Wall Street Vampire? Or Just Another False Caricature? Mitt Romney has been depicted as a blood-sucking, Wall Street Vampire. If only that were the simple truth. Having an iniquitous personality would be better than the public persona he exudes right now. It would add a certain cache to his otherwise soporific blandwagon of a campaign. Newt Gingrich represents the anti-Romney persecution with a 28 minute political ad entitled “When Mitt Romney Came to Town.” The ad could be a Michael Moore “documentary” about E-VIL, Greeeee-dy, Rethuglicans snorting fine, Columbian Cocaine off the succulent rear-end of a hooker through rolled up $100 bills. Cicero was more fair and balanced in his indictments during The Cataline Conspiracy. Candidate Romney has predictably fired back with an ad that portrays Bain Capital as pretty much the good guys from The Lord of The Rings. His ad “Bright Future” paints Romney as a creator of wealth and jobs. It shows the names of hugely successful businesses that presumably would still be vending their wares out of pushcarts or bucket shops without the Benevolent Mittman. Like much we see in the heated skirmishes of a Presidential Primary, neither view of Bain Capital seems exactly steeped in the light of justice and truth. I’m not sold by either Mitt Romney or his opposition. I’ve tried to blog about this issue from the standpoint of a guy who just wants the fulsome, soiled laundry out of the gym bag so that it can be aired. Let’s settle this puppy in house, before David Axelrod tells America what to believe about this during next Fall’s Presidential Election. It would help to get some perspective on this not driven by Romney’s minions or detractors. Perhaps Fortune Magazine offers exactly that in a feature blog entitles “Fact or Fiction? Romney’s Private Equity Past.” Dan Primack, author of the Fortune Blog issues a statement outlining his purpose. “Mitt Romney is running for president as a “job creator,” based on his time as a venture capitalist and private equity investor at Bain Capital. Some of his rivals are beginning to accuse Romney of being more of a job destroyer, citing some of Bain’s more troubled investments.” ”So we’ve decided to keep track of who is saying what about Romney’s tenure at Bain, and about private equity in the context of presidential politics. More importantly, we’re going to tell you if the statements are true, sort of true or false.” He speaks out on several recent depictions of Romney’s role at Bain Capital. He begins with “When Mitt Romney Came To Town”. “Winning Our Future, a political action committee supporting Newt Gingrich, today released a 28-minute video titled ‘When Mitt Romney Came to Town.’ It focuses on the failures of four companies formerly owned by Bain Capital, and is so chock full of errors that it deserves its own post.” His post goes on to say: A) Unimac’s Florida plant was not closed until after Bain had sold Unimac to a different entity. He goes on to point out that Romney had stopped being a decision-making principal at Bain Capital five years prior to Bain’s sale of the asset and six years prior to Unimac’s plant closing. B) KB Toys was purchased one year after Romney left Bin in 1999. C) DDI Corporation was acquired under Romney’s watch. Romney and Bain acquired DDI in 1996, left the company in 1999. DDI Corp ran into trouble in 2000. However, contra-Primack, Romney isn’t completely in the clear because a 13D form suggests Romney was still involved in DDI as late as 2000. (Although not as a member of the Bain Board). So I’m not as willing as Mr. Primack to completely absolve Mitt on DDI as Primack does later in the post. Primack does not, however, paint a completely rosy picture of Romney’s activities at Bain. Primack takes issue with National Review Online for stating “Bain is involved in, among other things, leveraged buyouts, meaning that the firm and its investors borrow money from banks to acquire companies, usually firms that are in trouble but believed to be salvageable.” Primack notes factual discrepancies and omissions in the National Review Online Article. Primack points out the PE firms often arrange the finance so that they aren’t 100% on the hook if the deal goes Ka-Bloom! I take no great moral umbrage to them managing risk to avoid blowing themselves up. However, it is somewhat self-serving to claim Bain took on more actual risk than it really did. It sort of reminds me of a soldier that embellishes his old war stories a bit to look more heroic in front of the ladies. Primack further delves into this risk management issue and indicts National Review for not properly describing how Bain Capital took dividends out of money that they sometimes forced firms to borrow. This is a major and significant