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Iowa’s $200-Per-Vote Caucuses Reward Negatives, Nastiness, Narrow Thinking

The Republicans who would be president, the super PACs and the surrogates had already spent more than $12 millionon television ads—almost half of them negative—before the final weekend leading up to Tuesday’s Iowa caucuses.

That doesn’t count the thousands of radio ads, mailings, lighted billboards in Des Moines and costs for staff.

Add it all up and there is a good chance that, when all is said and done Tuesday night, the candidates will have spent $200 a vote to influence the roughly 110,000 Iowans who are expected to participate in the GOP caucuses.

And the really unsettling thing is that the caucuses are just for show.

While the results may so damage some candidates that their runs for the presidency will be finished, they will not actually produce any delegates to the Republican National Convention.

That’s because, as the Des Moines Register notes, “Iowa delegates are not bound to vote for a specific candidate at the national convention, and no percentage of delegates is given to any one candidate (on caucus night).” Iowa Republican Party Executive Director Chad Olsen told the paper that the GOP caucus acts more as a “temperature gauge” of how Iowans feel about the candidates, and convention delegates use the results to inform their decision.

Seriously? All this for an glorified straw poll?

That’s the problem with the caucus system, which operates on an only slightly better model on the Democratic side.

Huge amounts of money are spent to influence a very small percentage of the electorate—less than 20 percent of Iowans who are likely to vote Republican in November will participate in Tuesday’s caucuses, and most of them will leave after the balloting finishes. An even smaller number of Iowans will begin the process of choosing representatives to county conventions, who in turn elect delegates to district and state conventions at which Iowa’s national delegates are actually selected.

Ultimately, party insiders are all but certain to form the delegation and choose how to vote at the national convention.

I don’t begrudge Iowa a place at the start of the calendar. In fact, I prefer that Midwesterners start things. But the caucuses are not the right way to begin.

The progressive movement of a century ago fought for open primaries, where all voters could easily participate and where the power of political bosses—and, ideally, outside money—could be overwhelmed by popular democracy.

There are good arguments to be made that primaries no longer hold out such promise, and I am not suggesting that open primaries will in and of themselves cure all that ails our politics. But the Iowa campaign of 2012 confirms that the caucuses are more prone to being warped by money and by rules that favor party bosses.

Iowa maintains a caucus system not because it is the best way to choose a nominee but because its first-in-the-nation status depends on a longstanding arrangement with New Hampshire, which claims the right to hold the first primary. Under the deal, Iowa can go first, so long as it does not hold a primary. Unfortunately, that means Iowa must hold caucuses. And the caucuses are a dysfunctional way to begin the process.

The parties have lacked the courage to demand a reform of this arrangement. But they should do so before the 2016 race begins because the presidential nominating process should not be defined by caucuses—in Iowa or anywhere else.


By: John Nichols, The Nation, January 1, 2012

January 3, 2012 Posted by | Election 2012, GOP Presidential Candidates | , , , , , | Leave a comment

Bank Of America Cuts Off Credit To Some Small Businesses

Bank of America Corp., under pressure to raise capital and cut risks, is severing lines of credit to some small-business owners who have used them to stay afloat.

The Charlotte, N.C., bank is demanding that these customers pay off their credit line balances all at once instead of making monthly payments. If they can’t pay in full, they are being offered new repayment plans for as long as five years, but with far higher interest rates than their original credit lines had.

Business owners complain that BofA’s credit squeeze is abrupt and could strain their small companies and even put them out of business. The credit cutoff is coming at a time when the California economy can’t seem to catch a break, and bucks what the financial industry says is a new trend of easing standards on business loans.

One such customer, Babak Zahabizadeh, was told in a letter that the $96,000 debt carried by his Burbank messenger service must be repaid Jan. 25. A loan officer offered multiple alternatives over the phone that Zahabizadeh called unaffordable, including paying off the debt at 12% interest over two years. That’s about $4,500 a month, nearly 10 times his current interest-only payment.

Zahabizadeh, known as Bobby Zahabi to his customers, said he has cut the staff of his Messengers & Distribution Inc. to 80 from 200 to nurse his business through tough times.

“I was like, ‘Dude, you’re calling a guy who’s barely surviving!’ ” he said. “My final word was that I can double my payment — but not triple or quadruple it. I told them if they apply too much pressure they’re going to push me into bankruptcy.”

