The Trouble With Mitt’s Money : Personal Liberty Digest™

February 8, 2012 by John Myers 

UPI

Mitt Romney is a venture capitalist.

“Greed, for lack of a better word, is good. Greed is right, greed works.” — Gordon Gekko, “Wall Street”

“Like Gekko, Romney made his fortune buying and selling companies.” — Salon.com, Jan. 9

Republican Presidential candidate Mitt Romney has accumulated a vast amount of wealth and in doing so probably hasn’t broken a law or bylaw. However, Romney isn’t being honest about what kind of business he operated and he greatly exaggerates his business know-how.

Romney made that money not by building things but by tearing things down. His wealth was created through takeovers, buyouts and mergers. So his claim that he knows how to renew the American dream is disingenuous at best.

Vulture Economics

Romney founded Bain Capital in 1984 and oversaw the operations of the firm for several years. That put him in charge of business takeover operations similar to what the fictional Gordon Gekko ran ruthlessly in Oliver Stone’s movie “Wall Street.”

Private equity firms like Bain shift capital around. They prey on companies that they take over. Sometimes, they burden them with huge debts. Sometimes, they leave them with zero real assets. Many of the companies go bankrupt while the private equity firms pad their balance sheets.

Private equity firms buy companies they plan to bankrupt. They don’t care about how many pink slips are handed out. Their goal is to make sure that creditors collect as little as possible. To accomplish their goal, they transfer the assets of the acquired companies into other companies. That means big profits for private equity firms, but the economy gains nothing.

There is nothing illegal in it (unless, like Gekko, you use insider trading to fatten your profits), but it doesn’t add jobs. If anything, Romney is in the business of slashing jobs to get a bigger bottom line.

Romney Is No Henry Ford

Romney uses his resume to proclaim that he knows how to energize the American economy. Buying companies and trading stocks and bonds doesn’t so much as put a shingle on a barn.

Romney argues that he was helping workers and investors. Ron Paul disagrees. According to Paul, under the terms of a typical leveraged buyout, “The wealth is taken from the middle class and it goes to the select few, who are the insiders.”

Former GOP Presidential candidate and Texas Governor Rick Perry agrees with Paul.

“I happen to think that companies like Bain Capital could have come in and helped these companies if they truly were venture capitalists,” Perry told voters in Lexington, S.C.  “But they’re not — they’re vulture capitalists.”

Romney doesn’t help himself. Not only does he wear expensive suits like Gekko, but he seems to have some of the same attitudes. In “Wall Street,” Gekko says, “If you need a friend, get a dog.”

Romney expressed pretty much the same view when he said: “I like being able to fire people.” Like Gekko, Romney could have added: “Lunch is for wimps.”

On Jan. 19, Sun Sentinel.com ran a column by Bill Press that argued against Romney’s public relations blitz regarding his business expertise.

There’s a big difference between the attacks on John Kerry’s war record in 2004 and the questions raised about Mitt Romney’s business record in 2012. The entire Swift Boat campaign was nothing but one big fat lie. But Gingrich and Perry are only telling the truth. Corporate predators like Bain Capital do, in fact, swoop in on distressed companies, leverage them with debt, strip them down, fire workers or export jobs, and then sell companies off for scrap — while investors walk away with huge profits.

Citing the success of Domino’s, Sports Authority and Staples, Romney brags about creating a “net 100,000 new jobs.” But he’s offered no proof of that claim, and his numbers don’t add enough. The 100,000 figure includes current employers of all three companies, hired long after Bain left the scene. And it doesn’t factor in the thousands of jobs Romney/Bain destroyed by looting other companies. Indeed, out of 77 companies taken over by Bain, the Wall Street Journal found that 22 percent had either filed for bankruptcy or simply shut their doors. The truth is, Romney was never a job creator. He was a wealth creator. And it’s a lie for him to suggest otherwise.

Just as it’s a lie to suggest that he ever lived in fear of getting a “pink slip.” As reported by the Boston Globe, Romney had a deal with Bain Capital that allowed him to return to his former job at his former salary if things didn’t work out. For him, there was zero financial risk.

There is also the contradiction between Romney the venture capitalist and Romney the political leader. As the Governor of Massachusetts, his reduction of the State bureaucracy was modest, as Boston Globe reporters Scott Helman and Michael Kranish report in their book, The Real Romney: “After four years, he reduced the payroll of agencies under his direct control by 603 jobs, according to his administration’s tally.”

Helman and Kranish point out that Romney’s predecessor, Republican Governor William F. Weld “had closed state hospitals, privatized services, and slashed about 7,700 jobs during his first term, though the numbers had later increased when the economy improved.”

