The Father of ‘Citizens United’ Is a Big Man at the Republican Convention

August 30, 2012    

David Bossie is not a household name, nor is he a particularly recognizable figure. However, it is David Bossie — and the United States Supreme Court — that the Republican Party, and it’s billionaire funders and supporters, have to thank for allowing them the opportunity to flood Election 2012 with vast amounts of undisclosed money.

On several occasions over the years, I’ve written about Bossie. Thanks to Esquire’s brilliant Charles P. Pierce, I was reminded that Bossie’s scattershot approach to politics, which had played a nagging role in the body politic for years, had inadvertently hit the big time with the Citizens United case.

It was Bossie’s Citizens United that was the protagonist in the historic Supreme Court decision in Citizens United v. Federal Election Commission.

In January 2010, The Nation editorialized: “The Citizens United campaign finance decision by … a Supreme Court majority of conservative judicial activists is a dramatic assault on American democracy, overturning more than a century of precedent in order to give corporations the ultimate authority over elections and governing. This decision tips the balance against active citizenship and the rule of law by making it possible for the nation’s most powerful economic interests to manipulate not just individual politicians and electoral contests but political discourse itself. “

The story leading up to the case going to the Supreme Court goes like this:

In 2007, Citizens United was gearing up for what it was certain would be Hillary Clinton’s historic run for the presidency atop the Democratic Party’s ticket.

For years, CU’s toolbox had been filled with an assortment of material — misinformation, disinformation, and egregious lies — used to attack both President Clinton and Hillary. Now CU was attempting to marshal the resources for the mother of all anti-Hillary hit pieces.

Bossie, president and Chairman of the Board of Citizens United, acknowledged that he was inspired by the success of Michael Moore’s films, saying that he “… saw the impact Moore was having. … [and] realized the long-form documentary could be a powerful tool to deliver a political message.”

Bossie and his partner, the veteran Swift Boater, Floyd Brown, came up with the idea of making a full-length documentary film about Hillary. The film would be so powerful that it would stop her in her tracks; revealing all the secrets about her sordid past that the American public either had forgotten or did not know.

The movie, titled Hillary: The Movie, was set to “explode onto the scene!” Citizens United’s web site proclaimed. Produced by Bossie, the author of the “Hillary: The Politics of Personal Destruction,” the film contained more than 40 interviews “with experts, opinion makers, and many of the people who personally locked horns with the Clintons.”

Citizens United prepared several short ads for the film that were set to run on television as political advertisements.

According to Esquire’s Pierce, the “film about Hillary Clinton … was pretty much as spurious as most of the work [Bossie had] done in his entire career, and a court ruled that the advertising for the film violated existing campaign laws about ‘electioneering’ within 30 days of a primary. In 2004, Bossie and Citizens United had sued on precisely those grounds, arguing that ads for Michael Moore’s Fahrenheit 911 violated the same laws. He had lost that case. In the interim, he recast his organization as a legitimate filmmaking operation and so, when a lower court ruled against him, he was ready with the argument that convinced Kennedy and four of his brethren.”

Bossie’s checkered past

Before Citizens United, Bossie was national youth director in Senator Robert Dole’s 1988 presidential campaign. Four years later, he became the executive director of Floyd Brown’s Presidential Victory Committee, a political action committee that produced an ad and a 1-800 number with recordings of Gennifer Flowers’ alleged conversations with Bill Clinton.

Bossie made his reputation as a fiercely anti-Clinton partisan and provocateur. In addition to the conservative media swallowing his anti-Clinton news releases, the Columbia Journalism Review reported that The New York Times often printed “verbatim” opposition research provided by Bossie, without identifying its sources. .

In May 1994, Trudy Lieberman, a senior editor at Consumer Reports described Bossie as a twenty-eight-year-old political director for Citizens United, who “runs an information factory whose Whitewater production lines turn out a steady stream of tips, tidbits, documents, factoids, suspicions, and story ideas for the nation’s press and for Republicans on Capitol Hill. Journalists and Hill Republicans have recycled much of the information provided by Citizens United into stories that have cast a shadow on the Clinton presidency.”

Bossie was hired as chief investigator for the Whitewater hearings held by North Carolina’s Republican Senator Lauch Faircloth, and was an investigator for Representative Dan Burton (R-IN), the chairman of the House investigation into alleged Clinton campaign finance abuses.

Media Matters for America reported that Bossie “was fired [at the behest of then House Speaker Newt Gingrich] in 1998 from his job as chief investigator for the House Committee on Government Reform and Oversight … for his role in releasing selectively edited transcripts of former Clinton administration official Webster Hubbell’s prison conversations.”

Bossie is also the author of a number of books attacking Democrats including “Prince Albert: The Life and Lies of Al Gore (2000), “Intelligence Failure: How Clinton’s National Security Policy Set the Stage for 9/11″ (2004), and “The Many Faces of John Kerry: Why This Massachusetts Liberal Is Wrong For America” (2004).

In 2008, Bossie, who along with Floyd Brown promoted the Obama-Bill Ayers connection, told Time magazine that he was “assembling material for TV spots about Obama’s ties with [Bill] Ayers, a Chicago professor and unrepentant former member of the Weather Underground, a group that bombed several government buildings to protest the Vietnam War.”

David Bossie’s imprint is likely to be stamped on future U.S. elections. And now, according to Esquire’s Pierce, David Bossie, “the most important man at [the GOP’s] convention” is Tampa’s toast of the town.
http://truth-out.org/buzzflash/commentary/item/11711-the-father-of-citizens-united-is-a-big-man-at-the-republican-convention

The Meaning of Intelligence by Krista Tippet

On Being, August 30, 2012

When he was in high school, Mike Rose was placed in a vocational track, until it was discovered that a clerical error with test scores meant he should have been in college prep classes. His insights from his own schooling, plus the time he spent watching his mother work — and think — as a waitress, have informed his academic study of the role of education in physical labor, and democracy. As he explains, America’s contradictory opinion of learning rarely addresses the ways education can help people reach their full potential.

“Valuing Intellectual Depth and Its Relationship to Work and Life in All Its Forms”

I was hooked by the opening lines of Mike Rose’s lovely book, The Mind at Work:

“I grew up a witness to the intelligence of the waitress in motion, the reflective welder, the strategy of the guy on the assembly line. This, then is something I know: the thought it takes to do physical work. Such work put food on our table, gave shape to stories of affliction and ability, framed how I saw the world … I’ve been thinking about this business of intelligence for a long time: the way we decide who’s smart and who isn’t, the way the work someone does feeds into that judgment, and the effect such judgment has on our sense of who we are and what we can do.”
Mike Rose grew up in an immigrant family in the center of Los Angeles; I grew up in a small town in the melting pot of Oklahoma. I did not grow up around much physical work, but I did attend a school where advanced classes in languages, math, and science were axed to sustain a strong football team. His story of his late discovery of the strength of his own mind, and, even later, grasping the forms of intelligence he had known without appreciating, sparked all kinds of longing and recognition in me.

Our stories taken together are disparate but kindred facets of a disconnect in the American story that thrives, largely unexamined, in our public life. Despite our national history of exceptional intellectual achievement, we harbor what the historian Richard Hofstadter classically observed as a “national distaste for intellect.” At the same time, we harbor a learned dismissal of the cognitive accomplishments of “average” people, working people, and “manual” labor.

Mike Rose can demonstrate the error of such dismissiveness with hard research. But his concern goes deeper than that and is relevant to us all. Failing to see and nurture the intellectual and civic substance of all kinds of work, he worries, is profoundly undemocratic. It limits our collective vision and range of action from school reform to social planning. We shape educational policies with economic competitiveness in mind, Mike Rose says; but we need also to ask what kind of education befits a democracy? Here is part of his answer to that question, in our conversation:
“So what kind of a language should we use in a democratic society? Certainly a language that includes the economic motive. Absolutely. Of course. But that braids that motive in with all the other reasons that actually historically in our country we’ve talked about as well. The civic motive. We send kids to school to become civic beings. We sent kids to school to learn how to solve problems with each other. Children go to school because their parents want to help them develop into better people. They want them to find passions. They want them to learn how to learn.

And what about in a democracy learning how to speak up when you think something is not right? Or learning to take a risk. You know, in this kind of test-based world that students grow up in, you’re penalized if you take a risk but yet just about any intellectual breakthrough of any kind that you’ll study has seen that it’s been a path of breakthrough and failure. So where in all of this are children encouraged to take intellectual risks? What kinds of classrooms are created that allow that?

What you see when you travel through all these communities and you talk to parents and you watch these teachers who work so hard and you spend time with these kids, is you get a sense of this immense rich thing that a classroom can be, a place of both learning subject matter but of learning how to exist in a public space and how to have this feeling, this sense, that you matter and that your mind matters and that this is a place that’s safe and respectful and where I can take chances and I can learn something. And that can have an effect on who I’m going to be.”

I Recommend Reading:

 »The Mind at Work: Valuing the Intelligence of the American Worker
by Mike Rose

This refreshing, wonderfully written examination of beliefs about the mind explores blue-collar vocations and offers ample opportunity for the reader to reevaluate one’s assumptions about the complexity of thinking that takes place as a hairdresser snips a lock, a waitress juggles multiple tables and orders, a carpenter problem-solves on site.
About the Program
On Being is a spacious conversation — and an evolving media space — about the big questions at the center of human li

Greed and Debt: The True Story of Mitt Romney and Bain Capital By Matt Taibbi

Rolling Stone, August 29, 2012  

The great criticism of Mitt Romney, from both sides of the aisle, has always been that he doesn’t stand for anything. He’s a flip-flopper, they say, a lightweight, a cardboard opportunist who’ll say anything to get elected.

The critics couldn’t be more wrong. Mitt Romney is no tissue-paper man. He’s closer to being a revolutionary, a backward-world version of Che or Trotsky, with tweezed nostrils instead of a beard, a half-Windsor instead of a leather jerkin. His legendary flip-flops aren’t the lies of a bumbling opportunist – they’re the confident prevarications of a man untroubled by misleading the nonbeliever in pursuit of a single, all-consuming goal. Romney has a vision, and he’s trying for something big: We’ve just been too slow to sort out what it is, just as we’ve been slow to grasp the roots of the radical economic changes that have swept the country in the last generation.

The incredible untold story of the 2012 election so far is that Romney’s run has been a shimmering pearl of perfect political hypocrisy, which he’s somehow managed to keep hidden, even with thousands of cameras following his every move. And the drama of this rhetorical high-wire act was ratcheted up even further when Romney chose his running mate, Rep. Paul Ryan ofWisconsin– like himself, a self-righteously anal, thin-lipped, Whitest Kids U Know penny pincher who’d be honored to tell Oliver Twist there’s no more soup left. By selecting Ryan, Romney, the hard-charging, chameleonic champion of a disgraced-yet-defiant Wall Street, officially succeeded in moving the battle lines in the 2012 presidential race.

Like John McCain four years before, Romney desperately needed a vice-presidential pick that would change the game. But where McCain bet on a combustive mix of clueless novelty and suburban sexual tension named Sarah Palin, Romney bet on an idea. He said as much when he unveiled his choice of Ryan, the author of a hair-raising budget-cutting plan best known for its willingness to slash the sacred cows of Medicare and Medicaid. “Paul Ryan has become an intellectual leader of the Republican Party,” Romney told frenzied Republican supporters in Norfolk,Virginia, standing before the reliably jingoistic backdrop of a floating warship. “He understands the fiscal challenges facing America: our exploding deficits and crushing debt.”

Debt, debt, debt. If the Republican Party had a James Carville, this is what he would have said to win Mitt over, in whatever late-night war room session led to the Ryan pick: “It’s the debt, stupid.” This is the way to defeat Barack Obama: to recast the race as a jeremiad against debt, something just about everybody who’s ever gotten a bill in the mail hates on a primal level.

Last May, in a much-touted speech in Iowa, Romney used language that was literally inflammatory to describeAmerica’s federal borrowing. “A prairie fire of debt is sweeping across Iowa and our nation,” he declared. “Every day we fail to act, that fire gets closer to the homes and children we love.” Our collective debt is no ordinary problem: According to Mitt, it’s going to burn our children alive.

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.

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 inAmericamore 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. It’s almost enough to make you think he really is qualified for the White House.

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. The sight was so disgusting that people everywhere were ready to drop an H-bomb onLower Manhattanand bayonet the survivors. But today that same insane greed ethos, that same belief in the lunatic pursuit of instant borrowed millions – it’s dusted itself off, it’s had a shave and a shoeshine, and it’s back out there running for president.

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.

Mitt Romney – a man whose own father built cars and nurtured communities, and was one of the old-school industrial anachronisms pushed aside by the new generation’s wealth grab – has emerged now to sell this make-nothing, take-everything, screw-everyone ethos to the world. He’s Gordon Gekko, but a new and improved version, with better PR – and a bigger goal. A takeover artist all his life, Romney is now trying to take over America itself. And if his own history is any guide, we’ll all end up paying for the acquisition.

Willard “Mitt” Romney’s background in many ways suggests a man who was born to be president – disgustingly rich from birth, raised in prep schools, no early exposure to minorities outside of maids, a powerful daddy to clean up his missteps, and timely exemptions from military service. In Romney’s bio there are some eerie early-life similarities to other recent presidential figures. (IsAmericareally ready for another Republican president who was a prep-school cheerleader?) And like other great presidential double-talkers such as Bill Clinton and George W. Bush, Romney has shown particular aptitude in the area of telling multiple factual versions of his own life story.

“I longed in many respects to actually be in Vietnam and be representing our country there,” he claimed years after the war. To a different audience, he said, “I was not planning on signing up for the military. It was not my desire to go off and serve inVietnam.”

Like John F. Kennedy and George W. Bush, men whose way into power was smoothed by celebrity fathers but who rebelled against their parental legacy as mature politicians, Mitt Romney’s career has been both a tribute to and a repudiation of his famous father. George Romney in the 1950s became CEO of American Motors Corp., made a modest fortune betting on energy efficiency in an age of gas guzzlers and ended up serving as governor of the state ofMichiganonly two generations removed from the Romney clan’s tradition of polygamy. For Mitt, who grew up worshipping his tall, craggily handsome, politically moderate father, life was less rocky: Cranbrook prep school in suburban Detroit, followed by Stanford in the Sixties, a missionary term in which he spent two and a half years trying (as he said) to persuade the French to “give up your wine,” and Harvard Business School in the Seventies. Then, faced with making a career choice, Mitt chose an odd one: Already married and a father of two, he left Harvard and eschewed both politics and the law to enter the at-the-time unsexy world of financial consulting.

