Mitt Romney at Bain Capital

Posted on April 30th, 2012 in Politics by Robert Miller

Is this man Presidential?

Presidential candidate Mitt Romney refuses to release his income tax records beyond the last two years and he will not talk about his dealings when he was at Bain Capital. Yet, he claims to have created “100,000” jobs through the process of “creative destruction.” Given this claim, it’s worth emphasizing that, for a private equity firm to make money and provide high yield returns to its investors and partners, the number one enemy of such an organization is labor. If you keep that one fact in mind, then you can understand why Romney doesn’t like to talk about his history at Bain and his absurd claim to have created “100,000 jobs.” Anyone running a private equity firm that did not reduce labor costs in the new company, sometimes by firing workers and hiring them back at reduced wages, would himself be fired or voted out by the company partners. With that in mind, it’s a little easier to see that what counts for job creation by Romney, takes place for example,  when a retirement fund that made profits through Bain investments goes out and hires someone or takes on a retiree for benefits. And since Bain is a private company, they have no obligation to make their actions and investments known to the public, which suits Romney just fine.

While Romney tries to make a case that he was a job creator at Bain, others have done enough homework to show that this was not the case, and a recent article in City Pages by Pete Kotz provides a good summary of Romney’s record as a “job creator.” Just reading that article alone will help you understand why candidate Romney doesn’t want to talk about his history at Bain Capital. Texas Governor Rick Perry, former Presidential candidate, claimed that Mitt Romney practiced “vulture capitalism” at Bain, but author Pete Kotz has a more accurate description of Romney’s role at Bain as an “American Parasite.” Private equity firms take perfectly healthy striving companies and destroy them by saddling them with excessive debt and management fees. Indeed, Romney parasitized healthy manufacturing companies many of which went bankrupt.  Given the stories that Kotz describes, we can only imagine how many manufacturing jobs would have stayed here in America, if we had made it illegal to have “leveraged buyouts” back in the early days of the Reagan Presidency, when this activity first got underway. But, unchecked, the leveraged buyout contributed to the destruction of manufacturing in America.

When Romney ran against Ted Kennedy for his Senate seat in 1994, early in the campaign, it seemed like he might be successful. But then Kennedy learned of Bain Capital’s purchase of a company called “AMPAD” (American Pad and Paper) in 1992 and how Bain had loaded the company with debt and management fees and laid off workers. Kennedy ran television ads of interviews with workers who had lost their jobs at AMPAD and won re-election rather handily. So here’s a good question for Romney: how many more manufacturing jobs would exist in America today if there had been no leveraged buyouts and no private equity firms?  The man who believes that corporations are people should have no trouble responding to this form of interrogation, yet he wants to avoid the discussion altogether. Leveraged buyouts evolved into private equity firms and contributed to the predatory reach of business and finance. Private equity firms–the destroyer of labor. If somehow we could rewrite the Old Testament, that line should be in there somewhere and Moses should be asked to deal with it.   As for Romney and his Bain Capital experience, will the mainstream media cooperate with Romney and let him remain silent on his doubtful past as a job creator? I am betting that the Occupy movement has now raised income inequality in American consciousness, such that Romney will not be able to dodge the fact that his actions at Bain contributed to the pathological state of our income distribution and the silly boring state of our politics, where trivial topics rule the airwaves.  Romney is betting that people won’t give a damn and he can throw enough advertising at the problem to distract voters from thinking his job creation history. But, Romney made his fortune destroying businesses in ways that should have been illegal;  we need to help fan the flames of the Occupy Movement to return our country to economic sanity. We need to rebuild America and force our financial institutions to play a role in financing that task, or form new banks and force them to do it. Had we broken free from the rescue of our banks and created new ones, with restrictions on how they could use the money, we would already be seeing signs of solid recovery and not the anemic one we are in now where people at the top are thinking about debt, rather than thinking about jobs.
RFM

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This year it’s the primaries that count

Posted on April 28th, 2012 in Politics by Robert Miller

Representative Jason Altmire D-PA voting in primary 2012 (Keith Srakocic - AP)

