A Bailout for Mitt

We’re smack dab in the middle of the Republican National Convention.  Needless to say, I don’t agree with much of anything that is being said on the stage.  But what I’m learning from watching coverage is that people have a tendency to view things in very, very different ways.  Even when Republicans and Democrats are looking at the same thing, they come away from it with totally different opinions.  And while that’s fine there are some things that you just can’t dispute.

Rolling Stone published an account of Mitt Romney’s time as the titular head of Bain & Co., the consulting firm where he first began his career.  Romney left Bain Capital, the private equity fund in late 1992 to run a turnaround operation at his previous employer.  The company was in serious financial trouble, and if significant actions were not taken, it would have run out cash and ultimately been forced into liquidation.  So, here’s a bit of background.

Bain Capital was spun off of Bain & Co. in the early 1980s when the leveraged buyout boom was going strong.  By the early 1990s, the partners had sold their equity in the firm off, and saddled the company with tons of toxic debt.  Business had started to decline due to the recession in 1991, and Bain & Co. found itself in a downward spiral.  During his efforts to revive the company, Romney began restructuring the debt to make it more manageable for the firm to pay off.  That effort soon failed, and Romney then demanded even more generous repayment terms from the creditors.  The banks refused, and Romney then began pumping even more cash out of the firm in the form of bonuses to management.  The banks, terrified that they were not going to see any of their money from a firm that Romney was intentionally stripping of assets, soon relented.

One of the banks Bain & Co. owed money to at the time was under the stewardship of the FDIC.  Romney left the bank, and ultimately the FDIC, on the hook for $30.6 million dollars that he just walked away from.  The FDIC paid out the amount to the bank.  For those of you that are unaware of how the FDIC is funded, it receives its money from banks, which ultimately pass off the costs to you, the consumer.

We’re hearing a lot about self-reliance from these clowns in Tampa.  That’s fine.  It’s politics.  The people watching the convention are voting for Romney anyways.  But when President Obama gets up on the state and rebuts the outright falsehoods that are coming from the podium in Florida, the discrepancies are going to come to light, and the facts just don’t align in favor of the Republicans.  The same thing is going to happen once the debates take place this coming fall.  The fact of the matter is that the media has failed, utterly and totally, when it comes to holding Republicans accountable for their fabrications, lies and distortions of the truth.

To the bases of the respective parties, frankly, it doesn’t matter.  You can say whatever you want and get away with it.  But presidential elections are fought and won in the center of the political spectrum, and the center of American politics still cares about this thing called the truth.

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Can Romney Win Michigan?

As of now, the polls look promising for Romney.  He’s neck and neck with President Obama right now, according to a new poll by Mitchell Polling of East Lansing.  And some in the national punditocracy seem to think that it’s a state that Romney could actually carry.  While it’s certainly within the realm of possibility, I have to conclude that it’s a remote one.

Michigan, much like Pennsylvania, is a state that Republicans should have a chance at carrying.  Demographically speaking, they’re older states, which plays to the GOP.  It’s a state that’s suffered more than most, economically speaking.  I would have to say that at least half, if not more, of the state would be considered socially conservative.  Romney was also born in Detroit, and grew up here, where he still has politically active family members, and his father was a popular governor.  So, there are a number of factors that should ostensibly play in Mitt’s favor.

But at the end of the day, I don’t think that Michigan is going to go for Romney.  First off, despite having been considered a ‘swing state’ for about as far back as I can remember, it hasn’t actually gone for a Republican candidate since George H.W. Bush in 1988.  When something seems like it’s something else, but hasn’t been that in nearly a quarter century, it’s time to think of it as whatever it actually is.  I don’t think that Michigan is a swing state.

Also to consider is Romney’s stance on the bailout.  Even by his standards of verbal contortions, he has a pretty impressive record of changing on the topic, usually depending on who his audience is.  At the end of the day though, he did author a New York Times column, which was titled ‘Let Detroit Go Bankrupt.’  So despite whatever rhetorical acrobatics he performs, he’s on the record as having opposed the auto bailout.  Which, regardless of political affiliation in Michigan, was not wildly popular, but seen as being vitally necessary.  Michigan is growing again today, not because of liquidating the Big Three, but because of a massive financial injection by the federal government to save an industry that employs not just hundreds of thousands in Michigan, but millions across the nation.

Michigan, theoretically, could go for Mitt Romney, but, at the end of the day, I doubt that it’ll happen.  For whatever advantages the Romney campaign has here, they’re annihilated by his position on the auto bailout, which we didn’t really want to have to ask for, but, frankly, there was no other alternative, other than an economic apocalypse in Michigan, to which we had been skirting perilously close.

Good as Gold?

Not quite.  One of the policy ideas floating around the GOP is a return to the gold standard.  The prevailing sentiments surrounding this idea is that linking the value of the dollar to a fixed quantity of gold bullion would somehow make the dollar more stable and, consequently, more valuable, has gained widespread currency amongst some Republican constituents, particularly those of the Ron Paul stripe.  So much so, that there will likely be a call for it to be studied seriously in the party platform to be officially adopted in Tampa this coming week.

