So I kept thinking as I watched Ed Schultz’s interview last night with Scott Prouty—as we now know, the man who made and leaked the 47 percent video—I kept trying to check my impulses by asking myself: Now, suppose this were Fox, and suppose Scott Prouty had secretly taped Barack Obama saying that corporate leaders were heartless mercenaries who cared nothing about their employees or America, and suppose that that had helped cost Obama the election. What would I be thinking about him?
I admit easily and breezily that I would have disliked him and would have spent the hour probing for weaknesses and points of possible attack. That’s how it goes in this business.
However, I also say this: I don’t think I would have found many. Prouty was intelligent, judicious, and thoughtful. He seemed completely sincere (I say seemed since I don’t know the man). He knew exactly what he was doing. Weaknesses were few to nonexistent.
Let me put it this way. In my post yesterday, I fretted about the onslaught he was about to experience from the right. But as I Google his name this morning, I see nothing from the right-wing media. If you’ve ever done such a search on a topic that the right-wing press has jumped on, you know that the first page and sometimes the first two pages return you nothing but conservative media. So they aren’t piling on the guy, so far at least. Long experience teaches me: When they go dark is when they know they can’t win.
So here’s how it happened. Prouty had worked for a while for this high-end caterer. He brought his camera to the event because he thought there might be opportunity afterwards for picture-taking sessions with the candidate (which never materialized, and which made him think Romney was sort of a jerk). He started recording the speech just to capture it. Obviously, he had no idea Romney was going to say the things he said. And then Prouty started listening.
Interestingly, the thing that bothered Prouty wasn’t so much the 47 percent remarks, although he had enough news sense in him to know they were dynamite. What bothered him were Romney’s remarks about a factory in China Bain had bought, a factory whose grounds were surrounded by fencing and barbed wire to keep the young female workers in. Romney spoke about it in a way that struck Prouty as disingenuous and unfeeling, and he got mad.
He went home and did some Googling. He learned that Romney had profited from outsourcing. He saw an article on the factory by David Corn. He spent two weeks pondering whether to take it public, thinking through the moral and legal consequences, whatever they were. He finally looked himself in the mirror and said fuck it. Here we go. He got in touch with Corn.
He said last night he’s a registered independent, but he’s clearly a liberal-minded person. He said he was proud Obama is the president. He decided to give the interview to Schultz because Schultz is uniquely devoted in the TV universe to class issues. So whatever his registration, he’s on a side. Fine. He decided to help that side—or more accurately, to stop the other side.
It was Romney’s appearance on Fox on March 3 that made him go public now. Romney’s self-serving interview clearly infuriated him. The greatest thing he said during the whole hour went something like (I can’t find a transcript yet): You know, Romney could still be making positive contributions. He could go to one of those communities where Bain closed a factory, that town in Illinois say, and say he’s sorry about what happened, start a fund or a foundation to help people there. Yes, he is right. But yeah, sure. Can anyone picture Romney doing that? It would be an admission that his life’s work was something less than wholly admirable, which is an admission he shows no signs of being able to make.
I kept thinking while I was watching the left’s accidental hero of 2012 of the right’s accidental hero of 2008, Joe the Plumber. The Republicans and the right used Samuel Wurzelbacher, who was neither named Joe nor was a (licensed) plumber, as a convenient cudgel against Obama, and Wurzelbacher was delighted to play along, reveling in the fame that came his way as a result of his frequent Fox appearances during the 2008 campaign.
Prouty, by contrast, never sought notoriety during the campaign, and even now, well, he’s being hailed today, and properly so, but I’d be very disappointed and frankly quite surprised if he becomes some kind of slatternly MSNBC fixture who shows up to mouth half-coherent DNC talking points as Wurzelbacher has on Fox, and run a crappy and stupid race for Congress. Prouty sounded last night as if he wants to seize on this opportunity to do the kind of work he cares about and help working people or union people in some way. Wurzelbacher was a show horse and a blowhard, playing to a movement that loves show horses and blowhards provided they’re blowing the approved notes. He changed nothing.
Prouty is a serious and earnest person who is actually trying to help working people and who did make an enormous difference. Their notoriety and how they gained it and the purpose to which they used it tells us not only something about them, but about the two sides as well.
