Monday, July 16, 2012

Speculation mounts as to what is hiding in Romney's tax returns

Romney's "Obama=liar" campaign has won over conservatives, including a hysterical editorial in Investors Business Daily today, a neo-Nazi rag pretending to be about business and continually shifting to move themselves farther right than the always right leaning Wall Street Journal.  The public has not taken notice yet.
Mother Jones has of course made the whole issue moot by uncovering some Romney outsourcing investment from 1998, which is as predictable as bear leaving a trail of bear scat.

Perhaps IBD, WSJ and their cronies just need time to confuse the issue.   Remember why outsourcing is bad.  $1 paid to an American worker is spent locally, enabling local businesspeople to spend, and their suppliers to spend so that $1 becomes $3 in economic activity. Send $1 to a contractor hiring overseas labor, and you lose the entire $3.  The salary paid to foreign workers goes to multiply in their community, and the profit to the contractor is usually lost as well, being spent in overseas investments or held as economically inflationary and destructive speculation on asset prices.  When that outsourcing is in a program to deliver relief to poor people, as in Massachusetts, the loss is greater since a job given to someone on food stamps would lead to more economic activity and perhaps several people not needing food stamps, medical care, housing, welfare, etc.  In other words, your loss just went from $3 loss to the community to $4 to the community by outsourcing one payroll dollar, $3 is in lost economic activity plus $1 in required additional poor relief.   Granted that $1 stays in the community and is better than the $$ cost of starvation that would otherwise occur, but it is still a bad deal.

Romney would not have calculated this because he had an extremely short time horizon as a businessman.  Indeed, the Staples investment is a perfect example.  Bain Capital divested when Staples had $12 million in sales.  Why? Because their business model was to "pump and dump" not "buy and hold."    And that is key to understanding why the outsourcing was such a big deal.  Bain Capital and Bain Consulting  ran on a business model that promoted outsourcing, so even when he personally wasn't involved in a deal, it reflected his business model, and his business model included outsourcing.  We know that because he vetoed the legislature's attempt to put an end to outsourcing in Massachusetts in 2004.   This is fact, and when Romney calls Obama a "liar" on this issue, then he is adding to his already overwhelming stack of lies.  That of course is classic Karl Rove: Bush was an AWOL deserter so Kerry had to be accused of military misconduct.  Now Romney is known as a pathological liar so for the next four months we will be told from every pulpit in the land that Obama is the biggest liar ever, and on thin or fake evidence like this.

That "business model" also led Bain Capital down the path of fraud.  When Romney sold Damon Corp. to Corning Inc. at a profit, he was clearly defrauding Corning if he knew about Damon's Medicare scams as he claims.  Part of Bain's model was leverage.  Bain would buy a company and then get that company to borrow on their credit, but typically one third the money borrowed did not go to improve the company, but it was transferred to Bain Capital and booked as profit. That should also be seen as fraud on a grand scale, since it enabled Bain Capital to make money at the cost f the creditors who thought they were lending to a going concern.

That record of consistent business fraud leads people to speculate on why Romney has refused to publish any more than 1 year of tax returns.  The official Republican position is that he obeyed the law, and the custom of presidential candidates baring their finances is an invasion of privacy and silly besides.  However, when John McCain vetted Romney for VP, Romney gave McCain 20 years of tax returns.  The fact that Romney wasn't chosen, makes people think that McCain might have discovered problems in them.

Some of the possibilities:

1. Romney lost money in some years, paying no tax, thus puncturing his image as an infallible businessman
2. Still more foreign bank accounts not yet disclosed
3. Mishandled political contributions
4. Huge charitable contributions, possibly to groups that he pretends to be against.
5. Huge post-games contribution to Salt Lake Olympics, which otherwise would not have reported a profit
6. Losses to Madoff or some other ponzi scheme
7. Large profits from foreign businesses engaged in businesses antithetical to US interests
8. Income levels so high, his personal wealth must be much larger than has been admitted
9. Tax fraud or participation in the Swiss Bank Account tax amnesty for cheaters
10. Contributions to hate groups
11. Gambling profits or losses
12. Investments in liquor, pornography or other areas inconsistent with his image

The longer Romney delays revealing his taxes, the more speculation there will be. If that were Romney's only crisis of character, it might even be a good ploy to wait until the week before the election to release them, since all the speculation would then seem like a paranoid bad dream if there is nothing in them.  However, that is not the case this year.  There is more than enough dirt on Romney even without the tax returns.

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