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Mitt Romney - the Big Lie

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1Mitt Romney - the Big Lie Empty Mitt Romney - the Big Lie on 8/29/2012, 11:12 am

Sal

Sal
Brilliantly written!

Everyone knows that he is fantastically rich, having scored great success, the legend goes, as a "turnaround specialist," a shrewd financial operator who revived moribund companies as a high-priced consultant for a storied Wall Street private equity firm. But what most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.

By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions – placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place. That same man then runs for president riding an image of children roasting on flames of debt, choosing as his running mate perhaps the only politician in America more pompous and self-righteous on the subject of the evils of borrowed money than the candidate himself. If Romney pulls off this whopper, you'll have to tip your hat to him: No one in history has ever successfully run for president riding this big of a lie. It's almost enough to make you think he really is qualified for the White House.

The unlikeliness of Romney's gambit isn't simply a reflection of his own artlessly unapologetic mindset – it stands as an emblem for the resiliency of the entire sociopathic Wall Street set he represents. Four years ago, the Mitt Romneys of the world nearly destroyed the global economy with their greed, shortsightedness and – most notably – wildly irresponsible use of debt in pursuit of personal profit. The sight was so disgusting that people everywhere were ready to drop an H-bomb on Lower Manhattan and bayonet the survivors. But today that same insane greed ethos, that same belief in the lunatic pursuit of instant borrowed millions – it's dusted itself off, it's had a shave and a shoeshine, and it's back out there running for president.

Mitt Romney, it turns out, is the perfect frontman for Wall Street's greed revolution. He's not a two-bit, shifty-eyed huckster like Lloyd Blankfein. He's not a sighing, eye-rolling, arrogant jerkwad like Jamie Dimon. But Mitt believes the same things those guys believe: He's been right with them on the front lines of the financialization revolution, a decades-long campaign in which the old, simple, let's-make-stuff-and-sell-it manufacturing economy was replaced with a new, highly complex, let's-take-stuff-and-trash-it financial economy. Instead of cars and airplanes, we built swaps, CDOs and other toxic financial products. Instead of building new companies from the ground up, we took out massive bank loans and used them to acquire existing firms, liquidating every asset in sight and leaving the target companies holding the note. The new borrow-and-conquer economy was morally sanctified by an almost religious faith in the grossly euphemistic concept of "creative destruction," and amounted to a total abdication of collective responsibility by America's rich, whose new thing was making assloads of money in ever-shorter campaigns of economic conquest, sending the proceeds offshore, and shrugging as the great towns and factories their parents and grandparents built were shuttered and boarded up, crushed by a true prairie fire of debt.

Mitt Romney – a man whose own father built cars and nurtured communities, and was one of the old-school industrial anachronisms pushed aside by the new generation's wealth grab – has emerged now to sell this make-nothing, take-everything, screw-everyone ethos to the world. He's Gordon Gekko, but a new and improved version, with better PR – and a bigger goal. A takeover artist all his life, Romney is now trying to take over America itself.

The reality is that toward the middle of his career at Bain, Romney made a fateful strategic decision: He moved away from creating companies like Staples through venture capital schemes, and toward a business model that involved borrowing huge sums of money to take over existing firms, then extracting value from them by force. He decided, as he later put it, that "there's a lot greater risk in a startup than there is in acquiring an existing company." In the Eighties, when Romney made this move, this form of financial piracy became known as a leveraged buyout, and it achieved iconic status thanks to Gordon Gekko in Wall Street. Gekko's business strategy was essentially identical to the Romney–Bain model, only Gekko called himself a "liberator" of companies instead of a "helper."

Here's how Romney would go about "liberating" a company: A private equity firm like Bain typically seeks out floundering businesses with good cash flows. It then puts down a relatively small amount of its own money and runs to a big bank like Goldman Sachs or Citigroup for the rest of the financing. (Most leveraged buyouts are financed with 60 to 90 percent borrowed cash.) The takeover firm then uses that borrowed money to buy a controlling stake in the target company, either with or without its consent. When an LBO is done without the consent of the target, it's called a hostile takeover; such thrilling acts of corporate piracy were made legend in the Eighties, most notably the 1988 attack by notorious corporate raiders Kohlberg Kravis Roberts against RJR Nabisco, a deal memorialized in the book Barbarians at the Gate.

