“Invisible And Untaxed”: How Mitt Romney Made A Fortune Off The Auto Bailout
Faced with the hard facts that “bin Laden is dead and General Motors is alive,” as Vice President Biden always says, Mitt Romney has resorted to claiming that Obama followed his lead on the auto industry bailout. “I know [Obama] keeps saying, you wanted to take Detroit bankrupt,” he said during this week’s debate at Hofstra University. “Well, the president took Detroit bankrupt.” Romney’s right, in a way — both his plan and Obama’s plan envisioned the auto companies going through a period of bankruptcy restructuring. But there’s a key difference: Obama’s approach was to use government dollars to prop up the auto companies until they could stand on their own again — something that Romney, like other Republicans in the Tea Party’s anti-spending thrall, adamantly opposed as dangerous government intervention in private industry.
But it turns out that Romney should know firsthand that this kind of intervention can be successful, as a new report shows that he and his wife made at least $15.3 million courtesy of Obama’s auto bailout. According to a Greg Palast, who followed the paper trail for the Nation, Romney and his wife made the money via an investment in a hedge fund that saw astronomical returns on its investments in an auto parts maker that would have gone under absent the president’s rescue operation.
Delphi, the auto parts company, was once part of General Motors but was spun off in 1999. It foundered on its own and declared bankruptcy in 2005, at which point hedge funds came in and bought up the company’s old debt. Among them was Elliott Management, a giant in the industry run by GOP mega-donor Paul Singer. Romney was an investor. Elliott and the other hedge funds were able to buy Delphi’s toxic debt for a fraction of their face value, around 20 cents on the dollar. In 2009, as bailout negotiations were underway, Elliott used their bonds to buy large shares in the company, again for pennies (this time for about 67 cents per share). Not only would Delphi have gone out of business along with its largest customer, GM, but the parts maker got at least $2.8 billion directly from the taxpayer-funded Troubled Assets Relief Program (TARP). In 2011, Elliott and the other hedge funds took Delphi public at $22 a share, making a whopping 3,000 percent return on their investment of less than 70 cents a share.
So how much did Romney make? His personal financial disclosure forms say he and Ann Romney had at least $1 million invested, but the disclosure rules are so vague that it could be far more. Palast sketches out the possible windfall:
It is reasonable to assume that Singer treated the Romneys the same as his other investors, with a third of their portfolio invested in Delphi by the time of the 2011 initial public offering. This means that with an investment of at least $1 million, their smallest possible gain when Delphi went public would have been $10.2 million, plus another $10.2 million for each million handed to Singer — all gains made possible by the auto bailout.
But that’s just the beginning. Since the November 2011 IPO, Delphi’s stock has roared upward, boosting the Romneys’ Delphi windfall from $10.2 million to $15.3 million for each million they invested with Singer… The Romneys’ exact gain, however, remains nearly invisible—and untaxed—because Singer cashed out only a fragment of the windfall in 2011.
By: Alex Seitz-Wald, Salon, October 19, 2012
“Another Miscalculation”: Romney’s Odd Insistence On Using Bill Clinton As A De Facto Spokesperson
I’ve written before about the Romney campaign’s odd insistence on using Bill Clinton as a de facto spokesperson. Every so often, Team Romney highlights a comment by Clinton as a critique of President Obama, as if Clinton wasn’t an avowed and enthusiastic supporter of the president. The rationale, I suppose, is to be able to claim bipartisan discontent with Obama. The problem is that this does nothing more but boost Clinton’s credibility by turning him into a nonpartisan figure of repute. And as we saw during the Democratic National Convention, he can use this “referee” status to effectively hammer Mitt Romney and the Republican Party.
Indeed, it was after Clinton’s devastating speech that I expected Republicans to leave the former president out of the election. Turns out, they couldn’t resist: Today, Team Romney is distributing a clip of Clinton in Ohio, where he said that the economy has not been “fixed” under President Obama.
In their eagerness to use Clinton against Obama, it’s obvious that the Romney campaign failed to listen to what came after that statement.
Here’s the transcript:
“This guy ran Bain Capital and is a business guy, and he’s hiding his budget? That ought to tell you something. Well, he’s hiding his taxes, too, but he’s hiding his taxes in the years when he earned ordinary income. He’s given us two years when he was just running for president. And, he’s hiding whether he would have signed the Lilly Ledbetter act. He’s hiding everything. He doesn’t want you to think about him. He wants you to think, ‘Oh this economy is terrible. I’m a jobs guy.’ And as President Obama said in the debate, if I brought you a deal to Bain Capital and I said, fund my new business, I’ll give you the budget sometime in the future, just trust me on that, you wouldn’t give me one red cent, and we should not give him one vote on that.”
This is a potent message—it’s a variation on the “sketchy deal” language adopted by Obama—and by giving credibility to Clinton, Romney is making it stronger.
