A Few Good Reasons Not To Vote Romney or For Any Conservative Republican

Where Mittens puts his money

A Few Good Reasons Not To Vote Romney or For Any Conservative Republican

There is no shortage of reasons not to vote Republican. The litany includes tax cuts for the rich, cutbacks in government programs, obstructing needed legislation, disregard for the environment, denial of women's and other human rights, military escalation.

But the following five reasons have to do with money -- specifically, who's paying for the $1 trillion of annual tax savings and tax avoidance for the super-rich? And who's paying for the $1 trillion of national security to protect their growing fortunes? The Republicans want that money to come from the rest of us.

1. Economic Darwinism -- Republicans want the Poor to Pay

Paul Ryan's proposed budget would take about a half-trillion dollars a year from programs that support the poor. This is a continuation of a 15-year shredding of the safety net by Republicans. The GOP-controlled Congress of Bill Clinton created Temporary Assistance to Needy Families (TANF), which has experienced a 60% drop in its caseload despite growing poverty, and which, according to the Urban Institute, provides "maximum benefits [that] even in the more generous states were far below the federal poverty level of $1,525 a month for a family of three."

The Supplemental Nutrition Assistance Program (SNAP), another vital program that serves 50 million "food insecure" Americans, would be cut by $16 billion under the House version of the Farm Bill. The average recipient currently gets $4.30 a day for food.

Republicans also voted to end the Child Tax Credit, and favor a tax plan that would eliminate the Earned Income Tax Credit.

2. Payroll Tax -- Republicans want the Middle Class to Pay

Encouraged by the steady Republican demand for lower corporate tax rates, big business has effected a stunning shift in taxpaying responsibility over the years, from corporate income tax to worker payroll tax. For every dollar of payroll tax paid in the 1950s, corporations paid three dollars. Now it's 22 cents.

It's gotten worse in recent years, as corporations decided to drastically cut their tax rates after the start of the recession. After paying an average of 22.5% from 1987 to 2008, they've paid an annual rate of 10% since. This represents a sudden $250 billion annual loss in taxes.

Republicans claim that almost half of Americans don't pay taxes. But when payroll and state and local taxes are considered, middle-income Americans pay at about the same rate as the highest earners. Only about 17% of households paid no federal income tax or payroll tax in 2009. And average workers get little help from people who make most of the money. Because of the $110,000 cutoff for payroll tax deductions, the richest 10% of Americans save $150 billion a year in taxes.

3. Job Shrinkage -- Republicans want Young People to Pay

The jobs that exist for young Americans are paying much less than just a few years ago. During and after the recession, according to the National Employment Law Project, low-wage jobs ($7.69 to $13.83 per hour) dropped by 21 percent, and then grew back at a 58 percent rate. Mid-wage jobs ($13.84 to $21.13 per hour) dropped by 60 percent and grew back at a 22 percent rate. In other words, the median wage is falling fast.

Unemployment for workers under 25 stands at 16.4 percent, twice the national average. Half of recent college graduates are jobless or underemployed.

Yet Republicans killed a jobs bill that was supported by two-thirds of the public.

An academic study of employment data over 64 years found that an average of two million jobs per year were created under Democratic presidents, compared to one million under Republican presidents. Similar results were reported by the Bloomberg Government Barometer.

4. Retirement Planning -- Republicans want the Seniors to Pay

There's a common misconception in our country that most seniors are financially secure. Actually, Census data reveals that elderly people experience greater inequality than any other population group, with the poorest one-fifth receiving just 5.5% of the group's total resources, while the wealthiest one-fifth receives 46%.

The senior wealth gap is further evidenced by data during the great 30-year surge in inequality. The average over-60 wealth was five times greater than the median in 1995, as would be expected with a small percentage of ultra-high-net-worth individuals and a great majority of low-wealth people. Further confirmation comes from 2004 Harvard data that shows rising inequality within all age groups, including the elderly. Indeed, an MIT study found that about 46% of U.S. senior citizens have less than $10,000 in financial assets when they die.