Romney and Bain avoided the hostile approach, preferring to secure the cooperation of their takeover targets by buying off a company's management with lucrative bonuses. Once management is on board, the rest is just math. So if the target company is worth $500 million, Bain might put down $20 million of its own cash, then borrow $350 million from an investment bank to take over a controlling stake.

But here's the catch. When Bain borrows all of that money from the bank, it's the target company that ends up on the hook for all of the debt.

Now your troubled firm – let's say you make tricycles in Alabama – has been taken over by a bunch of slick Wall Street dudes who kicked in as little as five percent as a down payment. So in addition to whatever problems you had before, Tricycle Inc. now owes Goldman or Citigroup $350 million. With all that new debt service to pay, the company's bottom line is suddenly untenable: You almost have to start firing people immediately just to get your costs down to a manageable level.

"That interest," says Lynn Turner, former chief accountant of the Securities and Exchange Commission, "just sucks the profit out of the company."

Fortunately, the geniuses at Bain who now run the place are there to help tell you whom to fire. And for the service it performs cutting your company's costs to help you pay off the massive debt that it, Bain, saddled your company with in the first place, Bain naturally charges a management fee, typically millions of dollars a year. So Tricycle Inc. now has two gigantic new burdens it never had before Bain Capital stepped into the picture: tens of millions in annual debt service, and millions more in "management fees." Since the initial acquisition of Tricycle Inc. was probably greased by promising the company's upper management lucrative bonuses, all that pain inevitably comes out of just one place: the benefits and payroll of the hourly workforce.

Once all that debt is added, one of two things can happen. The company can fire workers and slash benefits to pay off all its new obligations to Goldman Sachs and Bain, leaving it ripe to be resold by Bain at a huge profit. Or it can go bankrupt – this happens after about seven percent of all private equity buyouts – leaving behind one or more shuttered factory towns. Either way, Bain wins. By power-sucking cash value from even the most rapidly dying firms, private equity raiders like Bain almost always get their cash out before a target goes belly up.

Which brings us to another aspect of Romney's business career that has largely been hidden from voters: His personal fortune would not have been possible without the direct assistance of the U.S. government. But the way Romney most directly owes his success to the government is through the structure of the tax code. The entire business of leveraged buyouts wouldn't be possible without a provision in the federal code that allows companies like Bain to deduct the interest on the debt they use to acquire and loot their targets. This is the same universally beloved tax deduction you can use to write off your mortgage interest payments, so tampering with it is considered political suicide – it's been called the "third rail of tax reform." So the Romney who routinely rails against the national debt as some kind of child-killing "mortgage" is the same man who spent decades exploiting a tax deduction specifically designed for mortgage holders in order to bilk every dollar he could out of U.S. businesses before burning them to the ground.

Because minus that tax break, Romney's debt-based takeovers would have been unsustainably expensive. Before Lynn Turner became chief accountant of the SEC, where he reviewed filings on takeover deals, he crunched the numbers on leveraged buyouts as an accountant at a Big Four auditing firm. "In the majority of these deals," Turner says, "the tax deduction has a big enough impact on the bottom line that the takeover wouldn't work without it."

Thanks to the tax deduction, in other words, the government actually incentivizes the kind of leverage-based takeovers that Romney built his fortune on. Romney the businessman built his career on two things that Romney the candidate decries: massive debt and dumb federal giveaways. "I don't know what Romney would be doing but for debt and its tax-advantaged position in the tax code," says a prominent Wall Street lawyer, "but he wouldn't be fabulously wealthy."

