The Bane of Bain

I have to write about this.  The recent media hoopla surrounding Cory Booker’s comments about Bain Capital just put me over the top.  I guess it’s just an occupational hazard with me. I teach this stuff. I study this stuff. I know the difference between venture capital, capital angels, and corporate raiders.  I’m wondering how many politicians actually grok this.  Oddly enough, Romney’s Republican primary rivals knew the difference before they were forced to tow the Romney line.  I did watch Newt Gingrich last night on Piers Morgan (only because Lama was here and it was on)  and he doesn’t seem to be able to fully embrace the Bain Mission.The best Gingrich could say was it was a better job than any thing Obama has done. He said something obligatory about Obama raiding the tax payer’s funds.   Gingrich still knows what Romney did is not from the positive ledger side of equity capital firms.

Venture capitalists are wonders to be hold and represent the best of the best.  These guys take on tremendous amounts of risk and usually bring a lot of business acumen to a start up firm.  Frequently, start up firms are high tech and ran by nerdy scientists who are great in labs and on computers.  They known nothing of financing, bringing products to market, or monetizing an investment.  This is a true partnership of great minds and money.  This is not what Mitt Romney did when he was CEO of Bain Capital.  Romney’s firm could’ve been a contender in the angel category except that’s not what he did either.  Warren Buffet has been an angel investor many times. Romney’s firm basically ran like a pack of hyenas to a company that was struggling and used the law to extract its life force.

Ralph B reminded me of several articles that have been out there written by financial economist wonks like me explaining why Romney never got a hero’s welcome in the past and should not get a pass right now.  Putting corporate raiders into the same pile as the rest of equity capital firms is like saying cancer is just basically another cell that exists in your body.

Here’s three excellent points by Konczal on why Romney isn’t an angel or a venture capital hero.  Romney’s firm played the sociopathological side of the equity capital game. They were serial killers.

1. Tax/regulatory loopholes. I did an interview with Josh Kosman, author of The Buyout of America, where he argued that the whole point of the enterprise is to game tax law loopholes. Private equity “saw that you could buy a company through a leveraged buyout and radically reduce its tax rate. The company then could use those savings to pay off the increase in its debt loads. For every dollar that the company paid off in debt, your equity value rises by that same dollar, as long as the value of the company remains the same.”

A recent paper from the University of Chicago looking at private equity found that “a reasonable estimate of the value of lower taxes due to increased leverage for the 1980s might be 10 to 20 percent of firm value,” which is value that comes from taxpayers to private equity as a result of the tax code.

That’s one thing in an industry with large and predictable cash flows. But after those low-hanging fruits were picked, as Kosman explained, “firms are taken over in very volatile industries. And they are taking on debts where they have to pay 15 times their cash flow over seven years — they are way over-levered.”

This critique has power as far as it goes. But let’s combine it with another issue.

2. Risk-shifting among parts of the firm. Traditional “creative destruction” is about putting rivals out of business with better products and techniques. Leveraged buyouts and private equity are about something different, something that exists within a single firm. This is often described as putting new techniques into place, firing people and divisions that are not performing, and generally making the firm more efficient.

The critique here is that, instead of making the firm more efficient, it often simply shifts the risks into different places. As Peter Róna, head of the IBJ Schroder Bank & Trust in New York, described it in 1989:

The very foundation of the LBO is the current actual distribution of hypothetical future cash flows. If the hypothesis (including the author’s net present value discounted at the relevant cost of capital) tums out to be wrong, the shareholders have the cash and everyone else is left with a carcass. “Creating shareholder value” and “unlocking billions” consists of shifting the risk of future uncertainty to others, namely, the corporation and its current creditors, customers, and employees…

The notion that underleveraging a corporation can cause problems is neither new nor unfounded. What is new is the assertion that shareholders shouid set the proper leverage because, motivated by maximizing the return on their investment, they will ensure efficiency of all factors of production. This hypothesis requires much more rigorous proof than Jensen’s episodic arguments… although Jensen denies it, the maximization of shareholder returns must take place, at least in part, at someone else’s expense.

Shareholders gain, but at the expense of other stakeholders in the firm. This isn’t the normal winner/loser dynamic, where some suffer in the short-term to do what’s best for the long-term. Here the long-term suffers to create short-term winners. Once again, this issue becomes problematic when combined with another critique.

3. Dividend looting. The theory behind private equity, as Róna caught above, is that it requires shareholders to be the proper and most efficient group to set the leverage ratio. But what if, instead of setting leverage for the long term to make the firm more efficient, shareholders simply use additional debt to pay themselves, regardless of the health of the firm? As Josh Kosman put it:

If you look at the dividends stuff that private equity firms do, and Bain is one of the worst offenders, if you increase the short-term earnings of a company you then use those new earnings to borrow more money. That money goes right back to the private equity firm in dividends, making it quite a quick profit. More importantly, most companies can’t handle that debt load twice. Just as they are in a position to reduce debt, they are getting hit with maximum leverage again. It’s very hard for companies to take that hit twice…

The initial private equity model was that you would make money by reselling your company or taking it public, not by levering it a second time…Right after this goes on for a few years, you’ve starved your firm of human and operating capital. Five years later, when the private equity leaves, the company will collapse — you can’t starve a company for that long. This is what the history of private equity shows.

The biggest difficulty I have with all this political back and forth is that Republicans and Democrats will take money from Wall Street as political donations without really looking at the individual or the firm.  Some private equity firms are value-added.  Others basically remove value from the US economy. Romney falls into the looter baron role.  However, Booker and Obama have both taken political donations from all breeds of these guys. So, they may not have closed down the companies or bootstrapped Yahoo, but they’ve been in on the spoils.

Again, let’s look at what some of Romney’s Republican rivals said.

