Thursday Reads: Mitt Romney, Casino Capitalist, and Other News

Good Morning!

I hope everyone had a nice, relaxing holiday. There wasn’t a whole lot of news breaking yesterday, but I read some good reactions to the Vanity Fair Story on the many overseas tax shelters that Mitt’s Romney uses to hide his money.

Mitt Romney, Casino Capitalist

At the Nation, Ben Adler worked up an excellent summary of the VF article, highlighting the main points. Here’s his summary of a particularly disturbing part–the possibility that Bain was laundering money money for some questionable people.

§ Did Bain serve as a tax haven for foreign criminals? As Shaxson explains, “Private equity is one channel for this secrecy-shrouded foreign money to enter the United States, and a filing for Mitt Romney’s first $37 million Bain Capital Fund, of 1984, provides a rare window into this. One foreign investor, of $2 million, was the newspaper tycoon, tax evader, and fraudster Robert Maxwell, who fell from his yacht, and drowned, off of the Canary Islands in 1991 in strange circumstances, after looting his company’s pension fund. The Bain filing also names Eduardo Poma, a member of one of the ‘14 families’ oligarchy that has controlled most of El Salvador’s wealth for decades; oddly, Poma is listed as sharing a Miami address with two anonymous companies that invested $1.5 million between them. The filings also show a Geneva-based trustee overseeing a trust that invested $2.5 million, a Bahamas corporation that put in $3 million, and three corporations in the tax haven of Panama, historically a favored destination for Latin-American dirty money—’one of the filthiest money-laundering sinks in the world,’ as a US Customs official once put it.”

Politico seemed disapproving of the Obama campaign calling attention to the VF piece. The headline seems to suggest that it is somehow unseemly to refer to an opponent’s tax evasion methods.

From Obama campaign spokseman Ben LaBolt, on a call with Ohio reporters:

“Today we’re learning more about Mitt Romney’s bets against America. Vanity Fair’s raising important questions about Romney’s offshore accounts in foreign tax havens, including his mysterious corporation in Bermuda, his funds in the Cayman Islands, and the Swiss bank account he opened. The question is, why? Was he avoiding paying his fair share of U.S. taxes? Was he hedging against the dollar? Until he releases his tax returns from that period, Americans will never know. This raises serious questions. If he has nothing to hide, why doesn’t he just release his tax returns?”

And from Bill Burton, at Priorities:

“Today’s Vanity Fair article confirms what the New York Times and the Wall Street Journal reported but the Romney campaign falsely denied. Unlike the vast majority of Americans who pay their fair share of taxes, Mitt Romney is avoiding taxes by stashing millions of dollars in the Cayman Islands. This matters in the presidential campaign because it is just these types of loopholes for the wealthy that Romney would protect, forcing more of the tax burden onto the middle class.

Those seem like pretty good questions to me.

RalphB posted this AP article in the comments yesterday: Mystery Bermuda-based company and other undisclosed Romney assets hint at larger wealth

For nearly 15 years, Republican presidential candidate Mitt Romney’s financial portfolio has included an offshore company that remained invisible to voters as his political star rose.

Based in Bermuda, Sankaty High Yield Asset Investors Ltd. was not listed on any of Romney’s state or federal financial reports. The company is among several Romney holdings that have not been fully disclosed, including one that recently posted a $1.9 million earning — suggesting he could be wealthier than the nearly $250 million estimated by his campaign.

The omissions were permitted by state and federal authorities overseeing Romney’s ethics filings, and he has never been cited for failing to disclose information about his money. But Romney’s limited disclosures deprive the public of an accurate depiction of his wealth and a clear understanding of how his assets are handled and taxed, according to experts in private equity, tax and campaign finance law.

Romney reported this holding on his 2010 tax form, but he did not disclose it when he ran for governor in 2001-02, even though he was required to do so. Pretty sleazy. Unfortunately, the statute of limitations on this ethics violation has expired.

Paul Krugman blogged about Romney yesterday: Off And Out With Mitt Romney.

It appears that the Obama campaign has decided to ignore the queasiness of Democrats with Wall Street ties, and go after Mitt Romney’s record at Bain. And rightly so!

After all, what is Romney’s case – that is, why does he want us to think he should be president? It’s not about ideology: Romney offers nothing but warmed-over right-wing platitudes, with an extra helping of fraudulent arithmetic, and it’s fairly obvious that even he himself doesn’t believe anything he’s saying.