failure on the part of National Review Online. It also is worth noting that National Review completely ignored the issue of dividend recaps, which is the real issue that keeps getting glossed over because it doesn’t fit into a 30-second soundbite. Dividend recaps are when a private equity firm raises even more debt for an existing portfolio company, and then takes a dividend out of the debt proceeds (rather than from profits). That is how a private equity firm can profit on an investment whether the company later thrives or fails (although, typically, dividend recaps alone do not generate the type of returns that PE firms promise their investors). This issue needs to get aired out. If I were cursed by the gods with being Debbie Wasserman-Schultz for a fun-filled evening of barking at the moon and chasing parked cars, that’s the one I’d demagogue to the hilt. I’d talk about Romney eating these companies’ seed-corn like it was a box full of Cracker Jacks. Primack astutely and correctly points out: “Sometimes, however, such companies later fail and cite their heavy leverage load as a contributing factor. That is why Romney and Bain Capital are sometimes accused of profiting from bankrupting companies, even though that’s really some sloppy shorthand for what actually happens.” Believe you me, the Democrats running ads this Fall would cite heavy leverage load as a reason for these companies going under and tell you the personal life history of every line worker who was ever fired. Primack’s entire blog is long, detailed and well-researched. If you actually care about what happened when Mitt Romney came to town, Primack gives us about as good and as fair-minded a view of it as anyone else I’ve seen out there. No, Mitt’s still not charismatic enough to be Dracula. However, he’s not clear of Bain Capital by a long shot. The GOP voting public can and should demand of him more answers.
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Hero or Villain? Romney Under The Microscope At Bain Capital
To summarize : $92.6 billion in spending ( 7% increase over last year’s ); $9.2 billion deficit over eighteen months (half in the first six months, the other half in the next twelve). Brown is requesting $7 billion in new taxes, mostly from raising the sales tax again (to 7.75%) but with a faux-populist-friendly soak-the-rich* (actually, soak-the-small-business-owner) increase to 10.3%. Or the state can ‘cut’ an additional $4.8 billion in educational aid (he’s already planning to reduce poverty assistance by $4.2 billion): the most increased spending appears to be in tax relief/local government**… and education. In other words, that cut would actually be mostly in a projected increase in education spending, which means that it’s not really a cut at all. Or, to summarize the summary: Brown’s bailing out the municipalities; and he’s trying to blackmail the Californian populace into a tax hike to pay for it by threatening to wipe out an increase in K-12 education funds if they don’t vote said hike in. See how that works? Increase spending in a line-item; then call the threat to remove that increase a ‘budget cut’ and use it to justify a ‘temporary’ tax. It’s a great scam; or, rather, it was a great scam twenty years ago, when there was more give in the system. Today, it’s just kind of alarming. And, just for anybody still ready to believe in old Moonbeam: “Brown had been scheduled to release his general-fund budget Jan. 10, but was forced to unveil it today after it was inadvertently posted to the Finance Department’s website.” Oops. Moe Lane ( crosspost ) *Not to be rude about this, but California business owners should contemplate that, say, Texas has no state income tax and a state sales tax of 6.25%, with a maximum state/local tax of 8.25%. Which is one major reason why Texas now has four extra seats in Congress and California’s delegation has stagnated for the first time since it became a state. **But don’t worry! …The Legislative, Judicial, Executive line item in the new CA state budget isn’t going to take a hit, either .
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Gov. Jerry Brown’s (D, CA) new budget: more spending and higher taxes!
On Tuesday, the House Financial Services Committee passed , by a 52-4 margin, a bill designed “to stop future bonuses at Fannie Mae and Freddie Mac and suspend the current multi-million dollar compensation packages for the top executives.” The rest of the Committee’s press release on the bill: Earlier this month, the Federal Housing Finance Agency announced the CEO of Fannie Mae received $5.6 million in compensation and the CEO of Freddie Mac received $5.4 million. Under the bill, the top executives of Fannie and Freddie could only have earned $218,978 this year.