For the vast majority of seniors, Social Security has been life-sustaining, accounting for 55% of their annual income. Because of this successful and popular program, the senior poverty rate has dropped from 50% to 10%, and due to life-long contributions from working Americans the program has a $2.7 trillion surplus while contributing nothing to the deficit. Yet Republicans want to undo it.

5. Public Fire Sale -- Republicans want Society to Pay

The common good is threatened by the Republican disdain for public resources. Drilling and mining and pipeline construction continues on public lands, and the House of Representatives has voted over 100 times since 2011 to subsidize the oil and gas industry while weakening environmental, public health, and safety requirements. The "land grab" is pitting corporate muscle against citizens' rights.

Sadly, most of America envisions a new era of energy independence that increases our world-leading consumption of energy while depending on a proliferation of dirty technologies to extract it. Threats of methane emissions, water pollution, and earthquake activity don't deter the fossil fuel enthusiasts.

It gets worse. Republicans are eager to sell public land. Paul Ryan's "Path to Prosperity" proposes to sell millions of acres of "unneeded federal land" and billions of dollars worth of federal assets. His running mate Mitt Romney admits that he doesn't know "what the purpose is" of public lands.

That brings us to the heart of the reasons not to vote Republican. Their reckless belief in the free market, and their dependency on corporatization and privatization to run the country, means that middle-class Americans keep paying for the fabulously wealthy people at the top who think they deserve everything they've taken from society.

 Fellow bloggers might consider re-posting this article on their blogs and sending it to everyone on their e-mail list. Conservatism has come to mean remaking the USA into very much what old European monarchies looked like. The vast majority of the population relegated to be being wage slaves for their wealthy overlords, with very little chance to move up the economic ladder, no matter how hard you work.

Right-Wing Media Ignores President Obama's Plan For Economic Growth. Sure unemployment figures could be better. Guess which party has pulled very legislative trick to stop three job creation bills. Conservatives say that government does not create jobs, yet Romney claims he is a veritable job wizard that will create jobs if elected. Go figure on how the conservative mind reconciles the hypocrisy of stalling jobs bills, saying government cannot create jobs and the claim they will use government to create jobs.

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Bain Capital is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain’s billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise.
Romney

Mitt Romney was not a businessman; He was a master financial speculator who bought, sold, flipped, and stripped businesses.

Nevertheless, Mitt Romney claims that his essential qualification to be president is grounded in his 15 years as head of Bain Capital, from 1984 through early 1999. According to the campaign’s narrative, it was then that he became immersed in the toils of business enterprise, learning along the way the true secrets of how to grow the economy and create jobs. The fact that Bain’s returns reputedly averaged more than 50 percent annually during this period is purportedly proof of the case—real-world validation that Romney not only was a striking business success but also has been uniquely trained and seasoned for the task of restarting the nation’s sputtering engines of capitalism.

Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way—out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale—the faster the better.

That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn’t be much scope for it because it creates little of economic value. But we have a rigged system—a regime of crony capitalism—where the tax code heavily favors debt and capital gains, and the central bank purposefully enables rampant speculation by propping up the price of financial assets and battering down the cost of leveraged finance.

So the vast outpouring of LBOs in recent decades has been the consequence of bad policy, not the product of capitalist enterprise. I know this from 17 years of experience doing leveraged buyouts at one of the pioneering private-equity houses, Blackstone, and then my own firm. I know the pitfalls of private equity. The whole business was about maximizing debt, extracting cash, cutting head counts, skimping on capital spending, outsourcing production, and dressing up the deal for the earliest, highest-profit exit possible. Occasionally, we did invest in genuine growth companies, but without cheap debt and deep tax subsidies, most deals would not make economic sense.

