“Bemoaning Their Hardship”: The Billionaire Obama Hate Club Up In Arms Over Obama’s New Tax Plan
So Obama, defending his plan to raise taxes on the rich, says this:
“If you are a wealthy C.E.O. or hedge-fund manager in America right now, your taxes are lower than they have ever been. They are lower than they have been since the nineteen-fifties,” the President said. “You can still ride on your corporate jet. You’re just going to have to pay a little more.”
And billionaire hedge-fund manager Leon Cooperman, a former Obama supporter, responds with this:
“You know, the largest and greatest country in the free world put a forty-seven-year-old guy that never worked a day in his life and made him in charge of the free world … Not totally different from taking Adolf Hitler in Germany and making him in charge of Germany because people were economically dissatisfied.”
Cooperman, like so many of his fellow super-rich, is upset at Obama’s class-warfare “tone.” But in response, as Chrystia Freeland documents in her definitive New Yorker treatment of billionaire Obama hate, Cooperman raises the level of divisive rhetoric light-years beyond Obama’s, straight into a galaxy of ludicrous imbecility. It is beyond irrational to compare Obama with Hitler, or to argue that in any meaningful way his administration has waged class warfare against the rich. If we’ve said it once, we’ve said it a million times, Obama has been great for the rich!
Freeland says it again:
The growing antagonism of the super-wealthy toward Obama can seem mystifying, since Obama has served the rich quite well. His Administration supported the seven-hundred-billion-dollar TARP rescue package for Wall Street, and resisted calls from the Nobel Prize winners Joseph Stiglitz and Paul Krugman, and others on the left, to nationalize the big banks in exchange for that largesse. At the end of September, the S. & P. 500, the benchmark U.S. stock index, had rebounded to just 6.9 per cent below its all-time pre-crisis high, on October 9, 2007. The economists Emmanuel Saez and Thomas Piketty have found that ninety-three per cent of the gains during the 2009-10 recovery went to the top one per cent of earners.
Vein-popping blood-pressure spikes are hard to avoid when one reads about the hurt feelings of America’s billionaires. Seriously, if you’re looking for ways to provoke real socialist revolution in the United States, the behavior investigated by Freeland is surely the best way to go about it, outside of mass-mailing invitations to a storm-the-barricades party to every American on food stamps. Flaunt your entitlement! Bemoan the hardship of your 14.1 percent tax rate! Complain that you are not getting enough credit for endowing the local symphony!
But the real wonder is that Obama doesn’t take more advantage of this obvious public relations bonanza. It is impossible to imagine anything that could play better for Obama with working-class voters than the fact that “hostility toward the President is particularly strident among the ultra-rich.” Franklin D. Roosevelt knew what to do with banker ire — just a few days before Election Day in 1936 he famously told a crowd at Madison Square Garden that “I welcome their hatred.”
Obama should be doing the same.
Or maybe he is. Because if we want to understand why polls show Obama up comfortably in Ohio, at least part of the reason has to be that Wall Street billionaires hate him — and like the other guy.
By: Andrew Leonard, Salon, October 1, 2012
“Words Not Intended For Voters To Hear”: Precious Moments Of Republican Candor Reveal The Party’s Core
The time-tested tactic used by Republicans to deflect attention from their most unpopular positions — especially on Medicare, Medicaid, Social Security, and taxes — is to cry “class warfare,” as if the workers were laying siege to the citadels of finance. It is a complaint that distracts from substantive debate and disguises the real vector of aggression against middle-class and low-income Americans over the past 30 years.
That old style of misdirection has gone stale, thanks to the emergence of audio and video clips that feature prominent Republican candidates voicing their true views… in private, of course. Caught on tape during those fleeting moments, they reveal intentions that they clearly believe most voters should never hear.
Mitt Romney’s ugly unguarded blather at a $50,000-a-plate fundraiser in Boca Raton — where he expressed scorn for the “47 percent” who supposedly pay no taxes, glom onto entitlements, and consider themselves “victims” — instantly became notorious when Mother Jones released a pirate videotape that went viral. His harsh (and highly inaccurate) words confirmed negative public opinion about him personally. But there is no shortage of fresh evidence, very little of which has received commensurate attention, that Romney’s remarks reflect core attitudes among the elite in his party.
Consider the audiotaped speech delivered by Romney’s running mate, Paul Ryan, when he appeared several years ago to pay homage to the late author Ayn Rand at a meeting of her acolytes in the Atlas Society. Although the Wisconsin congressman now insists that he disdains Rand, mostly because of her atheism, he can be heard on tape saying that he measures every important vote according to whether it advances her ideology of selfishness. He denounces Social Security and Medicare, which he constantly promises to “save” and “protect” in public, as “collectivist” schemes that violate individual freedom.
