During Neil Cavuto’s interview on Fox News, Neil tried to help Mitt Romney out after his devastating speech to a $50,000.00 a plate gathering with his closest wealthy friends. During his conversation and I use the term loosely, Mitt said something that caught my attention. Now I have to admit, I’m pretty thick sometimes but in this case, what he had to say, showed me his mindset and why this man and his “team” are just so wrong to be President and this country’s next Administration.
Mitt said, “…there are a number of retirees and members of the military and so forth who aren’t pay taxes and that’s as it should be, but a - but I do believe we should have enough jobs and enough take home pay, such that people would have the privilege of higher incomes that allow them to be paying taxes I think they would like to be paying taxes; the good news is if you’re doing well enough financially that you can pay tax and the problem right now as you see in this country, so many people are falling into poverty that they’re not paying taxes they have to rely on government and the right course to help them is not just to have government handing out, but instead government helping people to get back to good jobs. Neil, the numbers on food stamps are really revealing, when the president took office 32 million people were on food stamps, and now that number is now 15 million higher almost 50% higher now 47 million people on food stamps, you got Americans falling into poverty under this President, in increasing numbers it looks like in these food stamp figures and I want to get people back to work, I’d like to see –I’d like to see everybody who’s not retired not in the military having the privilege of having a good job and a good income, enough that they, that that they qualify to paying taxes.”
And still this man remains totally out of touch with the reality of today.
Out of touch with the type of jobs now out there.
Out of touch with the companies he’s bought, overseen and managed with the compensation of the employees.
Out of touch with the concept of a “Living Wage”.
Out of touch of the causes and reality of food stamps.
Out of touch on how government really works
Out of touch with the meanings of the words – ‘privilege’ and ‘qualify’
Follow me below that disturbing formal squiggly curlicue thingy symbol for more…
I need to dissect that statement to try and understand Mitt’s approach and where I believe he missed the boat.
“…we should have enough jobs and enough take home pay…”
So let’s look at Mitt’s “Business” approach.
Mitt’s Bain Capital and its takeover of office-supplier Staples (89,000 jobs), sporting goods retailer Sports Authority (15,000) and pizza chain Domino's (7,900) for putting new jobs for poverty pay level positions.
Salaried managers at Staples and Sports Authority typically make salaries in the mid-five figures, but the much larger pool of workers on the store floors average between $8 and $9 an hour, according to Glassdoor.com, a website based on worker feedback. As Bloomberg's Matt Townsend noted in February when reporting on Bain's success stories, a lot of full-time sales associates at both Staples and Sports Authority would find themselves toiling beneath the federal poverty line for a family of three.
The story isn't much different at Domino's. Managers average a salary somewhere in the 30's, according to GlassDoor.com, but delivery drivers typically don't make much more than the minimum wage before tips. Domino's and its franchises employ thousands of drivers who make deliveries in their own cars, and some of them have sued the company, claiming its reimbursement system for mileage violates wage and hour laws.
Now let’s look at the “enough take home pay” relationship to “food stamps”
What qualifies someone for “Food Stamps” or as the correct name Supplemental Nutrition Assistance Program (SNAP)
Let’s look at what would qualify for the typical family of 4 today
• 4 people with no elderly or disabled members.
• $2,050 gross monthly income (Job paying $10.37/Hr for a 40 Hour Week)
• $2,050 is less than the $2,422 allowed for a 4-person household, so determine net income.
• $2,050 gross income
• $1,500 earned income x 20% = $300.
• $2,050 - $300 = $1,750
• $1,750 - $155 standard deduction for a household size of 4 = $1,595
• $1,595 - $361 dependent care = $1,234
• $1,234 adjusted income/2 = $617
• $700 total shelter - $617 (half of income) = $83 excess shelter cost
• $1,234 - $83 = $1,151 Net monthly income
• Since the net monthly income is less than $1,863 allowed for a household of 4, the household has met the income test.
Now compare this to Mitt’s employees pay at Staples, Sports Authority and especially Dominos and 90%+ of those employees would most likely be eligible for SNAP (Food Stamps)
“…doing well enough financially that you can pay tax…”
Sorry Mitt, but after paying for food, rent/mortgage, utilities, gas for car, insurance, car payments, health care, clothes… (and I’m not even going to go after credit cards, college funds, retirement, etc.) there’s no money left to buy stocks or bonds of which I’d have to pay “Income Tax” on. However Mitt I do pay “Payroll Taxes”, “Social Security”, “StateTax”, etc. not to mention all those pass through taxes corporations make me pay on their bills to me and of course “Sales Tax.