VICTORY FROM THE JAWS OF DEFEAT

The startling fact is that four of the 10 Bain Capital home runs ended up in bankruptcy, and for an obvious reason: Bain got its money out at the top of the Greenspan boom in the late 1990s and then these companies hit the wall during the 2000-02 downturn, weighed down by the massive load of debt Bain had bequeathed them. In fact, nearly $600 million, or one third of the profits earned by the home-run companies, had been extracted from the hide of these four eventual debt zombies.

The most emblematic among them was a roll-up deal focused on down-in-the-mouth department stores and apparel chains that were falling by the wayside in small-town America due to the arrival of Wal-Mart and the big-box retailers. Bain invested $10 million in 1988 and nine years later took out 18X its money—that is, a $175 million profit.

Fittingly, Stage Stores Inc. was the last deal underwritten by the Drexel-Milken junk-bond machine before its demise. And the $300 million raised for this incipient LBO was exactly the kind of slush fund that Milken’s stable of takeover artists had used to acquire corporate castoffs and other bedraggled pots and pans that got rechristened as “growth” companies.

During the next eight years, Bain slogged it out, accumulating about 300 small Main Street storefronts under such forgettable banners as Royal Palais, Bealls, and Fashion Bar. Yet the company wasn’t making much headway. By 1996, it had paid back none of the Milken debt and was only earning $14 million—exactly what it had generated back in 1992 on half the number of stores.

In the spring of 1997, when Chairman Greenspan decided that “irrational exuberance” was not such a worrisome thing, Bain Capital decided to indulge, too. It caused Stage Stores Inc.—which was already publicly traded—to raise $300 million of new junk bonds and used the proceeds to buy a faltering 250-store chain of family clothing stores called C.R. Anthony.

These 12,000-square-foot cracker-box stores sold mid-market shoes, shirts, and dresses right in Wal-Mart’s wheelhouse. In hot pursuit of “synergies,” Bain promptly rebranded these Anthony stores to the purportedly more compelling Stage and Bealls banners. While the name change did nothing to ward off the grim reaper from Bentonville, it suddenly gave Stage Stores Inc. the “growth” story that Greenspan’s bull market craved. Within five months of this ostensibly “transformative” deal and long before the results of the ritual “synergies” and “rebranding” could be determined, the company’s stock price had doubled. Bain Capital and its partner, Goldman Sachs, quickly unloaded their shares at the aforementioned 18X gain.

As a matter of plain fact, the “transformative” C.R. Anthony deal was a bull-market scam. Almost immediately, results headed south. After growing 4 percent during the year of Bain’s quick 1997 exit, same-store sales turned to a negative 3 percent in 1998 and negative 7 percent in 1999, and were still falling when Stage Stores Inc. filed for bankruptcy shortly thereafter. The company hemorrhaged $150 million of negative cash flow during 1998-99—that is, during the two years after Bain and Goldman got out of Dodge City.

Bain Capital subsequently claimed the company was “a growing, successful and consistently profitable company during the nine years we owned it” but then immediately ran into “operating problems.” That was a doozy by any other name but typical of the standard private-equity narrative that confuses speculators’ timing with real value creation on the free market. The fact is, the bad inventory and vastly overstated assets that took the company down did not suddenly materialize out of the blue during the 24 months after Bain’s exit: they were actually the result of financial-engineering games from the very beginning.

Worse still, the Stage Stores deal embodied all of the hidden leverage that had become par for the course in the era of bubble finance. When the crunch came, the company had no assets to fall back on because Bain had hocked virtually everything; it sold all the company’s credit-card receivables to a third party, and among its 650 stores it owned exactly three! By my calculation, the capitalized debt embedded in its store leases was nearly $750 million and when added to its disclosed balance-sheet debt, the company’s true debt of was $1.3 billion or a devastating 25X its peak-year free cash flow.

The bankruptcy forced the closure of about 250—or 40 percent—of the company’s stores and the loss of about 5,000 jobs. Yet the moral of the Stage Stores saga is not simply that in this instance Bain Capital was a jobs destroyer, not a jobs creator. The larger point is that it is actually a tale of Wall Street speculators toying with Main Street properties in defiance of sound finance—an anti-Schumpeterian project that used state-subsidized debt to milk cash from stores that would not have otherwise survived on the free market.