Or consider Tommy Thompson, the former Wisconsin governor and Secretary of Health and Human Services now running for the U.S. Senate in his home state. Appearing before a Tea Party group several months ago, Thompson offered a boast. “[W]ho better than me, who’s already finished one of the entitlement programs” — by which he meant welfare reform — “to come up with programs to do away with Medicaid and Medicare?”
Around the same time, Linda McMahon, the World Wrestling Entertainment tycoon and Republican candidate for an open Senate seat in Connecticut, told a Tea Party outfit that she wants to “sunset” Social Security, which means in Washington jargon that she wants a chance to kill it. Surely that would come as a very unpleasant surprise to the working taxpayers who have underwritten the program for decades as a pillar of their retirement.
Obnoxious, offensive, extreme — such blurted gaffes used to be heard mainly from the likes of Rush Limbaugh, who need not worry whether he can win over a majority of the electorate. But the advent of the Tea Party, with its far-right agenda and insistence on purity, has given full voice to the GOP’s core crankiness. These are people who proudly pour vitriol on families surviving through unemployment and food stamps.
Naturally, Republican worthies like Ryan, Thompson, and McMahon protest, usually via paid spokespersons, that they would never, ever damage America’s most vital programs, and that their empathy for the struggles of the middle class is boundless. Amazingly, they seem to think nobody heard what they candidly told their Tea Party supporters. And if anyone mentions those embarrassing tapes, they will scream ” class warfare.”
It just may not work this year.
By: Joe Conason, The National Memo, October 1, 2012
“Standing Up To China, Romney Style”: MItt Invested In Chinese Company Fined Thousands For Selling Fake College Tests
In the latest Romney campaign reboot, the candidate has made a central theme of President Obama’s alleged softness on China. “Fewer Americans are working today than when President Obama took office,” the narrator of a Romney ad released last week intones. “It doesn’t have to be this way if Obama would stand up to China. China is stealing American ideas and technology.”
The 30-second ad, titled “Stand up to China,” says Obama failed on no fewer than seven occasions to stop China’s violations of intellectual-property laws. FactCheck.org notes that the ad mangles the facts, but beyond that, Romney’s whole focus on China carries perils, not least because he has invested in and profited off of Chinese companies known for violating American businesses’ intellectual property.
Romney’s recently released tax returns show that he invested in the parent company of Youku, a sort of Chinese YouTube that was a haven for pirated movies and TV shows, though the company is now apparently cleaning up its act.
Another notable Romney investment, which has so far gone unnoticed, was in a Chinese private education company that was cited repeatedly in the late 1990s for selling bootleg American graduate school entrance exams and was forced by a Chinese court to pay hundreds of thousands of dollars in fines in a landmark copyright case.
According to his 2011 personal financial disclosure form, Romney’s blind trust invested between $15,001 and $50,000 in New Oriental Education & Technology Group, the largest provider of private educational services in China, though his recent tax returns show he sold at least some of that position. Among other services, New Oriental helps Chinese students prepare for the tests needed to gain admission to American universities, like the Test of English as a Foreign Language (TOEFL), the GRE or the GMAT, the business school entrance exam. The company has said that as many as seven in 10 mainland-Chinese students who attended foreign universities have gone through one of the schools’ test-preparation classes.
A 2001 expose in the the Chronicle Of Higher Education reported that New Oriental, “like other Chinese test-preparation schools, has been pirating and selling Educational Testing Service publications — thus compromising their integrity and costing the testing service money by violating its copyrights.” Educational Testing Service (ETS) is the private nonprofit giant responsible for the TOEFL, the GRE and other tests.
ETS began to get suspicious of New Oriental in late 2000 when they saw “a surprising increase in Chinese student test scores,” University Wire reported at the time. In response, ETS sent a letter to American universities warning them to give extra scrutiny to Chinese students. In November of that year, Chinese authorities raided the school where they “seized thousands of illegal copies of the tests that were being sold logo and all in the bookstore of the New Oriental School,” as the AP reported at the time. The tests sold in the bookstore included “live questions” being used on current tests, leading ETS to believe that New Oriental had paid people to take the tests, memorize the questions, and later reproduce them. The school had already been caught hawking bootleg tests in 1996 and 1997, and despite apologies and promises to stop each time, it apparently did not.
In 2001, ETS and the Graduate Management Admission Council (GMAC), which administers the GMAT, sued New Oriental in Chinese court. In 2002, the school’s founder and president, who had developed a high profile as China’s leading expert on gaining admission to foreign universities, abruptly resigned. The Straits Times reported the resignation was due to the ETS piracy scandal, but the school denied this.