1. “The idea that you’ve got private equity companies that come in and take companies apart so they can make profits and have people lose their jobs, that’s not what the Republican Party’s about.” — Rick Perry [New York Times, 1/12/12]

2. “The Bain model is to go in at a very low price, borrow an immense amount of money, pay Bain an immense amount of money and leave. I’ll let you decide if that’s really good capitalism. I think that’s exploitation.” — Newt Gingrich [New York Times, 1/17/12]

3. “Instead of trying to work with them to try to find a way to keep the jobs and to get them back on their feet, it’s all about how much money can we make, how quick can we make it, and then get out of town and find the next carcass to feed upon” — Rick Perry [National Journal, 1/10/12]

4. “We find it pretty hard to justify rich people figuring out clever legal ways to loot a company, leaving behind 1,700 families without a job.” — Newt Gingrich [Globe and Mail, 1/9/12]

5. “Now, I have no doubt Mitt Romney was worried about pink slips — whether he was going to have enough of them to hand out because his company, Bain Capital, of all the jobs that they killed” — Rick Perry [New York Times, 1/9/12]

Even the media doesn’t know a damn thing about the variants of equity capital firms. ABC appears to be joining FOX news in spreading stupid tropes and canards.

Private-equity firms aren’t supposed to create jobs; they’re supposed to make money for their investors, which to a large extent include pension funds and university endowments. The companies in which they invest are sometimes on the brink of failure to begin with, and are likely to go bankrupt without outside help. These risky investments often include making decisions like cutting costs and jobs.

But in the little-understood world of private equity, Obama has seized upon a basic formula — Romney and Bain plus companies equals some lost jobs and millions for Romney — to argue that he’s unfit for the Oval Office.

Defending the Bain ad, Obama spokesman Ben LaBolt said the campaign isn’t “questioning the purpose of the private-equity business as a whole.”

“Why did Romney and his partners succeed even if the company failed?” LaBolt asked rhetorically on a conference call.

Probably because private-equity firms don’t necessarily rise and fall with the companies in which they invest. Finance experts explained that faced with a decision over bankruptcy, those firms are obligated to protect their investors, not the workers at the company. Pumping more money into a company that has shown signs of failure isn’t as smart a move business-wise as cutting losses to save investors money.

Actually, angels and venture capitalists do exactly all of that and make money if they do it right.   The above description is just whacked. I’d drum a student out of my corporate finance class that tried to offer this up.  But, the media can print just about any old thing it wants to and get away with it.  Most private equity firms are NOT corporate raiders. There are even funds that do project financing that help Governments build things like dams, highways and universities.  Gordan Gecko’s way of business is not the life blood of the private equity market.  They can provide seed money, start-up money, expansion and development money and a lot of money that isn’t based on gutting existing businesses. Some specialize in transfers of power from a sole owner who is retiring to a new group of owners.  Most don’t drain the firms of capital when they leave either.  Romney was a pirate not some kind of private enterprise swashbuckler.

Enuf said.

Okay, so that’s my lecture\rant for the day.  I’m going back to grading papers now.  That is all.


Why is Romney the Almost-Human?

Everybody — well, me, and Charles Pierce, and bostonboomer, and well, everybody — sees him as a stiff awkward robot with less charm than a Roomba.
Roomba robotic vacuum cleaner with lights on. Photo: benfulton, cc on flickr

Yes, that’s at least partly because he’s a rich guy who has to mix with the rubes on nothing stronger than caffeine-free Coke. And it’s partly because he’s been lying for votes for so long, it takes more and more time to get the right lies out of storage. A Roomba doesn’t have to do either of those things.

But, really, are those issues unusual for a politician? They all have to campaign among the manyheaded and sanitize their hands every few minutes. They all lie like tombstones, and we know it. So what is it with Romney? Why are the other politicians just doing what politicians do, but Romney gets called a robot?

I’m beginning to think that maybe it’s because he’s so bad at lying. It’s written all over his face that he doesn’t believe any of the drivel himself, that he’s reading his speeches to the proletariat because that’s what you have to do, that he’s going through the motions.

He’s such a bad liar, we can see him doing it. But truth-telling is so far off the table it’s in the Marianas Trench somewhere. That means we have to examine the only alternative. Good liars.

In the RE (Rove Era), elections are about piling on the most stimulating lies. For three and a half years we’ve had someone doing pretty much the diametric opposite of everything he campaigned on, and when he goes out campaigning now … people still believe him when he says the next four years will be different. He’s one of the best liars in all history.

It’s like a choice between being swindled out of your money or your house. Both alternatives are repulsive, but with a bad liar, we might be on our guard and actually get ripped off less. With a sweet-talking bamboozler, in Vastleft’s inimitable words, half the country accepts it while the other half demands even worse.

Crossposted from Acid Test

Monday Reads

Good Morning!

Lots of things don’t surprise me these days.  That would include the news that Clinton and Obama were more fiscally conservative than either of the Bush presidents or Ronald Reagan or Nixon or Ford.  For that matter, Carter came in third. Once again, evidence shows that Republican memes are lies.  Here’s a list of possible excuses for the Republican binges.

Let me anticipate some of your objections before you make them. (1) Reagan was fighting a war, he jacked up defense spending instead of discretionary spending, and he inherited a recession with inflation that might, well, inflate his numbers. This is all true, but expanding defense was Reagan’s choice, and a dollar spent, on no matter what, is a dollar taxed or borrowed. (2) Bush was fighting a war and battling a recession, too. Yes, but he had neither inflation nor a Great Recession. (3) Don’t play relativity games with me…too much government spending is too much government spending, even if Obama’s predecessors were worse! There is a time for government cuts, but it’s not when you have 9 percent unemployment and your interest rates are below 2%. (4) The language of Obamacare and financial reform are better indicators of big government than federal spending. It’s fair to measure government size by its total involvement in people’s lives, but that deserves a longer post. (5) We should be more concerned about the taxes and spending to come than the spending that has past. But they haven’t happened yet, so they’re not part of the president’s record.

Economix shows us how the recession has decreased the number of people that have health insurance. Some have lost coverage due to job loss. Some have lost insurance because their employers have scaled down benefits.

The share of children and working-age adults who had insurance through an employer fell 10 percentage points during the last recession, according to a study released on Thursday by the Center for Studying Health System Change, a nonpartisan research group in Washington.

From 2007 to 2010, the share of children and working-age adults with employer-sponsored coverage fell  to 53.5 percent from 63.6 percent, according to the study.