Instead, his thing is competence: supposedly, his record as a successful businessman should tell us that he knows how to create jobs….[but] even if Romney were a true captain of industry, a latter-day Andrew Carnegie, this wouldn’t be a strong qualification.

In any case, however, Romney wasn’t that kind of businessman. He didn’t build businesses, he bought and sold them – sometimes restructuring them in ways that added jobs, often in ways that preserved profits but destroyed jobs, and fairly often in ways that extracted money for Bain but killed the business in the process….

Or put it a different way: Romney wasn’t so much a captain of industry as a captain of deindustrialization, making big profits for his firm (and himself) by helping to dismantle the implicit social contract that used to make America a middle-class society.

I particularly want to recommend a brilliant essay in The Nation by Robert Reich: Mitt Romney and the New Gilded Age. Reich has really dedicated himself to standing up for the 99% this year, and this piece really brings it all together and holds Romney up as the perfect symbol of “casino capitalism.”

Connect the dots of casino capitalism, and you get Mitt Romney. The fortunes raked in by financial dealmakers depend on special goodies baked into the tax code such as “carried interest,” which allows Romney and other partners in private-equity firms (as well as in many venture-capital and hedge funds) to treat their incomes as capital gains taxed at a maximum of
15 percent. This is how Romney managed to pay an average of 14 percent on more than $42 million of combined income in 2010 and 2011. But the carried-interest loophole makes no economic sense. Conservatives try to justify the tax code’s generous preference for capital gains as a reward to risk-takers—but Romney and other private-equity partners risk little, if any, of their personal wealth. They mostly bet with other investors’ money, including the pension savings of average working people. You can check out easyslots.com.

Another goodie allows private-equity partners to sock away almost any amount of their earnings into a tax-deferred IRA, while the rest of us are limited to a few thousand dollars a year. The partners can merely low-ball the value of whatever portion of their investment partnership they put away—even valuing it at zero—because the tax code considers a partnership interest to have value only in the future. This explains how Romney’s IRA is worth as much as $101 million. The tax code further subsidizes private equity and much of the rest of the financial sector by making interest on debt tax-deductible, while taxing profits and dividends. This creates huge incentives for financiers to find ways of substituting debt for equity and is a major reason America’s biggest banks have leveraged America to the hilt. It’s also why Romney’s Bain and other private-equity partnerships have done the same to the companies they buy.

These maneuvers shift all the economic risk to debtors, who sometimes can’t repay what they owe. That’s rarely a problem for the financiers who engineer the deals; they’re sufficiently diversified to withstand some losses, or they’ve already taken their profits and moved on. But piles of debt play havoc with the lives of real people in the real economy when the companies they work for can’t meet their payments, or the banks they rely on stop lending money, or the contractors they depend on go broke—often with the result that they can’t meet their own debt payments and lose their homes, cars and savings.

Reich notes that if Romney were to win the White House, he would be very different from past wealthy presidents.

We’ve had wealthy presidents before, but they have been traitors to their class—Teddy Roosevelt storming against the “malefactors of great wealth” and busting up the trusts, Franklin Roosevelt railing against the “economic royalists” and raising their taxes, John F. Kennedy appealing to the conscience of the nation to conquer poverty. Romney is the opposite: he wants to do everything he can to make the superwealthy even wealthier and the poor even poorer, and he justifies it all with a thinly veiled social Darwinism.

Obama should be holding Romney up as the personification of all that brought the economy to its knees in 2008. Why aren’t the Democrats screaming from the rooftops about it?

Part of the answer, surely, is that elected Democrats are still almost as beholden to the wealthy for campaign funds as the Republicans, and don’t want to bite the hand that feeds them. Wall Street can give most of its largesse to Romney this year and still have enough left over to tame many influential Democrats (look at the outcry from some of them when the White House took on Bain Capital). But I suspect a deeper reason for their reticence is that if they connect the dots and reveal Romney for what he is—the epitome of what’s fundamentally wrong with our economy—they’ll be admitting how serious our economic problems really are. They would have to acknowledge that the economic catastrophe that continues to cause us so much suffering is, at its root, a product of the gross inequality of income, wealth and political power in America’s new Gilded Age, as well as the perverse incentives of casino capitalism if you bother to check out these no deposit mobile casinos and connect the dots.

Please go read the whole thing. You won’t regret it.

In other news,

The Sun has been very active lately.