According to Senator John Kerry [D-MA], just because you take someone’s money doesn’t mean you have to support them. In fact, even though Kerry’s raked in well over $1 million from those ‘fat cats’ on Wall Street, according to his apparent logic, taking campaign donors’ money while spitting in their eyes is quite alright. That’s the gist of an article in Politico that goes into some detail about Wall Street’s concern with Democrats backing the Marxist occupiers in lower Manhattan (and elsewhere). via Politico : After the Democratic Congressional Campaign Committee sent a recent email urging supporters to sign a petition backing the wave of Occupy Wall Street protests, phones at the party committee started ringing. Banking executives personally called the offices of DCCC Chairman Steve Israel (D-N.Y.) and DCCC Finance Chairman Joe Crowley (D-N.Y.) last week demanding answers, three financial services lobbyists told POLITICO. “They were livid,” said one Democratic lobbyist with banking clients. The execs asked the lawmakers: “What are you doing? Do you even understand some of the things that they’ve called for?” said another lobbyist with financial services clients who is a former Democratic Senate aide. Just to be clear, the Neo-Coms in Manhattan, as well as across the country have advocated for jailing the bankers, sending them to re-education camps (or beheading them), as well as taxing of the rich, the seizure of private property , and a worlwide tax on all financial transactions— just to name a few. To make matters worse, despite the fact that Wall Street has bankrolled President Obama’s party (to the tune of $14.9 million in 2008), Obama has now come out in support of the Marxist occupiers, his White House spokesman even parroting the protesters’ false 99% narrative the Neo-Coms are using. According to the Politico piece : “Most Wall Street guys, they feel like they’re going to be burned in effigy,” said Anthony Scaramucci, managing partner of SkyBridge Capital, who gave to Obama in 2008 but is now fundraising for Mitt Romney. Some moderate donors, who have given to both parties, “fled from Obama in his support of the Wall Street protests,” he said. Based on some of the mad rants of the lunatics on the left, its not the burning in effigy that they should be worried about—it’s the actual use of force* that the Marxist mobs are advocating. As to the man who wanted to be President, John Kerry: Sen. John Kerry (D-Mass.) said taking money from a group doesn’t equate to supporting them. “It’s what you fight for and how you vote, it always has been,” Kerry said in a recent interview. “It’s hard to run for office and not have somebody in some sector or some industry have contributed to you; but the question is, are you voting commonsense and values and for the interests of the people, broadly?” * Note: As many Venezuelan industrialists can attest to, Marxists cannot seize private property without the use of force. P.S. For those Democrats trying to make the comparison between #OccupyWallSt protesters and the Tea Party: When is the last time you heard of sex, drugs , mass stealing , or even a rape occurring at a Tea Party event? _________________ “I bring reason to your ears, and, in language as plain as ABC, hold up truth to your eyes.” Thomas Paine, December 23, 1776 Cross-posted on LaborUnionReport.com
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Dems Have No Regrets Taking Wall Street Money While Backing #OccupyWallSt
The Senate is in session this week working on a package of appropriations bills called the “Minibus.” The House is out this week, but will be meeting in pro forma session to block the Obama Administration from making recess appointments. No Child Left Behind is starting to wind through the committee process in the Senate. The Senate is scheduled to take up H.R. 2112 , legislation to carry appropriations for the Agriculture, Commerce, Justice, and Science (CJS) and Transportation/HUD appropriations bills (THUD). The Agriculture appropriations bill passed the House on a 217-203 vote on June 16, 2011 and is being used by the Senate to carry two other appropriations bills CJS and THUD back to the House. This is called a “Minibus,” because the package will combine different appropriations bills together into one. The Senate will spend the week working through amendments to these appropriations bills before they break for a week this Friday. Expect conservatives to force multiple votes to cut some of the fat out of the federal budget. The Senate will conduct a vote on Cathy Bissoon to be U.S. District Judge for the Western District of Pennsylvania. Nominations have come back into focus as a result of a vote last week on liberal activist Alison Nathan to be U.S District Judge for the Southern District of New York. Nathan’s nomination squeaked by on a 48-44 vote . Conservatives need to keep a close eye on these votes. A nomination that is expected to be a big fight in the Senate is the nomination of Richard Cordray to be the director of the Consumer Financial Protection Bureau (CFPB). Conservatives are blocking that nomination because they fear the expansive powers of the CFPB will be a job killer and will further slow a future economic recovery. On Wednesday, the Senate Health, Education, Labor and Pensions Committee (HELP) will markup a bill to reauthorize No Child Left Behind. The Senate Finance Committee will have a hearing on tax reform options. Embattled Secretary of the Treasury Tim Geithner will testify before the Senate Small Business Committee on the a small business law that passed Congress last year and Secretary of Homeland Security Janet Napolitano will testify before the Senate Judiciary Committee . The Senate will recess for a week starting on Friday, as the House comes back into session next week.
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This Week in Washington – October 17, 2011