By: Michael Tomasky, The Daily Beast, March 14, 2013
Here’s the 47% Question: If the hedge fund founded by the Republican candidate for president buys a company in a small Midwestern town and then sends all its jobs to China, do those workers thereby become the “victims” Mitt Romney had in mind when he dismissed those who “do not take responsibility for their lives” because they are “dependent” on government?
That’s the situation facing 170 workers at an auto sensor manufacturing plant in Freeport, Illinois after a Bain Capital-owned company, Sensata Technologies, bought out their factory and then decided it would be cheaper to board up the plant and send its parts to China — but not before subjecting workers to the final humiliation of training their Chinese replacements.
In response, some workers have set up a camp across from the factory and are calling “Bainport” to protest the move, according to Dave Johnson at Truthout. Others have asked Mitt Romney to intercede on their behalf with his former company, foolishly taking Romney at his word that, as president, he would “get tough” with China and fight for every American job. Good luck with that.
It’s not as if the company is hurting for money. According to a company financial statement quoted by Johnson, Sensata’s net income last year was $355 million, up 16% from 2010. Its total revenues were $1.8 billion in 2011, up almost 19% from the year before.
Yet, Romney’s former colleague, Sensata board chairman Paul Edgerley, says Bain’s responsibilities to investors demands shuttering the Freeport plant and shipping operations to Asia.
Johnson says the layoffs will surely have a ripple-effect in this small town of about 25,000 that has only three principal employers and a poverty rate well above the national average. And so, Bain’s decision to move the plant to China is a dagger in the heart of this community, says Johnson, and represents “the epitome of corporate America’s lack of patriotism, [with] it’s capital unmoored from any sense of responsibility for the people that make the profits or the communities where they live.”
In moving the plant to China, Sensata is simply operating according to the business strategy mapped out for the hedge fund by Romney himself: Buy assets with little money down. Load them with debt. Raid their pension funds. Break their unions. Then “harvest them” for profits.
On that infamous video disrespecting the bottom 47%, Romney makes a dubious value judgment when he says individuals who are not resourceful or self-reliant enough to make it in the survival-of-the-fittest jungle created for them by cut-throat capitalists like those at Bain Capital are therefore “irresponsible” when they lean on others in hard times, especially when it’s the crutch of government.
That’s the same self-serving justification we hear from conservative economists like Charles Murray who ignore the consequences of globalization and technological change and blame instead the middle class for its own shrunken prospects when average Americans stray from the traditional family values and old-fashioned American work ethic Murray thinks is all that separates rich from poor.
Romney’s is an ethic that equates “morality” with “success.” This may help explain a presidential campaign that justifies egregious falsehoods and elaborate fabrications if they win Romney a point or two with a gullible public.
Newt Gingrich was right when he called out Romney during the Republican primaries as a “predatory corporate raider” who only pretends to be a real capitalist.
A real capitalist, said the original Austrian-school economist Joseph Schumpeter, would know that the fruits of the free market’s dynamic innovations could only be harvested by societies prudent enough to make provision for the victims of capitalism’s relentless change.
Schumpeter, Austria’s finance minister in 1919 and the originator of the famous phrase about capitalism’s “creative destruction,” believed public relief during Hard Times was “imperative on moral and social grounds” and also important to stabilize demand, writes Hans-Michael Trautwein.
“Schumpeter was in favor of unemployment relief as the best way to counteract the effects of the business cycle on workers’ welfare,” says Trautwein in a paper on the great economists’ views on unemployment.
Predators like Mitt Romney, in contrast, want to have their cake and eat it too. They want the benefits that go with destroying other people’s lives for their own profit but without the responsibility to pay the least in compensation.
A real capitalist concerned about the viability of a free market capitalist system in a democratic society would be far more alert to the caveats Schumpeter laid out. And the fact that Romney isn’t, as he speaks contemptuously of the victims his Bain Capital business model have created, exposes Romney as someone who cares little about the free market beyond his own ability to profit spectacularly from the very same unregulated and lightly taxed rigged system he would promote as president.
The irony of the rapacious worldview Romney shares with many in America’s plutocratic class is that it fails as both morals and economics. This is one reasonRomney’s peculiar brand of buccaneer capitalism has so often had to be rescued from itself.
