Book of the Month

Wall street greed is illuminated.

In an improbable sequence of events we are reaching a time when everything is illuminated about Wall Street greed.  The improbable messenger is Newt Gingrich. The foil is Mitt Romney. The audience in this sudden drama is a combination of Americans of every political stripe who understand that financial industry excesses nearly brought this country to its knees. The stage crew is Occupy Wall St. The on-lookers are the power brokers in Washington. In standing room only are the hedge funds and financial executives who like first year med students are watching an autopsy. Standing in the wings is Barack Obama. 

On the first day of campaigning in South Carolina, and  facing an onslaught of advertising and 30 minute film on the predatory practices of Bain Capital, Romney ran straight into Obama's arms for cover.  Preposterously, Romney compared the closing of plants by Bain as part of the same "creative destruction" process that was necessary, for example, when Obama took the reigns of the Automotive Industry. Using Obama's rescue of the Auto Industry as cover shows, in my opinion, absolute fear by Romney that the attacks on Bain are viable.

After the Iowa primary I speculated upon Gingrich's opportunity to adopt a populist position as an anti-Romney strategy, suggesting that he could tap into the latent anger toward Wall St. greed. But I had no idea the extent of what was possible in the Bain revelations nor the phenomenon in which a host of cross currents might aggregate into a wave of anti-Wall St. sentiment. 

I suspect many in the financial industry will run for cover and throw Romney under the bus in the process. There was a scathing article in Forbes which took to task not only Bain Capital but some of the other Private Equity Capital companies. The stock of Blackstone, which went public several years ago, giving the partners a market for their private stock, went all the way down to $5 after the public offering. At the present time the stock is around $15, about half the initial offering price. Shades of Bain. The Forbes article concludes that Romney's entire campaign is an attempt to protect the 15% carried interest tax which privileges private equity firms, hedge funds and others in the 1%.  

Unexpectedly, Romney is becoming the poster boy of financial industry excess. Because of Occupy Wall St., Matt Lauer was able to confront Romney about the issue of "fairness" in wealth inequality in a way that resonated with a broad audience. Because Romney savaged Gingrich in Iowa, Newt retaliated on Bain Capital. Because the Bain attack is a focal point at the most critical juncture of the 2012 Republican primary, the issues surrounding Bain Capital, and Private Equity in general, are being examined in detail by mainstream media. The elements of the Wall St. Greed story are reinforcing each other like a mob forming. 

Like the lucky bystander who puts a dollar into a slot machine and hits the jackpot after some other guy has been plugging the machine all night long to no avail, Obama just had gold dropped into his lap. Not only will all of the Obama team's operations research be amplified by the Bain Capital attacks, but a wealth of potential focus group research has been created. More importantly, Romney himself just endorsed Obama's rescue of the Auto Industry---but in a manner that draws the exact contrast between saving an industry vs. ransacking a company for private gain

One could of course question the use of a word like ransack---which gets to the intangible and perhaps most powerful element of the Bain Wave. In the populace, right and left, is seething anger toward Wall St that has been frustrated by the fact that much of what Wall St. did was not necessarily illegal, but crossed the line of moral behavior. Many blame Obama for not downsizing the banks, penalizing the financial institutions and perp walking CEO's and I share the sentiment behind those criticisms. In any case, there has been no overall accounting for Wall St. greed---no societal sacrifice or scapegoat---until, perhaps, now. 

One small but juicy slice of the greed pie is the example in South Carolina where a Bain company went bust and the Federal Government had to spend tax payer money to salvage the pension fund. That was after Bain had taken millions out of the company. The death of Bain Capital by a thousand incisions has only just begun.  

Romney's campaign has been characterized by planning and caution, but sometimes you simply cannot ask all the right questions beforehand---like, "Who expects a tsunami?"

  

It's a beautiful thing when the guy who really thought he was your worst nightmare (Newt) ends up giving you cover for your future attack.