The major contributor to the decline was the loss of employment during the downturn, with almost a third of the people younger than 65 living in a family where no one was working, according to the study. The study is based on the center’s 2007 and 2010 Health Tracking Household Surveys.

The surge in unemployment, coupled with the steady deterioration of the number of employers offering coverage and the number of workers signing up for insurance, is causing a “steady erosion” in employer-based coverage, said Chapin White, a senior researcher at the center who is an author of the study.

I wrote a post on Saturday on how  the Obama administration seems to have back pedaled on its birth control coverage mandate for all but strict religious organizations.  It appears that by providing self-insurance, organizations can avoid having private insurers providing the benefit for them.  This would mean many schools, universities and hospitals–large employers of women–could avoid the mandate to provide women’s preventative health care.

Taking a conciliatory tone and asking for a wide range of public comment, the Obama administration announced this afternoon new accommodations on a controversial mandate requiring contraceptive coverage in health care plans.

Coming after a month of continued opposition from the U.S. bishops to the mandate, which was first revised in early February to exempt certain religious organizations, today’s announced changes from the Department of Health and Human Services make a number of concessions, including allowing religious organizations that self-insure to be made exempt.

It appears that the Administration has no problem with religious institutions discriminating against women or persons that don’t hold their specific views.

Romney’s won the Puerto Rican primaries.  While the delegates are apportioned, Romney’s margin of victory will still give him the entire delegation.

Mitt Romney will win Sunday’s Republican presidential primary in Puerto Rico, CNN projects, based on vote results obtained from local party and election officials.

At 8:35 p.m. ET, with about 23% of total ballots accounted for, the former Massachusetts governor had a substantial lead with more than 25,000 votes — or 83% of the vote.

Rick Santorum was a distant second, at 8% with slightly more than 2,500 votes.

The other two candidates, former House Speaker Newt Gingrich and Texas Rep. Ron Paul, were further behind with 2% and 1% of the vote, respectively.

Speaking at a rally Sunday night in Vernon Hills, Illinois, Romney said that Puerto Rican voters were clear about which of the four candidates “most represent their feelings” — and especially their desire to nominate someone who can bring about a stronger economy and smaller government. He said his party can appeal to Latinos, and win the presidency, with a low-tax, pro-business message.

I’ve been watching this story unfold with absolute horror.  This one has the feel of something that will make the wind change.  Seventeen year old Trayvon Martin was killed by a neighborhood watch “captain” with a police fantasy and a racist mindset.  The more you hear about his killer, the more it will make you wonder about who lives in your neighborhood.

On February 26, 2012, a 17-year-old African-American named Trayvon Martin was shot and killed in Sanford, Florida. The shooter was George Zimmerman, a 28-year-old white man. Zimmerman admits killing Martin, but claims he was acting in self-defense. Three weeks after Martin’s death, no arrests have been made and Zimmerman remains free.

Here is what everyone should know about the case:

1. Zimmerman called the police to report Martin’s “suspicious” behavior, which he described as “just walking around looking about.” Zimmerman was in his car when he saw Martin walking on the street. He called the police and said: “There’s a real suspicious guy. This guy looks like he’s up to no good, on drugs or something. It’s raining and he’s just walking around looking about… These a**holes always get away” [Orlando Sentinel]

2. Zimmerman pursued Martin against the explicit instructions of the police dispatcher:

Dispatcher: “Are you following him?”
Zimmerman: “Yeah”
Dispatcher: “OK, we don’t need you to do that.”

[Orlando Sentinel]

3. Prior to the release of the 911 tapes, Zimmerman’s father released a statement claiming “[a]t no time did George follow or confront Mr. Martin.” [Sun Sentinel]

4. Zimmerman was carrying a a 9 millimeter handgun. Martin was carrying a bag of Skittles and a can of iced tea. [ABC News]

5. Martin weighed 140 pounds. Zimmerman weighs 250 pounds. [Orlando Sentinel; WDBO]

6. Martin’s English teacher described him as “as an A and B student who majored in cheerfulness.” [Orlando Sentinel]

7. Martin had no criminal record. [New York Times]

8. Zimmerman “was charged in July 2005 with resisting arrest with violence and battery on an officer. The charges appear to have been dropped.” [Huffington Post]

9. Zimmerman called the police 46 times since Jan. 1, 2011. [Miami Herald]

10. According to neighbors, Zimmerman was “fixated on crime and focused on young, black males.” [Miami Herald]

11. Zimmerman “had been the subject of complaints by neighbors in his gated community for aggressive tactics” [Huffington Post]

12. A police officer “corrected” a key witness. “The officer told the witness, a long-time teacher, it was Zimmerman who cried for help, said the witness. ABC News has spoken to the teacher and she confirmed that the officer corrected her when she said she heard the teenager shout for help.” [ABC News]

13. Three witnesses say they heard a boy cry for help before a shot was fired. “Three witnesses contacted by The Miami Herald say they saw or heard the moments before and after the Miami Gardens teenager’s killing. All three said they heard the last howl for help from a despondent boy.” [Miami Herald]

14. The officer in charge of the crime scene also received criticism in 2010 when he initially failed to arrest a lieutenant’s son who was videotaped attacking a homeless black man. [New York Times]

15. The police did not test Zimmerman for drugs or alcohol. A law enforcement expert told ABC that Zimmerman sounds intoxicated on the 911 tapes. Drug and alcohol testing is “standard procedure in most homicide investigations.” [ABC News]

The police down here in New Orleans are considered to be so out of control that the DOJ may be taking over operations shortly.  We also have had several suspicious shootings down here recently. 

New Orleans police officials confirmed Thursday that the 20-year-old man who was fatally shot by a plain-clothed narcotics officer during a drug raid at a Gentilly house a day earlier was unarmed. New Orleans police officer Joshua Colclough, 28, fired a single shot Wednesday evening that killed Wendell Allen, 20. Police officials were guarded in their comments about the shooting Thursday, citing the ongoing investigation.

“We have not been able to yet completely understand what exactly occurred,” Police Superintendent Ronal Serpas said Thursday.

The shooting took place inside a red-brick, two-story home at 2651 Prentiss Ave. in Gentilly. Officers were executing a search warrant at the home following a days-old probe of marijuana dealing. Serpas said officers later found drug paraphernalia and 138 grams of marijuana — about four and a half ounces — inside the residence.