While there are noble sentiments attached to this feeling, they’re just that: feelings.  Were the US to return to the gold standard, put simply, it wouldn’t work.  There’s two main reasons for this.  The first is that there’s simply not enough of the shiny yellow metal to back the US monetary supply.  There never has been, even when the country was officially on the system, and it was a source of great political debate for decades, as rural farmers and populists campaigned for years to supplement the bullion reserves with silver.  In some elections, it was actually the central issue, as in the 1896 campaign for the presidency wherein William Jennings Bryant captivated millions with his ‘Cross of Gold’ speech at the 1896 Democratic convention.  The practical effect of a gold-backed currency was that the monetary supply was never able to keep up with economic demand, and prices remained unreasonably  high for most of the country for decades.

So you have the supply reason first.  We tried it, and it didn’t work so well.  But the other reason is one of conversion.  Were the US to revert to the gold standard, it wouldn’t mean much, because currencies in global exchanges exist in value relative to one another.  Meaning, just because we adopted a new gold standard doesn’t mean that it would help stabilize the system, just because other countries don’t work on it.

The gold standard is a fantasy.  It’s has more import now as a figure of speech, as when people speak of the ‘gold standard,’ they’re referring to something that has a proven and lasting value.  But the facts of the matter point to a situation where a reversion to that system wouldn’t even produce the kind of effects for which it would strive, and, if anything, would retard economic growth for America.  But, that won’t stop the ‘magical thinking’ movement in the GOP regarding the issue.  Magical thinking has become all too common in conservative policy formulation, and in this, we should expect no different.

You Don’t Say

In politics, what you say is often less important than what’s not said.  Participants in politics sometimes have a tendency to stay mum on what their true thoughts are.  Call it discretion, call it being shifty, it’s an ingrained feature of the political landscape, and it’s a tactic that’s widely employed by members of both parties.  When Congressman Todd Akin (R-MO), the senatorial candidate dropped his bombshell statements about ‘legitimate’ rape, he gave voice to a sentiment that, at least up until now, had remained relatively hidden.  His comments put the issue front and center.

Both parties are coalitions, more or less.  They’re not monolithic, and their members are not in uniform agreement on issues, although in the recent past they’ve become more so.  Each segment has their particular pet issue, and those issues are packaged and balanced against one another into all of the various campaigns.  On the state and local level, given the political geography of the various constituencies, it’s relatively straightforward.  You play to your base, pay homage to the party leadership and toe the line.  Policy, broadly speaking, is set on the national level, and it flows down from there.  That’s been how it’s always worked, at least up until relatively recently in the Republican party.

Going into the election, the GOP effort was to maintain a laser-like focus on jobs and the economy.  That particular bread and butter issue truly is the first amongst issues, all others being of secondary import.  And in crafting the mantras of the campaign, the GOP, while working to end curb abortions, didn’t make much of it politically.  Akin’s gaffe gave voice to that highly vocal segment of the Republican party who views abortion as being the central political issue of our time.  Vice presidential candidate Congressman Paul Ryan (R-WI) who reiterated his belief that life begins at conception, and that there ought to be no exceptions, whatsoever, for abortions to take place.

Frankly speaking, though this is an issue that a very well organized and dedicated group of Americans care about passionately, it doesn’t play well with the national electorate.  The reason that the GOP wasn’t bringing this up was because they knew that this was the case.  But the Republican pro-lifers can’t bring themselves to stay mum on the issue, even though they’re well aware that, first, they’re in the minority on this issue and second, that it may well cost them election.  The reason they weren’t bringing it up was because they knew what it would lead to, and if I were a Republican right now, I’d be trying very hard to duct tape any candidate’s mouth shut who started talking about abortion over jobs.

Say It Ain’t So Lance

Well, the French are probably ecstatic today.  Lance Armstrong has officially been stripped of his seven wins in the Tour de France cycling race, and all other victories Armstrong racked up since 1998 have been officially invalidated.  He’s been banned from competing in future competitions, and his athletic career is now over.  This a sad ending to a fabled athletic career.  What I like/d about Lance Armstrong was that despite the tribulations he faced, he never, ever gave up.  Faced with a highly dangerous case of cancer, he prevailed over it, and continued not only to compete, but to win.

Which is what makes his decision to stop fighting the doping charges against him all the more confusing and disappointing.  Armstrong and his camp claim that they’re not able to get a fair chance, that the outcome seems predetermined, and that continuing their struggle to uphold his name was in vain.  For someone who’s faced long odds before, and in a life and death matter where the outcome was even weightier, this, sadly, confirms my hunch that he did, at least at some point, probably engage in doping.

