Wednesday, May 30, 2012

Romney gives false impression of economic literacy

Mitt Romney tried to reassure Michigan voters he doesn't intend to cut spending by saying cutting spending is recessionary.

Was this an endorsement of Keynesian economic theory? Of course not.  It's just another attempt to deceive.  In fact, Romney's fiscal goals call for cutting the entire government by close to 60%, other than the military and social security, including things such as Medicare, despite his claims that he wouldn't touch it for ten years.

Romney has called for $8 trillion in spending cuts to go with his $2 trillion military expansion.

Despite his lies, we know a number of things about Romney's core beliefs.  One is that he is a rigid ideologue. In Massachusetts, he vetoed adding any more liquor licenses.  As a businessman and SLOC chair he engaged in "symbolic" cost cutting, fining people monetarily if they were late for staff meetings, and choosing what hotels they were allowed to stay at.  He didn't save much money by all this, but it demonstrated his power and his ideology. His ideology is simple. He is better than you and so you must sacrifice and give more to him.

To pretend that he harbors some Keynesian ideas similar to Obama's is to misread him entirely. He managed to get through decades with Bain Capital without learning the difference between capitalism and white collar fraud.  He is not a man who deserves a chance to run our economy.

Romney says he has clinched nomination

Romney today is claiming final victory in the Republican primary.

Other sources put him still 100-200 delegates off. Once again he received less than 70% of the popular vote, unopposed, in Texas.  Granted there were more Republican votes than Democratic votes in the Texas primary, but Texas has long been the most politically uninvolved state in the nation. It's part of how the rich maintain control.  In 2004, for example, only 33% of Texans voted for president, when a Texan was running, compared to 50% of Michiganders. Another possible cause may be inflated census numbers for Texas, since Florida with 7 million fewer residents always has a higher total vote than Texas, but that's an issue for another blog.

Romney's total votes for all primaries to date are hovering just under 8 million.  There are just five states left with primaries. In 2008, John McCain reached 9,840,746 votes compared to Romney's 4.5 million.  Will Romney be able to beat the McCain number?  He may, but it will be close.  California and New Jersey had about 2.6 million Republican votes in 2008, and if Romney wins two-thirds of them plus a big show in Utah, the final state, he might beat the McCain totals.

Meanwhile, Obama won 88% of the admittedly miserable Texan Democrat primary vote.  You won't see any stories about this, although you did see them last week when 40% of Democratic voters did not vote for him.

Texas is as Southern as any of the previous "protesting" states, but Texas did not protest Obama yesterday.
As for how many total votes Obama received, you won't see that on Wikipedia, where they don't count any state where he received 100% of the votes in coming up with a 4.5 million total. In practice, he has received more votes than Romney despite no effort and no real race.

Saturday, May 26, 2012

Romney can't close his enthusiasm gap, but Obama's widens. A Curious case of backstabbers appears

The Romney steamroller rolled on...and got worse results in Kentucky and Arkansas than he received last week, in both cases less than 70% of the Republican vote even though he is technically unopposed.
That wasn't the story the (biased Republican) Kentucky media wanted to sell, which was that Obama didn't get 40% of Democratic votes in Kentucky (and Arkansas; and also in West Virginia, which voted before the whole gay marriage flap).   Before that his previous protest votes had rarely ranged as high as 20%.  But these three states were the most violently pro-Hillary Clinton in 2008 and it is likely they retain some animus from that period.  Why Romney has been unable to rally the Southern Conservatives is a more interesting question. It is difficult to believe they won't vote for him in the fall, but it is also difficult to believe there is any enthusiasm.

 The Obama campaign dealt with several very curious incidents this weekend, both where supposed allies tried to undermine his re-election candidacy.  The first was a revival of the notorious and ridiculous birther controversy. The second was an attack by the African-American mayor of Newark on an Obama campaign ad.

Both these incidents are very curious because they highlight the differential treatment of Republicans and Democrats in the press.

In the first case conservative blog Breitbart uncovered a pamphlet from a no longer existing company that supposedly represented Obama as a literary agent when he was an unpublished author, and claimed he was born in Kenya, the son of a finance minister.  Since I met Obama in 1983 and he told me he was born in Hawai'i, I know for a fact he was not claiming to be a Kenyan national at that time.  The alleged author said it was a fact-checking mistake, but I'd be very surprised indeed if the whole incident isn't a forgery, both the pamphlet which somehow missed the light of day in 2004 when Obama was a keynote speaker, or when he ran for Senate in Illinois, or when he ran for president in 2008 against very capable opposition in his own party. If so, that would mean the woman who said she made the "error" would be lying.

The second was Cory Booker's defense of "private equity." The Newark mayor pretended to be "nauseated" by Obama's attacks on Bain Capital.  It was not reported why, but the Obama campaign discovered the reason, namely that Bain had given big money to Booker in his mayor's race.

However,  while the Obama campaign found that interesting tidbit, the "media" did not cover that story, nor did they find out what Bain expected to get for such a lot of money in such a small place with such inexpensive elections.  In fact, to the extent they did cover the story, it was to imply that the White House "slapped down" Booker on the issue, as opposed to revealing the pertinent fact that Bain funded Booker.