It was the second fatal shooting of a suspect by police within a week in the NOPD’s 3rd District, a relatively sleepy swath of residential neighborhoods that stretch from Lakeview through Gentilly. In last week’s incident, in Mid-City, two officers were badly injured in a gunfight before the alleged gunman, 20-year-old Justin Sipp, was killed by police gunfire.

Here’s another horrifying story from NY.

A trans woman says that when she was arrested for a minor subway violation, NYPD officers belittled her, called her names, asked about her genitals — and kept her chained to a fence for 28 hours. Now she’s suing. And it turns out she’s far from alone.

In her lawsuit, Temmie Breslauer says she was arrested on January 12 in a subway station for illegally using her dad’s discount fare card (only seniors and people with disabilities can get these). She says the arresting officers — the suit names one, Officer Shah — laughed at her. When they took her to the station, a desk sergeant asked her “whether she had a penis or a vagina.” Breslauer explained that she was in transition. Then, instead of putting her with female inmates or in her own room, the department allegedly chose this course of action:

[S]he was fingerprinted, seated on a bench, then painfully chained to a fence wherein, for no apparent reason, her arm was lifted over her head and attached to the fence to make it appear that she was raising her hand in the classroom. She sat there in that position for 28 hours.

She also says officers not only refused to call her “she,” they instead referred to her as “He-She”, “Faggot,” and “Lady GaGa,” and asked her “So you like to suck dick? Or what?” Meanwhile, people arrested for the same minor crime (misdemeanor “theft of services”) she was were calmly processed and allowed to leave. Finally, she was able to go before a judge, who gave her two days of community service. She says the whole ordeal aggravated her existing PTSD and left her sleepless and suicidal.

Makes you wonder what ever happened to honest, decent people, doesn’t it?

So, what’s on your reading and blogging list today?

Evening News: Before the results…

We will be having a live blog tonight as the results for the Michigan and Arizona Primaries come in. Michigan polls close at 8pm local time and Arizona’s closes at 7pm local time.

So before the “fun” begins, I thought it would be good to get the evening news roundup out-of-the-way.

First some humor…then the tough stuff…and then the finale…its a good one.

You just know the comedians and satirists are itching for a Santorum nomination.

Yup, that is about the right shade of pea green…don’t you think.

Now for the news…

I wonder how long it will take the clown brigade to hop on this news item from the Washington Post:  Portions of 9/11 victims’ remains taken to landfill, report says –

Some small portions of unidentified human remains recovered from the Sept. 11, 2001, terrorist attacks on the Pentagon and in Shanksville, Pa., were incinerated and ultimately dumped in a landfill, the Defense Department acknowledged Tuesday.It was the first time that the Pentagon has said that some remains of Sept. 11 victims taken to the Dover Air Force Base mortuary later ended up in a landfill.

We have a suit and pair of shoes tucked away in our basement that has human remains and ash from the towers…my guess is lots of those remains went home on the trains and buses on September 11th, 2001.

I just don’t like these people using someone’s misery to campaign against each other.

Here are some links about the results expected today…you can pretty much guess what is being said.

After Many Momentum Shifts, Michigan Is Too Close to Call –

People sometimes apply the term “tossup” a bit too broadly, using it to refer to anything close enough that they don’t want to render a prediction about it.

In Michigan, however, the term is appropriate. Rick Santorum, who once trailed Mitt Romney badly in the state, then surged to a clear lead there, then saw Mr. Romney regain his footing and pull back ahead, appears to have some late momentum in the race — perhaps just enough to win, and perhaps not.

In fact, after adding in a poll from Public Policy Polling that showed Mr. Santorum ahead by five points in interviews conducted on Monday night, our forecast model of the state briefly showed a tie, with Mr. Romney and Mr. Santorum each at 37.6 percent of the vote.

George Stephanopoulos has this question…which is on everyone’s minds. /snark. What Happens if Rick Santorum Wins Michigan?

That’s the question I asked ABC News contributor Matt Dowd ahead of tonight’s primary. Mitt Romney has been bouncing up and down in the polls of his home state, and is now neck and neck with Rick Santorum.

“If Rick Santorum wins tonight it’s the equivalent of a 9.0 on a Richter scale. I mean it is going to shake Washington, it’s going to shake Republican establishment it’s just going to shake things to their very core,” Dowd told me. “And I think what you’re going to see are the conversations that have been going on behind quiet doors saying we need another candidate in this race.”

But how can another Republican jump in?  After Super Tuesday, the filing deadlines will be open in only seven states.  Even if a candidate can manage to get on the ballot – and win every one of those states – he or she will still have fewer than a third of the delegates needed for the nomination.

Dowd says Republicans could recruit another candidate to shake things up and “demonstrate that these guys are not the guys that are most electable.”

“They may not be able to win the number of delegates, but if nobody gets the majority of the delegates going into the convention, if somebody comes out from behind the scene and shows up tomorrow or in the next week or two they could actually show that they could win this,” Dowd said on “GMA.”

Video interview at the link.

Whoa…What a minute…did someone say something about recruiting other candidates?  Huh? Still pushing that meme I see…Damn they really hate Mittens.

And only after backlash like those cartoons up top has Santorum walked back his vomit comment.

Santorum regrets ‘throw up’ response to Kennedy speech

Rick Santorum regrets saying that he wanted to “throw up” in response to watching a video clip of President John F. Kennedy’s 1960 speech about the separation of church and state.

“I wish I had that particular line back,” Santorum said Tuesday on Laura Ingraham’s radio show.

From that display of histrionics yesterday while defending his remarks, I don’t think he really wants to take that line back…

I know that you’ve heard me say it before, never underestimate the power of the Jesus Freaks. Case in point: Santorum on top in second straight Ohio poll

I guess I should also add violence loving Waffle House customers to that list as well: How Mitt Romney booked Kid Rock

And now for the finale…this is for all those sheep out there voting for Santorum in Michigan, because the big orange site told you to:   ‘Oldest sheep’ dies after falling off cliff

I cannot embed the video, but you have to watch it…and listen to what the owner says. It is priceless!

