Mitt Romney made the case last week that young people looking for opportunities and success should rely on their parents’ wealth. If your folks don’t have much in the way of disposable income, well, good luck.
To drive home the significance of the Republican candidate’s vision, consider the tale of Tagg Romney, the former governor’s oldest son.
The New York Times had a fascinating report this week on Tagg getting together in 2008 with Spencer Zwick, a Romney campaign fundraiser, to create a private equity fund called Solamere Capital.
Neither had experience in private equity. But what the close friends did have was the Romney name and a Rolodex of deep-pocketed potential investors who had backed Mr. Romney’s presidential run — more than enough to start them down that familiar path from politics to profit.
Two years later, despite a challenging fund-raising climate for private equity, Solamere, named after a wealthy enclave in Utah’s Deer Valley where the Romneys have a winter home, finished raising its first fund. The firm blew past its $200 million goal, securing $244 million from 64 investors, including a critical, early $10 million from Mitt Romney and his wife, Ann, and hefty commitments from wealthy supporters of the campaign.
There’s no reason to think Solamere Capital did anything wrong. Rather, the point is, Tagg Romney, despite having no background in private equity, partnered with someone else who had no background in private equity, and they were able to put together a very successful financial operation, thanks in large part to Tagg’s father’s wealth, his last name, and Republican donors who probably assumed Mitt Romney would run for president in 2012.
Adding an interesting wrinkle to the story is the fact that Romney’s Solamere Capital invested in Allen Stanford’s Stanford Financial Group in 2009, hiring several of the firm’s employees. Stanford, of course, is now incarcerated, after getting caught running a $7 billion Ponzi scheme.
Stanford’s former employees, who became Tagg Romney’s employees, have been accused of ignoring widespread fraud, though Tagg says the staff wasn’t with Stanford long enough to learn of the boss’ wrongdoing.
Of course, the larger significance is what the story tells us about the Romney vision of economic opportunity.
To hear Tagg tell it, his political connections were irrelevant. “Our relationships with people got us in the door, but that did not get us investors,” he told the Times.
Paul Waldman offered a more compelling perspective.
Does Tagg Romney actually believe that his dad had nothing to do with his successful entry into the private equity game, and the millions he has made and will continue to make are the result only of his own merit? That his life is radically different from those of the millions of people struggling to get by only because they don’t work as hard as he does, or have his gumption and entrepreneurial spirit? Maybe he does. That may strike you and me as utterly insane, but it wouldn’t surprise me a bit. [...]
There are a thousand ways in which wealth determines the opportunities available to you, in large part by making things easy. Yes, if you’re a poor kid being raised by a single parent who never finished high school, you can get to Harvard. But you’re going to have to be one in a million. It’s going to take extraordinary spirit, determination, and luck for you to make it. I’m sure Tagg Romney is a fine fellow, but the truth is that even if he was a lazy dolt he’d still do well. He went to the best schools, his parents gave him all kinds of enriching experiences, and he never had to worry about much of anything. He wasn’t going to get pulled out of college and have to take a job if one of his parents got sick. When he decided this private equity thing looked interesting, there was an escalator waiting, and all he had to do was hop on. That’s opportunity.
Look again at what Mitt Romney said last week, while talking to college students, after condemning President Obama for an imaginary “attack” on “success”: “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”
In the Republican’s mind, this actually constitutes a vision of opportunity. If you work hard, get into a good school, but can’t afford the tuition, Romney believes you’ll have the opportunity to find some other college with cheaper tuition. If you’re innovating, come up with an idea for a new business, but can’t afford the start-up costs, Romney believes you’ll have the opportunity to ask your parents for money they may or may not have.
It’s not the job of public institutions to create a level playing field; it’s the job of individuals to find an unlevel playing field and “take a shot.”
It worked out well for Tagg Romney, right?
By: Steve Benen, The Maddow Blog, May 2, 2012
Before the Great Recession, I would sometimes give public lectures in which I would talk about rising inequality, making the point that the concentration of income at the top had reached levels not seen since 1929. Often, someone in the audience would ask whether this meant that another depression was imminent.
Well, whaddya know?
Did the rise of the 1 percent (or, better yet, the 0.01 percent) cause the Lesser Depression we’re now living through? It probably contributed. But the more important point is that inequality is a major reason the economy is still so depressed and unemployment so high. For we have responded to this crisis with a mix of paralysis and confusion — both of which have a lot to do with the distorting effects of great wealth on our society.
Put it this way: If something like the financial crisis of 2008 had occurred in, say, 1971 — the year Richard Nixon declared that “I am now a Keynesian in economic policy” — Washington would probably have responded fairly effectively. There would have been a broad bipartisan consensus in favor of strong action, and there would also have been wide agreement about what kind of action was needed.
But that was then. Today, Washington is marked by a combination of bitter partisanship and intellectual confusion — and both are, I would argue, largely the result of extreme income inequality.
On partisanship: The Congressional scholars Thomas Mann and Norman Ornstein have been making waves with a new book acknowledging a truth that, until now, was unmentionable in polite circles. They say our political dysfunction is largely because of the transformation of the Republican Party into an extremist force that is “dismissive of the legitimacy of its political opposition.” You can’t get cooperation to serve the national interest when one side of the divide sees no distinction between the national interest and its own partisan triumph.