The news companies handled these stories a little gingerly but with a raging bias.  ABC merely noted that the publishing error "might have been the source" of the birther story,  falsely implying the birthers were rational not crazy, when not a single birther ever brought it up before now.   All the networks covered Booker's attempt to point a finger at Obama for "dirty campaigning" when Obama has not yet even scratched the surface of the Romney perfidy as we've seen on this blog.   None of them questioned Booker's expertise in the matter of "private equity," which is something a New Jersey mayor would not normally be expected to know a lot about.   I hope the Obama people fully understand now the extent of uphill battle they have with the media in such relentlessly hostile hands.

Monday, May 21, 2012

The Election will be about Jobs, Jobs, Jobs

It's no secret what this election will turn on: Jobs, jobs, job, jobs, jobs.  The hardest hit group of people in the job market are the young, a third of whom are underemployed, and the older people who have lost jobs and not regained them.  The former were big supporters of Obama in 2008 and he cannot win the election without them this year.  This is pretty  much the only opening Romney has to win the election, since he is a man without character and personality.

But what is the truth about jobs in America?  How did it get to be a crisis, and why hasn't Obama done more?

As background, it is necessary to understand some of the history of US employment, separated from the noise of Republican propaganda.  For instance, a Republican talking point is now taught in high schools, namely that when social security was started there were 7 people paying in for everyone withdrawing, whereas today the ratio is 3 to 1 and falling, and that can only be sustained because so many older people have such pitiful benefit levels.   The implication is clear: we have become a nation of loafers.  But the reality is different.  In 1944 67 million people paid into social security out of a population of 132 million.  In 2010 160 million paid into social security out of a population of 308 million. That is the ratio of "worker bees" to total population has actually slightly increased from 51% to 52%, as the elderly, students, and prisoners replaced children, orphans, mental patients, housewives, and sanitarium residents in the dependent column.  It's just that more of today's dependents rely on social security and less on family support and charity.  Remember when you hear someone complaining about social security tax, how they would have likely had family dependents to support in a previous generation.

Ultimately, the question of jobs is a question of facts and statistics.  The public "feels" unemployment more in 2012 than it did in 2008 or 2009 because it optimistically thought the challenges of those years were temporary blips. Progressives said no, there was a structural problem of too much wealth concentration and a predatory and false global trade regime, and while Obama remained committed to the latter, he at least understood the problems posed by the former.  Republicans do not.  Mitt Romney sees no problem with concentrated wealth and his business partner Edward Conard thinks that the successful are underpaid!  Moreover, Republicans made Obama's stimulus too small and refuse to consider a supplement. Republican governors dragged their feet about spending any of what was available (see high speed rail).  Republican senators have filibustered the president an unprecedented 300 times, and then blame him for inaction!  But they've done worse. A tea party group last fall asked employers not to hire anyone before the presidential election, so that economic sabotage would bring down the president, a scenario - a strike of sorts by employers -  out of Ayn Rand's "Atlas Shrugged."

America's large industrials have boasted they are holding more than $1 trillion overseas, money they say they MIGHT return to America if their taxes were cut.

That second article is particularly amusing for saying that cash held overseas nonetheless "helps" the economy when it brings no dividends or interest home, so much so that the US has fallen into current account deficit, not just trade deficit and we are not benefiting from our overseas investments.

It is interesting that they were able to make such a treasonous boast without fear of retribution from the public, and it is certain that the latter claim is largely bombast.  They keep a lot of money in China because China makes them, and has capital controls that the USA doesn't have.  Yet these companies are eager to invest in Communism while blaming American workers for being too greedy, as did their (Chinese) labor secretary under George W. Bush.

Nonetheless, it is clear that Republicans advocate economic sabotage to achieve political ends, and that they have no love for the U.S. economy apart from it enriching them personally.   Their continued existence in Washington makes the nation unable to fix employment problems.

 For years, the only employment "statistic" that counted was the Unemployment Rate.  This rate has always been misleading as an international comparison.  We were told in the 1980s that unemployment was worse in Europe because the socialistic economies there are "sclerotic" and make it hard to fire people and have unions on the board of directors (Germany). Today Germany employs 5% more of its people than we do.
However, their "unemployment rate" is as high as ours because it is counted differently.  Similarly, Canada employs 5% more of its people than we do but does not usually have lower unemployment.  The unemployment rate, then, has been massaged in the USA to the point of being unbelievable.  In the early Bush II years, for instance, they cut the labor force 2% in order to hold the unemployment rate down. Needless to say, they have not done this for Obama.

But the partisan "professionals" at the Bureau of Labor Statistics have done even worse in their reporting of the employment rate.  Here, for example, is their snapshot of nonfarm jobs in America.

The top table, their "official" results are shocking. They show a flat employment trend from 2002 to 2011, with very slight swings,  yet we know the population increased 27 million during that time.  That's 27 million people who had to be fed, clothed, and supported (22 million of them under Bush) with not a single extra body working.  It was not done with productivity increases as much as it was not done at all, and has been reflected in the rapid increase of poverty.  According to the chart, Obama actually has a net decline in jobs from his 2009 inaugural to the end of 2011, whereas Bush is showing a slight increase from 2002 to 2009 (because 2001, a year of heavy job losses, has been hidden).  This is what Romney is running on.  Add back the last year, however, and you see Obama looks like a giant of economic stimulation compared to Bush, whose Keynsian "stimulus" was in tax cuts and $300 checks to families and government employment, and bubbles in health care, banking, and real estate.