The capped credit lines stem from a corporate overhaul launched by Brian Moynihan, who became Bank of America’s chief executive in 2010. He promised to address losses caused by loose lending and rapid expansion by reining in risks and shedding investments deemed non-core.

BofA spokesman Jefferson George said a “very small percentage” of small-business customers have been affected by the changes. He would not provide exact numbers except to say it wasn’t in the hundreds of thousands. Some of the affected businesses had been customers of other banks that Bank of America acquired, but most were BofA customers from the start, George said.

“These changes were explained in letters to customers, and they were necessary for Bank of America to continue prudent lending to viable businesses across the U.S.,” he said.

The bank still has 3.5 million non-mortgage loans to small businesses on its books. The affected business owners were notified a year in advance that their credit lines were being called, George said, although Zahabi and several others said they had not received the early warnings.

The changes also include added annual reviews of borrowers and annual fees, and often reductions in the maximum amount of credit. George said the aim was to reduce Bank of America’s risks and to bring the loan terms in line with more stringent standards imposed after the 2007 mortgage meltdown and 2008 credit crisis.

Scott Hauge, president of the advocacy group Small Business California, called the credit cuts “a tragedy” for longtime BofA clients left vulnerable by years of struggle in a sour economy.

“If small businesses are going to lead the way out of the economic doldrums we now face in this country, they must have access to capital, not only to hire more people but to protect the jobs they are currently providing,” Hauge said.

Bank of America was a leader in the banking industry’s abortive attempt to impose debit card fees. But it appears to be a laggard in tightening business lending standards. Most other banks, having tightened lending standards in the aftermath of the financial crisis, had eased credit last year as competition for small-business customers heats up, bank analysts say.

“Everyone … is targeting commercial and particularly small-business lending as the real focus area for growth,” said Joe Morford, an analyst in San Francisco for RBC Capital Markets.

While Bank of America is advertising its own commitment to small businesses, it needs to send another message to its government supervisors because it has less of a capital cushion against losses than major rivals, said FBR Capital Markets bank analyst Paul Miller.

Restricting credit lines “is a way to show the regulators they are serious about addressing risks,” Miller said. “Bank of America is under great pressure, especially with another round of [Federal Reserve] bank stress tests coming up, as the regulators say: ‘We want you to tighten up.’ ”

The analysts said all banks monitor business customers and restrict credit on a case-by-case basis. But they said they were unaware of any other large bank systematically capping credit at this time.

Customers interviewed by The Times said they could understand how the turbulent economy might result in some restrictions. But they complained that the credit cutoffs threatened to undo businesses they shepherded through the downturn by slashing costs, hoping to expand when brighter days return.

Several small-business owners indicated that they had nearly used up all the available credit on their Bank of America lines. However, George said maxing out the lines wasn’t a major factor in the bank’s reevaluation of the credit terms.

Kathleen Caid’s Antique Artistry Studio in Glendale sells elaborately beaded, Victorian-style shades that she makes for lamps, chandeliers and sconces. She said she had understood that her $85,000 credit line would remain in place “as long as I wasn’t in default,” and she hadn’t missed any payments.

Caid and her husband, Tim Melchior, a video producer with a Burbank media company, insist they are not in serious financial trouble despite having laid off her eight full-time employees and downsized her business space by two-thirds during the recession.

Yet Bank of America says that her credit-line debt, totaling $80,000, is due in May.

“I wouldn’t have run it up if I knew what was in store,” she said, adding that she would be speaking to an attorney and other banks about her options.


By: E. Scott Reckard, Los Angeles Times, Jamuary 3, 2012

January 3, 2012 Posted by | Bank Of America, Businesses, Class Warfare | , , , , , | Leave a comment

Michele Bachmann’s Last Stand: Will Campaign End In Iowa?

She’s in last place in the polls in the state where she was born, but you wouldn’t know it by watching the relentlessly upbeat Michele Bachmann campaigning on Monday—the last day before Iowans go to the caucuses and, possibly, her last day as a presidential candidate.

Along with her husband, Marcus, Bachmann waded into packed shops and restaurants on a side street in West Des Moines to gamely sign autographs, chat up patrons, and pose for quick iPhone pictures with anyone who asked.

