Matt Taibbi: The Secret to Mitt Romneys Fortune? Greed, Debt and Forcing Others to Foot the Bill http://www.democracynow.org/2012/8/30/matt_taibbi_the_secret_to_mitt Our former manufacturing-based economy is in tatters, littered with the corpses of exploited companies whose wealth has been extracted and transferred upward, all with help of a government tax deduction for borrowing, without which vulture capitalism could not function profitably. Whereas our former manufacturing-based economy spread wealth into the population and communities, the financialization revolution has fostered movement of wealth away from them. Romney built Staples from the ground up, but then became a leverage buyout takeover artist. His business formula for the last few decades: pile debt onto unsuspecting companies that are financially stressed and write gigantic checks that other people have to cover. He is one of the biggest irresponsible debt creators ever. That is how he actually helps companies turn around. Now he and his sidekick are basing their campaign platform on debt. How ironic. His reputation for flip-flopping is partly due to his willingness to change his business strategy, for which he sees no reason for people to get upset, but it probably makes it easier for him to adopt the same approach in telling lies.
Wholly incorrect. US manufacturing is still trending upwards, the jobs and companies that are gone didn't die to some corporate boogey man, it was technology that did them in. Will you be posting another article lamenting the loss of US agricultural jobs? http://www.federalreserve.gov/releases/g17/current/ This isn't an endorsement for anything Mitt has done, but simply pointing out a huge misnomer that is constantly being repeated.
'A great example is Dunkin Donuts, whose parent company was taken over a couple years ago by a combination of Bain Capital and the Carlyle Group. Dunkin was induced to do one of those dividend recapitalizations. They had to pay half-a-billion dollars to their new masters. And just to pay the debt service on the loan they took out to make that payment to Bain and Carlyle, theyre going to have to sell like two-and-a-half million cups of coffee every month just to pay the debt service. So, thats extraordinary. They aretheyre essentially vultures who hang out waiting for companies to get sick, then they forcibly take them over, and they extract fees, commissions and dividends, by force, essentially' lol... this guy is making Romney out to be a VULTURE... a debt GURU... RETURDICANS, you sure what this guy running our country? and: MATT TAIBBI: Yeah, no, its absolutely typical of a private equity transaction. I think one of the glaring misconceptions about this kind of business thats persisted throughout Mitt Romneys campaign for the presidency is that what these companies do is turn around and fix companies, that theyre in the business of helping these companies. Romney constantly uses this term, that hethat, you know, "help." "Im either helping this firm, or Im helping it turn around." He wrote a book called Turnaround. But they are not in the business of turning companies around and creating jobs. That is a complete mischaracterization. What theyre in the business of doing is repaying the investors who lent them the money to take over those companies. The workers are completely irrelevant in this scheme. Romney isyou know, the old-school industrialists, like Mitt Romneys father, they were men and women who built communities. They had factory towns. They were very anxious to leave, you know, hard legacies that people could see: hospitals, churches, schoolsyou know, the Hersheys of the world, the Kelloggs. But these new owners have absolutely no allegiance to American workers, American places, American communities. Their only allegiance is to the investors and to themselves. And so, its not at all uncharacteristic to have these situations where people are pleading for their jobs or theyre saying, you know, "Well tighten our belts, if you just make this concession and keep us." Thats irrelevant to the Mitt Romney-slash-Bain Capital-slash-Carlyle Groups of the world. Theyre entirely about making profits. And if that means shipping jobs to China or eliminating jobs, thats what theyre going to do. And thats the new generation of corporate owners in this country.
I don’t know anything about a loss of agricultural jobs. Granted, technology has facilitated greater efficiency and streamlining, enabling companies to do more with less, but that is just part of the picture. A rosy picture can also be painted based on the sharp and steady rise of corporate profits, but that also fails to recognize and address the elevated economic pain experienced throughout other sectors of the economy. Far too many factories have been relocated offshore, and an alarming number of big-name companies have been raped by the financial vampires. If you want to say that how we stand with today’s flourishing survivors compared with the way things were during prosperity does not warrant the label “tatters,” that’s your opinion. The worker who became unemployed upon returning from China after training his outsource replacement would find your assessment hard to appreciate.
