Romney . . . is a perfect representative of one side of the ominous cultural divide that will define the next generation, not just here in America but all over the world. Forget about the Southern strategy, blue versus red, swing states and swing voters – all of those political clichés are quaint relics of a less threatening era that is now part of our past, or soon will be. The next conflict defining us all is much more unnerving.
That conflict will be between people who live somewhere, and people who live nowhere. It will be between people who consider themselves citizens of actual countries, to which they have patriotic allegiance, and people to whom nations are meaningless, who live in a stateless global archipelago of privilege – a collection of private schools, tax havens and gated residential communities with little or no connection to the outside world....
Obama ran on "change" in 2008, but Mitt Romney represents a far more real and seismic shift in the American landscape. Romney is the frontman and apostle of an economic revolution, in which transactions are manufactured instead of products, wealth is generated without accompanying prosperity, and Cayman Islands partnerships are lovingly erected and nurtured while American communities fall apart. The entire purpose of the business model that Romney helped pioneer is to move money into the archipelago from the places outside it, using massive amounts of taxpayer-subsidized debt to enrich a handful of billionaires. It's a vision of society that's crazy, vicious and almost unbelievably selfish, yet it's running for president, and it has a chance of winning. Perhaps that change is coming whether we like it or not. Perhaps Mitt Romney is the best man to manage the transition. But it seems a little early to vote for that kind of wholesale surrender.
-- Matt Taibbi, Greed and Debt: The True Story of Mitt Romney and Bain Capital, Rolling Stone, August 29, 2012.
Maybe you're not supposed to begin a diary with a blockquote, but I think Taibbi's summary absolutely must be front and center. Because Taibbi does a brilliant job explaining who Mitt Romney really is, and thus, what this election is really all about.
It's been nearly three decades now that I read a book entitled, America, Inc.: Who Owns and Operates the United States, by Morton Mintz and Jerry S. Cohen. Mintz is the Washington Post reporter who, in 1962, first publicly exposed the horrifying story of thalidomide, a sleeping pill developed and marketed by German pharmaceutical company Grünenthal GmbH that caused severe birth defects in several thousand children worldwide.
Yeah, that was the book that changed my life. It started me down my life's journey of fighting for political and economic freedom from entrenched special interests, especially corporations.
I have not been at all successful. I'm sorry.
I have diaried and commented before my dismay that the debate in this election is so superficial - often even here on DailyKos. Because the central issue we now confront in the United States - and around the world - is the rise of a new, global oligarchy, based on finance capitalism (as opposed to industrial capitalism). This new oligarchy is inherently hostile to democratic self-government, as detailed most famously by Naomi Klein in her 2007 book The Shock Doctrine: The Rise of Disaster Capitalism. This oligarchy's operating doctrine - and spore - is economic neo-liberalism, a confusing term for the radical laissez faire economic policies exemplified by Margaret Thatcher and Ronald Reagan.
When I began writing on political economy in the 1980s, the United States - though stumbling badly as it tried to recover from the catastrophic interest rate shock therapy applied by then Federal Reserve chairman Paul Volcker - led the world in almost every area of technological and industrial competence. But Volcker's and Reagan's unleashing of usury proved to be the medicine that killed the patient. That's all the "free market" reforms of Ronald Reagan and movement conservatism has accomplished - it has allowed usurers and speculators to gain control of every facet of our economy. The result has been a series of looting raids that has left the U.S. industrial economy crippled and trailing behind most other advanced industrial economies. The apologists for this collapse of explained it away by concocting the myths of "post-industrial society" and "globalization." Entire industries have been destroyed in the United States, including textiles, clothing, footwear, consumer electronics, and printing equipment. Many other industries, such as machine tools, industrial electronics, shipbuilding, and power generating equipment, are now shadows of what they used to be.
Another result has been the destruction of the working class, and a freeze on the progress of the middle class. Now that the working class has been squeezed dry, the middle class is being attacked.
Taibbi does a superlative job of relating how Romney and Bain where in the forefront of this disastrous shift to finance capitalism, beginning with Romney relationship to leveraged buy-out criminal Michael Milken of Drexel Burnham Lambert. In 1990, Milken pled guilty to charges of financial fraud related to illegal activities in the junk bond market. The scandal caused the collapse and bankruptcy of Drexel. As Taibbi reports, one of Romney/Bain's first "private equity" deals was done with Milken's assistance. Taibbi points out that anyone familiar with how mobsters operate will immediately recognize the Romney/Bain/Milken scam as the classic mobster's "bust-out":
...a gangster takes over a restaurant or sporting goods store and then monetizes his investment by running up giant debts on the company's credit line. (Think Paulie buying all those cases of Cutty Sark in Goodfellas.) When the note comes due, the mobster simply torches the restaurant and collects the insurance money. Reduced to their most basic level, the leveraged buyouts engineered by Romney followed exactly the same business model. "It's the bust-out," one Wall Street trader says with a laugh. "That's all it is."In Romney case - and in the case of all other leveraged buy-outs and private equity deals - the investment is monetized by imposing massive debts on the companies taken over. Taibbi relates example after example of Romney's bust-outs.
But the interesting thing, Taibbi points out, is the monumental hypocrisy of Romney, who got rich by wildly misusing corporate debts, to now run for President and make an issue of the debt of the federal government.