In 2003, a court in Beijing ruled in ETS and GMAC’s favor and forced New Oriental to pay about $1.2 million in fines, along with over $100,000 in legal fees, and required the school to turn over all illegal copies of ETS and GMAC materials, and publish an apology. New Oriental appealed, and while the decision was upheld, the fine was reduced to $774,000 in 2004.
The ruling became a landmark case in Chinese intellectual property law, as it was the first case argued after China joined the World Trade Organization and a rare win for a plaintiff. “This ruling should give international companies more confidence about operating in China and having their significant intellectual property rights recognized and enforced by the Chinese courts,” the president of GMAC said in a statement. The company has since changed its ways; in 2007, New Oriental and ETS made up when they entered into a licensing agreement.
Since September 2006, when New Oriental began trading on the New York Stock Exchange under the symbol EDU, the price has skyrocketed from just over $5 to $17.44 a share today.
It’s not clear from Romney’s personal financial disclosure forms when his trust purchased the position in New Oriental, and the Romney campaign did not respond to a request for comment. New Oriental did not respond to a request either, but has told Businessweek that it doesn’t comment on past litigation. As the campaign has often said of Romney’s investments, his trust, like that of most other politicians, is “blind,” meaning he has no control over how the money is invested and cannot see where his money is kept. While this is true, it still puts Romney in an awkward position to be making money off a company that has a poor record on intellectual property at the same time as he criticizes his opponent for being weak on intellectual property violators.
And while Romney now says that it’s not fair to criticize investments in his blind trust, he did just that in 1994 when running against the late Sen. Ted Kennedy. “The blind trust is an age-old ruse,” Romney said then. “You can always tell a blind trust what it can and cannot do. You give a blind trust rules.”
By: Alex Seitz-Wald, Salon, October 1, 2012
“No Daylight”: From “Opposition” To “Red Line”, Justification For Another MId-East War
Since Mitt Romney has decided, for reasons that are a bit obscure, to make foreign policy a major focus of his campaign at this sensitive moment of the presidential contest, it’s time once again to note a rather jarring contradiction nestled in the center of his and his party’s policies and rhetoric. It’s nicely presented once again in a Wall Street Journal op-ed signed by the Republican nominee himself.
It begins with the usual “American exceptionalism” rap: the world is safe if the United States not only walks tall, but walks alone in its status as the source of all virtue and power:
Since World War II, America has been the leader of the Free World. We’re unique in having earned that role not through conquest but through promoting human rights, free markets and the rule of law. We ally ourselves with like-minded countries, expand prosperity through trade and keep the peace by maintaining a military second to none.
But Obama doesn’t get it, and isn’t maintaining our towering-colossus position:
President Obama has allowed our leadership to atrophy. Our economy is stuck in a “recovery” that barely deserves the name. Our national debt has risen to record levels. Our military, tested by a decade of war, is facing devastating cuts thanks to the budgetary games played by the White House. Finally, our values have been misapplied—and misunderstood—by a president who thinks that weakness will win favor with our adversaries.
But what is the supreme example of Obama’s “weakness” and refusal to keep the United States the world’s sole supremely sovereign super-power? Refusing to outsource our Middle Eastern policy to Bibi Netanyahu:
The president began his term with the explicit policy of creating “daylight” between our two countries. He recently downgraded Israel from being our “closest ally” in the Middle East to being only “one of our closest allies.” It’s a diplomatic message that will be received clearly by Israel and its adversaries alike. He dismissed Israel’s concerns about Iran as mere “noise” that he prefers to “block out.” And at a time when Israel needs America to stand with it, he declined to meet with Prime Minister Benjamin Netanyahu.
In this period of uncertainty, we need to apply a coherent strategy of supporting our partners in the Middle East—that is, both governments and individuals who share our values.
So the first step Romney urges is “placing no daylight between the United States and Israel.” And that clearly includes a shift in U.S. policy towards Iran away from opposition to acquisition of nuclear weapons to the “red line” Netanyahu is demanding, acquisition of “nuclear capability,” which because of the vague nature of the definition of “capability,” means a pre-justification for military action against Tehran any old time now.
Put aside for a moment the arguments about Iran’s ultimate intentions and its alleged historically unique indifference to nuclear deterrence, or about the actual balance of military power in the Middle East. Forget if you can the calamitous consequences, not only to regional peace and stability, but to the U.S. and global economies, of war with Iran.
Think about this: Mitt Romney is running for president on a platform of indistinguishable and conjoined exceptionalism for the U.S. and Israel. And because Israel faces a vastly greater military threat, this means America would abandon its own independence of action and consign its fate to Bibi Netanyahu, a man whose views on peace and security are highly controversial in Israel itself.
Republican foreign policy thinking has had to go through a lot of twists and turns to arrive at this extraordinarily anomalous place. But the bottom line seems to be remarkably similar to the one embraced twelve years ago by George W. Bush and his advisors, who took office determined to wage war with Iraq, despite the cover of all the middle-school bully-boy talk of preventing war by plotting it constantly.
