Mitt Romney likes to say that this election is a battle for “the soul of America.” He’s right — just not in the way that he thinks.
Romney asserts that President Obama wants to “fundamentally transform America,” turning the country “into a European-style entitlement society.” In fact, Romney and his Republican presidential rivals have a far more radical transformation in mind. They envision a dramatically shrunken federal government and a dangerously unraveled social safety net.
Theirs is not the self-styled compassionate conservatism of a George W. Bush. “It is compassionate to actively help our fellow citizens in need,” Bush said in 2002. “It is conservative to insist on responsibility and results.”
A decade and a Tea Party later, active help — at least active help from the federal government — is out of Republican fashion. Of course Republicans have traditionally favored state over federal involvement, but the degree of proposed retrenchment during the current campaign is remarkable — and troubling.
Consider Romney’s answer to a question at the last debate about the safety net in an age of austerity:
“Well, what we don’t need is to have a federal government saying we’re going to solve all the problems of poverty across the entire country, because what it means to be poor in Massachusetts is different than Montana and Mississippi and other places in the country,” Romney said.
“And that’s why these programs, all these federal programs that are bundled to help people and make sure we have a safety net, need to be brought together and sent back to the states. And let states that are closest to the needs of their own people craft the programs that are able to deal with the needs of those folks.”
Romney went on to tick off specific programs: food stamps, housing vouchers, Medicaid, emergency heating assistance.
“What unfortunately happens is, with all the multiplicity of federal programs, you have massive overhead with government bureaucrats in Washington administering all these programs. Very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them,” Romney added.
Nice talking point, if it were true. As the Center for Budget and Policy Priorities has demonstrated, the major programs for the poor are extraordinarily efficient, even taking into account state as well as federal administrative costs. In 2010, 96.2 percent of Medicaid spending went for care; 94.6 percent of food stamp spending went for food; and 90.9 percent of housing program dollars went to rental assistance for low-income tenants.
Even for the man who ran Bain Capital, that shouldn’t seem like massive overhead.
The more important point is the degree to which Romney & Co.’s back-to-the-states approach would shred protections for the most vulnerable Americans. Romney’s observation about the differences between being poor in Massachusetts and Mississippi underscores the importance of a national safety net. Mississippi has more needs, and less money, than does Massachusetts.
Indeed, it was Richard Nixon who, reacting to reports about pockets of deep poverty and hunger in a wealthy nation, instituted a guaranteed federal minimum income for the elderly and disabled (Supplemental Security Income, or SSI) and set national eligibility levels for food stamps.
Imagine what would have happened during the recession if, say, food stamps — now known as SNAP (Supplemental Nutrition Assistance Program) — were a fixed block grant to states, as Romney envisions. Needs rose dramatically, but states, already strapped for cash, would not have been able to meet them.
Romney, the former Massachusetts governor, understands the importance of the federal role — or once did. His observations about the need to return control to states came in the context of a discussion about the Low Income Home Energy Assistance Program (LIHEAP).
Yet Gov. Romney, in 2003, called on Congress to “support the highest possible funding,” adding, “We need to get the funds to those who need help the most to stay safe and warm this winter.”
Indeed, one of Romney’s leading supporters in New Hampshire, Republican Sen. Kelly Ayotte, is lobbying for more LIHEAP money — funding, by the way, that the president proposed cutting, and that already comes in the form of a block grant to states that decide how to use it.
“It’s an important safety net,” Ayotte told Newsweek. “I’m not against having a safety net for those who are most in need.”
Is Romney? Are his rivals? Because the impact of their plans would be to shred the safety net. Making sure that doesn’t happen is the real battle for America’s soul.
By: Ruth Marcus, Opinion Writer, The Washington Post, January 12, 2012
January 15, 2012
Posted by raemd95 |
Election 2012 | Kelly Ayotte, Mitt Romney, Politics, Poverty, Republicans, SNAP, Social Safety Nets, Teaparty |
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Last week, when we first looked at the former Massachusetts governor’s claim that “we helped create over 100,000 new jobs,” his campaign provided a list that included the growth in jobs from three companies that it said Romney helped to start or grow while at Bain Capital: Staples (a gain of 89,000 jobs), The Sports Authority (15,000 jobs), and Domino’s (7,900 jobs).
