The Failure of Reaganism

Since the 1970s, the Republican Party has fallen increasingly under the influence of radical ideologues, whose goal is nothing less than the elimination of the welfare state — that is, the whole legacy of the New Deal and the Great Society. From the beginning, however, these ideologues have had a big problem: The programs they want to kill are very popular. Americans may nod their heads when you attack big government in the abstract, but they strongly support Social Security, Medicare, and even Medicaid.

Paul Krugman

With Hurricane Sandy, the Ronald Reagan-inspired Republican policy of preferring small government, or even better, private industry, to big government took a really hard hit. Presidential candidate Mitt Romney said back in May 2011:

... every time you have an occasion to take something from the federal government and send it back to the states, that’s the right direction. And if you can go even further and send it back to the private sector, that’s even better,” Romney responded.

“Instead of thinking in the federal budget, ‘What we should cut?’ we should ask ourselves the opposite question, ‘What should we keep?’ We should take all of what we’re doing at the federal level and say, ‘What are the things we’re doing that we don’t have to do?’ And those things we’ve got to stop doing,” Romney continued.

But all of the sudden, Romney recognized that he had a very poor case on his hands and that big government wasn't looking so bad, after all. Very understandably, Romney dodged questions about whether, as president, he'd continue to support the existence of FEMA. Understandable, but in doing that, he essentially conceded that the whole right-wing argument for shrinking the government was kind of silly. As Krugman points out, even after many decades of anti-big-government talking points being put out by the Republican Party, members of the public "strongly support [big government programs such as] Social Security, Medicare, and even Medicaid."

The fire at a factory in Bangladesh that was producing clothes for sale by Walmart was another hard blow to the right-wing, Republican project of "getting big government off the backs of the people" of industry. It turns out that corporations will not, after all, effectively regulate themselves and will cut expenditures on safety in the name of making bigger profits.

In late November, there was a toxic train wreck in Paulsboro, NJ, where whole freight cars full of a flammable gas known as vinyl chloride, used to make PVC plastics, were derailed and fell into the Mantua Creek. Of course, the industry that produces vinyl chloride has been tramsporting and handling "massive amounts of toxins with minimal oversight," which works really good until one day it doesn't.

A local blogger found a March 2010 survey that gauged public attitudes toward Republicans:

Here are the perceptions “where the Republicans seemed in trouble”:

“The Republicans are not for the average person…”

“The Republicans do not champion the public interest….

“The Republicans put the needs of big corporate interests ahead of the ordinary citizen….”

“Though the Republicans are strong on moral values, only half the voters think Republicans share their values and priorities….”

“Republicans may be going too far in pushing their religious conservative agenda….”

“They are not heralded for their economic policies….”

“They are not heralded on the environment….”

“They are not heralded for how they relate to the world….”

“They are the establishment….”

In other words, the Republican project of shrinking big government down to size has resulted in nothing more than that the American people regard the party as heartless and heedless of the damage they're causing in the name of their small-government ideology.

Rewards and punishments

And on precisely the same note as in my previous post, Hostess is asking their bankruptcy judge to distribute bonuses to executives on the logic that giving out $1.8 million in bonuses to just 19 executives of a bankrupt company (While discharging 18,000 workers) means they'd be able to keep those executives on the job during the year or so that it would take to properly and effectively close the company down. The argument on behalf of the executives is that "In January, Hostess filed for its second Chapter 11 bankruptcy in less than a decade, citing steep costs associated with its unionized work force" while the counter-argument is that "The company's demise came after years of management turmoil, with workers saying the company failed to invest in updating its products."

Hostess is hardly the only company to reward executives of failed firms, but

Even as it blamed unions for the bankruptcy and the 18,500 job losses that will ensue, Hostess already gave its executives pay raises earlier this year. The salary of the company’s chief executive tripled from $750,000 to roughly $2.5 million, and at least nine other executives received pay raises ranging from $90,000 to $400,000. Those raises came just months after Hostess originally filed for bankruptcy earlier this year.

Also:

But the union and the 5,600 Hostess workers represented by the union did not create the crisis that led the company’s incompetent managers to announce plans to shutter it.

The BCTGM workers did not ask for more pay.

The BCTGM workers did not ask for more benefits.

The BCTGM workers did not ask for better pensions.

