Tag Archives: Romney

GOP: Getting Back to Base-ics?

Now, would someone in the corporate media care to discuss “Republicans in Disarray?”  Heaven knows it’s been a hallmark of coverage about issues within the Democratic Party.  As a former adherent of the GOP, and now as a complete outsider, I’ve had some rambling notions about what’s been happening since the 1980’s.  Here they are.

Ancestor Worship

The election of President Ronald Reagan was a significant one for the Republicans, and the popularization of the Southern Strategy by GOP activist Kevin Phillips continued into the decade.  The Republicans offered a home for the Dixiecrats, the gun lobby, and the “God, Guns, and Gays” wedge issue proponents who found succor within Republican realms.  His was the “Southern Strategy Fulfilled.”  All of this made it far easier for the beknighted President to advance an agenda that was blatantly anti-union, persistently pro-banking, and generally pro-corporate.   He was, however, not the consistent opponent of the New Deal some conservative would like to remember.

“Reagan increased payroll taxes in 1983. History records that, alarmed by spiraling deficits, he signed tax increases during six of his eight years in office. Even so, his administration tripled the national debt, to almost $3 trillion.” [Salon]

He pulled U.S. forces out of Lebanon after the Beirut Barracks bombing. He gave amnesty to undocumented immigrants.  He did not privatize Social Security, instead he raised the payroll taxes.   What he did do was to popularize some right wing ideas which advanced the corporate agenda (to break the social compact between citizens and their government) such as the “welfare queen.”  Reagan’s world was “Leave it to Beaver” without the unionized employees who made the show possible.  It was “Ozzie and Harriet” without any African American neighbors.  It was “See The USA In Your Chevrolet” without acknowledging the Eisenhower Administration’s grand public works project — the Interstate Highway system.  Reagan, instead, paved the route for the Bush and Rove show.

The Bush-Rove Bargain

The Show was abetted by the advance of right wing talk radio in the AM revival after the fairness doctrine was eliminated during the Reagan Administration in 1987.   The Reaganesque mythology of welfare queens was translated to the John Birch Society – Randian free market mythology, and further transmogrified into Compassionate Conservatism, proving  once and for all times that a snappy slogan exempts the speaker from having to provide any specific, cogent, or rational policy proposals on any given subject.  The spins, the twists, and the dog whistling created an environment in which the Oil Barons, the Bankers, and the CEO’s were the Blesséd Among Us, while the rest of the nation’s population would have to demonstrate their worthiness to receive the charity of the country.  If this is sounding a bit familiar, it should.

The Truth Tellers

One of the well documented features of the Romney-Ryan election efforts was the casual association their campaign had with the truth.  Nor did their campaign suffer from a surfeit of consistency.   Indeed, one of the highlights came when this quotation was captured: “I’m not familiar precisely with what I said, but I’ll stand by what I said, whatever it was,” Romney responded.” [RS]  How on Earth could a candidate get away with this?  Even worse, there was this comment from the Romney camp: “We’re not going to let our campaign be dictated by fact-checkers,” Romney pollster Neil Newhouse said at a panel organized by ABC News.” [HP]  The answer may well be that Governor Romney assumed that the Mythology of Reagan, the focus group centered conservatism of Bush, the fulfillment of the Southern Strategy, and the cynicism toward information from the media created by the GOP-Fox-Right Wing radio Echo Chamber, would all culminate in a successful election effort.

What Went Wrong?

Policy Matters.  Those corporate friendly policies of the Bush Administration which tended toward de-regulation, capital flight, and “creative” products to enhance investment revenues collapsed in a staggering heap circa 2007 and 2008.  We went from “Greed Is Good,” back to “Greed Is One Of The Seven Deadly Sins.”

Item – The vaunted and well publicized Supply Side Theory of economics proved illusory, in all probability because it was a hoax in the first place.  It may take the American public some time to understand the facts, but as of 2008 they were inescapable — low taxation did not, and never had, create economic growth in the real economy. No amount of spinning, theorizing, generalizing, or rationalizing can make this ideological theory whole again. Yet the Romney campaign persisted, enabled by the plutocrats on the Rove donor lists, the Club for Growth, the US Chamber of Commerce, and the bankers.

Item – The Republicans themselves, at least in the form of former House Speaker New Gingrich, recognized that they had a Financialist candidate in a race wherein the electorate was still reeling from the effects of financialist excesses.   American voters rejected the Supply Siders, in favor of a candidate whose economic policies emphasize growth not European style austerity, which seems to have done precious little for the Eurozone economic growth rate.

Item – the conservative complaints about immigrants being a curse upon the civil state were strident enough to cause Hispanic voters to express their opinions in the polling that mattered.  Opposition to the DREAM Act, calls for self-deportation, “papers please” legislation,” and charges that the Hispanic community was basically “unAmerican,” didn’t help expand the numbers for the Republican Party.

