Nel's New Day

October 30, 2012

Bain Capital, Romney – Part Two

Before I continue with Part Two of the Bain Capital debacle, I want to say how sad I feel for the devastation of Hurricane Sandy, both in the Caribbean and in the United States. In addition, I am grateful for the speed with which government has moved to keep the storm’s effects from as much tragedy as possible. In watching all the work that has been done to save people’s lives and make their lives a bit better, I am also angry at the outrageous comments made by Michael Brown, head of FEMA largely responsible for the disaster in New Orleans following Hurricane Katrina and now a radio host in Colorado. From his safety on the other side of the country, he criticized President Obama for moving too fast. Yesterday he talked about how New Yorkers were saying that the storm, Sandy, isn’t a big deal. The people hit by Sandy are indeed fortunate that he is no longer in charge of government emergency assistance.

The same people are also fortunate that the United States has a president who believes that government should help people in need after such an act of nature. Mitt Romney not only said in the primary debates that the federal government, and probably the state governments, should have no part in emergency aid, he also refused to answer any questions today—14 times after one interview–about how he sees the role of FEMA.

In his writings, David Stockman, budget director for Ronald Reagan, summarized Bain Capital in less than glowing terms: “Bain would put in a little money, borrow much more, and buy out a company. It wasn’t hostile because Bain paid company executives so much they welcomed a takeover. Bain would have the company fire the workers and sell off assets to pay the crushing debt and high ‘management’ fees to Bain. Often the ‘saved’ company would go bankrupt after Bain left. Companies almost never produced more useful goods or services or employed more people after Bain than before.”

Stockman was kind enough, however, not to explain the source of Romney’s capital to set up Bain. When Romney says he knows how to start a small business, he may mean one that is funded by Central American elites linked to death squads in El Salvador. After initially struggling to find start-up investors, Romney traveled to Miami in 1983 to win pledges of almost 40 percent of Bain’s $37 million start-up money. Huffington Post reporter Ryan wrote, “There’s no possible way that anybody in 1984 could check out these families–which is the term that [Romney’s campaign] use, these families–and come away convinced that this money was clean.”

During the 1980s, Romney managed to get lots of cigarettes into Russia. Bain & Co.—and Romney–worked with British American Tobacco (BAT), which is behind brands like Kool and Lucky Strike, to move their products into Russia. Before Bain, BAT was largely locked out of the Russian market; now it controls almost one-fourth of cigarette sales that have skyrocketed since the Soviet Union collapse. Then Bain moved into the U.S.; a month after Romney took over, the first got a $1 million contract with Philip Morris.

Romney clearly described Bain’s goal in 1985: its purpose has never been to create jobs; its purpose is to “harvest” companies. The most recent harvested company is moving into China right before this year’s general election.

Although Romney is no longer active in Bain, he’s still reaping the benefits from moving Sensata Technologies from Freeport (IL) to China. The company made record revenues last year, and workers have been working three shifts for 24 hours a day. They make $14-$17 per hour with benefits. The first thing that Bain did after buying the company was to organize its capital funds in the Cayman Islands so Bain could avoid paying taxes on these funds. Now Bain will get money for relocating the plant offshore while U.S. taxpayers have paid $780,000 to retrain some of Sensata’s fired workers.

Romney has a history with Bain and China. In 1998, when he was running Bain, he saw the horrible conditions of workers making $.24 an hour at the Global-Tech Appliances plant in Dongguan and invested millions in the firm. But he could make money by exploiting these workers.

William Cohen wrote in Bloomberg, “Is there any fairness in a system where a group of people can borrow a bunch of money to buy a company and pay themselves millions of dollars in dividends and fees, while the company itself ends up bankrupt and its employees lose their jobs, health insurance and pensions?”

Romney’s experience with Bain makes him uniquely unqualified to be president of the United States. In campaigning he said, “A prairie fire of debt is sweeping across Iowa and our nation. Every day we fail to act, that fire gets closer to the homes and children we love.” Our collective debt is no ordinary problem: According to Romney, the debt will “burn our children alive.” Yet he made his personal fortune by borrowing vast sums of money that other people were forced to pay back. His experience with Bain shows that he is one of the greatest and most irresponsible debt creators of all time, piling more debt onto more unsuspecting companies and writing more gigantic checks that other people have to cover than perhaps all but a handful of people on planet Earth.

