid work. Could things be any worse? Of course, you could have the House of Representatives cut off your unemployment compensation. Once again, conservatives there are claiming that paying unemployment compensation will be a disincentive for you to find work. I guess that they assume that you enjoy peeing in a bottle and living on the street, losing your pension and begging for food. How could I have missed the joi di vivre?
Simply listen to the conservative candidates in debates and speeches and you will discover that “people on welfare WANT to be there.” “They DON’T want to work.” The assumptions are both incorrect and dehumanizing. How humiliating it must be to lose your job because Romney crushed your company and grabbed your pension and then you have to apply for food stamps. Gingrich follows with his invective that blacks especially should learn to be school janitors so that we can bust unions and hire kids “who don’t have good role models.” Unfortunately, many black kids live in homes or on the street where their parents have to work two and more part time jobs without healthcare simply to buy food and shelter. Rick Santorum specifically mentioned blacks receiving welfare and then denied it despite the clear video where he pronounced it for perpetuity. Their assumptions drive their heartless and brainless policies. Fundamental assumption: The poor are causing the problems in our society.
Tax policies are the most interesting. “Everybody should pay some taxes.” Now that sounds fair, doesn’t it? Except for the fact that even the poorest pay local taxes although they may not pay federal income taxes because they have no income. Sure, Mittens Romney pays taxes like a good boy, and although it is less than 15%, it is all legal, right? While true, it is also true that Bain and other equity and investment companies lobbied Congress directly and forcefully to qualify dividend income and “carried interest” income at lower rates than any worker on a paycheck. Romney helped write the law. Mittens was also able to contribute a $100 Million gift to his sons in one year without the usual tax. In fact, he paid no tax on that gift. Now this may have been some sort of special trust arrangement, but limitations exist for each of us who may not have a crew of attorneys and accountants. Recently, we were restricted to $11,000 and, since 2011, that has been raised to $1 Million annually in gifts. I guess Mittens could not wait a hundred years and surely, he could not afford the taxes. Every proposed tax scheme of conservative candidates will increase the taxes paid by lower and middle class citizens and reduce the taxes of the highest economic class. The rationale for trickledown has not changed, but neither has the reality. The “job creators” need the tax breaks to create jobs so that others can pay taxes. We have enjoyed ten years of the lowest tax rates for “job creators” in over 50 years and they have created no jobs, but continue to amass wealth so they can continue to influence tax legislation. Do you feel the trickledown? Maybe you spilled something from that bottle you had to pee in.
Peace,
George Giacoppe
10 February 2012
Slim were the pickins
As enterprise owners
Enforced a servitude
Without benefit or bonus
For the emerging multitude
By trimming the wages
For workers in cages
While claiming piety
So that they held the wealth
And much better health
And we had anxiety
Back in 1960, there was a brash business professor at MIT who looked at the world of work and saw something fundamentally wrong with the assumptions often made by those in power as managers and owners of enterprise in the developed world. Douglas McGregor wrote The Human Side of Enterprise mostly as a cautionary tale of motivation gone wrong. He postulated that the assumptions made by those leaders in business (or politics or the military) were critical in enabling the motivation of the followers and workers. Essentially, he said that if you make “Theory X Assumptions” about workers; that they are lazy and untrustworthy and must be coerced or coopted into working, then motivation is largely extrinsic and fleeting at best. By demonstrating a lack of trust in workers, the leader risks failure and potentially increasing costs for doing business. On the other hand, if the leader adopts “Theory Y Assumptions” that work is as natural as play and that people can enjoy their work and can be trusted to complete tasks and be productive, then motivation becomes more intrinsic and less monitoring and enforcement is required. Trust is exhibited in specific ways, including how rewards are applied and how decisions are made. A manager who appears to be playing favorites erodes motivation and a manager who constantly monitors employees and demonstrates distrust destroys motivation.
