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Mitt Romney the Tax Cheat - Image: Haraz N. Ghanbari
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Update: See Matt Taibbi's masterpiece in Rolling Stone: "[W]hat 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."
By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions – placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place. That same man then runs for president riding an image of children roasting on flames of debt, choosing as his running mate perhaps the only politician in America more pompous and self-righteous on the subject of the evils of borrowed money than the candidate himself. If Romney pulls off this whopper, you'll have to tip your hat to him: No one in history has ever successfully run for president riding this big of a lie."
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ABC News reports Willard Mitt Romney has parked millions of dollars of his personal wealth in investment funds set up in the Cayman Islands, a notorious Caribbean tax haven.
The last few weeks of the Republican Presidential road show has been dominated by discussion of Mitt Romney's career as head of a Wall Street private equity firm -- Bain Capital. Most people who enter politics have some previous career in the private sector -- especially if they're wealthy.
But Mitt Romney's career on Wall Street -- which he apparently hoped would allow him to tout his credentials as a "job creator" -- will instead weigh down his election hopes like a massive millstone. There are six reasons why:
1). First and most important, attacks on Romney's history at Bain are not "attacks on free enterprise" -- or being "anti-business." They are important for what they communicate about Mitt Romney and his values and the contrast that it poses with President Obama.
Barack Obama - like Mitt Romney -- earned a degree at Harvard -- and all of the opportunities that afforded. But when he graduated from law school, Obama went to work helping workers in the shadow of closed -down steel mills. Romney made millions for himself closing down steel mills.
The point is not just that workers were laid off, or jobs were outsourced -- though they were. The point is not whether some of the ventures Romney funded succeeded and others failed. The point is that the impact of Romney's business activity on the lives of ordinary people was incidental to his one and only goal: making huge sums of money for himself and a small group of his partners and investors.
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| Willard Mitt Romney with friends at Bain |
Romney's idea of success was embodied in that picture from two decades ago, with Romney at the center, surrounded by a squadron of Wall Street sharpies with money coming out of their pockets, their mouths and ears.
The point of the Bain story is that Romney would do whatever he could legally do to make money for himself and his crew. The effect of his decisions on the lives of ordinary people -- or even the businesses in which they invested -- was simply irrelevant. If shifting jobs overseas would make him and his friends more money - fine. If Bain could make millions by loading up a business with debt and bleeding it of cash -- that was fine too -- even if it meant that the business itself was ultimately forced to close. If buying a business and chopping it up into parts for resale would make him more money -- so be it.
Improving the lives of ordinary workers -- or of local communities -- was never his goal. His goal was to make millions and millions of dollars for himself -- often at other people's expense. Instead of viewing ordinary workers as human beings who were parts of a team, he viewed them as "factors of production" -- assets to be used when they helped him make money -- objects to be discarded when that would fatten his bottom line.
Americans want a President who understands and cares about ordinary people -- that's not the Mitt Romney of Bain Capital.
2). If you were the Republican Party, you couldn't pick a worse time to nominate a candidate with a resume as one of Wall Street's "Masters of the Universe."
Even today, most voters are acutely aware that the recklessness of the big Wall Street Banks -- and a complicit Bush Administration -- caused the 2008 financial crisis that cost eight million Americans their jobs and worst economic calamity since the Great Depression.
The GOP will have to go some distance to convince everyday voters that they should trust their economic futures to a guy who was part of precisely the same crowd whose greed and recklessness just sent the economy crashing in flames.
After all, not many people would be keen to sign up for a cruise managed by the same team that commanded the Titanic.
3). Over the last year, Americans have become increasingly focused on economic inequality -- and on the fact that the gang that caused the economy to collapse kept making billions while everyone else paid the price. The message of the Occupy Movement doesn't resonate solely on the left of the political spectrum. Occupy speaks to many independents and conservatives as well.
And let's remember, the Occupy Movement started out as "Occupy Wall Street." Americans are increasingly uncomfortable with the exploding role of the financial sector in the American economy. They are not uncomfortable because of theoretical or "policy" concerns. It just doesn't make sense to them that a relatively tiny number of people -- who don't build a product or create a service -- can make massive amounts of money, while ordinary people who work hard and play by the rules see their incomes flat-line.
Their view is simple. They create cars, or food, or houses or computers -- or they provide police protection, or care for sick people, or teach our kids. Why should they be asked to sacrifice when guys who basically gamble for a living -- as Wall Street speculators -- make incomprehensibly large sums of money?