“When you get out of a place like Harvard, you can do anything – at least in the old days you could,” says a prominent corporate lawyer on Wall Street who is familiar with Romney’s career. “But he comes out, he not only has aHarvardBusinessSchooldegree, he’s got a national pedigree with his name. He could have done anything – but what does he do? He says, ‘I’m going to spend my life loading up distressed companies with debt.’ ”

Romney started off at the Boston Consulting Group, where he showed an aptitude for crunching numbers and glad-handing clients. Then, in 1977, he joined a young entrepreneur named Bill Bain at a firm called Bain & Company, where he worked for six years before being handed the reins of a new firm-within-a-firm called Bain Capital.

In Romney’s version of the tale, Bain Capital – which evolved into what is today known as a private equity firm – specialized in turning around moribund companies (Romney even wrote a book called Turnaround that complements his other nauseatingly self-complimentary book, No Apology) and helped create the Staples office-supply chain. On the campaign trail, Romney relentlessly trades on his own self-perpetuated reputation as a kind of altruistic rescuer of failing enterprises, never missing an opportunity to use the word “help” or “helped” in his description of what he and Bain did for companies. He might, for instance, describe himself as having been “deeply involved in helping other businesses” or say he “helped create tens of thousands of jobs.”

The reality is that toward the middle of his career at Bain, Romney made a fateful strategic decision: He moved away from creating companies like Staples through venture capital schemes, and toward a business model that involved borrowing huge sums of money to take over existing firms, then extracting value from them by force. He decided, as he later put it, that “there’s a lot greater risk in a startup than there is in acquiring an existing company.” In the Eighties, when Romney made this move, this form of financial piracy became known as a leveraged buyout, and it achieved iconic status thanks to Gordon Gekko in Wall Street. Gekko’s business strategy was essentially identical to the Romney–Bain model, only Gekko called himself a “liberator” of companies instead of a “helper.”

Here’s how Romney would go about “liberating” a company: A private equity firm like Bain typically seeks out floundering businesses with good cash flows. It then puts down a relatively small amount of its own money and runs to a big bank like Goldman Sachs or Citigroup for the rest of the financing. (Most leveraged buyouts are financed with 60 to 90 percent borrowed cash.) The takeover firm then uses that borrowed money to buy a controlling stake in the target company, either with or without its consent. When an LBO is done without the consent of the target, it’s called a hostile takeover; such thrilling acts of corporate piracy were made legend in the Eighties, most notably the 1988 attack by notorious corporate raiders Kohlberg Kravis Roberts against RJR Nabisco, a deal memorialized in the book Barbarians at the Gate.

Romney and Bain avoided the hostile approach, preferring to secure the cooperation of their takeover targets by buying off a company’s management with lucrative bonuses. Once management is on board, the rest is just math. So if the target company is worth $500 million, Bain might put down $20 million of its own cash, then borrow $350 million from an investment bank to take over a controlling stake.

But here’s the catch. When Bain borrows all of that money from the bank, it’s the target company that ends up on the hook for all of the debt.

Now your troubled firm – let’s say you make tricycles in Alabama – has been taken over by a bunch of slick Wall Street dudes who kicked in as little as five percent as a down payment. So in addition to whatever problems you had before, Tricycle Inc. now owes Goldman or Citigroup $350 million. With all that new debt service to pay, the company’s bottom line is suddenly untenable: You almost have to start firing people immediately just to get your costs down to a manageable level.

“That interest,” says Lynn Turner, former chief accountant of the Securities and Exchange Commission, “just sucks the profit out of the company.”

Fortunately, the geniuses at Bain who now run the place are there to help tell you whom to fire. And for the service it performs cutting your company’s costs to help you pay off the massive debt that it, Bain, saddled your company with in the first place, Bain naturally charges a management fee, typically millions of dollars a year. So Tricycle Inc. now has two gigantic new burdens it never had before Bain Capital stepped into the picture: tens of millions in annual debt service, and millions more in “management fees.” Since the initial acquisition of Tricycle Inc. was probably greased by promising the company’s upper management lucrative bonuses, all that pain inevitably comes out of just one place: the benefits and payroll of the hourly workforce.

Once all that debt is added, one of two things can happen. The company can fire workers and slash benefits to pay off all its new obligations to Goldman Sachs and Bain, leaving it ripe to be resold by Bain at a huge profit. Or it can go bankrupt – this happens after about seven percent of all private equity buyouts – leaving behind one or more shuttered factory towns. Either way, Bain wins. By power-sucking cash value from even the most rapidly dying firms, private equity raiders like Bain almost always get their cash out before a target goes belly up.

This business model wasn’t really “helping,” of course – and it wasn’t new. Fans of mob movies will recognize what’s known as the “bust-out,” in which 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 Streettrader says with a laugh. “That’s all it is.”

Private equity firms aren’t necessarily evil by definition. There are many stories of successful turnarounds fueled by private equity, often involving multiple floundering businesses that are rolled into a single entity, eliminating duplicative overhead. Experian, the giant credit-rating tyrant, was acquired by Bain in the Nineties and went on to become an industry leader.

But there’s a key difference between private equity firms and the businesses that wereAmerica’s original industrial cornerstones, like the elder Romney’s AMC. Everyone had a stake in the success of those old businesses, which spread prosperity by putting people to work. But even private equity’s most enthusiastic adherents have difficulty explaining its benefit to society. Marc Wolpow, a former Bain colleague of Romney’s, told reporters during Mitt’s first Senate run that Romney erred in trying to sell his business as good for everyone. “I believed he was making a mistake by framing himself as a job creator,” said Wolpow. “That was not his or Bain’s or the industry’s primary objective. The objective of the LBO business is maximizing returns for investors.” When it comes to private equity, American workers – not to mention their families and communities – simply don’t enter into the equation.

Take a typical Bain transaction involving an Indiana-based company called American Pad and Paper. Bain bought Ampad in 1992 for just $5 million, financing the rest of the deal with borrowed cash. Within three years, Ampad was paying $60 million in annual debt payments, plus an additional $7 million in management fees. A year later, Bain led Ampad to go public, cashed out about $50 million in stock for itself and its investors, charged the firm $2 million for arranging the IPO and pocketed another $5 million in “management” fees. Ampad wound up going bankrupt, and hundreds of workers lost their jobs, but Bain and Romney weren’t crying: They’d made more than $100 million on a $5 million investment.

To recap: Romney, who has compared the devilish federal debt to a “nightmare” home mortgage that is “adjustable, no-money down and assigned to our children,” took over Ampad with essentially no money down, saddled the firm with a nightmare debt and assigned the crushing interest payments not to Bain but to the children of Ampad’s workers, who would be left holding the note long after Romney fled the scene. The mortgage analogy is so obvious, in fact, that even Romney himself has made it. He once described Bain’s debt-fueled strategy as “using the equivalent of a mortgage to leverage up our investment.”

Romney has always kept his distance from the real-life consequences of his profiteering. At one point during Bain’s looting of Ampad, a worker named Randy Johnson sent a handwritten letter to Romney, asking him to intervene to save an Ampad factory inMarion,Indiana. In a sterling demonstration of manliness and willingness to face a difficult conversation, Romney, who had just lost his race for the Senate inMassachusetts, wrote Johnson that he was “sorry,” but his lawyers had advised him not to get involved. (So much for the candidate who insists that his way is always to “fight to save every job.”)

This is typical Romney, who consistently adopts a public posture of having been above the fray, with no blood on his hands from any of the deals he personally engineered. “I never actually ran one of our investments,” he says in Turnaround. “That was left to management.”

In reality, though, Romney was unquestionably the decider at Bain. “I insisted on having almost dictatorial powers,” he bragged years after the Ampad deal. Over the years, colleagues would anonymously whisper stories about Mitt the Boss to the press, describing him as cunning, manipulative and a little bit nuts, with “an ability to identify people’s insecurities and exploit them for his own benefit.” One former Bain employee said that Romney would screw around with bonuses in small amounts, just to mess with people: He would give $3 million to one, $3.1 million to another and $2.9 million to a third, just to keep those below him on edge.

The private equity business in the early Nineties was dominated by a handful of takeover firms, from the spooky and politically connected Carlyle Group (a favorite subject of conspiracy-theory lit, with its connections to right-wingers like Donald Rumsfeld and George H.W. Bush) to the equally spooky Democrat-leaning assholes at the Blackstone Group. But even among such a colorful cast of characters, Bain had a reputation on Wall Street for secrecy and extreme weirdness – “the KGB of consulting.” Its employees, known for their Mormonish uniform of white shirts and red power ties, were dubbed “Bainies” by other Wall Streeters, a rip on the fanatical “Moonies.” The firm earned the name thanks to its idiotically adolescent Spy Kids culture, in which these glorified slumlords used code names, didn’t carry business cards and even sang “company songs” to boost morale.

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.”

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. It’s an attitude that recalls the standard defense offered by Wall Street in the wake of some of its most recent and notorious crimes: Goldman Sachs excused its lying to clients, for example, by insisting that its customers are “sophisticated investors” who should expect to be lied to. “Last time I checked,” former Morgan Stanley CEO John Mack sneered after the same scandal, “we were in business to be profitable.”

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.”

In the old days, making money required sharing the wealth: with assembly-line workers, with middle management, with schools and communities, with investors. Even the Gilded Age robber barons, despite their unapologetic efforts to keep workers from getting any rights at all, builtAmericain spite of themselves, erecting railroads and oil wells and telegraph wires. And from the time the monopolists were reined in with antitrust laws through the days when men like Mitt Romney’s dad exited center stage in our economy, the American social contract was pretty consistent: The rich got to stay rich, often filthy rich, but they paid taxes and a living wage and everyone else rose at least a little bit along with them.

But under Romney’s business model, leveraging other people’s debt means you can carve out big profits for yourself and leave everyone else holding the bag. Despite what Romney claims, the rate of return he provided for Bain’s investors over the years wasn’t all that great. Romney biographer and Wall Street Journal reporter Brett Arends, who analyzed Bain’s performance between 1984 and 1998, concludes that the firm’s returns were likely less than 30 percent per year, which happened to track more or less with the stock market’s average during that time. “That’s how much money you could have made by issuing company bonds and then spending the money picking stocks out of the paper at random,” Arends observes. So for all the destruction Romney wreaked onMiddle Americain the name of “trying to make money,” investors could have just plunked their money into traditional stocks and gotten pretty much the same returns.

The only ones who profited in a big way from all the job-killing debt that Romney leveraged were Mitt and his buddies at Bain, along with Wall Street firms like Goldman and Citigroup. Barry Ritholtz, author of Bailout Nation, says the criticisms of Bain about layoffs and meanness miss a more important point, which is that the firm’s profit-producing record is absurdly mediocre, especially when set against all the trouble and pain its business model causes. “Bain’s fundamental flaw, at least according to the math,” Ritholtz writes, “is that they took lots of risk, use immense leverage and charged enormous fees, for performance that was more or less the same as [stock] indexing.”

‘I’m not a Romney guy, because I’m not a Bain guy,” says Lenny Patnode, in an Irish pub in the factory town ofPittsfield,Massachusetts. “But I’m not an Obama guy, either. Just so you know.”

I feel bad even asking Patnode about Romney. Big and burly, with white hair and the thick forearms of a man who’s stocked a shelf or two in his lifetime, he seems to belong to an era before things like leveraged debt even existed. For 38 years, Patnode worked for a company called KB Toys inPittsfield. He was the longest-serving employee in the company’s history, opening some of the firm’s first mall stores, making some of its canniest product buys (“Tamagotchi pets,” he says, beaming, “and Tech-Decks, too”), traveling all over the world to help build an empire that at its peak included 1,300 stores. “There were times when I worked seven days a week, 16 hours a day,” he says. “I opened three stores in two months once.”

Then in 2000, right before Romney gave up his ownership stake in Bain Capital, the firm targeted KB Toys. The debacle that followed serves as a prime example of the conflict between the old model of American business, built from the ground up with sweat and industry know-how, and the new globalist model, the Romney model, which uses leverage as a weapon of high-speed conquest.

In a typical private-equity fragging, Bain put up a mere $18 million to acquire KB Toys and got big banks to finance the remaining $302 million it needed. Less than a year and a half after the purchase, Bain decided to give itself a gift known as a “dividend recapitalization.” The firm induced KB Toys to redeem $121 million in stock and take out more than $66 million in bank loans – $83 million of which went directly into the pockets of Bain’s owners and investors, including Romney. “The dividend recap is like borrowing someone else’s credit card to take out a cash advance, and then leaving them to pay it off,” says Heather Slavkin Corzo, who monitors private equity takeovers as the senior legal policy adviser for the AFL-CIO.

Bain ended up earning a return of at least 370 percent on the deal, while KB Toys fell into bankruptcy, saddled with millions in debt. KB’s former parent company, Big Lots, alleged in bankruptcy court that Bain’s “unjustified” return on the dividend recap was actually “900 percent in a mere 16 months.” Patnode, by contrast, was fired in December 2008, after almost four decades on the job. Like other employees, he didn’t get a single day’s severance.

I ask Slavkin Corzo what Bain’s justification was for the giant dividend recapitalization in the KB Toys acquisition. The question throws her, as though she’s surprised anyone would ask for a reason a company like Bain would loot a firm like KB Toys. “It wasn’t like, ‘Yay, we did a good job, we get a dividend,’” she says with a laugh. “It was like, ‘We can do this, so we will.’ ”

At the time of the KB Toys deal, Romney was a Bain investor and owner, making him a mere beneficiary of the raping and pillaging, rather than its direct organizer. Moreover, KB’s demise was hastened by a host of genuine market forces, including competition from video games and cellphones. But there’s absolutely no way to look at what Bain did at KB and see anything but a cash grab – one that followed the business model laid out by Romney. Rather than cutting costs and tightening belts, Bain added $300 million in debt to the firm’s bottom line while taking out more than $120 million in cash – an outright looting that creditors later described in a lawsuit as “breaking open the piggy bank.” What’s more, Bain smoothed the deal in typical fashion by giving huge bonuses to the company’s top managers as the firm headed toward bankruptcy. CEO Michael Glazer got an incredible $18.4 million, while CFO Robert Feldman received $4.8 million and senior VP Thomas Alfonsi took home $3.3 million.