Item – That “rape thing” in combination with wholesale assaults on the Affordable Care Act, attached to radio ranting about “sluts” who take birth control pills, and associated with the most extreme anti-abortion rhetoric wasn’t good for Republicans either.  Only 15% to 20% of Americans believe that abortion should be illegal in all instances. [PR]  Proposing to adopt policies supported by 20% of the population doesn’t seem to be a constructive way to attract votes from the 46.2% of American women who are registered to vote. [Census]


Leadership matters.   Those not self identified members of the Republican Party have marveled at the importance attached to the opinions of the right wing radio ranters in GOP politics.  There have been several instances in which members of Congress, for example, sought to distance themselves from or disagree with radio commentator Rush Limbaugh — only to walk back their criticism almost immediately. Unfortunately for Republican politicians, Mr. Limbaugh’s misogynistic, racist, and otherwise radical offerings are associated with the fringe right not the moderate middle.

It is handy to have one’s own television network, but Fox News however helpful it seeks to be has done a poor job of informing its viewers.  Studies from the University of Maryland and Fairleigh Dickinson University both demonstrated that Fox viewers were the least well informed, and were often willing to accept obviously inaccurate information.  [HP] Fox’s response was to attack the Universities, not to deny the results of the studies.  The Republicans could be certain to count as theirs the votes among the Fox viewers, but while Fox draws about 604,000 per day [TV] it should be recalled that there are 112,806,642 people in the country between the ages of 18-44, another 81,489,445 aged 45-64, and some 40,267,984 over 65.   In slightly more stark terms, Fox is reaching 604,000 daily viewers out of 234,564,071 of those eligible to vote.

Item – An echo chamber can also be a trap.   From the outside it appears the Republicans can’t decide if they are a Party with its own radio and TV broadcasters, or if they are the operatives responsible for promoting the policies sought by  one television network, and a handful of broadcasters on AM radio.   The Party appears to be functioning without a national spokesperson — is the anointed one Rush Limbaugh? Senator John McCain? Sean Hannity, Bill O’Reilly?  Governor Mitt Romney? Senator Mitch McConnell?  What are we to think of a party that for two election cycles didn’t (or couldn’t) use the services of its most recent incumbent?

Having an incumbent in the White House is always an advantage, but President Obama is the acknowledged leader of the Democratic Party, and has secured the support of former President Bill Clinton, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid, Senator Dick Durbin, Senator John Kerry, and the imprimatur of the Kennedy family.  GOP spokesperson may rail about the “Chicago” clique responsible for the Obama Campaign, but there’s no mistaking the fact that unlike the GOP there is a clear coterie of national Democratic leadership aligned with an incumbent president.

In Fine

Ancestor worship, focus group politics, and the narrowing perspective along polarized lines promoted by a self referencing media does not constitute a recipe  for long term success.  Self definition works better.  If the GOP is truly the Small Government Party, then the privacy invasive anti-abortion portion of the base will be disappointed.  If the GOP is the Party of Big Business, then eventually small business owners will come to define themselves separately from the mega-corporations and the bankers.  If the GOP is the Party of Social Conservatives then does it permanently constrain its membership to the 20% to 30% of voters for whom issues like abortion are primary considerations?

Perhaps the Party might want to look at Democratic efforts to realign itself after 1988?  There’s a template there should the GOP choose to follow it, but WARNING — it requires moderation.

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Filed under 2012 election, conservatism, Politics, Republicans

Distorted Vision: Romney’s Numbers Still Don’t Add Up

Those who believe former Governor Romney is presenting a “vision” for America, especially for the American economy, should move away from the fun house mirror.  The numbers still don’t add up.

I could have sworn that Governor Romney proposed a smaller number for the total deductions cap at one point, [TP]  but I might be suffering from Romnesia. (video)  However, as of the last debate the former Governor would like for us to believe that his tax plan — which will “generate jobs” — will replace revenue lost from giving billionaires and millionaires a hefty tax break with a deductions cap of $25,000.  Nope.

“Capping deductions would generate less additional revenue, and the higher the cap, the smaller the gain. Limiting deductions to $17,000 would increase revenues by nearly $1.7 trillion over ten years. A $25,000 cap would yield roughly $1.3 trillion and a $50,000 cap would raise only about $760 billion.” [taxvox]

Remember that Governor Romney’s calculations call for a reduction in government revenues, ” TPC estimates that on a static basis, the Romney plan would lower federal tax liability by about $900 billion in calendar year 2015 compared with current law, roughly a 24 percent cut in total projected revenue. Relative to a current policy baseline, the reduction in liability would be about $480 billion in calendar year 2015.”

As the chart above indicates there is no way Governor Romney can keep this promise:

“Romney has vowed to make up for all revenue the government would lose due to his proposed tax cut by eliminating tax breaks, particularly for the rich, and by a spurt of economic activity he anticipates would generate more money for the Treasury.” [Bloomberg]

What about those six studies which supposedly ‘prove’ this magic act will work?  In the last week several factcheckers have been busily debunking this contention.  See Politifact, Bloomberg, and New York Times.

The only way to make the numbers fit is to assume some fanciful increase in job creation and economic growth generated by tax cuts.   And, in order to assume that tax cuts lead to economic expansion and therefore job growth is to buy in lock, stock, barrel, nuts, bolts, nails, tacks, and staples into the Supply Side Mythology Voodoo Economics Trickle Down Hoax.