“We’re having a ball!” she said as she led a swarm of reporters and photographers from Paula’s Café across the street to the Diggity Dog pet bakery and on to the Floral Touch florist on the corner, where dozens of people had gone to escape the howling January wind. “This is what the Iowa Riviera feels like!” Bachmann joked.

But unlike her rivals for the Republican presidential nomination, who conducted a virtual siege of undecided voters across Iowa with last-minute “whistle-stop tours” and get-out-the-vote rallies, Bachmann’s only public events for the crucial last day were the impromptu lunchtime visit to West Des Moines and a 9 p.m. event at her headquarters in Urbandale.

Between her sparse schedule, the results of the recent Des Moines Register poll, which showed her solidly in last place, and an anemic $7,600 ad buy (her first and only television ads in the state), there was little doubt Monday that Bachmann was a happy warrior atop a campaign in its last throes of existence.

“I don’t think she has a chance,” said Charlie Freund, a Monday regular at Paula’s Café. “I think she’s a nice person, but she doesn’t have a chance.”

It’s a painfully inauspicious place for the Bachmann campaign to be after launching with fanfare amid a tide of Tea Party enthusiasm six months ago. As Sarah Palin sat on the sidelines, Bachmann jumped into the arena. She hired a top-tier campaign manager, used her Tea Party connections to raise millions of dollars, and rocketed to the front of the pack in early states like Iowa on the power of her personality and the novelty of her mom/lawyer/Obama-is-a-socialist message.

She peaked in August when she became the first woman ever to win the Ames Straw Poll, an early victory that the media downplayed as a fluke, but was at least real enough to send Tim Pawlenty scrambling from the race.

But several verbal gaffes and failed fact-checks later, Bachmann found herself struggling to raise money or her position in the standings, which cratered as skittish GOP voters dashed from one favorite candidate to another and dumped Bachmann in favor of the swashbuckling Texan Rick Perry just days after she won the straw poll. She also had serial staff problems, as Ed Rollins, her campaign manager, left the campaign as quickly as he had joined it, right up through the day she watched her Iowa campaign chairman defect to Ron Paul at a televised rally just days before the caucuses.

Voters who initially felt they had connected with her backed away as they judged her not ready for primetime.

“She lost it in the debates for me,” said Mark Lundberg, the chairman of the Sioux County Republican Party, who remains undecided about whom he’ll caucus for, but knows it won’t be Bachmann.

Larry Steele, from Knoxville, Iowa, said he went to see Bachmann at Floral Touch, but is planning to caucus for Rick Santorum because he seems the most like Mike Huckabee, whom he supported in 2008. “Santorum seems to share my values,” he said.

Despite the ominous signs all around her, Bachmann has refused to show any outward indications of panic, or even concern, right until the very end.

“I will fearlessly stand on the stage and take on Barack Obama, defeat him in the debates, and go on to win and be the next president of the United States,” Bachmann said in front of her hulking campaign bus Monday, likening herself to Ronald Reagan and Margaret Thatcher in her closing campaign argument. “My goal is to be America’s Iron Lady, and that’s what I intend to do.”

As a part of a specific pitch to women voters, Bachmann’s Iowa ad also  makes the connection to Thatcher’s strong-woman, “Iron Lady” persona. “I am women’s best candidate,” she told me in the flower shop. “They  need to vote for Michele Bachmann.”

She also insisted that no matter the results in Iowa, her campaign will go on. “We already bought and paid for our tickets to South Carolina and we already have events scheduled, so we’re on our way,” she said. She also promised to go to New Hampshire and build a 50-state campaign operation, a promise made more difficult to keep amid rumors of a poor fourth quarter of fundraising.

But the news wasn’t all bad for Bachmann on Monday. Just mostly bad.

The Des Moines Register reported that she had won the “Coffee Bean Caucus” at the Hamburg Inn, a diner in Iowa City that famously invites patrons to drop a coffee bean into a canister for their favorite candidate. Bachmann won with 28.8 percent of the GOP vote, beating out Mitt Romney, Ron Paul, and Newt Gingrich, in that order. The only cloud over Bachmann’s victory was Barack Obama’s bean count, which was six times more than hers and more than all of the GOP beans combined.

One person who would have dropped a bean for Bachmann if he had been there was Caleb Sisson, an 18-year-old student and Bachmann convert who was thrilled after meeting her in West Des Moines. “It’s really cool to see her come into town and try to meet everybody,” Caleb said. “I’d absolutely vote for her.” One catch, though. Caleb was in Des Moines on a school trip … from Ohio.