And what did Bain bring to the table in return for its massive, outsize payout? KB Toys had built a small empire by targeting middle-class buyers with value-priced products. It succeeded mainly because the firm’s leaders had a great instinct for what they were making and selling. These were people who had been in the specialty toy business since 1922; collectively, they had millions of man-hours of knowledge about how the industry works and how toy customers behave. KB’s president in the Eighties, the late Saul Rubenstein, used to carry around a giant computer printout of the company’s inventory, and would fall asleep reading it on the weekends, the pages clasped to his chest. “He knew the name and number of all those toys,” his widow, Shirley, says proudly. “He loved toys.”

Bain’s experience in the toy industry, by contrast, was precisely bupkus. They didn’t know a damn thing about the business they had taken over – and they never cared to learn. The firm’s entire contribution was $18 million in cash and a huge mound of borrowed money that gave it the power to pull the levers. “The people who came in after – they were never toy people,” says Shirley Rubenstein. To make matters worse, former employees say, Bain deluged them with requests for paperwork and reports, forcing them to worry more about the whims of their new bosses than the demands of their customers. “We took our eye off the ball,” Patnode says. “And if you take your eye off the ball, you strike out.”

In the end, Bain never bothered to come up with a plan for how KB Toys could meet the 21st-century challenges of video games and cellphone gadgets that were the company’s ostensible downfall. And that’s where Romney’s self-touted reputation as a turnaround specialist is a myth. In the Bain model, the actual turnaround isn’t necessary. It’s just a cover story. It’s nice for the private equity firm if it happens, because it makes the acquired company more attractive for resale or an IPO. But it’s mostly irrelevant to the success of the takeover model, where huge cash returns are extracted whether the captured firm thrives or not.

“The thing about it is, nobody gets hurt,” says Patnode. “Except the people who worked here.”

Romney was a prime mover in the radical social and political transformation that was cooked up by Wall Street beginning in the 1980s. In fact, you can trace the whole history of the modern age of financialization just by following the highly specific corner of the economic universe inhabited by the leveraged buyout business, where Mitt Romney thrived. If you look at the number of leveraged buyouts dating back two or three decades, you see a clear pattern: Takeovers rose sharply with each of Wall Street’s great easy-money schemes, then plummeted just as sharply after each of those scams crashed and burned, leaving the rest of us with the bill.

In the Eighties, when Romney and Bain were cutting their teeth in the LBO business, the primary magic trick involved the junk bonds pioneered by convicted felon Mike Milken, which allowed firms like Bain to find easy financing for takeovers by using wildly overpriced distressed corporate bonds as collateral. Junk bonds gave the Gordon Gekkos of the world sudden primacy over old-school industrial titans like the Fords and the Rockefellers: For the first time, the ability to make deals became more valuable than the ability to make stuff, and the ability to instantly engineer billions in illusory financing trumped the comparatively slow process of making and selling products for gradual returns.

Romney was right in the middle of this radical change. In fact, according to The Boston Globe – whose in-depth reporting on Romney and Bain has spanned three decades – one of Romney’s first LBO deals, and one of his most profitable, involved Mike Milken himself. Bain put down $10 million in cash, got $300 million in financing from Milken and bought a pair of department-store chains, Bealls Brothers and Palais Royal. In what should by now be a familiar outcome, the two chains – which Bain merged into a single outfit called Stage Stores – filed for bankruptcy protection in 2000 under the weight of more than $444 million in debt. As always, Bain took no responsibility for the company’s demise. (If you search the public record, you will not find a single instance of Mitt Romney taking responsibility for a company’s failure.) Instead, Bain blamed Stage’s collapse on “operating problems” that took place three years after Bain cashed out, finishing with a $175 million return on its initial investment of $10 million.

But here’s the interesting twist: Romney made the Bealls-Palais deal just as the federal government was launching charges of massive manipulation and insider trading against Milken and his firm, Drexel Burnham Lambert. After what must have been a lengthy and agonizing period of moral soul-searching, however, Romney decided not to kill the deal, despite its shady financing. “We did not say, ‘Oh, my goodness, Drexel has been accused of something, not been found guilty,’ ” Romney told reporters years after the deal. “Should we basically stop the transaction and blow the whole thing up?”

In an even more incredible disregard for basic morality, Romney forged ahead with the deal even though Milken’s case was being heard by a federal district judge named Milton Pollack, whose wife,Moselle, happened to be the chairwoman of none other than Palais Royal. In short, one of Romney’s first takeover deals was financed by dirty money – and one of the corporate chiefs about to receive a big payout from Bain was married to the judge hearing the case. Although the SEC took no formal action, it issued a sharp criticism, complaining that Romney was allowing Milken’s money to have a possible influence over “the administration of justice.”

After Milken and his junk bond scheme crashed in the late Eighties, Romney and other takeover artists moved on to Wall Street’s next get-rich-quick scheme: the tech-Internet stock bubble. By 1997 and 1998, there were nearly $400 billion in leveraged buyouts a year, as easy money once again gave these financial piracy firms the ammunition they needed to raid companies like KB Toys. Firms like Bain even have a colorful pirate name for the pools of takeover money they raise in advance from pension funds, university endowments and other institutional investors. “They call it dry powder,” says Slavkin Corzo, the union adviser.

After the Internet bubble burst and private equity started cashing in on Wall Street’s mortgage scam, LBO deals ballooned to almost $900 billion in 2006. Once again, storied companies with long histories and deep regional ties were descended upon by Bain and other pirates, saddled with hundreds of millions in debt, forced to pay huge management fees and “dividend recapitalizations,” and ridden into bankruptcy amid waves of layoffs. Established firms like Del Monte, Hertz and Dollar General were all taken over in a “prairie fire of debt” – one even more destructive than the government borrowing that Romney is flogging on the campaign trial. When Hertz was conquered in 2005 by a trio of private equity firms, including the Carlyle Group, the interest payments on its debt soared by a monstrous 80 percent, forcing the company to eliminate a third of its 32,000 jobs.

In 2010, a year after the last round of Hertz layoffs, Carlyle teamed up with Bain to take $500 million out of another takeover target: the parent company of Dunkin’ Donuts and Baskin-Robbins. Dunkin’ had to take out a $1.25 billion loan to pay a dividend to its new private equity owners. So think of this the next time you go to Dunkin’ Donuts for a cup of coffee: A small cup of joe costs about $1.69 in most outlets, which means that for years to come, Dunkin’ Donuts will have to sell about 2,011,834 small coffees every month – about $3.4 million – just to meet the interest payments on the loan it took out to pay Bain and Carlyle their little one-time dividend. And that doesn’t include the principal on the loan, or the additional millions in debt that Dunkin’ has to pay every year to get out from under the $2.4 billion in debt it’s now saddled with after having the privilege of being taken over – with borrowed money – by the firm that Romney built.

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.”

Which brings us to another aspect of Romney’s business career that has largely been hidden from voters: His personal fortune would not have been possible without the direct assistance of theU.S.government. The taxpayer-funded subsidies that Romney has received go well beyond the humdrum, backdoor, welfare-sucking that all supposedly self-made free marketeers inevitably indulge in. Not that Romney hasn’t done just fine at milking the government when it suits his purposes, the most obvious instance being the incredible $1.5 billion in aid he siphoned out of the U.S. Treasury as head of the 2002 Winter Olympics inSaltLake– a sum greater than all federal spending for the previous sevenU.S.Olympic games combined. Romney, the supposed fiscal conservative, blew through an average of $625,000 in taxpayer money per athlete – an astounding increase of 5,582 percent over the $11,000 average at the 1984 games inLos Angeles. In 1993, right as he was preparing to run for the Senate, Romney also engineered a government deal worth at least $10 million for Bain’s consulting firm, when it was teetering on the edge of bankruptcy. (See “The Federal Bailout That Saved Romney,” page 52.)

But the way Romney most directly owes his success to the government is through the structure of the tax code. The entire business of leveraged buyouts wouldn’t be possible without a provision in the federal code that allows companies like Bain to deduct the interest on the debt they use to acquire and loot their targets. This is the same universally beloved tax deduction you can use to write off your mortgage interest payments, so tampering with it is considered political suicide – it’s been called the “third rail of tax reform.” So the Romney who routinely rails against the national debt as some kind of child-killing “mortgage” is the same man who spent decades exploiting a tax deduction specifically designed for mortgage holders in order to bilk every dollar he could out of U.S. businesses before burning them to the ground.

Because minus that tax break, Romney’s debt-based takeovers would have been unsustainably expensive. Before Lynn Turner became chief accountant of the SEC, where he reviewed filings on takeover deals, he crunched the numbers on leveraged buyouts as an accountant at a Big Four auditing firm. “In the majority of these deals,” Turner says, “the tax deduction has a big enough impact on the bottom line that the takeover wouldn’t work without it.”

Thanks to the tax deduction, in other words, the government actually incentivizes the kind of leverage-based takeovers that Romney built his fortune on. Romney the businessman built his career on two things that Romney the candidate decries: massive debt and dumb federal giveaways. “I don’t know what Romney would be doing but for debt and its tax-advantaged position in the tax code,” says a prominent Wall Street lawyer, “but he wouldn’t be fabulously wealthy.”

Adding to the hypocrisy, the money that Romney personally pocketed on Bain’s takeover deals was usually taxed not as income, but either as capital gains or as “carried interest,” both of which are capped at a maximum rate of 15 percent. In addition, reporters have uncovered plenty of evidence that Romney takes full advantage of offshore tax havens: He has an interest in at least 12 Bain funds, worth a total of $30 million, that are based in the Cayman Islands; he has reportedly used a squirrelly tax shelter known as a “blocker corporation” that cheats taxpayers out of some $100 million a year; and his wife, Ann, had a Swiss bank account worth $3 million. As a private equity pirate, Romney pays less than half the tax rate of most American executives – less, even, than teachers, firefighters, cops and nurses. Asked about the fact that he paid a tax rate of only 13.9 percent on income of $21.7 million in 2010, Romney responded testily that the massive windfall he enjoys from exploiting the tax code is “entirely legal and fair.”

Essentially, Romney got rich in a business that couldn’t exist without a perverse tax break, and he got to keep double his earnings because of another loophole – a pair of bureaucratic accidents that have not only teamed up to threaten us with a Mitt Romney presidency but that make future Romneys far more likely. “Those two tax rules distort the economics of private equity investments, making them much more lucrative than they should be,” says Rebecca Wilkins, senior counsel at the Center for Tax Justice. “So we get more of that activity than the market would support on its own.”

Listen to Mitt Romney speak, and see if you can notice what’s missing. This is a man who grew up inMichigan, went to college inCalifornia, walked door to door through the streets of southernFranceas a missionary and was a governor ofMassachusetts, the home of perhaps the most instantly recognizable, heavily accented English this side ofEdinburgh. Yet not a trace of any of these places is detectable in Romney’s diction. None of the people in any of those places bled in and left a mark on the man.

Romney is a man from nowhere. In his post-regional attitude, he shares something with his campaign opponent, Barack Obama, whose background is a similarly jumbled pastiche of regionally nonspecific non-identity. But in the way he bounced around the world as a half-orphaned child, Obama was more like an involuntary passenger in the demographic revolution reshaping the planet than one of its leaders.

Romney, on the other hand, is a perfect representative of one side of the ominous cultural divide that will define the next generation, not just here inAmericabut all over the world. Forget about the Southern strategy, blue versus red, swing states and swing voters – all of those political cliches 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.

Mitt Romney isn’t blue or red. He’s an archipelago man. That’s a big reason that voters have been slow to warm up to him. From LBJ to Bill Clinton to George W. Bush to Sarah Palin, Americans like their politicians to sound like they’re from somewhere, to be human symbols of our love affair with small towns, the girl next door, the little pink houses of Mellencamp myth. Most of those mythical American towns grew up around factories – think chocolate bars from Hershey, baseball bats fromLouisville, cereals fromBattle Creek. Deep down, what scares voters in both parties the most is the thought that these unique and vital places are vanishing or eroding – overrun by immigrants or the forces of globalism or both, with giant Walmarts descending like spaceships to replace the corner grocer, the family barber and the local hardware store, and 1,000 cable channels replacing the school dance and the gossip at the local diner.

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, andCayman Islandspartnerships 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.

This story is from the September 13, 2012 issue of Rolling Stone.

Related
Mitt Romney’s Federal Bailout: The Documents
Right-Wing Billionaires Behind Mitt Romney
How the GOP Became the Party of the Rich

http://m.rollingstone.com/?redirurl=%2Fpolitics%2Fnews%2Fgreed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829

Republican Deficit-Hawk Hypocrites by Sen. Bernie Sanders

 

Reader Supported News, August 29, 2012

Miitt Romney, Paul Ryan and the Republican Party are now mounting a massive attack against Social Security and other programs. Using “deficit reduction” as their rationale, they are attempting to dismantle every major piece of legislation passed since the 1930s that provides support and security to working families.

They are being aided by at least 23 billionaire families, led by the Koch brothers and Sheldon Adelson, who are spending hundreds of millions of dollars in this campaign as a result of the disastrous Citizens United Supreme Court decision. Despite paying the lowest effective tax rate in decades, the billionaires want more tax breaks for the very rich. Despite the fact that the elimination of strong regulations caused the Wall Street meltdown and a terrible recession, the billionaires want more deregulation. Despite outsourcing of millions of good-paying American jobs to China and other low-wage countries, the billionaires want more unfettered free trade.

At this pivotal moment in American history, it’s important to note how we got into this deficit crisis, who was responsible and what is the fairest way to address it.

Let us never forget that when Bill Clinton left office in 2001, this country enjoyed a healthy $236 billion SURPLUS.

Under George W. Bush and his fellow “deficit hawks,” we went to war in Afghanistan and Iraq. Bush and Congress “forgot” to pay for those wars that will end up adding some $3 trillion to our national debt. Where were Paul Ryan and the other “deficit hawks” when we spent trillions on wars and added to the deficit? They voted for those policies.