Governor Romney is asking Americans to purchase his Supply Side Hoax, just as President George W. Bush promised that his Supply Side Tax Cuts would generate economic expansion —  What happened?

The tax cuts for the ultra-wealthy (President Bush famously called them his base), helped fuel the Wall Street Casino which in turn created the Housing Bubble and the consequent financial collapse.  And when the collapse hit during 2007-2008 we lacked the financial capacity — having already kept two wars off the books — to address the needs of Americans, their infrastructure, and their economy.

Tax cuts and deregulation were the ingredients offered by former President George W. Bush for economic expansion — they didn’t work.  Now, presidential candidate Romney is energetically advocating following the EXACT SAME RECIPE but this time assuming different results.

And, what do we call “doing the same thing over and over again while expecting different results.”  [answer]

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Filed under 2012 election, Economy, tax revenue, Taxation

What Does Romney Have In His Own Safe?


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Filed under 2012 election, presidential race, Romney

What did Romney and Ryan Store in the Republican Safe?


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Filed under 2012 election, Politics, presidential race, Republicans, Romney

Follow The Money: How To Play The Traveling Money Game

I think I get it. How to play the Traveling Money Game — Romney Style.  Political Carnival provides the explanation, and because I tend to think in charts and graphs, this is my rendition of that explication.

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Filed under 2012 election, banking, Economy, financial regulation, Politics, Romney, Taxation

The Mythology of the Missing Apology and Diplomatic Matters

There’s no need to re-invent the wheel, and even less reason to re-write the well written.  J. Patrick Coolican’s masterful takedown of the Obama Apology Mythology in the Las Vegas (NV) Sun is a must read.  Less informative, but more sophomorically  amusing is the third comment down the page from a Tea Party “thinker” who has nothing on offer but ad hominem attacks on the Obama Administration and the President personally.   There are several other articles worth citing which offer cogent explications of various parts of the foreign policy story.

Before anyone starts rambling about why the American embassies and consulates aren’t better protected,  some attention should be paid to the reasons for that, one of which is:

‘Secretaries of State have had to beg for crumbs from Congress, which sees diplomacy as an easy thing to cut back — who lobbies for more money for diplomats? Military contractors have all the money. In addition, no president is criticized for gutting State, while taking even a nail file to Defense’s obese budget elicits slurs from the opposing party.”  [Salon]

There’s some additional commentary on the subject of the Libyan Gaffe   worth reading at The Nation, regarding the political ramifications of Governor Romney’s ill-timed remarks, and a perceptive piece from George Zornick about the intertwined relationship between Governor Romney’s foreign policy pronouncements and the right wing blogs.   Frank Rich explains how Governor Romney got out ahead of the facts.

The wretched hack piece of a film which launched the protests in the Middle East and northern Africa is very difficult to explain to citizens of nations wherein the media is controlled by government agencies.  It is equally hard to explain why “free speech” which denigrates and demeans another religion isn’t officially banned here to citizens of nations in which church/mosque/etc. and state are not separated.  Jack Balkin offers a summary of the legal reasons the wretched hack piece of a film is protected constitutionally.

Secretary of State Clinton reiterated this point in her remarks to U.S. – Morocco Strategic Dialogue:

“I also want to take a moment to address the video circulating on the internet that has led to these protests in a number of countries. Let me state very clearly – and I hope it is obvious – that the United States Government had absolutely nothing to do with this video. We absolutely reject its content and message. America’s commitment to religious tolerance goes back to the very beginning of our nation. And as you know, we are home to people of all religions, many of whom came to this country seeking the right to exercise their own religion, including, of course, millions of Muslims. And we have the greatest respect for people of faith.”

If you agree that the attack on the consulate in Libya looked very different from the usual rock and bottle throwing flag burners in other hot spots, then the information in Hisham Matar’s contribution to the New Yorker will be instructive. Here’s a taste:

“It is thought to be the work of the same Salafi, ultra-religious groups who have perpetrated similar assaults in Benghazi. They are religious, authoritarian groups who justify their actions through very selective, corrupt, and ultimately self-serving interpretations of Islam. Under Qaddafi, they kept quiet. In the early days of the revolution some of them claimed that fighting Qaddafi was un-Islamic and conveniently issued a fatwa demanding full obedience to the ruler. This is Libya’s extreme right. And, while much is still uncertain, Tuesday’s attack appears to have been their attempt to escalate a strategy they have employed ever since the Libyan revolution overthrew Colonel Qaddafi’s dictatorship. They see in these days, in which the new Libya and its young institutions are still fragile, an opportunity to grab power. They want to exploit the impatient resentments of young people in particular in order to disrupt progress and the development of democratic institutions.”

Some attention should also be paid to the delicate work that is the essence of diplomacy.   The object of the game is to keep sovereign nations talking constructively with one another so as to promote their mutual interests, and — here’s the sticky part — address, so far as is practicable, their own agendas.