A ewe, thought to have been a contender for the title of world’s oldest sheep, has died after falling off a cliff.

An ear tag on the blackface ewe, nicknamed Methuselina, showed that she was 25 years and 11 months old.

Her owner, John Maciver, said he her longevity down to her good teeth which allowed her to graze easily.

See you all later tonight!

Wednesday Reads: Strange Coincidences

Abruzo Italy vintage travel poster

Good Morning

Yesterday was a sort of strange day for Santorum of the Frothy. I don’t know if it just was the typical reaction to the new front runner…but it was like some people suddenly realized this guy…this is not my kind of guy.

Rick Santorum defends Satan comments

Santorum told roughly 200 supporters at a rally here that when candidates veer from “very structured, very ordered events,” voters believe they have to “worry about everything he says.”
“No, you don’t, because I’ll defend everything I’ll say,” Santorum told the applauding crowd, pledging to “tell you the truth about what’s going on in this country.”

Santorum didn’t specifically mention the four-year-old speech from Ave Maria University in Florida, from which the Satan comments came, or a number of other statements on the campaign trail that have raised eyebrows in recent days, including remarks that some say called into question President Barack Obama’s Christian faith. Questions have also arisen over comments Santorum made that appeared to compare the Obama presidency to the rise of Nazism before World War II and remarks about prenatal testing.

Asked about the Ave Maria speech by reporters following the Phoenix rally, Santorum called the question “a joke” and “absurd.”

“You know … I’m a person of faith. I believe in good and evil. I think if somehow or another because you’re a person of faith you believe in good and evil is a disqualifier for president, we’re going to have a very small pool of candidates who can run for president,” Santorum said.

Santorum said questioning whether he believed Satan was attacking America was “not relevant.”

“Look, guys, these are questions that are not relevant to what’s — what’s being discussed in America today. What we’re talking about in America today is trying to get America growing. That’s what my speeches are about, that’s what we’re going to talk about in this campaign,” Santorum said.

“If they want to dig up old speeches of talking to [a] religious group, they can go ahead and do so, but I’m going to stay on message and I’m going to talk about things that Americans want to talk about, which is creating jobs, making our country more secure, and yeah, taking on the forces around his world who want to do harm to America, and you bet I will take them on.”

I am not sure that this is really a defense of his Satanic comments…

“Ronald Reagan did it. He called the Soviet Union an evil empire and the media went wild,” he said. “How dare you, how dare you ascribe terms like good and evil to regimes? Because Ronald Reagan told the truth, he didn’t sugarcoat it. He went out and called it the way it was. He went out and promoted the values of our country.”

It all seems so comic…doesn’t it?  Hmmm….what could be causing Santorum to act this way?  Could it be….Satan?

Uh…okay then…good luck with all that.

One thing is funny about these last remaining GOP candidates, they all seem mentally ill. We all know people who are like these dudes, they are the ones who you avoid when their name pops up on caller id. They are the guys you make excuses to when invited over to their house on game day. Lets face it…they are the people who you never feel quite right about. The kind of guy who is described by neighbors to local news stations after the police tape has been put up around his house as, “He was weird, I always knew it would end up this way. There was just something not right about that guy…”

There were some other revelations yesterday that did not involve frothy dick, check it out. Pet abuse seems to run in the Romney family. Seamus Was Not The Only One! – The Dish | By Andrew Sullivan – The Daily Beast

Screen shot 2012-02-21 at 12.41.11 PM

That is from the cross-country travel blog of Craig Romney and friends in 2009. It’s a pet fish that didn’t fit into the crammed truck used for the road trip. Inquiring minds immediately want to know. Did it eventually travel inside the truck? Did they strap it to the roof and have it constantly sprayed with water? Did they just suspend it from the bumper, Clark Griswold style, because it enjoyed the view? Here’s Craig’s caption – and, no, I am not making this up, Gail, I promise:

our fearless sidekick. this fish has cheated death more times than i can remember

Wow, there is a sadistic quality to that comment.

There is something wrong with these people.

The rest of today’s links will be quick ones, because glancing at the clock, I see it is 6:40 am and this post should have been published 10 minutes ago.

Virginia Delays Ultrasound Vote I wonder if it could have anything to do with the “optics” of these transvaginal ultrasounds. Jon Stewart Explains Ultrasound Law To GOP: ‘A TSA Pat-Down In Your Vagina’ 

Nuclear Inspectors Say Iran Mission Has Failed –  did we really expect anything less?

Iceland Provides Blueprint for How to Deal With the Financial Crisis Hang on…isn’t this the country that refused to bail out the banks?

Icelanders who pelted parliament with rocks in 2009 demanding their leaders and bankers answer for the country’s economic and financial collapse are reaping the benefits of their anger.

Since the end of 2008, the island’s banks have forgiven loans equivalent to 13 percent of gross domestic product, easing the debt burdens of more than a quarter of the population, according to a report published this month by the Icelandic Financial Services Association.

So does the story end there? Did the people revolt and the banks give in, leading to a lower standard of living or some financial disaster or something? No. Debt deleveraging successfully brought back the Icelandic economy.

The island’s steps to resurrect itself since 2008, when its banks defaulted on $85 billion, are proving effective. Iceland’s economy will this year outgrow the euro area and the developed world on average, the Organization for Economic Cooperation and Development estimates. It costs about the same to insure against an Icelandic default as it does to guard against a credit event in Belgium. Most polls now show Icelanders don’t want to join the European Union, where the debt crisis is in its third year.

The island’s households were helped by an agreement between the government and the banks, which are still partly controlled by the state, to forgive debt exceeding 110 percent of home values. On top of that, a Supreme Court ruling in June 2010 found loans indexed to foreign currencies were illegal, meaning households no longer need to cover krona losses.

We’ve heard in this country for the past several years of housing crisis that principal forgiveness rewards bad actors and causes moral hazard, and that we can’t do that to the poor, put-upon banks. Well guess what? Debt write-downs work. They generate a wealth effect among the population, and they help to end balance-sheet recessions and bring about economic growth. What’s more, Icelandic home values came back, just 3% off their September 2008 pre-crisis level. You can take the example of Iceland or you can take the example of the rest of Europe. It’s your choice. But the facts reveal that austerity is counter-productive, while debt forgiveness is extremely productive.