One of the major problems with the Democratic party is that it has too many conservative members, too many Blue Dog Democrats that  vote with Republicans on many issues and often support positions of the Tea Party–anti-healthcare and anti-climate change legislation to name just two issues. They are fiscal conservatives at a time when our government needs to respond very differently to our economic circumstances–they are Hooverites! While many conservative Democrats come from Southern states, others come from states like Pennsylvania and other regions of the Midwest. At a time when it should be obvious that our economy is badly in need of a second stimulus to address jobs, student loans and mortgage foreclosures, like their Republican counterparts, conservative Democrats are interested in solving the Great Recession by austerity, which can only make things worse. To endorse a strategy other than providing stimulation to the economy is dispiriting to the entire nation–not just the unemployed. In these times, those that have employment worry about losing their job and by hearing stories about the unemployed (which our mainstream media tries to hide from us), the gloom of helplessness cuts an ever wider swath through our culture. There’s a reason they call it a depression. Couple the issue of decent jobs to the ongoing mortgage crisis, which must also be solved before we can think about trimming the sails of our economy, and one can begin to see the depth of the problem and why governments are in a state of denial and paralysis.  But these issues are not insoluble. We tackled similar problems during the Great Depression and the longer the current recession goes on, the more we are in danger of sliding backwards rather than moving forwards in our economy.  Add to that the idea that we have to fix the planet and you realize we must bring back Rosy the Riveter, while adding Ronny the Riveter to the new mix. We need to make things again, and use the ingenious, creative character of an energized Middle Class to fan the flames of a new economy. It is too dangerous for us to have an economy dominated by the financial industry, which does not serve Main Street very effectively. The bankers know this as well as anyone.  Paul Krugman has an editorial in the NY Times describing how leaders in Europe and the United States are finally beginning to admit that the austerity plans they have imposed on their economies are making things worse, even though they probably won’t do anything about it, at least not yet. British Prime Minister David Cameron is experiencing sinking popularity as he tries to explain why he didn’t follow the economic prescription described in the Economics 101 textbook–good old fashioned Keynesianism. Belt-tightening works for a person who is in debt and wants to cut spending to balance their own personal economic circumstance, but it does not work for a nation, because then everyone’s belt gets tightened whether they like it or not. Greek Economist Yanis Varifoukas explains this simple concept very effectively. Anyone comparing  the impact of austerity on a person’s single budget, claiming the outcome would be the same for the economy at large, has flunked Economics 101, and he/she is in need of remedial course work.

One reason we still have a hard time doing something more effective about our chronic unemployment situation is that within the Democratic Party, we have too many conservatives and not enough liberal, more progressive-minded representatives: the Republicans are against anything that would work, hoping to have the bad economy stick around until the election this fall, thus leading perhaps  to a victory by Romney over Obama and a trifecta for the party, giving them command of the Senate, House of Representatives and the Presidency. Then they can get busy and really screw things up. But conservative Democrats are also part of the problem.

You only have to look what’s happening in Europe to understand that they are going down the wrong path; by doubling down on austerity they are doubling down on misery. When recession hits, it’s the responsibility of  government to temporarily create demand to soften the blow and in the United States we did that when Obama was first elected and it worked. But it wasn’t big enough or long enough, as the magnitude and depth of our recession wasn’t properly calibrated. But, with the huge Republican victory of 2010, the Democrats were forced out of control in the House and are in the process of rebuilding their party, so the interesting elections to watch are those taking place in the Democratic primaries–right now.  Of course, we have the recall election of Governor Scott Walker  in Wisconsin at the head of our watch list, but we already have results in a few test cases in the country.  The NYT reported on the results of a Democratic primary in Pennsylvania, where two conservative House Democrats, Representatives Jason Altmire and Tim Holden lost out to two more progressive opponents. In Altmire’s case, he lost to fellow incumbent Mark Critz in a district that had been redrawn because of census realignment: both representatives ran against each other for the same, newly created district. Tim Holden lost out to newcomer Matt Cartwright. In each case the opponents criticized their more conservative incumbents for their opposition to the healthcare bill and votes against global climate change issues. As the Times pointed out in their article “The ouster of the Democratic incumbents — and the tough primaries being waged against some House Republicans — suggest that redistricting ultimately is going to send more liberal Democrats and more conservative Republicans to the House.” If the Democrats gain control of the House, through primaries like those in Pennsylvania, it will mean that a more progressive Democratic Party will be in charge. What this might mean too, is instead of Obama leading the party in a more progressive direction, something his policy of triangulation has largely prevented, the newly elected Democrats in Congress, could mean that a more progressive party would be leading Obama in a direction more favorable for progressive causes. So instead of hope that arrived on the day Obama was elected in 2008, we might have hope through more effective legislation that deals with the real problems of this country and avoids the devastating budget cuts scheduled to go in place during the first of 2013. This year, the Democratic primaries are everything, though redistricting has probably created lots of safe seats for Republicans and Democrats. It has been estimated that the effects of redistricting means that only about 100 of the 435 seats are up for grabs–true contests. However, the Blue Dog Democrats, who peaked at 54 members in 2010, have dropped to 23 and could drop further in the future. If the Supreme Court rules against The Affordable Health Care Act, these new progressive Democratic candidates could be further energized with the message that a single payer plan is already waiting for us–it’s “Medicare for All”–a simple one page bill.
RFM