Without Bain Capital (or somebody like them), Dunkin Donuts was bankrupt and would have been liquidated. democracynow.org? Is that supposed to be credible to somebody other than other O-bots?
Try some history! Still repeating the same nonsense. If we're "relocating factories offshore" then why is manufacturing output still up? It's because you're repeating a myth.
I fail to see what in the world Bain Capital has to do with being President. What the OP should be focused on is this: Did Romney complete and excel in the task he was given as CEO of Bain? Not whether their business practices were good or not. Hell, in my opinion, we want someone who is a vulture in office to finally bring some heat on China and their unfair business practices, you don't want some nice guy who plays fair, that's how we got into this mess. Ask yourself how is "evilness" translated into his 4 years of Governor and whether he continued unfair business practices or exceled in the job he was given there. How did he do when running the Olympics? Did he excel or did he carry along vulturic forms of business practice? Try using realism in your calculations next time OP.
Is being in debt worse than being liquidated? Compare Romney at Bain and Dunkin Donuts to Obama and the US Government and GM. Dunkin is operating profitably. GM is deeply in the red. People holding Dunkin stock prior to Bain still have their equity. GM shareholders prior to the Obama raid were stripped of their equity.
I dont believe that chart is accurate. The fact is that the bulk of that U.S. Manufacturing is actually taking place in foreign counties. The data used to compile that chart are completely corrupted by the differences in external savings rates between counties who trade manufactured parts. High external savings rates act to depress domestic wages in the county with the high rates of external savings. China falls into this category. The opposite is seen in counties with growing externally held debt as they will see their domestic wages and apparent productivity rise. The U.S. falls into this category. When U.S. manufacturing data is compiled, they do not take this into account, and therefore greatly underestimate the value that foreign manufacturing is contributing to what is apparently domestic manufacturing. Technology certainly played a role, but a much smaller role than you would think. By my estimation, the bulk of productivity gains are simply a by-product of faulty data computation -- the true cause of productivity gains actually coming from wage differences between foreign and domestic trade partners. Again, this is as a result of differences in externally held savings and debts. If you read a few pages into the report below, you should start to see how the data is being corrupted as it relates to productivity and overall rates of manufacturing. http://www.upjohninst.org/publications/wp/06-130.pdf
You're welcome to disprove it, the data comes from the FED and BLS. http://www.federalreserve.gov/releases/g17/current/ The numbers don't lie. That "US manufacturing is down" is a complete and total myth. Not that I don't like you, but your just some dude on the internet. If you've got any evidence to the contrary present it.
Wow...so all that "Bain outsourcing" stuff we all heard about was all bogus huh??? I wonder how well we'd be doing without all the non existent outsourcing?? Hey...that new American sensation...the "Chevy Volt"? We're sending production of it to China already....Ford? Chinese made brother. Take the China out of Walmart? No more Walmart (which actually would be a very good thing). JCREW clothes???? Not American either...that crap is from countries you've never even heard of manufactured by slave child labor. Shall I go on???
Another interesting graph would be one that shows what the output and jobs numbers might have been if so many companies weren't moved offshore and so much outsourcing done. What should we be loooking at instead of the myth?
Gotta hand it to the guy and his education. He certainly knows how to game a system. The only problem for Romney is that he really can't load up the U.S. up with more debt before he takes an enormous management fee and sells it off for parts. Or can he?
Pointing to any single company is very myopic. Jobs come and go, KIA and Toyota have both opened plants here recently and things such as that have been going on for decades but isn't the reason that employment in manufacturing is down. Been to a modern factory lately? Most operate in the dark with virtually no human involvement. Technology! We've gotten better at doing the things we've done, just like what occurred in agriculture; robotics, machinery and automation make the work life easier, but at the cost of employment.