“…the right course to help them is not just to have government handing out, but instead government helping people to get back to good jobs.”
So now I take it, good old Mitt is going to establish a new government department
The Job Placement Department
• Most likely staffed by terminated Republican High School Guidance Counselors from the70s & 80s
• Ones that will place the millions of unemployed into high paying jobs so no federal assistance programs will need to be tapped.
The Privilege Of Having A Job
The driving philosophy Bain and Romney understood was companies cannot, should not, and must not take responsibility for employment.
To understand the mindset under which Romney operates was best explained in Forbes Magazine.
In one sense, (corporate economic) truth flows from simple logic. Corporations can and do own capital. They cannot own workers. Workers own themselves. Only the owner of something has the right, the responsibility, and the legitimate authority to manage it. Accordingly, companies cannot be responsible for their workers’ lives, jobs, or careers.But in the end Romney doesn’t understand the “Privilege” is earned. It’s earned through trust. It’s a social thing. The “Privilege” of working, in Romney’s definition, is that a company is allowing you to work for them and that (“my friend”) is something you should be thankful for.
Also, no matter how popular it might be for a company to “take responsibility” for creating or preserving jobs, any company that actually tries to do this will end up increasing its costs. This will make it uncompetitive with other companies that focus solely upon optimizing the productivity of their capital. If “socially responsible” companies resist economic reality for long enough, they will go bankrupt, and they will cease to employ anyone at all.
Economic reality dictates that if it is possible to replace (say) $500 worth of electricity with $100 worth of natural gas, a company must do this. Similarly, if it is possible to replace expensive U.S. workers with cheaper workers in other lands or cost-effective robots, a corporation must make the substitution or it will see its capital destroyed.
A market economy has no alternative other than to make decisions based upon the assumption that workers are worth what they cost. In other words, economic decision makers must assume that if the marginal worker did not work at Company X, he or she could go to work for Company Y for a similar wage. It is the next best alternatives of buyers and sellers that determine the market price of a resource.
Every union contract that calls for workers to be paid more than market—which is to say, virtually every union contract—embodies a lie.
Once created, such lies are broadcast throughout the world by the price system. This stimulates the economy to try to replace the expensive union workers with cheaper resources, such as non-union workers in “right to work” states, foreign workers, or machinery. Eventually, the economic lie is extinguished, and the jobs of the unionized workers are eliminated.
Sometimes, before this process can go to completion, a private equity firm like Bain will buy control of the company and force it to start telling the truth. In this specific case, one truth is that the unionized workers are not worth what they are being paid. If it is skillful, the LBO firm may be able to salvage the company’s market position, the value of its capital, and some of its jobs. If it is successful, the private equity firm’s reward will likely include being savaged by Progressives for “union busting” and/or “destroying jobs”.
Summing up, before anyone criticizes private equity firms, they should be aware that the alternative to Bain is more bankruptcies and bailouts. Under Mitt Romney, Bain Capital was an agent of economic truth. It did its best to do its specific job, which was to help preserve society’s capital. We could do worse than to have our country led by a man who made his fortune by forcing dysfunctional, underperforming organizations to face reality.
My father started a business back in 1919 and by the late 60s was the second largest metallurgical firm in the United States. The company was bought by GTE and my father retired. His company grew for 40 years and he always looked at his workers as partners. He was socially aware of the responsibilities of the company to make a profit and he also knew the well being and care for his workers was an important part of the equation. The products the workers turned out were used in so many things from toasters, to TVs and Radios, to the Government’s Space Program and those worker’s products are sitting on the Moon’s surface today. I could always remember the workers (and so many were my friends too) tell me what a privilege it was working for my dad.
So Mitt, you failed Language in school and have no inkling of what the word “Privilege” means.
Qualifying To Pay Taxes
The average worker and family makes about $55,000.00 a year. That’s barely enough to get by today. The ability to “qualify” to pay taxes on Stocks and Bonds, Real Estate Investments, etc., can be left to those making $200,000 or more. The 7-9%.
Mitt you just don’t get it!