Money For Nothing
bob
Sure default Republican presidential candidate Mitt Romney lined his pockets to the tune of a quarter-billion-dollars or more as chief of Bain Capital. But in the process he innovated and created jobs and generally behaved as the sort of model capitalist that any American could be proud of, right?
GOP spin-meisters notwithstanding, Rolling Stone political reporter Matt Taibbi followed the money and did the math, and came to a somewhat different conclusion:
Last May, in a much-touted speech in Iowa, Romney used language that was literally inflammatory to describe America’s federal borrowing. “A prairie fire of debt is sweeping across Iowa and our nation,” he declared. “Every day we fail to act, that fire gets closer to the homes and children we love.” Our collective debt is no ordinary problem: According to Mitt, it’s going to burn our children alive.
And this is where we get to the hypocrisy at the heart of Mitt Romney. 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.
See, Mitt’s strategy at Bain Capital was to pick a target company that was pulling in money but struggling to stay profitable. Mitt/Bain would put up a wee down payment and get their buddies at places like Goldman Sachs to lend them the rest – sometimes hundreds of millions of dollars.
Then, Bain would use the money it just borrowed to buy up a controlling interest in the target company. Then, Tabbai reported, Bain would transfer responsibility for the loan from Goldman or whomever to the target company itself. And then, Bain would advise the now-debt-riddled target company on how to reduce expenses, i.e. who to lay off. Finally, Bain would charge millions in “management” fees for this swell advice.
However, it turns out the Mitt Strategy wouldn’t have been nearly so profitable if not for a fine loophole in the U.S. government’s tax code. Reports Tabbai:
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.
Feeling chilly this afternoon? Blood not boiling enough today? Read the rest of this report (and there is a lot) and fire yourself up.
Sounds like the Mafia.
1The Bain/Romney strategy may be complicated, but it’s still a sleight-of-hand shell game performed on a street corner to bilk ordinary people out of their livelihoods.
2Thanks, Bob. And Kate, you’re right: this is exactly how the criminals operate. I actually took the time to read all five pages of Taibbi’s article, and was floored by the information.
And I’m remembering that he also wrote a block-buster about John McCain, back in 2008. If not for Matt Taibbi, I would not have learned that John McCain actually crashed five multi-million dollar aircraft. This young writer has earned some attention. But I’m wondering: did McCain ever pay back the cost of those wrecked airplanes?
3Thanks for this. I don’t know that I completely understand the process, but I certainly know more about it now. I think it should be criminal.
4We need a movie that shows a prototype Romney doing just this. “All the President’s Men” did that for Watergate. If it had just the right stars millions might go see it. (Don’t think Clint Eastwood would be appropriate!)
Thinking on what I just said, it says something kind of creepy about our society that we get our information from a Hollywood movie!
I just received a phone call. They talked so fast that I was not able to hear all of it except that unless I give 3 dollars, just 3 dollars, POTUS Obama will beat Mitt Romney by 50 million dollars in fund raising.
All I needed to do was give 3 dollars. Only 3 dollars. My husband is retired, I am on disability. Yet they want 3 of my dollars, when his plan is to gut SS and Medicare. The 2 things, besides saving money, my husband and I contributed to for our “golden years”.
I didn’t know Mitt was so hard up for cash. 3 of my dollars will not even by me a gallon of gas.
I wonder if he and Anne are still eating their dinner off the ironing board? Ya think????
The caller was lucky I pressed the other button, the one that removes me from their list. I don’t know if I could have prevented myself from telling the person on the other end what I really thought of Mitt Romney and his politics.
Where are your tax returns, Mitt?????
5And he’s going to do this to our country….the United States of The Corporations….too.
6@Diane: Are you SURE it was the Rmoney campaign and not the Obama campaign? The Pres is always sending me emails asking for either $3 or $68. The deadline for the latest FEC reporting period is midnight tonight, so I am being inundated with emails from everybody.
It just seems strange that the Rmoney campaign would be trolling for chump change. Unless you believe that anyone giving you money, no matter how little, will make sure to vote for you.
7Barb,
8I’m positive it was for Romney. They spoke very fast and I don’t know who the money was going to(that was another issue) but it was for Romney, that they mentioned several times. To beat POTUS Obama in Nov.
But the last sentence was push 9 if you wanted to be removed from Romney for POTUS.
I really wished I had pushed the other button to find out more.