(SPACE.com) The sun is unleashing some powerful solar flares today (July 4) in an impressive celestial fireworks display just in time for the U.S. Independence Day holiday.

The latest solar flare erupted at 5:47 a.m. EDT (0947 GMT) and hit its peak strength eight minutes later. The flare fired off from the active sunspot AR1515 and registered as a class M5.3 solar storm on the scale used by astronomers to measure space weather, according to the Space Weather Prediction Group operated by NOAA.

Class M solar flares are powerful, but still medium-strength, sun storms that can supercharge northern lights displays on Earth. The weakest of the sun’s strong solar flares are C-class storms.

NASA’s Solar Dynamics Observatory spacecraft currently watching the sun also captured another solar flare this morning that reached M2 on the sun storm scale.

“As the United States is observing Independence Day, active region 1515 unleashed another M2-class solar flare,” SDO scientists wrote in an announcement posted to the mission’s Facebook and YouTube sites. The flare peaked at 12:37 a.m. EDT (0437 GMT), they added.

Here’s a video of solar flares that took place on July 4, 2012.

Breathtaking!

TV doctor Drew Pinsky, AKA Dr. Drew, is being looked at by the Feds in the GlaxoSmithKline case.

One of Glaxo’s blockbuster drugs was Wellbutrin, which was approved by the FDA to treat depression. Starting in 1999, the Justice Department says, the company “engaged in a nationwide scheme” to promote the drug to treat other conditions including weight problems, addictions, and sexual dysfunction. Pinsky was one of the experts paid to tout Wellbutrin, according to the complaint filed against Glaxo by government prosecutors….

The federal complaint says Cooney Waters, a public-relations firm hired by Glaxo to promote Wellbutrin, “hired Dr. Drew Pinsky from MTV and Loveline as a spokesperson to deliver messages about WBSR [Wellbutrin] in settings where it did not appear that Dr. Pinsky was speaking for WBSR.”

Apparently Pinsky hasn’t specifically been accused of any crime.  He told The Daily Beast that he was paid $275,000 to discuss “intimacy and depression” in a number of settings and media. He claims that all of his “comments were consistent with my clinical experience.”

Here’s one example from the federal complaint:

Pinsky said one of the ingredients in Wellbutrin “could explain a woman suddenly having 60 orgasms in one night.” The complaint against Glaxo says “Dr. Pinsky explained that one of the things he advocates for people experiencing diminished libido or arousal” is Wellbutrin.

Stephen Hawking said that he had to pay off a $100 bet that the Higgs boson particle would never be discovered. He says Peter Higgs should get the Nobel Price for predicting it.

A sunken land bridge that once was home to “tens of thousands” of people has been discovered in the North Sea between Scotland and Denmark.

‘Britain’s Atlantis’ – a hidden underwater world swallowed by the North Sea – has been discovered by divers working with science teams from the University of St Andrews.
Doggerland, a huge area of dry land that stretched from Scotland to Denmark was slowly submerged by water between 18,000 BC and 5,500 BC.

Divers from oil companies have found remains of a ‘drowned world’ with a population of tens of thousands – which might once have been the ‘real heartland’ of Europe.

A team of climatologists, archaeologists and geophysicists has now mapped the area using new data from oil companies – and revealed the full extent of a ‘lost land’ once roamed by mammoths….

The area was once the ‘real heartland’ of Europe and was hit by ‘a devastating tsunami’, the researchers claim. The wave was part of a larger process that submerged the low-lying area over the course of thousands of years.

Those are my recommendations for today.  Now it’s your turn.  What are you reading and blogging about?

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25 Comments on “Thursday Reads: Mitt Romney, Casino Capitalist, and Other News”

  1. RalphB says:

    Great roundup BB. The Rmoney articles would cook his goose if they were known widely enough and really pushed. I think the Obama campaign is gonna try to toast him with them. Robert Reich is right about the party though.

    If the Higgs Boson data is good enough for Hawking then I consider if well blessed. Should open up a whole generation of additional questions for physicists. Fun times ahead for them.

  2. RalphB says:

    The Rmoneys are apparently irony free, since their campaign has been so kind to Obama. 🙂 I guess Willard’s opponents aren’t supposed to fight back.

    Ann Romney: Obama’s whole campaign strategy is “let’s kill this guy”

    From what I’ve read Jan Crawford, CBS chief political correspondent, is a close friend of Clarence and Ginni Thomas and a reliable Federalist hack. CBS may turn into Fox this campaign season.