Bain’s acclaimed success with another retailer—Staples—is also not what it is touted to be. Tom Stemberg was a visionary entrepreneur who got $5 million of seed money from Bain in 1986 when it was still in the venture-capital business; the Milken-style LBO schemes came later. As it happened, Bain exited the Staples deal after only a few years with a $15 million profit, a rounding error in the scheme of things.

Stemberg made Staples a free-market success, a relentless generator of efficiency in the retail distribution of office supplies. Yet this honest capitalist efficiency, which benefited millions of customers, was achieved by a rampage of job destruction among tens of thousands of Main Street stationery and office-supplies stores and other traditional distributors. These now-defunct operations could not compete with Staples due to their high labor costs per dollar of sales—including upstream labor expense in the traditional, inefficient wholesale and distribution layers that stood behind Main Street retailers.

Ironically, the businesses and jobs that Staples eliminated were the office-supply counterparts of the cracker-box stores selling shoes, shirts, and dresses that Bain kept on artificial life-support at Stage Stores Inc. At length, Wal-Mart eliminated these jobs and replaced them with back-of–the-store automation and front-end part-timers, as did Staples, which now has 40,000 part-time employees out of its approximate 90,000 total head count. The pointless exercise of counting jobs won and lost owing to these epochal shifts on the free market is obviously irrelevant to the job of being president, but the fact that Bain made $15 million from the winner and $175 million from the loser is evidence that it did not make a fortune all on its own. It had considerable help from the Easy Button at the Fed.

Romney and his crony pals have simply found a way to to use tax subsidies, leveraged buy outs and assorted financial tricks to pay themselves use fees and sell off the bones of the company they stripped apart in the name of plutocratic plundering, not capitalism. Capitalism is this great system for competing to sell the best products and services to actually create jobs and improve the quality of people's lives. Romney would probably laugh in your face if you told him that in private.

Romney and Paul Ryan are just your garden variety conservative Republican stealth candidates, hiding their real selves and real agenda behind fake patriotism and fake values, Charity president says Paul Ryan 'ramrodded' way into fake dish washing photo-op

Mitt Romney Running Anti-China Trade Ad Against Obama Yet Has Money in China, Cayman Islands and Switzerland

Mitt Romney Running Anti-China Trade Ad Against Obama Yet Has Money in China, Cayman Islands and Switzerland

The tale of Asimco Technologies, an auto parts manufacturer whose plants dot eastern China, would seem to underscore Mitt Romney’s campaign-trail complaint that China’s manufacturing juggernaut is costing America jobs.

Nine years ago, the company bought two camshaft factories that employed about 500 people in Michigan. By 2007 both were shut down. Now Asimco manufactures the same components in China on government-donated land in a coastal region that China has designated an export base, where companies are eligible for the sort of subsidies Mr. Romney says create an unfair trade imbalance.

But there is a twist to the Asimco story that would not fit neatly into a Romney stump speech: Since 2010, it has been owned by Bain Capital, the private equity firm founded by Mr. Romney, who has as much as $2.25 million invested in three Bain funds with large stakes in Asimco and at least seven other Chinese businesses, according to his 2012 candidate financial disclosure and other documents.

That and other China-related holdings by Bain funds in which Mr. Romney has invested are a reminder of how he inhabits two worlds that at times have come into conflict during his campaign for the White House.

As a candidate, Mr. Romney uses China as a punching bag. He accuses Beijing of unfairly subsidizing Chinese exports, artificially holding down the value of its currency to keep exports cheap, stealing American technology and hacking into corporate and government computers.

“How is it China’s been so successful in taking away our jobs?” he asked recently. “Well, let me tell you how: by cheating.”

But his private equity dealings, both while he headed Bain and since, complicate that message.