A private equity firm like Bain typically finds floundering businesses with good cash flows. It puts down 10-30 percent of its own money and then borrows the rest from a large bank to buy a controlling stake in the company. Bain avoided the hostile takeover, done without the company’s consent, by buying off the management with huge bonuses. The takeover companies, including Bain, aren’t on the hook for the debt; the company they purchase is. That company is destroyed by just the interest they have to pay, either going bankrupt or slashing benefits and firing workers. Then Bain can swoop in and purchase the company for pennies on the dollar, the vulture approach.

Romney is a prime example of why lowering taxes doesn’t create jobs. He pays low taxes while he destroys jobs or sends them offshore. And he can’t pretend that he doesn’t know what happens at Bain.  “I insisted on having almost dictatorial powers.” Colleagues described him as cunning, manipulative and a little bit nuts, with “an ability to identify people’s insecurities and exploit them for his own benefit.”

In the business world, lying and changing positions is praised because it makes money. Romney seems genuinely puzzled by the public’s insistence that he be consistent. “I’m not going to apologize for having changed my mind,” he’s fond of saying. But that doesn’t translate into successful leadership of a country.

And it’s all legal. The entire business of leveraged buyouts wouldn’t be possible without a provision in the federal code that allows companies like Bain to deduct the interest on the debt they use to acquire and loot their targets. And he couldn’t pay such low taxes if it weren’t for the same tax code. Romney rails against the national debt at the same time he exploits a tax deduction specifically designed for mortgage holders. He bilks every dollar he can out of U.S. businesses before burning them to the ground.

Romney also shows his lack of ethics in his tax avoidance strategies. He used a loophole to “rent” the Mormon church’s tax exemption status and defer paying taxes for 15 years. Bloomberg News reported that Romney set up a charitable remainder unitrust (CRUT) in June 1996 just before Congress cracked down on the loophole in 1997. “In this instance, Romney used the tax-exempt status of a charity — the Mormon Church, according to a 2007 filing — to defer taxes for more than 15 years,” Bloomberg’s Jesse Drucker explained. “At the same time he is benefiting, the trust will probably leave the church with less than what current law requires.” The amount available to go to the Mormon Church has decreased from at least $750,000 in 2001 to $421,203 at the end of 2011 as Romney has collected yearly cash payments from the trust. Although a small amount when compared to Romney’s fortune, he has many other methods of avoiding taxes.

Romney’s hypocrisy is overwhelming. His strong opposition to federal aid has no relationship to the experiences of himself and his family. According to Romney’s biography The Real Romney, written by  journalists Michael Kranish and Scott Helman, the United States first helped the Romney family in 1912: “Fortunately for the Romneys, the U.S. government, which had once chased Miles [Romney] to Mexico due to his polygamy, now welcomed the Romneys and other Mormons to the United States. Congress established a $100,000 relief fund that enabled the Romneys and other Mormon exiles to receive food and lodging. Initially, the [Romneys’] stay on U.S. soil was to be temporary. The El Paso Herald reported on October 25, 1912, that Gaskell Romney and his family, including little George, had gone to Los Angeles “until it is safe for his family to return to the colonies in Mexico.’”

Much later George Romney received welfare from the federal government. According to his wife,Lenore Romney, [George Romney] was a refugee from Mexico. He was on relief, welfare relief for the first years of his life. But this great country gave him opportunities.” Romney is unwilling to give anyone else the same opportunities that his family had.

The Olympics is a classic example of Romney’s hypocrisy. While describing his magical leadership to save the faltering Winter Olympics in 2002, much of his success came from the $1.5 billion that he took from the federal government, an amount 1.5 times the amount, adjusted for inflation, spent by the federal government to support all seven Olympic games in the United States back to 1904.  These expenditures averaged $625,000 in taxpayer money for each athlete, an increase of 5,582 over the $11,000 average at the 1984 games in Los Angeles. Even Sen. John McCain pointed out that at the time that this was a bailout.

