All The G.O.P.’s Gekkos: “I Create Nothing I Own”
Almost a quarter of a century has passed since the release of the movie “Wall Street,” and the film seems more relevant than ever. The self-righteous screeds of financial tycoons denouncing President Obama all read like variations on Gordon Gekko’s famous “greed is good” speech, while the complaints of Occupy Wall Street sound just like what Gekko says in private: “I create nothing I own”, he declares at one point; at another, he asks his protégé, “Now you’re not naïve enough to think we’re living in a democracy, are you, buddy?”
Yet, with the benefit of hindsight, we can see that the movie went a little off at the end. It closes with Gekko getting his comeuppance, and justice served thanks to the diligence of the Securities and Exchange Commission. In reality, the financial industry just kept getting more and more powerful, and the regulators were neutered.
And, according to the prediction market Intrade, there’s a 45 percent chance that a real-life Gordon Gekko will be the next Republican presidential nominee.
I am not, of course, the first person to notice the similarity between Mitt Romney’s business career and the fictional exploits of Oliver Stone’s antihero. In fact, the labor-backed group Americans United for Change is using “Romney-Gekko” as the basis for an ad campaign. But there’s an issue here that runs deeper than potshots against Mr. Romney.
For the current orthodoxy among Republicans is that we mustn’t even criticize the wealthy, let alone demand that they pay higher taxes, because they’re “job creators.” Yet the fact is that quite a few of today’s wealthy got that way by destroying jobs rather than creating them. And Mr. Romney’s business history offers a very good illustration of that fact.
The Los Angeles Times recently surveyed the record of Bain Capital, the private equity firm that Mr. Romney ran from 1984 to 1999. As the report notes, Mr. Romney made a lot of money over those years, both for himself and for his investors. But he did so in ways that often hurt ordinary workers.
Bain specialized in leveraged buyouts, buying control of companies with borrowed money, pledged against those companies’ earnings or assets. The idea was to increase the acquired companies’ profits, then resell them.
But how were profits to be increased? The popular image — shaped in part by Oliver Stone — is that buyouts were followed by ruthless cost-cutting, largely at the expense of workers who either lost their jobs or found their wages and benefits cut. And while reality is more complex than this image — some companies have expanded and added workers after a leveraged buyout — it contains more than a grain of truth. One recent analysis of “private equity transactions” — the kind of buyouts and takeovers Bain specialized in — noted that business in general is always both creating and destroying jobs, and that this is also true of companies that were buyout or takeover targets. However, job creation at the target firms is no greater than in similar firms that aren’t targets, while “gross job destruction is substantially higher.”
So Mr. Romney made his fortune in a business that is, on balance, about job destruction rather than job creation. And because job destruction hurts workers even as it increases profits and the incomes of top executives, leveraged buyout firms have contributed to the combination of stagnant wages and soaring incomes at the top that has characterized America since 1980.
Now I’ve just said that the leveraged buyout industry as a whole has been a job destroyer, but what about Bain in particular? Well, by at least one criterion, Bain during the Romney years seems to have been especially hard on workers, since four of its top 10 targets by dollar value ended up going bankrupt. (Bain, nonetheless, made money on three of those deals.) That’s a much higher rate of failure than is typical even of companies going through leveraged buyouts — and when the companies went under, many workers ended up losing their jobs, their pensions, or both.
So what do we learn from this story? Not that Mitt Romney the businessman was a villain. Contrary to conservative claims, liberals aren’t out to demonize or punish the rich. But they do object to the attempts of the right to do the opposite, to canonize the wealthy and exempt them from the sacrifices everyone else is expected to make because of the wonderful things they supposedly do for the rest of us.
The truth is that what’s good for the 1 percent, or even better the 0.1 percent, isn’t necessarily good for the rest of America — and Mr. Romney’s career illustrates that point perfectly. There’s no need, and no reason, to hate Mr. Romney and others like him. We do, however, need to get such people paying more in taxes — and we shouldn’t let myths about “job creators” get in the way.
By: Paul Krugman, Op-Ed Columnist, The New York Times, December 8, 2011
Poor Timing On Mitt Romney’s “Frugal” Habits
The New York Times has a feature piece today on Mitt Romney’s “thrifty habits.” Apparently, the guy considers himself pretty cheap.
It was a stark sign of the tug of war, still evident in Mr. Romney’s life, between an instinctive, at times comical frugality, and an embrace of the lavish lifestyle that accompanied his swelling Wall Street fortune.
Mr. Romney, 64, has poured $52 million of his own money into campaigns for the Senate and the White House, but is obsessed with scoring cheap flights on the discount airline JetBlue.