Fast-forward to the 1990s and the ability of mega-firms to create and destroy organizations without input from employees and you have the perfect brew for anxiety. Romney and Bain Equity, through its equity management have repeatedly entered organizations and stripped assets including pension funds and have cut jobs or shipped jobs overseas as the employees were merely onlookers to the process. Protective unions were long gone and even management was helpless in the downsizing and seizure of assets. Clearly, the first casualty of the process was trust, but close behind that injury was the generation of anxiety in workers losing, not only their jobs, but their dignity, self worth and optimism for life. Men or women responsible for providing nourishment and shelter for their families were then subject to the whims of an arbitrary system where they were made to feel bad by applying for unemployment compensation or even food stamps. Remember that the cause of their predicament is not of their doing, but imposed by a legal form of enterprise that immediately sets up winners and losers and creates stress and pain in powerless workers.
Picture the typical layoff. “This is nothing personal. You have been a good and loyal employee, but because of circumstances beyond my control, we have to let you go.” Immediately, there is nothing more personal. Your hopes, dreams, your way of living and concept of self are smashed and your very life is threatened by a legal but destructive ploy over which you had no control. Many of us have had this experience, and frequently, it was due to mismanagement by senior executives who gambled with your security and future and lost. I recall heading the training department for a bank that suddenly decided to enter international lending. They threw out all the safeguards of domestic lending and opened an office in London that quickly lent money to international shipping. Worse, they lent money for oil tankers. Still worse, all the tankers were from one country, Greece. Soon, the oil market collapsed and my employer was stuck with a bunch of tankers sitting in the port of Athens. I got the “nothing personal” speech along with my entire department and my bank was purchased by a bigger bank that soon met the same fate for similar mismanagement. I am certain that bank conveyed the same “nothing personal” speech.
Have we changed materially since the days of Dickens? No, not really, but the methods have morphed and the stakes have become higher since people believed the rhetoric about becoming participants in this ownership society and invested in homes when prices were high and banking treachery was higher. So now, being laid off also means losing your home instead of being kicked out by your landlord. If you call that progress, you have a high threshold for pain. Bain or its counterpart just ate your lunch by confiscating your pension, but it was nothing personal, thank god. You are reduced to standing in line to get unemployment compensation and soon you are further embarrassed to show your food stamp card at the supermarket. In a few states, you also have to pee in a bottle to prove that you are not on drugs before you qualify for food stamps because you are getting “government” money (much like the conservative politicians on the government payroll except for the peeing in a bottle part). So far, only 2% of these recipients have tested positive for drugs while 9% of the general population tests positive for drugs, yet the assumption continues that people are lazy and that they WANT to get food stamps to avoid work. Could things be any worse? Of course, you could have the House of Representatives cut off your unemployment compensation. Once again, conservatives there are claiming that paying unemployment compensation will be a disincentive for you to find work. I guess that they assume that you enjoy peeing in a bottle and living on the street, losing your pension and begging for food. How could I have missed the joi di vivre?
Simply listen to the conservative candidates in debates and speeches and you will discover that “people on welfare WANT to be there.” “They DON’T want to work.” The assumptions are both incorrect and dehumanizing. How humiliating it must be to lose your job because Romney crushed your company and grabbed your pension and then you have to apply for food stamps. Gingrich follows with his invective that blacks especially should learn to be school janitors so that we can bust unions and hire kids “who don’t have good role models.” Unfortunately, many black kids live in homes or on the street where their parents have to work two and more part time jobs without healthcare simply to buy food and shelter. Rick Santorum specifically mentioned blacks receiving welfare and then denied it despite the clear video where he pronounced it for perpetuity. Their assumptions drive their heartless and brainless policies. Fundamental assumption: The poor are causing the problems in our society.