So how did that happen? For the past century, political polarization has closely tracked income inequality, and there’s every reason to believe that the relationship is causal. Specifically, money buys power, and the increasing wealth of a tiny minority has effectively bought the allegiance of one of our two major political parties, in the process destroying any prospect for cooperation.
And the takeover of half our political spectrum by the 0.01 percent is, I’d argue, also responsible for the degradation of our economic discourse, which has made any sensible discussion of what we should be doing impossible.
Disputes in economics used to be bounded by a shared understanding of the evidence, creating a broad range of agreement about economic policy. To take the most prominent example, Milton Friedman may have opposed fiscal activism, but he very much supported monetary activism to fight deep economic slumps, to an extent that would have put him well to the left of center in many current debates.
Now, however, the Republican Party is dominated by doctrines formerly on the political fringe. Friedman called for monetary flexibility; today, much of the G.O.P. is fanatically devoted to the gold standard. N. Gregory Mankiw of Harvard University, a Romney economic adviser, once dismissed those claiming that tax cuts pay for themselves as “charlatans and cranks”; today, that notion is very close to being official Republican doctrine.
As it happens, these doctrines have overwhelmingly failed in practice. For example, conservative goldbugs have been predicting vast inflation and soaring interest rates for three years, and have been wrong every step of the way. But this failure has done nothing to dent their influence on a party that, as Mr. Mann and Mr. Ornstein note, is “unpersuaded by conventional understanding of facts, evidence, and science.”
And why is the G.O.P. so devoted to these doctrines regardless of facts and evidence? It surely has a lot to do with the fact that billionaires have always loved the doctrines in question, which offer a rationale for policies that serve their interests. Indeed, support from billionaires has always been the main thing keeping those charlatans and cranks in business. And now the same people effectively own a whole political party.
Which brings us to the question of what it will take to end this depression we’re in.
Many pundits assert that the U.S. economy has big structural problems that will prevent any quick recovery. All the evidence, however, points to a simple lack of demand, which could and should be cured very quickly through a combination of fiscal and monetary stimulus.
No, the real structural problem is in our political system, which has been warped and paralyzed by the power of a small, wealthy minority. And the key to economic recovery lies in finding a way to get past that minority’s malign influence.
By: Paul Krugman, Op-Ed Columnist, The New York Times, May 3, 2012
Driving west from Madison, Wisconsin, through the small towns and dairy farm country of western Wisconsin, it quickly becomes clear that the Wisconsin recall election is a statewide phenomenon.
For all the efforts of Governor Walker to convince the hosts on Fox and CNBC that he is a popular governor who is threatened not by angry citizens but by “the left, the radical left, and the big labor union bosses” who are “somehow counting on the idea that they can bring enough money and enough bodies into Wisconsin to dissuade voters,” the message from farm country tells an entirely different story.
Walker has had the overwhelming spending advantage since the recall fight started last November. Walker has had all the benefits of the Republican Party organization that has gone into overdrive to aid his candidacy, while Democrats have faced a multi-candidate primary fight.
Yet, Walker does not have the swing counties of western Wisconsin wrapped up. Not by a long shot.
Along Highway 14, heading out of Dane County and into Iowa and Richland Counties, hundreds of hand-painted signs propose to “Recall Walker.” Most list reasons for the governor’s removal: “Worst Job Losses in US,” “Attacks on Collective Bargaining,” “Cut Education,” “Cut BadgerCare,” “Divided State,” “John Doe.”
Of course, the governor has his supporters.
But there is genuine, broad-based and statewide opposition to this governor in every region of Wisconsin—but especially in the western and northern parts of the state. Even as the governor has spent $21 million so far on the recall campaign, that opposition is growing.
The new Marquette University Law School Poll shows that disapproval of the governor’s performance had moved up to 51 percent. Indeed, the governor’s approval rating has now declined to 47 percent, the lowest point so far this year. And one of the prospective Democratic challengers, Tom Barrett, has now moved ahead of Walker in head-to-head match-ups run by the Marquette pollsters.
What has changed? The polling shows that Wisconsinites, who once felt that Republicans had the right equation for creating jobs (tax cuts for multinational corporations, attacks on public employees and their unions, slashing of education and public-service funding), have soured on the GOP and its poster-boy governor. They’ve been influenced, of course, by the Bureau of Labor Statistics study that reveals that, in the year since Governor Walker implemented his austerity agenda, Wisconsin has suffered the worst job losses in the nation. The Marquette poll shows that Wisconsinites now believe that investments in education, good relations with unions and fair tax policies are more likely to grow the economy than Walker’s “war on workers” approach.
The governor admitted Wednesday that the recall contest on June 5 is “a 50-50 race.” But what’s notable is that his numbers are declining, while numbers for the opposition are rising.
When I spoke at the Arcadia Bookstore in Spring Green the other night, we talked a good deal about the Democratic gubernatorial primary. I suggested, as I will here, that people should take their vote seriously. After all, they are not just choosing a nominee. If the signs in front of the farms are correct, and if the polls are correct, it looks like Democrats may be choosing a governor.
By: John Nichols, The Nation, May 3, 2012