We keep hearing the same stories over and over again. And we’re supposed to believe that Mitt Romney and his Band of Merry Capitalists would be GOOD for America?
In the August issue of Vanity Fair, Nicholas Shaxson investigates Romney’s offshore accounts and tax loopholes. In the course of the investigation, he reports on another business which was cannibalized by Bain Capital and, under Romney’s management, whose employees were brutalized in the process — for the profit of a few:
“Dade Behring is a cause célèbre for Romney’s and Bain’s critics, and it illustrates the leverage problem clearly. In 1994, Bain bought Dade International, a medical-diagnostics company, then added the medical-diagnostics division of DuPont in 1996 and a German medical-testing company called Behring in 1997…
“[Bain] closed a Puerto Rico plant in 1998, a year after harvesting $7.1 million in local tax breaks aimed at job creation…”
“Then brutal cost cutting began. Bain cut R&D spending to an average of 8 percent of sales, a little more than half what its competitors were doing. Cindy Hewitt, Dade’s human-resources manager, remembers how the firm closed a Puerto Rico plant in 1998, a year after harvesting $7.1 million in local tax breaks aimed at job creation, and relocated some staff to Miami, then the company’s most profitable plant. Based on reassurances she had received from her superiors, she told those uprooting themselves from Puerto Rico that their jobs in Miami were safe for now—but then Bain closed the Miami plant. “Whether you want to call it misled, or lied, or manipulated, I do not believe they provided full information about what discussions were under way,” she says. “I would never want to be part of even unintentionally treating people so poorly.”
“[...] In 1999, generous pensions were converted into less generous benefits, wages were cut, and more staff members were laid off… “I have been dealing with pensions issues for over 25 years and I never saw anything like this,” recalls Stein. The spooked employees did not go to court. Stein says that, while breaking pension contracts like this was not unheard of, the practice at that time was “questionable,” adding that Dade may have saved $10 to $40 million from converting its pensions.
“Take $10 to $40 million squeezed from a pension pot, then use that to create new, rosier financial projections to borrow several times that amount, and then pay yourself a big special dividend from the borrowed funds…”
“The beauty—or savagery—of leverage is that it can magnify any and all cash-flow boosts, such as this one. Take $10 to $40 million squeezed from a pension pot, then use that to create new, rosier financial projections to borrow several times that amount, and then pay yourself a big special dividend from the borrowed funds, many times the size of the pension savings. That is just what Bain Capital did: the same month it converted the pensions, it created new financial projections as a basis to borrow an extra $421 million—from which Bain, its co-investor Goldman Sachs, and top Dade management extracted $365 million in dividends. According to Kosman, “Bain and Goldman—after putting down only $85 million … made out like bandits—a $280 million profit.” Dade’s debt rose to more than $870 million. Romney had left operational management of Bain that year, though his disclosures show that he owned 16.5 percent of the Bain partnership responsible for the Dade investment until at least 2001.
“Quite soon, however, a fragile Dade faced adverse conditions in the currency markets, and it had to start in effect cannibalizing itself, cutting into the core of its business. It filed for bankruptcy in August 2002 and Bain Capital departed… Nor was this an isolated incident: Kosman lists five other “formerly healthy” companies—Stage Stores, Ampad, GS Technologies, Details, and KB Toys—Bain helped drive into bankruptcy, while making big profits.”
The GOP / tea party base really needs to explain how Romney’s and Bain’s business model is in any way commendable, inspiring, or helpful to more than a handful of people who figured out how to get even richer than they were off the suffering of other people.
And if the GOP base can’t explain it, and if they plan to vote for Mitt Romney regardless of this knowledge, then these voters should admit they’re not concerned for America or its people — they’re only concerned about getting someone labeled “Republican” into the White House. They’re suicidal and want the rest of us to suffer with them.
“We’re now living in an America where rampant inequality is accepted, and even celebrated.”
Sara Robinson in her op-ed How a Brutal Strain of American Aristocrats Have Come to Rule America asks: “America didn’t used to be run like an old Southern slave plantation, but we’re headed that way now. How did that happen?” She discusses how the meaning of “liberty” differs between northern elites and southern elites:
“[...] Individuals were expected to balance their personal needs and desires against the greater good of the collective — and, occasionally, to make sacrifices for the betterment of everyone. (This is why the Puritan wealthy tended to dutifully pay their taxes, tithe in their churches and donate generously to create hospitals, parks and universities.) In return, the community had a solemn and inescapable moral duty to care for its sick, educate its young and provide for its needy — the kind of support that maximizes each person’s liberty to live in dignity and achieve his or her potential. A Yankee community that failed to provide such support brought shame upon itself. To this day, our progressive politics are deeply informed by this Puritan view of ordered liberty.