How can it be possible, for example, that a company like Citibank could sell securities it knows to be toxic to one set of customers while at the same time betting on those very same securities to default – and then only getting a $285 million fine from regulators, which is a slap on the wrist considering the monstrous sums involved?
That is what New York Times columnist Thomas Friedman wants to know when he says of Citibank’s fraud” “It doesn’t get any more immoral than this.”
Romney complains about the 47% he says are parasites. Yet, as Friedman notes, “there is in our economy now a disconnect between pay and performance,” which is a fairly serviceable definition of “parasite” in my book.
Under the rules now in place, says Friedman, Romney’s Bain Capital can make tens of millions of dollars on firms it buys that go bankrupt. A bank like Citigroup can sell toxic securities to a hedge fund that loses hundreds of millions of dollars on the deal while Citigroup still makes $160 million in fees and trading profits betting against those same assets.
Despite the wrong turns it has taken in recent decades, Friedman still believes capitalism and free markets are the best engines for generating growth and relieving poverty — “provided they are balanced with meaningful transparency, regulation and oversight.”
What we’ve lost in the last decade, he says, is that balance. “And if we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis. And, if that happens, the cry for justice could turn ugly.”
Mitt Romney sells himself as a successful businessman who “knows” how to create jobs because he “understands” what it takes because Romney himself is rich. In place of policy, in other words, all that Romney has to offer is biography.
Mitt Romney wants to be our president. Yet as Chrystia Freeland reminds us, Romney embraces a “ravage capitalism that is loyal to no nation-state and blind to every human virtue but profit” – a win-at-all-costs ethos that has a familiar, if dangerous, pedigree among history’s self-destructive ruling classes.
What separates successful states from failed ones, says the author of Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, are governing institutions that are either inclusive or extractive.
Extractive states are those controlled by ruling elites whose sole objective is extracting as much wealth as they can from the rest of society, says Freeland, while inclusive states “give everyone access to economic opportunity.”
Greater inclusiveness creates more prosperity which, in turn, creates an incentive for ever greater inclusiveness, says Freeland
Elites themselves prosper from these inclusive systems, says Freeland, but there also comes a time when these elites face the self-destructive temptation to pull up the ladder behind them once they’ve extracted wealth from the broader community “to such a degree that the society becomes dysfunctional and mired by social problems.”
Marx’s famous warning about capitalism containing the seeds of its own destruction may be the danger America faces today, says Freeland, as the 1% percent “pulls away from everyone else” by cannibalizing the broad Middle Class Republic that America has built up since the Second World War — with its public investments in education, infrastructure, basic research and development and health and retirement security — and as these elites pursue “an economic, political and social agenda that increases that gap even further and ultimately destroys the open system that made America rich and allowed its 1 percent to thrive in the first place.”
This is the absurdity of Mitt Romney’s comment about the 47% who are “dependent upon government,” says Freeland, since it’s those at the “top of the economic pyramid who have been most effective at capturing government support — and at getting others to pay for it.”
Today’s super-rich may be different from you and me but they are no different from their plutocratic predecessors throughout history, says Freeland.
“Now, as then, the titans are seeking an even greater political voice to match their economic power,” she writes. “Now, as then, the inevitable danger is that they will confuse their own self-interest with the common good. The irony of the political rise of the plutocrats is that they threaten the system that created them.”
By: Ted Frier, Open Salon, November 3, 2012
We already know that Mormon Mitt Romney has been tremendously generous to his church, giving over $5 million in the past two years alone, but now we learn that his charitable activity with LDS may not have been entirely altruistic. Bloomberg’s Jesse Drucker reports that Romney exploited the church’s tax-exempt status to lower his tax bill.
Romney reportedly took advantage of a loophole, called a charitable remainder unitrust or CRUT, which allows someone to park money or securities in a tax-deferred trust marked for his or her favorite charity, but which often doesn’t pay out much to the nonprofit. The donor pays taxes on the fixed yearly income from the trust, but the principal remains untaxed. Congress outlawed the practice in 1997, but Romney slid in under the wire when his trust, created in June 1996, was grandfathered in.