I think Armstrong’s tactic to pull out of the proceedings against him was a fairly cynical move.  I think it’s a preventative measure that likely was meant to forestall the inevitable full disclosure of some fairly damning physical evidence against him, and that cutting the proceedings short at this point was the least painful way for him to end the process and to retain at least a certain degree of dignity in so doing.

A man who has beaten a case of cancer that could have easily killed him, and would usually end such a grand career is not a person that throws in the towel easily.  I believe that Lance Armstrong, had he actually been innocent, would have continued his fight against these charges, no matter what the outlook was.  Only the truly guilty cut their losses when the handwriting is on the wall, and the jig is up.  It’s a very disappointing end for a truly exceptional, albeit, highly flawed man.

And it marks yet another activity in which public confidence has been badly shaken by allegations of corruption, both by the participants and those who regulate it.  From the dozens of political scandals to the economic collapse of a few years ago, to Joe Paterno to this Armstrong affair, a very clear and very sad pattern is emerging wherein those who are in positions of power to abuse the system do so without compunction.

The story of Lance Armstrong is a sad one, and because of the fact that we find it being played out, over and over again throughout various scenarios in society is what makes it all the more worrying, and heartbreaking.

The Vanishing Middle

It’s happening not just in politics, but economically, as well.  The Pew Research Center finally put together a set of numbers that spells out a data driven narrative of what we’ve felt happening for some time now: the middle class, as defined by a family of three living on $39,000 to $118,000 a year, has declined to 51% of the total population, down from 61% in the early 1970s.  The top quarter of the income brackets has seen their share of income rise, the middle class declining significantly, and the top 10% decline slightly.  The middle class, in addition to shrinking, has seen their net worth (overall accumulated wealth) decline by 28%.  The upper class has expanded to 20% from 14%, so some of the skewed wealth distribution is explained by some people simply doing better, overall.

And it’s not just the numbers that are falling: faith in the future is slipping as well.  What’s interesting is that black and Latino folks are more upbeat about the future than their white counterparts, even though they’ve suffered much more, comparatively speaking, through the most recent economic downturn.

The middle class in this country is the lynchpin of American politics.  On average, I’d say it’s outlook is largely center-right, with some socially liberal tendencies.  It’s getting harder to enter and stay in the middle class, and that, over the long term, may significantly impact voter attitudes.  If, as to be expected, this trend of a shrinking middle class continues, I see no reason why national politics will assume a tone that’s much more hostile and statist than what we’ve seen in the past few decades.

Suffering on this scale in the middle class is not without precedent, and in all of those precedents, each and every time, government, as directed by that middle class, has stepped in to remedy the economic imbalances that inevitably occur.  It happened in the early 1900s, during the course of the Great Depression and in the 1960s.  While we should take heart from historical precedent, we should allow ourselves to become complacent, because, as with all politics, it requires action on the part of voters and our leadership in order to craft and implement a real, results-driven solution.

One of the beauties of America is that, even though it always takes far longer than any of us ever like, the self-correcting nature of our democracy, in the long term, gets it right.  Our results at home may not always be stellar, but, Americans, Winston Churchill famously said, after we’ve exhausted all other available options, always do the right thing.

When Gaffes Illuminate

I thought I’d take a few days and wait until at least some of the furor over Congressman Todd Akin’s comments about ‘legitimate rape’ died down, at least a bit.  The Congressman is running against Senator Claire McCaskill (D-MO) for her seat in the Senate, and until a few days ago, he was, at least outside of the Show Me State, a relatively unknown quantity.  It usually takes about a decade for a Senator to achieve the degree of notoriety that Akin has attained, but he’s done so for all the wrong reasons.

Akin has tapped into a particular vein of rage, a rather well justified one, I’m forced to admit, when it comes to his stance not even on abortion, but rape.  And while he’s backpedalled about as fast as humanly possible to distance himself, along with pretty much any other politician that you’ve heard of, from his own idiocy, I think there’s much more in his original statements than his apologies would indicate.

This wasn’t just a misstatement, or a verbal ‘oopsie.’  His was a full blown apologia for the entire concept of rape.  In his mind, it consists of multiple varieties, and they are not all equal.  This was not just a simple one-liner about an opinion that he holds, it was, rather, a full-blown explanation as to how he views rape.  There’s actually historical precedent for his comments, and for a long time, it held fairly wide currency in the field of medical jurisprudence, dating all the way back to the Middle Ages.

Todd Akin can backpedal, distance himself from, condemn and repudiate the comments he made all he wants, but the fact of the matter remains that he had a fully developed (although neither cogently nor accurately) theory regarding rape and procreation.  Deny it all he wants, this bout of verbal diarrhea indicates how this man actually feels.

This is just another Senate race that Republicans will likely lose, and it’s because they voted for the most ideologically pure candidate that they could find.  Claire McCaskill, who, up until this incident, was looking like a goner, suddenly has much more staying power than originally thought.  And thank God, otherwise, we’d end up with the likes of this troglodyte Akin in the Senate.