BREAKING NEWS: 950 pages of Romney confidential financial records released

Today Gawker.com released what is says are nearly 950 pages of financial records covering Romney’s investments.  John Cook at Gawker says:

Today, we are publishing more than 950 pages of internal audits, financial statements, and private investor letters for 21 cryptically named entities in which Romney had invested—at minimum—more than $10 million as of 2011 (that number is based on the low end of ranges he has disclosed—the true number is almost certainly significantly higher). Almost all of them are affiliated with Bain Capital, the secretive private equity firm Romney co-founded in 1984 and ran until his departure in 1999 (or 2002, depending on whom you ask). Many of them are offshore funds based in the Cayman Islands. Together, they reveal the mind-numbing, maze-like, and deeply opaque complexity with which Romney has handled his wealth, the exotic tax-avoidance schemes available only to the preposterously wealthy that benefit him, the unlikely (for a right-wing religious Mormon) places that his money has ended up, and the deeply hypocritical distance between his own criticisms of Obama's fiscal approach and his money managers' embrace of those same policies. They also show that some of the investments that Romney has always described as part of his retirement package at Bain weren't made until years after he left the company.

Gawker has not analyzed the documents completely nor has anyone else.  You can view the documents by following this link:  http://gawker.com/5936394

Watch for a lot more about what these newly released documents reveal about  Romney’s wealth and taxes in the days ahead.  If determined to be authentic, these documents will be a major distraction (and possible embarrassment  to Romney and his campaign.

Will the state of the economy determine the outcome of the election?

Most people recognize that while the recession is over, the stock market has rebounded and the unemployment numbers have come down from their peak in 2010, the recovery is sluggish, the unemployment rate is still too high and there is danger of a new recession if the automatic cuts and tax increase go into effect in January.  Republicans have been betting that a struggling economy would be just the thing to defeat Obama and have done all they could to prevent or weaken any efforts by Obama and the Democrats to help get the economy moving again.   Will the Republican strategy work?

Robert Grafstein, Associate Dean and Professor of Political Science in the University of Georgia School of Public and International Affairs, addresses that question in an interesting new article in The Citizen, a publication of the UGA School of Public and International Affairs.  Grafstein notes that there is strong evidence that the state of the national economy has an impact on how people vote.  That would seem to be good news for Romney and the Republicans.  All they have to do is ask voters:  Are you better off now than you were in January 2009 when Obama took office?  They assume most people will say NO and that they will blame Obama.  In other words, Republicans want to make the election a referendum on Obama’s performance in creating jobs.  Even if voters think the economy is improving, Republicans believe they can still win on the issue of whether it is improving fast enough.  Grafstein notes that political scientists refer to this as the “retrospective model” of economic voting.  In deciding whether to give an incumbent president a second term voters judge him based upon his performance during his first term.  The retrospective model would suggest that in the absence of a dramatic improvement in the jobs numbers between now and the end of October, Obama has a real problem and Romney and the Republicans have a real advantage.  However, says Grafstein, there is a different model for explaining economic voting called “prospective voting.”

The prospective model says people make voting decisions not based upon past performance but upon future expectations.  Voters focus not so much on the president’s record during his first term than on what his economic message is for the future, particularly compared to the economic message of his opponent.  In this case, voters are looking forward, not back.

 

Grafstein says he is willing to stick his neck out and bet that this year, “the prospective model is fundamentally right as a matter of political science.”  If you look at the polls, Grafstein may be right.  The retrospective model would suggest that a challenger going up against an incumbent when unemployment is over 8% should be way ahead.  Romney isn’t.  Recent polls suggest that while Americans are unhappy with the current status of the economy and Obama’s performance in creating jobs, Romney has not made the case that he has a better strategy.  That might make all the difference in this election.

Aiken not hurt…yet.

A new Public Policy Poll suggests that Todd Akin’s (Missouri Republican Senate candidate) abortion comments haven’t hurt him too much…yet.  PPP conducted a quick one-night poll and found Akin basically tied with Democrat Claire McCaskill 44 % to 43%.  That is basically the same PPP had them before the Abortion flap. Independents support Akin 45 to 41, same as before. 75% of all MO voters say Akin's comments were inappropriate including 64% of Republicans but MO voters disapprove of McCaskill 53% to 41% (approve).

NOTE: The PPP poll is much different from the Survey USA poll that showed Aiken ahead by 11 points last week before Akin’s abortion comments. No new Survey USA poll out yet. We'll see.  The PPP poll was conducted over just one night so is subject to greater error than normal.