Since you didnt say much to back up your disparaging of democracynow.org, Ill eat a bit of humble pie and do it for you: http://spectator.org/archives/2012/09/04/taking-down-taibbi (Thanks to Hoosier8, 9/06/12, in the thread Wow, democratic convention a real disaster!!!) If it has enough validity, its a setback for the O-bot crowd. The explanations of business dynamics make it worth reading. Perhaps both of the opposing viewpoints have a valid claim on real-life instances that would probably include many that are in between extremes. I remain skeptical about any broad economic benefit of having schemers walk off with somebody elses money in their pockets. This process may or may not be one of the reasons for an excessive amount of money being funneled upward, but the following is (and is a plus to the questioned credibility of democracynow.org if it is not biased in some way that I am not yet aware of). Democracy Now, a daily independent global news hour, with Amy Goodman & Juan González. Monday, July 30, 2012 Pulitzer-Winning Reporting Duo Don Barlett and James Steele on "The Betrayal of the American Dream" (They are also the authors, 20 years ago, of the number one bestseller, America: What Went Wrong?). James Steele: the wealth of the top 1 percent in this country is greater than the wealth of the bottom 90 percent. That is a staggering figure. And one of the things that has made that possible has been a whole series of tax changes over a long period of time, mainly in the last 10 years. I mean, one of the things theyve done in the last 10 years that we just cannot get over was in 2003 when they made dividend income taxable at 15 percent. This was the first time ever that dividend income was treated differently than somebody earning a wage or salary. And the idea that that somehow should be more favored than somebody working in the sweat of their brow is absolutely ridiculous and appalling. Donald Barlett: in 1955, the top 400 households in this country, they paid 51.2 percent of their income in taxes. Thats 1955. In 2007, they paid 16.6. And everybodys talking about a deficit. Of course theres a deficit, and theres going to always be a deficit until they impose the tax system that had existed in this country in the 40s, the 50s, the 60s and the 70s, in which people at the top who had money paid serious taxes. No onebut no one at the top pays serious taxes today remotely close to what their, you know, peers would have paid back in the 60s and 70s. A significant thing we also talk about is, we really need to invest in the country, because corporations arent. So many of them are going abroad. A true broad-based investment infrastructure and many other things. The largest peacetime infrastructure investment program in this country was under Dwight Eisenhower in the '50s: the interstate highway program. And that was with broad, bipartisan support. I mean, that's what we need to get back to in this country. Obamas rather anemic stimulus program was roundly condemned by conservatives, when in fact its things like that that are part of the solution to the problem.
Mr. Bartlet and company are utterly cluless: Actually, even if true, it is pretty much a useless factoid. Yes by all means would should completely ignore the fact that in the fifties, total federal expenditures were less that 19%% gdp, and 70- 80% of the Budget was military. Now the military is 20% of the budget, and the Budget is 25% of GDP, the top 20% of earners pay 70% of that taxes while the bottom 50% of earners pay 1% of the income tax reciepts received and the GDP is nearly 30 times higher than it was in 1959.
These are also nearly useless factoids except that they serve as deflections against arguments for raising taxes on the rich. Tax rates on high-income earners are too low. Likewise the related excuse that confiscating wealth can't put a dent in the overall debt or deficit has been mathematically refuted by others, but of greater importance is giving the economy a much needed injection, even if that injection has to be borrowed money, since the return in revenue from an invigorated economy would offset the cost of relatively cheap interest. If the roughly 30-fold increase in GDP since 1959 has a bearing on these issues, I haven't heard about it.
"Democracy Now, a daily independent global news hour..." Taxcutter says: ...and I'm the King of Siam. Matt Taibbi should tell you something. Before Bain came along, Dunkin Donuts was headed for liquidation. Today its profitable. Obviously Bain did something right.
The problem isn't too little in the way of tax revenues it is too much in the way of government. And please note the real figure spent on government in this country is closer to 50% of GDP than 25% and much of that spending is compelled of the states, cities, and counties by the federal government.