Mitt Romney has laid his private sector business experience as the foundation for his campaign. This experience has been used as a central qualification for the presidency in this down economy. Presidents Obama's comparatively minimal business experience has been used by the Romney campaign to explain why our economy has not shown the improvements we have been waiting for. He most recently mentioned it in his speech at the RNC convention when he said:
[Obama] took office without the
basic qualification that most Americans have, and one that was
essential to the task at hand. He had almost no experience
working in a business.
While on its face, these justifications appear reasonable most average Americans. It seems reasonable to assume that a man who ran a large financial company would be uniquely qualified to bring this country out of its economic downturn. This narrative is effective as long as we continue to ignore past presidents that were businessmen, and also some of our least effective presidents. First, we can consider Romney's new favorite punching bag, Jimmy Carter, then there was also both Bushes, Harding, and Hoover, aka both recessions, depression, and depression. Most importantly, we must examine the type of business Romney ran, and how that experience relates to running a country. More below fold.
I have chosen to use Robert Reich's critique on private equity firms, it is basic, easy to understand, and animated! You can watch the video here: The Magic of Bain Capital's Profits Explained in 8 Easy StepsI will attempt to relate these eight easy steps to Romney's possible future presidency.
Step 1: Get Other People's Money!
Initially I was going to compare this to American taxpayers, but came to realize that we are not the investors. Thanks to the Citizens United ruling most of these investors are anonymous, so too are Romney's bundlers, but we do know that Sheldon Adelson, and the Koch brothers, as well as several others have been major contributors to pro-Romney Super PACs. These are the investors in Romney's new private equity government.
Step 2: Buy a company!
This company is obviously the American federal government. If the GOP and their Super PAC donors can win a majority in the Senate, maintain their House majority, and buy the presidency, they will essentially have bought our government. Without effective opposition they are free to move to the next step.
Step 3: Cut Workers! Cut Benefits!
This has been a pillar of right-wing extremists for decades now. Payroll is one of the largest costs for most companies, so by firing employees and/or cutting benefits a company can cut costs. Romney has previously spoken of shrinking the federal government, and cutting departments such as Education, and agencies such as the EPA. He and Ryan have also spoken of making Medicare a defined contribution program, cutting $25 billion in Medicaid, and repealing the Patient Protection and Affordable Care Act (PPACA). This creates the appearance of government becoming fiscally solvent, but it fails to solve the underlying problems that spawned these programs. This bluff can lead the world to believe that America is on the rise, and lead into the next nefarious step.
Step 4: Inflate Profits!
This is the step involving a little government sleight of hand, the old Kansas City Shuffle if you will. It involves borrowing money to create the sense that these reforms are creating fiscal solvency. We know this works because we saw it happen with the Bush the Younger administration. They kept both wars, and the Medicare Part D plan off the books. It lead Americans to believe that deficits were minimal even after large tax cuts. This same maneuver would be simple for Romney as he is an old hand at this trick by now. He has promised to lower taxes on the wealthiest Americans, and increase defense spending, while still remaining revenue and spending neutral. According to the independent
Tax Policy Center, in order to pull this rabbit out of the hat, he would either have to increase taxes by $2,000 on the average middle class worker, or increase borrowing from other countries. While neither is politically popular, Dubya knows which one is easier to hide from the average American. Once Americans have been lulled to sleep at the fiscal wheel he is free to proceed as planned.
Step 5: Payback Investors!
You didn't think that the wealthy Super PAC donors were giving these contributions selflessly, did you? If these capitalists have learned anything in the past three decades, they know that government favors pay far higher dividends than research and development. They have come to expect the federal government to insulate them from competition through regulations, deregulations, tax breaks, subsidies, permits, etc. Romney will be unable to turn his back on the men and women who bought him the presidency.
Step 6: Sell Profitable Company
The far right extremists have adopted the Ayn Rand philosophy whole-heartedly. They believe that the private-sector can do almost everything better than the government, and we have seen them sell services to private entities on the local and state level for years now. I have been reading Kurt Vonnegut's Hocus Pocus the past couple of days after Isaac knocked out my power, and I have actually been a little horrified of his prescience. In the novel, almost every service once provided by the government has been sold to large multi-nationals, and it was written 22 years ago. This has already been stated as part of the Romney plan. In his speech at the RNC convention he proclaimed that, as a child, his visits to our national parks stirred up a great love for this country, and in that very same speech he told us that he was ready to spoil that land by selling permits to energy concerns. Five of our National Parks scheduled for possible destruction can be found here. This idea is maddening enough as is, but it is only one facet of a possible larger plan of privatization. I am sure we would not have to wait long before the Bush era Social Security Privatization plan was reanimated under the Romney administration, as well as the reinvigoration of private security companies if we were to go to war with Iran.
Step 7: Pocket 20% of the Gains!
This part would be a little trickier for Romney himself, considering the recent passage of the STOCK Act. He would be unable to participate in any investments linked to his decisions, oh, but he does have that blind trust which he claims to have no control over. However, the STOCK Act is week in some aspects. While it does ban elected officials from insider trading, it fails to address the possibility that elected officials could pass bills that benefit their already existent investments, nor does it have provisions for family and friends. These anonymous bundlers still have the ability to legally gain this inside information without recourse as long as they do not take a position in Romney's cabinet or as part of his staff.
Step 8: Pay Only 15% Tax!
This figure has become all too familiar. It is the rate at which capital gains are taxed. This means that any of Romney's cronies made money from investments that were made due to inside information, they would only be subject to a 15 % tax rate, which is lower than the average income tax. Romney has supported permanently setting the capital gains tax at 15% to avoid it reverting back to 20% in 2013. Of the Romney/Ryan ticket, this is the least preposterous of their separate plans. Under the Ryan plan, the capital gains tax would be abolished, cutting it to zip, zero, nada%. Either plan is beneficial to Romney's bundlers, donors, and Super PAC donors, but I believe the push in a Republican controlled government would be closer to Ryan's plan.
So there you have it, Mitt's business modeled applied to the public-sector. Mitt's business acumen would have a much stronger footing if he had followed in his father's footsteps. If he had ran a company that actually made things, I believe his experience would relate a little better to the office he is seeking. In a company that makes stuff, they are expected to give a reasonable rate of return to investors by providing a product that customers want. In this scenario, we as taxpayers and Americans play the part of both. However, in the real world, with Romney's actual experience, we are the shills. We are the employees of that gutted company, holding our hats and wondering "How did it all go so wrong?"