Read the poll here: http://www.publicpolicypolling.com/main/2012/08/akin-44-mccaskill-43.html

Election strategy and Romney’s BIG problem

As you know, the presidential election isn’t decided by the popular vote.  It is decided by votes in the Electoral College and 270 electoral votes are required to win.  That fact presents a big problem for Romney. 

All the polls suggest that Romney and Obama are basically tied in the national popular vote.  There is a BIG difference when it comes to the Electoral College vote.  Here is a map showing the Electoral College vote as of today according to Real Clear Politics.   If you can’t see the map, go here: http://www.realclearpolitics.com/epolls/2012/president/2012_elections_electoral_college_map.html

According to Real Clear Politics, Obama has a lock on 142 Electoral Votes largely from big states like California and New York that are not likely to go Republican.  He has 37 Electoral votes from states he is likely to win and 58 from states that are leaning in his direction.  Romney starts off with 191 sure Electoral votes with 55 likely to go for him and 60 leaning in his direction.  So, Obama has 237 Electoral votes BEFORE we take the true battle ground states into consideration.   Romney has just 191 Electoral votes WITHOUT the battleground states.

Now it gets to be fun.  There are nine (9) battle ground states according to Real Clear Politics.  Four of these are states with less than 10 electoral votes—Colorado, Iowa, Nevada, and New Hampshire.  Five of these battleground states have more than 10 electoral votes: FL with 29, OH with 18, NC with 15, VA with 13 and WI with 10.

Assume either Obama or Romney takes all of the battleground states with LESS Than 10 electoral votes each.  That’s 25 votes total.  That would give Obama 262 Electoral Votes which would be just 8 votes short of the 270 he needs to win.  If Romney wins ALL of the less-than-10 Electoral Vote Battleground states, the he has 216 votes.  He is still 54 votes short.

Obama can get the 270 votes he needs at this point by picking up just one of the five remaining states.  On the other hand, Romney needs to pick up three of the five states, even if he wins the biggest prize—Florida.  If Romney doesn’t win Florida, he has to pick up ALL of the remaining states other than Florida to win.

That’s Romney’s problem and it is a BIG one.  Run the number yourself.

The Repub nuts just keep getting nuttier

Todd Akin (R-MO) the Republican candidate for the Senate from Missouri says American women who find themselves victims of “legitimate rape” don’t have to worry about getting pregnant because “the female body has ways to try to shut that whole thing down.”  He says he has that “Fact” from qualified medical authority that he refuses to name.  I’m not kidding you.  See the video here:  http://www.youtube.com/embed/fdisTOKom5I/ or below:

Here is the scary thing.  This certified nut case could actually end up as a member of the U.S. Senate.  

Vital information for ALL young people

Please share this information with every young person you know.

A new report from the Georgetown Public Policy Institute provides dramatic proof of the importance of a college education in today’s economy.  If you know a young person in high school or college who may be considering dropping out of school and not getting a college degree much less a high school degree, please make sure they see , understand and heed the lessons this chart from the Georgetown report.  There future depends upon them understanding that they must obtain as much education as they can if they hope to have a secure economic future.   If the chart doesn’t display, go to http://cew.georgetown.edu/collegeadvantage/ and download the full report.  The chart is on page 5.

Notice the green line on the chart representing the job gains/losses of people with a Bachelor’s degree or better during the recession.  They actually gained jobs doing the recession.  Next, look at the blue line showing what happened to those with just a high school degree or less.  These people were the most likely to lose their jobs and most of them are still unemployed.  That’s the truth about getting and keeping a job today.  Every young person must be made to understand this vital fact.  Stay in school.  Stay in school.  Stay in school just as long as you can. 

A Clearly “Bad” Choice, Not an Echo

Romney has now given us a clear choice with his selection of Paul Ryan as his running mate.  It is a clearly bad choice.

• If you believe Medicare was a mistake and should be dismantled, Romney/Ryan is for you.  And don’t believe for a moment that you are protected from changes to Medicare because you are 55 or over.  Romney/Ryan want to convert Medicare to a voucher system but say that those 55 and over can keep traditional Medicare.  Don’t believe them.  A voucher option would create a two tier system.  Those 55 and over would have a traditional Medicare Defined Benefit.  Those under 55 would have a Defined Contribution plan that would not be anywhere close to matching the traditional Defined Benefit.  Those under 55 who are denied traditional Medicare won’t tolerate that 2^nd class status for long.  It won’t be long after Romney and Ryan implement their voucher plan before we will see demands for “fairness.”  Traditional Medicare will be taken away from those who have it.  They’ll be place in the same leaky boat as everyone else.  That WILL HAPPEN if we let Romney/Ryan dismantle Medicare.