The trust essentially lets someone “rent” the charity’s tax-exemption while not actually giving the charity much money. If done for this purpose, the trust pays out more every year to the donor than it makes in returns on its holdings, depleting the principal over time, so that when the donor dies and the trust is transferred to the charity, there’s often little left. The actual contribution “is just a throwaway,” Jonathan Blattmachr, a lawyer who set up hundreds of CRUTs in the 1990s, told Bloomberg. “I used to structure them so the value dedicated to charity was as close to zero as possible without being zero.”
Indeed, this appears to be the case for Romney’s trust as well. Bloomberg obtained the trust’s tax returns through a Freedom of Information Request and found that Romney’s CRUT started at $750,000 in 2001 but ended 2011 with only $421,203 — over a period when the stock market grew. Romney’s trust was projected to leave less than 8 percent of the original contribution to the church (or another charity that he can designate). This, along with the trust’s poor returns — it made just $48 in 2011 — suggest the trust is not designed to grow for the LDS church but just serve as a tax-free holding pool from which annual payments can be disbursed to the Romneys.
This is hardly the first tax-avoidance strategy Romney has employed. It’s well known that he holds offshore bank accounts in Switzerland and the Cayman Islands, but he has used more obscure vehicles as well. There’s the “total return equity swap,” where a taxpayer calls a stock he owns by another name and doesn’t pay taxes on it. There’s the way he’s been avoiding gift and estate taxes through a trust that he set up for his children and grandchildren. And there’s the neat trick whereby private equity firms claim that management fees are capital gains and thus qualify for a lower tax rate than straight income. Bain Capital was known for pursuing an aggressive tax-mitigation strategy (they’re now under investigation for it), and so was Marriott Hotels when Romney was an influential board member.
And it’s not just taxpayers who lose out. “The Romneys get theirs off the top and the charity gets what’s left,” said Michael Arlein, a trusts and estates lawyer at Patterson Belknap Webb & Tyler LLP. “So by definition, if it’s not performing as well, the charity gets harmed more.”
By: Alex Seitz-Wald, Salon, October 31, 2012
It’s often said that the way a candidate runs his campaign gives insight into the way he’ll run the government, but unfortunately it usually isn’t true. A campaign has a few similarities to a government, but not many; likewise, while there are similarities between running for president and being president (lots of speeches, for instance), most of the really important things couldn’t be more different.
As the presidential election nears its end—a vote of tremendous consequence preceded by a campaign of unusual triviality—is there anything left to learn about Barack Obama and Mitt Romney? Despite the fervid hopes of those on the extreme right that there is some secret revelation waiting to be unearthed about Obama, we know most of what we need to know about his potential second term just by taking stock of his first. We know that domestically, where he needs Congress’s cooperation he’ll pursue the policies his party supports, just as Mitt Romney will. In foreign policy and national security, we know that he’ll continue to distress the progressives who care to think about it, with a continuation of the drone war in Pakistan and Afghanistan and a vision of presidential power that is little different from George W. Bush’s. The bulk of his policy initiatives will merely continue what he has already done; whether you think that’s a good idea depends almost entirely on your party affiliation.
If you had particular foresight, you might have seen in Obama’s pre-presidential political career some of the characteristics that produced his greatest successes as president. In particular, he combines a carefulness and methodical planning with extremely bold action when he believes circumstances have produced the perfect moment. The most obvious example was his decision to run for president in the first place. Let’s not forget that at the time, nearly every sage observer said Obama was being presumptuous and premature. When his run began he was a mere two years removed from the Illinois state senate, an electrifying presence but hardly possessed of the seasoning that a president needed. But Obama saw that the end of the Bush years provided an opportunity he might not see again, when the thirst for someone new and different made the election of the nation’s first black president a possibility, even one who had only occupied high office for only a brief time.
There have been plenty of times when Obama could have gone farther than he did, or would have done better forcing a confrontation instead of settling for conciliation. But that boldness could be seen at most of the key moments of his first term: ignoring advisers like Rahm Emanuel who counseled abandoning the Affordable Care Act when it was in jeopardy; bailing out the auto industry when many thought it was a dying elephant; and yes, ordering the operation that killed Osama bin Laden despite all the risks it entailed.