Donald Barlett and James Steele reported that “wealthy Utahans used the games as an excuse to receive exemptions for projects that would otherwise never meet environmental standards, or to receive generous subsidies for improvements of questionable value to the games—but with serious value to future real estate developments.” bailout.

Romney has always been clear about all his priorities. The Salt Lake games came just months after 9/11. When a representative of widows and orphans whose husbands and fathers were firefighters killed in the terrorist attack inquired about free or discounted tickets to games, Romney twice denied the request, saying that there was a policy against giving away tickets. Six weeks later, Romney offered a hundred tickets, valued at $885 each, free to Utah legislators.

Romney has always used Bain to justify his ability to become president instead of his time as governor of Massachusetts. During his one term the state ranked 47th in job growth; suffered the second-largest labor force decline in the nation with only Louisiana greater because of Hurricane Katrina in 2005; lost 14 percent of its manufacturing jobs, double that of the nation at the time perhaps because he vetoed legislation that would have banned companies doing business with the state from outsourcing jobs to other countries; experienced “below average” economic growth and was “often near the bottom”; and piled on more debt than any other state despite his raising fees while he was in office.

That’s what would happen to the United States if he were to be elected—or appointed—president.

September 6, 2012

Democratic Convention 2012 – Day Two, Extraordinary

Topping the first day of the Democratic convention was difficult, but the second day  displayed as much–if not more– electricity with non-stop speakers throughout the evening, capped by a 48-minute speech from former President Bill Clinton.

Many of the convention speakers, in contrast to those at the GOP convention last week, have been non-politicians. For example, three workers from Bain-controlled companies talked about problems of Mitt Romney’s leadership. Randy Johnson began by describing how Bain bought his company in 1994 and fired hundreds of employees without any warning. “They rushed in security guards to walk us out of our plant. We weren’t even allowed to take our personal items.”

Cindy Hewitt, a worker at Dade Behring, told how Bain drop her company, an important part of the community, was driven into bankruptcy, destroying 850 jobs.

David Foster, worker at a steel mill said, “When Romney and Bain took over the mill, they loaded it up with millions in debt, and within months, they used some of that borrowed money to pay themselves millions. Within a decade, the debt kept growing and was so large the company was forced into bankruptcy. They fired 750 steelworkers while they pocketed $12 million in profit. A steelworker at GST Steel would have had to work 240 years to make $12 million.”

Sister Simone Campbell, who led the “Nuns on the Bus” tour for social justice this past summer, used her seven-minute speech to decry Paul Ryan’s budget: “Paul Ryan claims this budget reflects the principles of our shared faith. But the United States Conference of Catholic Bishops stated that the Ryan budget failed a basic moral test, because it would harm families living in poverty.”

Sandra Fluke, the activist who has fought for contraception from insurance companies and called a slut and worse by Rush Limbaugh, talked about the alternate futures, depending on who is elected as president. ”Six months from now, we’ll all be living in one or the other. But only one. A country where our president either has our back or turns his back; a country that honors our foremothers by moving us forward, or one that forces our generation to re-fight the battles they already won; a country where we mean it when we talk about personal freedom, or one where that freedom doesn’t apply to our bodies and our voices.”

House Minority Whip Steny Hoyer (MD) said, “My friend Paul Ryan talks about fiscal responsibility but voted to put two wars on a credit card. He voted to spend trillions of dollars on tax cuts for millionaires and billionaires. He voted for a prescription drug benefit with no plan to pay for it. He abandoned the bipartisan principle that we must pay for what we buy.”

House Minority Leader Nancy Pelosi (CA) said that a vote for Democrats in the November election is a vote to preserve Medicare and Social Security and a vote in favor of women.

Former Secretary of State Madeleine Albright said GOP presidential nominee Mitt Romney’s claims that President Barack Obama is weak on Israel make “no sense” and are “ludicrous.” Earlier in the day when during an MSNBC interview, she said, “I think we do not know what Gov. Romney’s position on national security is, frankly. He has advisers that are some neocons, some of the people that brought you the previous policies under the [President George W.] Bush administration and he barely talked about foreign policy in his speech.”