As we noted, “This tally obviously does not include job losses from other companies with which Bain Capital was involved — and are based on current employment figures, not the period when Romney worked at Bain.”
Glenn Kessler live chatted with readers on this topic. Read the chat transcript now.
In Saturday’s ABC News-Yahoo debate, Romney expanded on the list: “There’s a steel company called Steel Dynamics in Indiana, thousands of jobs there; Bright Horizons Children’s Centers, about 15,000 jobs there; Sports Authority, about 15,000 jobs there, Staples alone, 90,000 employed. That’s a business that we helped start from the ground up.”
Last week, when we looked at this 100,000 figure, we evaluated it along with Romney’s claims about President Obama’s job creation figures, which overall earned One Pinocchio. Earlier, we had ruled that it was all but impossible to prove or disprove Romney’s claims on job creation. But in light of Romney’s comments during the debate and some additional research, we have come to a new assessment.
The Facts
By all accounts, Romney was a highly successful venture capitalist. While running Bain Capital, he helped pick some real winners, earning his investors substantial returns. High finance is a difficult subject to convey in a sound bite, so Romney evidently has chosen to focus on job creation.
This is a mistake, because it overstates the purposes of Bain’s investments and has now led Romney into a factually challenging cul-de-sac.
Romney never could have raised money from investors if the prospectus seeking $1-million investments from the super wealthy had said it would focus on creating jobs. Instead, it said: “The objective of the fund is to achieve an annual rate of return on invested capital in excess of the returns generated by conventional investments in the public equity market and the private equity market.”
Indeed, the prospectus never mentions “jobs,” “job,” or “employees.”
Second, it has become increasingly hard to understand how Romney’s personal involvement played a role in creating these jobs, especially years later. He clearly is adding up all the jobs now at the companies that are thriving, arguing these numbers far outweigh the job losses at companies that failed. But as the Wall Street Journal reported Monday, the failure rate one can attribute to Bain Capital changes significantly if one counts five years from an investment or eight years from an investment.
Bain, in fact, rejected the Journal’s analysis, saying it “uses a fundamentally flawed methodology that unfairly assigns responsibility to us for many events that occurred in companies when we did not own or control them, and disregards dozens of successful venture capital investments.”
In other words, Bain appears to be rejecting a central premise of Romney’s calculation — that years after the investment ended, one can attribute either good news or bad news about the company to Bain’s involvement.
Romney is generally careful to use phrases such as “helped create.” He also acknowledged Saturday that we “were investors to help get them going.” But even that overstates the case.
Bain may have provided management expertise or money when others would not, but a company such as Staples — one of the biggest contributors to Romney’s job figures — was largely the brainchild of entrepreneur Tom Stemberg. Stemberg presumably should get most of the credit for inventing a killer new business category. (Left unsaid, of course, is all the jobs that might have been lost at small stationery stores unable to compete with the low prices of Staples, Office Depot and so forth.)
Moreover, should Romney even get any credit for jobs at Domino’s, as his campaign claims? The deal in which Bain Capital bought Domino’s closed on Dec. 21, 1998, according to a Domino’s news release that referred to “Milt Romney.” Less than two months later Romney had left Bain to run the Salt Lake Olympics, meaning he had barely any role in running the company once it became part of the Bain investment portfolio.
When Romney made a run for the governorship, the Boston Globe reported in 2002 that he had not been involved in the details of many deals toward the end of his Bain experience: “These days, Romney can say he hasn’t inked a deal in many years. Even during the end of his tenure at Bain, from 1994 to 1999, he played the role of CEO and rainmaker rather than delving into the details of buyouts.”
Interestingly, when Romney ran for the Senate in 1994, his campaign only claimed he had created 10,000 jobs. In one ad, a narrator said: “Mitt Romney has spent his life building more than 20 businesses and helping to create more than 10,000 jobs. So when it comes to creating jobs, he’s not just talk. He’s done it.”
Now, apparently, those 10,000 jobs have increased tenfold, apparently in part because of Bain investments in which Romney had at best a tangential role.
In the 2008 presidential campaign, as far as we can tell, Romney never highlighted any number for jobs created, having learned a lesson from how ruthlessly he was attacked by Sen. Edward Kennedy in that Senate race for jobs lost through Bain investments.
We asked the Romney campaign for a response, but did not get one.