The union and its members had a long history of working with the company to try to keep it viable. They had made wage and benefit concessions to keep the company viable. They adjusted to new technologies, new demands.

My problem with rewarding what strongly appears to be a case of vulture capitalism is that it gives corporate executives every incentive to drive their companies into the ground and loot them dry. If we make it pay for executives in charge of companies go under, what's to prevent them from making decisions that they know will harm the company, its customers and their larger community?

My proposed solution is to remove the profit motivation for corporate executives to seek the destruction of the firms they supervise. When a company goes under, every executive should be placed on seven-eighths of their usual pay and no bonuses, ever! No stock sell-offs, no financial compensation of any sort. Any stock they own should be taken back and discontinued. I don't think the employees should be automatically rewarded either, just in case it really is union demands that make the company go under, but most certainly, the owners and executives should "take a haircut" on any company that goes bankrupt.

Flabbergasted

I'm absolutely amazed that the Romney campaign has not only failed to cut the salaries of all of their people in half, but that they've actually gone in the other direction and have handed out bonuses!!!!!! Now, I would understand that, on victory night, you give everybody a "Well done!" and a slap on the back and the next day, cut them all nice, fat checks. That would make complete sense.
I can understand that after a loss, you'd need about a month to close up shop, pay off all your bills and debts or at least set up long-term arrangements to do so and maybe, just maybe, you'd have something left over to hand out as a consolation and as a "Better luck next time."
But to hand out bonuses before the campaign is over?!?!? To hand out bonuses to a campaign that's a complete disaster??!?! This is beyond incompetence, this is why the culture of the golden parachute is so horribly inappropriate and so blatantly counterproductive for American business.

The Republican Convention

Ann Romney started it off by giving a very nice, pleasant speech that was completely devoid of any bothersome policy specifics, y'know, anything that might tax the minds of any of the gentle, proper ladies that were listening. Reading between the lines and listening carefully, a feminist might actually take heart from Romney's acknowledgement of women's struggles, but Romney presented it as "whattaya gonna do, huh?" instead of as a challenge to be confronted and surmounted.

Clint Eastwood talking to the empty chair that was supposed to represent President Obama...whooo-weee!!!!!! Yeah, Eastwood's Hollywood buddies clearly thought that he's, uh, kinda lost it.

The speech reminded me of the grandfather on the cartoon The Simpsons yelling at clouds.

What really bothered me about the speech was that Eastwood addressed a right-wing caricature of a rude, disrespectful Obama and not the real-life fellow who's actually quite likeable.

Wow! ALL of the factcheckers came out swinging against Ryan's speech!

Of course, some media outlets don't regard fact-checking as their mandate and contented themselves with theater critcism, i.e., how well did Ryan tell his many lies?

An especially annoying lie of Ryan's was his description of the Simpson-Bowles "Cat Food Commission" (As it's policy prescriptions were guaranteed to leave the middle and working classes more desperate and impoverished than before).

But there's so much more. Ryan claimed that Obama "created a bipartisan debt commission. They came back with an urgent report.  He thanked them, sent them on their way, and then did exactly nothing." In fact, the Simpson-Bowles debt commission never issued an official report—in part because Paul Ryan, who sat on the commission, voted against it because he and his fellow Republicans opposed raising taxes on the rich to increase revenue and reduce the debt.

Romney's speech? Well, again, the speech completely lacked any real specifics. Romney promised 12 million new jobs, no specifics as to how and his point number three, his promise to forge "new trade agreements," presumably in the mold of NAFTA, actually contradicts the idea that he'll create new jobs here in America. Also, as we DFH lefties have been pointing out for many years, Romney's fifth point, that he wants to cut the deficit, ALSO completely contradicts the promise of new jobs. America simply cannot cut the Federal Budget AND create new jobs in the numbers that are desperately needed.

Jon Stewart ran a segment on The Daily Show a few years ago on Romney's first point, that of energy independence, showing that EVERY American president, from Harry Truman onwards, has made exactly the same promise. Not that it's a bad promise to make, but Romney really needs to flesh that promise out a bit. I looked at his campaign website a few weeks ago and his energy policy is just Sarah Palin's "Drill, baby, drill." Romney wants Americans to be educated. Okay, what does he plan to do about the crushing burden that student loans have become? No word on that.

