A takeover artist his whole life, Mitt Romney is now trying to take over America itself.
Adam Rifkin stashed this in America!
Stashed in: Economics!, Politics!, Wealth!, Greed!, Strategery, Awesome, Ethics, Pirates!, poli, Obama!, politics, Republicans, Paul Ryan, Jerk Store, Pants on fire!, Rolling Stone!, I pity the fool., Sociopaths, Ayn Rand
Recently Jared posted about the government bailout that saved Mitt Romney.
Now, Matt Taibbi's cover story takes that one step further.
Mitt was a real-life Gordon Gekko: he took over companies, saddled them with debt, used that excuse to fire lots of people, cut lots of projects, sold the newly lean companies, and made hundreds of millions of dollars doing it over and over.
Matt Taibbi goes into mind numbing detail.
Mitt Romney is NOT a flip flopper on the one issue he cares about: MONEY.
It is his goal to take over an America saddled with debt, and do the same thing he did to all the companies he saddled with debt: fire lots of people, cut lots of programs, and make lots of money doing so.
Romney's Wall Street experience colors his every move.
In that sense, he's been astonishingly consistent. He believes greed is good.
This really spoke to me:
And this is where we get to the hypocrisy at the heart of Mitt Romney. Everyone knows that he is fantastically rich, having scored great success, the legend goes, as a "turnaround specialist," a shrewd financial operator who revived moribund companies as a high-priced consultant for a storied Wall Street private equity firm.
But what most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns:
Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.
By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions – placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place.
That same man then runs for president riding an image of children roasting on flames of debt, choosing as his running mate perhaps the only politician in America more pompous and self-righteous on the subject of the evils of borrowed money than the candidate himself. If Romney pulls off this whopper, you'll have to tip your hat to him: No one in history has ever successfully run for president riding this big of a lie. It's almost enough to make you think he really is qualified for the White House.
Debt is not bad if it helps America get through tough economic times.
Matt Taibbi explains why Mitt doesn't see himself as inconsistent:
That cultlike zeal helps explains why Romney takes such a curiously unapologetic approach to his own flip-flopping. His infamous changes of stance are not little wispy ideological alterations of a few degrees here or there – they are perfect and absolute mathematical reversals, as in "I believe that abortion should be safe and legal in this country" and "I am firmly pro-life."
Yet unlike other politicians, who at least recognize that saying completely contradictory things presents a political problem, Romney seems genuinely puzzled by the public's insistence that he be consistent. "I'm not going to apologize for having changed my mind," he likes to say. It's an attitude that recalls the standard defense offered by Wall Street in the wake of some of its most recent and notorious crimes: Goldman Sachs excused its lying to clients, for example, by insisting that its customers are "sophisticated investors" who should expect to be lied to. "Last time I checked," former Morgan Stanley CEO John Mack sneered after the same scandal, "we were in business to be profitable."
Romney believes the public should expect to be lied to.
He's in the business of winning, not truth.
In the old days, making money required sharing the wealth...
...with assembly-line workers, with middle management, with schools and communities, with investors. Even the Gilded Age robber barons, despite their unapologetic efforts to keep workers from getting any rights at all, built America in spite of themselves, erecting railroads and oil wells and telegraph wires. And from the time the monopolists were reined in with antitrust laws through the days when men like Mitt Romney's dad exited center stage in our economy, the American social contract was pretty consistent: The rich got to stay rich, often filthy rich, but they paid taxes and a living wage and everyone else rose at least a little bit along with them.
But under Romney's business model, leveraging other people's debt means you can carve out big profits for yourself and leave everyone else holding the bag. Despite what Romney claims, the rate of return he provided for Bain's investors over the years wasn't all that great. Romney biographer and Wall Street Journal reporter Brett Arends, who analyzed Bain's performance between 1984 and 1998, concludes that the firm's returns were likely less than 30 percent per year, which happened to track more or less with the stock market's average during that time. "That's how much money you could have made by issuing company bonds and then spending the money picking stocks out of the paper at random," Arends observes. So for all the destruction Romney wreaked on Middle America in the name of "trying to make money," investors could have just plunked their money into traditional stocks and gotten pretty much the same returns.