The Pinocchio Test
Romney certainly has a good story to tell about knowing how to manage a business, spotting opportunities and understanding high finance. But if he is to continue to make claims about job creation, the Romney campaign needs to provide a real accounting of how many jobs were gained or lost through Bain Capital investments while the firm managed these companies — and while Romney was chief executive. Any jobs counted after either of those data points simply do not pass the laugh test.
By: Glenn Kessler, The Washington Post, January 10, 2012
January 15, 2012
Posted by raemd95 |
Election 2012 | Bain Capital, Corporations, Jobs, Mitt Romney, Politics, Vulture Capitalism, Workers |
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Following Mitt Romney on the campaign trail is a painful yet familiar experience.
Painful, because of the wince-inducing moments when you realize that, for all of Romney’s success in imitating human attributes, there remain glitches in the matrix that reveal him to be different from the rest of us.
In the past few days alone, he claimed to take pleasure in firing people, expressed his phony fears about getting a “pink slip” from the job that swelled his wealth to nearly a quarter-billion dollars and asserted misleadingly that he worked an “entry-level” job after Harvard Business School.
Romney further alleged that “I never thought I’d get involved in politics” — though he has been in politics for two decades. And he claimed that he didn’t seek reelection as Massachusetts governor because “that would be about me” — as if running for president, which he did instead, was a gesture of sacrifice and altruism.
Romney, the conservative writer Jonah Goldberg argued this week, has an “authentic inauthenticity problem.”
And that is precisely why his struggle is so familiar. He is the political reincarnation of Al Gore, whose campaign I covered with an equal amount of cringing a dozen years ago.
To see Romney, in his Gap jeans, laughing awkwardly at his own jokes and making patently disingenuous claims, brings back all those bad memories of 2000: “Love Story.” Inventing the Internet. Earth tones. Three-button suits. The alpha male in cowboy boots. The iced-tea defense. The Buddhist temple. The sighing during the debate.
It’s familiar, as well, to Michael Feldman, a longtime Gore aide who watched his boss get undone by the inauthentic label. “When an impression like that hardens, you’re communicating into a stiff wind,” he told me. “These caricatures can form impressions that are really hard to turn around.”
If anything, Romney’s problem is greater than Gore’s because it is rooted in his frequent repositioning on issues such as abortion, gay marriage and health care. In substance, Romney’s troubles may turn out to be closer to John Kerry’s: As my colleague Greg Sargent has written, the undermining of Romney’s business acumen by the attacks on his work at Bain Capital is similar to the undoing of Kerry’s record as a Vietnam War hero by the Swift Boat Veterans for Truth.
Romney, with his many homes, also shares certain rich-guy vulnerabilities with Kerry. Newt Gingrich used an image of Kerry windsurfing in an ad attacking Romney this week, closing with a supposed insult: “Just like John Kerry, he speaks French, too.”
But in temperament and style, Romney is closest to Gore, another politician’s son from Harvard with pedantic tendencies who, in public, never quite seems comfortable.
The media tend to assign each candidate a character flaw as a form of shorthand (John McCain was volatile, George W. Bush was dopey, Obama is all talk). Ominously, Romney’s descriptions are the same applied to Gore 12 years ago: assuming “personas,” going through “makeovers,” attempting “regular-guy” traits, exhibiting “robotic” behavior and issuing new versions, such as “Romney 3.0.”
For Romney, the problem now becomes that reporters, and opponents, are perpetually on the lookout for new examples to add to his dossier of awkwardness. “It’s a self-perpetuating cycle,” explained Chris Lehane, who sought, with limited success, to help Gore defy his “wooden” image. “You’re trying so hard to think through what you’re going to say that you get mental handcuffs every time you speak. You’re so nervous about the archetype that you fall into the archetype.”
In Romney’s case, there is already abundant support for the archetype: his belief that “corporations are people,” his talk about hunting “small varmints,” the story about driving with the family dog in a kennel strapped atop the Romneys’ car, his attempted $10,000 bet with Rick Perry, his singing “Who let the dogs out?,” his pretending to be pinched on the behind by a waitress, his bizarre jokes about Hooters and hollandaise sauce, and his tendency to ask debate moderators for protection from his opponents.