The Yosemite Sam version of diplomacy in which trade and security interests are promoted at gun point with all the sensitivity of a saltwater crocodile  isn’t often very helpful increasing bi-lateral trade and commerce. Characterizing diplomacy as “soft” (as opposed to rushing in guns blazing “hard”) is counterproductive to our own economic interests.  Likewise, when it does come to the classic definition of war — a failure of diplomacy — it’s always better to have friends, especially friends who are willing to foot part of the bills.   There’s one more step in this waltz.

President Obama was, for example, very cautious in his classification of Egypt — a nation not necessarily a friend, but not an enemy.  In a less complex world, or perhaps in one in which there are only two countries, the “friends and enemies” categorizations are possible.  Reality is another matter entirely.   There are friends, enemies, and nations which are both given a particular set of circumstances at a given point in time.  Think: Great Britain and the Falklands/Islas Malvinas (Argentina).    Think: China imports about $82 billion worth of U.S. goods annually.  Some further thought leads inevitably to the conclusion that some friendships are stronger than others, and some enemies can, at times, be very helpful. Think: Pakistan.


Therefore, diplomacy in the advancement of American interests requires patience, all too often not our best suit — we like our beer cold, our soup hot, and our aspirin to work within 15 minutes.  The patience involved is not only a matter of concern for Secretary Clinton engaging with the Moroccans at the moment, but also our patience with other countries, especially those which are experiencing internal instability.

Why, we wonder, can’t the citizens of Whateveria get their act together and form a government?  What’s so hard about having an election?  We’ve been having elections forever about everything; six year old first grade students hold up their hands to select either a Story Hour or Puzzle Time for Rainy Day Recess.  That’s the point.

We start practicing “elections,” and other rudimentary forms of democracy with children who are barely housebroken.  The losers in the Story Hour/Puzzle Time vote learn to “go along with the majority.”  Imagine the middle aged man voting in the first election of a lifetime in which the outcome was not already a forgone conclusion.  Imagine a nation in which people are trying to figure out what it means to form a “loyal opposition.”

We also tend to forget the patient long term efforts of diplomats and agencies which carefully tended organizations, in eastern Europe for example, which gradually consolidated sufficient political power to finally and  literally make The Wall fall down.

We imperil our own interests if we don’t recognize that most of the nations with whom we share this planet don’t fall neatly into Cold War Era categorizations of Friends or Enemies.  As tidy and convenient as those labels may be, the simplification is both seductive and counter-productive.  The paradigm is outdated. The classifications are too simplistic.  American interests are always better served when we put away our cartoon character persona’s, re-color our maps in something other than black and white, and approach discussions of foreign policy with the understanding that the ties binding us to each other on this planet are incredibly tangled.

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In The Reading Room

   Information concerning the relationship of Medicare to the Patient Protection and Affordable Care Act is bountiful, albeit not always accurate or informative.   Perrspectives explains “The Return of Republican Medicare Frauds” with clarity and fact based analysis.   Perrs quotes Jackie Calmes’ article in the New York Times; and, those wanting to place the issue in a political framework will want to read Calmes’ summary of why the Medicare messaging from the Republicans has become such a muddle.


Politicususa highlights a Republican provision concerning SNAP (food stamps) in the House version of the Farm Bill which is as draconian as it is nonsensical.   “The Republican plan eliminates “categorical eligibility” which means that a family living at or below the poverty line that owns a dependable car will be cut off of food assistance. According to Republicans, a dependable automobile will be figured in to the family’s income and when they are near the eligibility cut-off point, even a moderately-priced used car sends them over the limit.”   (emphasis added)   Think about this for a minute, or think back to the time in your early life when you need the car to get work and the work to keep paying for the car.

If a family doesn’t own a “dependable automobile” then they will be eligible for food stamps, thus in order to qualify for food assistance the family has to part with the means to get to work!  Precisely how this is supposed to incentivize people to find jobs escapes any logic, especially if they are required to give up the means to get TO a job in order to eat.  If one has an undefined “undependable automobile,” then must a person only be able to accept work from an employer who doesn’t care when or if he or she can show up?  Seen any of those recently?


This pathological perseveration about someone receiving any form of public assistance, lest they become “dependent,” leads right wing members of Congress into such silly statements as Rep. Allen West’s comment that Social Security is a 21st century version of slavery. [Think Progress]   Rep. West seems to have missed the obvious point wherein individuals receive Social Security benefits — because they paid into the system during their working lives.


Apparently pointing out that someone is very rich is now a “character assault?”   “In a statement, Romney spokesperson Andrea Saul said “The Obama campaign’s latest unfounded character assault on Mitt Romney is unseemly and disgusting.”  [WashMonthly]  ICYMI, Vanity Fair’sWhere The Money Lives” approaches being a primer on how the ultra-rich avail themselves of tax loopholes and other accounting treatments to avoid paying taxes.  Governor Romney is quite precise about it — stating he pays just what the law requires and not at dollar more.   And… about those arguments predicated on the assumption that Governor Romney can’t be blamed for any actions taken by Bain Capital since he left?