And those Icelandic banksters?

P.S. Here’s another element of the Icelandic comeback: they are actually prosecuting the people who caused the crisis:

Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.

Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.

Since there has been a lot of talk about “lady parts” this next link is about another organ that most of the GOP dumbasses also lack.

Study: Women Can Be Missing Symptoms Of A Heart Attack

Chest pain is considered the hallmark symptom of a heart attack, but patients can also experience other kinds of pain, and in some cases, none at all. That’s especially true for women, and they can be missing the symptoms.

Researchers say younger women have a greater risk of dying from a heart attack. A new study in this week’s Journal of the American Medical Association indicates that may be because their warning signs are often very different.

Lalina Franklin was having neck and jaw pain. She had no idea she was on the verge of a severe heart attack .

“You think of some really bad pain in your chest and collapsing. I wasn’t having any pain at all in my chest,” Franklin said.

New research shows 42 percent of women under 55 do not feel chest pain during a heart attack. And hospitals often don’t diagnose those women properly until it’s too late.

Symptoms to look out for:

“They might have other symptoms like jaw pain, back pain, shortness of breath, nausea, fatigue and simply sweating. All of these things could be a heart attack,” Steinbaum said.

Steinbaum says for any woman noticing those symptoms, getting help immediately could be critical.

And lastly, if you think there has been a lot of decisions made lately that seem beyond our control, my suggestion is to round up all the misogynistic religious right wing righteous jackasses, you know the “usual suspects” and put them in a rocket heading in the direction of this particular black hole. Because it would probably the only way to send these “good Christians” to hell where most of them belong. Cosmic Hurricane: Black Hole Has 20 Million MPH Winds

Scientists have measured the fastest winds yet observed from a stellar-mass black hole, shedding light on the behavior of these curious cosmic objects.

The winds, clocked by astronomers using NASA’s Chandra X-ray Observatory, are racing through space at 20 million mph (32 million kph), or about 3 percent the speed of light. That’s nearly 10 times faster than had ever been seen from a stellar-mass black hole, researchers said.

“This is like the cosmic equivalent of winds from a Category 5 hurricane,” study lead author Ashley King, of the University of Michigan, said in a statement. “We weren’t expecting to see such powerful winds from a black hole like this.”

I think that we have been seeing a display of these forceful winds coming from the mouths of the GOP for a long, long time.

Okay, that is it…the post is late enough already. What you all reading about today?

Friday Reads

Good Morning!

As you may know, one of my pet peeves is how right wing politicians distort historical figures and quotes to their advantage and very few journalists or people bother to spell check them.  Mitt Romney is going on using a George Patton quote and attributing it to one of my favorite founders, Thomas Paine.  Any one remotely familiar with the 18th century would know that “lead, follow, or get out of the way” couldn’t even be part of the lexicon.  But, never let a good opportunity to skew history the wrong direction get in the way of a pol in heat.

Fred Shapiro, editor of the authoritative Yale Book of Quotations published by Yale University Press, told BuzzFeed that “the notion that Thomas Paine said this is extremely ridiculous.”

“The diction and tone of ‘lead, follow, or get out of the way’ are, of course, far too modern to have been said by Thomas Paine,” Shapiro said.

A similar form of the quote — “push, pull, or get out of the way” — can be traced to a proverb dating back to 1909, according to Shapiro, who is the author of a forthcoming book on notable misquotes. And there is a newspaper mention of the quote from 1961, but it’s from the governor of Ohio. According to Paine biographer Craig Nelson, Paine “never said it. George Patton did.” (You can also find the quote attributed to Patton on the Internet).

In response to a request for comment on the Paine misquote, Romney spokeswoman Andrea Saul noted that the candidate had hedged a little bit: “In another era of American crisis, Thomas Paine is reported to have said, ‘Lead, follow, or get out of the way.'”

University of Texas professor and Paine scholar William Scheick called Romney’s misquoting of Paine “another deplorable example of politicians distorting history to advance themselves and their shadowy supporters” and said that Paine “hardly is apt in Romney’s case.”

“For me, that’s the real story here — that Romney and his audience apparently have no clue to what a searing liberal freethinker Paine was,” said Scheick.

Don’t you just love the description “searing liberal freethinker”?  I might also add the man was a well-known critic of organized religion.  That’s hardly a combination of attributes for a leader that  you would think a Republican presidential wannabe would want thrown around these days.  I remember reading a biography of Thomas Paine in high school and thinking “wow”.  At the end of his days, Thomas Jefferson was one of the few folks that would even speak to him.  He was that scandalous. It is pretty well known that he moved from being a deist into the realm of atheism by his end days.  His most famous work is Age of Reason but he is also well known as a pamphleteer or the equivalent of a 18th century blogger.

What you may not know is that he was one of the most ardent and earliest supporters of emancipation for women.  One of his most famous works is called: An Occasional Letter on the Female Sex and includes many examples of how women have been subjugated to men.  Here, Paine channels his inner female to argue for emancipation.

If a woman were to defend the cause of her sex, she might address him in the following manner:

“How great is your injustice? If we have an equal right with you to virtue, why should we not have an equal right to praise? The public esteem ought to wait upon merit. Our duties are different from yours, but they are not therefore less difficult to fulfill, or of less consequence to society: They are the fountains of your felicity, and the sweetness of life. We are wives and mothers. ‘Tis we who form the union and the cordiality of families. ‘Tis we who soften that savage rudeness which considers everything as due to force, and which would involve man with man in eternal war. We cultivate in you that humanity which makes you feel for the misfortunes of others, and our tears forewarn you of your own danger. Nay, you cannot be ignorant that we have need of courage not less than you. More feeble in ourselves, we have perhaps more trials to encounter. Nature assails us with sorrow, law and custom press us with constraint, and sensibility and virtue alarm us with their continual conflict. Sometimes also the name of citizen demands from us the tribute of fortitude. When you offer your blood to the State think that it is ours. In giving it our sons and our husbands we give more than ourselves. You can only die on the field of battle, but we have the misfortune to survive those whom we love most. Alas! while your ambitious vanity is unceasingly laboring to cover the earth with statues, with monuments, and with inscriptions to eternize, if possible, your names, and give yourselves an existence, when this body is no more, why must we be condemned to live and to die unknown? Would that the grave and eternal forgetfulness should be our lot. Be not our tyrants in all: Permit our names to be sometimes pronounced beyond the narrow circle in which we live. Permit friendship, or at least love, to inscribe its emblem on the tomb where our ashes repose; and deny us not that public esteem which, after the esteem of one’s self, is the sweetest reward of well doing.”