Elizabeth Warren, who founded the Consumer Financial Protection Bureau in 2010, talked about how “the [financial] system is rigged” but that President Obama is working to give everyone a chance at a “level playing field.” She described the GOP approach to governing in this statement:  “I’ve got mine; the rest of you are on your own.” Aiming at the GOP, Warren said, “Republicans say they don’t believe in government. Sure they do! They believe in government to help themselves and their powerful friends. After all, Mitt Romney’s the guy who said, ‘Corporations are people.’” She finished her speech by quoting the Bible: “Inasmuch as ye have done it unto one of the least of these my brethren, ye have done it unto me.”–Matthew 25:40.

Bill Clinton was the highlight of the evening when he shredded all the arguments from the GOP convention speakers about President Obama’s four years. “He inherited a deeply damaged economy, put a floor under the crash, began the long, hard road to recovery, and laid the foundation for a modern, more well-balanced economy that will produce millions of good new jobs, vibrant new businesses and lots of new wealth for the innovators.”

In answer to the objections that life is not better under this president, Clinton said, “Are we where we want to be? No. Is the president satisfied? Of course not. But are we better off than we were when he took office with an economy in free-fall, losing 750,000 jobs a month? The answer is yes.” He continued, “President Obama started with a much weaker economy than I did,” he said. “No president–not me or any of my predecessors–could have repaired all the damage in just four years. But conditions are improving and if you’ll renew the president’s contract you will feel it.”

Andrea Mitchell said, “As a political document, this speech was extraordinary,” providing an “explanation of all of the policy points.” Republican strategist Steve Schmidt, who managed GOP nominee John McCain’s 2008 presidential campaign, said, “I wish to God, as a Republican, we had someone on our side who had the ability to do [what Clinton did tonight].”

Blogger Michael Hayne said, “In short, the 42nd President of the United States beautifully encapsulated how Obama has consistently extended the olive branch to Republicans and they have proudly taken that branch, ripped it up into a million pieces, stomped it into the sand and buried their heads with it so that the economic worsened and they could easily say ‘vote Republican’ in 2012.”

Unlike Paul Ryan’s and Mitt Romney’s speeches in Tampa, Clinton’s speech was on policy and gave specifics in amazing detail, so much that there isn’t enough room for it here. Even more amazing, no matter how much FactCheck.org and USA Today scoured the multitude of facts that Clinton provided in his speech, the two organizations could not find anything false. This is far different from their investigation of Ryan’s and Romney’s speeches when they had trouble finding anything true.

Asides: The reading level for Michelle Obama’s speech was Grade 12; Ann Romney’s speech was seven grades below. [Note: Is this what each person thinks of her political party’s education?]

Clinton said, “Though I often disagree with Republicans,” he said, “I never learned to hate them the way the far right that now controls their party seems to hate President Obama and the Democrats.” Ann Coulter’s tweets show how vicious the far right is:

“Bill Clinton just impregnated Sandra Fluke backstage…”

“To get Bill Clinton to speak at the convention, Obama had to agree to carry his bags.”

In another hateful spate, Rush Limbaugh claimed that President Obama isn’t actually black because he lacks any slave ancestry. Not that it matters, but one of the president’s ancestors is the first documented slave, John Punch, according the The New York Times. 

The ADP National Jobs Report reported the addition of 201,000 private-sector jobs in the month of August, almost 50 percent more than the estimated increase of 140,000 jobs. It also revises the number of jobs added in July up to 173,000 from 163,000. In addition, the Department of Labor’s weekly report today showed the number of new claims for state unemployment benefits had fallen by 12,000 when Wall Street had expected only 1,000.

Things are looking better!