None of those is, by itself, disqualifying — and, as in Gore’s case, not all the examples are fair. But, combined with Romney’s frequent fluctuations on the issues, his awkwardness has left an impression that he is a phony and not to be trusted. Romney isn’t necessarily doomed — Gore, after all, received more votes than the other guy — but this much seems clear: Over the next 10 months, Romney will be getting the Gore treatment.
By: Dana Milbank, Opinion Writer, The Washington Post, January 13, 2012
January 14, 2012
Posted by raemd95 |
Election 2012, GOP Presidential Candidates | Al Gore, media, Mitt Romney, Newt Gingrich, Politics |
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Back in the late-1950s there was a TV show called “The Millionaire” about a mysterious rich man, named John Beresford Tipton, who would anonymously give checks for $1 million to total strangers.
Usually, the recipient was a poor schlub who was over the top with joy until it turned out that the money didn’t buy happiness. Clearly, we were all better off in our humble homes, clustered around our 14-inch TVs.
I am bringing this up because the current presidential race has demonstrated that a million dollars is nothing — nothing — these days. Nothing! A million dollars is what they give you for designing the best pantsuit on a reality TV show.
Now, if you want to impress people, you have to be a billionaire, for sure. There are about 400 billionaires in the United States, and, while some of them are famous, like Bill Gates and Warren Buffett, many have profiles so low that their own families may not recognize them. Really, it could be the guy living down the block, if your block happened to contain a 30,000-square-foot Tudor with 10 bathrooms.
But even the humblest billionaire wants to be on the campaign trail this year. They’re everywhere. Rick Santorum has Foster Friess, a mutual fund manager who likes the fact that Santorum starts the day with 50 push-ups. (“That’s the kind of energy level that the Republican Party needs right now.”) Friess has vowed to give Santorum’s super-sized political action committee at least a million. Which certainly is the least he could do for all that exercise.
Newt Gingrich’s “super PAC” got $5 million from billionaire Sheldon Adelson, a casino owner, in what Adelson’s associates said was an act of friendship. I certainly hope so, since giving money to the Gingrich-for-president effort at this point is like betting that the New York Jets will win the Super Bowl. You would think that a casino owner would know what futile acts of desperation look like.
Jon Huntsman’s dad is a billionaire, which didn’t seem to help as much as you would think. (Once again: not buying happiness.) Mitt Romney is probably only a quarter-of-a-billionaire, which, in this company, is kind of the equivalent of playing the harmonica for lunch money on the street.
But it’s hard to be sure about Mitt’s wealth because he has refused to release his tax returns. This is something every major presidential candidate in recent history has done, but so what? If every major presidential candidate in recent history jumped off the roof, would you expect Mitt to do that? How many other major presidential candidates in recent history came from the business sector? How many drove to Canada with their family dog strapped to the roof of the car? So, really, stop with the sweeping generalizations.
Romney does appear to have more billionaire pals than anybody — 10 percent of all the billionaires in the country are already giving money to Mitt, including Sam Zell, Destroyer of Great Newspapers, and John Paulson, a hedge fund operator who made a killing in 2007 by betting against the housing market. Forbes, which put Paulson at No. 17 on its list of richest people in America in 2011, said he had made $4.9 billion in the preceding year.
People, how much TV time do you think a person like that could buy if he put his mind to it? Seriously, by September we could be seeing entire networks devoted to nothing but Mitt Romney. Every week, Mitt will solve crimes, save patients with extremely rare diseases, build a house for a deserving family, help Zooey Deschanel with her dating problems and win bids for abandoned storage lockers all around the country.
Not that President Obama won’t have enough money to buy a channel of his own, if he wants one. So far, the president is behind Mitt in the billionaire donor sweepstakes, but he is still doing fine, thank you very much. So well, in fact, that a spokesman for the re-election campaign has been forced to denounce the idea that Obama will raise $1 billion. There’s that number again.
All these billionaires would not be so worrisome if the Supreme Court had not totally unleashed their donation-making power in the Citizens United case. Gingrich, who loved that decision, was furious when Mitt’s rich friends chipped in to run anti-Newt ads in Iowa.
He declined to acknowledge that the two things had any connection whatsoever.
“In fact, this particular approach, I think, has nothing to do with the Citizens United case. It has to do with a bunch of millionaires getting together to run a negative campaign, and Governor Romney refusing to call them off and refusing to be honest about it,” he told MSNBC.