As I said, it’s really hard for me to imagine Willard thinking that he is quoting Paine.  He obviously knows not what of he speaks in many ways.

 Sabrina Rubin Erdely has written an incredible account of the “One Town’s War on Gay Teens” in this month’s Rolling Stone. The town is none other than Anoka, MN who is represented in congress by the dread Pirate Bachmann and her faux therapist, closeted husband Marcus. The personal stories of several teens is detailed and gut-wrenching. So much for Minnesota nice.

Against this supercharged backdrop, the Anoka-Hennepin school district finds itself in the spotlight not only for the sheer number of suicides but because it is accused of having contributed to the death toll by cultivating an extreme anti-gay climate. “LGBTQ students don’t feel safe at school,” says Anoka Middle School for the Arts teacher Jefferson Fietek, using the acronym for Lesbian, Gay, Bisexual, Transgender and Questioning. “They’re made to feel ashamed of who they are. They’re bullied. And there’s no one to stand up for them, because teachers are afraid of being fired.”

The Southern Poverty Law Center and the National Center for Lesbian Rights have filed a lawsuit on behalf of five students, alleging the school district’s policies on gays are not only discriminatory, but also foster an environment of unchecked anti-gay bullying. The Department of Justice has begun a civil rights investigation as well. The Anoka-Hennepin school district declined to comment on any specific incidences but denies any discrimination, maintaining that its broad anti-bullying policy is meant to protect all I students.

Meanwhile, I continue to wonder if any Republican presidential candidate has read that bible they keep thumping.  Here’s the latest example of  audacious  insensitivity from Rick Santorum.

GOP contender Rick Santorum had a heated exchange with a mother and her sick young son Wednesday, arguing that drug companies were entitled to charge whatever the market demanded for life-saving therapies.Santorum, himself the father of a child with a rare genetic disorder, compared buying drugs to buying an iPad, and said demand would determine the cost of medical therapies.

“People have no problem paying $900 for an iPad,” Santorum said, “but paying $900 for a  drug they have a problem with — it keeps you alive. Why? Because you’ve been conditioned to think health care is something you can get without having to pay for it.”

The mother said the boy was on the drug Abilify, used to treat schizophrenia, and that, on paper, its costs would exceed $1 million each year.

Santorum said drugs take years to develop and cost millions of dollars to produce, and manufacturers need to turn a profit or they would stop developing new drugs.

“You have that drug, and maybe you’re alive today because people have a profit motive to make that drug,” Santorum said. “There are many people sick today who, 10 years from now, are going to be alive because of some drug invented in the next 10 years. If we say: ‘You drug companies are greedy and bad, you can’t make a return on your money,’ then we will freeze innovation.”

Santorum told a large Tea Party crowd here that he sympathized with the boy’s case, but he also believed in the marketplace.

Then there’s “I don’t care about poor people Willard”.  Do these guys even think before they speak?  I really like this Pierce description in an article where he rips austerity a new one.  We have to be punished for suffering, for not surviving their financial abuses, and for not being patient enough.  Hallelujah  and trickle it down Big Brother!

The idea of poverty’s being a sin that requires ritual purification before redemption runs pretty deeply in this country. When Jonathan Edwards delivered his great sermon, Sinners In The Hands Of An Angry God, I doubt whether even that unbending piece of Puritan iron realized how many of his fellow citizens would be so willing to be the servants of that god, seeking to punish their fallen brethren. There has always been a strong view in our politics that pain can purify the nation. Especially the pain of other people, less-worthy-people. Sinners.

We are falling like dim children, like the suckers we always are, to the notion of the deserving and undeserving poor, the have-less-and-lesses are being pitted against the have-littles, and the have-nots. That’s what Willard Romney’s been about the last couple of days. He wants to find a way to harness the fear people have of becoming poor to his advantage at the expense of the people who actually are. That is the basis of the entire public career of Paul Ryan, the zombie-eyed granny-starver from Wisconsin, and the whole party has signed the guestbook into his little S&M parlor of a budget.

Speaking of Big Brother References, I just finished an interesting novel about religious cults, domestic violence and alternative realities called 1Q84 by Haruki Murakami.  I’m checking the sky for two moons these days.  I totally recommend it.  It’s literary.  It’s unusual.  It’s got marvelous character development and descriptions and a plot that is amazing.  Here’s the NYT review from October. Aomame makes the girl with the dragon tatoo look like a conformist and weakling.  It was a very long read and didn’t always capture me, but it is still worth the time. It starts out with what seems like two completely unconnected characters and events and then weaves all the connections from there on out.

One of the many longueurs in Haruki Murakami’s stupefying new novel, “1Q84,” sends the book’s heroine, a slender assassin named Aomame, into hiding. To sustain her through this period of isolation she is given an apartment, groceries and the entirety of Marcel Proust’s “Remembrance of Things Past.”

For pity’s sake, if you have that kind of spare time, follow her lead. Aomame has the chance to read a book that is long and demanding but well worth the effort. The very thought of Aomame’s situation will pain anyone stuck in the quicksand of “1Q84.” You, sucker, will wade through nearly 1,000 uneventful pages while discovering a Tokyo that has two moons and is controlled by creatures that emerge from the mouth of a dead goat. These creatures are called Little People. They are supposed to be very wise, even though the smartest thing they ever say is “Ho ho.”

You can see the Times reviewer was not enthralled.  I was frankly happy to read something not so cookie cutter for a change. So, I guess that’s what’s on my mind these days since I’ve had plenty of bedrest and time on my hands. What’s on your reading and blogging list today?

Friday Reads

Good Morning!!