Under George W. Bush and his fellow “deficit hawks,” we gave huge tax breaks to the wealthiest people in this country, which cost $1 trillion over a decade. Where were Paul Ryan and the other “deficit hawks” when Bush and Congress spent a trillion dollars on tax breaks for the very rich and added to our national debt? They voted for those policies.

Under George W. Bush and his fellow deficit hawks, Congress passed an overly expensive Medicare prescription drug program written by the insurance companies and drug industry. The government was barred from negotiating lower drug prices with the pharmaceutical industry under the program, which will end up adding $400 billion to our national debt over a 10-year period. Where were Paul Ryan and the other “deficit hawks” when Bush and Congress spent $400 billion for a much too expensive prescription drug program? They voted for those policies.

Now, having run up huge deficits, our born-again “deficit hawks” want to cut every program in sight to save money. In order to cover the costs they incurred in Iraq and Afghanistan, they want to cut Social Security. In order to cover the costs of the tax breaks for the rich, they want to cut Medicare and Medicaid. In order to cover the insurance-company-written Medicare prescription drug program, they want to cut education and food stamps.

This approach – balancing the budget on the backs of the elderly, the sick, the children and the poor – is not only immoral, it is bad economic policy. It is something that must be vigorously opposed.

The $16 trillion national debt and the current $1 trillion deficit are serious problems, but they must be addressed in a fair way that will not cripple our economy, lead to the loss of jobs and punish people who are already hurting.

At a time when the wealthiest people in this country are doing phenomenally well and when their effective tax rate is the lowest in decades, the richest people in this country have got to be asked to pay their fair share of taxes.

At a time when corporate profits are soaring and when about one in four major profitable corporations pays nothing in federal income taxes, we must end corporate loopholes and demand that corporate America starts paying its fair share of taxes.

At a time when this country loses $100 billion every single year because wealthy people and corporations stash money in tax havens in the Cayman Islands and elsewhere, we must crack down on abusive tax cheats.

The United States military budget has virtually tripled since 1997, and we now spend nearly as much as the rest of the world combined. It is time to take a hard look at military spending.

There are serious and responsible ways to move this country toward deficit reduction. Unfortunately, that’s not what Romney and Ryan are talking about. For them, it’s the same old Republican saga: more tax breaks for millionaires and billionaires, and more austerity and pain for the most vulnerable people in this country.
http://readersupportednews.org/opinion2/277-75/13188-deficit-hawk-hypocrites

“The Dumbest Idea in the World”: Corporate America’s False – and Dangerous – Ideology of Shareholder Value

by Lynn Stout, Berrett-Koehler Publishers, Published on Alternet, August 29, 2012

Excerpt

For at least the past two decades, Americans have been duped into believing that the sole purpose of a corporation is to maximize value for its shareholders. That belief, first promoted in business schools, has been absorbed in the media, in academic circles, and in the political realm….But in reality, it has no basis in the law or American precedent. The maniacal quest to raise share price is bad for eveyone — even shareholders themselves. This is why scholars, journalists (most recently, Joe Nocera of the New York Times [2]) and even corporate leaders are coming to the realization that the American corporation has made a wrong turn based on a false ideology. No less than Jack Welch, the former CEO of General Electric and a former enthusiast for shareholder value ideology, has done an about-face, calling it “the dumbest idea in the world.” Fortunately, there’s new movement aimed at challenging the destructive ideology shareholder value…

Full text

For at least the past two decades, Americans have been duped into believing that the sole purpose of a corporation is to maximize value for its shareholders. That belief, first promoted in business schools, has been absorbed in the media, in academic circles, and in the political realm — even progressives like Al Franken have repeated it as if it were indisputable fact. But in reality, it has no basis in the law or American precedent. The maniacal quest to raise share price is bad for eveyone — even shareholders themselves. This is why scholars, journalists (most recently, Joe Nocera of the New York Times [2]) and even corporate leaders are coming to the realization that the American corporation has made a wrong turn based on a false ideology. No less than Jack Welch, the former CEO of General Electric and a former enthusiast for shareholder value ideology, has done an about-face, calling it “the dumbest idea in the world.”

Fortunately, there’s new movement aimed at challenging the destructive ideology shareholder value. AlterNet has been on the forefront of this movement, publishing a series of articles, “Corporations for the 99% [3]” in partnership with William Lazonick, one of America’s top authorities on the American business corporation, who, along with AtlerNet’s Lynn Parramore and jouranlist Ken Jacobson, set about debunking this dangerous myth. Cornell University law professor Lynn Stout’s new book [4], “The Shareholder Value Myth,” is a welcome contribution to this movement — a must-read for anyone who seeks to understand the relationship between corporations and the public and to learn how to overturn a myth that has done incalculable damage to our society and economy. Below is an excerpt from the Introduction to Stout’s book. ~Editor

The Dumbest Idea in the World

The Deepwater Horizon was an oil drilling rig, a massive floating structure that cost more than a third of a billion dollars to build and measured the length of a football field from bottom to top. On the night of April 20, 2010, the Deepwater Horizon was working in the Gulf of Mexico, finishing an exploratory well named Macondo for the corporation BP. Suddenly the rig was rocked by a loud explosion. Within minutes the Deepwater Horizon was transformed into a column of fire that burned for nearly  two days before collapsing into the depths of theGulf of Mexico. Meanwhile, the Macondo well began vomiting tens of thousands of barrels of oil daily from beneath the sea floor into the Gulf waters. By the time the well was capped in September 2010, the Macondo well blowout was estimated to have caused the largest offshore oil spill in history.1

The  Deepwater  Horizon disaster was tragedy on an epic scale, not only for the rig and the eleven people who died on it, but also for the corporation BP. By June of 2010,  BP had suspended paying  its regular  dividends, and  BP common stock (trading around $60  before the spill) had plunged to less than $30 per share. The result  was a decline in BP’s total stock market value amounting to nearly $100 billion. BP’s shareholders were not the only ones to suffer. The value of BP bonds  tanked as BP’s credit rating was cut from a prestigious AA to the near-junk status BBB. Other oil companies working in the Gulf were idled, along with BP, due to a government-imposed moratorium  on further deepwater drilling in the Gulf. Business  owners and workers in the Gulf fishing  and tourism industries struggled to make a living. Finally, the Gulf ecosystem itself suffered  enormous damage, the full extent of which remains unknown today.

After  months of investigation, the  National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling concluded the Macondo blowout could be traced  to multiple decisions by BP employees and contractors to ignore standard safety procedures in the attempt to cut costs. (At the time  of the  blowout,  the Macondo project was more than a month behind schedule and almost $60  million over budget, with each day of delay costing an estimated $1 million.)2  Nor was this the first time  BP had sacrificed  safety to save time  and money. The Commission concluded, “BP’s safety lapses  have been chronic.”3

The Ideology of Shareholder Value

Why would a sophisticated international corporation make such an enormous and costly mistake? In trying to save $1 million a day by skimping on safety procedures at the Macondo well, BP cost its shareholders alone a hundred thousand times more, nearly $100  billion.  Even if following proper safety procedures had delayed the development of the Macondo well for a full year, BP would have done much better. The gamble was foolish, even from BP’s perspective.

This  book  argues  that the Deepwater Horizon disaster is only one example of a larger problem that  afflicts many public corporations today. That problem might  be called shareholder value thinking. According to the doctrine of shareholder value, public corporations “belong” to their shareholders, and they exist for one purpose only, to maximize  shareholders’ wealth.  Shareholder wealth, in turn, is typically measured by share  price—meaning share price today, not share  price next year or next decade.

Shareholder value  thinking is  endemic in the business world today.  Fifty years ago, if you had asked the directors or CEO of a large public  company what the  company’s purpose was, you might have been told the corporation had many purposes: to provide  equity investors with solid returns, but also to build great products, to provide decent  livelihoods  for employees, and to contribute to the community and the nation. Today, you are likely to be told the company has but one purpose, to maximize its shareholders’ wealth.  This  sort of thinking drives directors and executives to run public  firms like BP with  a relentless focus on raising stock price.  In the quest  to “unlock shareholder value” they sell key assets,  fire loyal employees, and ruthlessly squeeze the workforce  that remains; cut back on product support, customer assistance, and research and development; delay replacing outworn, out- moded,  and unsafe equipment; shower CEOs with stock options and expensive pay packages  to “incentivize” them; drain cash reserves to pay large dividends and repurchase company shares,  leveraging  firms until they teeter  on the brink  of insolvency;  and lobby regulators and Congress to change  the law so they can chase short-term profits speculating in credit default  swaps and other high-risk financial  derivatives. They do these  things even though many individual directors and executives  feel uneasy about such strategies, intuiting that  a single-minded focus on share  price may not  serve the interests of society, the company, or shareholders themselves.

This book examines and challenges the doctrine of shareholder value.  It argues that shareholder value ideology is just that—an ideology, not a legal requirement or a practical necessity  of modern business life.United States corporate law does not, and never has, required directors of public corporations to maximize either share  price or shareholder wealth.  To the contrary, as long as boards do not use their power to enrich themselves, the law gives them a wide range of discretion to run  public  corporations with other goals in mind, including growing  the firm, creating quality  products, protecting employees,  and serving the public interest. Chasing  shareholder value is a managerial choice, not a legal requirement.

Nevertheless, by the  1990s,  the idea  that  corporations should  serve only shareholder wealth as reflected in stock price came to dominate other  theories of corporate purpose. Executives, journalists, and business school professors alike embraced  the  need  to maximize  shareholder value with near-religious fervor. Legal scholars argued  that corporate managers ought to focus only on maximizing the shareholders’ interest in the firm, an approach they somewhat misleadingly called “shareholder primacy.” (“Shareholder absolutism” or “shareholder dictatorship” would be more accurate.)

It  should  be noted that  a handful of scholars  and  activists continued to argue  for “stakeholder” visions of corporate purpose that gave corporate managers breathing room to consider the  interests of employees, creditors, and  customers. A small number of others  advocated for “corporate  social responsibility” to ensure that public companies indeed served the public  interest writ large. But by the turn  of the millennium,  such alternative views of good corporate governance had been reduced to the status of easily ignored minority reports. Business and  policy elites  in the  United States and much of the rest of the world as well accepted as a truth that should not be questioned that  corporations exist to maximize shareholder value.4

Time for Some Questions

Today, questions seem called for. It should be apparent to anyone who reads the newspapers that Corporate America’s mass embrace of shareholder value thinking has not translated into better corporate or economic  performance. The  past  dozen years  have  seen  a daisy  chain  of costly  corporate disasters, from  massive  frauds  at Enron, HealthSouth, and  Worldcom in the early 2000s, to the near-failure and subsequent costly taxpayer  bailout  of many  of our largest  financial  institutions in 2008, to the BP oil spill in 2010. Stock market returns have been miserable, raising the question of how aging baby boom- ers who trusted in stocks for their  retirement will be able to support  themselves in  their   golden  years.  The population of publicly  held  U.S. companies is shrinking rapidly  as for- merly public  companies like Dunkin’ Donuts and  Toys“R”Us “go private”  to escape  the  pressures of shareholder-primacy thinking, and  new  enterprises decide not to sell  shares to outside investors at all. (Between 1997 and 2008, the  number of companies listed  on  U.S. exchanges declined from 8,823 to only 5,401.)5  Some experts worry America’s public corporations are losing their  innovative edge.6  The National Commission found that an underlying cause of the Deepwater Horizon disaster was the fact that the oil and gas industry has cut back significantly  on research in recent  decades,  with the result  that  “knowledge  and  experience within  the  industry may be decreasing.”7

Even former champions of shareholder primacy are beginning to rethink the wisdom of chasing shareholder value. Iconic  CEO Jack Welch,  who ran GE with an iron fist from 1981 until his retirement in 2001, was one of the earliest, most vocal, and most influential adopters of the shareholder value mantra. During his  first five years at GE’s helm, “Neutron Jack” cut the number of GE employees by more than a third. He also eliminated most of GE’s basic research programs. But several years after retiring from GE with more than $700 million in estimated personal wealth, Welch observed in a Financial Times interview about the 2008 financial crisis that “strictly speaking, shareholder value is the dumbest idea in the world.”8

Revisiting the Idea of “Shareholder Value”

Although shareholder-primacy ideology still dominates business and academic circles today, for as long as there have been public corporations there have been those who argue they should serve the public interest, not shareholders’ alone. I am highly sympathetic to this view. I also believe, however, that one does not need  to embrace either a stakeholder-oriented model of the firm, or a form of corporate social responsibility theory,  to conclude that shareholder value thinking is destructive. The gap between shareholder-primacy ideology as it is practiced today, and stakeholders’ and the public interest, is not only vast but much wider than it either must or should be. If we stop to examine the reality of who “the shareholder” really  is—not an abstract creature obsessed with the single goal of raising the share  price of a single firm today, but real human beings  with the capacity to think for the future and to make binding commitments, with a wide range  of investments and interests beyond the shares they happen to hold in any single  firm, and  with consciences that make most of them concerned, at least a bit, about the fates of others, future generations, and  the planet—it soon becomes  apparent that conventional shareholder primacy harms not only stakeholders and the public, but most shareholders as well. If we really want corporations to serve the interests of the diverse human beings  who ultimately own their  shares  either directly or through institutions like pension and mutual funds, we need to seriously reexamine our ideas about  who shareholders are and what they truly value.

This  book  shows how the  project of reexamining shareholder value thinking is already underway. While the notion that managers should  seek to maximize  share  price  remains conventional  wisdom in many  business circles  and in the press,  corporate  theorists  increasingly  challenge  conventional  wisdom.  New scholarly articles  questioning the effects of shareholder-primacy thinking and  the wisdom  of chasing shareholder value seem to appear daily. Even more important, influential economic  and  legal experts  are proposing alternative theories of the  legal structure and  economic  purpose of public corporations that show how a relentless focus on raising the share price of individual firms may be not only misguided, but harmful to investors.

These  new theories promise to advance our understanding of corporate purpose far beyond  the  old, stale  “shareholders- versus-stakeholders” and “shareholders-versus-society” debates. By revealing how a singled-minded focus on share price endangers many shareholders themselves, they also demonstrate how the perceived gap between the interests of shareholders as a class and those of stakeholders and the broader society in fact may be far narrower than  commonly  understood. In the process,  they also offer better, more  sophisticated, and  more  useful  understandings of the role of public corporations and of good corpo- rate governance that  can help business leaders,  lawmakers, and investors  alike ensure  that  public  corporations reach  their  full economic potential.