Like Obama, Mitt Romney is known as a careful planner. But unlike Obama, Romney has shown an aversion to risk-taking that is nearly absolute. That isn’t always a bad thing; though many of Obama’s risks have worked out well, there’s nothing inherently wrong with caution. But Romney’s caution is extreme, so much so that it’s impossible to think of a single risk he’s ever taken—political, personal, or otherwise. When he was working at Bain & Co. and the firm’s founder asked him to run the new venture of Bain Capital, Romney negotiated a deal that guaranteed him his old job back if the private equity firm failed. When he went to run the Olympics in Salt Lake, he negotiated a similar deal with Bain Capital. And the private equity business that he helped pioneer is all about risking borrowed money and making sure to charge huge management fees, so even if the company you buy goes under, you still wind up making a profit.
In politics, Romney’s aversion to risk is all the explanation you need for his reinventions: When the next electorate to be wooed didn’t look favorably inclined to the last iteration of Mitt, rather than risk being rejected because of what he stood for, he sought out the path of least ideological resistance. The problem is that if he becomes president, Romney will face decisions in which there is no safe choice. I don’t doubt that if a natural disaster hit, Romney could effectively manage the government’s response, since it would be an administrative challenge with clear goals. But what about some international crisis where all paths pose tremendous risks? What if, say, fundamentalists staged a coup in Pakistan? Can anyone say how Romney would respond, or even what in his character or experience might give us some idea? He might handle such crises brilliantly or disastrously. We have no idea.
Nevertheless, for all Romney’s ideological revisions and reimaginings, we can be fairly sure about many of the things he’ll do. Just like Obama, he’ll be a creature of his party. He’ll stock the executive branch with the same Republicans who would arrive with any GOP president. He can’t enact his tax cut plan as he has presented it during this campaign, but he’ll attempt to cut income tax rates in some fashion, and probably try to cut capital gains and inheritance taxes to boot. He’ll appoint judges (and Supreme Court justices if he gets the chance) who are hostile to reproductive rights and friendly to corporate power and privilege. When he promises to cut regulations that limit business’s ability to pollute or harm consumers, he means it. While he may not achieve his utterly arbitrary goal of increasing military spending to 4 percent of GDP, he’ll certainly try to increase it. He might get cold feet on voucherizing Medicare, but he’ll be happy to go after Medicaid; doing so is less risky since the latter’s constituency is poor people.
Finally, if we’re trying to imagine the next four years, it’s as important to ask what each candidate doesn’t care about as what he does care about. A president won’t take a political risk or invest in a long-term effort to accomplish a goal he can live without achieving. Obama wouldn’t have undertaken the monumental struggle required to pass the Affordable Care Act if he didn’t care about the goal of health care reform. On the other hand, he clearly doesn’t care much about the proliferation of guns.
As for Mitt Romney, it’s so hard to determine what he cares about that it’s equally difficult to say what he doesn’t care about. His campaign recently informed reporters that he will be giving no more interviews between now and Election Day, lest he be subjected to the risk of an uncomfortable question or another cringe-inducing gaffe. So whatever voters don’t know about Mitt Romney they aren’t going to find out unless he becomes president.
By: Paul Waldman, Contributing Editor, The American Prospect, October 29, 2012
Have you ever seen a Mitt Romney lookalike bobblehead doll? Or the parody video, since removed from the Internet, with former Republican candidate Jon Huntsman’s three daughters interview a nodding Mitt bobblehead?
This year, the Romney bobbleheads are marketed on the Internet, along with Barack Obama bobbleheads that are reportedly selling faster. But the original Mitt bobblehead first appeared four years ago and was produced—by Ann Romney’s brother at a factory in China—as a party favor for big donors.
Last January, when former Utah governor Jon Huntsman was still in the GOP presidential primary race, his three daughters “went rogue” and produced the video, with two of them donning blonde wigs to imitate Fox News anchors, and “interviewed” a Romney bobblehead doll. As they studied their nails and asked sarcastic questions — “Governor Romney, people accuse you of being stiff. Do you agree?” — the bobblehead would rapidly oscillate, indicating yes or no.
If those dolls could talk, they might have a lot to tell about their country of origin and who made them there. Although Romney now complains frequently that China has unfairly “taken American jobs,” the Chinese bobblehead Mitts are yet another example of Romney’s propensity to invest in the People’s Republic—and to enrich family members such as Roderick Davies, his brother-in-law, who oversaw the creation of the dolls in China through a Utah company called Asian Sources, Inc.