    • bostonboomer says:

      I was just about to post that. Poor Ann. Mean old Obama is telling awful lies about her husband. She can’t figure out why people don’t like him, so it must be Obama’s fault. He must have poisoned Massachusetts voters against him too, since he was too unpopular to seek reelection as Governor.

      • Pat Johnson says:

        Whoever “the real Romney is” (and from what we have seen so far, he does not come across as anywhere near “authentic”) he has sold his soul for the chance to be POTUS.

        He is “owned” by the Radical Right, Wall Street, and Grover Norquist. He is advised by the neo cons who served under George W. Bush. He has twisted, bent, contorted, walked back, and spun every issue on his path to the WH. He cannot tell the truth to save himself.

        The issue isn’t Obama, the economy, the EU, or any other issue that is before us today. The issue is Mitt himself. There’s just “no there there” that is plaguing him and has for years.

      • ANonOMouse says:

        What Pat said!!!! 🙂

  3. Pat Johnson says:

    Wonderful round up, bb!

    But I demand to see Mitt Romney’s birth certificate and passport! With all his money hidden away in off shore accounts and Swiss banks, exactly which country does he swear his allegiance to?

    To suggest this man is a “patriot” when he goes to such lengths to hide his wealth along with his tax filings, how deep does his “love of country” go? Seems to me he has worked out a system that allows him to keep most of the money he has “earned” (said faceticiously) by creating accounts that are essentially untraceable.

    As for HIggs-boson, I make no claim to even begin to understand the theory but I applaud those who have made science their lifelong study in trying to get to the origin of creation which makes “creating the universe in 7 days” such a silly myth.

  4. ANonOMouse says:

    BB….I’m glad you decided to follow-up on this story, Like so many of Mitt’s contradictions, it’s going to be an anchor around his neck. His life has been solely about personal wealth enhancement, not about a commitment to protecting American jobs or American investments. And the possiblity that some of these investment tools are laundering money is devastating if it is possible to prove.

    FYI…..The ODS crowd at WND is still working to remove Obama from State ballots and to prove that Obama is “teh other” by claiming that a 15 yr old Barack acquired an illegal Social Security number. How stupid!!!! These folks never quit

    http://www.wnd.com/2012/07/obamas-social-security-number-challenged/

  5. bostonboomer says:

    The Wall Street Journal is afraid that Eric “Etch-a-Sketch” Fehrnstrom and Mitt’s latest flip-flop will kill his chances to beat Obama.

    If Mitt Romney loses his run for the White House, a turning point will have been his decision Monday to absolve President Obama of raising taxes on the middle class. He is managing to turn the only possible silver lining in Chief Justice John Roberts’s ObamaCare salvage operation—that the mandate to buy insurance or pay a penalty is really a tax—into a second political defeat.

    Appearing on MSNBC, close Romney adviser Eric Fehrnstrom was asked by host Chuck Todd if Mr. Romney “agrees with the president” and “believes that you shouldn’t call the tax penalty a tax, you should call it a penalty or a fee or a fine?”

    “That’s correct,” Mr. Fehrnstrom replied, before attempting some hapless spin suggesting that Mr. Obama must be “held accountable” for his own “contradictory” statements on whether it is a penalty or tax. Predictably, the Obama campaign and the media blew past Mr. Fehrnstrom’s point, jumped on the tax-policy concession, and declared the health-care tax debate closed.

    For conservative optimists who think Mr. Fehrnstrom misspoke or is merely dense, his tax absolution gift to Mr. Obama was confirmed by campaign spokeswoman Andrea Saul, who tried the same lame jujitsu spin. In any event, Mr. Fehrnstrom is part of the Boston coterie who are closest to Mr. Romney, and he wouldn’t say such a thing without the candidate’s approval.

    Even though it’s clear that Romney himself was behind the “gaffe,” the conservatives all seem to want Romney to dump Fehrnstrom. Rupert Murdoch sure thinks he’s an amateur.

    • Pat Johnson says:

      I am convinced that there are enough voters out there whose hatred of Obama, real or imagined, allows them to consider voting for the likes of Mitt Romney regardless of the gaffes, the lies, the spin, the “nothingness” that is Mitt. As he has said himself, his goal is that 50.1% to carry him over the finish line.