By: Patricia Murphy, The Daily Beast, January 3, 2011

January 3, 2012 Posted by | Election 2012, GOP Presidential Candidates | , , , , , | 1 Comment

Romney’s Decision-Making Algorithm: “It Seems To Me, He Lives His Life With A Finger In The Wind”

Byron York had an interesting report the other day on the process Mitt Romney went through before running for the Senate. He noted, for example, that the Massachusetts Republican traveled to Salt Lake City in 1993 in order to brief several leaders of his church about the policy positions he intended to take.

That in itself may prove controversial, and raise questions about Romney’s appreciation for the church-state line.

But before he did even that, Romney took a poll.

How Romney handled that dilemma is described in a new book, “Mitt Romney: An Inside Look at the Man and His Politics,” by Boston journalist Ronald Scott. A Mormon who admires Romney but has had his share of disagreements with him, Scott knew Romney from local church matters in the late 1980s.

Scott had worked for Time Inc., and in the fall of 1993, he says, Romney asked him for advice on how to handle various issues the media might pursue in a Senate campaign. Scott gave his advice in a couple of phone conversations and a memo. In the course of the conversations, Scott says, Romney outlined his views on the abortion problem.

According to Scott, Romney revealed that polling from Richard Wirthlin, Ronald Reagan’s former pollster whom Romney had hired for the ‘94 campaign, showed it would be impossible for a pro-life candidate to win statewide office in Massachusetts. In light of that, Romney decided to run as a pro-choice candidate, pledging to support Roe v. Wade, while remaining personally pro-life. [emphasis added]

So, let me get this straight. Mitt Romney was pro-choice because a poll told him it was the easiest way to advance his political ambitions? And then he decided he wasn’t pro-choice anymore, when that was the easiest way to advance other political ambitions?

There’s going to be a point later this year when voters will be asked, “How can you trust Mitt Romney?” and the answer, even for Republicans, will be far from clear.


By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, January 2, 2012

January 3, 2012 Posted by | Election 2012, GOP Presidential Candidates, Iowa Caucuses | , , , , , | Leave a comment

Mitt Romney Takes His China-Bashing Campaign To Company That Touts Its Chinese Outsourcing

Well, this is awkward. Mitt Romney, who’s been on the trail recently talking tough on China, is making his last campaign stop of the day before the caucuses at a business that touts the way it outsources much of its manufacturing to China.

Competitive Edge is a firm headquartered near Des Moines that creates and sells promotional items with corporate logos. Romney’s scheduled to make a campaign stop there at around 9:00 PM CT, as part of a day-long tour through the Hawkeye State in the run-up to Tuesday’s caucuses.

What he may not mention: customers of Competitive Edge are choosing a company to make their promotional goods that brags about how much manufacturing work it sends to China.

From the company’s website:

We achieve this goal by utilizing a global network of manufacturers that assist us in sourcing, designing and making our products. It is not surprising that most labor-intensive products are produced in China. What may not be as well known is the level of sophistication and technical expertise that Chinese manufacturers have developed. Competitive Edge takes advantage of these foreign assets and has been working with Chinese manufacturers for over 25 years. As a result of our years of experience and our extensive factory and agent relationships in China, we are able to bring great value and a high level of service to our customer.

The website also features pictures of Chinese employees hard at work on what looks to be Competitive Edge orders. They’re really quite good at sending work to China, the website says:

Our extensive use of cutting edge technology makes it easy for us to collaborate and compete in real time with people and companies located anywhere in the world. Utilizing computer networking, e-mail, teleconferencing and dynamic software applications, conducting business in China is as easy for us as working with domestic companies.

At the Clive location, where Romney will be speaking, the company houses its “Screen Printing and Embroidery Departments.”

On the trail, Romney has said he’d take China before the WTO to be penalized for currency manipulation. Rival Jon Huntsman has warned against that, saying it would start a trade war that would boost prices on Chinese goods and, presumably, making life a lot harder for companies like Competitive Edge.


By: Evan McMorris-Santoro, Talking Points Memo, January 2, 2012

January 3, 2012 Posted by | Election 2012, GOP Presidential Candidates, Iowa Caucuses, Jobs | , , , , | Leave a comment

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