Bain Capital-- How Did Cory Booker Wreck His Career?
The DWT art department rarely asks any questions. They just send art and tell me to post a blog about it. But yesterday they did ask a question:
Why would Romney's leeching organization be called Bain? That is identical in pronunciation the Bane...
1. Fatal injury or ruin: "Hath some fond lover tic'd thee to thy bane?" (George Herbert).
a. A cause of harm, ruin, or death
Earlier this year, on January 8, while campaigning in New Hampshire, then candidate Newt Gingrich opened a can of worms-- and a can of whoopass on Willard-- by publicly uttering what many were already thinking: “Those of us who believe in free markets and those of us who believe that in fact the whole goal of investment is entrepreneurship and job creation, 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.” Two days later a second GOP candidate, Texas Governor Rick Perry, took up the same theme-- and expanded on it, at least rhetorically, this time in South Carolina: "Mitt Romney and Bain Capital were involved with what I call vulture capitalism.” Later the same day, in an interview with the National Journal, he went further in denigrating the Bain model that is the crowning achievement of Romney's public life:
“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”
Gingrich, whose $4.8 million campaign debt has turned him into another word for the world's oldest profession, "a Romney surrogate," indicated to CNN's Piers Morgan he needs to smelling salts now to cope with the attacks by President Obama on Romney's record at Bain. "I’m very surprised that President Obama went down this road." Surprised? Maybe someone on President Obama's team noticed the only significant contribution Newt made to the 2012 campaign for president, the 28 minute film, When Mitt Romney Came To Town which has been watched in its entirety by a quarter million people. It's worth watching-- or watching again-- in light of the Republican hysteria over the gall of the Obama campaign raising the issue of Romney's record-- and using prominent Republicans to do it for him.
Newark Mayor Cory Booker stepped right in it on Meet The Press last weekend, doing what conflicted, conservative Democrats do-- including, all too often, the Obama administration: they twist themselves into a knot kissing the ass of the Wall Street special interests that are the natural allies in almost all ways-- economic success being the exception-- of the Republican Party.
Booker's career-- much like Rahm Emanuel's, Artur Davis' and Harold Ford's-- has been financed by Wall Street. They picked him out early, the same way they picked out Paul Ryan and Eric Cantor-- as an energetic young politician with no ethical compunctions about bribery who could go far in the cesspool of politics. Monday, Josh Israel, did some digging around for Think Progress.
A ThinkProgress examination of New Jersey campaign finance records for Booker’s first run for Mayor-- back in 2002-- suggests a possible reason for his unease with attacks on Bain Capital and venture capital. They were among his earliest and most generous backers.
Contributions to his 2002 campaign from venture capitalists, investors, and big Wall Street bankers brought him more than $115,000 for his 2002 campaign. Among those contributing to his campaign were John Connaughton ($2,000), Steve Pagliuca ($2,200), Jonathan Lavine ($1,000)-- all of Bain Capital. While the forms are not totally clear, it appears the campaign raised less than $800,000 total, making this a significant percentage.
He and his slate also jointly raised funds for the “Booker Team for Newark” joint committee. They received more than $450,000 for the 2002 campaign from the sector-- including a pair of $15,400 contributions from Bain Capital Managing Directors Joshua Bekenstein and Mark Nunnelly. It appears that for the initial campaign and runoff, the slate raised less than $4 million-- again making this a sizable chunk.
In all-- just in his first Mayoral run-- Booker’s committees received more than $565,000 from the people he was defending. At least $36,000 of that came from folks at Romney’s old firm.
Joe Biden, the guy was less a creation of Wall Street. And last week his explanation of what Bain is all about had, for him, surprising clarity: “Romney made sure the guys at top got to play by a different set of rules, he ran massive debts, and the middle class lost. And folks, he thinks this experience will help our economy? Where I come from, past is prologue.” Yesterday I ook a taxi to JFK on my way back to L.A. The driver, an Egyptian-American, who hasn't missed voting in a presidential election since George H.W. Bush ran-- and who he admires and voted for-- told me he is horrified by Romney. He explained to me that businessmen only care about making money for themselves and their circle and that if Romney won, he would be an even worse president than Bush II. I know that from personal experience with Romney's Bain model.