Because of his retirement deal with Bain Capital, his finances are still deeply entangled with the private-equity firm that he founded and spun off from Bain and Co. in 1984. Though he left the firm in 1999, Romney has continued to receive large payments from it—in early June he revealed more than $2 million in new Bain income. The firm today has at least 138 funds organized in the Cayman Islands, and Romney himself has personal interests in at least 12, worth as much as $30 million, hidden behind controversial confidentiality disclaimers. Again, the Romney campaign insists he saves no tax by using them, but there is no way to check this.”

Americablog observes that Governor Romney needs to answer some basic questions about his tax returns.


The Chart of the Day:  What would a graph of the Real GDP look like using data from January 1, 2009 to Q3 2012?  This:

Probably not something the Republicans are going to post on their campaign web pages?


More LIBOR.  Robert Reich calls it “a mammoth violation of public trust.” [BusInsider] The Guardian (UK) reports a Barclays whistleblower alleges Bob Diamond would have to have known about the rate rigging.   The BBC reports that the Serious Fraud Office has launched a criminal investigation. From the Telegraph, “Vince Cable: Banks are throttling UK recovery,” (Cable is the UK Business Secretary.) On Friday authorities said external audits were being conducted to see if Deutsche Bank was involved in the LIBOR rigging scandal, today it’s reported two bank employees have been suspended. [Reuters]

ZeroHedge has been following the story, and has several interesting analytical posts on the subject.  Pragmatic Capitalism yawns and tells us that the LIBOR scandal doesn’t tell us anything we didn’t already know. The main bit of evidence is the fact that the LIBOR and Effective Federal Funds rates are closely aligned — which is good, BUT it’s the little spaces in which the Big money can be gleaned.   And lost.

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Filed under banking, Medicare, Politics, Republicans, Romney

On The Chalk Board: Romney’s Massachusetts State Debt

Source link here.

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Filed under 2012 election, Economy, Federal budget, Romney

Positions Available At Romney’s Gaffe-A-Matic Campaign HQ?

Maybe former Massachusetts Governor Mitt Romney IS a “job creator?”  There are four recent examples of positions for which the incumbent seems a bit overwhelmed.

On April 19, 2012 Mr. Romney gave a speech on the economy in a vacant drywall  factory property, blaming the President for job losses.  A lovely background indeed, except for one little, but important detail — “The factory actually closed in June 2008, seven months before Obama took office. And during the Obama administration, unemployment has actually fallen in Ohio from 8.6 percent in January 2009 to 7.6 percent in February 2012.”  [TW] (emphasis added)

But, but, but, sputtered the Republican spinmeisters, the economy has been struggling for the last three years — yes, does that mean the President and his Administration hasn’t been cleaning up the Bush Administration’s mess fast enough?  Be that as it may, one job — either in the advance team or the Romney scheduling brigade — might well be open.

The Romney Campaign continued lurching through April.  On April 26, 2012 one of Mr. Romney’s top foreign policy advisers, Pierre Prosper stumbled on another brick in the road.

PROSPER: The United States has become a spectator on issues of national security. We’ve also been embarrassed by North Korea where again it continues to be a conciliatory leaning forward approach and yet the North Koreans will launch a missile surprising the United States by violating their agreement.

You know Russia is another example where we give and Russia gets and we get nothing in return. The United States abandoned its missile defense sites in Poland and Czechoslovakia, yet Russia does nothing but obstruct us, or efforts in Iran and Syria. (emphasis in original) [TP]

First, was anyone surprised the North Koreans attempted to launch a missile?  Was anyone particularly surprised when the 100th Founder’s Birthday Celebratory missile broke into pieces over the Yellow Sea?  Was anyone surprised the North Koreans broke a promise?  The Department of State didn’t seem “surprised,” rather more annoyed:

Despite the failure of its attempted missile launch, North Korea’s provocative action threatens regional security, violates international law and contravenes its own recent commitments. While this action is not surprising given North Korea’s pattern of aggressive behavior, any missile activity by North Korea is of concern to the international community. The United States remains vigilant in the face of North Korean provocations, and is fully committed to the security of our allies in the region. [USEmbassy](emphasis added)

Moving right along.  The Romney Campaign’s foreign policy adviser obviously didn’t get the memo, or read the newspapers in September 2009, when the Obama Administration announced:

“The “new missile defense architecture in Europe … will provide capabilities sooner, build on proven systems and offer greater defenses against the threat of missile attack than the… program” that former President George W. Bush proposed, Obama said.  Obama said the change of gears was based on an “updated intelligence assessment” about Iran’s ability to hit Europe with missiles.”

The Secretary of Defense continued: “This new approach provides a better missile defense capability for our forces in Europe, for our European allies and eventually for our homeland than the program I recommended almost three years ago,” said Gates, who was defense chief in the last two years of the Bush administration and stayed on when Obama took office.The Bush-era proposal called for the U.S. to set up a radar site in the Czech Republic and 10 missile interceptors in Poland to counter the threat of Iran launching long-range missiles at America’s allies in Europe.”  [CNN]

The Romney foreign policy “expert” either didn’t know the shift in Pentagon plans suggested circa 2006, or wants the U.S. to revert to a system already declared inadequate.   Maybe there’s a job opening here?  BTW, Czechoslovakia hasn’t existed since January 1993 — the old missile defense plan called for placement in the Czech Republic.  The new hire should have a solid grasp of place name geography?

