We Need To Seize Back Our Continent

It’s the 68th anniversary of D-Day, and I was re-reading the wonderful speech Peggy Noonan wrote for Ronald Reagan at the 4oth Anniversary commemoration, “The Boys of Pointe Du Hoc.”  These lines jumped out at me:

“The Rangers looked up and saw the enemy soldiers at the edge of the cliffs, shooting down at them with machine guns and throwing grenades.  And the American Rangers began to climb.  They shot rope ladders over the face of these cliffs and began to pull themselves up.  When one Ranger fell, another would take his place.  When one rope was cut, a Ranger would grab another and begin his climb again.  They climbed, shot back, and held their footing.  Soon, one by one, the Rangers pulled themselves over the top, and in seizing the firm land at the top of these cliffs, they began to seize back the continent of Europe.”

They began to seize back the continent of Europe.  Today, we need to seize back this continent, our continent.  Our democracy is as threatened today as it was then, but now it’s under threat by our fellow citizens who are trying to turn our America into an oligarchy, a country of the super-rich, by the super-rich, for the super-rich.

For one brief shining moment after the Great Meltdown, the Tea Party had it right, a light went off in the minds of the “What’s the Matter with Kansas” people, and they got it.  But then their righteous anger at the Big Banks was perverted into hostility at “Big Government.”  They were co-opted by the Koch Brothers’ Americans for Prosperity [somewhere, Orwell is laughing] and Dick Armey’s FreedomWorks.  Instead of blaming the folks who caused their fellow citizens to need food stamps, they turned their fury and frustration on the poor souls who suddenly had to rely on those food stamps.

A rope was cut yesterday in Wisconsin.  We need to seize another one, and we need to climb.

Why 2012 Is Not 1980

Some in the GOP are comparing President Obama to Jimmy Carter in 1980 and predicting that Mitt will win just as Reagan did.

But I believe there’s a fatal flaw in that thinking.

Carter won in 1976 because it was the first presidential election since Nixon had resigned in disgrace, and voters wanted to tell the GOP what they thought of Watergate.  They also viewed Gerald Ford as somewhat illegitimate because he had been appointed vice president, not elected.   To add insult to that injury, Ford, this guy nobody had voted for, took it upon himself to pardon Nixon.

When the economy blew up under Carter, with the prime rate at 20% and gas lines stretching to the horizon, voters recognized that Ronald Reagan had nothing to do with Watergate or Nixon or Ford.  By voting for him, they weren’t in any way condoning or returning to the way things had been under the last Republican Administration.

That’s why voting for Mitt now is different from voting for Reagan in 1980.  While the economy is not exactly going gangbusters under Obama, Mitt would take us back to the Bush policies, to the complete lack of interest in regulating Wall Street, that led to the Great Recession. He would support the kind of drastic austerity that would pull us right back into recession.

We may not like where we are, but we hate where we’ve been, and we’ll be damned if we’re going back there.  Forward!



Our Two Economies

When I was growing up, the stock market pretty much tracked the job market — chances are if the Dow was high, unemployment was low.  Productivity gains translated into higher wages.  Wall Street and Main Street prospered together.  Since the Great Meltdown, we’ve seen the stock market come back, while unemployment and underemployment have remained high, and productivity gains go to profits, not wages.  I believe this hurts Mitt’s chances for election.

Americans don’t doubt that Mitt is amazing at making money.  We know he’d be good for corporate profits and the stock market.  Where we have less confidence is that he’d be good for getting us or our brother or neighbor a job.

Back in 2004, in the first post-9/11 presidential election, Bush defeated Kerry by convincing us that Kerry wasn’t ruthless enough to deal with the terrorists. That’s what the Swift-Boating was all about, casting doubt on the toughness of someone who’d actually served in combat, unlike Bush himself.

In this election, Obama will defeat Mitt by convincing us that Mitt, based on his Bain record, is too ruthless to deal with the Main Street side of our economy, as opposed to the Wall Street side.  Mitt identifies with the bottom line, not the unemployment line.  If 2004 called for toughness abroad, 2012 calls for some tenderness at home, a trait we don’t associate with Mitt.

Strong corporate profits, a high Dow Jones no longer mean the jobs are “trickling down” to us.  There’s definitely a trickle, but it’s just the one percent peeing on your leg.

The $14 Million Woman

From Joe Nocera, “Make Banking Boring,” NYT:

“We also know that Ina Drew, a JPMorgan veteran who headed the chief investment office — and who departed on Monday — made $14 million last year.  Wall Street executives who make $14 million are not risk managers.   They are risk takers — big ones.  And genuine hedging activity does not cost financial institutions billions of dollars in losses:  their sole purpose is to protect against big losses.  What causes giant losses are giant, unhedged bets, something we also learned in the fall of 2008.

“Thus, the final thing we know:  At JPMorgan, nothing changed.  The incentives, the behavior, even the trades themselves are basically the same as they were in the run-up to the financial crisis.”  Emphasis added.

It also looks as if that $2 billion loss JPMorgan has acknowledged might end up being more like $4 billion.  And warnings were being sounded about the bets as far back as 2007.