The BLS, it turns out though, is faking to support the Republican story  too.  Some of it is obvious. The top chart is their new number and right under it is a table of previous reports. You can see that the Obama employment totals have been consistently revised upwards after their initial reporting.  But this doesn't seem to have happened under Bush....That means that news reports about employment are always not as positive as the final results apparently are.

Then you look into the methodology and realize that BLS  has rather unprofessional data practices.

Thus we see that they send out employment surveys, which are indifferently processed by companies, but even though they recognize the data is garbage, the assume the month to month fluctuations in the garbage have some "real" validity.  Someone evidently pointed out to them that states collect unemployment insurance data that is comparatively comprehensive and well-policed and better than a survey which is only returned occasionally and which can't follow the turnover in companies declining and starting that states are able to track.  Therefore they take "primarily" state unemployment data and use it to "recenter" their survey results once a year (for unseasonally adjusted numbers) but a full five years for seasonally adjusted numbers.   This makes no sense. If the states have better data, then junk the surveys and get monthly reports from the states!

 Anyone who has taken a statistics class knows that you can't "recenter" bad data and treat it as though it gives an accurate time series.  Bad data is bad data.  Moreover, restating five years instead of leaving the individual benchmarks compounds the error trends in their survey data.

In short, the Republicans are using these numbers because they control them and have distorted them at the source.  Even if you ignore their apparent sabotage, their record on jobs has been poor and their "story" on this issue has no substance.

Until late in George W. Bush's term, few people looked at the employment numbers.

Thursday, May 17, 2012

Polls differ on Mitt the Hall Monitor

Nebraska and Oregon had primaries last week, but all you have heard is Romney won.  Since Ron Paul has suspended his campaign and Romney was officially unopposed, they felt justified not letting you know that Romney received only 71% unopposed in these two Republican states.  29% of Republicans could not  bring themselves to vote for their party's nominee.  Meanwhile, Obama's foray into gay rights appears to have ended any protest vote against his candidacy on the left.

Still, Republican pollsters have not decided how to handle the situation.  Fox News released a poll taken May 13-15 showing Obama with an eight point national lead.

Gallup had Romney even or even ahead, with improved likeability.

These differences are too large to be reconciled. They cannot both be correct. Most likely, neither is correct.  As a former employee in the market research industry, I know how far distant the effort and results are from the "statistical and scientific" basis they are claimed to have.  Exit polls are the only polls which are truly accurate, and in modern America, they never match the reported election results. Survey results follow the needs of the buyer, suggesting a split in Republican strategy.

Some believe that showing a gain will improve Romney's shaky standing with the GOP faithful and get independent and undecideds to view a personally unpopular man as well within the "normal parameters" of electoral politics.  This would be the Gallup crowd, probably tight with the campaign and receiving a belated tepid endorsement from George W. Bush this week.  The Fox crowd, perhaps the only big conservative media player not in some way tethered to Bain Capital, see that as stupid.  The theme that works best for them is Romney the underdog and victim of monumental Wall St. connected elitist intellectual Democrats.
Not for them the idea that Romney is pandering to gays because Wall St. is supporting Romney. Indeed, they are scrutinizing Obama's financial statements for evidence of Wall Street ties.$2m/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BuzzGames_Gamecore+%28TheShowbuzz%3A+Games+GameCore%29

In 2006, Romney's disclosure indicated ties to state run oil and gas companies in Russia and China that did business with Iran.  If a conservative opponent hadn't highlighted these investments, the public would never have known.

What's really interesting is the blackout of news on Romney's 2010 investments.

Certainly what he hasn't hidden doesn't show him as "independent" of Wall Street, including large holdings of Freddie Mac and Fannie Mae bonds.

His Goldman Sachs funds are heavily invested in foreign markets in 2010 as in 2007.

Republicans found that Romney continued to have investments in Chinese oil companies and companies doing business with Iran until he got rid of some of these in 2010.

The whole range and scope of Romney's investments will not be covered anywhere unless the Obama campaign does so.  Indeed, the media campaign is already set.  Anything negative Obama says about Romney will get free rebuttals to the issue from CBS, NBC, and ABC.  Anything negative Romney says about Obama, Obama will have to pay for an ad for a response.

In the meantime, despite attempts by the media to squelch the bully story, evidence continues to roll in that Romney gets physical when opposed, and being opposed can be as little as refusing to put a seat upright on a plane. Romney views himself as a kind of National Hall Monitor,  just as in high school, and he is not about to give up the Enforcer role.  George W. Bush is also correct to be wary of a man who could easily seek his prosecution.
2012 hand on shoulder to stop Perry from talking.  Romney's contractor hired the illegal, so his claim was disingenuous.

2010 altercation

2002 altercation
1981 altercation

By threatening legal action, he managed to avoid trouble for all of this.  But it all points to the Romney as bully theme being an accurate representation of his character.

Friday, May 11, 2012

Republican operative Diane Sawyer organizes the media response: the timing is suspicious!

If you need any more proof that the mainstream media is biased in favor of Mitt Romney, you can find no more outstanding example than Diane Sawyer's ugly, slanted response on ABC News to the "curveball" that Mitt Romney was a physical bully in high school, forcibly cutting a gay student's hair and leading a blind professor to walk into a door.