Nah, if you're talking about the Obama campaign benefitting, I thought that at first, but it's becoming quickly clear that Newt's intent is to paint Romney (as well as the Paulsen wing of the end of the Bush adminstration) and Obama as twin enemies of truth justice and the true capitalist way:

LATimes reporting from Rock Hill, SC, today:

Newt Gingrich: 'Crony capitalism ... is not free enterprise

Read that, it's all there--Newt is taking your Soprano's story and adding this to it: the Obama Feds (Goldman Sachs, ya know) are part of the same gang.

As Benjy Sarlin at TPM aptly pointed out, what Newt is doing is using the same narrative I've been reading at OWS sites for months (and Fire Dog Lake type sites for years): they are all the same gang of cronies, Obama and Romney.

Of course, this also feeds into what many in the Republican base has been distrusting of Mitt for a very long time: Romney is Obama--Obamacare progenitor, etc. And Tea Partiers, too.

Who knows, by the time he's done he could pick a nice bunch of lefty votes. He's always fancied himself in the radical role, I'm sure he'd love to see himself do that. And that is certainly not out of the realm of possibility when you've already got so many lefties of the type that are labeled the disgruntled left by the Obama admin thinking they might want to vote for Ron Paul.

This is what all his yammering about being historic is about. He knows how to read polls, he sees the discontent with both parties, he's looking to build a new majority, Karl Rove can go screw himself, Newt sees himself doing it now. And the GOP brass knows he's trying to do it, split their factions.

All depends on how Newt handles himself, of course. If he flames out, and is not around to attack Obama equally, and pound at it every instance how Obama is in on it as much as Mitt, then the Obama campaign can pick up the meme. But not until he's not there to yell: Goldman Sachs! like many a FDL denizen.

I used to think the Fannie/Freddie gig thing would drag him down here, but nah, he can just fit this into the narrative about trying to be a reformer and getting all of that Tony Soprano taint out of big government.

This link was helpful for me too, on Newt today, from Spartanburg, SC:

http://www.cbsnews.com/8301-503544_162-57357368-503544/newt-gingrich-i-c...

The reporter's headline is bad, he's spinning it like Newt is saying he's confused He's not saying that, he's telling his diehard old line GOP interlocutor that it's going to take her a while to see that Mitt and Obama are the same thing, not real capitalists but crony or vulture capitalists, and that they are what's wrong with the country, and he is the real Republican capitalist.

This is also why Rush Limbaugh is twisting himself into a pretzel, as NCD so aptly pointed it on his thread.

Is Newt going for building a coalition of tea party and lefty and Todd Palin and independent votes and calling it the real Republican party? (Oh yeah, and throwing in some Christianist votes by pandering to the "Christian persecution around the world" civil rights movement--who on the left side of the aisle is going to object to that? Ready to argue "oh no, Christians should be persecuted!"?)

Yes, I think so, I think that's why he keeps yammering about being historic. I'm not saying in any way shape or form that he's talented enough to do what he's trying to do, just that that is what he seems to be trying.

And what he will be successful at doing is giving both Obama and Romney some pain.

Even Mama Grizz is talking, on Fox News, about 'proof' on Rmoney creating jobs, in the US, and voters 'deserving' to see his tax returns.

That is huge.  Obama's best hope for a win in November is an apathetic and depressed Republican electorate.  The longer the "populists" on the right advance an anti-Rmoney narrative, the more likely large numbers of those voters will stay home.

Thanks, Artsy. There absolutely is potential downside in this drama for Obama himself, but damn, I was saving that for my next blogpost. wink

Would be an amazing coup if he could pull this off.

He is, however, and IMHO, a sociopath.

But very interesting take...

Right.  Unfortunately this radical laissez faire Ron Paul view of the world is taking hold among many, and Gingrich is just jumping on the bandwagon.  "If only we had really, really, really pure, true perfect free market capitalism and competition, without all of those evil governments propping up their <i>cronies</i>, making all those <i>regulations</i>, imposing all those <i>taxes</i> and redistributing all that <i>wealth</i>, we would have a wonderful world."

fancied himself in the radical role,

somehow he has scrubbed that picture of him with the long hair and beard from the tubez...pity...