Adding to the hypocrisy, the money that Romney personally pocketed on Bain's takeover deals was usually taxed not as income, but either as capital gains or as "carried interest," both of which are capped at a maximum rate of 15 percent. In addition, reporters have uncovered plenty of evidence that Romney takes full advantage of offshore tax havens: He has an interest in at least 12 Bain funds, worth a total of $30 million, that are based in the Cayman Islands; he has reportedly used a squirrelly tax shelter known as a "blocker corporation" that cheats taxpayers out of some $100 million a year; and his wife, Ann, had a Swiss bank account worth $3 million. As a private equity pirate, Romney pays less than half the tax rate of most American executives – less, even, than teachers, firefighters, cops and nurses. Asked about the fact that he paid a tax rate of only 13.9 percent on income of $21.7 million in 2010, Romney responded testily that the massive windfall he enjoys from exploiting the tax code is "entirely legal and fair."

http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz24wowYsSI

2Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 11:18 am

Guest


Guest
salinsky wrote:Brilliantly written!


http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz24wowYsSI

When was the last time you willingly handed the IRS money? Here is your chance to show you are not a hypocrite. What is amazing is the fixation of the left on use of legal tax codes to avoid taxes. If you don't like the outcome write your congressman to change the code.

3Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 11:32 am

Guest


Guest
nochain wrote:
salinsky wrote:Brilliantly written!


http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz24wowYsSI

When was the last time you willingly handed the IRS money? Here is your chance to show you are not a hypocrite. What is amazing is the fixation of the left on use of legal tax codes to avoid taxes. If you don't like the outcome write your congressman to change the code.

When even most democrats came out against the COWH for attacking Romney on bain....it would figure that 'sal' would continue...

4Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 11:50 am

Sal

Sal
I hear dueling banjos.
Smile

5Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 11:56 am

Guest


Guest
salinsky wrote:I hear dueling banjos.
Smile

Dodge, bob, and weave. And the banjos you hear are probably from some fond memory you have from back in the hills of LaLa land.

6Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 12:11 pm

Floridatexan

Floridatexan

That was clear and concise, which is why it eluded the wingers, who can't read.

7Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 12:18 pm

Sal

Sal
Floridatexan wrote:
That was clear and concise, which is why it eluded the wingers, who can't read.

I know, right? Here the oligarch's entire scam is laid bare in gut-wrenching detail, and the numbskulls can only mumble incoherently about the fairness of the tax code and the inviolable reputation of Willard's tenure at Bain. It would be comical to watch these clueless pawns fawning at the feet of their corporatist overlords, if it wasn't so damn tragic.

8Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 12:23 pm

Guest


Guest
salinsky wrote:
Floridatexan wrote:
That was clear and concise, which is why it eluded the wingers, who can't read.

I know, right? mumble incoherently about the fairness of the tax code ic.

Actually dimwit you are the one whining about someone taking advantage of the tax code. Of course you offer no solutions, just keep digging and wasting your time.

9Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 1:26 pm

Floridatexan

Floridatexan
nochain wrote:
salinsky wrote:
Floridatexan wrote:
That was clear and concise, which is why it eluded the wingers, who can't read.

I know, right? mumble incoherently about the fairness of the tax code ic.

Actually dimwit you are the one whining about someone taking advantage of the tax code. Of course you offer no solutions, just keep digging and wasting your time.

How's this for a solution? Re-elect Obama and hold his feet to the fire (figuratively, of course). Because the Republican clown car has gone off the cliff. Your cardboard Ken Doll candidate has refused to stop lying...because it's working! On wingnuts like you.

10Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 1:41 pm

Guest


Guest
Floridatexan wrote:
How's this for a solution? Re-elect Obama and hold his feet to the fire (figuratively, of course). Because the Republican clown car has gone off the cliff. Your cardboard Ken Doll candidate has refused to stop lying...because it's working! On wingnuts like you.

Why re-elect Obama when he has been an absolute failure. Record unemployment, record deficits, disastrous economic policies, and the list goes on. Only a complete idiot would vote to continue to Obama train wreck.

11Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 1:47 pm

Guest


Guest
[quote="Floridatexan"][quote="nochain"][quote="salinsky"]
Floridatexan wrote:
How's this for a solution? Re-elect Obama and hold his feet to the fire (figuratively, of course). Because the Republican clown car has gone off the cliff. Your cardboard Ken Doll candidate has refused to stop lying...because it's working! On wingnuts like you.