Tax policies are the most interesting. “Everybody should pay some taxes.” Now that sounds fair, doesn’t it? Except for the fact that even the poorest pay local taxes although they may not pay federal income taxes because they have no income. Sure, Mittens Romney pays taxes like a good boy, and although it is less than 15%, it is all legal, right? While true, it is also true that Bain and other equity and investment companies lobbied Congress directly and forcefully to qualify dividend income and “carried interest” income at lower rates than any worker on a paycheck. Romney helped write the law. Mittens was also able to contribute a $100 Million gift to his sons in one year without the usual tax. In fact, he paid no tax on that gift. Now this may have been some sort of special trust arrangement, but limitations exist for each of us who may not have a crew of attorneys and accountants. Recently, we were restricted to $11,000 and, since 2011, that has been raised to $1 Million annually in gifts. I guess Mittens could not wait a hundred years and surely, he could not afford the taxes. Every proposed tax scheme of conservative candidates will increase the taxes paid by lower and middle class citizens and reduce the taxes of the highest economic class. The rationale for trickledown has not changed, but neither has the reality. The “job creators” need the tax breaks to create jobs so that others can pay taxes. We have enjoyed ten years of the lowest tax rates for “job creators” in over 50 years and they have created no jobs, but continue to amass wealth so they can continue to influence tax legislation. Do you feel the trickledown? Maybe you spilled something from that bottle you had to pee in.
Peace,
George Giacoppe
10 February 2012
Saturday, January 14, 2012
Bain: Crony and Phony Capitalism
In the world according to Romney
In this land of milk and honey
Selective memory is best
When belief is put to the test
Though now Mitt’s berated
For saying it’s jobs he created
When in fact he destroyed them
And pensions were crème de la crème
Still, he denounced us as envious
And not himself as devious
All the recent political theater of the Republican primary season makes Broadway and Hollywood seem real. One must suspend disbelief in order to endure a single debate and watch them each push and shove to enter and exit stage far right. Finally, on last Sunday’s performance, “Bain” and “Romney” were used to form a sentence. Romney has touted his extraordinary ability and experience in creating jobs. Let us look at that startling claim to see where it could possibly have arisen. His competitors questioned Mitt’s boast and yet it has been the lynch pin of his campaign. What happens when a company like Bain enters the door of a struggling corporation? It depends. If you are speaking about Bain Venture Capital, then Bain might provide money to expand business or encourage new sector entry or growth. On the other hand, if it is Bain Capital Private Equity at the door, look for a leveraged buyout by a known raider. Also look for the dark side of capitalism where employees are merely pawns that might be fired to enrich Bain. Bain will acquire and then disassemble the company and sell the pieces. It will also examine those assets for potential changes. Normally, a pension fund is a liability in accounting terms since that money is owed employees at some future date. Private equity firms don’t view pensions that way. Those firms, or vulture capitalists, as Rick Perry called them, see pension funds as assets to be saved from the clutches of employees and used for Bain’s profits. That is what happened when Bain bought GST Steel in Kansas City. Bain took much of the pension money for its profit and then the government agency Pension Benefit Guaranty Corporation had to bail out the pension fund at the expense of American taxpayers. This should not be used as a boast, but a source of shame for Bain and Romney. Is it capitalism to push liabilities to the government or is it greed and corporate socialism?
The current Romney charge that criticisms of his profiteering are “envy” and not righteous indignation pours salt in the wound that he created. It actually condemns criticism and makes it appear that anybody noting the pain he has caused in thousands of families is due to envy of the people so affected and not to Romney’s unique ethics. In effect, he is also claiming that criticism of his ethics is a criticism of capitalism itself. It is not. It is a criticism of Phony Capitalism that pretends to be taking risks to generate profits, but instead is transferring risks to workers and to the government. It is also heartless because those were real people whom he fired and they supported real families living real lives of suffering and pain that Romney has never experienced. His attempt to express identification with people getting pink slips by saying that he feared a pink slip in his life is an creepy joke given that he has never had to fear any economic threat. Let me cite a few examples.