Except for the part where the law that the court overturned had to do with keeping a bunch of millionaires from getting together to run a negative campaign. But, really, if they’re only millionaires, how much harm could they do?
By: Gail Collins, Op-Ed Columnist, The New York Times, January 13, 2012
January 14, 2012
Posted by raemd95 |
Election 2012 | Citizens United, Mitt Romney, Newt Gingrich, Politics, Republicans, Rick Santorum, SCOTUS, Super PAC's |
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“And greed — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A.”
That’s how the fictional Gordon Gekko finished his famous “Greed is good” speech in the 1987 film “Wall Street.” In the movie, Gekko got his comeuppance. But in real life, Gekkoism triumphed, and policy based on the notion that greed is good is a major reason why income has grown so much more rapidly for the richest 1 percent than for the middle class.
Today, however, let’s focus on the rest of that sentence, which compares America to a corporation. This, too, is an idea that has been widely accepted. And it’s the main plank of Mitt Romney’s case that he should be president: In effect, he is asserting that what we need to fix our ailing economy is someone who has been successful in business.
In so doing, he has, of course, invited close scrutiny of his business career. And it turns out that there is at least a whiff of Gordon Gekko in his time at Bain Capital, a private equity firm; he was a buyer and seller of businesses, often to the detriment of their employees, rather than someone who ran companies for the long haul. (Also, when will he release his tax returns?) Nor has he helped his credibility by making untenable claims about his role as a “job creator.”
But there’s a deeper problem in the whole notion that what this nation needs is a successful businessman as president: America is not, in fact, a corporation. Making good economic policy isn’t at all like maximizing corporate profits. And businessmen — even great businessmen — do not, in general, have any special insights into what it takes to achieve economic recovery.
Why isn’t a national economy like a corporation? For one thing, there’s no simple bottom line. For another, the economy is vastly more complex than even the largest private company.
Most relevant for our current situation, however, is the point that even giant corporations sell the great bulk of what they produce to other people, not to their own employees — whereas even small countries sell most of what they produce to themselves, and big countries like America are overwhelmingly their own main customers.
Yes, there’s a global economy. But six out of seven American workers are employed in service industries, which are largely insulated from international competition, and even our manufacturers sell much of their production to the domestic market.
And the fact that we mostly sell to ourselves makes an enormous difference when you think about policy.
Consider what happens when a business engages in ruthless cost-cutting. From the point of view of the firm’s owners (though not its workers), the more costs that are cut, the better. Any dollars taken off the cost side of the balance sheet are added to the bottom line.
But the story is very different when a government slashes spending in the face of a depressed economy. Look at Greece, Spain, and Ireland, all of which have adopted harsh austerity policies. In each case, unemployment soared, because cuts in government spending mainly hit domestic producers. And, in each case, the reduction in budget deficits was much less than expected, because tax receipts fell as output and employment collapsed.
Now, to be fair, being a career politician isn’t necessarily a better preparation for managing economic policy than being a businessman. But Mr. Romney is the one claiming that his career makes him especially suited for the presidency. Did I mention that the last businessman to live in the White House was a guy named Herbert Hoover? (Unless you count former President George W. Bush.)
And there’s also the question of whether Mr. Romney understands the difference between running a business and managing an economy.
Like many observers, I was somewhat startled by his latest defense of his record at Bain — namely, that he did the same thing the Obama administration did when it bailed out the auto industry, laying off workers in the process. One might think that Mr. Romney would rather not talk about a highly successful policy that just about everyone in the Republican Party, including him, denounced at the time.
But what really struck me was how Mr. Romney characterized President Obama’s actions: “He did it to try to save the business.” No, he didn’t; he did it to save the industry, and thereby to save jobs that would otherwise have been lost, deepening America’s slump. Does Mr. Romney understand the distinction?
America certainly needs better economic policies than it has right now — and while most of the blame for poor policies belongs to Republicans and their scorched-earth opposition to anything constructive, the president has made some important mistakes. But we’re not going to get better policies if the man sitting in the Oval Office next year sees his job as being that of engineering a leveraged buyout of America Inc.
By: Paul Krugman, Op-Ed Columnist, The New York Times, January 12, 2012
January 14, 2012
Posted by raemd95 |
Class Warfare | Bain Capital, Corporations, Economy, Income Inequality, Mitt Romney, Politics, Republicans, Vulture Capitalism, Wealthy |
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