A Republican with Nothing to Hide

I guess I’ve spent too many years complaining about Republican cover-ups to insist on one now, but if ever there were a time it would be at the sight of naked Republican congressman Ken Yoder of Kansas cavorting in the Sea of Galilee. According to this report in Politico, about 20 GOP Congressmen, staffers and family took part in an impromptu swim last August (though the others were partly or fully clothed). Eric Cantor, who was on the American Israel Educational Foundation (AIPAC’s affiliated charitable organization) sponsored trip was quite perturbed—perhaps because the group waited till after he left the party to take their swim.

Now, good progressive that I am, I must confess I can’t get too fired up about public nudity. And in fact I applaud the discovery of the rare Republican who’s an advocate of full disclosure. I just wish a little of that would rub off on Mitt Romney, who seems to be a great deal more interested in hiding his family jewels (or at least the taxes he paid on them) from the light of day than Rep. Yoder.

So what’s the big deal about seeing Mitt’s tax returns? Well, first of all, the other candidates, including President Obama (and as we all know, Mitt’s father, George), have always shared theirs, so why not Mitt? Now we all know he’s rich. That part’s fine. Seriously, I haven’t heard the most die-hard liberal complain about the fact that he has money. But the question a lot of us do have is exactly how he got that way. Since one of the economic options to deal with the deficit is to raise the tax on capital gains, I’d like to see how much that would cost the man who aims to put himself in the best position in the world to sway that particular decision to his benefit. Even more importantly, I’d like to see if Mitt took advantage of one of the special amnesty programs for people who hid income in offshore accounts, of which Mitt has many.  Did he pay all the taxes he owed each year, or not until amnesty was offered? That would tell us if he’s one of those people who loves his country so much he’ll do anything for it—except help pay for it.

People Are Legal Fictions

Used to be that corporations were legal fictions and people were real. Now we’ve already established that corporations are people (Mitt told us so specifically). But now it’s also clear that people have become the legal fiction. Mitt claims that his continuing to be listed as CEO, chairman of the board, and sole stockholder of Bain Capital from 1999 (when he “left” the company) to 2002, and being paid an annual 6-figure sum is some sort of legal fiction, some bureaucratic device necessary to keep the lights on and the buyouts continuing while a team of lawyers took the few years necessary to untangle the interlocking web of holding companies so that Mitt’s “retirement” from the company would be in order and his name wouldn’t need to keep being plastered all over the paperwork filed on behalf of the company that he had absolutely nothing whatsoever to do with in any shape or form or anything, no, not my job man, I wasn’t there, it must’ve been somebody else. (dang, that’s a long sentence—gotta watch the coffee)

And of course Mitt is insulted, he’s outraged, that Democrats would suggest that he might continue to have had even the tiniest bit of interest in a company he was listed as CEO, chairman and sole owner of. How dare they insinuate that he would dream of paying the slightest attention to what the people running the show at Bain were doing to a company he was listed as “owning 100%” of. No diligent and responsible businessman would ever, you know, make a few calls, exchange a couple emails to see that the great corporate benefactor Bain Capital had decided to start looting pension plans. Heck, that would be like Bob Evans retiring from his sausage company and then caring that the new guys started stuffing the links with sawdust and selling them with his name on the package. What sensible businessman would spend 5 minutes worrying about something like that? No, the best businessman knows when to pull back; “Do whatever you want guys, it’s only my money and reputation. Ha Ha!”

So “CEO, chairman of the board and 100% owner” was just a necessary fiction for Mitt to take off and run the Olympics. What kind of fiction will the US presidency be for Mitt? Maybe we could just skip the presidency phase and let him go straight to running another Olympics. The 2014 Winter Games are in Sochi. Know where that is? Me neither. Sounds like a good place for Mitt.

Grover’s Gonna Gitcha, Mitt

First, I guess a shout out to Chief Justice John Roberts for his completely out of character decision to step away from the side of the knuckle-dragging apologists for the plutocracy and do the right thing by upholding Obamacare*. And if you disagree that this was uncharacteristic of him, show me a Republican who was not surprised by it. Good on him. Won’t hold my breath waiting for a repeat performance, but I’m willing to be pleasantly surprised. One more like this and maybe Scalia will have an actual seizure, rather than just simulating one in his dissenting opinion.