GST Steel eventually lost all 750 jobs in Kansas City and in no small part because Bain and Romney saddled CST with debt and Bain and Romney essentially confiscated $44 Million from the CST pension fund that later had to be made up by taxpayers through the US government Pension Benefit Guaranty Corporation (PBGC). That is a federal bailout going into profits for Bain and the loss of jobs for the steelworkers. Think about it. While corporations normally regard pension funds as liabilities that must be funded, Romney’s Bain saw pension funds as an asset. In accounting, they are on opposite sides of the ledger. In reality, not all the money Romney took was returned by PBGC, so workers each lost about $400/month in their eventual pension benefits. No wonder Romney likes firing people. It means money in his pockets. Romney boasted of creating 100,000 jobs, (80% through Staples), although Bain has never verified that number. He speaks of net/net meaning that all losses have been subtracted from spinoff jobs “created.” Hmm. Romney neglects to mention that the 750 jobs at GST Steel resulted in a cascade of lost jobs at the energy companies and the supply companies that did business with GST. Look closely. Bain and Romney issued bonds after purchasing GST (changing the name from Armco). While making improvements, they also took $36 Million as a dividend to Bain. That is the nature of private equity. Private equity does not create jobs. It creates profit unrelated to jobs. Venture capital is completely different. It may actually create jobs. The jobs lost at GST, were lost by Bain Capital Private Equity, the vulture side of Bain. To show you the balance of business, only about 2.3% of Bain’s business is done by Bain Venture Capital. In other words, vulture capital does over 97% of the business for Bain. Romney has not differentiated between the two nor has he indicated the huge imbalance toward vulture capitalism. Additionally, Bain took its profits directly while socializing losses (as in socialism) by increasing local taxes, increasing borrowing costs for others and using the Pension Benefit Guaranty Corporation to pay greatly reduced pensions to fired workers Was it legal? Yes. Was it ethical? Hmm. Did it create jobs? Probably not here in the USA.
Without going through all the details, Bain essentially did the same maneuver on Ampad by going in and charging Ampad for consulting and having them purchase lots of other office supply companies. In 1992 Bain bought Ampad for $5 Million. In 1993, Ampad had debt of $11 Million. By 1999, Ampad was in debt by $400 Million. Highly leveraged? Worse, Ampad was paying Bain high management fees along the way. Hundreds of employees were laid off and Ampad was put into competition with Staples for the same market while having less purchasing power. Who bankrolled Staples? Why it was Bain, of course. Conflict of interest you say? Not exactly, if your sole interest is making money, there can be no conflict of interest. Are not layoffs and bankruptcy problems? Not for Bain. Bain sold stock and the nearly 400 layoffs were simply a cost of bad management for which Bain was highly rewarded with a profit of over $100 Million. Jobs were outsourced and Bain made money without creating a US job.
Taxes? The Congress in its wisdom taxes profits from raiding companies like Bain Capital Private Equity at 15% not the 35% that you might assume. You may be wondering why “Mittens” has not divulged his tax returns despite calls to do so. He has compared his situation to that of the late Ted Kennedy who had his money in a blind trust meaning that if he divulged his tax return, he would have to reinvest his money in order to avoid interest conflicts in his Senate decisions. Mittens holds no government position so that, even if he had a blind trust then there would be no conflict of interest. How dare you ask? Besides, what if he paid no taxes? That is none of your business.
Now we hear cries from Senator McCain and others that attacking Mittens Romney is directly attacking our fundamental capitalist economic system. I don’t think so. Even the idea that Romney was picking winners and losers while having taxpayers pick up the tab flies against the advertised strength of capitalism of being rewarded for risk without government. Romney has scalded Obama for bailing out GM and Chrysler and yet jobs were saved and workers shared in the process of reducing demands to ensure survival instead of another bankruptcy. He has yet to take responsibility for his heartless creating of weak companies and then devouring the highly leveraged carcasses he created. Employees had no role except as victims. Crony Corporate Socialism as practiced by Romney and Bain should not be confused with Capitalism. Mussolini would love Romney for his corporatism, but we must call it what it is and it does not create jobs. It is essentially high finance with other people’s money. Remember Wall Street that was too big to fail but was bailed out by GW Bush? Conservatism or Corporatism?