      The imbalance is their constant drumbeat against “anything Obama” while casually looking the other way about the GOP and the policies they present as they continue their assault against women, the poor, and the middle class.

      I’m no fan of Obama but the alternative is frightening. And yes, for me it is important to consider “the lesser of two evils” this time around if having a solid GOP congress is the goal.

      “This way” to the Ryan Budget, SC picks, and the deregulation of air, water and food supplies if this crowd gets their way. Along with other major cutbacks that affect the rest of us, this is where we should be focusing our attention rather than whose wife is more appealing or whose kids are picture perfect.

      • bostonboomer says:

        For the life of me, I can’t understand why any working- or middle-class person would vote to have his or her own taxes raised, social services decimated, social security and medicare destroyed, salaries lowered, jobs shipped overseas, and public lands handed over to oil companies. Are these people stupid, delusional, ignorant, or all of the above?

      • RalphB says:

        Personally I don’t find anything about the Romneys to be appealing. But if I did, I would never vote for him because of what would come in with him. He’s out of the question.

  6. bostonboomer says:

    Last night San Diego accidentally shot off all their fireworks at once a few minutes before the display was supposed to start.

    Port District authorities said a “technical difficulty” resulted in all the fireworks going off at once.

    About 5 minutes before the show was supposed to start, a sudden burst of fireworks shot into the air near the bay. Throughout downtown San Diego, a large rumble could be felt just before 9 p.m. on Wednesday night.

    It appeared that hundreds of fireworks were set off at the same time. The explosions lasted a few seconds.

    At about 9:20 p.m., people waiting for the display were told to return home. The fireworks show was canceled, a radio announcement said.

    • ANonOMouse says:

      A Premature Celebration!

      • bostonboomer says:

        Sadly, there was a comparable explosion on the deck of a private home in New Hampshire that injured 11, including badly burning two toddlers who were airlifted to Boston. There was a huge fireball and mushroom cloud, according to the neighbors.

        Why would anyone keep a pile of fireworks on the deck? I think fireworks should be illegal for anyone to handle except for professionals. But they are legal in NH.

      • bostonboomer says:

        Also in NH, four kids were badly injured when they put sparklers into a glass bottle and it exploded. One had to be airlifted to Mass. General in Boston.

      • RalphB says:

        These kind of accidents happen every year but people just refuse to learn from them.

      • ANonOMouse says:

        I live in one of those areas where we haven’t had rain, except for a few sprinkles, in about 2 months and we’ve had 100+ temps for several weeks in a row. Fireworks were banned due to the dry conditions, YET, folks in my neighborhood began shooting off fireworks 2 days before the 4th. There were a couple of yard fires nearby because of it, but that’s not stopped them.

        I haven’t been a fan of fireworks since a cherry-bomb exploded in my hand when I was 10. I had a very serious hand injury, stitches, bruising, I lost all of my fingernails on that hand. I learned about the dangers of fireworks the hard way.

  7. bostonboomer says:

    Joe Williams, the reporter who was fired for saying that Romney is more comfortable around people like those on Fox News Sunday (white, wealthy, and conservative) was on probation for assaulting his ex-wife early this year. Fishbowl DC heard this from the ex-wife:

    “I can’t comment on a legal case but will say that I sincerely hope that Joe Williams finds his professional footing and that he also begins to take seriously his responsibilities as the father of our two children.”

  8. bostonboomer says:

    Wikileaks publishes millions of Syrian e-mails.

  9. RalphB says:

    Preliminary private sector jobs look pretty good. Of course, public sector losses would drag it down and who knows what the BLS will report tomorrow?

    Private survey: US economy added 176K jobs in June

    WASHINGTON — A private survey shows U.S. businesses increased hiring in June, suggesting the job market could be recovering after three sluggish months.

    Payroll provider ADP says businesses added 176,000 jobs last month. That’s better than the revised total of 136,000 jobs it reported for May.

    The report only covers hiring in the private sector and excludes government job growth. The Labor Department will offer a more complete picture of June hiring on Friday.

    The ADP survey offered some hope that hiring is picking up. But it has often deviated sharply from the government report. In May, the Labor Department said employers added just 69,000 jobs, the fewest in a year and nearly half ADP’s estimate.

    • bostonboomer says:

      Obama needs to explain very plainly what is happening to public sector jobs because states have no money.

  10. bostonboomer says:

    George Zimmerman’s bail has been set at $1 million.

  11. Oh, this is wonderful…thanks BB