The daughter of  a Republican county executive (the county that contains Louisville, Kentucky), Diane Sawyer rose to prominence working as a press officer for Richard Nixon's White House.  This was the same Richard Nixon who was known for his dirty tricks and electoral games, and who had to resign for covering up campaign misconduct. After he resigned, Sawyer followed him to California, helping him write a memoir to whitewash his image.  Then, she decided to go into journalism, where she was gratefully welcomed, being the right kind of woman, a rightist.  Of course that has not prevented the right from accusing her of liberal bias on the apparent theory that ovaries are always suspect....and that could be true. Daughters of Republicans aren't always reliable (see Hillary Clinton).

Anyway, when rattled, Sawyer reverts to republicanism. The story about Mitt Romney's bullying, confirmed by five witnesses, four of them willing to share their names, apparently did rattle her.  She did her Karl Rovian best to turn it into a story not about Mitt Romney, but about the Obama campaign and the Washington Post.   "But we rarely go back to high school" in vetting candidates,  she exclaimed, forgetting that they have done just that to Obama. A national magazine published interviews with his former girlfriends last week, and he was said to eat dog in Indonesia when he was under ten years old, a story ABC News reported.   She also forgets that everything about Obama from his papers, to his grades, to his athletic record, to his professors and preachers, to the birth certificate he had no control over, has been minutely examined, while Romney has been bragging all the time about marrying his childhood sweetheart and presenting himself as a kind of goody two-shoes; whereas any discussion of his religion, when he was a preacher, is considered bigotry!

She covered the article by showing a few several second clips of one accuser (there were five) and then interviewing at greater length a Romney defender who wasn't there when the incidents happened, and who doubted the incidents were that serious. She questioned whether the five had a political motive, something that was not done to impugn the Swift Boat Veterans for Truth, even though none of them had any first hand dirt on John Kerry.  She even said the timing of the story "seems suspicious" in an effort to imply that the Obama campaign planted the story in the Washington Post to reinforce the president's declaration of support for gay marriage yesterday.

She had no evidence to back up an assertion like that, and the timing actually suggests the opposite. The story took time to uncover, whereas Obama's interview on gay marriage was not scheduled until yesterday morning and the subject was only brought up after Biden endorsed gay marriage a few days ago.  Obama's team originally backpedaled after Biden's speech.  There were rumors Obama wanted to support gay marriage earlier, but didn't want to be associated with the likely defeat of gay marriage in North Carolina.  If so, then why not schedule the interview several days in advance? The whole thing doesn't add up.  If anything, the likelihood runs the other way - that the Obama camp found out about the story first and decided to get their position out beforehand to reap maximum rewards.

It must be a brutal shock to conservatives that the Washington Post, which was so thoroughly fixed in their camp for years after Katherine Graham died, could run such a story.   Conservatives have come to expect a right wing bias in the news.  They offered nothing but standard assertions of "liberal bias" in the story when it was revealed that Romney had gotten twice as much positive coverage as Obama over these past few months.  One story Diane Sawyer has not run is the fact that since 2008 Mitt Romney's Bain Capital has attempted to buy up much of America's media.  But neither has anyone on the right, who are now accusing the Washington Post of being an arm of the Obama campaign.  Chances are they would have had made these same claims of liberal press bias had the Washington Post compared Obama to Satan.

Bain Capital, Mitt Romney CEO, owns the largest network of radio stations in the country, Clear Channel of San Antonio;  did own the second largest, Cumulus of Atlanta,  and still has a major investment in it, and also owns many right wing talk show syndications, including Limbaugh, Hannity, and Beck.  I don't recall any of them mentioning they are employees of Mitt Romney. I don't remember Diane Sawyer investigating that either.  Nor does ABC note that Gannett, the largest newspaper chain in the land, has as its largest shareholder an investment company, which in turn is owned by a Romney money manager named Munder Capital.  Lee Munder was Romney's Florida finance co-chair.

Will Diane Sawyer recuse herself because she worked for Nixon? Of course not.  Will she mention that ABC is owned by Disney, that Disney's largest shareholder is Fidelity, and that Fidelity's largest share holder are the Johnson family, big Romney supporters?    In this article, Woody Johnson attends Ann Romney's birthday party.

Is Diane Sawyer anything but an unofficial Romney campaign official?

The right was quick to take the hint.  Breitbart, a conservative blog whose founder died recently, responded with entirely fallacious claim that the real story was the Washington Post's bias and claim the bullying story is "imploding."  They claimed the original source of the Post story was "Stu White," who wasn't present, even though the Washington Post named four of their five witnesses as sources and they were not Stu White.   Breitbart also had that the victim's "teary" sister is angry about how her brother had been portrayed, as if conservatives would have been nicer.  A more lame response is hard to imagine, but that is the way Karl Rove worked, and Beth Myers, Romney's campaign manager, was his student.  As with Dan Rather and George W. Bush's record as a deserter, they will suggest lies and forgery (which was never proved).  Could the right have, in Machiavelli fashion, sold the Post a story they can later subvert as fake? Possibly, but highly unlikely in this case where four witnesses were willing to go on record.  Nonetheless, the right thinks its readers will accept the claim this was a smear job.

Most important of all, there was no denial from Romney.  He said he "didn't remember," but if he really didn't remember, he would have simply denied it since it would be his word against theirs. He did it, he remembers, and as always, he is unwilling to accept personal responsibility for his actions.  He does not have the maturity to be president.