Mittens says that any criticism is Romney Envy? No, he really does not get it. Maybe people felt fear or even hate, but envy? Maybe people envied their outsourced jobs? Governor Romney paid corporations incentives for moving to Massachusetts at the expense of taxpayers and the losing states. Mittens needs to level with us and admit that he created lots of profit for himself and Bain, but please, spare us the phony economics lesson on jobs. Just think of this on a national scale. Ouch.
Peace,
George Giacoppe
13 January 2012
In this land of milk and honey
Selective memory is best
When belief is put to the test
Though now Mitt’s berated
For saying it’s jobs he created
When in fact he destroyed them
And pensions were crème de la crème
Still, he denounced us as envious
And not himself as devious
All the recent political theater of the Republican primary season makes Broadway and Hollywood seem real. One must suspend disbelief in order to endure a single debate and watch them each push and shove to enter and exit stage far right. Finally, on last Sunday’s performance, “Bain” and “Romney” were used to form a sentence. Romney has touted his extraordinary ability and experience in creating jobs. Let us look at that startling claim to see where it could possibly have arisen. His competitors questioned Mitt’s boast and yet it has been the lynch pin of his campaign. What happens when a company like Bain enters the door of a struggling corporation? It depends. If you are speaking about Bain Venture Capital, then Bain might provide money to expand business or encourage new sector entry or growth. On the other hand, if it is Bain Capital Private Equity at the door, look for a leveraged buyout by a known raider. Also look for the dark side of capitalism where employees are merely pawns that might be fired to enrich Bain. Bain will acquire and then disassemble the company and sell the pieces. It will also examine those assets for potential changes. Normally, a pension fund is a liability in accounting terms since that money is owed employees at some future date. Private equity firms don’t view pensions that way. Those firms, or vulture capitalists, as Rick Perry called them, see pension funds as assets to be saved from the clutches of employees and used for Bain’s profits. That is what happened when Bain bought GST Steel in Kansas City. Bain took much of the pension money for its profit and then the government agency Pension Benefit Guaranty Corporation had to bail out the pension fund at the expense of American taxpayers. This should not be used as a boast, but a source of shame for Bain and Romney. Is it capitalism to push liabilities to the government or is it greed and corporate socialism?
The current Romney charge that criticisms of his profiteering are “envy” and not righteous indignation pours salt in the wound that he created. It actually condemns criticism and makes it appear that anybody noting the pain he has caused in thousands of families is due to envy of the people so affected and not to Romney’s unique ethics. In effect, he is also claiming that criticism of his ethics is a criticism of capitalism itself. It is not. It is a criticism of Phony Capitalism that pretends to be taking risks to generate profits, but instead is transferring risks to workers and to the government. It is also heartless because those were real people whom he fired and they supported real families living real lives of suffering and pain that Romney has never experienced. His attempt to express identification with people getting pink slips by saying that he feared a pink slip in his life is an creepy joke given that he has never had to fear any economic threat. Let me cite a few examples.