He has acquired six-figure thoroughbred horses for his wife, Ann, yet plays golf with clubs from Kmart. And he has owned a series of multimillion-dollar homes, from a lakefront compound in New Hampshire to a beach house in California, but once rented a U-Haul to move his family’s belongings himself between two of the vacation retreats.
For the record, if a guy spends $12 million on one of several luxurious mansions, and then rents a U-Haul to move belongings himself, I’m not sure “frugal” is the right adjective.
In any case, the timing of the piece is unfortunate. The article invests 2,000 words in making the case that Romney “has never become entirely comfortable with his own wealth,” and is one of those guys who just doesn’t like to open his wallet, but the article went to print just as Romney was willing to drop $10,000 on a bet over a fairly obscure point during a nationally-televised debate.
As a rule, thrifty individuals don’t throw around five-figure wagers on a whim.
There was also this tidbit:
The Romneys lived in an affluent suburb, Bloomfield Hills, with a housekeeper and two refrigerators in the kitchen. But George Romney still required his children to mow the lawn, shovel snow, rake leaves, weed the garden. “I know he worried that because my brother, sisters and I had grown up in a prosperous family, we wouldn’t understand the lessons of hard work,” Mitt Romney wrote.
I’m pretty sure this is the same guy who later hired a landscaper that relied on undocumented workers and told the company, “Look, you can’t have any illegals working on our property. I’m running for office, for Pete’s sake, I can’t have illegals.”
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, December 11, 2011
“To Know Mitt Romney Is To Dislike Him”: Those Who Saw Romney’s Leadership Up Close
There’s a traditional model for presidential candidates when it comes to their pre-announcement career trajectory. It’s pretty straightforward: an official gets elected to a prominent office, he/she does well, his/her constituents are impressed, and the official parlays that success into a national campaign.
In recent decades, this is the path Obama, Bush, Clinton, and Reagan all took from statewide office to the White House. It’s always fascinated me how poorly Mitt Romney fits this model.
He was governor from 2003 to 2007, and as Edward Mason and Tom Mashberg explained the other day, Romney failed to impress much of anyone.
“His favorability was basically a straight line down from his honeymoon,” said David Paleologos, director of Suffolk University’s Political Research Center and a longtime Massachusetts pollster. “Sometimes familiarity breeds contempt.” […]
Romney entered the Massachusetts State House in January 2003 with a flashy favorability rating of 61 percent…. By November 2004, voters were souring, and a Suffolk poll found his favorable rating had dropped to 47 percent.
A year later, that rating sank another 14 points. Just 33 percent of Bay State voters had a favorable opinion of Romney in 2005, according to Suffolk, while 49 percent were unfavorable.
Things did not improve in 2006, when Suffolk found that his unfavorable rating had risen to 55 percent while his favorable remained stagnant.
By November 2006, as he closed out his increasingly absentee term, his overall job approval rating had cratered to 36 percent.
Thomas Whalen, a Boston University political science professor, put it this way: “To know Mitt Romney is to dislike him. That is the moral of the story.”
Maybe he looks better in hindsight? No, Romney’s former constituents still don’t like him and still don’t want him to be president.
Maybe it’s because he was a GOP governor in a reliably “blue” state? No, Massachusetts has had plenty of modern Republican governors — Weld, Cellucci, Swift — and all were more popular with their Bay State constituents than Romney.
This is all generally overlooked, which is a shame because it seems pretty important. We’re talking about a politician who’s held public office just once, for a grand total of four years. During that one term, his constituents got a good look at his leadership, and came to actively dislike him.
Romney looked at this and thought, “Hey, now I’m ready for a promotion to the White House!”
This really ought to come up on the campaign trail more often. Here’s the sample question reporters can ask Romney: why were you so woefully unpopular with your own constituents when voters gave you a chance to lead?
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, December 11, 2011
Mitch McConnell: GOP Isn’t “Here To Defend High-Income People”
The number two Senate Republican, Arizona Sen. Jon Kyl (R), last week decried attempts by Senate Democrats and President Obama to pay for a payroll tax cut extension with a surtax on millionaires. Despite the fact that payroll tax cut extension would keep an extra $1,000 in the pockets of the average American family, and despite the fact that the millionaire surtax would hit relatively few households, Kyl said he could only support extending the tax cut for working Americans if it was accompanied by massive tax cuts for the wealthy.
This morning on Fox News Sunday, host Chris Wallace asked Senate Minority Leader Mitch McConnell (R-KY) what he made of characterizations of the GOP as the party that defends millionaires, given that more than half of McConnell’s caucus has repeatedly voted against a tax cut for the middle class. McConnell laughed at the assertion before saying the GOP is “not here to defend high-income people.” As proof, McConnell told Wallace that the Republican plan took such drastic steps as to prevent millionaires from receiving unemployment benefits or food stamps:
WALLACE: Why are so many Republicans, including more than half of your Senate Republicans, why are they voting against the payroll tax cut?