July 19, 2012

Romney’s Problems Grow

Mitt Romney’s campaign has two serious dilemmas: the call for his releasing tax returns and the outsourcing done by Bain Capital, Romney’s personal business. To solve the first one, he sent his wife, Ann, to convince the media that he is a truly good person. In an interview with Robin Roberts on ABC, Ms. Romney said:

“You know, you should really look at where Mitt has led his life, and where he’s been financially. He’s a very generous person. We give 10 percent of our income to our church every year. Do you think that is the kind of person that is trying to hide things, or do things? No. He is so good about it.”

When asked why they don’t release the tax forms if there is no problem with them, Ms. Romney continued:

“Because there are so many things that will be open again for more attack… and that’s really, that’s just the answer. And we’ve given all you people need to know and understand about our financial situation and about how we live our life. And so, the election, again, will not be decided on that. It will be decided on who is gonna turn the economy around and how are jobs gonna come back to America.”

My favorite phrase from her interview is “you people,” the term that smacks of an arrogance in the same way that Michelle Malkin’s comment on Fox and Friends Weekend did when she said,

“Romney types, of course, are the ones who sign the front of the paycheck, and the Obama types are the one who have spent their entire lives signing the back of them.”

Lots of people are betting that Romney’s tax returns would show some shady deals. The first question is how he got between $21 million and $101 million in an IRA that can’t collect more than $30,000 a year. Another questionable activity comes from when he was chairman of Marriott’s audit committee. At that time, a Marriott tax shelter, known as “Son of BOSS,” involved creating paper losses to offset taxes on real income. The Internal Revenue Service challenged the shelter, and Marriott lost in court. Judges called the shelter “fictitious” and a “scheme,” and the company was forced to pay $29 million.

The Republicans who are telling Romney to release the tax returns have found a solution for his second problem, outsourcing. Jonah Goldberg summarized their position: “Outsourcing isn’t evil. Building businesses overseas doesn’t necessarily cost American a thing, and it often creates wealth and value both here and abroad.”

The 170 workers losing their jobs in Freeport (IL) because Bain owns their jobs disagree with Goldberg. In 2006 Bain bought Sensata Technologies, based in Attleboro (MA), and plans to move production to China during the month of this year’s election despite the fact that the business has never lost money. The city council has drafted a resolution that “calls on Mitt Romney to come to Freeport to meet the people directly affected by Bain Capital’s outsourcing and to step in and stop the outsourcing of these jobs from Freeport to China.” Although Romney does not operate Bain, he does have a controlling financial interest.

Robert Reich wrote that the biggest problem with corporations is that they have no concern for the people of the United States. He quoted an Apple executive who told the New York Times, “we don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.” Reich might have added “and showing profits big enough to continually increase our share price.” Apple’s employment of 43,000 people in the United States is dwarfed by their contracts with over 700,000 workers overseas. U.S. workers get six percent of what people pay for an iPhone.

The Republicans who would solve the problem of outsourcing by  lowering salaries in this country and perhaps getting rid of the minimum wage overlook the fact that Chinese workers live in company dormitories where they can be called up to work any time day and night. Apple assembles iPhones in China both because wages are low there and because Apple’s Chinese contractors can quickly mobilize workers from company dorms at almost any hour of the day or night.

Reich also cited another reason for outsourcing as this country not educating young people to do the necessary high tech jobs farmed out to Japan and Germany, in large part because the government does not pay for education. While this country forces young people to ratchet up high student loans, China invests in world-class universities and research centers.

The United States also has substandard transportation and communication systems compared to other countries. Outmoded ports, congested roads, and faulty bridges damage the opportunities for people to have jobs in this nation.

Without support from corporations, this situation will only exacerbate. Without government requiring corporate support, these companies will continue to outsource. All they want are lower taxes and fewer regulations. To get what they want, they buy elections.

Goldberg needs to know the following results of outsourcing:

U.S. multinationals cut their U.S. workforces by 2.9 million in the 2000s while increasing employment overseas by 2.4 million, according to the U.S. Department of Commerce. The Bush tax cuts may have caused the 35 biggest U.S.-based companies to add jobs, but almost three-fourths of these jobs were offshore.