I’ve spent the last few days editing tables, proofreading, and formatting bibliography, cross checking table of contents and lists of tables to make sure page numbers match.  It’s the kind of work that makes you want to pull out every last thread of hair on your head.  I’m hopefully at the end of the road to chasing down about a dozen signatures for forms too.  It’s driving me nuts!!  I’m going to be so glad when this stupid dissertation gets published and I don’t have to mess with the thing ever again!

Given that I”m doing this mind numbing frustrating detail work, it’s probably contributing to some things that are making me really mad.  I cannot–for one–imagine any one having any reasons to defend a football coach who didn’t report horrible instances of child sexual assault.  I don’t understand the riots on campus that occurred the other night.  I certainly don’t understand glib tweets defending said coach sent out to millions of fans by celebrities either.  How many little boys were assaulted and how many people around them will be hurt as they spend their lives trying to overcome the trauma?  How on earth do you defend some who who was covering up and not reporting a series of heinous felonies?

Demonstrators tore down two lampposts, one falling into a crowd. They also threw rocks and fireworks at the police, who responded with pepper spray. The crowd undulated like an accordion, with the students crowding the police and the officers pushing them back.

“We got rowdy, and we got Maced,” said Jeff Heim, 19, rubbing his red, teary eyes. “But make no mistake, the board started this riot by firing our coach. They tarnished a legend.”

An orderly crowd first filled the lawn in front of Old Main when news of Mr. Paterno’s firing came via students’ cellphones. When the crowd took to the downtown streets, its anger and intensity swelled. Students shouted, “We are Penn State.”

Some blew vuvuzelas, others air horns. One young man sounded reveille on a trumpet. Four girls in heels danced on the roof of a parked sport utility vehicle and dented it when they fell after a group of men shook the vehicle. A few, like Justin Muir, 20, a junior studying hotel and restaurant management, threw rolls of toilet paper into the trees.

“It’s not fair,” said Mr. Muir, hurling a white ribbon. “The board is an embarrassment to our school and a disservice to the student population.”

Just before midnight, the police lost control of the crowd. Chanting, “Tip the van,” the students toppled the news vehicle and then brought down a nearby lamppost. When the police opened up with pepper spray, some in the crowd responded by hurling rocks, cans of soda and flares. They also tore down street signs, tipped over trash cans and newspaper vending boxes and shattered car windows.

The irony of all this is that the right wing noise machine has less to say about this violence and mayhem than it ever has about the Occupy Protests.  Most disappointing is that Assistant Coach Mike McQueary will not be attending the game because he’s gotten death threats for doing the right thing after witnessing the sodomy of an approximately ten year old boy by then Assistant Coach Sandusky.

Raw Story has an interesting piece up about Romney who seems to have an itchy missile finger trained on Iran.  Just what we need; more entanglements in the Middle East.

Accusing President Barack Obama of naivete on Iran, Republican presidential challenger Mitt Romney promised Thursday that if elected president he would “prepare for war” with the Islamic republic.

In a commentary published in the Wall Street Journal, Romney said he would back up US diplomacy “with a very real and very credible military option,” deploying carrier battle groups to the Gulf and boosting military aid to Israel.

“These actions will send an unequivocal signal to Iran that the United States, acting in concert with allies, will never permit Iran to obtain nuclear weapons,” he wrote.

Nouriel Roubini has some interesting choices to lay at the feet of European Community leaders.  It’s really worth a read.  For some reason leaders here and in the US are obsessed with austerity.  They should be obsessed with way promoting economic growth.

First of all, without economic growth, you have a dual problem: a) The socio-political backlash against fiscal austerity and reforms becomes overwhelming as no society can accept year after year of economic contraction to deal with its imbalances; b) more importantly, to attain sustainability, flow deficits (fiscal and current account) and excessive debt stocks (private and public, domestic and foreign) need to be stabilized and reduced, but if output keeps on falling, such deficit and debt ratios keep on rising to unsustainable levels.

Second, restoring growth is also important because, without growth, absolute fiscal deficits become larger rather than smaller (given automatic stabilizers). Third, restoring external competitiveness is key as that loss of competitiveness led—in the first place—to current account deficits and the accumulation of foreign debt and to lower economic growth as the trade balance detracts from GDP growth when it is in a large and growing deficit. So, unless growth and external competitiveness are restored, flow imbalances (fiscal and current account deficits) persist and stabilizing domestic and external deficits becomes “mission impossible.” Finally, note that, unless growth and competitiveness are restored, even dealing with stock problems via debt reduction will not work as flow deficits (fiscal and current account) will continue and, eventually, even reduced debt ratios will rise again if the denominator of the debt ratio (debt to GDP), i.e. GDP, keeps on falling. Growth also matters as credit risk—measured by real interest rates on public, private and external debt, which measures the default risk—will be higher the lower the economic growth rate. So, for any given debt level, a lower GDP growth rate that leads to a higher credit spread makes those debt dynamics more unsustainable (as sustainability depends on the differential between real interest rates and growth rates times the initial debt ratio).

Switching to US problems, Morgan Stanley has its knickers in a knot about potential failure of the super committee. They anticipate more downgrades of US soverign debt.

Now Morgan Stanley is weighing in on this question, as part of a broder note about the impact of the super-committee on the economy.

From MS’ Christine Tan:

S&P reminded market observers in October that the US remains on negative watch due to its unsustainable fiscal outlook, which implies a 1 in 3 chance of further downgrade from its current
AA+ rating. If the Super Committee fails to reach a $1.2trn deficit reduction deal, if such a deal relies more upon accounting changes than real deficit reduction, or if Congressional action lessens the impact of the $1.2trn automatic trigger, we believe this could potentially provide S&P with a pretext to downgrade the US further from AA+ to AA. The initial S&P downgrade of the US’s AAA rating on
August 5, 2011 roiled the markets into severe risk-aversion mode and the GRDI, Morgan Stanley’s proprietary risk appetite indicator fell to an all-time low of  -5.13.

So it’s important to bear in mind that the consequence of a downgrade would be an economic slowdown, not anything on the cost of borrowing side.

It sure is a crazy mixed-up world.  What is on your reading and blogging list today?