His campaign, though, was quick to move to North Carolina to see if it could scrape up some votes.
That may be hard to do.  Amendment One to ban gay marriage passed by 1.3 million to 800,000, but North Carolina will likely cast 4.3 - 5  million votes for president, meaning that only a little more than a quarter of its voters felt strong enough to get out and vote against gay marriage.  Obama actually polled fewer than 800,000 votes in the primary, meaning more North Carolinians voted against banning gay marriage than voted for Obama. True, total Democratic votes in the presidential primary were 959,000 suggesting at least 130,000 Democrats voted against gay marriage.  That is hardly a huge potential pickup for Romney. Romney's uphill struggle seems to be represented in that running with only the token opposition of Ron Paul, and the same number of primary voters as the Democrats, he won 100,000 fewer votes than Obama.  It does seem peculiar, and perhaps a mark of fraud, that 200,000 more votes were recorded on Amendment One than on who should be President.  Civil Rights groups say many people in liberal areas were given ballots without the Amendment on it, so if anything, the count should have been in favor of the Presidential race. One thing is certain, and that is the tide of people supporting gay marriage is rising rapidly, and Romney will not benefit from that.

Thursday, May 10, 2012

Romney apologizes for teenage bullying, pretends homophobia was not involved.

The news is buzzing with Romney's apology for teenage pranks.  One involved holding a male classmate down who had bleached his hair and forcibly cutting the hair, and another involved calling another male classmate a girl.

Romney gave the standard excuse for pre-Stonewall homophobia: I didn't even know what a homosexual was!

Of course they knew what a homosexual was. In over fifty years of hearing this excuse from my elders, I never met one who was telling the truth.  And besides,  says Romney, I don't remember!  But I'm sorry if anyone was offended!

Romney should say that he was a spoiled youth with an inflated sense of worth because of his powerful father, and friends and enemies who evaluated him based on his father.  He will never do that, however, because he still hasn't matured, nor can he speak honestly about his father.  A simple acknowledgement that politicians and businessmen like his father left Detroit the smoking ruin it is today, would be nice.  It will not be forthcoming.

Still, the media focus today is on his apology, not on the original article, which was not strictly about gays and included other "jokes" like when Romney purposely led a blind teacher into a door, when he disdained people from the wrong side of the tracks, and he would never "break up" with a girlfriend, but simply stop calling.

The truth is Romney is not reformed.  Just like George H.W. Bush, who resuscitated his teenage bullying as an adult by hiring Karl Rove to do it for him, at heart Romney is still a socially approved delinquent,

Wednesday, May 9, 2012

Edward Conard reveals the lies of Romneyomics

This New York Times article gives us a good insight into what Mitt Romney really thinks in an interview with business partner Edward Conard.  Conard's viewpoint explains how Romney can think that wealth inequality is no big deal, and complaints about it motivated simply by envy.  It's because they do not understand how economies work.

Romney and Conard come from  the perspective that economies are powered by investment, not consumption.  This idea was discarded by the economics profession because it was wrong.  The notion the rich have of investment is that it is something they acquired by saving more of their income than other people (virtuously), which is then put to work investing in new opportunities which brings innovation and change. We'll call this the "virtue" version of wealth.  They then compete in bringing new products to the public at cheaper prices, which benefits the public more than it benefits the rich - if they are successful.  According to Conard, insane disproportionate rewards are beneficial because they make people compete to earn them (the "lottery" model of labor competition, where a bigger jackpot causes more people to join the game).

This is a fundamental lie about how economies work, how investment works, how innovation works, how the rich got their money, and about what they did with it.

In all economies, investment  is driven by demand, not capital.  This was the great insight of Lord Keynes in the 1930s and the truth has been never more apparent than today, with the failure of austerity measures in Europe to bring about prosperity. The rich can affect it by distorting investment, but they can't create demand.

Nobody will invest in any idea for which there is not a market, and there is  no market where there is no spending money.  Give a rich man a million dollars and he will buy a nice car.  Give a hundred men $10,000 each and you will sell a hundred cars.  In the second case there is demand to build cars and the rich will find and employ men to build them, and if there aren't enough rich in the country to finance it, overseas rich will be brought in or the financial system will create fiat money to do it.   In the former case, the rich man moves his money to where there is demand, offshore,  which has been the case in the United States in the past dozen years as middle class incomes have fallen.

 When the rich absorb more of the spending money, they reduce the amount of spending money available for consumption demand and therefore the amounts that will be invested and the people who will be employed.  The rich then either send it offshore or waste it speculating on asset values, which leads to the eventual crash of asset prices.   Moreover, when they earn vast amounts that no risk or skill can justify, they lower the value of work and money for everyone.  Fairness is what Adam Smith's mystical "Invisible Hand" was, the idea that anyone's money was as good as anyone else's and people could expect through work to earn reasonable rewards.  Eliminate the fairness and you eliminate the Invisible Hand.  People won't work if the system isn't fair and the rewards few, and increasingly the system isn't fair and people are less and less inclined to  work.  Mormons, on the other hand, believe it is one of God's miracles to make Greed into Good.

Money represents a "store of value," or past work, and those who have earned in the past are not always the best placed to envision or promote the future.  When we tie all our investments to people who have money, and they are increasingly unrepresentative of the public, then their investments will be an increasingly bad fit with what the public wants.  The fewer and richer they are, the more brittle, uncreative, inflexible, stupid and backwards looking their investments will tend to be.  Nothing retards innovation as much as a rich man who thinks he knows technology.