I've written about it before and I didn't need to hear it back in January from David Axelrod, but who was correct in pointing out about Bain that “They closed down more than 1,000 plants, stores and offices. They outsourced tens of thousands of jobs, and they took 12 companies to bankruptcy. I don’t think those are the values that people want to animate our economy. He is not a job creator, he is a corporate raider. Those aren’t the values that we want to lead our economy.” My own Bain experience was at TimeWarner where I was a division president. (I ran Reprise Records at Warner Bros and was mortified to see the Bain people come in and loot the company, drain it of assets, drop artists we had developed over decades so they could line their own pockets-- and then leave the barely-living carcass for the Russian Mafia to pick over.
On he Democratic side of this story, it's important to remember that many Democratic politicians-- maybe even most Democratic politicians-- are as culpable as a garden variety Republican when it comes to taking money from banksters and other shady characters looking for people without morals they can bribe who will sell out their own constituents. So far this cycle, the finance sector has spent $253,290,163 on elections, 49.5% to Republicans and 31.2% to Democrats. Since 1989 they spent $1,710,713,286 on congressional races. Of that $936,860,394 went to Republicans and $761,397,793 went to Democrats. If current Members of the House were to be arrested and charged with accepting bribery based on taking big money from the banksters in return for services rendered the Top 3 criminals would be:
John Boehner (R-OH)- $6,653,176
Eric Cantor (R-VA)- $6,027,865
Spencer Bachus (R-AL)- $5,763,934
But waddling right up to the bar behind them would be another notorious crook Charlie Rangel, a Democrat, and former Chair of the House Ways and Means Committee, who has accepted $5,155,543 in bribes from the financial criminal class he was supposed to be helping to regulate. And the 5 worst in the Senate are John McCain (R-AZ- $36,390,767), John Kerry (D-MA- $20,043,114), Chuck Schumer (D-NY- $18,757,891), Joe Lieberman (I-CT- $10,891,541), and Miss McConnell (R-KY- $6,841,197).
Republicans are bad, very bad, but that doesn't make Democrats good. Are they all on the take? No, but most of them are. Who doesn't take money from the banksters? On the Senate side, Bernie Sanders (I-VT) and Herb Kohl (D-WI). And on the House side Walter Jones (R-NC), Hansen Clarke (D-MI) and... um... that's about it I'm afraid. But not all Democrats have sold their souls to private equity the way the GOP has-- or the way Rahm Emanuel has or the way Harold Ford has or the way Cory Booker has. Robert Reich sure hasn't-- and he's urging Obama to go on the attack against casino gambling in the form of both Bain and JPMorganChase... and to resurrect Glass-Steagall for real.
I wish President Obama would draw the obvious connection between Bain Capital and JPMorgan Chase.
That way his so-called “attack” on private equity is neither a personal attack on Mitt Romney nor a generalized attack on American business.
It’s an attack on a particular kind of capitalism that Romney and JPMorgan both practice: Using other peoples’ money to make big bets which, if they go wrong, can wreak havoc on the economy.
It’s the substitution of casino capitalism for real capitalism, the dominance of the betting parlor over the real business of America, financial innovation rather than product innovation.
It’s been terrible for the American economy and for our democracy.
It’s also why Obama has to come out swinging about JPMorgan. The JPMorgan Chase debacle would have been prevented if the Volcker Rule were sufficiently strict, prohibiting banks from using commercial deposits to make bets except very specific offsetting bets (hedges) on narrow classes of trades.
But Jamie Dimon and JPMorgan have been lobbying like mad to loosen the Volcker Rule and widen that exception to include the very kind of reckless bets JPMorgan made. And they’re still at it, as evidenced by Dimon’s current claim that the rule that eventually emerges would allow those bets.
As a practical matter, the Volcker Rule is hopeless. It was intended to be Glass-Steagall lite-- a more nuanced version of the original Depression-era law that separated commercial from investment banking. But JPMorgan has proven that any nuance-- any exception-- will be stretched beyond recognition by the big banks.
So much money can be made when these bets turn out well that the big banks will stop at nothing to keep the spigot open.
There’s no alternative but to resurrect Glass-Steagall as a whole. Even then, the biggest banks are still too big to fail or to regulate. We also need to heed the recent advice of the Dallas branch of the Federal Reserve, and break them up.
At the same time, there’s no point to the “carried interest” loophole that allows private-equity managers like Mitt Romney to treat their incomes as capital gains, taxed at only 15 percent, when they’ve risked no money of their own.
If private equity were good for America it wouldn’t need this or the other tax preference it depends on, elevating debt over equity. But the private equity industry has huge political clout, which is why these tax preferences remain.
Get it? Bain Capital and JPMorgan are parts of the same problem. The President should be leading the charge against both.