It is time for us here, from the objective distance of Making the Nut Headquarters in Australia, to discuss clearly and dispassionately the upcoming US elections. My calm and reasoned conclusion is this: Mitt Romney is a strange, greedy profiterole whose presidency would destroy our great ally, the US of A.
But we are getting ahead of ourselves. Let’s start with some facts about the Republican aspirant, Willard Mitt Romney.
Greedy
Mitt Romney has proclaimed himself a ‘Job Creator’ through his work at the private equity firm he owned, Bain Capital. He’s been strutting around telling energetic white crowds that he ‘resuscitated’ companies. That he, the shining knight, swooped in on his mighty steed of free-market justice, and righted the economic wrongs suffered by badly-managed companies. In so doing, he saved jobs and local economies.
Here’s the thing: it’s bullshit.
What Romney and Bain Capital specialised in was the leveraged buy-out, or LBO. The LBO was made famous by Gordon “greed is good” Gekko in the movie Wall Street. In a nutshell, an LBO is this: a private equity firm, like Bain Capital, buys a majority share in a company; either with or without the consent of the company (buying out a company without their consent is called a ‘hostile takeover’). They put some of their own money in the deal and borrow the rest. LBOs can sometimes turn a company around – especially one that is badly managed – but this isn’t the sort of buy-out for which Bain Capital became known.
No, Bain Capital has attracted a lot of attention for the scorched earth policy on acquisitions it undertook in the 80s and 90s when Romney was an owner. A classic case – and one that has been well-documented in the media – was Bain’s acquisition of KB Toys.
This is what went down: Bain put up 18 million of their own money and borrowed the remaining 302 million they needed to purchase a majority share in KB Toys, the second oldest toy company in the US. The 302 million dollars of debt (and the associated debt repayments) became the responsibility of – not Bain – but KB toys (am I the only person who finds this strange?). They also paid themselves a handsome dividend of 83 million.
Burdened with debt repayments for these loans and outrageous dividend payments to Bain Capital, KB Toys went bankrupt. When it went bankrupt, Romney’s company kept millions in fees and dividends while the workers – many who had been there for decades – were left jobless and without any severance pay or entitlements.
This is classic cowboy capitalism. Buy out a company with borrowed money, pay yourself millions of dollars in fees; sack workers, and smash the company into pieces and sell off the profitable bits.
Romney’s side of politics like to say America is divided up between the ‘makers’ and the ‘takers’. Between the mega-wealthy who create the jobs, and the lazy poor or middle class people who simply sit back and reap the benefits. This is the fantasy land Romney and his ilk live in.
He’s not an industrialist or a manufacturer: he’s got no Microsoft, no Apple; no railways or car factories in his past. He’s a breaker, not a maker.
Weird
I’m not going to get into the detail of Romney’s religion, Mormonism, of which he is a devout follower. The US media has stayed away from this subject (passing strange, given it goes right to the very core of his character and beliefs). But we’re not going there because it is the inalienable right of every individual to believe in whatever religion they wish.
All I’m saying is this: if Mitt Romney believes what the Mormon Church believes – that Jesus died, rose again, then went and visited Mormons that had lived in North America since 600BC. That these Jewish tribes had sailed to America by boat and established a civilisation a thousand years before Columbus discovered America. That these tribes (for whom no archaeological evidence exists) hid golden plates in the ground that were found by reputed con-man Joseph Smith in 1828. That this confidence man then translated the golden tablets by using magical seer stones only he could use, which became the book of Mormon; a book which apparently allowed him to have 32 wives over his lifetime (must be nice). And furthermore if you’re a really really good Mormon you get to become a god yourself with your own planet. Well, all I’m saying is that if Romney believes this nonsense he’s a weirdo.
Not that there’s anything wrong with weirdos. They’re everywhere. You know, like the geeks who learn to speak Na’vi (the language of the aliens in the movie, Avatar), or the freak parents who enter their 7-year old girls in beauty pageants. I’m just not sure a weirdo should be running America.
Bad for America
What’s even worse than Mitt Romney being greedy, ignorant, tax-avoiding, country-club, fake-tanned economic bandit is this: he has linked his presidency to the Tea Party. Through the choice of his Vice Presidential running-mate, Paul Ryan, he has energised the lunar right anti-government Tea Party and their agenda of American economic self-destruction. Paul Ryan is one of those classic pro-business ideologues who have never actually worked in a business. He’s a guy who talks about the ‘evils’ of big government, but who has worked in Washington and Washington only since the age of 22. He’s a silver spooner who wants to strip health insurance from tens of millions of poor Americans. In short, he’s a hypocrite and a douchebag.
As an aside, the funny thing about Republicans is that the so-called party of ‘small government’ has consistently increased the size of government. Since 1970, Democrat presidents have increased government spending on average by 1.28 per cent a year, while Republican presidents have increased it by 2.12 per cent a year.
The economic plan of Paul Ryan will increase America’s debt in the short term and systematically undermine healthcare coverage. He’ll increase taxes on the middle classes while reducing already low taxes for millionaires and billionaires. They will increase spending on the military to levels higher than requested by the Pentagon (think about that statement for a moment). They’ll tear up the social contract in the US and leave in its place a Darwinian law of the jungle.
But this shouldn’t be a surprise. Mitt Romney is the guy, after all who said to a dinner of big Republican donors, “There are 47 per cent of the people who will vote for the president no matter what… who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. … My job is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.” Yes Mitt, all those people receiving entitlements refusing to take responsibility for their own lives: like students, or the disabled, or war veterans, or pensioners.
Two weeks after he made this statement, he said he didn’t mean it – that he’d govern for 100 per cent of Americans. Which begs the questions, was he telling the truth to his major donors, or was he telling the truth in his statement two weeks later?
Military spending aside, the Romney-Ryan model will see is the steady erosion of the power of the US Federal system of government (including the ability to respond to natural disasters like the recent hurricane Sandy), an ever-widening gap between rich and poor, and an inwards looking polity that withdraws the US from the world.
These things weaken America. And an economically weak, philosophically stunted America is bad for everyone. Generally, Australians understand this. A recent poll here found 72 per cent of Australians would vote for Obama, 5 per cent for Romney (the rest undecided).
We understand that the world needs the US to be an economically solvent, rational, outward looking republic. That won’t happen under Mitt Romney.
The article first Appeared in Making the Nut