Mr. Romney’s campaign insists he has no control over his investments since they are held in a blind trust. That said, a confidential prospectus for one of the Bain funds, obtained by The New York Times, promotes China as a good investment for some of the same reasons that Mr. Romney has said concern him: “Strong fundamentals” like manufacturing wages 85 percent lower than what Americans earn, vast foreign exchange reserves and the likelihood that China will surpass the United States as the world’s largest economy.

“Accordingly, Bain Capital expects to see an increasing array of high-growth companies available for investment,” the prospectus says, noting the relative dearth of private equity in China.

Among the companies in which the Bain funds have invested is a global auto parts maker that is in the process of closing a factory in Illinois and moving most of the equipment and jobs to Jiangsu Province, where the Chinese government has built it a new plant; a Chinese electronics retailer accused by Microsoft of selling computers with pirated software; and a Hong Kong-based Chinese appliance maker that was sued for copying another company’s design for a deep-fat fryer.

Asked if Mr. Romney sees any conflict between his Bain investments in China and his policy positions, the campaign said: “Only the president has the power to level the playing field with China. No private citizen can do that alone.”

The campaign said Mr. Romney put his fortune, estimated at $250 million, in a “blind trust” when he became Massachusetts governor in 2003. “The trustee of the blind trust has said publicly that he will endeavor to make the investments in the blind trust conform to Governor Romney’s positions, and whenever it comes to his attention that there is something inconsistent, he ends the investment,” the statement said.

Should Mr. Romney become president, however, the structure of the trust would most likely not meet the federal requirements for independent management. It is managed by a Boston-based law firm, Ropes & Gray, that has a long history of doing legal work for both Mr. Romney and Bain Capital, including representing some of the same Bain funds in which it invested Mr. Romney’s money.

Mr. Romney’s trustee, R. Bradford Malt, who is chairman of Ropes & Gray, declined to comment.

Bain Capital declined to comment on specific investments, but said in a statement that its Chinese holdings “are consistent with the widely accepted principle that the private sector has a critical role to play in the continuing interdependence of the world’s economies.”

For many sophisticated and wealthy investors, as well as for ordinary workers invested in pension funds, China is a part of any diversified investment strategy. President Obama, a former Illinois state senator, has as much as $100,000 in a state retirement plan that contains shares of Sensata Technologies, the same auto parts company controlled by Bain that is closing its Illinois factory.

Last year, Mr. Romney’s trust sold its stake in an array of foreign holdings, including two Chinese state-owned companies: an oil company and a bank that have done business in Iran. But Mr. Romney continues to have money in Bain funds with sizable holdings in China.

He has as much as $250,000 in the Bain Capital Asia Fund and as much as $1 million each in Bain Capital Funds IX and X, all Cayman Islands entities used by Bain to make sizable investments in China, according to the 2012 candidate financial disclosures and confidential Bain prospectuses obtained by The Times through a public records request.

Among those funds’ holdings is $234 million that Bain invested in 2009 in Gome Electrical Appliances, a major Chinese retailer that was accused by Microsoft this year of selling computers with pirated software. In 2007, Bain’s Asia fund also invested $39 million in Feixiang Group, a Chinese producer and exporter of chemicals that is a designated “state high-tech enterprise,” making it eligible for tax breaks and other government incentives. Ropes & Gray represented Bain in the partial sale of Feixiang three years later for a 53 percent return on the fund’s investment.

The Asia fund withdrew from another deal in 2008 that could have proved politically embarrassing to Mr. Romney. After the Bush administration objected, Bain dropped plans to team up with a Chinese technology giant, Huawei, to buy 3Com, a network equipment maker that supplies software and equipment to the Pentagon and other federal agencies.

Republicans like to say that Americans are lazy and there are plenty of jobs out there. There are jobs in Asia where conservatives stash a lot of their money. What ever happened to America first. And how is it that Romney claims to be a person with values, yet has run televison ads that set a new low for lies and hypocrisy.

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