Source URL: http://www.alternet.org/economy/dumbest-idea-world-corporate-americas-false-and-dangerous-ideology-shareholder-value

Links:
[1] http://www.alternet.org/authors/lynn-stout
[2] http://www.nytimes.com/2012/08/11/opinion/nocera-down-with-shareholder-value.html
[3] http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDgQFjAD&url=http%3A%2F%2Ffiles.alternet.org%2Fuploads%2Fpdfs%2F99corpsv2.pdf&ei=Y1Q-UNnlFa-B0QHFkoHAAg&usg=AFQjCNHe8OzdOV8EsoF53W5HpyTJhF6_Ww
[4] http://www.bkconnection.com/ProdDetails.asp?ID=9781605098159&PG=1&Type=BL&PCS=BKP
[5] http://www.alternet.org/tags/shareholder-value
[6] http://www.alternet.org/tags/shareholder-value-ideology
[7] http://www.alternet.org/tags/america
[8] http://www.alternet.org/tags/bp
[9] http://www.alternet.org/tags/business-0
[10] http://www.alternet.org/tags/ceo
[11] http://www.alternet.org/tags/company-layoffs
[12] http://www.alternet.org/tags/company-reorganization
[13] http://www.alternet.org/tags/congress-0
[14] http://www.alternet.org/tags/corporate-governance
[15] http://www.alternet.org/tags/corporate-social-responsibility
[16] http://www.alternet.org/tags/corporations-law
[17] http://www.alternet.org/tags/deepwater-horizon-oil-spill
[18] http://www.alternet.org/tags/deepwater-horizon-0
[19] http://www.alternet.org/tags/english-law
[20] http://www.alternet.org/tags/enron
[21] http://www.alternet.org/tags/financial-times
[22] http://www.alternet.org/tags/ge-0
[23] http://www.alternet.org/tags/gulf-mexico-0
[24] http://www.alternet.org/tags/healthsouth
[25] http://www.alternet.org/tags/jack-welch
[26] http://www.alternet.org/tags/law-0
[27] http://www.alternet.org/tags/legal-entities
[28] http://www.alternet.org/tags/man-made-disaster
[29] http://www.alternet.org/tags/national-commission-bp-deepwater-horizon-oil-spill
[30] http://www.alternet.org/tags/national-commission
[31] http://www.alternet.org/tags/person-career
[32] http://www.alternet.org/tags/shareholder-primacy
[33] http://www.alternet.org/tags/usd
[34] http://www.alternet.org/tags/united-states
[35] http://www.alternet.org/tags/worldcom
[36] http://www.alternet.org/tags/corporate-law
[37] http://www.alternet.org/tags/offshore-oil-spill
[38] http://www.alternet.org/tags/oil-and-gas-industry
[39] http://www.alternet.org/tags/oil-drilling-rig
[40] http://www.alternet.org/tags/oil-spill
[41] http://www.alternet.org/tags/oil-0
[42] http://www.alternet.org/tags/unsafe-equipment

6 Right-Wing Zealots and the Crazy Ideas Behind the Most Outrageous Republican Platform Ever

By Peter Montgomery, AlterNet, August 28, 2012 |  

TAMPA, FLA. — The official 2012 Republican Party platform is a far-right fever dream, a compilation of pouting, posturing and policies to meet just about every demand from the overlapping Religious Right, Tea Party, corporate, and neo-conservative wings of the GOP. If moderates have any influence in today’s Republican Party, you wouldn’t know it by reading the platform. Efforts by a few delegates to insert language favoring civil unions, comprehensive sex education and voting rights for the District of Columbia, for example, were all shot down. Making the rounds of right-wing pre-convention events on Sunday, Rep. Michele Bachmann gushed [3] about the platform’s right-wing tilt, telling fired-up Tea Partiers that “the Tea Party has been all over that platform.”

Given the Republican Party’s hard lurch to the right, which intensified after the election of Barack Obama, the “most conservative ever” platform is not terribly surprising. But it didn’t just happen on its own. Here are some of the people we can thank on the domestic policy front.

1. Bob McDonnell. As platform committee chair, McDonnell made it clear he was not in the mood for any amendments to the draft language calling for a “Human Life Amendment” to the U.S. Constitution and legal recognition that the “unborn” are covered by the 14th Amendment (“personhood” by another name). McDonnell is in many ways the ideal right-wing governor: he ran as a fiscal conservative and governs like the Religious Right activist he has been since he laid out his own political platform in the guise of a master’s thesis at Pat Robertson’s Regent University.

His thesis argued [4] that feminists and working women were detrimental to the family, and that public policy should favor married couples over “cohabitators, homosexuals, or fornicators.” When running for governor of Virginia, McDonnell disavowed his thesis, but as a state legislator he pushed hard to turn those positions into policy. As the Washington Post noted, “During his 14 years in the General Assembly, McDonnell pursued at least 10 of the policy goals he laid out in that research paper, including abortion restrictions, covenant marriage, school vouchers and tax policies to favor his view of the traditional family. In 2001, he voted against a resolution in support of ending wage discrimination between men and women.” As governor, McDonnell signed the kind of mandatory ultrasound law that is praised in this year’s platform. When his name was floated as a potential V.P. pick, Cecile Richards of Planned Parenthood decried [5] his “deeply troubling record on women’s health.”

2. Tony Perkins. Perkins heads the Family Research Council, whose Values Voter Summit is the Religious Right’s most important annual conference, where activists rub shoulders with Republican officials and candidates. Perkins bragged [6] in an email to his supporters how much influence he and his friend David Barton (see below) had on the platform. Perkins was an active member of the platform committee, proposing language to oppose school-based health clinics that provide referrals for contraception or abortion, and arguing for the strongest possible anti-marriage equality language. Perkins also introduced an amendment to the platform calling on the District of Columbia government to loosen its gun laws, which Perkins says still do not comply with recent Supreme Court rulings.

The media tends to treat Perkins, a telegenic former state legislator, as a reasonable voice of the Religious Right, but his record and his group’s positions prove otherwise. Perkins has been aggressively exploiting [7] the recent shooting at FRC headquarters to divert attention from the group’s extremism by claiming that the Southern Poverty Law Center was irresponsible in calling FRC a hate group. Unfortunately for Perkins, the group’s record of promoting hatred toward LGBT people is well-documented. Perkins has even complained that the press and President Obama were being too hard on Uganda’s infamous “kill the gays” bill, which he described [7] as an attempt to “uphold moral conduct.” It’s worth remembering that Perkins ran a 1996 campaign for Louisiana Senate candidate Woody Jenkins that paid $82,600 to David Duke for the Klan leader’s mailing list; the campaign was fined [8] by the FEC for trying to cover it up.

3. David Barton. Texas Republican activist and disgraced Christian-nation “historian” Barton has had a tough year, but Tampa has been good to him. He was perhaps the most vocal member of the platform committee, and was a featured speaker at Sunday’s pre-convention “prayer rally.” During the platform committee’s final deliberations, Barton couldn’t seem to hear his own voice often enough. He was the know-it-all nitpicker, piping up with various language changes, such as deleting a reference to the family as the “school of democracy” because families are not democracies. He thought it was too passive to call Obamacare an “erosion of” the Constitution and thought it should be changed to an “attack on” the founding document. He called for stronger anti-public education language and asserted that large school districts employ one administrator for every teacher. He backed anti-abortion language, tossing out the claim that 127 medical studies over five decades say that abortion hurts women.

Progressives have been documenting Barton’s lies for years, but more recently conservative evangelical scholars have also been hammering [9] his claims about American history. The critical chorus got so loud that Christian publishing powerhouse Thomas Nelson pulled Barton’s most recent book – which, ironically, purports to correct “lies” about Thomas Jefferson – from the shelves. Of course, Barton has had plenty of practice at this sort of thing, from producing bogus [10] documentaries [10] designed to turn African Americans against the Democratic Party to pushing his religious and political ideology into Texas textbooks [11]. Barton’s right-wing friends like Glenn Beck have rallied around him. And nothing seems to tarnish Barton with the GOP allies for whom he has proven politically useful over the years.

4. Kris Kobach. Kris Kobach wants to be your president one day; until now, he has gotten as far as Kansas Secretary of State. He may be best known as the brains behind Arizona’s “show me your papers” law, and he successfully pushed for anti-immigrant language in the platform, including a call for the federal government to deny funds to universities that allow illegal immigrants to pay in-state tuition – a plank that puts Kobach and the platform at odds with Kansas law. Immigration is not Kobach’s only issue. He is an energizing force behind the Republican Party’s massive push for voter suppression laws around the country, and he led the effort to get language inserted into the platform calling on states to pass laws requiring proof of citizenship for voter registration.

He also pushed language aimed at the supposed threat to the Constitution and laws of the US from “Sharia [12] law”; getting this language into the platform puts the GOP in the position of endorsing a ludicrous far-right conspiracy theory. Kobach hopes that will give activists a tool for pressuring more states to pass their own anti-Sharia laws. In the platform committee, he backed Perkins’ efforts to maintain the strongest language against marriage equality. Even an amendment to the marriage section saying that everyone should be treated “equally under the law” as long as they are not hurting anyone else, was shot down by Kobach. Kobach also claims [13] he won support for a provision to oppose any effort to limit how many bullets can go into a gun’s magazine.

5. James Bopp. James Bopp is a Republican lawyer and delegate from Indiana whose client list is a who’s-who of right-wing organizations, including National Right to Life and the National Organization for Marriage, which he has represented [14] in its efforts to keep political donors secret. As legal advisor to Citizens United, Bopp has led legal attacks on campaign finance laws and played a huge role in the issue of unlimited right-wing cash flooding our elections. Bopp chaired this year’s platform subcommittee on “restoring constitutional government,” which helps explain its strong anti-campaign finance reform language.

Bopp is also an annoyingly petty partisan, having introduced [15] a resolution in the Republican National Committee in 2009 urging the Democratic Party to change its name to the “Democrat Socialist Party.” In this year’s platform committee, Bopp successfully pushed for the removal of language suggesting that residents of the District of Columbia might deserve some representation in Congress short of statehood. His sneering comments [16], and his gloating fist [17]- [17]pump [17] when the committee approved his resolution, have not won him any friends among DC residents – not that he cares. He also spoke out against a young delegate’s proposal that the party recognize civil unions, which Bopp denounced [18] as “counterfeit marriage.” In spite of all these efforts, Bopp has been at the forefront of Romney campaign platform spin, arguing [19] in the media that the platform language on abortion is not really a “no-exceptions” ban, in spite of its call for a Human Life Amendment and laws giving 14th Amendment protections to the “unborn.”

6. Dick Armey. Former Republican insider Dick Armey now runs FreedomWorks, the Koch [20]- [20]backed [20], [20]corporate [20]- [20]funded [20], [20]Murdoch [20]- [20]promoted [20] Tea Party astroturfing group – or, in its words, a “grassroots service center.” Armey has been a major force behind this year’s victories of Tea Party Senate challengers like Ted Cruz in Texas and Richard Mourdock in Indiana, both of whom knocked off “establishment” candidates. FreedomWorks also backed Rand Paul in Kentucky and Mike Lee in Utah in 2010. As Adele Stan has reported [21], FreedomWorks’ goal is to build a cadre of far-right senators to create a “power center around Jim DeMint,” the Senate’s reigning Tea Party-Religious Right hero.

To put Armey’s stamp on the platform, FreedomWorks created a “Freedom Platform” project, which enlisted Tea Party leaders to come up with proposed platform planks and encouraged activists to vote for them online. Then FreedomWorks pushed the party to include these planks in the official platform:

•Repeal Obamacare; pursue patient-centered care

•Stop the tax hikes

•Reverse Obama’s spending increases

•Scrap the tax code; replace with a flat tax

•Pass a balanced budget amendment

•Reject cap and trade

•Rein in EPA

•Unleash America’s vast energy potential

•Eliminate the Department of Education

•Reduce the bloated federal workforce

•Curtail excessive federal regulation

•Audit the fed

An Ohio Tea Party Group, Ohio Liberty Coalition, celebrated [22] that 10 of 12 made it to the draft – everything but the flat tax and eliminating the Department of Defense. But FreedomWorks gave itself a more generous score, arguing [23] for an 11.5 out of 12. FreedomWorks vice president Dean Clancy said the platform’s call for a “flatter” tax “opens the door to a flat tax” and said they considered the education section of the platform a “partial victory” because it includes “a very strong endorsement of school choice, including vouchers.”

Honorable mention: Mitt Romney. This is his year, his party and his platform. The entire Republican primary was essentially an exercise in Romney moving to the right to try to overcome resistance to his nomination from activists who distrusted his ideological authenticity. The last thing the Romney campaign wanted was a fight with the base, like the one that happened in San Diego in 1996, when Ralph Reed and the Christian Coalition delighted in publicly humiliating nominee Robert Dole over his suggestion that the GOP might temper its anti-abortion stance. Romney signaled his intention to avoid a similar conflict when he named Virginia Gov. Bob McDonnell to chair the platform committee.

Keeping Everybody Happy

The new GOP platform reflects Romney’s desire to placate every aspect of the party’s base. It also demonstrates both the continuing [24] power [24] of the Religious Right within the GOP, as well as ongoing efforts [25] to erase any distinctions between social conservatives and anti-government zealots, as demonstrated by Ralph Reed welcoming [26] Grover Norquist to his Faith and Freedom coalition leadership luncheon on Sunday.