By: Jamelle Bouie, The American Prospect, October 19, 2012
“Too Many Mitt’s”: Shameless And Shape Shifting; To Know Him Is To Mistrust Him
It will have zero effect on a certain Romney landslide in Utah, but the particular wording and reasoning of the Salt Lake Tribune‘s editorial endorsing Barack Obama will resonate far and wide. The “Trib” chose to write its repudiation of semi-favorite-son Mitt with the tone of someone familiar with a pol who’s sold his birthright for a mess of pottage:
Nowhere has Mitt Romney’s pursuit of the presidency been more warmly welcomed or closely followed than here in Utah. The Republican nominee’s political and religious pedigrees, his adeptly bipartisan governorship of a Democratic state, and his head for business and the bottom line all inspire admiration and hope in our largely Mormon, Republican, business-friendly state.
But it was Romney’s singular role in rescuing Utah’s organization of the 2002 Olympics from a cesspool of scandal, and his oversight of the most successful Winter Games on record, that make him the Beehive State’s favorite adopted son. After all, Romney managed to save the state from ignominy, turning the extravaganza into a showcase for the matchless landscapes, volunteerism and efficiency that told the world what is best and most beautiful about Utah and its people.
Sounds like the buildup to an endorsement, eh? Not hardly.
In short, this is the Mitt Romney we knew, or thought we knew, as one of us.
Sadly, it is not the only Romney, as his campaign for the White House has made abundantly clear, first in his servile courtship of the tea party in order to win the nomination, and now as the party’s shape-shifting nominee. From his embrace of the party’s radical right wing, to subsequent portrayals of himself as a moderate champion of the middle class, Romney has raised the most frequently asked question of the campaign: “Who is this guy, really, and what in the world does he truly believe?”
The evidence suggests no clear answer, or at least one that would survive Romney’s next speech or sound bite. Politicians routinely tailor their words to suit an audience. Romney, though, is shameless, lavishing vastly diverse audiences with words, any words, they would trade their votes to hear.
The editorial eventually gets around to some measured positive comments about Barack Obama, but it’s clear from the headline–“Too Many Mitts”–that its main thrust is aimed at showing not everybody in Utah is buying this particular snowstorm.
The president is entertaining audiences today by referring to his opponent with his vast number of serpentine manuevers as someone suffering from “Romnesia.” The Salt Lake Tribune begs to differ: Mitt hasn’t forgotten a thing; he’s just doing whatever the political markets call for, and hoping voters suffer from Romnesia.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, October 19, 2012
“A Hot New Republican Lie”: The Government Spends More On Welfare Than Everything Else
You are probably going to start hearing a hot new lie from Republicans soon: The government spends more money on welfare than on anything else, even the military!
This is apparently the conclusion of a new report from the nonpartisan Congressional Research Service (the same organization that recently said that Obama’s supposed “welfare reform gutting” was totally legal!), though in fact it is a claim made by Senate Republicans who are abusing the nonpartisan research of the CRS. Here’s the story in the Weekly Standard, complete with charts from the Republicans on the Senate Budget Committee. Here’s the story in the Daily Caller, which is more upfront about all the material coming from Senate Republicans and not from the CRS. And here’s a Weekly Standard follow-up with some new charts.
They claim that “welfare spending” is the “largest budget item” for the federal government, with the fed spending $745.84 billion, more than is spent on Social Security, Medicare and “non-war defense.” (Hah.) Plus: “In all, the U.S. government, including federal and state governments, spends in excess of $1 trillion on welfare.”
That is a lot of welfare spending! Those poor people must be rolling in dough, right?
In the context of political discussions, “welfare” traditionally (as in pretty much always) refers specifically to Temporary Assistance for Needy Families, or TANF, the federal program that was created in 1996 to replace the Aid to Families With Dependent Children program — also known as “welfare” — that had existed since the New Deal. This is what people refer to when they say “welfare caseloads” and “welfare rolls,” and when conservatives accuse Obama of gutting “welfare reform” they are referring to TANF. The federal government spends $16.5 billion a year on TANF and, combined, the states spend another $10 billion.
Most of the federal budget is “defense” and war spending and Medicare, which should be common knowledge but that fact is regularly obscured by right-wingers who claim to be deficit hawks but refuse to cut defense spending and are scared of proposing real reductions to our programs for old people. This is how you get poll results where people think most of what the federal government spends money on is “foreign aid” and public broadcasting. So this is obviously just an attempt to rebrand “everything else” as “welfare.”
(On a state level, the majority of money goes, unsurprisingly, to healthcare and education. Less is spent on actual “public assistance” than is spent on prisons.)