U.S. manufacturing has suffered the biggest blow from offshoring. Working America reported that manufacturing jobs dropped every month for 43 months—the longest stretch since the Great Depression—between August 2000 and February 2004. Between 1998 and 2008, the time that George W. Bush gave corporations big tax cuts to create jobs, the number of manufacturing plants shrank 12.5 percent. The country lost 51,000 plants during those ten years, plants that gave stable, middle-class jobs.

Revenue from the global electronics contract manufacturing industry reached $360 billion in 2011 and is expected to expand to $426 billion by 2015. These companies contract outside firms primarily in third-world countries. Other huge companies, Nike for example, subcontracts all its shoe production to foreign companies.

Private equity firms have upped the competition between corporations by creating the fear that if CEOs don’t run their businesses to maximize short-term profits and share prices that they will be taken over by a company like Bain Capital. Their answer is outsourcing. If they lose the company to a company like Bain, “the standard strategy has been to load up company executives with so much stock and stock options that they don’t hesitate to make difficult decisions such as shedding divisions, closing plants or outsourcing work overseas,” according to Steve Pearlstein, a professor of public and international affairs at George Mason University and a Pulitzer-prize winning columnist.

Three-fourths of the companies surveyed by Duke’s Fuqua School of Business gave labor costs as their reason to relocate offshore, but this is becoming a weaker excuse for taking jobs away from the United States.  The labor cost gap between the U.S. and China has shrunk by almost 50 percent within the last eight years; this gap is project to be just 16 percent by next year. Fuel prices are also rising, increasing the costs of transportation.

The same survey showed that “only 4 percent of large companies had future plans for relocating jobs back to the United States.” No reason was given, but Seth Hanlon thinks that their reluctance is the U.S. tax code that “rewards companies for making investments abroad—and leads to them shifting offices, factories, and jobs abroad even if similar investments in the United States would be more profitable absent tax considerations.”

Tax loopholes and porous rules allow multinational companies to avoid U.S. taxes by reporting much of their profits in tax havens such as Bermuda and the Cayman Islands. That may be why Romney is fond of these tax havens. Shifting profits into tax havens costs the U.S. Treasury tens of billions of dollars in revenue every year. While President Obama wants a law that benefits companies for keeping jobs in the United States, Romney wants to make U.S. corporations’ overseas profits exempt from U.S. taxes, understandable because this would financially benefit him.

Today, the Senate tried to vote on the Bring Jobs Home Act to end taxes that reward companies that ship jobs overseas and instead provide a tax cut for American businesses that move overseas jobs and business activity back to America. A filibuster killed the bill was killed with a 56-42 vote; it’s the standard Republican position that 60 out of 100 votes are required to pass any Senate bill. The three brave Republican senators voting against the filibuster were Susan Collins (ME), Olympia Snowe (ME), and Scott Brown (MA). Therefore the Senate Republican “majority” of 41 men and 3 women have determined that taxpayers must continue to pay for the offshoring of jobs.

According to The Hill, Republicans wouldn’t vote for a bill to bring jobs back to the United States because they wanted to include an amendment repealing the Affordable Care Act. Senate Majority Leader Harry Reid, (D-NV) said, “It’s no surprise Republicans are on the side of corporations making big bucks sending American jobs to China and India. After all, their presidential nominee, Mitt Romney, made a fortune outsourcing jobs, too.”

July 13, 2012

Romney Getting in Deeper Trouble

Filed under: Uncategorized — trp2011 @ 8:53 PM
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Typically presidential campaigns show Democrats beating up on Republicans and vice versa. This year’s campaign has a new twist: Republicans are beating up on the Republican nominee. The latest kerfuffle comes from Mitt Romney’s refusal to release more than one year of tax returns. His own party leaders think that he’s wrong in not being more transparent about his financial background.

“If there’s nothing there, there’s no ‘there’ there, don’t create a ‘there.’ Put out as much information as you can. Even if you don’t release 12 years worth of tax returns, at least three, four, five.”—former RNC Chairman Michael Steele

“I think he [Romney] should release his financial records and I think if he does it in July it would be a lot better than in October …. Whenever you are asking for the vote of the American people that you need to fully disclose what your holdings are, if you have any.”—Rep. Walter Jones (R-NC) who thinks that Romney should release the last six to seven years of his records.