The Men That Built America

As for Romney, the businessman, some of you may believe that plundering is straightforward economic Darwinism — a necessary and, ultimately, good thing. If that is true, then Bain Capital not only survived but thrived under Romney’s leadership.

What is not true is that Romney has business experience that builds up corporations and creates a vast number of jobs. Perhaps that is not his fault. He might have been born a century too late.

I came across a list of the richest individuals in history. Nobody alive is on that list. Men like Bill Gates and Warren Buffet are not even in the same ballpark as that crowd. The Americans who are on the list are the magnates of industry who were building their fortunes and the Nation in the early 1900s.

John D. Rockefeller is noted as the richest individual ever. His personal fortune peaked at $318.3 billion in 2007 U.S. dollars.

The second richest ever — Andrew Carnegie — had his personal wealth top out at $298.3 billion, again adjusted for inflation.

Others in the top 10 list include William Henry Vanderbilt, Andrew William Mellon and Henry Ford. They were the builders. The others in the list were plunderers, including: Marcus Licinius Crassus at No. 8 with $170 billion; and Nicholas II, the last tsar of Russia, at No. 3 with $253.5 billion.

What America so desperately needs today are leaders and builders like Carnegie and Ford, not pillagers like Crassus and Nicholas. What disturbs me most about Romney in his campaign for the Presidency is that his business model more closely resembles the latter than it does the former.

Yours in good times and bad,

via personalliberty.com

Interesting perspective.

Obama Signals He May Back Down On Contraception Mandate

Roman Catholic pressure to get the Obama administration to back down from its insistence that they provide free contraceptives in their healthcare plans appeared to be paying off on Tuesday.

Now the White House may be ready to work with the church to find a way to get around the mandate, said David Axelrod, a top adviser to President Barack Obama’s re-election campaign.

"I think we need to lower our voices and get together," Axelrod told MSNBC’s Morning Joe.

“We certainly don’t want to abridge anyone’s religious freedoms, so we’re going to look for a way to move forward that both provides women with the preventative care that they need and respects the prerogatives of religious institutions."

“The president and the administration will move forward, but with a grace period or time period in order to work this thing through,” Axelrod added. “We want to resolve it in an appropriate way.”

Axelrod said Health and Human Services Secretary Kathleen Sebelius had already given churches an exemption to the mandate, against the recommendation of the Institute of Medicine. “The question now is about these extended affiliated institutions … and there are tens of thousands – hundreds of thousands – of women who work in these hospitals and universities who are not Catholic or they may be Catholic and they use birth control.

“The question is whether they are going to have the same package that every other woman in the country has to the same right and access to basic preventive care.”

Axelrod’s stance was in stark contrast to the message put out by White House press secretary Jay Carney less than 24 hours earlier.
“These services are important,” Carney said on Monday. “American women deserve to have access to that kind of insurance coverage regardless of where they work.”

The administration’s insistence that religious organizations provide insurance that covers contraceptives – including abortifacients such as the morning-after pill – has led to claims that Obama is anti-religion. Presidential candidate Newt Gingrich, who converted to Catholicism in 2008, said last week, “The Obama administration is raging a war against the Catholic Church.”

Fellow Catholic candidate Rick Santorum said the church should have fought harder against the whole Affordable Health Care Act. “I told the Catholic bishops years ago when they were … promoting Obamacare, be careful what you wish for,” he said. “They got what they deserved.”

Catholic bishops wrote letters that were read to parishioners from the pulpit over the weekend. “We cannot – we will not – comply with this unjust law,” was the message in the letter from many of the bishops. “People of faith cannot be made second-class citizens.”

Sister Mary Ann Walsh of the U.S Conference of Catholic Bishops likened the regulation to forcing a Jewish deli to sell pork chops while Archbishop Timothy Dolan of New York said, “In effect, the president is saying we have a year to figure out how to violate our consciences.”

Archbishop Joseph Naumann of Kansas City went so far as saying the church may drop healthcare coverage altogether if a way cannot be found out of the impasse.

But whether the bishops have the backing of their followers is unclear. A USA Today poll released Tuesday showed that 58 percent of Catholics support compulsory contraceptive insurance. That figure rose to 62 percent among Catholic women.

Sebelius revealed the plan in late January, saying it would help guarantee universal access to birth control under Obama’s signature healthcare laws. The mandate is due to go into effect during 2013.

“The public health case for making sure insurance covers contraception is clear,” Sebelius wrote in an article in USA Today. She claimed the administration had worked to strike a balance between the rights of religious employers and the healthcare needs of their workers.

via newsmax.com

Interesting.

The January Jobs Are Statistical Artifacts : Personal Liberty Digest™

February 7, 2012 by Paul Craig Roberts 

PHOTOS.COM

In a prolonged downturn, seasonal adjustments and the birth/death model produce nonexistent employment.