“In the old South, on the other hand, the degree of liberty you enjoyed was a direct function of your God-given place in the social hierarchy. The higher your status, the more authority you had, and the more “liberty” you could exercise — which meant, in practical terms, that you had the right to take more “liberties” with the lives, rights and property of other people. Like an English lord unfettered from the Magna Carta, nobody had the authority to tell a Southern gentleman what to do with resources under his control. In this model, that’s what liberty is. If you don’t have the freedom to rape, beat, torture, kill, enslave, or exploit your underlings (including your wife and children) with impunity — or abuse the land, or enforce rules on others that you will never have to answer to yourself — then you can’t really call yourself a free man.
“The military — always a Southern-dominated institution — sucks down 60% of our federal discretionary spending, and is undergoing a rapid evangelical takeover as well.”
“[...] They also had a profound evangelical conviction, brought with them out of the South, that God wanted them to take America back from the Yankee liberals — a conviction that expressed itself simultaneously in both the formation of the vast post-war evangelical churches (which were major disseminators of Southern culture around the country); and in their takeover of the GOP, starting with Barry Goldwater’s campaign in 1964 and culminating with Ronald Reagan’s election in 1980.
“They countered Yankee hegemony by building their own universities, grooming their own leaders and creating their own media. By the 1990s, they were staging the RINO hunts that drove the last Republican moderates (almost all of them Yankees, by either geography or cultural background) and the meritocratic order they represented to total extinction within the GOP. A decade later, the Tea Party became the voice of the unleashed id of the old Southern order, bringing it forward into the 21st century with its full measure of selfishness, racism, superstition, and brutality intact.”
God save us, the South cannot be allowed to ever rise again:
All the pretty trees, gone — and for what?
In his Vanity Fair piece Mitt Romney’s Offshore Accounts, Tax Loopholes, and Mysterious I.R.A., Nicholas Shaxson discusses offshore tax havens and something not a lot of Americans know: America is also an offshore tax haven for foreign money:
“Little noticed in the academic discussions of financialization is the role of offshore tax havens, one of the big reasons the financial sector has become so powerful. In 1966, Michael Hudson, a young Chase Manhattan balance-of-payments economist, was in a company elevator when he was handed a memo by a former State Department operative. The memo came from the U.S. government, and Hudson was tasked with figuring out how much foreign money the U.S. might attract. “They were saying, ‘We want to replace Switzerland,’ ” Hudson explains. “All this money will come here if we make this the criminal center of the world. We wanted foreign criminal money, which was patriotic, but not American criminal money.”
“In the years since then, almost unknown to most Americans, the United States has turned itself into a giant tax haven for foreigners, just as the memo suggested. Federal and state tax laws have been deliberately shaped to give foreigners special tax exemptions unavailable to Americans, plus financial secrecy and exemptions from regulatory restraints. “We have criticized offshore tax havens for their secrecy and lack of transparency,” said Senator Carl Levin. “But look what is going on in our own backyard.”
“In this grand scenario, tax havens such as the Caymans serve as feeders of foreign savings into Tax Haven U.S.A. from abroad, providing foreign investors with additional ways to skip around tax, disclosure, and regulatory requirements that they might trigger if they invested directly.
“The money sucked into Tax Haven U.S.A., often via the “feeder” tax havens, is frequently tax-evading and other criminal foreign money, in the spirit of Hudson’s 1966 memo, and it is predominantly channeled not into productive investment but into real estate and financial business.”
Does this imply that if an American quarter-billionaire can get his wealth into foreign off-shore accounts, he can funnel it back into America with “special tax exemptions,” because it’s been magically transformed into foreign money. I guess that’s how the one percent launder their money, pay little or no federal tax, and call themselves patriots.
Mitt Romney wants your vote — he just doesn’t want to tell you how much he’s really worth or where he keeps all his money.
“As the Romney campaign debates itself about whether the Affordable Care Act’s individual mandate is an evil tax or an unconstitutional penalty, it’s worth remembering that Republican presidential icon Ronald Reagan imposed his own national healthcare mandate on the country. The mandate is well know today — it requires emergency rooms to treat anyone in need, regardless of their ability to pay — but the fact that Reagan signed it into law is often forgotten. [...] In 1986, Congress passed the Consolidated Omnibus Budget Reconciliation Act, which contained the Emergency Medical Treatment and Active Labor Act. The law requires hospitals to treat patients in need of emergency care regardless of their ability to pay, citizenship or even legal status. It applies to any hospital that takes Medicare funds, which is virtually every hospital in the country.” — Reagan’s healthcare mandate – Salon.com
And that’s how we’re all paying for healthcare for everyone in our country. Courtesy of Reagan and the GOP, we have socialized healthcare funding without the actual benefits of socialized healthcare.
At least the individual mandate in the Affordable Care Act attempts, in some way, to share the burden of healthcare costs between everyone.
At one point, stopping to guzzle a glass of lemonade, Romney was asked how it tasted, to which he replied, “Lemon. Wet. Good.” – ABC News
think-progress: President Obama stopped shaking hands for a moment today so that he could embrace a sobbing woman whose uninsured sister recently died of colon cancer.