 

Newt yesterday posed the most significant question yet. In one company that went bust Bain took out $190 million, six times their investment. Newt simply asked what's the right amount. If they had taken out only $90 million, three times their investment, might the company have survived. Delicious question. 

I refer to him as 'Myth' Romney because it fits.  IMHO everything one believes he knows about this man's fine character is just a facade.  

His analogies such as noted in the post are becoming more bizarre and not like apples and oranges, but instead bitter v. sweet.  Muddying the waters, evading the real issue and utilizing politico speak is the extent of his communication tools from his lofty perch.

It's beyond my comprehension how so many are so willing, even eager, to 'pay no attention to the man behind the curtain'.   

I hope that there are at least a few who will come forward and tell the truth about 'Myth'.  Not only those who have close up and personal experience from Bain, but the companies and vendors who dealt with him.  

As one columnist wrote today - Myth hasn't been truly confronted yet by the media.  It's been shadow boxing, but very soon the gloves are coming off and it's no holds barred.  I hope that's true.  But, I don't have much faith most of the media who, for the most, cashes their paychecks drawn against corporate bank accounts.

Thanks, good points. 

One thing that is significant, I think, is that both CNBC and Bloomberg are discussing the Bain situation in detail, bringing up a lot of the key questions of tax rates, fairness and so forth. Not that they aren't for the most part favorable to Romney, but the fact that these issues are in the spotlight is remarkable. 

Was just thinking, it's probably good to keep in mind, as Amazon.com tells us:

This title will be released on January 17, 2012.

The Real Romney [Hardcover]
Michael Kranish (Author)
Scott Helman (Author)

Pre-order now!

The book preview here:

http://www.vanityfair.com/politics/2012/02/mitt-romney-201202

is the source of most of the Bain Capital buzz right now.

In and of itself, it will be interesting to see how the publisher's PR campaign on the book will try to manipulate the Romney campaign (and the GOP for that matter) into producing more sales for them, and what type of people end up buying and reading it, and telling their friends and family what's in it.

Bain was also rescued by the FDIC.  The agency took over one of Bain's creditors after the S&L crisis and then, at the agency's direction, it forgave a $10 million loan to Bain in order to keep it from going under.  That's an outright bailout and it's exactly what borrowers from banks rescued by the Treasury under TARP didn't get.

 

Let's face the dire truth. The US is founded on vulture capitalism. What else is slavery?
 
It is a myth that capitalism is pure and good by itself and must not be regulated. It is now time to stand up for true righteousness and expose the hypocrisy. 
 
Remember the civil war and how unwillingness and stubborness led to the bloodiest war in the history of the US. Great Britain got rid of slavery in a peaceful way. The United States, where all men are created equal on paper, had to have it pried out of their fingers.
 
What would happen if the rich, who profit from vulture capitalism, and their powerful friends in the media and in Washington, are as stubborn and unwilling to acknowledge the evil of vulture capitalism. Why would God not bring justice to those oppressed by this selfish system as He did for the slaves?
 
Watch my video: A German's preachers thoughts on 2012.

sotto voce:  Um, don't bring up the Civil War on this blog.  We're still fighting it, apparently.  Thanks much.

Civil War, still can learn from it. Generations go by, yet some people never change. Sherman is bearing down, and the politicians of the south were...what else, arguing about taxes!

Southern Storm, excerpt from the Augusta Daily Chronicle and Sentinel, Nov. 15, 1864, from the Georgia State capitol at Milledgeville:

There is a tiresome amount of debate in the House. Petty issues often consume hours in running discussion, and it is a little notable that some of the poorest speakers are those who are oftenest on the floor. The most predominant feature of the session is the introduction of bills to change the lines between counties.....A man becomes dissatisfied with some action of his county, or with the rate of local tax, and runs to the Legislature to be cut off into a different county.....Several bills for changing lines were passed today, but none of which wold interest your readers...

Thanks, Matthias. With all respect, your views are so far outside the essential truths of our Constitution and my own convictions that we should not govern from the Bible that I really don't think we can have a conversation about the particulars of Capitalism.