Last Friday, the U.S. Bureau of Labor Statistics reported that in the first month of this year 243,000 jobs were created and the unemployment rate fell to 8.3 percent. This good news is a mirage. It is due to faulty seasonal adjustments and to the BLS birth/death model. In a prolonged downturn, seasonal adjustments and the birth/death model produce nonexistent employment.

The unadjusted data show a rise in the unemployment rate. The birth/death model, which estimates the net effect of jobs lost from business failures and jobs created by new start-ups, was designed for a normal growing economy, not for a prolonged downturn. Statistician John Williams (shadowstats.com) reports that the BLS adds 48,000 new jobs per month to the payroll employment report based on the birth/death model even though the economy has not come out of the deep recession. In other words, over the course of a year, the birth/death model adds about 580,000 jobs to the reported jobs numbers. End-of-year benchmark revisions quietly take the nonexistent jobs out of the totals, but these revisions do not receive headlines and pass largely unnoticed.

The reported January jobs gains are contradicted by other official reports. For example, the January payroll jobs report shows 50,000 new jobs in manufacturing, but according to the recently released fourth quarter gross domestic product, 81 percent of the reported growth consisted of undesired inventory accumulation. Normally, companies produce for sales, not for inventories. Why would manufacturers be hiring people to produce goods for undesired inventories?

Most of the new reported January jobs are in services. The January jobs report has 24,500 new jobs in wholesale and retail trade and 13,100 new jobs in transportation and warehousing. However the data show that inflation-corrected real retail sales are down. Why does it take more people to sell fewer goods?

The other remaining sizable components of the January jobs number are: professional and technical services (30,000), administrative and waste services (36,700), health care and social assistance (29,700), and leisure and hospitality (44,000) of which the largest component is food services and drinking places (32,800).

The leisure, waitresses and bartender employment numbers seem high for January. Perhaps it was an excellent ski month in the United States. However, accommodation (hotels) does not support this conclusion, as accommodation lost 3,900 jobs.

The BLS reports 21,000 new jobs in construction. However, the housing report says that housing starts dropped more than forecast in December, falling 4.1 percent. Why does it take more construction workers to produce fewer houses? Building permits, a proxy for future construction, were little changed.

As the adjusted data produce phantom jobs and employment, the BLS should headline the raw unadjusted data. With so many discouraged workers unable to find jobs, dropping discouraged workers out of the measure of unemployment seriously understates the true magnitude of the unemployment problem. If Americans were aware of the double-digit unemployment rate, would they be as tolerant of Washington’s multitrillion-dollar wars? Would Obama be facing a tougher re-election campaign? Would Republicans be pushing to reduce the Federal budget deficit at the expense of the social safety net?

The phony data serve many interests, but not those of the American people.

via personalliberty.com

Surprise, surprise...

Rove: Romney Campaign Must Offer More Ideas, Less Rhetoric

On Wednesday, Wall Street Journal editors argued that Republican presidential candidate Mitt Romney must focus more on policy ideas and less on his background. On Thursday, Journal contributing columnist Karl Rove made the same point.

“The Romney campaign is tilted too heavily toward biography and not nearly enough toward ideas,” former President George W. Bush’s senior adviser writes.

“It should make its mantra a line from President Ronald Reagan's final address to the nation: ‘I never thought it was my style or the words I used that made a difference: It was the content. I wasn't a great communicator, but I communicated great things.’"

Romney has proven his skill at eviscerating Newt Gingrich with a negative attack. But now he must build something positive, Rove says. “He should become bolder in his prescriptions, presenting a confident agenda for economic growth and renewed prosperity through reforms of tax, regulatory and energy policies.”

That shouldn’t be a problem for the former Massachusetts governor, Rove says. “While Mr. Gingrich called Congressman Paul Ryan's entitlement reforms ‘right-wing social engineering,’ Mr. Romney complimented them last November,” he writes.

Romney simply needs to repeat that speech of support. “He can also build on his best moments in recent debates, when he unapologetically and passionately defended free enterprise,” Rove says. “Far better to best Mr. Gingrich in the weeks ahead by taking the fight to President Obama, challenging the incumbent's unpleasant attempt to appeal to envy and resentment.”

Following that advice will help Romney unite Republicans, win the nomination more quickly and stand better prepared for the race against President Barack Obama, Rove maintains. “If not, the GOP contest will go on, the bitterness will linger, and the road ahead could be treacherous,” Rove writes.

“With his substantial war chest, Mr. Romney can easily saturate airwaves, stuff mailboxes, and jam phone lines to win most contests and more delegates. But Mr. Romney should be looking ahead and realize that what worked against an underfunded Mr. Gingrich won't work against the well-funded Barack Obama.”

via newsmax.com

Agreed.

