Thursday, October 18, 2012

Newsweek Magazine Article


Some readers have taken me to task for what they perceive as inconsistencies in my philosophy.  If I believe in personally living debt-free and spending less and saving more, shouldn't I be supporting the fiscally responsible platform of the Republican Party?

And the answer is, yes, I would, if they had one.

But the GOP in recent years has morphed from fiscal responsibility to "let's loot the treasury and hand the money to all our powerful friends!"  And to get elected, they have embraced some pretty odious political and social philosophies that are attractive to crazy people.  They go after the stupid vote and I ain't stupid.

This is not fiscal responsibility.  This is just using fiscal responsibility as a cover story to favor special interests - wealthy special interests.   Romney attacks Obama at the debate for not leasing out more Federal lands for oil drilling.  But these leases are just give-aways to the big oil companies, who often "sit" on them for decades, hedging their bets.   We see similar things with grazing rights on Federal Lands.

And no matter how you slice it, the Bush Era Tax Cuts were cuts for the VERY WEALTHY.  Those of us in the 15% and 25% brackets saw bubkis from these tax cuts.  Those in the higher brackets saved millions on their tax bills.   Allowing these to expire, while keeping the 15% and 25% brackets the same (as well as preserving the 10% bracket) will not impact the middle class at all.

Eliminating the home mortgage interest deduction, however, will start a wave of foreclosures across the country, as  many middle-class families suddenly find themselves with an effective 25% increase in their monthly mortgage payments.

But more to the point, the idea that we can decrease taxes, increase defense spending (by 20%), AND decrease the deficit and national debt,  just doesn't add up.  And cutting trivial government programs and NPR funding (which might be a good idea, anyway) isn't going to make up the difference.

The difference will be made up by cutting Social Security and Medicare, which the GOP has promised to do.    Their tag line is "Anyone over 55 will have their Social Security and Medicare preserved."

I'm 53.  I get shit-on-a-stick.    If you are under 55 and voting for Romney, you need to have your head examined.

But what about Romney the "Jobs Creator"?   This is an outright lie.   Bain Capital set out to scoop up distressed companies, repackage them for resale on the IPO market, and then cashed out big time, letting the newly repackaged companies fail shortly thereafter.  They made hundreds of millions of dollars doing this, but ultimately, the companies were closed and jobs were lost.  No jobs were "created" as result of this, however, a lot of money changed hands - usually from your 401(k) to Mitt Romney's pocket.

From the article cited above:
Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way—out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale—the faster the better.
It was a strategy that worked in the 1990's.  Everyone went IPO-crazy, and a lot of "little people" lost their shirts in the stock market, buying these turds that everyone, including Bain Capital, was selling.   He collected tired old discount stores, like Bealls, that were being creamed by Wal-Mart, and combined then and said they were "growing" (by claiming increased sales from acquisitions was "growth") and sold them to the unsuspecting.  Let's face it, who can make sense of an IPO?

Even the one company that Romney invested in early on - Staples - really didn't "create jobs".   And investing $5 million in a start-up company and then cashing out $15 million a couple of years later is hardly "hands on" experience in "Jobs Creation".

As as the Newsweek article points out, Staples did not so much "create" jobs as it forced a lot of Mom-and-Pop stationary and office-supply stores out of business, while replacing them with low-wage retail jobs.   It is like saying Wal-Mart is a "jobs creator" when it fact, it is job-neutral, or if anything, is a job drain.

You can't build a sustainable economy on selling things made in China.  We all can't work retail.

The problem with Romney is that he is not going to solve our "problems" and in fact, our "problems" are largely behind us and the economy is getting better by every imaginable measure.   Yes, the idea that the economy is getting worse and worse is yet another LIE told by the GOP.    Romney, if elected, will claim credit for an already-recovering economy, but his "plans" will not be what fixes things (and it is doubtful that he will have a filibuster-proof majority to push through a lot of his draconian measures).

The paranoia about the national debt and budget deficits is being fanned by the GOP to get out the vote.  They have convinced middle-class people that their income taxes have gone up, when in fact, they have gone down.   They are creating a lot of FEAR, and as I have noted before, when someone sells you FEAR, they have a hand on your wallet.  You should beware of FEAR-mongers, they are LIARS.

As the economy improves, tax revenues will increase (they already are) and letting the Bush-era tax cuts expire will accelerate this.  Combined with budget cuts, particularly in the military, which is standing-down from two expensive wars, this will result in decreased budget deficits.   This is, by the way, how we ended up with SURPLUSES under Clinton - the economy grew, and that wiped out the deficits.

Yet the GOP tells LIE after LIE about these things, and one of the WHOPPERS they tell is that if Obama is elected, companies will be "forced to lay off employees".   Again, what did I say about the stupid vote?