And this is where we get to the hypocrisy at the heart of Mitt Romney. Everyone knows that he is fantastically rich, having scored great success, the legend goes, as a "turnaround specialist," a shrewd financial operator who revived moribund companies as a high-priced consultant for a storied Wall Street private equity firm. But what most voters don't know is the way Mitt Romney actually made his fortune: by borrowing vast sums of money that other people were forced to pay back. This is the plain, stark reality that has somehow eluded America's top political journalists for two consecutive presidential campaigns: Mitt Romney is one of the greatest and most irresponsible debt creators of all time. In the past few decades, in fact, Romney has piled more debt onto more unsuspecting companies, written more gigantic checks that other people have to cover, than perhaps all but a handful of people on planet Earth.But this monstrous hypocrisy isn't even the worst part. To understand the worst part, you have to understand the utter moral bankruptcy of Wall Street today - a topic that Taibbi and others have tried to explain to Americans for five years now.
By making debt the centerpiece of his campaign, Romney was making a calculated bluff of historic dimensions – placing a massive all-in bet on the rank incompetence of the American press corps. The result has been a brilliant comedy: A man makes a $250 million fortune loading up companies with debt and then extracting million-dollar fees from those same companies, in exchange for the generous service of telling them who needs to be fired in order to finance the debt payments he saddled them with in the first place. That same man then runs for president riding an image of children roasting on flames of debt, choosing as his running mate perhaps the only politician in America more pompous and self-righteous on the subject of the evils of borrowed money than the candidate himself. If Romney pulls off this whopper, you'll have to tip your hat to him: No one in history has ever successfully run for president riding this big of a lie.
....The unlikeliness of Romney's gambit isn't simply a reflection of his own artlessly unapologetic mindset – it stands as an emblem for the resiliency of the entire sociopathic Wall Street set he represents. Four years ago, the Mitt Romneys of the world nearly destroyed the global economy with their greed, shortsightedness and – most notably – wildly irresponsible use of debt in pursuit of personal profit.What Taibbi explains is that this frightening ethos of greed was packaged by Romney into a concentrated form at Bain, which became notorious even on Wall Street for its socio-pathic greed.
Mitt Romney, it turns out, is the perfect frontman for Wall Street's greed revolution. He's not a two-bit, shifty-eyed huckster like Lloyd Blankfein. He's not a sighing, eye-rolling, arrogant jerkwad like Jamie Dimon. But Mitt believes the same things those guys believe: He's been right with them on the front lines of the financialization revolution, a decades-long campaign in which the old, simple, let's-make-stuff-and-sell-it manufacturing economy was replaced with a new, highly complex, let's-take-stuff-and-trash-it financial economy. Instead of cars and airplanes, we built swaps, CDOs and other toxic financial products. Instead of building new companies from the ground up, we took out massive bank loans and used them to acquire existing firms, liquidating every asset in sight and leaving the target companies holding the note. The new borrow-and-conquer economy was morally sanctified by an almost religious faith in the grossly euphemistic concept of "creative destruction," and amounted to a total abdication of collective responsibility by America's rich, whose new thing was making assloads of money in ever-shorter campaigns of economic conquest, sending the proceeds offshore, and shrugging as the great towns and factories their parents and grandparents built were shuttered and boarded up, crushed by a true prairie fire of debt.
The seemingly religious flavor of Bain's culture smacks of the generally cultish ethos on Wall Street, in which all sorts of ethically questionable behaviors are justified as being necessary in service of the church of making money. Romney belongs to a true-believer subset within that cult, with a revolutionary's faith in the wisdom of the pure free market, in which destroying companies and sucking the value out of them for personal gain is part of the greater good, and governments should "stand aside and allow the creative destruction inherent in the free economy."You really need to wade through all five pages of Taibbi's article. But I want to close with this very disturbing quote, to give you some insight into the truly sociopathic Wall Street culture Mitt Romney represents.
That cultlike zeal helps explains why Romney takes such a curiously unapologetic approach to his own flip-flopping. His infamous changes of stance are not little wispy ideological alterations of a few degrees here or there – they are perfect and absolute mathematical reversals, as in "I believe that abortion should be safe and legal in this country" and "I am firmly pro-life." Yet unlike other politicians, who at least recognize that saying completely contradictory things presents a political problem, Romney seems genuinely puzzled by the public's insistence that he be consistent. "I'm not going to apologize for having changed my mind," he likes to say....
Within the cult of Wall Street that forged Mitt Romney, making money justifies any behavior, no matter how venal. The look on Romney's face when he refuses to apologize says it all: Hey, I'm trying to win an election. We're all grown-ups here. After the Ampad deal, Romney expressed contempt for critics who lived in "fantasy land." "This is the real world," he said, "and in the real world there is nothing wrong with companies trying to compete, trying to stay alive, trying to make money."
....If you haven't heard much about how takeover deals like Dunkin' and KB Toys work, that's because Mitt Romney and his private equity brethren don't want you to. The new owners of American industry are the polar opposites of the Milton Hersheys and Andrew Carnegies who built this country, commercial titans who longed to leave visible legacies of their accomplishments, erecting hospitals and schools and libraries, sometimes leaving behind thriving towns that bore their names.
The men of the private equity generation want no such thing. "We try to hide religiously," explained Steven Feinberg, the CEO of a takeover firm called Cerberus Capital Management that recently drove one of its targets into bankruptcy after saddling it with $2.3 billion in debt. "If anyone at Cerberus has his picture in the paper and a picture of his apartment, we will do more than fire that person," Feinberg told shareholders in 2007. "We will kill him. The jail sentence will be worth it."