Main Street vs. Bain Street

When President Obama, speaking today in Chicago at the NATO Summit, was asked about Cory Booker’s comments on Meet the Press on Sunday, he used the opportunity to question the applicability of Mitt Romney’s record and experience at Bain Capital.

The President sums it up:

“When you’re President, as opposed to the head of a private equity firm, then your job is not simply to maximize profits. Your job is to figure out how everybody in the country has a fair shot.”

I’ve been harping on this for a while now.

There is no logic that I can think of that justifies Romney’s assertion that experience managing a private equity firm is the skill set needed to be President of the United States. Are there significant components related to finance that are part of a president’s job? Of course. But if one makes the same decisions as a president that one would as a private equity firm manager, one excludes most of America from the mix.

On the campaign trail, Romney is hiding from his record as Governor of Massachusetts so, if anything, the single-focus of business experience that Romney is touting as his primary selling point only proves how well rounded he isn’t.

Virtually lost in today’s hubbub about Cory Booker’s statements and President Obama’s response to them is the fact that the President was addressing a NATO summit.  Although this barely got reported on today, he spoke of strengthening the commitment of our NATO partners with regard to Afghanistan, he reminded us of the U.S. and NATO role in helping to overthrow Gaddhafi and to get Libya farther down the road to peace and prosperity, and he addressed the subject of European missile defense and the role that it plays in combating terrorism.

Considering the import of the issues being discussed at that conference, could a more stark contrast be drawn with the myopic campaign tactics of Mitt Romney?

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Today's Numbers

Today’s Numbers

The number of cents per gallon that gasoline has dropped since this time last month.

The number of cents per gallon that gasoline has dropped since this date last year.

The number of Republicans who previously blamed Barack Obama for rising gas prices who sent Barack Obama a note of congratulations or thanks for now lowering them.

* This number is not official, but it’s a pretty safe bet.

GM Head Discredits Romney

Last week, Mitt Romney tried to structure his sentences in such a way that he could give himself credit for the success of the automotive industry bailout.

Not surprisingly, liberals and progressives jumped all over that complete revisionist history.

What is surprising, however, is that the head of General Motors, CEO Dan Akerson, agrees with the liberals and progressives.  He confirmed on CBS This Morning that it was indeed the bailout saved the auto industry and, in particular, it saved GM.  As a result, GM is now the #1 auto manufacturer not only in the U.S. but also in the world.

Of particular note is the discrediting of Romney’s statements, which is particularly satisfying given that Akerson paraphrases Ronald Reagan.  When Charlie Rose asks about Romney’s position on the bailout, Akerson responds:

“… [T]here was a wise man named Ronald Reagan, who once said ‘There’s no limit to what a man can accomplish if he’s willing to share the credit.'”

(Reagan’s original quote is: “There is no limit to the amount of good you can do if you don’t care who gets the credit.”)

Mitt’s Business Acumen

Back in January, before Mitt Romney was the presumptive Republican nominee, I posted a tweet about the applicability of his business skills to the role of President:

I also published a more detailed (and only slightly less snarky) post on this blog on the same subject. While I was being just a tad sarcastic to make a point, my basic premise was deadly serious.
The Obama campaign today released a six-minute video that makes the same point a little more concretely, detailing the real-world consequences of Romney’s business philosophy while at Bain Capital:

There are lots of us in the middle class who are relieved (a) that Obama and his team are now campaigning in earnest, and (b) that they’re taking on this issue head-on.

Romney and his surrogates have been claiming that they don’t want to talk about social issues like women’s health and marriage equality (even though they’re usually the ones who are bring those subjects up). They keep claiming that their campaign forte is the economy.

Judging by today’s campaign video, it looks like Obama is welcoming that challenge.

Tampa, the GOP, and the Subprime Mess

There’s a stunning irony in the choice of venues for the GOP convention that is likely lost on most Republicans.  Tampa, Florida, was home to an entire division of Countrywide — the mortgage lender that played an enormous part in the nation’s economic downturn by saturating the market with subprime mortgages and then bundling them together into securities that could be sold by equally unscrupulous bankers on the open market to unsuspecting purchasers.

At the peak of subprime frenzy, Countrywide built out an entire facility in Tampa devoted to the sales and servicing of subprime mortgages.  The company could barely hire people fast enough to keep up with the demand that they themselves had generated by making loans available — on the worst terms possible for the borrower — to tens of thousands of borrowers who simply were not qualified to carry those loans.

At one point, Countrywide boasted of a record of $28 billion of mortgages written in a single month of lending, with many of those loans underwritten using the shoddiest of underwriting standards.

Consider these unemployment numbers for Florida:  In 2005-2006, unemployment bottomed out at 3.3%, right when all that subprime lending was going on.  With the subsequent tanking of the economy, due in large part to the collapse of the subprime market because of the fraudulent lending practices of Countrywide and others, unemployment in Florida skyrocketed to 11.4% in mid-2009, and remains to this day at or above 9%.

Florida also boasts one of the highest foreclosure rates in the nation, particularly on condominiums which were built (or overbuilt) in response to the new demand that all that subprime lending had created.  When the bubble burst, construction on half-finished developments came to a halt. Buyers who had bought into these developments were stuck with properties that were worth pennies on the dollar compared to what they now owed.  These early owners also took on the obligations of the condominium associations, the expense of which was to have been spread across dozens or hundreds of owners and now consequently was legally required to be borne by those unlucky few.

So, when the GOP opted to hold its convention in Tampa, organizers apparently were completely unaware of the optics of this choice.  Add to the bad optics of this backdrop the fact that the presumptive GOP candidate is touting a return to (or a doubling down on) the same economic policies that created this financial disaster, and it becomes hard to think that there won’t be some pretty significant negative repercussions for the Republicans.

The Democrats would be fools not to make hay out of this hypocrisy.  My guess is that the haymaking is already underway.

 

 

Sarkozy Is History

Nicholas Sarkozy, who has been at the head of a country with an austerity plan and an unemployment rate greater than 10%, has just been voted out, in favor of Socialist François Hollande. The ramifications of this change in leadership and policy may be far-reaching.

Many prominent economists blame the austerity measures put in place by the Sarkozy government for the failure of the French economy to recover. And yet those measures are almost identical to the GOP’s so-called economic recovery plan.

While it’s not likely that any drastic economic improvements will happen instantaneously with the change in leadership in France, it will certainly be something to keep an eye on in the coming months.  And there’s no doubt that what happens in France will affect economies around the world.

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