Conard attacks the financial crisis of 2008, which he describes as merely a run on the bank, not caused by mortgages or CDOs.  This shows a simplistic view of the banking system.  If what he says were true, then the government's stimulus would have corrected the crisis immediately and there would be no structural unemployment. Those of us who were alive during the last decade remember it differently.  When the Federal Reserve Act was passed, its board was charged by Congress with ensuring that banks not invest more than 25% of their assets in real estate. The experience of many nineteenth century banking panics had been that banks were all too prone to betting on land prices and neglecting business loans.  Alan Greenspan lost that discipline. In the orgy of deregulation set loose in the financial sector in the 90s and early 00s,  low interest rates and weak demand led the banks to invade the real estate market such that by 2006 the majority of their assets were backed by real estate instruments and the outstanding real estate loans in the nation had increased five-fold.  As long as real estate prices appreciated quickly, banks had more money to lend, and they sucked in money from all over the globe by repackaging risky mortgages and selling them overseas with little off balance sheet guarantees that made 5% risky loans into 5% risk free loans.  When real estate prices began to fall, banks had to mark down their assets, which gave them fewer balances to lend against.  They were forced to stop lending.  Thus, the real financial crisis started in 2007, and it was met by the government with reductions to the reserve requirements and a massive injection to banking reserves of cash in August and October 2007, amounting to a trillion dollars of liquidity. The objective was to keep the banks lending.

The banks should have spent the next year carefully culling their real estate portfolios. Instead, they redoubled their bad habits.  It was the redoubled speculation, combined with a slightly higher mortgage default rate, that led to the collapse. The government guaranteed their actions, and their losses were comparatively slight, but there is no evidence that they learned from anything from what they did, nor did they eliminate the off balance sheet derivatives that their CEO's never understood but which continue to put the worldwide economy in danger. Just week, the Chase CEO Jamie Dimon, paid $23 million last year, admitted to a $2 billion trading loss on a $100 billion derivative bet, a bet of a size that no player in the economy should have been allowed to make.  Chances are Mr. Dimon still does not understand the bet or why it went wrong.

 They continue to reap insane bonuses, they continue to invest in asset bubbles, and they have not restarted business lending within the United States.  There is rather something of a "capital strike" going on by major corporations, who claim they are holding $2 trillion overseas that they would love to spend in America, if only the government would eliminate their taxes.  One clear example of how political gamesmanship is leading to economic suboptimal outcomes was a rejected proposal for special glass for the new Freedom Tower, made in Pittsburgh, which was then planned to be shipped around the world to China to be cut and shipped back, not because China has better glass cutting technology, or because an around the world trip of heavy breakable glass was genius business, but so the company could justify parking its profits in China. The accounting was driving the business instead of vice versa, and that is always a danger sign for an economy.
Fortunately, that plan was scuppered after being revealed on television.

Conard makes the startling claim that entrepreneurs who with very little real effort can become billionaires are underpaid, and if we paid them more we would have many more entrepreneurs.  This is nonsensical.  Ideas to improve society are always ubiquitous, but the limitation is the willingness of people to pay for them, not the willingness of people to work for them.  Moreover, when people try to become say a professional basketball player and fail, while the basketball may be marginally better than it would have been without the extra competition, we now have a large class of people who have failed and do not have skills to support themselves.   In Conard's world of entrepreneurs like gnats, there would be a huge increase in the supply of failed businesspersons who have no means of support.

Society would clearly be better off if fewer people tried to be professional basketball players or famous actors or billionaire bankers and more people learned a different trade like plumbing or installing solar collectors.  Germany invests less than half of what we do on health care and barely half of what we do on education per capita, yet their manufacturing and trade are healthy, they run trade and current account surpluses consistently,  and they employ 5% more of their population than we do. The gambling rich can only be supported at a high level of income if they agree to socialistic support of the rest of society who tried and failed, and neither Romney nor Conard would support that.  To them, failures simply disappear, and there is no reason to wonder who feeds them, where they live, what medical care they might receive, or who pays for it all.

Conard was probably responsible for the Dade International deal with Romney, where Bain paid $400 million for a medical products company that today is worth $7 billion (not a fair comparison since Romney merged the company with two others).. The part Conard leaves out is the part where Bain didn't see that potential in the company and demanded to be bought out.  The loans undertaken for the company's business were diverted to line Bain's pockets, and Dade went into bankruptcy, with the creditors accusing Bain of "unjust enrichment" in court.  It was only after those debts were managed or discharged under bankruptcy that the company has climbed to a worth of $7 billion.  It turns out when they made an investment and the company went bankrupt, Bain Capital always profited.  There is only way that could happen: they either defrauded new lenders who invested or buyers that they sold the companies to.  They only got away with it because the buyers represented the competitors of the companies so stripped and closed.  The plan was to reduce competition and raise prices, not to compete and lower prices as Conard insists.

Conard then takes a swipe at Warren Buffet's charity, saying that the money earmarked for the undeserving poor is money that would otherwise go to the middle class. This unjustifiable slam at charity attempts to turn the middle class against the poor, just as the rich are thought to be more deserving than the middle class.