You are way off in "left" field again.
1. Hold BHOs "feet to the fire"? What has he been doing for almost 4 years? Obviously he could give a hoot about anything and those who elected him have given him a lifetime free pass on his many failures. What makes you think a lame duck 4 years is going to make him different?
2. M.R. is not my candidate. Unfortunately the Dems were too cowardly to push a QUALIFIED candidate to the front of BHO and the Repubs were very weak. Ron Paul wouldn't have a chance. Hillary would have been an exceptional choice and I would have voted for her.
3. This is a stinky race with no good candidate to vote for.
4. You have a shallow mind with a repetitious drumbeat with your pitiful "wingnut" tag on nearly every comment.

12Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 2:14 pm

NaNook

NaNook
salinsky wrote:
Floridatexan wrote:
That was clear and concise, which is why it eluded the wingers, who can't read.

I know, right? Here the oligarch's entire scam is laid bare in gut-wrenching detail, and the numbskulls can only mumble incoherently about the fairness of the tax code and the inviolable reputation of Willard's tenure at Bain. It would be comical to watch these clueless pawns fawning at the feet of their corporatist overlords, if it wasn't so damn tragic.

Where is the Obama life-story?

BTW: There is nothing wrong with the various markets. Who is paying for the BBteam and the new site? You want the rich to pay more? Just kill tax free bonds. It's simple, you can do it.

Let the truly poor pay ........

Everyone has to have some skin in the game....a 5% national sales tax. Don't need a 52" TV, don't buy it. Think about your family........what is the problem?

Let's go to solve problems......

13Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 3:50 pm

Floridatexan

Floridatexan

http://readersupportednews.org/opinion2/279-82/13178-romney-is-lying-through-his-big-white-teeth

(Robert Reich):

We're not going to let our campaign be dictated by fact-checkers," says Neil Newhouse, a Romney pollster.

A half dozen fact-checking organizations and websites have refuted Romney's claims that Obama removed the work requirement from the welfare law and will cut Medicare benefits by $216 billion.

Last Sunday's New York Times even reported on its front page that Romney has been "falsely charging" President Obama with removing the work requirement. Those are strong words from the venerable Times. Yet Romney is still making the false charge. Ads containing it continue to be aired.

Presumably the Romney campaign continues its false claims because they're effective. But this raises a more basic question: How can they remain effective when they've been so overwhelmingly discredited by the media?

The answer is the Republican Party has developed three means of bypassing the mainstream media and its fact-checkers.

The first is by repeating big lies so often in TV spots - financed by a mountain of campaign money - that the public can no longer recall (if it ever knew) that the mainstream media and its fact-checkers have found them to be lies.

The second is by discrediting the mainstream media - asserting it's run by "liberal elites" that can't be trusted to tell the truth. "I am tired of the elite media protecting Barack Obama by attacking Republicans," Newt Gingrich charged at a Republican debate last January, in what's become a standard GOP attack line.

The third is by using its own misinformation outlets - led by Fox News, Rush Limbaugh and his yell-radio imitators, book publisher Regnery, and the editorial page of the Wall Street Journal, along with a right-wing blogosphere - to spread the lies, or at least spread doubt about what's true.

Together, these three mechanisms are creating a parallel Republican universe of Orwellian dimension - where anything can be asserted, where pollsters and political advisers are free to create whatever concoction of lies will help elect their candidate, and where "fact-checkers" are as irrelevant and intrusive as is the truth.

Democracy cannot thrive in such a place. To the contrary, history teaches that this is where demagogues take root.

The Romney campaign has decided it won't be dictated by fact-checkers. But a society without trusted arbiters of what is true and what is false is vulnerable to every lie imaginable.


14Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 4:13 pm

boards of FL

boards of FL
alecto wrote:Why re-elect Obama when he has been an absolute failure. Record unemployment, record deficits, disastrous economic policies, and the list goes on.

This would be a good point except for the fact that all of those things are either improving or have improved since Obama took office.

As a reminder, 1) we were shedding 600K jobs per month when Obama took office, 2)the economy was receding at a rate of more than 8% per quarter when Obama took office, and 3) the deficit has decreased each year since Bush's last budget. Further, 4) the majority of economists surveyed about the stimulus policy feel that it had a positive impact on the economy.