The con is pretty easy to see when you read the actual CRS report. Senate Republicans are counting 83 separate (and wildly different) programs as “welfare” in order to make the case that the government is spending more on poor people than old people. The majority of this money is Medicaid and CHIP, which are healthcare spending, which is increasing for the same reason that Medicare spending is increasing, which is that healthcare costs are increasing. (And Medicaid is much less generous than Medicare, because it is a program for poor people, not old people.) But so many other things now also count as welfare, including Pell Grants, public works spending, Head Start, child support enforcement, the Child Tax Credit, Foster Care assistance, housing for old people, and much more. They’re also counting the Earned Income Tax Credit, which is, traditionally, the form of “welfare” that conservative Republicans actually support. Basically, all social spending (though specifically not spending on rich old people or on healthcare for veterans with service-related disabilities, which Republicans requested be excluded from the CRS report) now counts as “welfare.”
So we’ve learned that when you count everything — especially Medicaid and CHIP — as “welfare,” it is easy to make it look like “welfare” is very expensive, because healthcare is very expensive. This dumb lie will live forever, and you will hear until the end of your days that “the government spends more on welfare than it does on defense.”
By: Alex Pareene, Salon, October 18, 2012
“You’re Welcome Ladies”: What Mitt Romney Will Actually Do On Abortion
During Tuesday’s debate, Mitt Romney did a sneaky little pivot on the issue of contraception coverage that surely went over the head of most of the people watching. What Romney supports is a Republican bill, the Blunt amendment, that would allow any employer to refuse to include coverage for contraception in employees’ health insurance. For many women, that would mean they would be shut out of getting contraception through the plans that, we should note, they paid for themselves (insurance coverage isn’t a favor your employer does for you, it’s part of your compensation that you get in return for your labor, which means you paid for it). But when it came up in the debate, Romney said this:
“I don’t believe that bureaucrats in Washington should tell someone whether they can use contraceptives or not. And I don’t believe employers should tell someone whether they could have contraceptive care of not. Every woman in America should have access to contraceptives. And—and the—and the president’s statement of my policy is completely and totally wrong.”
See what he did there? Instead of answering the actual question of whether your boss should be able to take your coverage for contraception away, he answered a question nobody ever asked, which is whether the government should ban contraception, or whether your boss should be able to literally come to your doctor’s office during your appointment and grab the prescription for birth control pills out of your hand. In other words, Romney thinks your boss should be able to cancel your coverage for contraception, but he generously acknowledges that your boss shouldn’t actually tell you whether you can use contraception or not. You’re welcome, ladies.
Romney is doing something similar on abortion. On the one hand, he has said multiple times that he wants to see Roe v. Wade overturned and wants to cut off funding for Planned Parenthood; on the other he’s been claiming that he really has no abortion agenda at all; nothing to see here, everything will stay as it is (here’s an ad pitched at women, making the case for Mitt the Moderate on both issues). As Michelle Goldberg tells us, social conservatives haven’t said a peep about Romney’s new abortion moderation. Why? Because they know it’s just for show, and they know what really matters.
I’m sure there are more than a few voters who listen to Romney and say, “Well, he doesn’t seem like one of those radical pro-lifers, so I guess I’m OK with him.” But this is a helpful reminder that what’s in the president’s heart is of only minimal importance. The question “Is Mitt Romney really pro-life?” is all but meaningless, not only because it’s Mitt Romney we’re talking about, and when it comes to policy he has no “real” beliefs that exist outside of the pressures and incentives he has at a given moment. More importantly, when we elect a president we effectively elect an entire party, and the party Mitt Romney represents is the GOP circa 2012, a party more conservative than it has ever been before. There are 3,000 appointed positions in the federal government. Who’s going to fill these positions? Why, Republicans, of course. Who’s going to be running the Department of Health and Human Services? People who are committed to undermining the Affordable Care Act, because that’s what Republicans who work on health care policy believe. Who’s going to be running the Department of Labor? Representatives of business who are committed to destroying unions and reducing protections for workers, because that’s what Republicans who work on labor issues believe. Who’s going to be running the EPA? People who are committed to undermining environmental protections and making it easier for industry to pollute, because that’s what Republicans who work on environmental issues believe.
And if Stephen Breyer or Ruth Bader Ginsburg decides to retire in two years, would President Romney say, “Just find me the best candidate; I don’t really care if they may vote to uphold Roe v. Wade“? Hell no. He’ll do exactly what everyone on both sides expects, which is to locate the next Samuel Alito, someone who went to the best schools of course and has an admirable elite pedigree, but who also was nurtured within the conservative movement, someone who will make the right wing weep with joy. During his confirmation hearings this prospective justice will say solemnly that he shouldn’t comment on issues that might come before the Court, so he really can’t comment specifically on Roe, but rest assured that he’ll faithfully apply the Constitution and just call those balls and strikes, as John Roberts so memorably put it in his own hearings. Democrats will complain, most will vote against the nominee, but he’ll be confirmed. And within weeks, a dozen lawsuits will be filed with the intention of forcing the Court to revisit Roe. Those cases will fly up the judicial ladder with all deliberate speed, and the four conservatives on the Court and their new colleague will finally get the opportunity they’ve been waiting for. And that will be that.
By: Paul Waldman, Contributing Editor, The American Prospect, October 18, 2012
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