USA Today poll

I was corresponding with a right-winger last night (Using the comments section attached to a piece in our local paper) and he suggested that I check out a USA Today poll concerning the Obama campaign's attacks on Bain Capital and what people thought of Romney's  business experience as far as his economic expertise goes. Apparently, the news on that is good for Romney as the poll showed that the public thinks 63% to 29%, that Romney's business experience is a plus when it comes to dealing with our economy.
Slight problem, though. When the focus of the question is narrowed from the public at large to just independent voters who have been paying attention to the campaign in swing states (Where the Obama campaign anti-Bain advertisements have been airing), the result is far less pleasant to the Romney campaign. The polling there shows a significant movement towards Obama and against Romney when those particular voters hear about Bain focusing on "creat[ing] wealth for their investors" as opposed to "creat[ing] a stronger American economy."
Problem is, there's a difference between running a private, for-profit corporation, no matter how large it may be, and between running a democratic government. Democratic governments can't simply toss liabilities overboard and stick others with taking care of them the way private industries regularly do. Overseeing the budget for a private company is a relatively simple matter, you want to make sure that your bottom line is a positive number. If it is, you're a success and if it's a really big positive number, you're even more of a success. Governments are more multi-purposed and have several different mandates to juggle. As US News pointed out back in February, the idea that businessmen automatically make good presidents, well, that may be a great idea in theory, but once you start really examining that idea, it quickly falls apart.

Update: and yes, we've now confirmed that Obama's attacks on Bain Capital did indeed have their intended effect. Romney has now stopped talking about his business background and is now talking about his being Governor of Massachusetts!

WaPo fact-checker needs to be sanctioned

There's a good summary of the Mitt Romney-Bain Capital "Who was leading Bain Capital during the time when Bain was a national leader in outsourcing/offshoring production from America to low-wage countries?" dispute. The years were 1999 to 2002 and Romney's story is that during those years, he was out of the loop and retired as the company's founder and chief executive. As the piece points out, Romney was receiving an annual $100,000 salary during those years. What was Bain paying him six figures for if all he was doing was standing around and acting as the figurehead, but not actually being involved in the operations of the company?

Also, as another blogger points out, where is the evidence that a new chairman took over in 1999?

And another thing. If Romney wasn’t the CEO for those three years, who was? Shouldn’t someone be coming forward to say they were in charge, not Mitt. Wouldn’t there be minutes from a board meeting detailing the line of succession? How about a mass email sent out to everyone at Bain congratulating the new CEO like you would get at every other company in America? These are arrogant fuckers, surely there has to be one Bain brochure with the new non-Mitt CEO standing in front of his office. Surely Bain must have an investor newsletter that would tell investors that Romney was out in 1999 and the new CEO was in charge. Where is all that stuff?

The WaPo Fact Checker, Glenn Kessler, states that:

We had examined many SEC documents related to Romney and Bain in January, and concluded that much of the language saying Romney was “sole stockholder, chairman of the board, chief executive officer, and president” was boilerplate that did not reveal whether he was actually managing Bain at the time.

Erm. slight problem with the "boilerplate" theory is that lying to the SEC is a felony, and for very good reason. Such a situation would be

"Very, very serious. And in the normal course would subject somebody in this position to every manner of investigation with all the consequences that you can imagine that would follow."

The reason why it's so serious is that investors need full, complete and accurate information about a company that they might be investing millions of dollars into. As Romney was the “sole stockholder" in Bain Capital, that particular provision might not matter so much as nobody was investing directly in the company. But as Romney is running for President of the United States, to dismiss these misrepresentations as mere "boilerplate" holds Romney to an extraordinarily low standard of truthfulness and trustworthiness.

An amusing "rebuttal" Kessler makes is that: "To accept some of the claims, one would have to believe that Romney, with the advice of his lawyers, lied on government documents and committed a criminal offense." Problem is, we've now uncovered conflicting documents that say different things. Not only did Romney claim on official government filings that he was “sole stockholder, chairman of the board, chief executive officer, and president,” but he also said, again, on official government filings, that "Since February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity." It's kinda difficult for both statements to be true. Seems to me that he had to have lied on at least one of those occasions. Romney's situation is now made even more difficult by the statement made several months after his alleged "retirement," that he was now a part-time CEO. Sure, he was running preparations for the Olympics, no one is making the claim that he retained day-to-day control of Bain Capital, but the quoted press release directly contradicts his assertion that he played no role in the company after  February 1999.