The only ones who profited in a big way from all the job-killing debt that Romney leveraged were Mitt and his buddies at Bain, along with Wall Street firms like Goldman and Citigroup. Barry Ritholtz, author of Bailout Nation, says the criticisms of Bain about layoffs and meanness miss a more important point, which is that the firm's profit-producing record is absurdly mediocre, especially when set against all the trouble and pain its business model causes. "Bain's fundamental flaw, at least according to the math," Ritholtz writes, "is that they took lots of risk, use immense leverage and charged enormous fees, for performance that was more or less the same as [stock] indexing."
Mitt Romney was one of the men who changed the social contract.
He made himself wealthy at the expense of others and spent a lot of money to make sure what he was doing was legal and protected.
And here's how Romney destroyed jobs:
In the end, Bain never bothered to come up with a plan for how KB Toys could meet the 21st-century challenges of video games and cellphone gadgets that were the company's ostensible downfall. And that's where Romney's self-touted reputation as a turnaround specialist is a myth.
In the Bain model, the actual turnaround isn't necessary. It's just a cover story. It's nice for the private equity firm if it happens, because it makes the acquired company more attractive for resale or an IPO. But it's mostly irrelevant to the success of the takeover model, where huge cash returns are extracted whether the captured firm thrives or not.
"The thing about it is, nobody gets hurt," says Patnode. "Except the people who worked here."
If Romney does to America what he did to the firms he took over, we'll all get hurt.
Also, Romney was the recipient of several government bailouts:
Which brings us to another aspect of Romney's business career that has largely been hidden from voters: Romneys personal fortune would not have been possible without the direct assistance of the U.S. government.
The taxpayer-funded subsidies that Romney has received go well beyond the humdrum, backdoor, welfare-sucking that all supposedly self-made free marketeers inevitably indulge in. Not that Romney hasn't done just fine at milking the government when it suits his purposes, the most obvious instance being the incredible $1.5 billion in aid he siphoned out of the U.S. Treasury as head of the 2002 Winter Olympics in Salt Lake – a sum greater than all federal spending for the previous seven U.S. Olympic games combined. Romney, the supposed fiscal conservative, blew through an average of $625,000 in taxpayer money per athlete – an astounding increase of 5,582 percent over the $11,000 average at the 1984 games in Los Angeles.
In 1993, right as he was preparing to run for the Senate, Romney also engineered a government deal worth at least $10 million for Bain's consulting firm, when it was teetering on the edge of bankruptcy.
But the way Romney most directly owes his success to the government is through the structure of the tax code. The entire business of leveraged buyouts wouldn't be possible without a provision in the federal code that allows companies like Bain to deduct the interest on the debt they use to acquire and loot their targets.
He used the government to enrich himself, and he is trying to again.
There is no good reason why private equity should be as lucrative as it is:
Adding to the hypocrisy, the money that Romney personally pocketed on Bain's takeover deals was usually taxed not as income, but either as capital gains or as "carried interest," both of which are capped at a maximum rate of 15 percent. In addition, reporters have uncovered plenty of evidence that Romney takes full advantage of offshore tax havens: He has an interest in at least 12 Bain funds, worth a total of $30 million, that are based in the Cayman Islands; he has reportedly used a squirrelly tax shelter known as a "blocker corporation" that cheats taxpayers out of some $100 million a year; and his wife, Ann, had a Swiss bank account worth $3 million. As a private equity pirate, Romney pays less than half the tax rate of most American executives – less, even, than teachers, firefighters, cops and nurses. Asked about the fact that he paid a tax rate of only 13.9 percent on income of $21.7 million in 2010, Romney responded testily that the massive windfall he enjoys from exploiting the tax code is "entirely legal and fair."
Essentially, Romney got rich in a business that couldn't exist without a perverse tax break, and he got to keep double his earnings because of another loophole – a pair of bureaucratic accidents that have not only teamed up to threaten us with a Mitt Romney presidency but that make future Romneys far more likely. "Those two tax rules distort the economics of private equity investments, making them much more lucrative than they should be," says Rebecca Wilkins, senior counsel at the Center for Tax Justice. "So we get more of that activity than the market would support on its own."