 Conard then goes into a wildly unhistorical comparison of Europe and the US, saying that Europe erred in turning to socialism, even though European countries have eliminated most of the income gap between them and us which existed in 1945. He then lies about Obama's alleged income redistribution efforts, which so far have not produced any improvement in the income structure of society.  Conard then dismisses crony capitalism as not really something that happens in a large modern economy, a breathtaking thing to say when confronted with Dick Cheney, whose extraordinary wealth is founded only on corruption. In short, Conard makes a very strong case for why Mitt Romney should never be allowed to get within a mile of 1600 Pennsylvania Avenue.  Everything that he thinks is self-serving, ignorant, childish, and dumb.  He is a living advertisement for the fact that wealth and merit are nowhere correlated.

Romney reiterates opposition to gays, not just gay marriage

Mitt Romney's delicate balancing act, that of advocating discrimination against gays without seeming to, appears to have hit a stumbling block.  The idea was to use coded language to outrage gays and soothe conservatives while leading the apathetic middle to think that Romney was against unfairness but for a discriminatory environment.  That way Aunt Mildred could safely vote for Romney while pretending to her grandchildren Romney had nothing against gays.

Barack Obama's support for gay marriage has changed the game.  Romney can now appeal more thoroughly to outraged conservatives, but with demographics shifting against the Republican base, his potential gain in the "enthusiasm gap" both candidates face is shrinking and Obama's is widening.

Romney's reference in his reaction to "states" being the appropriate forum for deciding what benefits to give out, merely highlights to gays that most states don't give out any benefits and don't intend to.

Indeed, in most states it is still perfectly legal to fire gays for no other reason than homosexuality and if the Obama campaign concentrates some fire on the unfairness of that, they may succeed with underemployed youth.

The media ran to get comments from two marginalized gay Republican groups, but did not survey a single one of the traditional gay community organizations, as one would expect from a biased, Republican controlled media.

The only gay marriage proponent they spoke to was Richard Soccarides, the son of an antigay psychiatrist, who is a full-time lawyer, not a full-time activist.

In this article they also spoke to two opponents, one "academic," and one "anonymous" Democratic critic.

Once again the media blackout on the real gay community was total.

Romney beats the ghosts, media launches anti-Obama campaign

Today comes word that Romney has won three more primaries, in West Virginia, Indiana, and North Carolina.  His vote totals were under 70% in the first case and around 65% in the latter two.  Ron Paul only received 11-15% in each state, meaning that candidates who had officially withdrawn from the race still managed to poll 19-23% against Mitt Romney.  Apparently, money can't buy all the votes, only most of them.  Romney's vote total in the primaries so far is now up over 6 million, one-third of what Hillary Clinton gained in a losing effort in 2008, and it will be surprising if he beats half her total when the primary season is over.

Rick Santorum finally gave him a grudging endorsement, but still received many votes in the primaries.


Romney signaled how the campaign is going to go, though, which is that will be the dirtiest and most dishonest campaign in history.  Romney tacitly agrees with a woman who claims Obama should be charged with treason, misrepresenting Obama's position on the role of the Supreme Court:

The traditional Republican cant has been that liberal judges on the court are activists who are "legislating from the bench."  Obama simply pointed out that the two judges who have done the most "legislating from the bench" in the last twenty years are the two most conservative: Scalia and Thomas.  So Romney now has taken the opposite approach, that Supreme Court judges should "legislate from the bench" because that is their job.  Will this then prevent him from accusing the Democrats of using the courts to fix a legislative shortfall? Of course not, Republicans are nothing if not able to hold contradictory opinions simultaneously.

This is important because this shows Romney has no "limit" beyond which he will not go. He would think nothing of arresting a former president for treason if it were in his power, and he has said, "If Obama is re-elected, Iran will have a nuclear weapon," suggesting that if in a presidential debate he thinks he has lost the election, he might well try to assassinate the president himself.

Meanwhile, he has decided he can't let his advisers out-lie him, and he has now claimed as an official position, the idea that he always advocated managed bankruptcy for the auto companies.

This is a direct contradiction to his repeated positions during the crisis, when he said GM should fail and it would be good for the auto industry if it did.  Certainly there is an argument that there is excess capacity in the global auto industry, and at the time India and China were thinking of buying one of the Big Three to start their invasion of the American market.  Presumably Romney wanted one of them to pick over GM's carcass.  But at no time did Romney ever advocate a "managed bankruptcy" to save the companies.

However, Romney won't be alone in his campaign. He has been helped every step of the way by the non-objective "objective" media.  He received relentlessly positive coverage from the media, mainly in defiance of the facts.  This is no surprise, of course, since we have shown on this blog that Romney actually owns a sizeable chunk of the media.

They are cheerleading today, and according to the latest polls, propaganda works.   His campaign has not even really begun and already he is even with the president.,0,84111.story

Partly this is anti-incumbent mood, also reflected in Greece and France where governments were soundly rejected.  The rejection in those cases made sense: the economic theories they were rejecting were failed conservative policies of austerity.  How  is it that Romney is viewed as helpful to the economy when his theories are wrong and his record is one of financial crime, not intelligent enterprise?

Clearly, even when the press has been negative about Romney, it has not spoken about his business record or his economic theories.    The question is, does Obama have the ability to correct that? So far, he seems less well-organized and capable than in 2008 when he will need far more to be successful. The omens are not good.

Saturday, May 5, 2012

Romney investment firm employs Ponzi scheme salesmen; is Romney's interest in profit making universities driven by personal financial interest?

Solamere Capital, a firm started by Mitt Romney's son and revolving around fundraiser Spencer Zwick, is employing castoffs from the fraudulent Stanford Financial Group, which bilked investors of billions.

The CDs offered by Stanford offered a fake return.