Regardless of how much a "hands-on" manager Romney was, the bottom line, no matter how many anonymous Democrats say otherwise,  is that

Look at it this way, guys like Ken Lay and Jeff Skilling also tried to say they didn't know what was going on and Enron and couldn't be held responsible for details. The law disagreed. That's not to say that Bain did anything illegal during that period, but the underlying principle is the same. If your name is on the legal paperwork, you're responsible.

One comment I found truly annoying was the assertion by Kessler that: "...in these partisan times, the backgrounds of sources should be disclosed." It's difficult to see why the backgrounds of any of the sources for the story are of the slightest relevance. The Boston Globe piece very clearly refers to documents, not just to people testifying. If you've seen the actual documents, why do you need to know the motivations of the people who brought those documents to light?

Perhaps Kessler doesn't need to be dismissed as a reporter entirely, perhaps he can simply be relieved of his duties as a fact-checker, but doing nothing will further degrade the esteem in which fact-checkers are held.

Update:

Romney responds

Romney responded to a particularly biting attack - that he may either be guilty of a felony or of lying to the American public - by asking in his CNN interview, "is that really what's expected from the campaign of the sitting president of the United States?"

"Is this the level that the Obama campaign is willing to stoop to? Is this up to the standards expected of the presidency of the United States," he asked. "It's disgusting; it's demeaning; it's something which I think the president should take responsibility for and stop."

CNN

If one reads the piece above, there is plenty of good reason to believe that Romney is either lying and/or a felon. If he wants to disprove that, he can begin by releasing all of his tax returns from 1998 onwards.
  

Update II:

Kessler backs down

With a lot of hemming and hawing and irrelevant asides, Kessler concedes the points made by the Obama campaign concerning Romney and his departure date from Bain Capital.

I found Kessler's following statement to be hugely amusing: "The years 1999-2002 are a gray period in Romney’s life." Gee, why would that be? Could it be because Romney himself has been vague and unwilling to produce documentation about that period? There is no inherent ambiguity here, The only questions are raised by the Romney campaign and its refusal to be open and honest about what Romney's status was.

Re: "Focusing on wrong issues" Letter 14 May 2012

The writer sets out a number of propositions, that:

• the $15 trillion debt,
• the $1.5 trillion annual deficit,
• the high unemployment rate,
• a failed strategy in the Middle East,
• and 50 percent of the population paying no federal income tax in an ever-expanding entitlement society.

are all very serious problems that need to be tackled and all of which are far more timely and urgent than marriage equality between gays and straights. I wrote about this letter to the Inky on the subject of whether or not marriage equality was a meaningful issue (I think it is), but the above is an interesting list. The first two items on the list, debt and deficit, cannot be pursued at the same time that the third item, unemployment, is pursued. The President and the Republican Congress spent all of 2010 and the first half of 2011 trying to lower the deficit and at the same time, promised that they were pursuing job growth. They couldn't do both and a quick look at employment growth for the last several years shows some progress in climbing out of the hole of the Great Recession, but very slow progress. The red line going upwards doesn't look anything like a strong, healthy financial recovery. In fact, at precisely the time when job growth should have been really taking off in response to the policies that the President and Congress were pursuing, job growth abruptly slowed down instead. This was a complete surprise to those who had put their faith in the "Comfidence Fairy," but not all surprising to liberal Keynesians. An economist explains on The Real News what the agenda of the pro-austerity crowd is. It's nothing that regular citizens should support and there's a reason that Europeans are opposed to it. Back in 1999, anti-globalists spoke of the "race to the bottom," and that seems to be precisely what's going on.

Not sure how Obama's strategy in the Middle East is a failure. Certainly he's doing no worse than the last president did.

And no, first off, entitlements are not "ever-expanding," the number of people on food stamps has grown tremendously, but that's entirely because of the Great Recession. Why are so many people still on food stamps, years after the crash? Well, if Obama and the Republicans had not "pivoted" towards deficit reduction and away from getting Americans back to work, there wouldn't be as many people on food stamps. There would be more Americans paying taxes because there more of our citizens would have well or at least decently-paying jobs.