• If you believe that Social Security was a mistake and want to dismantle it, the Romney/Ryan ticket is for you.  Romney/Ryan want to let younger workers opt out of traditional Social Security.  They say they want to “save” Social Security.  Social Security IS NOT in trouble.  The funds can be there for all with just a few minor changes such as very gradually raising the cap and/or the age for full retirement.  The big problem for Social Security is the declining number of workers paying in for the number of retirees.  Now, if that is the problem, does it make sense to REDUCE the number of workers paying into Social Security by letting some opt out?  No, it makes no sense.  Letting more workers opt out would guarantee that Social Security will run out of money to pay benefits FAST. 

• If you think banks and financial institutions should be de-regulated and allowed to perate anyway they wish, Romney/Ryan is for you.  Just remember that the major cause of the great recession we just experienced was the de-regulation of the financial industry that Republicans forced upon us under Bush.  We need MORE regulation of financial institutions, not less if we want to protect our economy and jobs from the greed of a few.

• If you think the Environmental Protection Agency isn’t needed and should be abolished, Romney/Ryan is for you.  Just don’t complain about having to drink polluted water and breath polluted air.  And when that nuclear accident occurs in the plant near you, don’t ask for help from the Romney/Ryan federal government.  You won’t get it.

• If you believe the Food Stamp program and other pieces of the social safety net like unemployment insurance are the wrong thing for the country and should be stripped of funding, even if that means some American children will starve, Romney/Ryan is for you.  Just hope you never lose your job or run out of money before you run out of life.

• If you think the rich is America are taxed too much and that their taxes should be driven as close to zero as possible, then Romney/Ryan is for you.  Just remember under their budget, YOU PAY for the tax cuts for the rich.

• If you believe the United States should abandon or severely roll back financial support for education, infrastructure improvement, financing of basic research and development and just about everything but national defense, then Romney/Ryan is for you.  Just learn to live with bad roads, unsafe bridges, bad schools, and a brighter future that will no longer be yours.

• If you believe that Obamacare should be repealed and that health insurance companies should be free to deny people coverage to people with pre-existing conditions and raise premiums at will, the Romney/Ryan is for you.  By-the-way, under the Romney/Ryan “end-Obamacare and convert Medicare to a voucher program plan” that voucher won’t be any good to you if you have heart problems, high blood pressure, are overweight, have diabetes or have any other pre-existing conditions because no insurance company will accept your medicare voucher.

• If you believe that the reforms of the Progressive Movement of the early 1900s that brought us child labor laws, occupational health and safety, the right of labor to organize, pure food and drug laws, anti-trust laws, the creation of our national parks, and so on were excessive government intervention with free market capitalism and should be rolled back or repealed outright, then Romney/Ryan are for you.

• If your hero is the atheist Ayn Rand and you agree with her that the individual owes nothing to society, that greed is good, compassion is weakness and that the worth of a human being should be judged totally by their net worth in dollars, then Romney/Ryan is for you.

Romney has made this election a choice between an American government that is good, decent, compassionate, devoted to protecting the weak and determined to provide a guarantee of a fair opportunity for all and an American government that turns its back on the majority of Americans, particularly workers, seniors, the poor and those most in need. 

Watch this video and learn what damage the Romney/Ryan ticket will do if elected or go here: http://www.youtube.com/embed/oWyk-Mr6cfc/

How Romney could have paid zero taxes on millions of income

A reader of Talking Points Memo who claims to be familiar with the way equity partners can avoid paying taxes offers this explanation of how Romney might have indeed paid zero or near zero taxes for many years as Harry Reid claims.

The corporate structure of most private equity firms is such that there is a management company (holding company) above a set of LLCs or limited partnerships which are the actual funds investing the capital and collecting the fees/distributing the profits. Romney was both a general partner in the funds and the sole shareholder of the management company.

The management company shares are generally considered to have relatively nominal value (i.e. you can conceivably put them into an IRA) as there generally isn’t a lot of (or any) income/revenue associated with them — however, since the management company owns the brand name and controls the funds and all hiring/firing/compensation decisions (within Bain Capital), if Romney’s partners wanted to continue using the name “Bain Capital” and take over control of the private equity firm and funds in the future, they would have to buy back Romney’s shares over a period of several years for hundred+ of millions of dollars. This is not uncommon in private equity firms undergoing an ownership transition. Since these shares (could) have been contributed to an IRA over the years, the Romney’s income 2002 to 2009 would largely be from his partners at Bain buying back shares that he’s already contributed to his IRA, and just like any trading you do in your IRA, the sale of these shares would be tax free until after he turns 65 (and/or withdraws from said IRA) and he’d pay zero income taxes on that. 