If Romney wins and the United States supinely follows Bibi into yet another, and this time vastly more dangerous, Gulf war, nobody can say we were not warned.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Anmal, October 1, 2012
“No, We Don’t Dig It”: What We Still Don’t Know About Mitt Romney’s Taxes
With the documents Mitt Romney released recently, we know a bit more about his taxes.
We know, for instance, that Romney paid a rate of 14.1 percent on $13.7 million in income on his 2011 tax return, which he achieved by purposely overpaying. Though he was entitled to deduct $4 million in charitable contributions, Romney deducted only $2.25 million to keep his tax rate above 13 percent.
(Romney, it has been pointed out, could file an amended return to claim the full deduction after the election. We’ve contacted the Romney campaign, and Michele Davis, a spokeswoman, assured us he would not do so.)
We know, according to a letter from his accountants at PricewaterhouseCoopers, that Romney has paid state and federal income taxes each year since at least 1990, which would seem to disprove Senate Majority Leader Harry Reid’s claim in July that Romney had not paid any taxes for a decade.
And we know that Romney’s tax rate since 1990 never dipped below 13.66 percent, according to his accountants. Romney paid an average effective tax rate between 1990 and 2009 of 20.2 percent.
But there’s still a lot we don’t know. “I think most of the major questions we had before [last Friday] are still out there,” said Brian Galle, a tax law professor at Boston College. Here are a few:
How much did Romney make before 2010?
While Romney has disclosed his average effective tax rate for the last two decades, he hasn’t said how much he earned in those years or how much — the dollar amount — he paid in taxes.
That’s an important distinction, said Daniel Shaviro, a tax law professor at New York University. Various tax-planning strategies may have enabled Romney to reduce his adjusted gross income in some years.
In 2008, for instance, investors everywhere lost money when the stock market tanked. Romney may have carried those losses forward, Shaviro said, and used them to reduce his adjusted gross income in 2009. While we know Romney paid at least 13.66 percent of the income he recorded on his taxes in a given year, we don’t know what percentage he paid of the money actually took home that year.
Why is Romney’s IRA worth so much?
Much of Romney’s wealth sits in his IRA, which is worth as much as $101.6 million. It’s a remarkable number, in part because Romney would have been able to contribute a maximum of $30,000 a year to his IRA while he was at Bain, from 1984 to 1999.
Galle, the Boston College tax law professor, said the most likely explanation for the outsized IRA is that Romney put in shares in Bain investments that swelled in value. According to the Wall Street Journal, Bain allowed employees to buy a special class of shares in the firm’s investments. The shares didn’t cost very much, but they could be extremely lucrative. In one deal, the Journal reported, “some Bain employees saw a 583-fold increase” in the value of their shares — an astronomical return. Because the shares were in IRAs, the profits could be plowed into new Bain deals without subtracting taxes.
Romney also may have beefed up his IRA by contributing “carried interest” — a share of the profits in funds managed by Bain. As Reuters reported earlier this year, any potential carried interest would “not be disclosed in his personal financial summary or on a federal income tax return.” In other words, even if Romney released all his tax returns, we still might not know exactly how he accumulated his huge IRA.
What about Romney’s investments offshore?
We know many of Romney’s IRA investments are based in foreign countries but it’s hard to know how much. He valued one account in the Cayman Islands at anywhere between $5 million and $25 million.
One thing we do know is that Romney pays a far lower tax rate overseas than he does here. According to Quartz, Romney paid only 2.4 percent in foreign taxes in 2011 on the $3.5 million he earned abroad.
We also know where Romney’s current overseas investments are held —Bermuda, the Cayman Islands, Switzerland, Luxembourg — and many of the firms he has invested in, including a state-owned Chinese oil company and a Chinese bank that Romney’s family trusts sold their stake in last year. But we don’t have a lot of other important documentation, including forms would show whether Romney had, as the New York Times has reported, “over the years declared all of his foreign income to the IRS in a timely manner.”
The Wall Street Journal has reported that Romney’s offshore IRA investments likely helped him avoid a little-known tax called the unrelated business income tax. The tax, “meant to discourage tax-exempt entities such as an IRA or college endowment fund from unfairly competing with for-profit, taxpaying entities by operating a business without paying taxes on it,” could have hit Romney at up to 35 percent.
The Romney campaign seems unlikely to release any more information about his finances, but that hasn’t kept reporters from digging it up. Bloomberg, for instance, analyzed securities filings to report last Thursday that Romney has set up a type of trust known as an “I Dig It” trust — a legal way for Romney to avoid estate and gift taxes and pass some of his fortune onto future generations.
By: Theodoric Meyer, Propublica, October 1, 2012
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