May 1, 2012: Visiting NYFD’s  Ladder 5 & Engine 24 is a nice thing.  However, doing it on the anniversary of Osama Bin Laden’s death combined with commentary saying, “Even Jimmy Carter would have given that order,” Romney said, referencing the former president in his answer to a reporter’s question after a campaign appearance in New Hampshire,” [WNYC] and then making the visit with former NYC Mayor Rudy “Noun, Verb, 9/11” Giuliani equates to a multi-layered Gaffe-A-Matic mixed message.  Even Jimmy Carter? The Jimmy Carter who did pull the trigger:

“In the spring of 1980, Carter ordered a helicopter rescue attempt – one that ended disastrously and left an indelible scar on his presidency. Two of the eight helicopters developed problems on the way to a remote desert landing spot and had to turn back; a third had a hydraulic problem after landing. Carter canceled the mission but during the withdrawal, a helicopter collided with a C-130 transport plane, resulting in eight deaths.”  [HuffPo]

Yes, Jimmy Carter DID give the order for Operation Eagle Claw, and no, it did not work out well, no better than a subsequent “Black Hawk Down,” order.  The order that was NOT given was at Tora Bora.  An applicant for Mr. Romney’s security adviser position may want to read the U.S. Special Operations Command’s report “1987-2007” (pdf).

A new adviser may also want to be aware when making light of former President Carter’s alleged “softness” on defense, that the former President was a graduate of the Naval Academy, served on the USS Wyoming testing electronic and gunnery equipment, served on the team developing the first nuclear submarine (K-1), and retired from the Navy in 1953.  “After his father’s death in 1953, Carter resigned from the Navy to return to Georgia to manage the family interests. Carter was honorably discharged on 9 October 1953 at Headquarters, Third Naval District in New York City. On 7 December 1961, he transferred to the retired reserve with the rank of Lieutenant at his own request. ”  [USNavy]

Those who have not served would do well not to be dismissive of the service of others.   The new hire in the Romney campaign office would do well to remember this maxim.

And, now coming full circle, the Romney campaign will shift back to “The Economy” with a speech in northern Virginia, “the switch back to the economy on Wednesday allowed Romney to focus on his strengths as a businessman — a core message of his campaign.”  [TheHill]

Oh, yes, by all means, let’s return to the “economy,” wherein we bump into the Romney Fiscal Fantasy Plan:

“The Romney campaign has been very clear about what the former governor is promising: $5 trillion in tax cuts on top of extending the Bush tax cuts, with those benefits heavily weighted toward the country’s wealthiest taxpayers. Romney himself has acknowledged the lack of details, stating in reference to his tax plan that “frankly, it can’t be scored.” I have been party for many years to searches for “high-income tax shelters” that can feasibly be closed. I know of no reputable expert in either political party who would find that there is anything even approaching $5 trillion in potential revenue to be generated from this source.” [Summers, WaPo]

Maybe a new tax policy adviser needs to get on board? A new economic adviser? Someone in the Romney Campaign needs the ability to spin straw into gold in order to explain how the Predator’s Ball of Bain Capital danced around the issue of off-shoring and job elimination:

“… the firm had made a lot of money while closing factories, eliminating jobs, using tax-sheltered offshore accounts, and, in some cases, driving the companies it had bought into bankruptcy. “Bain Capital is the model of how to leverage brain power to make money,” Howard Anderson, a professor at M.I.T.’s Sloan School of Management, told the Globe. “They are first rate financial engineers. They will do everything they can to increase the value. The promise (to investors) is to make as much money as possible. You don’t say we’re going to make as much money as possible without going offshore and laying off people.” [NewYorker]

And so, the Romney Campaign blithely blunders into May.   We’ll have to wait to see if it “creates” any more jobs.

Update: May 2, 2012 the Romney campaign announces the resignation of Richard Grenell from their foreign policy team, seems he’s gay… [WaPo]

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Filed under 2012 election, giuliani, Romney

How Do Financialists Campaign?

We know what a Financialist sounds like, and we probably need to pay more attention during upcoming Nevada elections to how Financialists campaign.  The Financialist Agenda* is relatively simple, but requires a complex set of messages to be successful.   Several of those messages are already in the public domain of political discourse.

Agenda Item One:  The relaxation of regulation and oversight of financial markets.

Two messages are crucial for the success of this item. First, the American public must be convinced that the machinations of Wall Street bankers had little, if anything, to do with the financial crisis of 2008.  Opponents of financial oversight sought to spread the blame for the financial collapse all over the landscape.  Surely, they cried it was  (1) “All Fannie and Freddie’s fault.”  Not that these two institutions covered themselves in glory, especially when they reduced their underwriting standards and sought to find a niche in the burgeoning securitization sector.  However, other than to call for the privatization of the two GSE’s (which were already private) the conservatives offered no suggestions as to how to reform the secondary mortgage market, nor did they set forth specific proposals concerning how to restrain the chaos in underwriting standards  that reigned supreme during the Housing Bubble.