But given the reasoning behind the court’s decision, to wit, that the individual mandate was constitutional because it is technically a tax (and of course Congress does still retain the power to tax), I’m really wondering about the effect of this on Mitt. Why? Because Mitt established a similar insurance mandate in Massachusetts, and that means he’s in violation of his pledge to Grover Norquist not to raise taxes. Now that evil, ankle-biting gnome is going to have to run honking after his party’s standard bearer like an angry goose, demanding penance (or perhaps one of Mitt’s overseas bank accounts).

Which reminds me. All these Congresspeople who signed Grover’s pledge. How, exactly, does a pledge to a someone who doesn’t even live in your district somehow take priority over your responsibilities to your job? “Oh, I promised!” Oh, right, like your other promises ever meant squat. And what sense does it make to promise to anyone that you’ll never, ever do anything? I mean, I’m about as anti-war and anti-foreign-misadventure as it gets, and I’d certainly like my leaders to promise to try to avoid war, but I wouldn’t for a minute think it was sensible to promise never, ever to go to war no matter what.

Oh, and when Grover drowns the government in his bathtub, if Mitt is president then, will he go swirling down the drain along with Social Security and Medicare? Or will those 2 good programs reject his presence and allow him to float to the surface like water was supposed to reject a witch in medieval times?

*As per a previous post, I think President Obama should get full credit for this very important (but still preliminary) step in reforming American health care. Let his name stay attached so everyone who now has access to health care and wouldn’t’ve before knows exactly who to thank.

Mitt and Bain

There’s been a fair amount of ink and electrons expended in regards to the topic of Mitt Romney and Bain Capital. Most of it has been of the nature of a sporting activity, either “boo, vulture capitalist” or “yaay, job creator.” Although this vague attempt to envision the consequences of a candidate’s principles is theoretically a slight improvement on the “Horse Race Journalism” I railed against in a previous post, it continues the chattering class’s insistence on confusing labeling with rational analysis. Hence my surprise today to encounter a reference in a NY Times editorial today to an article actually looking deeper into the fortunes of 77 companies acquired by Bain Capital during Romney’s tenure. The article appeared in the Wall Street Journal 1/9/12.

Now, overall, Bain produced about $2.5 billion for its investors on about $1.1 billion invested. Ok, 250% is not a bad return compared with, say, the fraction of 1% I’m getting on my bank savings account now, but hey, I guess Mitt’s just a really good manager. But take a look at the specific gains. Not too surprisingly, 10 of the 77 deals produced over 70% of the gains (see figure). How gainful were these gains? Well, you can see that Bain invested $5.1 million in American Pad & Paper in ’92, took them public in ’96, and pocketed $102 million—a 20 fold return (2000%). Oh, and Bain made AP&P so profitable and successful that AP&P went bankrupt  4 years later, in 2000. Even better was Wesley Jessen VisionCare, which turned a $6.4 million investment in ’95 into a $302 million (47x) profit after going public in ’95.

Wall Street Journal, 1/9/2012

Wiley business strategies? Absolutely. I wish I made 250%, or 2000% or 4700% on my money—then I’d be rich and you all would have to listen to me (or at least run me for president). But is this investment success evidence that Mitt knows how to manage businesses out of a jam, solve the problems that are keeping them from being profitable? That’s the narrative the Republicans want, because that shows he’s the man to fix America’s problems, too. Well, let’s think about it. Take American Pad & Paper. How do you fix and manage your way to 2000% profit? Even if Mitt went in and found that Tom on the 3rd shift had mistaken the office supplies coming off the production line for scrap paper and was throwing them all out, you couldn’t make an extra $100 million. Not even if Mitt personally invented a new, cheaper glue for Post-it notes. Now I’m sure that many management improvements were made, but that is how you go to 20% profit, not 2000%—and fixing management problems doesn’t put you in bankruptcy a few years later. Without further digging into these private deals than even the WSJ did or could do, we can’t say for sure what happened (gee, how about that) but there doesn’t seem to be any way to avoid the conclusion that Mitt’s success was all due to leveraged buyouts and sucking money out of IPOs rather than any particular ability to run a business (other than a vulture capital business, which is what he should stick with). There is zero carry-over to managing the USA.