Interesting.  Very interesting.

Republicans promote job-killing economic uncertainty

Republicans maintain that businesses are holding back on hiring in part because of the uncertainty about whether the Bush tax cuts will be allowed to expire at the end of this year.  They argue that ALL of the Bush tax cuts should be extended.  Democrats say they agree that we should extend the tax cuts on the first $250,000 of income for everyone including millionaires but that the top marginal rates on of an individual’s income in excess of $250,000 should return to what they were before the Bush tax cuts were enacted.

Republicans and Democrats AGREE that we should reduce uncertainty and that doing so would help with job creation.  Both Republicans and Democrats AGREE that the Bush tax cuts on the first $250,000 of income for everyone should be extended, at least temporarily.

All Congress needs to do is pass legislation that ALL members of Congress, Democratic and Republican AGREE should be passed.  The Bush tax cuts on the first $250,000 of everyone’s income should be extended.

Once that is done, Democrats and Republicans can continue to debate whether the Bush tax cuts on income OVER $250,000 should be extended or allowed to expire.

Democrats are fully prepared to accept such a compromise.  Republicans aren’t.  So, who is creating the uncertainty that is killing jobs?  REPUBLICANS.  

The one-page solution to Romney’s tax problem

Romney is taking a lot of punishment from Harry Reid with the charge that he may not have paid any income taxes for 10 years.  Republicans and even some Democrats are saying that Reid is misbehaving.   Romney still refuses to release his tax returns. The irony is that Romney could put an end to the whole issue by releasing just one page from any of his tax returns for the past 10 or 15 years.  Any tax he owed would be shown on page 2, line 61 (or a comparable line) on his Form 1040.  All Romney has to show is that during at least one year over the last 10 or 15 years, he paid SOME tax.  That’s all.  Reid would be shown to be wrong.  Romney would win the argument.  So, why doesn’t Romney do this one simple thing to end the controversy? Is it because Reid is RIGHT?

Check out Form 1040 below.

We would have 7.6% unemployment accept for Republicans

As you know the unemployment rate ticked up slightly in July to 8.2%.  That is in spite of the fact that private sector job growth was the best it has been for three months, adding 172,000 jobs for an average of 141,000 per month so far this year.  See the BLS July report here:  http://www.bls.gov/news.release/empsit.nr0.htm

So, why did unemployment go up?  The answer is simple.  Republicans in Congress have been extremely successful in blocking the federal aid to state and local governments that we would normally see during a recession.  Additionally, Republicans at the state level continue to lay off public employees even in those states and communities where state and local revenues have improved.   Consequently, we continue to see declines in public sector employment. In fact, government payrolls have fallen in 23 of the last 26 months.  More than one million public sector employees have lost their jobs. Nine thousand were lost in July.

Republicans were not successful in totally blocking the stimulus that turned around the private sector and got it on a path to job growth.  However their austerity policies and obstruction of any efforts to help state and local governments has had the effect they desired--cripple or at least slow the recovery in the hope that a struggling economy would be good for Republicans in the 2012 election.

The Brooking Institute crunched the numbers and concluded:  “If government employment had remained steady rather than shrinking, the current unemployment rate would be 7.6% rather than 8.3%.”

Why do we have 8.3% unemployment rather than 7.6%?  Answer: Because Republicans who are willing to sacrifice American jobs for political advantage.  Will they be rewarded for this cynical attack on America?  We’ll find out in November.

Read more here: http://www.brookings.edu/blogs/jobs/posts/2012/08/03-jobs-burtless?rssid=LatestFromBrookings&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BrookingsRSS%2Ftopfeeds%2FLatestFrom

UPDATE: Why Romney won’t release his tax returns.

Harry Reid said in a recent Huffington Post interview that he knows why Romney want release his taxes. A Bain investor told Reid that Romney didn't pay ANY taxes for 10 years.  Of course that would be easy for Romney to refute--just release his tax returns. Romney says he can't recall if there were years when he paid less than 13.9% in taxes but he would "go back and look." His campaign says that he WILL NOT be looking.

Is it possible this has tax return controversy has more  to do with a character trait/flaw than the issue of the returns?  Is it possible that Romney can't admit that he made a wrong decision--like deciding not to release his returns? That would be a more serious issue than not releasing returns. We can't afford a president who can't admit and learn from a mistake.