MCCONNELL: Well the president’s comments, it’s hard not to laugh, because four out of five of the people they’re targeting, of “the rich people” they’re targeting, are actually business owners who create jobs. Look, we’re not here to defend high-income people. In this bipartisan package that we’re just discussing, we make sure millionaires don’t get unemployment, don’t get food stamps. […] It doesn’t do anything for millionaires, in fact, it goes after them on the benefits side.
McConnell’s assertions seem belied by the facts. Though he insists the payroll tax cut extension will pass, it was the GOP that opposed paying for it through a small surtax on the wealthiest Americans. It was the GOP that opposed any move to raise taxes on the wealthiest Americans in efforts to reduce the deficit — leading to the first credit downgrade in American history and ultimately dooming the super committee. It was his party that nearly shutdown the government in April over the same issue — even though the wealthiest Americans are paying historically low tax rates.
And while McConnell claims the GOP plan “goes after” millionaires “on the benefits side,” it “goes after” low- and middle-income Americans “on the benefits side” even harder. While the GOP opposes any tax increase on millionaires, the House plan to extend the payroll tax cut guts unemployment insurance — one of the most effective means of economic stimulus the government has — reducing the number of weeks one can remain on the program from 99 to 79, and then from 79 to 59.
McConnell’s claims that “four out of five people” Democrats are “targeting” are actually “business owners who create jobs” is equally laughable. NPR last week tested that claim, asking Republican Congressional offices to help them find business owners who opposed the millionaire surtax. Unsurprisingly, since only 2 percent of those with business income would be affected by the surtax, the Republican offices and business lobbying groups couldn’t find anyone for NPR to talk to.
By: Travis Waldron, Think Progress, December 11, 2011
A Rare Politician, “Newt Gingrich Is A Lousy Human Being”
Newt Gingrich is a lousy human being. Any assessment of his presidential aspirations has to begin with that. It’s always worth considering what motivates a politician, particularly given all the personal complexities that attend a life lived in public, but with Newt Gingrich this is particularly relevant. We have had some very successful presidents whose personal lives were messy and complicated and we have had some terrible and even disastrous presidents whose personal lives seemed relatively stable, but it’s rare that we have a president who is such a lousy human being and whose politics are no better. Newt Gingrich is a rare politician, but he won’t be president. He is a rare politician because he is such a lousy human being and because his politics are so terrible. He won’t be president precisely because he is such a lousy human being and because his politics are so terrible.
The politics of Newt Gingrich are obvious. Not only is he a cookie-cutter Republican champion of the 1 percent, he also is an enemy of the 99 percent. A typical Republican hypocrite on fiscal responsibility, he espouses a balanced budget but after voting for the policies of Reagan and the elder Bush that created the largest federal deficits in history, he then voted against the Bush tax increases that were meant to begin to address them. He then voted against the Clinton tax increases on the wealthy that helped balance the budget and spark the economic boom that created near full employment. And while opposing most of the best of President Clinton’s policies, he supported President Clinton’s worst policies. He now calls for possibly reinstating Glass-Steagall, but at the time he helped spearhead its repeal. And, of course, while opposing any restraints on the rapacious greed of the worst 1 percenters, he also opposes government programs that help those victimized by them. He proposed to privatize Social Security, which would have taken guaranteed income from the elderly and placed it in the hands of the same investment bankers who after being unfettered from Glass-Steagall crashed the economy; and with the economy still staggering from the Bush-Cheney economic meltdown, he is waging war on food stamps, while throwing in a racist dogwhistle at President Obama, just for good measure. He wants a Medicare voucher plan, which would take guaranteed health care from the elderly and place their medical security in the hands of those always benevolent private insurers. He wants to restructure the tax code, making the 1 percent even more disproportionately wealthy while adding even more to the federal deficit.
If it seems Newt Gingrich hates all things government, that’s only part of the story. Because while he does oppose using the government to help those who most need help, he does seem to love its ability to enrich himself. In fact, lest anyone forget, Gingrich’s long career in public office came to an ignominious end after he was caught using tax-exempt funds for overt political propagandizing, the wider investigation of which by the House Ethics Committee he obstructed by providing false information, the result of which was an enormously bipartisan House vote to make him the first Speaker of the House ever to be disciplined for ethical wrongdoing. And within a year, and just four years after leading the GOP to a House majority, he was so unpopular within his own caucus that he was forced to abandon his leadership, and soon his tenure in Congress. After which he went on to become a very well-paid non-lobbyist lobbyist. Newt Gingrich has never demonstrated any interest in helping make the world better for all, but he does love to make the world a better place for Newt Gingrich. Indeed, he seems to abide by a credo of asking not what he can do for his country but what his country can do for him. But that’s not even the worst of it.