Allen Stanford was a failed Texas businessman who reinvented himself in Caribbean tax shelters, and allegedly through bribery and paying greedy people more than honest operators could expect, built a Ponzi empire and even got himself knighted.

He was eventually found guilty.

Solamere Capital, meanwhile, employs one of Meg Whitman's sons

That's Griff Harsh, who was charged with felony battery in 2006

Meg worked for Mitt Romney at Bain and was thought likely to be his vice-presidential nominee in 2008, but her failed run for California governor did not help her.   Perhaps Griff is another reason why. 

Anyway, I think we are closer to finding out why the Romney boys are on such a short leash.  And perhaps that sheds some insight into the parenting ways of the Romneys.  Are they running an employment service for the problem children of the rich?

One of Solamere's business lines is for-profit universities through TA, which Romney himself promotes (and receives contributions from.  Maybe he was better off financing his own campaigns).  Pay to Play for the Romney family?  Is their presidential scheme intended for personal enrichment?  Isn't a for-profit university just an expensive corruption and inappropriate privatization, like the for-profit charity consulting trend that failed ten years ago?  Jeb Bush wanted to privatize Florida's water supply, and maybe Romney has similar schemes up his sleeve.

Thursday, May 3, 2012

Romney is a conservative revolutionary

News has come that Newt Gingrich has finally folded his campaign, but did not endorse Romney.

Why not?

The staff at Capitol Hill Blue speculate that he wants Romney to pay his campaign debts.

That leaves Ron Paul as Romney's only  official opponent, who can be ignored -  although, as Rachel Maddow pointed out, it now appears Ron Paul has won both Iowa and Minnesota delegations.

However, Paul previously offered to withdraw for a VP slot, so we can't view his candidacy as serious either.  Notwithstanding the lack of opposition, it is still not perfectly certain Romney can win enough support to clinch the nomination before the convention.

Meanwhile, Romney having secured majorities (barely) in the northeast primaries, his gay token adviser Richard Grenell has obediently resigned.  Gay former conservative blogger Andrew Sullivan claims to have the inside story, and appears shocked that Romney didn't give Grenell full support.

Romney himself responded that he wanted Grenell to stay and that he never considered Grenell's "sexual preference," itself a codeword used by the right which doesn't like "orientation" because that implies something inborn or unchangeable, whereas "preference" indicates choice.  By using the terminology of the enemies of gays, instead of what gays call themselves, Romney is indicating that he does discriminate even when he is saying that he doesn't.

This "moderation" is a theme repeated elsewhere in the gay press, that Romney "folds" when confronted by the Christian right as if he were personally an ok guy except for being spineless.  I think after twenty years of  relentless attacks on gays individually and collectively by the Mormons, who assumed the leading position of organizing attacks on gay rights, spending millions in state after state to stop gay marriage, often under phoney evangelical front groups founded and funded by the Mormons, that lunkheads in the gay press would have realized by now that the Mormons and Romney ARE the Christian right, and much the most competent part of it.

Romney's PAC didn't give $10,000 to fund the group fighting for Proposition 8 because he is "caving to pressure."  The still unexplained very large donations from politically uninvolved millionaires in the San Diego area may well have been additional hidden donations from Romney, who has a house in the area.
Romney did not try to stop gay marriage in Massachusetts by finding and implementing an unused 1913 law to prevent out of state gays from contracting marriages in Massachusetts because of  Bryan Fischer and the American Family Association, who are bragging that they toppled Grenell.  Romney and the Mormons are relentless opponents of gays and always have been, and the fact that so many people still don't understand that shows how effective their  fake "centrist" propaganda has been.

Sullivan should know better.  When Romney was Governor of Massachusetts, his record was not one of moderation.  In the 2006 budget, for example, he inserted 250 line item vetoes. 

What kinds of things did he veto?

The "job creator"  vetoed money for additional training for unemployed workers.

He vetoed school breakfasts and indeed all support for the poor.

His adoption of health reform did not extend to mentally ill and disabled persons, wanting to keep the former on the streets and the latter institutionalized.

Romney even vetoed an expansion of the liquor licensing quota system, so that additional taverns and hotels could participate. He said he was "preventing the stigma and decay of the infamous 'wide open cities' of some states."   Does he mean Las Vegas, where Mormons are a huge proportion of the population?  Boston would love to get a piece of their tourism pie and their 2000s growth rate.,1049357

There is not one evangelical in the nation who would have been more puritanical than this.  The legislature had a Democratic supermajority and overrode every Romney veto in 2006.  That gave Romney a reputation for "moderation," since Massachusetts cannot be said to have taken a right turn while its legislature was 85% Democratic.  That this was no fault of Romney's doesn't seem to have occurred to many people on the left, which is disturbing.  Both in 2000 with George W. Bush and 2012 with Romney, there is an attempt to take candidates who are far outside the limits of acceptable human behavior, and normalize them, fit them into existing benign categories.  They didn't believe it when we said George W. Bush should not be running the country and even though we were right about Bush, and we have not had the same reaction about anyone else until Mitt Romney, they refuse to believe us about Romney.

They continue to treat him at face value, believing him when he said he was an "independent," even though both his parents ran for national office as Republicans.  They believe that he once favored gay rights, even though as Governor he did everything he could to block gay marriage. Romney is and will continue to be a conservative revolutionary, someone who plans basic structural change in a conservative direction by any means possible.