I am curious though, since it seems to keep coming up, when did you develop the notion that slavery could have been ended in America without a war?  Also, have you been sending contributions to Ron Paul?

Well, keep in mind that he does appear to be European, and the British did end slavery without a war (and paid slave owners for their "loss").

That said, I'm not sure Matthias was saying we could have ended slavery without a war in our country. In fact, at face value, he's saying just the opposite. That we were so in love with it that it took a war to stop it. I think that might be about right.

Thanks for that. 

I guess I was more focused on Matthias' cuckoo clock on the pine paneled wall behind him. Now if he wants to send me some of that old growth pine lumber from Germany I might be a buyer. 

A glance at Google News's home page, where at upper right it currently says

Popular Video: Romney Lashes Back on Bain

The Wall Street Journal Digital Network

reminded me that it (duh!) might be wise to follow The Wall Street Journal on this story (of Republicans arguing about what good capitalism is,) rather than just the standard political sources--it does, after all, concern their "main beat."

Not that the WSJ campaign reporter interviewed on that video says anything that we don't already know, it's just seeing how they will be informing their audience about it. After all, their main mission has always been to give investors the knowledge tools regarding how/when/where to invest. He basically says Gingrich & Perry are the only renegades not going along with the traditional Republican party talking points on this, and gets into other particulars about the campaigns in South Carolina.

The ending interchange was interesting, here's my transcription of it:

Anchor: Now I know there's a documentary going to be released, King of Bain, When Mitt Romney Came to Town. We've seen trailers for it showing a lot of sad, laid-off people. Has that been released yet or is there still much anticipation around that and the impact that will have?

Reporter: No, if you go to www.kingofbain.com, you can watch all 28 minutes of it. It's a pretty well done, interesting video, but very much in the style of Michael Moore (laughs a little.) As we point out in our story, it was made by Republicans, is now being aired by Republicans, but is not exactly the kind of thing you would normally see being produced by Republicans.

Thanks, Artsy. The surrogates are out in force trying to spin how Bain Capital is the bedrock of capitalism. It seems that they are doing a better job than Romney himself who puts his foot in his mouth every time he tries to explain the benefits of Bain Capital. The guy is just proving how elitist he really is---the $10K bet, all of it. 

I just realized that Blackstone, one of the other Private Equity funds, mentioned above, headed by Steve Swartzman, is one of Romney's big funding sources. 

I love Romney's comment that talking about "wealth inequality" and taxes should be reserved for "quiet rooms". 

The surrogates are out in force trying to spin how Bain Capital is the bedrock of capitalism.

Nate Silver made an important point which reminded me why that kind of thing may not work as well as it once did, in the conclusion of his late-night Thursday post:

Welcome to the strange world of “super PACs” and the undisciplined messaging that they can facilitate.

Thanks, Artsy. Great article. It seems to me that the surrogates are making the "we're clearing the decks now, that's good" argument to insure that Romney still looks "electable" after the Bain attacks and the tea folks and the anti-R's are so divided in S.C. that the argument will probably work. 

The way I look at the effect of the Bain attacks is that they don't close off avenues of attacks but generate them. More options, not less.  

But overall, Romney has been defined by his own party in a way he didn't want, particularly in relationship to the working class core of the party. There is also a distinction between the Main St. Business wing of the Republican party and the Wall St. Wing. Romney has now been firmly identified as a Wall St. guy, and more specifically a buy out specialist---not by Democrats, but by his very own party. This is not the side of fence he wanted to be on. Certainly not in a General election. A Wall St. guy is not a job creator. He is neither Mr. Main St., business guy nor Mr. Working Class.

Also, I think the process of parsing what Bain is and what it isn't adds uncertainly to the veracity of a guy who is already a roaring flip flopper. Sarah Palin did a great service. Where are the 100K jobs, prove it. And by the way, where are those tax returns---does anyone think those returns will not show a lower tax rate than the rest of us, and most likely reveal off shore accounts? 

Now what was Nate saying about the "heuristic" methods of voters and the "counterfactuals"? Probably negates all of my comments. Crap, I thought "heuristic" went out years ago along with "didactic" and "paradigm".   

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