As I noted in my three-part series on deductions, most people haven't a clue how the tax code actually works, particularly people wearing tri-corn hats with teabags attached to them:
In the last posting, we covered basic deductions for business expenses, which would seem simple and straightforward, but then again, half the population misses the simple concept.  Every time someone says to you that eliminating the Bush Era Tax Cuts For The Wealthy will cause businessmen to reduce hiring, you've met one more person who fails to grasp the simple matter of deducting business expenses from taxable income.  And if you believe that argument, well, you've found two.

Similarly, when you run into someone who thinks that you somehow "make money" on deductions or by writing things off, you've found another person who cannot subtract one number from another and multiply it by a percentage.  If you believe the argument, again, you've found two.

A lot of people are idiots.  Please don't add to the pile.
You see, people don't hire people and give them jobs as some sort of charity or out of the goodness of their hearts as benevolent billionaires.   You are not 'lucky' to have a job - you are creating wealth for someone else by working.   And if someone's personal income tax rates are increased, it is not an incentive or disincentive to hiring or firing their employees.   That decision is made solely on the basis of whether hiring someone would be profitable or not.

We have had tax rates in this country, not to long ago, of 50% or more - when I was a kid, in fact.  And yet, our unemployment rate was lower than today.   The idea that raising the tax rates on the very wealthy by a paltry THREE PERCENT is going to result you your being laid off, is idiotic.  And that tells me all I need to know about the GOP these days - that they are going after the idiot vote with basic lies that any thinking person who understands the tax code, can see through.

And who is spreading such lies?  Odious people.   One fellow in Florida sent a Memo to his employees telling them they would be laid off if Obama was elected.  The media portrayed him as a "resort owner" but when I checked his website, my suspicions were confirmed - he is selling timeshares and timeshares are an utter rip-off.    (Just look at the photo of him and his plastic-surgery trophy wife in their "look at me!" house.  Again, this is all I need know).

That is who is supporting Romney - the people who run the check-cashing stores and the rent-to-own furniture places, timeshare sales and other rip-offs, including your friendly local 25% interest credit card company and the "let's play with other people's life savings" folks on Wall Street.   These are the people who don't have your best interests at heart.  These folks are not creating wealth in this country, but merely skimming a little off each poor person, and redistributing the wealth to the very wealthy.   This is not "jobs creation" to create a minimum-wage job at a retail chain selling Chinese-made goods.  This is just a race to the bottom, to see who gets the last seat in the last lifeboat, as the Titanic goes down.

I have said time and time again in this blog, that in order to get ahead in the world, you have to avoid these sort of rip-offs.   And yea, it would be nice to pass a law outlawing these raw deals (a proposal to regulate Payday Loans is going through Congress right now, a similar law has been passed in Georgia).  But think long and hard about voting for a candidate who gets most of his financial support from the people who are trying to rip you off every single day of your life.   Does he have your best interests at heart?   I don't think so.

So how does the Romney camp plan on getting elected?  Well, they can't get most people to sign on to their real financial agenda.   So they round up the religious nuts, the right-to-lifers, the gun-nuts and all the people who are stupid enough to vote on meaningless social issues, rather than more concrete things.   But even with the large number of crackpots in the USA, this isn't enough to get elected.  The Evangelicals are a minority in this country, despite what they might try to tell you.

So in order to get some more middle-of-the-road votes, Romney has to LIE, and LIE A LOT.  He has to "reposition" himself as a moderate now (which took Obama by surprise in the first debate) and claim to be for helping the middle class.  But it is just a claim, and not backed up by any real policy definitions, other than "vote for me, I'll get elected, and then I'll tell you what we'll do".    Anyone who can't see through that nonsense is an idiot.

And the idea that suddenly he is Mr. Pro-Contraception is just insane.   He promised the Evangelical Employers (that huge group, right?) that he would protect their right to refuse to offer contraception as part of their health care plan.  Chik-Fil-A is safe, for the time being.   But now, in a debate, he says just the opposite.   Which do you believe?  Because one of them is a LIE, and no matter how you slice it, or how you feel about contraception, the point is, he is blatantly lying.

Read the David Stockman article.  It is not perfect, by any means.  And Stockman admits that he did much of the same thing, in his tenure as a "Vulture Capitalist" - before he got caught by the IRS.   But taking failing companies and bundling them up for resale as IPOs and then walking away with mountains of cash is not "creating jobs" for anyone, and it is not "creating wealth" but rather just taking from one person and giving to another.

When Romney says he "knows how to create jobs" he is LYING.   Period.  End of Story.

But of course, what he says today, or tomorrow, is anyone's guess.  As he changes his story to suit the mood, the time, the audience, or even a whim.  Mr. Right-To-Life is now Mr. Birth Control.  And the guy who savages ObamaCare touts his record in enacting the same law as Governor - and does so within an hour at the same debate.

Some readers may think I'm inconsistent.   Perhaps so.  Romney is downright Schizophrenic.