Obama: Jesus Would Back Higher Taxes

President Barack Obama linked his economic policies to his Christian faith, saying on Thursday that meeting the nation's challenges requires strong values as much as smart policies.

Obama, making his third appearance as president at the National Prayer Breakfast in Washington, used his remarks to justify many of his actions, such as his call for the wealthy to pay more in taxes and his health care overhaul. He said they were not only economically sound but also rooted in his Christian values.

"When I talk about shared responsibility, it's because I genuinely believe that in a time when many folks are struggling and at a time when we have enormous deficits, it's hard for me to ask seniors on a fixed income or young people with student loans or middle-class families who can barely pay the bills to shoulder the burden alone," Obama said.

"But for me as a Christian, it also coincides with Jesus' teaching that, for unto whom much is given, much shall be required," he said.

His remarks came one day after Republican presidential hopeful Mitt Romney created a flap with clumsy comments about the struggling middle class. "I'm not concerned about the very poor. We have a safety net there. If it needs repair, I'll fix it. I'm not concerned about the very rich. They're doing just fine. I'm concerned about the very heart of America, the 90-95 percent of Americans who right now are struggling. You can focus on the very poor, that's not my focus," Romney said.

Obama didn't mention Romney or the other Republican candidates. But his defense of his policies was a rare injection of politics into the prayer breakfast. The annual event is hosted by lawmakers from both parties, and speakers usually refrain from direct political references, sticking instead to calls for civility and respect in Washington.

The president said his faith also guides some of his foreign policy decision, including supporting foreign aid or sending U.S. troops to Africa to target a notoriously violent rebel group.

"It's not just about strengthening alliances or promoting democratic values or projecting American leadership around the world, although it does all those things and it will make us safer and more secure," he said. "It's also about the biblical call to care for the least of these, for the poor, for those at the margins of our society; to answer the responsibility we're given in Proverbs to speak up for those who cannot speak for themselves, for the rights of all who are destitute."

Obama said that while personal religious beliefs alone should not dictate a politician's decisions, leaders should not abandon their faith entirely.

"We can't leave our values at the door. If we leave our values at the door, we abandon much of the moral glue that has held our nation together for centuries and allowed us to become somewhat more perfect a union," he said.

Obama speaks often about his faith but prefers to worship in private. He said Thursday that he starts each morning with a brief prayer, then spends time reading scripture. Sometimes, he said, pastors come to the Oval Officer to pray with him, for his family and for the country.

via newsmax.com

Nothing new here.

Why Community Activists Shouldn’t Run The U.S. Economy : Personal Liberty Digest™

Barack Obama was a community activist. He had never invested in, managed or started a business, much less served as CEO. He had no relevant experience to operate as CEO of the world’s greatest and largest economy. But we gave him the job anyway, and he failed. Wayne Allyn Root asks: Why are we surprised?

via personalliberty.com

Interesting.

Romney’s ‘Poor’ Quote Twisted by Media

Sources in the mainstream media were quick to jump on Mitt Romney for saying he doesn’t care about the very poor — without placing the remark in context.

The Republican presidential front-runner was actually saying that he isn’t concerned about the very poor because they are already protected by a safety net.

In an interview with CNN’s Soledad O’Brien on Wednesday morning, Romney said: “I’m in this race because I care about Americans. I’m not concerned about the very poor — we have a safety net there. If it needs repair, I’ll fix it. I’m not concerned about the very rich — they’re doing just fine. I’m concerned about the very heart of America, the 90 to 95 percent of Americans who right now are struggling.”

O’Brien jumped in, saying: “I think there are lots of very poor Americans who are struggling who would say, ‘That sounds odd.’”

Romney kept his cool. “Well, you had to finish the sentence, Soledad,” he replied. “I said, I’m not concerned about the very poor that have a safety net, but if it has holes in it, then I will repair it.”

He added that the middle class “are the people that have been most badly hurt during the Obama years.”

The New York Daily News was one of the sources taking Romney to task for the comment, stating that the candidate “was back to putting his foot in his mouth. The interview was just the latest in a string of tone-deaf comments Romney has made along the campaign trail as he struggles to shed his rich CEO image.”

The San Francisco Chronicle said the remark is “likely to become fodder for his critics.”

The Atlantic observed: “Democrats are squealing in delight that the fabulously rich GOP front-runner has ostensibly admitted, eyes facing a live camera, that he doesn't care about the poor.”

But it did point out: “The line is tailor-made to be taken out of context, but if you read closely, Romney is absolutely not saying he has no regard for the very poor. He's saying he believes that the safety net we have is sufficient to protect them.”

Romney addressed his controversial comment later on Wednesday, Politico reported, telling reporters on his campaign plane that his statement was taken out of context.

via newsmax.com

What a surprise... CNN