The Financialists also tried to blame the victims — (2) Surely, surely “the Housing Bubble was caused by Greedy People who bought houses they could not afford, and then didn’t want to pay for them!”  Not. So. Fast.   This argument requires that we indulge in massive collective amnesia, forgetting: “…the big subprime issuers (Ameriquest, Countrywide, New Century, IndyMac) were making money hand over fist on their subprime mortgages. Their profits and stock prices soared in the peak years of the housing bubble.”  [CEPR] Fannie and Freddie weren’t handing out those no-doc loans, nor were they issuing those infamous adjustable rate mortgages, which got warehoused offshore, repackaged into CDOs, and sold off, bet against, and otherwise manipulated by Wall Street banks.  Nothing in the Community Reinvestment Act required Wall Street financialists to perform these modifications on home loans.

The mortgages which eventually caused the Bubble to burst were made primarily to homeowners looking for “exurbian” properties [CEPR], the CRA requires banks to lend in inner city areas from which they take deposits.

“The Community Reinvestment Act is intended to encourage depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations. It was enacted by the Congress in 1977.” [CRA] (emphasis added)

If we missed the “housing boom” in inner city neighborhoods during the period from 2001 to 2008 it’s because it wasn’t there.   Thus the provisions of the CRA had little, if indeed anything, to do with the creation of the housing bubble, it just happens to be a convenient whipping boy for right wing fanatics who get their talking points from the American Bankers Association and the Financialists on Wall Street.

Secondly, the Financialists would have us believe that “onerous, burdensome, restrictive….” regulations are intrinsically bad for American capitalism.  There’s no small amount of irony in the continual clamor for “transparency and accountability” in government from the Right Wing while they just as enthusiastically beat their drums for less “accountability and transparency” in our financial markets.

For example, the conservatives and their allies in Congress are opposed to the Dodd-Frank Act which requires that major banks prepare a form of Living Will in case they are Too Big But Failing Anyway.   Now, why would bankers be taking exception to this prudent form of institutional financial planning?

“Those in the banking industry tend to take any sort of criticism of orderly liquidation authority as something akin to an insult to their mother, while many in the bankruptcy community draw rather unrealistic analogies between manufacturing plants and repos.”  [DealBook]

Returning to the central question: Why not be required to have and submit a plan for orderly liquidation?  Because then the bank would be required to tally up and report what positions it had in various financial transactions — positions they might not want other parties and counterparties to know.  This might be difficult for some banks which have un-priceable assets still stuck in their books or have taken positions against the interests of their own clientele?

The third proposition required in this narrative is a circular bit of illogical theory that because government agencies (FDIC, SEC, and OCC) didn’t stop the bankers from decimating the American economy by more than $10 trillion and the world economy by some $50 trillion when their Boom went Bust in 2008, then no government regulation will be sufficient — and so we shouldn’t have any.    This argument, of course, requires that we forget about the “regulator shopping” being done by financial institutions during the Boom, the inadequate resources allocated by the Congress to the regulators during the period, and the revolving door between the regulated and the regulators.

If our memories remain intact, achieving objective number one requires a relentless stream of negativity about “the greedy little apartment dwellers  or inner city people (read poor and maybe even African American) who victimized the nice bankers.  Ever more “horrific,” those nice regulators who were so cooperative during the Boom, are now tasked with making the financial system more “accountable and transparent.”

Agenda Item Number Two:  Conflate economic success with financial success.

Life for the Financialists will be ever so much more convenient and pleasant if we would all agree that everything comes with a price tag. They would be even more comforted if the Manic Mr. Market determined that price.

The Financialists have even provided a presidential candidate for whom financial success “proves” he’s a good businessman.   The following analysis from the Wall Street Journal is apparently what constitutes “success” at Bain Capital:

“Amid anecdotal evidence on both sides, the full record has largely escaped a close look, because so many transactions are involved. The Wall Street Journal, aiming for a comprehensive assessment, examined 77 businesses Bain invested in while Mr. Romney led the firm from its 1984 start until early 1999, to see how they fared during Bain’s involvement and shortly afterward.

“Among the findings: 22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses. An additional 8% ran into so much trouble that all of the money Bain invested was lost.

Another finding was that Bain produced stellar returns for its investors—yet the bulk of these came from just a small number of its investments. Ten deals produced more than 70% of the dollar gains.

Some of those companies, too, later ran into trouble. Of the 10 businesses on which Bain investors scored their biggest gains, four later landed in bankruptcy court.”

Yes, Bain was “successful” in that it raked in revenues.  However,  note that only TEN deals yielded nearly 70% of those revenues.  Only 13% of Bain’s Big Deals produced 70% of the “dollar gains.”   The definition of “success” also calls for some careful clock-watching.  The Wall Street Journal continues:

“The Journal analysis shows that in total, Bain produced about $2.5 billion in gains for its investors in the 77 deals, on about $1.1 billion invested. Overall, Bain recorded roughly 50% to 80% annual gains in this period, which experts said was among the best track records for buyout firms in that era.

