Written by Dan Flemming
Power is about having the ability to spend money. Businesses seek patronage of people with significant power. Marketing is about positioning your business, defining your business, attracting people with significant spending power, and expending capital to draw customers, publicize your business name, and create a public icon and trademark. Banks are very powerful indeed. And in US Politics money is power. And bankers are powerful.
Being Duped by Money and Power
Politics is the art of getting people to support you without doing anything for them. You might say it is an offshoot of marketing and public relations. Romney and Obama want to make themselves the ‘icon’ of their particular political party knowing that party supporters have their own personal definition of the party attributes. In the USA we call this being duped. But the whole thing falls apart without money and power.
Bain Capital, the Romney Private Equity company, is powerful in it’s ability to pull together investment funding for ailing businesses. Today there are many options in the financial world for structuring a financial deal. The financial crisis of 2008 and the proceeding subprime mortgage crisis are fresh examples. The Savings and Loan Crisis of the 80-90s highlighted so well by the ‘Keating Five’ is another. Romney comes from this world of money and power.
Where is the Main Street Candidate?
Today we have to look at U.S. Presidential Candidates. Are either of the candidates like Main Street America in any kind of way? Brush aside photos of handshakes with ‘Joe the Plumber’ and of kissing babies. Obama lives very well off of royalties from his books. Romney is playing the system to the hilt paying only 14% federal income tax on the largest income most of us can imagine. Matter of fact most of us don’t understand carrying interest (fee) and are unable to get such a thing even if we understood it. Look further and we see the Romney Swiss bank accounts, Cayman Island Accounts, and one of the largest most successful federal IRA Retirement Accounts in history. If memory serves my max contribution to an IRA account was $5000 annually for the last 20 years. But Romney turned an IRA into over $20 million dollars. A recent New York Times Article states that Romney took advantage of even the most remote tax avoidance strategy,
“It also showed that Mr. Romney had used a complex offshore tax shelter, known as a blocker corporation, to shield the investments in his I.R.A. from paying an obscure business tax.”
Should the U.S. Move from a Banking Frying Pan into a Banking Fire?
Mitt Romney is a financial behemoth. Where else in life do we see financial behemoths? Banking. Public and private banking. Bain is a private equity firm. Bain Financial or Bain Capital, the name makes no difference. Bain puts together funding for assisting ailing businesses or puts together funding to take over the business, slash overhead, eliminate expenses, and recreate a profitable business positioned for the future. And sometimes businesses fail, but Bain Capital often made money even in those cases.
Mr. Romney has been very successful in investment banking and has become a very wealthy man. But is there anything questionable about how he obtained, retained of extended that wealth? His tax returns would give hints about that but, as a New York Times editorial said, they have disappeared into a " financial black hole."
If it quacks like a duck, then what is it? Romney's business was, in all essential details, a powerful bank. We have seen a lot of questionable behavior and ‘moral hazard’ from banks since Neil Bush, Silverado Savings and Loan, and the S&L Crisis right up to the present day. Washington DC seems incapable of preventing another financial crisis through effective oversight, prosecutions, or legislation due to political gridlock and status quo politics. And since Lobby dollars, PAC dollars, and even foreign dollars are getting all the attention of politicians… Don’t you think it is a little dangerous to put up a ‘Banker’ like Romney for President of the USA?
Is There Any Difference Between the Candidates on Foreign Policy?
On another front, I can’t see anything conservative about Romney’s foreign policy. Is he likely to start more wars after we never paid for the last wars in Iraq and Afghanistan? How can it be conservative to borrow big dollars to restructure our military overseas in South Korea, Japan, Germany, and all the other places? When have Republicans ever paid for military programs instead of putting them on the credit card? Will Romney just continue the foreign engagement strategy continued and furthered by Obama? Will Romney change the U.S. military focus toward more strength in Asia? Or will he just increase the magnitude of the moves?
Never fear. Our next war or military expansion will be financed by the best bankers. And Romney is one of the most powerful bankers we have seen so close to the White House. But is he the president to unwind U.S. federal Debt, restore interest rates for US Individual Savings Accounts, fix underfunded U.S. Pensions, stimulate education, research and innovation in the U.S., and inject much needed funds into our U.S. Social Security Trust?
Not if he listens to many members of his own party.
About the Author
Dan Flemming is a Systems Analyst and Logistician. He has utilized dozens of defense systems to identify bottlenecks, problems, systemic issues, and solutions across agencies within the Department of Defense.