“His personal finances, the way he does things, his record, are fair game.”—Rep. Pete Sessions (R-TX), chairman of the House Republican re-election effort

“Mitt Romney had an opportunity to answer these questions during the primary. He did not answer these questions and now they’re coming up again.”—Republican strategist Rick Tyler

“I saw Andrea Saul’s robotic response [to the question of when he left Bain Capital], which was the same as it’s always been,” Tyler said, referring to Romney’s press secretary. “That doesn’t comport with documents that have his name on it after 1999 that list him as CEO who was making money off of transactions. If he wasn’t making money from Bain, then his tax returns from the period in question would reveal that. Only [Romney] can provide that information, or we’ll just have drip, drip, drip to November.”

“I feel like we are watching a rerun of an episode from the Republican primary with the return of the releasing of taxes issue. It turned into a big deal during the primary, and pretty much got diffused when he released the one-year of returns. I wish he’d hurry up and release more tax returns so this distraction would go away.”—Republican strategist Ana Navarro

“It is important for Mitt to release his tax returns. The fact is we can’t fire our nominee in September.”—Texas Gov. Rick Perry in a January 2012 debate

“Is it too much to ask Mitt Romney to get off autopilot and actually think about the race he’s running?”–Bill Kristol, editor of the conservative Weekly Standard

“Mr. Romney promised Republicans he was the best man to make the case against President Obama, whom they desperately want to defeat. So far Mr. Romney is letting them down.”—Wall Street Journal

One leading conservative still approves of Romney. Although the Romney campaign tried to keep the Wyoming fundraiser by George W. Bush’s former VP Dick Cheney very quiet, Cheney did endorse Romney with this statement: “Romney’s malleability is an advantage for his neocon advisers, giving them an opportunity to shape his worldview, as they did with Bush after 9/11. Four years after Bush left office in disgrace, Romney is their best shot to get back in power.”

Cheney’s statement can best be translated as follows: “Romney is so wishy-washy that he’ll do anything people tell him to do. Because 70 percent of Romney’s advisors worked for Bush, we can hope for a return to the Bush/Cheney years.” I wonder what W. thinks of being called “malleable.”

Romney has excellent reasons for not releasing any more tax returns. In the only one that he has allowed to be public, the return for 2010, he showed a blind trust held by his wife, Ann, with a $3 million Swiss bank account that was not reported on previous financial disclosure statements. Also shown was his complex offshore tax shelter, known as a blocker corporation, to shield the investments in his $100 million IRA from paying an obscure business tax. The country loses $1 billion per decade from the use of this decade.

In addition, at least 20 investments had not been previously listed on disclosure reports although there was not enough information to determine their size or holdings. Neither the tax return nor other disclosures have revealed the full amounts of the Romneys’ other offshore holdings over the years, including investments in Germany, Luxembourg, the Cayman Islands, Australia, and Ireland. Romney transferred a Bermuda account to his wife’s blind trust the day before he was inaugurated as governor of Massachusetts in 2003 but was not properly disclosed to voters.

Last month, Romney’s trust reported receiving a $2 million payment from Bain as part of unpaid earnings from his work there. Of the 138 Bain funds organized in the Cayman Islands, Mr. Romney has interests in 12, worth up to $30 million. Firms like Bain park money in the Caymans because the islands have no taxes on capital gains, profits or income for foreigners. Legal, yes; ethical, no.

The question that might be answered through the release of more tax returns would be how much money Romney is hiding. We know that he has a $102 million IRA, a difficult task when he put $32,000 in it for each of 15 years. That’s the kind of compound interest we would all like to have. When questioned recently about his Cayman Island assets, he said that this was only 0.5 percent of his money. If that’s true, then Romney has $6 trillion somewhere.

The “Bain issue” comes from the question of  when he left Bain Capital. Romney says that he was gone in 1999, but Romney and Bain filed government documents stating that Romney stayed as chief executive and chairman of the firm until 2002. Romney even created five new investment partnerships during the three years after the time that he said he was no longer in charge of the company.