It makes no sense to them that 400 families control as much wealth as 150 million of their fellow Americans -- that the top 1% control 30% of all of the wealth in America.
It makes no sense that a hedge fund investor like John Paulson can make $5 billion in income and pay a lower percentage in taxes than a secretary. He makes $2.4 million per hour -- or $40,000 a minute. Paulson makes as much in the first 1.25 minutes of the work year as the average worker makes all year long.
That kind of excessive wealth might not upset everyday Americans so much if their own incomes were growing. But those incomes have stagnated for decades. And over those same decades, the incomes of the top 1% have increased by almost 300%.
And perhaps most galling to everyday voters, is the fact that the wealthiest Americans have such an outsized influence setting the rules -- cutting their own taxes -- making their own regulations -- and are rarely held accountable for the recklessness that has cost everyone else so dearly.
Americans feel that the middle class is in dire jeopardy -- that it is under attack. They worry that the American dream will be snatched from their own families -- and those of their children.
Not a great time for the Republicans to nominate a poster boy for the one percent.
4). The impact of Romney's record at Bain is magnified by his own personality.
Romney comes across as a cold, calculating guy -- precisely the kind of guy who doesn't blink an eye when he orders up hundreds of "pink slips." He is about as empathetic as a rock.
He has a hard time connecting with people in public -- and on TV. And he seems to have a tin ear -- a hard time understanding how his remarks will be interpreted by ordinary voters.
He "enjoys" firing people who don't give him good service. Really?
He doesn't understand how it might sound for a guy who has a fortune of $200 million to say that he is actually "unemployed" too. Or when -- having graduated from Harvard, born into a family of the CEO of a big auto company, he says he has been worried about getting a "pink slip"? Sure.
He doesn't even have to stop and think when he offers to bet $10,000 on who is right in a televised debate? Ten thousand dollars is two thirds of the average annual Social Security benefit.
That kind of tin ear sends a message to ordinary voters that he is simply out of touch - that he doesn't understand or empathize with the lives of ordinary Americans.
Then there is the story of the 12-hour trip with the dog in the kennel on top of the car. The story about how when the dog got sick riding on top of the car -- had an attack of diarrhea. Romney hosed down the car -- hosed down the dog -- put the dog back on top of the car and continued the drive.
These personal characteristics just reinforce the picture of Romney as a Wall Street baron who doesn't understand or care about the needs, or lives, or interests of ordinary Americans.
5). The fact that Newt Gingrich and Rick Perry have joined in defining Romney's Bain years absolutely inoculates Democrats from charges that they are "anti-free enterprise" or "anti-business" when they make the same charges.
Probably not very likely that Gingrich or Perry would volunteer to attack Romney's history at Bain next September -- but they just did. All Democrats need to do is put a clip of Rick Perry in an ad where he accused Romney of being a "vulture capitalist.".
6). Finally, in so many respects, Romney's Bain history makes him the perfect antagonist in the campaign narrative set out by President Obama last month in his Kansas speech.
The President will, quite correctly, frame the upcoming election as a battle for the future of the American middle class -- a choice between a society where we're all in this together or all in this alone.
He will offer a vision of America where we look out for each other -- where everyone is called upon to play by the same rules -- and everyone gets a fair shot, a fair shake and contributes their fair share.
The Willard Mitt Romney who ran Bain Capital is the perfect foil for the Democratic narrative this fall. That's why the Bain Capital narrative is so important for defining Romney and setting the terms of this year's election campaign.
Just visualize the national political debate that features the Mitt Romney we've seen on TV the last several weeks and the Barack Obama who made the speech in Osawatomie, Kansas last month.
At the close of his Kansas speech -- which took place in the same town where Theodore Roosevelt had announced his "New Nationalism" a century ago. Obama said:
"We are all Americans," Teddy Roosevelt told them that day. "Our common interests are as broad as the continent." In the final years of his life, Roosevelt took that same message all across this country, from tiny Osawatomie to the heart of New York City, believing that no matter where he went, no matter who he was talking to, everybody would benefit from a country in which everyone gets a fair chance.
And well into our third century as a nation, we have grown and we've changed in many ways since Roosevelt's time. The world is faster and the playing field is larger and the challenges are more complex. But what hasn't changed -- what can never change -- are the values that got us this far. We still have a stake in each other's success. We still believe that this should be a place where you can make it if you try. And we still believe, in the words of the man who called for a New Nationalism all those years ago, "The fundamental rule of our national life," he said, "the rule which underlies all others -- is that, on the whole, and in the long run, we shall go up or down together." And I believe America is on the way up.