Last edited by boards of FL on 8/29/2012, 5:42 pm; edited 1 time in total


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15Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 4:33 pm

Guest


Guest
I'm not sure we'll know the full effects of the added debt for quite some time. the benefits are questionable too... rarely does the govt manage or apply tax dollars wisely. i think we saw enough examples of waste and fraud to seriously doubt the economists pov. hell... obama and geitner pressured dodd to insert loop holes into the stimulus for aig bonuses... was that a benefit or "positive"?



Last edited by PkrBum on 8/29/2012, 4:34 pm; edited 1 time in total (Reason for editing : word)

16Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 5:19 pm

othershoe1030

othershoe1030
newswatcher wrote:
nochain wrote:
salinsky wrote:Brilliantly written!


http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz24wowYsSI

When was the last time you willingly handed the IRS money? Here is your chance to show you are not a hypocrite. What is amazing is the fixation of the left on use of legal tax codes to avoid taxes. If you don't like the outcome write your congressman to change the code.
So does this mean you are no longer going to freak out over the 47% of Americans who pay no taxes because they are so poor? Does this outlook take them off the hook once and for all?

When even most democrats came out against the COWH for attacking Romney on bain....it would figure that 'sal' would continue...

I think there was a small dust up among the dems over knit-picking Romney's back-dating his departure from Bain, you know, was he in charge for real or just on paper? that sort of thing.

But I feel strongly that his general approach to business practices is totally fair game because he is basing his campaign on his ability as a business person who "knows how business works" and "knows how to create jobs".

17Mitt Romney - the Big Lie Empty Re: Mitt Romney - the Big Lie on 8/29/2012, 6:02 pm

Markle

Markle
othershoe1030 wrote:
newswatcher wrote:
nochain wrote:
salinsky wrote:Brilliantly written!


http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz24wowYsSI

When was the last time you willingly handed the IRS money? Here is your chance to show you are not a hypocrite. What is amazing is the fixation of the left on use of legal tax codes to avoid taxes. If you don't like the outcome write your congressman to change the code.
So does this mean you are no longer going to freak out over the 47% of Americans who pay no taxes because they are so poor? Does this outlook take them off the hook once and for all?

When even most democrats came out against the COWH for attacking Romney on bain....it would figure that 'sal' would continue...

I think there was a small dust up among the dems over knit-picking Romney's back-dating his departure from Bain, you know, was he in charge for real or just on paper? that sort of thing.

But I feel strongly that his general approach to business practices is totally fair game because he is basing his campaign on his ability as a business person who "knows how business works" and "knows how to create jobs".

That's good, because all President Barack Hussein Obama had to offer was his ability to manage an ACORN meeting.

As you know, former Governor Mitt Romney and Bain Capital were successful in turning 80% of the companies in dire financial straits they bought. Those companies sought out Bain for help. Gov. Romney also left Bain in 1999 in order to rescue the 2002 Winter Olympics in Salt Lake City Utah.


How many companies did President Barack Hussein Obama CLOSE just in the auto industry? Over a thousand of privately owned car dealerships along with all their employees. Hummer, Pontiac, Saturn. Who owns Chrysler so how is that an American car company?


For a list of CLOSED dealerships. (Over 100 in Florida alone)

http://www.edmunds.com/car-news/gm-dealerships-closing.html#FL


As for Bain, are all these jobs overseas? When you order a Domino’s Pizza, does it come by Federal Express?


The firm was founded in 1984 by partners from the consulting firm Bain & Company. Since inception it has invested in or acquired hundreds of companies including such notable companies as AMC Entertainment, Aspen Education Group, Brookstone, Burger King, Burlington Coat Factory, Clear Channel Communications, Domino's Pizza, Double Click, Dunkin' Donuts, D&M Holdings, Guitar Center, Hospital Corporation of America (HCA), Sealy, The Sports Authority, Staples, Toys "R" Us, Warner Music Group and The Weather Channel.

How many jobs do you think are in just these few Bain companies?


Unlike President Obama who was afraid to pick a VP that might be more intelligent, more informed on issues. Mitt Romney demonstrated what made Bain Capital an immense success. One of his strongest points is that he knows how to surrournd himself with people as good as he is or superior to him. It is one of the keys to success of SUCCESSFUL, HIGHLY QUALIFIED PEOPLE.

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