In my opinion, and speaking only for myself, it is a fundamental wrong to politicize politicians’ personal lives. The private behavior of consenting adults is their business not ours. Even if they hypocritically attempt to politicize the personal behavior of others, theirs remains sacrosanct. That applies to Anthony Weiner and it applies to Sarah Palin. But when Newt Gingrich argued over a divorce with his first wife while she was lying in a hospital bed the day after her third surgery for cancer treatments, that was not the private behavior of consenting adults. Gingrich’s first wife was not consenting to being so abused. Gingrich was demonstrating his utter disregard for what most people would consider a basic sense of humanity. As Robert Scheer wrote in 1994:
The man has chutzpah. In his 1974 campaign, he ran on the slogan, “Newt’s family is like your family.” A sad but perhaps accurate commentary on life in suburban Georgia. In 1978, he ran an ad blasting his opponent, Virginia Shapard, saying, “If elected, Virginia will move to Washington, but her husband and her children will remain in Griffin.” Under Gingrich’s photo, it said: “When elected, Newt will keep his family together.”And he did, until he filed for divorce 16 months later. His wife told the court she wanted to stay married although she had “ample grounds” for divorce herself. But she complained bitterly that he failed to support the family. As her petition stated:
“Despite repeated notices . . . plaintiff has failed and refused to voluntarily provide reasonable support sufficient to include payment of usual and normal living expenses, including drugs, water, sewage, garbage, gas, electric and telephone service for defendant and the minor children. As a result, many of such accounts are two or three months past due with notices of intent to cut off service . . . . “
The man who led the Republican drive to punish the less fortunate by cutting off what was and is framed as coddling government services was then ordered by a judge to provide basic child and family support. And it’s even worse. Because the same deadbeat dad who refused to take personal responsibility for his own children’s “normal living expenses” would go on to promote a political plan for single moms and their children that was right out of the most dystopian Victorian nightmare. As recently referenced by digby:
In 1994, during the early days of the public debate on welfare reform, Speaker of the House Newt Gingrich ignited a media firestorm by suggesting that orphanages are better for poor children than life with a mother on Aid to Families with Dependent Children (AFDC). Responding to blistering criticism, he first defended the proposal by invoking the idyllic orphanage life of the 1938 film “Boys Town,” finally retreating, at least rhetorically, from the entire controversy. Orphanages became just another blip on the nation’s radar screen, or so it seemed.In fact, the plan to revive orphanages is embedded in the Personal Responsibility Act, the Republican plan for welfare reform, and is a major piece of the Republican Contract With America. The Republicans’ pledge promised to balance the budget, protect defense spending, and cut taxes, targeting programs for the poor–cash assistance, food, housing, medical, and child care–as the big areas for major budget savings. Parents who are poor, it has been predicted, will have little or no choice but to watch their children board the orphan trains in search of shelter and food.
Newt Gingrich seems to have a problem with children. His own children. The children of single teenaged moms. Poor children:
“It is tragic what we do in the poorest neighborhoods, entrapping children in, first of all, child laws, which are truly stupid,” said the former House speaker, according to CNN. “Most of these schools ought to get rid of the unionized janitors, have one master janitor and pay local students to take care of the school. The kids would actually do work, they would have cash, they would have pride in the schools, they’d begin the process of rising.””You’re going to see from me extraordinarily radical proposals to fundamentally change the culture of poverty in America,” he added.
Change the culture of poverty? By punishing the poor? By punishing poor children? And of course, getting rid of unionized janitors undoubtedly would create even more poor children, because when you have a broken economy and chronic unemployment and you then start getting rid of some of the remaining well-paying jobs, you end up with more unemployed people. More people who were earning incomes and then suddenly aren’t. Some of whom undoubtedly have children. Children who then will become poor. Poor children created by Gingrich’s plan who then under Gingrich’s plan would be forced to find work, and maybe even would end up getting their parents’ old jobs. As non-unionized child labor janitors in their own schools.
Newt Gingrich personifies everything that is wrong with Washington. Even consummate DC Republican George Will can’t contain his disdain:
Gingrich, however, embodies the vanity and rapacity that make modern Washington repulsive.
And it’s astonishing that such a verity isn’t even the worst. Newt Gingrich wants to wage political war on poor children. And it calls into question the values of anyone who would support Gingrich. Any Republican who supports Newt Gingrich cannot claim to support families, family values, or any recognizable form of morality. Should Gingrich’s candidacy prevail in his party, it would prove once and for all that the much espoused Republican values are nothing but lies.
By: Lawrence Lewis, Daily Kos, December 11, 2011
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