They said it was for romney, but imagine giving your money to karl rove’s group that’s for romney. YUCK
Barb, it is indeed chump change–and that’s the point, I think. They desperately need very small donations so they can brag that the *average* donation is some reasonable, modest, grassy-rootsy, Joe-the-Plumber-sounding amount. Helps offset all those bazillionaires who are throwing the big bucks at Vulture & Voucher to buy the election. Makes for better PR, see?
Lies. Damn Lies. And Statistics.
9@Kay: Ah, so. That makes perfect sense. I’m just glad I have Caller ID. I don’t pick up the phone unless I know for sure who is calling. Saves a great deal of time and anxiety. See, back in 2006, I merrily sent a coupla bucks to a number of people Act Blue sponsored–all of it online. Imagine my shock when one of the candidates (from Ohio, no less) called personally looking for more. I did, indeed, give her a lot more and again in 2008. She just neglected to tell me that there was a third-party ringer in both races taking votes from her, until she lost for the second time. She was looking for more money for the non-profit she was now heading.
Then there was the money I gave Jon Tester in Montana six years ago. He repaid me by sponsoring several bills to negate the gun control measures we in DC had VOTED FOR on more than one occasion. Needless to say, he will never see another nickel from me.
10Bob,
There is another article in the same RS issue worth reading:
The Federal Bailout That Saved Mitt Romney By Tim Dickinson
http://www.rollingstone.com/politics/news/the-federal-bailout-that-saved-mitt-romney-20120829?link=mostpopular2
“In fact, government documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie. The federal records, obtained under the Freedom of Information Act, reveal that Romney’s initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had “no value as a going concern.” Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.”
11And for an appertief:
Mitt Romney’s Federal Bailout: The Documents
http://www.rollingstone.com/politics/pictures/mitt-romneys-federal-bailout-the-documents-20120829
12I believe you Diane, I’ve seen ‘net ads begging for small amounts for Willard.
13I have caller I.D. and usually the trash callers don’t leave messages. And, unfortunately these days, I’m getting a lot of trash calls, even though I have the “Do Not Call” setup.
Sometime in the last couple of days, a voice mail was left on my phone to send money to Mittens, “just $3”, to beat Obama, blah-blah-blah.
I have been trained by my husband not to respond to any comment to press ANY of the buttons, including the one to delete me from their list. Apparently, sometimes doing so simply notifies the calling robot that I’m actually home, even if I’m just responding to delete me. When they know I have heard them, they KEEP my name, which they then sell to other obnoxious calling lists.
Anyway, Mittens gets no money from me.
14I don’t know how people can make it through these campaigns without caller ID. It saves me from having a lot of distress.
Reading about how U.S. taxpayers saved Romney’s Bain and Romeny’s Olympics, not to mention the tax codes allowing him to keep so much money he “earned,” rather than his paying his fair share of income taxes, it should be obvious to all that he is nothing but a glorified grifter. He sucks money out of everyone’s pocket; he hasn’t earned jack$@#t!
15Thank you for those links to Rolling Stone articles.
Mitt’s billions came from LBOs that were THE big $$-makers for Goldman et al & the Big-8 accounting firms, who were charging BIG time for advice on how to make a dime, deduct a dime & keep a dime… all on someone else’s dime… & all while not producing anything Made in USA. The money boys want to take America back alright – back to supply-side economics with those twisted trickle-down effects.
16Mittens was just another corporate raider who didn’t get caught. Btw, Oliver Stone produced movies about the LBO era. . . .
“Wall Street” (1987) – Michael Douglas played Gordan Gekko, a corporate raider who uses inside information & a young broker played by Charlie Sheen. Gekko goes to prison – just like Michael Milken did.
“Wall Street: Money Never Sleeps” (2010) – an older Douglas plays Gekko tries to take down an old enemy & rebuild his empire – again using insider information & a young broker – his son-in-law (Shia LaBeouf).
17Elsie, June, Barb, et al… Caller ID? *Ppffffttt!* You want real peace, get rid of the *phone*! I unplugged the dang thing during the 2010 election season and haven’t ever bothered to hook it back up. I would not still be paying for it except that it’s my internet delivery system (I don’t want cable and the option for “naked DSL,” internet only with no phone line, is not available in my neighborhood). We’ve switched totally to our cell phones, which at this point are NOT infected with political calls or any other spammage. I’m sure the day is coming that they’ll figure out how to tap into our cells, but until then: No home landline phone for us!!!
18I just let everything go to voicemail – friends and family know this. Is it just me, or did anyone else get the creepy feeling watching the Romoney speech that his face is heavily botoxed? Note attempts at expression always turning up as twitchy mouth turns.Sort of like a teenager after being asked if he used pot.
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