GST Steel eventually lost all 750 jobs in Kansas City and in no small part because Bain and Romney saddled CST with debt and Bain and Romney essentially confiscated $44 Million from the CST pension fund that later had to be made up by taxpayers through the US government Pension Benefit Guaranty Corporation (PBGC). That is a federal bailout going into profits for Bain and the loss of jobs for the steelworkers. Think about it. While corporations normally regard pension funds as liabilities that must be funded, Romney’s Bain saw pension funds as an asset. In accounting, they are on opposite sides of the ledger. In reality, not all the money Romney took was returned by PBGC, so workers each lost about $400/month in their eventual pension benefits. No wonder Romney likes firing people. It means money in his pockets. Romney boasted of creating 100,000 jobs, (80% through Staples), although Bain has never verified that number. He speaks of net/net meaning that all losses have been subtracted from spinoff jobs “created.” Hmm. Romney neglects to mention that the 750 jobs at GST Steel resulted in a cascade of lost jobs at the energy companies and the supply companies that did business with GST. Look closely. Bain and Romney issued bonds after purchasing GST (changing the name from Armco). While making improvements, they also took $36 Million as a dividend to Bain. That is the nature of private equity. Private equity does not create jobs. It creates profit unrelated to jobs. Venture capital is completely different. It may actually create jobs. The jobs lost at GST, were lost by Bain Capital Private Equity, the vulture side of Bain. To show you the balance of business, only about 2.3% of Bain’s business is done by Bain Venture Capital. In other words, vulture capital does over 97% of the business for Bain. Romney has not differentiated between the two nor has he indicated the huge imbalance toward vulture capitalism. Additionally, Bain took its profits directly while socializing losses (as in socialism) by increasing local taxes, increasing borrowing costs for others and using the Pension Benefit Guaranty Corporation to pay greatly reduced pensions to fired workers Was it legal? Yes. Was it ethical? Hmm. Did it create jobs? Probably not here in the USA.
Without going through all the details, Bain essentially did the same maneuver on Ampad by going in and charging Ampad for consulting and having them purchase lots of other office supply companies. In 1992 Bain bought Ampad for $5 Million. In 1993, Ampad had debt of $11 Million. By 1999, Ampad was in debt by $400 Million. Highly leveraged? Worse, Ampad was paying Bain high management fees along the way. Hundreds of employees were laid off and Ampad was put into competition with Staples for the same market while having less purchasing power. Who bankrolled Staples? Why it was Bain, of course. Conflict of interest you say? Not exactly, if your sole interest is making money, there can be no conflict of interest. Are not layoffs and bankruptcy problems? Not for Bain. Bain sold stock and the nearly 400 layoffs were simply a cost of bad management for which Bain was highly rewarded with a profit of over $100 Million. Jobs were outsourced and Bain made money without creating a US job.
Taxes? The Congress in its wisdom taxes profits from raiding companies like Bain Capital Private Equity at 15% not the 35% that you might assume. You may be wondering why “Mittens” has not divulged his tax returns despite calls to do so. He has compared his situation to that of the late Ted Kennedy who had his money in a blind trust meaning that if he divulged his tax return, he would have to reinvest his money in order to avoid interest conflicts in his Senate decisions. Mittens holds no government position so that, even if he had a blind trust then there would be no conflict of interest. How dare you ask? Besides, what if he paid no taxes? That is none of your business.
Now we hear cries from Senator McCain and others that attacking Mittens Romney is directly attacking our fundamental capitalist economic system. I don’t think so. Even the idea that Romney was picking winners and losers while having taxpayers pick up the tab flies against the advertised strength of capitalism of being rewarded for risk without government. Romney has scalded Obama for bailing out GM and Chrysler and yet jobs were saved and workers shared in the process of reducing demands to ensure survival instead of another bankruptcy. He has yet to take responsibility for his heartless creating of weak companies and then devouring the highly leveraged carcasses he created. Employees had no role except as victims. Crony Corporate Socialism as practiced by Romney and Bain should not be confused with Capitalism. Mussolini would love Romney for his corporatism, but we must call it what it is and it does not create jobs. It is essentially high finance with other people’s money. Remember Wall Street that was too big to fail but was bailed out by GW Bush? Conservatism or Corporatism?
Mittens says that any criticism is Romney Envy? No, he really does not get it. Maybe people felt fear or even hate, but envy? Maybe people envied their outsourced jobs? Governor Romney paid corporations incentives for moving to Massachusetts at the expense of taxpayers and the losing states. Mittens needs to level with us and admit that he created lots of profit for himself and Bain, but please, spare us the phony economics lesson on jobs. Just think of this on a national scale. Ouch.
Peace,
George Giacoppe
13 January 2012
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