Some of the companies that ran into trouble did so after Bain was no longer involved and new owners had taken charge. Bain declined to provide information on when its involvement in its investments ended.” [WSJ]

Yes, one can have a “good track record” especially if one gets to unilaterally  determine where the track ends.  Mr. Romney was a good Financialist, and Bain was profitable, BUT does this automatically transform him into a good economic policy maker?

The example of Kansas City, Missouri’s Worldwide Grinding System isn’t as comforting.  In October 1993 Bain Capital became the majority shareholder.

“Less than a decade later, the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health insurance they’d been promised, and their pension benefits were cut by as much as $400 a month.

What’s more, a federal government insurance agency had to pony up $44 million to bail out the company’s underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.”  [Reuters] via [ThinkProgress]

Success for Bain, obviously didn’t mean future success for Worldwide Grinding Systems, nor did it improve the future for DDI Inc., American Pad and Paper, Dade International, and LIVE Entertainment. [Think Progress]

For most people the notion of “being a successful businessman” means a person who founds a company, builds it, and then either sustains it for a lifetime or sells it at a profit.  Narrowly viewed, Bain fits this definition, until we note that the function and profitability of Bain Capital didn’t necessarily have much to do with the insuring of the long term viability of the company in question.   Bain’s financial function was to acquire companies, make the deal revenue producing, and after an industry average of 5 1/2 years wash its hands of the deals and move on.  This isn’t “economic policy,” it’s “financialist policy.”

There is a larger point to be made, beyond that of defining the width and depth of what constitutes business success — at some point we need to have the discussion Prof. Michael Sandel calls for in “What Money Can’t Buy.”

“The problem with being able to buy and sell increasing numbers of things is that we devalue the things we are buying and selling — including our foreheads, our health, our children’s education, Sandel argues. Ultimately this corrodes the ties that bind Americans together.”  […]

“The more things money can buy, the more the affluent can buy their way out,” Sandel said. “The affluent lose a stake in the public sphere, and increasingly we lead separate lives.” “That’s not good for democracy, and it’s not a satisfying way to live,” he added. [HuffPo]

Sandel is too polite to say that we are in danger of becoming a nation of cynics who know the price of everything and the value of nothing.   Let’s generalize the message to read, “the more things we privatize the more we devalue our communities and our sense of community,”  and see where this takes us.

Yes, the ultra-rich may purchase top-of-the-line home security systems, behind electronic gates at the perimeters of their estates, and hire additional private security guards for their properties.  The “market” sets a price for private security personnel and equipment.  Having bought all these accoutrements of security, what stake does the 1%’er have in the support of developing an efficient and effective local police force?

Yes, the ultra-rich may purchase the best education money can buy for the offspring.   It would be very instructive at this point to take a gander at the check list for “visiting a private school.”   It also doesn’t take much imagination to guess what the criteria are — smaller class sizes, extracurricular programs, programs to accommodate special needs, “appearance, structure, and composition” of the campus, athletic facilities, science labs, library and media facilities…  Precisely what we’d hope to find in public schools.  However, having secured these top flight schools by paying the price set by Mr. Market, what stake do the ultra-rich have in securing them for the other 99%?

Yes, the rich would have no difficulty purchasing every book they’d ever want to read.  But, what stake would they have in supporting local public libraries?  And, yes, the rich can purchase resort accommodations, so why would they feel the need for public parks?   If Sandel is correct, then the further the 0.5% move from the public sphere, the greater the incentive to privatize the components of that sphere.

If the market sets a price for home security, for education, even for recreation, then why not allow the privatization of all the components of public life such that the indebtedness of the corporations which run our security firms and prisons, operate our schools, and administer our parks can be securitized, shipped into offshore ‘warehouses,’ sliced, diced, and tranched into securitized debt obligations (CDOs) and sold in private placement markets?

What remains is a world without much of a public sphere, one in which the indebtedness of private sewer and water systems, private security firms, and private transportation systems can be monetized, securitized, and when the investors become dis-enamored of the deals in the average 5 1/2 year span the “government” can bail out the enterprise?  What if 22% of our water companies went bankrupt? Our private police forces? Our public libraries, our schools, or our fire departments?  Do we shrug and say — Gee, that’s just the market?

Unfortunately, the popular  image of former Governor Romney as “out of touch,” gives us a superficial impression of a man who has difficulty relating to the issues facing 99% of Americans.  A more complete picture might include an image of a man who has invested heavily in the financial sphere while opting out and dis-investing in the public sphere he seeks to administer.


*A financialist believes that finance is the core of capital markets, this doesn’t necessarily mean the core banking operations (the transfer of wealth from areas of surplus to areas of shortage) is the self-same core of operations.  In a financialist system the manipulation of financial instruments of varying levels of complexity becomes more important (as a source of revenue) than the efficient delivery and allocation of capital.

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