 

Source URL: http://www.alternet.org/election-2012/6-right-wing-zealots-and-crazy-ideas-behind-most-outrageous-republican-platform-ever
Links:
[1] http://www.alternet.org
[2] http://www.alternet.org/authors/peter-montgomery
[3] http://www.alternet.org/election-2012/right-wing-finally-unites-behind-romney-anti-obama-hate-fest-tampa?akid=9276.229476.pdsq0L&rd=1&src=newsletter699502&t=3&paging=off
[4] http://www.washingtonpost.com/wp-dyn/content/article/2009/08/29/AR2009082902434.html
[5] http://thehill.com/blogs/healthwatch/abortion/236437-mcdonnell-tied-to-ultrasound-law-in-planned-parenthood-attack
[6] http://www.rightwingwatch.org/content/religious-righting-republican-platform
[7] http://www.rightwingwatch.org/content/religious-right-exploiting-tragedy-blunt-criticism-its-extremism
[8] http://joemygod.blogspot.com/2012/08/flashback-federal-election-commission.html
[9] http://www.rightwingwatch.org/content/even-more-conservative-scholars-publicly-question-david-bartons-scholarship
[10] http://www.pfaw.org/media-center/publications/david-barton-propaganda-masquerading-history
[11] http://www.pfaw.org/rww-in-focus/texas-textbooks-what-happened-what-it-means-and-what-we-can-do-about-it
[12] http://www.salon.com/2012/08/21/gop_embraces_anti_sharia/
[13] http://www.kansas.com/2012/08/23/2460486/kobach-adds-touches-to-republican.html
[14] http://www.minnpost.com/politics-policy/2012/06/board-investigating-complaint-marriage-groups-refusal-disclose-donors
[15] http://www.politico.com/news/stories/0409/21638.html
[16] http://www.rightwingwatch.org/content/gop-platform-committee-disses-dc
[17] http://media.nbcbayarea.com/images/dc+statehood+bopp.gif
[18] http://www.politico.com/news/stories/0812/79936.html
[19] http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/08/24/did-republicans-actually-endorse-a-full-abortion-ban-maybe-not/
[20] http://www.alternet.org/story/148598/tea_party_inc.%3A_the_big_money_and_powerful_elites_behind_the_right_wing%27s_latest_uprising
[21] http://www.alternet.org/hot-news-views/tea-partys-cruz-vanquishes-gop-pick-us-senate-texas-run
[22] http://www.ohiolibertycoalition.org/republican-platform-committee-accepts-10-of-12-tea-party-platform-issues/
[23] http://www.freedomworks.org/press-releases/republican-party-adopts-majority-of-tea-party’s-“f
[24] http://www.alternet.org/story/153949/5_signs_the_christian_right_still_wields_too_much_power_in_america
[25] http://www.alternet.org/story/150622/tea_party_jesus%3A_koch%27s_americans_for_prosperity_sidles_up_to_religious_right_for_2012_campaign
[26] http://www.alternet.org/election-2012/right-wing-finally-unites-behind-romney-anti-obama-hate-fest-tampa?akid=9276.229476.pdsq0L&rd=1&src=newsletter699502&t=3
[27] http://www.alternet.org/tags/election-2012
[28] http://www.alternet.org/tags/kobach
[29] http://www.alternet.org/tags/mcdonnell-0
[30] http://www.alternet.org/tags/romney-0
[31] http://www.alternet.org/tags/armey
[32] http://www.alternet.org/tags/barton
[33] http://www.alternet.org/tags/perkins
[34] http://www.alternet.org/tags/bopp

 

How the Republicans Built It

New York Times Editorial, August 28, 2012

It was a day late, but the Republicans’ parade of truth-twisting, distortions and plain falsehoods arrived on the podium of their national convention on Tuesday. Following in the footsteps of Mitt Romney’s campaign, rarely have so many convention speeches been based on such shaky foundations.

Gov. Chris Christie of New Jersey, in the keynote speech, angrily demanded that the American people learn the hard truths about the two parties, but like most of those at the microphone, he failed to supply any. He said his state needed his austere discipline of slashed budgets, canceled public projects and broken public unions, but did not mention that New Jersey now has a higher unemployment rate than when he took over, and never had the revenue boom he promised from tax cuts.

“We believe in telling our seniors the truth about our overburdened entitlements,” he said, but his party has consistently refused to come clean about its real plans to undo Medicare and Medicaid. “Mitt Romney will tell us the hard truths we need to hear to put us back on a path to growth,” he said, but Mr. Romney has consistently refused to tell the truth about his tax plan, his budget plan, and his health care plan.

It was appropriate that “We built it,” the needling slogan of the evening, was painted on the side of the convention hall. Speaker after speaker alluded to the phrase in an entire day based on the thinnest of reeds — a poorly phrased remark by the president, deliberately taken out of context. President Obama was making the obvious point that all businesses rely to some extent on the work and services of government. But Mr. Romney has twisted it to suggest that Mr. Obama believes all businesses are creatures of the government, and so the convention had to parrot the line.

“We need a president who will say to a small businesswoman: Congratulations, we applaud your success, you did make that happen, you did build that,” said Gov. Bob McDonnell ofVirginia. “Big government didn’t build America; you built America!”

That was far from the only piece of nonsense on the menu, only the most frequently repeated one. Conventions are always full of cheap applause lines and over-the-top attacks, but it was startling to hear how many speakers in Tampa considered it acceptable to make points that had no basis in reality.

Gov. John Kasich of Ohio, for example, boasted of the booming economy in his state, never mentioning that he and Mr. Romney opposed the auto bailout that has played an outsized role in the state’s recovery. (Apparently Mr. Obama’s destructive economic policies do not apply everywhere.)

Andy Barr, a Congressional candidate in Kentucky, made the particularly egregious charge that the president was conducting “a war on coal,” ruthlessly attacking an industry and thousands of struggling miners.

He was apparently referring to the Environmental Protection Agency’s efforts to limit greenhouse gas emissions and prevent power-plant pollution from drifting through the East Coast states. The country desperately needs to reduce its reliance on coal, which is far more polluting than natural gas, but that goal gets harder to achieve every time someone like Mr. Barr makes it out to be an attack on a way of life.

Considering how Mr. Romney has conducted his campaign so far, most recently his blatantly false advertising accusing Mr. Obama of gutting the work requirement on welfare, it is probably not surprising that the convention he leads would follow a similar path.

Voters looking for a few nuggets of truth would not have found them inTampa on Tuesday.

http://www.nytimes.com/2012/08/29/opinion/how-the-republicans-built-it.html?_r=1&nl=todaysheadlines&emc=edit_th_20120829

I Have A Dream – Dr. Martin Luther King, Jr. – August 28, 1963

 from htttp://www.americanrhetoric.com/speeches/mlkihaveadream.htm 

delivered 28 August 1963, at the Lincoln Memorial,WashingtonD.C. 

I am happy to join with you today in what will go down in history as the greatest demonstration for freedom in the history of our nation. 

Five score years ago, a great American, in whose symbolic shadow we stand today, signed the Emancipation Proclamation. This momentous decree came as a great beacon light of hope to millions of Negro slaves who had been seared in the flames of withering injustice. It came as a joyous daybreak to end the long night of their captivity. 

But one hundred years later, the Negro still is not free. One hundred years later, the life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination. One hundred years later, the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity. One hundred years later, the Negro is still languished in the corners of American society and finds himself an exile in his own land. And so we’ve come here today to dramatize a shameful condition. 

In a sense we’ve come to our nation’s capital to cash a check. When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the “unalienable Rights” of “Life,Libertyand the pursuit of Happiness.” It is obvious today thatAmericahas defaulted on this promissory note, insofar as her citizens of color are concerned. Instead of honoring this sacred obligation,Americahas given the Negro people a bad check, a check which has come back marked “insufficient funds.” 

But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. And so, we’ve come to cash this check, a check that will give us upon demand the riches of freedom and the security of justice. 

We have also come to this hallowed spot to remind America of the fierce urgency of Now. This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism. Now is the time to make real the promises of democracy. Now is the time to rise from the dark and desolate valley of segregation to the sunlit path of racial justice. Now is the time to lift our nation from the quicksands of racial injustice to the solid rock of brotherhood. Now is the time to make justice a reality for all of God’s children. 

It would be fatal for the nation to overlook the urgency of the moment. This sweltering summer of the Negro’s legitimate discontent will not pass until there is an invigorating autumn of freedom and equality. Nineteen sixty-three is not an end, but a beginning. And those who hope that the Negro needed to blow off steam and will now be content will have a rude awakening if the nation returns to business as usual. And there will be neither rest nor tranquility in America until the Negro is granted his citizenship rights. The whirlwinds of revolt will continue to shake the foundations of our nation until the bright day of justice emerges. 

But there is something that I must say to my people, who stand on the warm threshold which leads into the palace of justice: In the process of gaining our rightful place, we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred. We must forever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence. Again and again, we must rise to the majestic heights of meeting physical force with soul force. 

The marvelous new militancy which has engulfed the Negro community must not lead us to a distrust of all white people, for many of our white brothers, as evidenced by their presence here today, have come to realize that their destiny is tied up with our destiny. And they have come to realize that their freedom is inextricably bound to our freedom.  

We cannot walk alone. 

And as we walk, we must make the pledge that we shall always march ahead. 

We cannot turn back. 

There are those who are asking the devotees of civil rights, “When will you be satisfied?” We can never be satisfied as long as the Negro is the victim of the unspeakable horrors of police brutality. We can never be satisfied as long as our bodies, heavy with the fatigue of travel, cannot gain lodging in the motels of the highways and the hotels of the cities. We cannot be satisfied as long as the negro’s basic mobility is from a smaller ghetto to a larger one. We can never be satisfied as long as our children are stripped of their self-hood and robbed of their dignity by signs stating: “For Whites Only.” We cannot be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote. No, no, we are not satisfied, and we will not be satisfied until “justice rolls down like waters, and righteousness like a mighty stream.” 

I am not unmindful that some of you have come here out of great trials and tribulations. Some of you have come fresh from narrow jail cells. And some of you have come from areas where your quest — quest for freedom left you battered by the storms of persecution and staggered by the winds of police brutality. You have been the veterans of creative suffering. Continue to work with the faith that unearned suffering is redemptive. Go back to Mississippi, go back to Alabama, go back to South Carolina, go back to Georgia, go back to Louisiana, go back to the slums and ghettos of our northern cities, knowing that somehow this situation can and will be changed. 

Let us not wallow in the valley of despair, I say to you today, my friends. 

And so even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream. 

I have a dream that one day this nation will rise up and live out the true meaning of its creed: “We hold these truths to be self-evident, that all men are created equal.” 

I have a dream that one day on the red hills of Georgia, the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood. 

I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression, will be transformed into an oasis of freedom and justice. 

I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character. 

I have a dream today! 

I have a dream that one day, down in Alabama, with its vicious racists, with its governor having his lips dripping with the words of “interposition” and “nullification” — one day right there in Alabama little black boys and black girls will be able to join hands with little white boys and white girls as sisters and brothers. 

I have a dream today! 

I have a dream that one day every valley shall be exalted, and every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight; “and the glory of the Lord shall be revealed and all flesh shall see it together.” 

This is our hope, and this is the faith that I go back to the South with. 

With this faith, we will be able to hew out of the mountain of despair a stone of hope. With this faith, we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith, we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day. 

And this will be the day — this will be the day when all of God’s children will be able to sing with new meaning: 

My country ’tis of thee, sweet land of liberty, of thee I sing. 

Land where my fathers died, land of the Pilgrim’s pride, 

From every mountainside, let freedom ring! 

And ifAmericais to be a great nation, this must become true. 

And so let freedom ring from the prodigious hilltops ofNew Hampshire. 

Let freedom ring from the mighty mountains ofNew York. 

Let freedom ring from the heightening Alleghenies of Pennsylvania. 

Let freedom ring from the snow-capped Rockies of Colorado. 

Let freedom ring from the curvaceous slopes ofCalifornia. 

But not only that: 

Let freedom ring from Stone Mountain of Georgia. 

Let freedom ring from Lookout Mountain of Tennessee. 

Let freedom ring from every hill and molehill ofMississippi. 

From every mountainside, let freedom ring. 

And when this happens, when we allow freedom ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God’s children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual: 

                Free at last! Free at last! 

                Thank God Almighty, we are free at last! 

——————————————————————————– 

¹ Amos 5:24 (rendered precisely in The American Standard Version of the Holy Bible) 

2 Isaiah 40:4-5 (King James Version of the Holy Bible). Quotation marks are excluded from part of this moment in the text because King’s rendering of Isaiah 40:4 does not precisely follow the KJV version from which he quotes (e.g., “hill” and “mountain” are reversed in the KJV). King’s rendering of Isaiah 40:5, however, is precisely quoted from the KJV. 

3 At: http://www.negrospirituals.com/news-song/free_at_last_from.htm 

Also in this database: Martin Luther King, Jr: A Time to Break Silence 

Audio Source: Linked directly to: http://www.archive.org/details/MLKDream 

External Link: http://www.mlkmemorial.org/ 

External Link: http://www.thekingcenter.org/ 

Copyright inquiries and permission requests may be directed to: Estate of Dr. Martin Luther King, Jr, Intellectual Properties Management, OneFreedomPlaza, 449 Auburn Avenue NE, Atlanta,GA30312, Fax: 404-526-8969 

http://www.americanrhetoric.com/speeches/mlkihaveadream.htm

The New New Deal By David Plotz

Slate.com. Aug. 14, 2012

President Obama’s stimulus has been an astonishing, and unrecognized, success, argues Michael Grunwald.

Michael Grunwald, a Time magazine correspondent, this week publishes The New New Deal: The Hidden Story of Change in the Obama Era, a gripping account of President Obama’s stimulus bill. Grunwald writes that the stimulus has transformed America—and American politics—in ways that we have failed to recognize. I interviewed him by email about the book.

Slate: What possessed you to write this book?

Grunwald: I fled Washington for the public policy paradise of South Beach while writing my last book, about the Everglades and Florida, so in 2010 I was only vaguely aware of the Beltway consensus that President Obama’s stimulus was an $800 billion joke. But because I write a lot about the environment, I was very aware that the stimulus included about $90 billion for clean energy, which was astonishing, because the feds were only spending a few billion dollars a year before. The stimulus was pouring unprecedented funding into wind, solar, and other renewables; energy efficiency in every form; advanced biofuels; electric vehicles; a smarter grid; cleaner coal; and factories to make all that green stuff in the U.S.

It was clearly a huge deal. And it got me curious about what else was in the stimulus. I remember doing some dogged investigative reporting—OK, a Google search—and learning that the stimulus also launched Race to the Top, which was a real a-ha moment. I knew Race to the Top was a huge deal in the education reform world, but I had no idea it was a stimulus program. It quickly became obvious that the American Recovery and Reinvestment Act (the formal name of the stimulus) was also a huge deal for health care, transportation, scientific research, and the safety net as well as the flailing economy. It was about Reinvestment as well as Recovery, and it was hidden in plain view.