Asian Sources was one of a string of failed businesses formed by Davies — Ann Romney’s older brother — in Michigan, Florida, Colorado and Utah, culminating in his bankruptcy in 2010. (Mitt Romney’s older brother, Scott, performed legal services for at least two of Davies’ failed ventures. Davies’ son and Mitt’s nephew, Ryan Davies, would eventually join Asian Sources, Inc. after leading a Utah alternative energy company into bankruptcy and being pushed out by the directors amid allegations of embezzlement, tax fraud and securities fraud.)
When Roderick Davies got the campaign doll deal, he already had the connections and experience to handle the job. Among other Asian outsourcing tasks, Davies had worked for Lifelike Doll Company, a Colorado firm that made custom dolls to look like the little girls who received them as gifts (just as bobbleheads are supposed to resemble specific individuals). Davies got that job, too, via Romney — and Bain Capital. After Davies allegedly helped run Lifelike into the ground, attempted a hostile takeover, and was sued by the company, he founded Asian Sources, the firm that went on to create and import Romney’s 2008 bobblehead dolls.
Along the way, Davies traded constantly on his famous brother-in-law’s name, with Mitt Romney’s encouragement. Indeed, Romney and Davies went together into the Lifelike doll business — a venture that not only illustrates their exploitation of China outsourcing but their ruthless corporate style. The Wall Street Journal first broke the Lifelike Doll Co. story last January. But after a single brief report the Journal promptly dropped the thread before unraveling the China connection. The Journal story also missed Romney’s and Bain’s fascination with several other doll and toy companies, not just Lifelike, all of which were also connected with bankruptcies.
The Wall Street Journal’s lead summarized the issue:
“Mitt Romney rarely got personally involved in individual deals toward the end of his time as chief executive of Bain Capital. But he was closely involved in a failed investment in a company that sold expensive dolls semi-customized to resemble the girl they were bought for. Mr. Romney was brought the idea by a friend from Brigham Young University and Harvard Business School who was one of the original partners of the doll company, which was called Lifelike Co. and used the brand name My Twinn.”
“As far as I can recall, Lifelike was the only investment that Mitt originated from his personal network,” former Bain executive Marc Wolpow told the Journal. “He said other Bain partners weren’t enthusiastic, but ‘it was a small investment, so no one really seemed to care that much.”
That “small” investment was $2.1 million, most of which Bain lost after Lifelike went bankrupt in 2003. What the Journal story missed was the fact that between 1997 and its financial collapse the company turned more and more to Asia for parts and after a disastrous 2001 holiday season “the Lifelike Company shifted all operations to China in an effort to reduce production costs,” according to its owners.
When Romney invested Bain’s money in Lifelike, he joined its board of directors and facilitated the hiring of his brother-in-law. Roderick Davies moved from Florida to Colorado to take the job. (Like Mitt Romney in Massachusetts, Davies had served as a Mormon stake president in Florida.)
The Journal quoted former Lifelike CEO Kenn Thiess, Romney’s friend, as saying that Mitt Romney did not pressure the firm to hire his brother-in-law. Interviewed subsequently for this article, Thiess, who had served as a Mormon stake president in Colorado said when Romney brought Davies in, Thiess agreed that the company should expand its use of Chinese suppliers. And because Davies had strong Chinese manufacturing connections, Romney said Davies could be hired to help.
According to the Journal, Lifelike eventually sued Davies, accusing him of trying to subvert its business “by conducting secret dealings with suppliers and trying to set up a competing entity.” While that charge may be valid, at least in part, Thiess fired Davies mainly because Davies was trying to buy controlling shares of Lifelike and then push him out. Thiess said Davies was acting with “Romney family money.” But he would not say whether he thought Mitt Romney was part of the coup attempt.
But in a recent interview Thiess said it was clear at the time—after Romney was elected governor—that “Mitt was setting things up to run for president.” He recalls Davies telling prospective Chinese suppliers that, through him, they were not only establishing a link to the chief executive of Massachusetts (who held an interest in Lifelike) but also, potentially, a future president of the United States.
By: Lynn Packer, The National Memo, October 24, 2012