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More light on the shady American Legislative Exchange Council (ALEC)

Posted on April 22nd, 2012 in Politics by Robert Miller

The shocking Republican resurgence in the election of 2010 resulted in a number of states that achieved single party control of state legislative bodies, together with the election of a compliant, same-party governor. For the Republican party, a political trifecta was achieved in a number of states, including Wisconsin. Neighboring Minnesota escaped the same disastrous outcome by less than 10,000 votes with Mark Dayton, a Democrat and former Senator, beating out Republican Tom Emmer and Independence Party candidate Tom Horner. Since the election, Dayton has kept his finger in the leaky Minnesota dikes of sensible governance.  With the current Republican party gripped in the clutches of its Tea Party iteration, you might assume that any state in which all three branches of government are under their control, would produce a legislative  agenda unfavorable to women, minorities, unions, students, democrats, seniors, gays, lesbians and young people, including of course many of the Tea Party members themselves: self-interest is not a feature of Tea Party legislative priorities. Photo-ID laws are now in place in many states and they are designed to deny voter rights, especially for those likely to vote in the Democratic column. Minnesota will have a referendum vote on a Photo-ID law this fall and if passed, it will become part of the state constitution. Minnesota has been one of the states with a relatively clean electoral system and no one has brought a legitimate example forward about fraudulent voting in the state.

Shortly after the 2010 election dust had cleared, we began to hear about the American Legislative Exchange Council (ALEC) and their fabrication of legislative templates for state laws that can be passed in the wink of an eye or the nod of a head. ALEC-sponsored laws were rapidly introduced by Republican legislators only too eager to cooperatively destroy our tattered democracy. ALEC recruits right-wing state legislators and meets with them, in sessions not open to the public, where they extract promises from legislators to introduce ALEC’s template laws into their state legislative process to further advance their neoliberal cause. But just within the past week, public outrage over the  shooting death of Trayvon Martin and its connection to Florida’s “Stand Your Ground” law (coupled with the very sluggish legal system in Florida) has started to focus on how such a law got on the books in the first place. The “Stand Your Ground Law” was promoted by the National Rifle Association (NRA), working through ALEC, who is also responsible for introducing photo-ID voting laws and disbanding unions for public employees, something that caught our attention in Wisconsin and was associated with massive public demonstrations in Madison, followed by an ongoing effort to recall Wisconsin Governor Scott Walker  (Walker has assisted the recall effort when  many members of his staff, during his position as Milwaukee County Executive, now face criminal charges for mishandling funds: this is discussed in Ruth Conniff’s article in The Progressive– stay tuned on this one).

Now ALEC is becoming more infamous through increased exposure from websites like ALEC EXPOSED a site that separately lists the state legislators and governors that have ties to ALEC and Color of Change. Democracy Now recently did a piece on ALEC, adding additional insight into their very shady techniques and raising serious doubts as to whether they are in violation of the rules for tax-exempt organizations. On Sunday, April 22, the NYT has a front page, above- the-fold article on ALEC, revealing more about how the organization works and the corporate influence in the design of specific bills. The article points out that ALEC has 2000 state legislators as members and all but one are Republicans. These legislators get their marching orders from ALEC and push these bills through their state houses, without acknowledging the source of the legislation. ALEC is funded almost entirely by major corporations and, in the wake of the national outrage over the Trayvon Martin shooting, many of these corporations have announced they will no longer support ALEC (according to the ALEC EXPOSED site, Coke, Pepsi, Kraft, McDonald’s, Wendy’s, Intuit, Reed-Elsevier, and others have dropped their membership in the American Legislative Exchange Council (ALEC) and in turn ALEC quickly announced they will no longer push “social legislation” (one of their next projects is to get a law passed that prevents family members of patients who die, as a result of taking FDA-approved drugs, from suing the pharmaceutical company, giving drug companies increased motivation to introduce new, unproven drugs at an accelerated pace).   ALEC’s immediate drop of its social agenda, whatever that mans, is an attempt to stop the bleeding of corporate sponsorship. What the Trayvon Martin shooting case has demonstrated, lest there was some doubt, is that our mainstream media are brain dead. The only chance left for Democracy in America is through the power of the internet to make issues go viral and have demands land on the desks of corporate officers–no corporate CEO wants to stand up for issues that will hurt sales and diminish profits. Put ALEC in the way of corporate profits through a national boycott of the products of the corporation (foundations are more problematic–but they have boards) and profits will prevail every time. But if we have found a medium that can challenge groups like ALEC, we are also confronted, by the rise of social media within the internet, a force which seems to be converting Americans into narcissistic tools of capitalism.

RFM

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