So I decided to do a piece for Time about this untold story. But my editors thought I was nuts. The stimulus was old news. Unemployment was 9 percent; what else was there to say? I actually flew up to New York to make my case. I told my bosses I felt like a reporter in 1938, trying to convince them to do a story on this initiative called “The New Deal.” They looked at me like I was that blogger in The Newsroom pitching his story on Bigfoot. To their credit, though, they eventually let me write an article about how the stimulus was changing America, which led to the book.

In what ways has the stimulus been like and unlike Roosevelt’s New Deal?

The stimulus isn’t the New Deal. But they were both massive exercises in government activism in response to epic economic collapses. And they were both about change. The stimulus was the purest distillation of what Obama meant by “Change we can believe in.” And it’s the essence of Obama-ism—not only the policies, which came straight from his campaign agenda, but his approach to getting them into law, which was more pragmatic and political and messy than his hopey-changey rhetoric had led people to believe. So there was plenty of New, and plenty of Deal.

The Obama team thought a lot about the New Deal while they were putting the stimulus together, but times have changed since the New Deal. The Hoover Dam put 5,000 Americans to work with shovels. A comparable project today would only require a few hundred workers with heavy equipment. Christy Romer, the Depression scholar who led Obama’s Council of Economic Advisers, kept reminding colleagues that the Roosevelt administration hired 4 million Americans in the winter of 1934. At one point she started calling Cabinet departments to see how many employees they could hire with unlimited funds: They’d say oh, a lot, maybe 20,000! So the stimulus didn’t create giant new alphabet agencies like the WPA or CCC. It only created one new agency, a tiny incubator for cutting-edge energy research called ARPA-E.

People forget that the CCC herded unemployed urban youths into militarized rural work camps—often known as “concentration camps,” before that phrase became uncool—for less than a dollar a day. That kind of thing wouldn’t fly today. The New Deal basically created Big Government, but it’s still here. There was no need to re-create Big Government, and no political desire to expand Big Government.

So the stimulus didn’t establish new entitlements like Social Security or deposit insurance, or new federal responsibilities like securities regulation or labor relations, or new workfare programs for the creative class like the Federal Art Project, Federal Music Project, or Federal Writers Project. The New Deal was a barrage of contradictory initiatives enacted and adjusted over several years. The stimulus was one piece of legislation cobbled together and squeezed through Congress during Obama’s first month in office. The New Deal was a journey, an era, an aura. The Recovery Act was just a bill on Capitol Hill.

But it was a really big bill, 50 percent bigger than the entire New Deal in constant dollars. It included some New Deal-ish programs, like a $7 billion initiative to bring broadband to underserved areas, a modern version of FDR’s rural electrification. It included another $7 billion in incentives for states to modernize and expand the New Deal-era unemployment insurance system, which was created for a workforce of male breadwinners. Its aid to victims of the Great Recession lifted at least 7 million people out of poverty and made 32 million poor people less poor. It built power lines and sewage plants and fire stations, just like the New Deal. It refurbished a lot of New Deal parks and train stations and libraries. And Republicans have trashed the stimulus as a radical exercise in socialism, just as some Republicans—but not all Republicans—trashed the New Deal.

The most significant difference is that the New Deal was wildly popular, while the stimulus has been a political bust. There are many reasons for this, but the most important is that FDR launched the New Deal after the U.S. had suffered through more than two years of depression under Hoover, while Obama launched the stimulus when the economy was nowhere near rock bottom. Everyone knew about the financial earthquake, but the economic tsunami hadn’t yet hit the shore.

The New Deal produced tangible, monumental physical achievements—dams, trails, works of art, buildings. The stimulus produced none of that. There were no new bridges—instead they repaved old ones.  Why? Why didn’t the Obama administration look for physical structures to build and celebrate?

I wouldn’t say “none of that.” The stimulus is producing the world’s largest wind farm, a half dozen of the world’s largest solar arrays, and America’s first refineries for advanced biofuels. It’s creating a battery-manufacturing industry for electric vehicles almost entirely from scratch. It financed net-zero border stations and visitors centers, an eco-friendly new Coast Guard headquarters, a one-of-a-kind “advanced synchrotron light source.” It jump-started three long-awaited mega-projects in Manhattan alone—the Moynihan Station, the Second Avenue Subway, and the Long Island Railroad connection to the East Side—and it would have jump-started that multibillion-dollar rail tunnel to New Jersey as well if Governor Chris Christie hadn’t killed the project.

It didn’t build new dams, because we don’t need new dams, but it did finance the largest dam-removal project in U.S. history to restore salmon flows on the Elwha River. It even distributed $50 million to artists.

But I take your point. Most of the money in the stimulus went to unsexy stuff designed to prevent a depression and ease the pain of the recession: aid to help states avoid drastic cuts in public services and public employees; unemployment benefits, food stamps, and other assistance for victims of the downturn; and tax cuts for 95 percent of American workers. And the money that did flow into public works went more toward fixing stuff that needed fixing—aging pipes, dilapidated train stations, my beloved Everglades—than building new stuff. In its first year, the stimulus financed 22,000 miles of road improvements, and only 230 miles of new roads. There were good reasons for that. Repairs tend to be more shovel-ready than new projects, so they pump money into the economy faster. They also pass the do-no-harm test. (New sprawl roads make all kind of problems worse.) And they are fiscally responsible. Repairing roads reduces maintenance backlogs and future deficits; building roads add to maintenance backlogs and future deficits.

Obama and his team did try to push a few big physical legacy projects. During his transition, he called for a massive nationwide effort to rebuild and retrofit public schools. But Republican Sen. Susan Collins of Maine hated it, and Obama needed her vote to get the stimulus through the Senate, so it got deleted. Obama also wanted to build a smart grid, with digital meters for all Americans (the smart part) and a new national network of high-voltage wires (the grid part). His aides explained that couldn’t happen quickly and didn’t even make sense as a federal project. Instead, the stimulus included about $11 billion of seed money for the smart grid, which has launched a new era for the utility sector but hasn’t really penetrated the national psyche. Finally, the White House slipped $8 billion into the stimulus for high-speed rail, the largest new transportation initiative since the interstates. But Florida’s Republican governor, Rick Scott, killed a bullet train from Tampa to Orlando that was supposed to be the showcase project, and the only other bullet train, connecting San Francisco to Los Angeles in less than three hours, is still decades away from completion. The shovel-readier projects—like improvements that will slice an hour off the Amtrak train from Chicago to St. Louis—won’t produce the oohs and aahs of bullet trains. They’re really higher-speed rail—worthy, but not iconic.

Your subtitle is: “The Hidden Story of Change in the Obama Era.” Why hidden? What are the great hidden accomplishments?
120801_INT_Michael-Grunwald-The-New-New-Deal-JacketThere are two reasons this story has been hidden, one understandable, one less so. First, the stimulus was supposed to create jobs at a time when jobs were vanishing at a terrifying rate. Nonpartisan economists agree that it helped stop the free fall; job losses peaked the month before it passed, and the economy dramatically improved once it kicked into gear. But even after the dramatic improvements, the unemployment rate was still sky-high and rising; an economy can do a lot better than losing 800,000 jobs a month without doing well. Ultimately, the stimulus was a 2.5 million-job solution to an 8 million-job problem.

And the Obama transition team put out a tragically dumb forecast suggesting it would keep the unemployment rate below 8 percent. In fairness, the situation was deteriorating far faster than people realized; the government had announced a growth rate of -4 percent in the fourth quarter of 2008, which is hideous, but that was later revised to -9 percent, which is way beyond hideous. Unemployment actually topped 8 percent the month the stimulus passed, which obviously wasn’t the fault of the stimulus. Recoveries after financial cataclysms are always ugly. But when you spend $800 billion on an economic recovery package, and the recovery stinks, people don’t tend to look past that.

That said, the national media should have tried to look past that, but it didn’t, because the national media sucks at covering public policy. The stimulus included $27 billion to computerize our pen-and-paper health care system, which should reduce redundant tests, dangerous drug interactions, and fatalities caused by doctors with chicken-scratch handwriting. It doubled our renewable power generation; it increased solar installations over 600 percent; it essentially launched our transition to a low-carbon economy. It provided a new model for government spending—with unprecedented transparency, unprecedented scrutiny, and unprecedented competition for the cash. Experts predicted that as much as 5 percent of it would be lost to fraud, but so far, investigators have documented less than $10 million in losses, about 0.001 percent. Despite all the controversy over the lack of shovel-ready projects, the Obama administration has met every spending deadline, and it’s kept costs so far under budget that it’s been able to finance over 3,000 additional projects with the savings. But the media coverage of the stimulus was almost exclusively gotcha stuff, usually without a real gotcha. And when the media did notice long-term investments in the stimulus, like Race to the Top or clean-energy research, it rarely mentioned the stimulus connection.

Except, of course, when it was noticing Solyndra. After a year of screaming headlines about crony capitalism and shady deals, even Republican investigators have admitted there’s no evidence of any political interference or other wrongdoing. A slew of independent reviews—including one led by John McCain’s finance chairman—have concluded that the clean-energy loan program is working well. Everyone knew that some of its loans would go bad. But the Solyndra scandal—which isn’t even a scandal—is probably the best-known product of the stimulus.

The complaint from the left about the stimulus has long been: It was too small. According to your reporting, that’s an unrealistic claim. Why?

Well, it was too small. More aid to states would have prevented more layoffs of public employees. More infrastructure projects would have put more unemployed laborers to work. More tax cuts would have put more money into the hands of consumers. What my reporting shows is that the disillusionment addicts of the left are wrong to blame President Obama for the size of the stimulus.

People forget that after Lehman Bros. collapsed in September 2008, Democrats couldn’t even get 60 votes in the Senate for a $50 billion stimulus; in fact, two Democrats voted against it. The $800 billion stimulus was over four times larger than Obama’s campaign proposal in October 2008. It was over twice as large as the package that 387 liberal economists urged Congress to pass in late November. It’s only in retrospect that $800 billion seems wimpy. And Obama couldn’t have gotten a dime more through the Senate. The three moderate Republicans who voted yes—Collins, Olympia Snowe, and Arlen Specter—all insisted they wouldn’t support anything over $800 billion. So did at least a half-dozen centrist Democrats, like Mark Begich of Alaska, Ben Nelson of Nebraska, and Blanche Lincoln of Arkansas. Byron Dorgan of North Dakota wanted a bigger stimulus, but he was in the room during the negotiations, and he told me: There was absolutely no way to make that happen.

Some progressives admit that Obama couldn’t have gotten more stimulus during his first month in office but complain that he never pushed for more stimulus after the Recovery Act passed. That’s just wrong. He never stopped pushing behind the scenes and ended up getting another $700 billion worth in 2009 and 2010, even though Republicans were trying to obstruct him at every turn. They were even marching in lockstep against unemployment benefits and small-business tax cuts that they had always supported in the past. So Obama did well to get what he got.

This is an adulatory story about the Obama administration, depicting a subtle, engaged, brilliant president working for the long-term good of the nation, surrounded by brilliant, self-sacrificing scientists and thinkers who are looking for sweeping change, and opposed by venal, selfish, viciously partisan Republicans willing to sacrifice the health of the nation for political gain. That’s a portrait that will surely delight Democrats and irritate Republicans. Why should the average reader trust it? Why shouldn’t they see this as partisan hackwork in the service of the Obama re-election campaign?

Wow! Maybe you’re so accustomed to reading breathless tell-alls about the fumbling, bumbling hacks in the White House—by right-wingers, left-wingers, and even Obama supporters who basically approve of his agenda but want to show how independent and tough-minded they are—that my story sounds adulatory. The guy doesn’t walk on water. I write about his missteps and miscalculations as well as his achievements, and I reveal a lot of internal dissension on his team.

That said, I realize The New New Deal tells a story that, for the most part, Obama lovers are going to like and Obama haters on the left and the right are going to hate. I’d say that readers shouldn’t see this as partisan hackwork because I’m not a partisan hack. I’ve been a reporter for 20 years, and my reporting is accurate. In case people are curious, I’m a registered independent, socially liberal, otherwise pretty unpredictable. I voted for Obama in 2008, but I voted for Charlie Crist for governor over a generic Democrat in 2006, back when he was a rising Republican star. I do tend to be a contrarian. I think I was the first non-oil-stooge to write that the BP spill was not that awful an ecological disaster. But I was just following my reporting; I know a lot of scientists in Louisiana, and I got to see a lot of persuasive data. I feel the same way about the stimulus; the data tell a very different story than the prevailing narrative.

I don’t think my book portrays the Republicans as “vicious,” but I do show—thanks to a lot of in-depth interviews with GOP sources—how they plotted to obstruct Obama before he even took office. I show how the stimulus was chock full of stuff they claimed to support until Jan. 20, 2009—not just things like health IT and the smart grid and energy efficiency and scientific research, but the very idea of Keynesian stimulus. Every presidential candidate in 2008 proposed a stimulus package, and Mitt Romney’s was the largest. So I do spend a fair amount of time chronicling Republican stimulus hypocrisies. (Readers might enjoy the backstory of Sen. Judd Gregg’s short-lived nomination to be Obama’s commerce secretary.) In general, I’d have to say my reporting backs up the Norm Ornstein-Thomas Mann thesis that the Republicans have gone off the policy deep end—denying global warming, denying Keynesian economics (except when it comes to business tax cuts and defense spending!), trashing Obama’s government takeover of health care and also his Medicare cuts, drumming stimulus supporters like Crist and Specter out of the party. Then again, one Republican who comes off pretty well is Mark Sanford, a rare voice of honest small-government conservatism in the party. (He also says some pretty surprising things about his trip down the Appalachian Trail.)

I think there ought to be a great debate about the stimulus and its interventions in various sectors of the economy. But we haven’t had that debate. We’ve debated a bizarro-world stimulus that does not exist. And I think that’s true about Obama, too. I don’t think he comes across as “brilliant.” I think he comes across as a pragmatic left-of-center technocrat who wasn’t interested in pursuing lost causes, but basically tried to do what he said he would do during the campaign. He wasn’t a policy entrepreneur with new policy ideas, but he did his best to get 60 votes for old policy ideas that made sense, and then pushed his administration to put them into action as cleanly and competently as possible. And I did a lot of reporting in the bowels of the bureaucracy and around the country to show how change has been playing out.