Public  Securities and Exchange Commission documents filed later by Bain Capital specifically identified Romney as the firm’s “sole stockholder, chairman of the board, chief executive officer, and president” in 2002. A Massachusetts financial disclosure form Romney filed in 2003 states that he still owned 100 percent of Bain Capital in 2002, and Romney’s state financial disclosure forms indicate he earned at least $100,000 as a Bain “executive” in 2001 and 2002, separate from investment earnings.

Fact checkers for the questionable three years have lost all credibility in identifying the veracity of statements. Washington Post Fact Checker Glenn Kessler, maintains that there is no proof that Romney a Bain executive during that time. Kessler explains that the terms “sole stockholder, chairman of the board, chief executive officer, and president” are simply “boilerplate” that doesn’t have anything to do with managing a company. Possibly Kessler has been offered a position with Romney.

Romney desperately wants people to believe that he left Bain in 1999 because of the company’s activities in the next three years. One of those was the company’s investment in a company called Stericycle whose services included the disposal of aborted fetuses. Another of Bain’s activities during that time  was sending jobs to China through a contract with a Chinese firm. Three weeks ago Romney’s campaign said that people just didn’t understand the difference between outsourcing and offshoring; this week they said they didn’t do it at all.

The Romney campaign has tried to shift the media’s attention to the story that Romney may choose Condoleezza Rice for his VP, an impossibility on many levels. First, Romney doesn’t deal well with women. Second, Rice is pro-choice, something that Romney has to avoid for the approval of conservatives. Third, she was in the middle of the Bush wars, again not good for Romney’s campaign. Fourth, she said in June and again more recently that she would not consider being Romney’s vice president. (Hint to Romney: Rick Santorum says he’s willing!)

Today Romney demanded an apology from President Barack Obama because his campaign said that Romney may have committed a felony by misrepresenting his position at Bainl. Before Romney’s statements, President Obama said, “My understanding is that Mr. Romney attested to the SEC, multiple times, that he was the chairman, CEO and president of Bain Capital. I think most Americans figure if you are the chairman, CEO and president of a company that you are responsible for what that company does. Ultimately Mr. Romney, I think, is going to have to answer those questions, because if he aspires to being president one of the things you learn is, you are ultimately responsible for the conduct of your operations.”

“Behind every great fortune there is a great crime.” –A maxim from Honore de Balzac

April 19, 2012

Romney Going in Circles

Do you call it circling the wagons? Or stalking? Or just plain going in circles? Whatever the definition, Mitt Romney supporters think that their time and their gasoline are best used by driving around and around and around the community college where President Obama spoke yesterday. The focus of his talk at Lorain County Community College (OH) was on the importance of retraining workers and meeting with students who have participated in LCCC’s worker-training programs.

Romney’s supporters seem to have quite a bit of time on their hands. One of them, a 69-year-old insurance salesman, has been to 117 Romney events in the past eight months and plans to keep on going until after the inauguration when he’s “going back to the farm in Virginia and whittle.”

Today Romney is speaking at the closed National Gypsum drywall plant in Lorain to explain why President Obama is a failure. Linking the plant’s closure to the president might not be a smart idea. The factory closed during George W. Bush’s administration because of the construction industry slump, and unemployment in Ohio shrank from 8.6 percent when Obama took office to 7.6 percent a month ago.

Officials also pointed out that the closed plant had opened in 1959, and National Gypsum’s 19 newer facilities used newer technology that give the company a 50-percent cost advantage over the older plants. Romney might also have made the disclosure that the company’s CEO, Thomas Nelson, is a big Romney donor.

Lorain is in the process of replacing the 58 jobs lost at the drywall plant. Republic Steel recently invested $85 million in a plant in the city, which Ritenauer predicts will create 450 new jobs and help retain 100 others. The company Camaco, which manufactures seat frames for automobile seats, is also investing in the area.

Perhaps President Obama would like to speak at one of the many places that Mitt Romney, through the candidate’s Bain Capital, closed down, closures that took money from the payroll and pensions of hundreds of thousands of workers. The president would have a very wide choice.

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