This is not the free market. This is rules distorted toward people with weath.
Romney is a pirate.
And here's the punch line: Romney represents the new divide.
Listen to Mitt Romney speak, and see if you can notice what's missing. This is a man who grew up in Michigan, went to college in California, walked door to door through the streets of southern France as a missionary and was a governor of Massachusetts, the home of perhaps the most instantly recognizable, heavily accented English this side of Edinburgh. Yet not a trace of any of these places is detectable in Romney's diction. None of the people in any of those places bled in and left a mark on the man.
Romney is a man from nowhere. In his post-regional attitude, he shares something with his campaign opponent, Barack Obama, whose background is a similarly jumbled pastiche of regionally nonspecific non-identity. But in the way he bounced around the world as a half-orphaned child, Obama was more like an involuntary passenger in the demographic revolution reshaping the planet than one of its leaders.
Romney, on the other hand, is a perfect representative of one side of the ominous cultural divide that will define the next generation, not just here in America but all over the world. Forget about the Southern strategy, blue versus red, swing states and swing voters – all of those political clichés are quaint relics of a less threatening era that is now part of our past, or soon will be. The next conflict defining us all is much more unnerving.
That conflict will be between people who live somewhere, and people who live nowhere. It will be between people who consider themselves citizens of actual countries, to which they have patriotic allegiance, and people to whom nations are meaningless, who live in a stateless global archipelago of privilege – a collection of private schools, tax havens and gated residential communities with little or no connection to the outside world.
Mitt Romney isn't blue or red. He's an archipelago man. That's a big reason that voters have been slow to warm up to him. From LBJ to Bill Clinton to George W. Bush to Sarah Palin, Americans like their politicians to sound like they're from somewhere, to be human symbols of our love affair with small towns, the girl next door, the little pink houses of Mellencamp myth. Most of those mythical American towns grew up around factories – think chocolate bars from Hershey, baseball bats from Louisville, cereals from Battle Creek. Deep down, what scares voters in both parties the most is the thought that these unique and vital places are vanishing or eroding – overrun by immigrants or the forces of globalism or both, with giant Walmarts descending like spaceships to replace the corner grocer, the family barber and the local hardware store, and 1,000 cable channels replacing the school dance and the gossip at the local diner.
Romney represents the stateless archipelago of privilege. I'm unnerved.
I did notice they went out of the way to show black people, Hispanic people, and women at the GOP convention:
The convention was an unparalleled triumph of mythmaking, or Mittmaking. Romney was so eager to woo Hispanic votes and join the cascade of speakers sharing immigrant family tales, from Rick Santorum to Ann Romney to Marco Rubio, that he made his father, George Romney, sound Hispanic.
“My dad had been born in Mexico,” he said, “and his family had to leave during the Mexican revolution.”
But so far it isn’t working. It’s a strange moment when Americans relate less to the tall, handsome, rich prince of a famous political family than to a skinny black dude of mixed parentage who spent a lot of time in Indonesia.
Given the president’s lackluster performance and the listless economy, Romney should be killing it. But he’s an odd duck running with a dissimulating striver. Ryan’s harsh stances toward women, the old and the poor are on record, so he set a new standard for gall when he intoned, “The truest measure of any society is how it treats those who cannot defend or care for themselves.”
The convention rebranding as compassionate conservatives is encouraging in that it shows that Republicans feel they are at a disadvantage with their Ayn Rand disdain for altruism, their Kempian trickle-down economics stripped of the humanity of Jack Kemp, their worship of the wealthy as the engine of economic prosperity.
Expected to draw Catholic votes, Ryan has been forced to renounce the atheist, Russian-born Rand, but he channeled her when he talked about wanting to define his own happiness, adding, “That’s freedom, and I’ll take it any day over the supervision and sanctimony of the central planners.”
Ryan’s lies and Romney’s shape-shifting are so easy to refute that they must have decided a Hail Mary pass of artifice was better than their authentic ruthless worldview.
It was all for show.
Where was George W Bush? Where was Bush 41? Cheney? Rumsfeld? Sarah Palin?
It's as if they rewrote their past to be the party of immigrants who made it big.