I tried to tell the story as fairly and honestly as I could. But I didn’t try to be balanced for the sake of balance. When politicians were full of shit, I tried to point that out.

Can you explain why so many local Republican officials and organizations traditionally aligned with the GOP (like the Chamber of Commerce) supported the stimulus, while the national party was united against it?

The top priority for many local Republican politicians and Republican-leaning business organizations was avoiding a depression. They saw that the Obama stimulus wasn’t radical leftism; it was textbook countercyclical stimulus. Republicans had called for $300 billion worth of tax cuts, and that’s exactly what it had. Republican governors like Crist, Arnold Schwarzenegger of California, Jodi Rell of Connecticut, Jim Douglas of Vermont, and Jon Hunstman of Utah understood that its aid to states—over $160 billion worth—would prevent massive cutbacks of public services and massive layoffs of public employees. As the lobbyist for the Chamber of Commerce told me: When you sit where I sit, you don’t want to see an epic collapse of aggregate demand. Depressions are bad for business. I also tell a fun story of a Democratic aide screaming and cursing at some business lobbyists, warning that they’d get nothing from the Democratic Congress if they couldn’t support an economic recovery bill during an economic emergency.

But the top priority for Washington Republicans was denying Obama bipartisan victories, so that they could come back from political oblivion. There’s a lot of fun fly-on-the-wall stuff in the book about meetings where Eric Cantor, Mitch McConnell, and other GOP leaders made this case—and on-the-record quotes from former GOP congressmen like Mike Castle, George Voinovich, and Specter complaining about it. McConnell often reminded his caucus about the 1984 election. Everyone remembers it as the 49-state Reagan landslide, Morning in America; people forget that only one Republican challenger ousted a Democratic incumbent that year. (It was McConnell, so he remembers.) His point was that there was nothing to be gained by going along with Obama. If the recovery plan worked and the economy boomed, Republicans would get re-elected even if they had voted against Obama. But if the economy was still struggling in 2010, Republicans could make a comeback if they stuck together.

Did the Republican opposition ruin Keynesian stimulus for the indefinite future?

I doubt it. The opposition is mostly opportunistic. One of the Republican alternatives to the stimulus in the House was a $715 billion plan that included far more highway construction than Obama’s. Almost the entire GOP conference supported it. And Republicans still defend business tax cuts and defense spending in Keynesian terms, even though they’re generally mediocre as Keynesian stimulus. I suspect that if Mitt Romney wins the election, the Republican opposition to fiscal stimulus will vanish, along with their rhetorical commitment to reining in budget deficits.

Why was the GOP’s message of opposition so much more effective than the administration’s message of spending? Was Obama’s failure fundamentally a communications failure, as Ed Rendell told you?

I don’t claim to be an expert in political strategy and messaging. I tried to tell the story and let readers decide for themselves where the politics went wrong. But I’ll make a few observations. First, the Obama team’s Recovery Act message was highly nuanced. It was short-term jobs along with long-term investments. It was tax cuts along with spending. It was the biggest domestic spending bill in history, but it was also just a first step toward normalcy. The economy needed fiscal stimulus in the short term but fiscal responsibility in the long term.

The Republican message was much simpler: No.

Republicans were also maniacally disciplined about repeating that message. During the stimulus debate, Democrats used most of their airtime quibbling with Obama’s specifics, which helped confirm the GOP message that the stimulus was a porky big-government mess. And once it passed, Obama and the Democrats moved on to other business, like health care, financial reform, and so on. The Republicans never moved on. Their message—big spending, big government, big mess—never changed.

There’s a lot of reporting about messaging in this book. It was a topic of hot debate inside the White House, on the Hill, and everywhere else. But I will say that I think people tend to overstate its importance. I’m not sure what kind of message would have worked when unemployment was hovering around double digits. I tell a story about how Obama set up White House interviews with all the major anchors to sell the stimulus—a chance to tell his story to the American people through Katie Couric and Anderson Cooper!—but all the questions were about Tom Daschle withdrawing his Cabinet nomination that morning because of unpaid taxes. I suppose you could make the case that was a turning point, but I really don’t think so. And I’m skeptical of Rendell’s idea that the Democratic Party’s Great Communicator suddenly became a lousy communicator once he took office. I think Obama and his team made more than their share of communications mistakes—I especially think he should have focused his message more on long-term transformation than short-term economic revival, and some of his aides agree with me—but I don’t see how better communications would have changed the story of 2010.

 When will Americans be able to look out and recognize measurable, wonderful gains from the stimulus?

Well, we’re already able. For example, 95 percent of us received Making Work Pay tax cuts of up to $800 a year for a family. But they were dribbled out through reduced withholding, because behavioral economics suggests that we’re less likely to spend money when it arrives in a big chunk, so fewer than 10 percent of us noticed them. The backstory of that decision will make Obama supporters cringe.

Similarly, anyone who received expanded unemployment benefits or food stamps or Cobra subsidies or Pell Grants in 2009 or 2010 benefited from the stimulus. The stimulus saved more than 300,000 education jobs, and preserved over $100 billion worth of health services for the poor. We’re already using more clean energy and less energy overall because of the stimulus; the electric vehicle industry is here because of the stimulus; the domestically manufactured content of U.S. wind turbines has increased from 20 percent to 60 percent because of the stimulus. There are over 100,000 stimulus projects that have upgraded our parks, subways, hospitals, food pantries, and so forth. On our last vacation my family visited Ketchikan, Alaska, where the stimulus upgraded the nature center. It was a very nice nature center.

Also: The stimulus helped prevent a depression, and as Romer says in the book, depressions really, really suck. They create horrible human suffering, and horrible deficits, too. The economy is quite lousy, but it really could’ve been a lot lousier.

The stimulus will produce more good stuff in the future. By 2015, almost all of us will have an electronic medical record because of the stimulus. The stimulus is also pouring $1 billion into desperately needed “comparative effectiveness research” that will help doctors and patients learn what kind of treatments actually work. There’s billions more for data-driven education reforms—Investments in Innovation and School Improvement Grants as well as Race to the Top—that will seek to scale up promising approaches in public schools. And the most exciting changes will transform the way we generate and consume energy. For example, a company called Envia Systems that got a grant from ARPA-E—a modern version of the Manhattan Project—has already developed the world’s most powerful lithium-ion battery, which could slice $5,000 off the price of the next Chevy Volt.

Will Americans associate any of this change with the 2009 stimulus? I doubt it. Maybe they will if my book becomes a runaway best-seller.

Would President Romney roll back these programs or A) is it too late and the money is spent? or B) would he actually support them as president because they are fundamentally valuable programs?

During the 2010 campaign, Republicans vowed to cancel all unspent stimulus funds if they took back Congress. They took back the House, but they didn’t take back one dime of stimulus money. Romney also says he’ll cancel unspent stimulus funds, but there aren’t many left to cancel—at this point, mostly health IT, high-speed rail, and some clean-energy dollars—and I’d bet they’ll all eventually get spent.

That said, Romney and the Republicans can make sure that much of the stimulus legacy ends with the stimulus. Romney wants to shut down the tax credit for wind power, which could virtually shut down the industry. High-speed rail could die on the vine. Romney has said nice things about ARPA-E—even though it “picks winners and losers”—and as governor he supported health IT and other stimulus-friendly policies, so maybe he’d keep them as president. I wouldn’t bet on that, though.

There’s a reason most of Romney’s ads feature the stimulus (a caricature of the stimulus, but still). He’s running against the idea that government can produce positive change, and the stimulus was the ultimate test of that idea. Maybe he’ll change his mind if he wins—he’s obviously changed his mind before—but presidents tend to try to keep their campaign promises. Obama certainly did.

http://www.slate.com/articles/news_and_politics/interrogation/2012/08/the_new_new_deal_a_book_argues_that_president_obama_s_stimulus_has_been_an_astonishing_success.html

Holy Book Learning – Americans are shockingly illiterate when it comes to religions — including their own by Christoper Shea

Boston Globe, March 4, 2007

Excerpt

This ignorance about basic religious and Biblical matters crosses all sorts of sectarian lines…  it’s about citizenship. Because religion isn’t going away — on the contrary, it’s booming — and because it is central to so many of the most important issues facing us today, knowledge of religion matters more than ever. “You need religious literacy,” he writes, “in order to be an effective citizen.”religious literacy has been held hostage in the culture wars between Christian activists, who believe nothing short of returning “Judeo-Christian” moral instruction to the schools will stop America’s moral slide, and secular activists wary of any mention of religion by public-school teachers… 

Full text

CRITICAL FACULTIES – . That’s a problem in today’s world, a BU professor argues. But it won’t be easily fixed.

Stephen Prothero, a professor of religious studies and chair of the religion department at Boston University, thinks he may have found something that conservative Christians and liberal secularists can agree on: It’s not a good thing if students, whether religious or not, think Joan of Arc was Noah’s wife — or stare blankly when a teacher (or President Bush or Hillary Clinton) refers to a “Good Samaritan.”

In his new book, “Religious Literacy: What Every American Needs to Know — and Doesn’t,” Prothero lays out the evidence of what he considers Americans’ paradoxical, and troubling, religious ignorance. According to various surveys conducted since 1990, half of all Americans can’t name even one of the four canonical Gospels (Matthew, Mark, Luke, and John), the cornerstone of the New Testament. A majority can’t name the first book of the Bible (Genesis). This suggests a curious unfamiliarity with a text that two-thirds of Americans believe contains the answers to all of life’s questions.

This ignorance about basic religious and Biblical matters crosses all sorts of sectarian lines. In a survey from 2000, 60 percent of evangelicals, but only 51 percent of Jews, answered yes when asked whether Jesus was born in Jerusalem (the New Testament says he was born, as we’re reminded by all those Christmas carols, in Bethlehem). Less surprising, students do even worse when asked almost anything about religions besides Christianity. Prothero has replicated these findings in surveys of his own students at BU.

For Prothero, there’s a lot more at stake than basic cultural literacy of the E.D. Hirsch variety, though that’s an important part of his argument. (“I am convinced,” he writes, “that one needs to know something about the world’s religions in order to be truly educated.”) And his concern is not morality, though he believes it’s possible that students who are more knowledgeable about the Bible “would have smarter discussions about moral questions,” as he put it in a recent interview. Strengthening morality, he says, “is not my issue.”

Instead, it’s about citizenship. Because religion isn’t going away — on the contrary, it’s booming — and because it is central to so many of the most important issues facing us today, knowledge of religion matters more than ever. “You need religious literacy,” he writes, “in order to be an effective citizen.” When biblical teachings are invoked by politicians and activists on issues from abortion and same-sex marriage to poverty and global warming, how, he asks, can a person engage in political debate without at least some fluency in the language being spoken?

“For me,” Prothero says, “the hope is that we can have more and better political conversations. My hope is that a huge portion of the American population won’t feel disengaged from political debates because they don’t know enough about religion.”

Unfortunately, for Prothero, religious literacy has been held hostage in the culture wars between Christian activists, who believe nothing short of returning “Judeo-Christian” moral instruction to the schools will stop America’s moral slide, and secular activists wary of any mention of religion by public-school teachers. 

Prothero plunges straight into this thicket. He proposes that high schools require one Bible 101 course (given the Bible’s particular importance in European and American history) and one on world religions. These courses would, he stresses, abide by guidelines the Supreme Court has laid down: They would be objective and not “devotional.”

Prothero’s proposal dovetails with the agendas of several other organizations. The Bible Literacy Project, based in Front Royal, Virginia, has produced two reports, with funding from the Templeton Foundation, a nonprofit group that supports efforts to bridge the divide between religious and secular culture – one on what teenagers actually know about the Bible and one on what teachers at various levels think they should know. Yet it finds that only 8 percent of American schools teach the Bible in any way.

On the Bible Literacy Project’s advisory board sit such leading scholars as Jean Bethke Elshtain of the University of Chicago and Mary Ann Glendon of Harvard Law School. Its proposed curriculum, which includes a textbook called “The Bible and Its Influence” and a Bible of the student’s choice, has been praised both by the conservative evangelical leader Charles Colson and Charles C. Haynes, a senior scholar at the First Amendment Center at Vanderbilt.

The Project in Religion and Secondary Education at the Harvard Divinity School has also worked to make clear to teachers and administrators that teaching about religion in high schools is appropriate and desirable. It is co-sponsoring a conference next fall at which teachers can learn from scholars about the latest thinking on religion, and offers joint degrees in theology and education.

So are we all on board with Prothero’s project? Well, the middle ground of non-devotional Bible education may be more controversial than he thinks. The National Council for Biblical Curriculum in Public Schools, another group advocating “non-devotional” Bible courses, has attacked the Bible Literacy Project as the tool of secularists. Language on its website speaks of “reclaiming our families” while a letter posted on that same site, from the televangelist John Hagee, refers to the statements about theology in the Bible Literacy Project textbook as “wolves in sheep’s clothing” — and equates discussion of other religions’ creation stories with a celebration of polytheism.

Prothero says such fighting is a fringe phenomenon: “There is more conflict in theory than in practice.” Still, this remains a contentious field. Daniel Mach, a lawyer in Washington with the ACLU specializing in church-state issues, says Supreme Court precedent certainly leaves room for teaching the Bible in a non-devotional way. In practice, however, “the problem is that it is rarely taught objectively.”

Daniel Dennett, the Tufts philosopher and noted defender of atheism, has made the case that a course on world religions ought to be mandatory for high school students, given the enormous influence of faith. “The toxic forms of religion thrive only under conditions in which the ignorance of the young can be enforced,” he writes in an e-mail message. But, he adds, “a class that only taught the Bible would not be appropriate at all. It is important for students to compare the different religions frankly.”

And it’s not only church-state watchdogs and atheists who are skeptical about whether teachers can pull off the non-devotional tightrope walk. “My own sense,” says Mark Noll, an acclaimed historian at Notre Dame who is an evangelical Christian, “is that the Bible is a pretty explosive book. If students read it carefully, they’d be changed in a way that public schools couldn’t handle — and appropriately so.

TChristopher Shea’s column appears biweekly in Ideas. E-mail critical.faculties@verizon.net.
http://www.boston.com/news/education/higher/articles/2007/03/04/holy_book_learning/