The Truth about the GOP

Brent Budowsky, over at The Hill‘s Pundits Blog, tells it like it is:

“Let’s be clear.  Boehner, McConnell, Cantor and Romney are not conviction politicians.  The are power politicians with deep insider financial backing, and deep crony-capitalist relations with Wall Street and K Street.  The people who run the party want the hostile takeover by Romney of the conservative movement to be done, over and complete.

“The Republicans…nominate the most insider candidates who do the best job of pretending to be conservative, just enough to humor and fend off the real conservatives.

“In the GOP, the insider, banking, Wall Street and K Street establishment is the boss.  Period.

“This process of an insincere Romney pretending he is farther to the right than he is, to humor the right that he will ultimately betray, has given Obama a huge advantage.

“To the political center, Romney looks too far to the right; to the political right, he looks too insincere; and to everyone else, he’s simply too elitist.”

I encourage you to head over to thehill.com and read the whole thing.

Right Message, Wrong Messenger

Newt is the wrong guy to bash Mitt for Bain Capital.  Paul Levy, a managing partner at JLL Partners, a firm like Bain, told Bloomberg TV of how Newtie loves him some private equity:

“Newt Gingrich spoke at my annual meeting two years ago, we paid him $40,000, and [he] praised private equity more fulsomely than I could ever do it. … He was great.  He gave a great evening. … Everybody had fun.  … But nobody praised private equity, risk taking, capital more fulsomely than Newt Gingrich.”  Emphasis added.

Update — Other media reports say Newt was paid $60,750, which included the cash equivalent of two first-class tickets, five-star hotel, etc.

I Hope Mitt’s 15% Tax Rate Will Get the Country’s Attention

Mitt Romney has been reluctant to release his tax records (and didn’t when he ran for senator, governor, or for president in 2008) because he knew people would be outraged that, as a Bain venture capital guy, he pays a rate of 15%, rather than ordinary income rates.  Of all the loopholes and funny business in our tax code, this is one of the worst, if not the worst.

While not releasing his tax returns, Mitt has now acknowledged that they show he pays 15%.

I am guessing that most of the country isn’t aware of this “carried interest” rule that lets him pay such a low rate, and although there have been efforts in Congress to change it, it’s never been an issue that’s lit up the switchboards.  I’m hoping that publicity about Mitt’s unfair tax advantage (and everyone else in venture capital, private equity, etc.) will finally generate enough anger to get the law changed.

By the way, Chuck Schumer, the Democratic senator from New York, and self-proclaimed champion of the little guy, has been one of the main forces in Congress blocking a fix for the 15% rule.  That’s because he gets tons of money from Wall Street, and he protects their unfair tax break in exchange.

I don’t want to “redistribute” Mitt’s wealth, I just want him to pay the 35% that I do.

Must Read on Mitt

You must read “When Romney ran Bain Capital, his word was not his bond,” by William D. Cohan in today’s Washington Post.   Cohan was a deal-adviser on Wall Street for 17 years and worked for Lazard Freres, Merrill Lynch, and J. P. Morgan Chase.  Some excerpts:

“Seemingly alone among private-equity firms, Romney’s Bain Capital was a master at bait-and-switching Wall Street bankers to get its hands on the companies that provided the raw material for its financial alchemy.  Other private-equity firms I worked with extensively over the years — Forstmann Little, KKR, TPG and the Carlyle Group, among them — never dared attempt the audacious strategy that Bain partners employed with great alacrity and little shame.  Call it the real Bain way.

“In my experience, Bain Capital did all that it could to game the system by consistently offering the highest prices during the early rounds of bidding — only to try to low-ball the price after it had weeded out competitiors.

“By bidding high early, Bain would win a coveted spot in the later rounds of the auction….

“This is the moment when Bain Capital would become especially crafty.  In my experience — which I heard echoed often by my colleagues around Wall Street  — Bain would seek to be the highest bidder at the end of the formal process in order to be the firm selected to negotiate alone with the seller, putting itself in the exclusive, competition-free zone.  Then, when all other competitors had been essentially vanquished and the purchase contract was under negotiation,  Bain would suddenly begin finding all sorts of warts, bruises and faults with the company being sold.  Soon enough, that near-final Bain bid…would begin to fall, often significantly.

“Once Bain’s real thoughts about the price were revealed, the seller either had to suck it up and accept the lower price, or negotiate with a new buyer, but with far less leverage.

“By the end of my days on Wall Street in 2004, I found the real Bain way so counterproductive that I no longer included Bain Capital on my buyer’s lists of private-equity firms for a company I was selling.

“I don’t know if Bain Capital still uses the bait-and-switch technique when it competes in auctuions these days (I’m told that it doesn’t).  But that was the way the firm’s partners competed when Romney ran the place.

“I have no idea how Romney might behave in office.  I do believe, however, that when he was running Bain Capital, his word was not his bond.”  Emphasis added.

So in the Wall Street world of tough, ruthless SOB’s, Mitt was the toughest, most ruthless SOB of all.

Please pass this article around to everyone you know.  Mittens is not the “oh, gosh, “oh, my goodness” guy he pretends to be on the trail.