Bain Mysteries

[RecycleMichael]

1. You can only be successful by defrauding others, therefore, wealth is evidence of a crime.
2. If you are a Democrat, you are always the victim, even if it is you who commits the fraud.
3. If you are not a Democrat, accusation, subpoena, or implication is equal to a conviction.
4. If you are a Democrat, accusation, subpoena, or implication is a vicious attack.

Put down the recyclables and show me the funny parts of gaspar's rant.

[Teatownclown]

 So lets say Romney is right. He really did not make any decisions at Bain after February 1999. So what he is saying that while he was still president and CEO, his hand picked successors at Bain went whole hog into the outsourcing business. Mitt was at best unaware. Still, it was his millions they poured into companies that outsourced, and he made millions in profits from companies that took American jobs. If he was aware, he could have stopped it. Instead he turned a blind eye and pocketed the cash.  I'm not sure how that's any better.There is no doubt and no question that that is what he did. He had the opportunity to lead and chose not to.

Same thing with his offshore investments. He could have told his lawyer in charge of his blind trusts not to use off shore tax shelters, but he did not. He just sat by and passively enjoyed the benefits.  And he wants to lead the free world? He can't even lead his own company and manage his own lawyer.

[Conan71]

So lets say Romney is right. He really did not make any decisions at Bain after February 1999. So what he is saying that while he was still president and CEO, his hand picked successors at Bain went whole hog into the outsourcing business. Mitt was at best unaware. Still, it was his millions they poured into companies that outsourced, and he made millions in profits from companies that took American jobs. If he was aware, he could have stopped it. Instead he turned a blind eye and pocketed the cash.  I'm not sure how that's any better.There is no doubt and no question that that is what he did. He had the opportunity to lead and chose not to.

Same thing with his offshore investments. He could have told his lawyer in charge of his blind trusts not to use off shore tax shelters, but he did not. He just sat by and passively enjoyed the benefits.  And he wants to lead the free world? He can't even lead his own company and manage his own lawyer.

I care far less about private enterprise investing in jobs overseas than I do an administration who repaid contributors with "stimulus" funds from unwitting taxpayers which ended up creating jobs overseas. 

As Democrats continue to bash Mitt Romney for his purported record on outsourcing jobs, the Republican Party has launched a counteroffensive, exposing President Obama's 2009 economic stimulus law for doling out millions of dollars to foreign companies or subsidizing U.S. firms that expanded operations abroad or purchased foreign goods.

The Obama campaign has been vocal in its dissent of job outsourcing, using Romney's past business endeavors as an indication of his performance on domestic job-creation. "I want to stop giving tax breaks to companies that ship jobs and factories overseas," the President asserted Tuesday during a speech in Cedar Rapids, Iowa. "As long as I'm president, I will keep fighting to make sure jobs are located here in the United States of America."

However, Obama's $787-billion American Recovery and Reinvestment Act funneled millions of federal dollars to companies that shipped American jobs overseas. Take, for example, North Carolina-based LED manufacturer Cree Inc., which reaped $39 million through a stimulus-funded tax credit program in January 2010. In November 2009, the company built a manufacturing plant in Huizhou City, China, which is the harbor for more than half of the company's employees.

While Cree is a U.S.-based company, chairman and CEO Chuck Swoboda says that "Cree management never runs this company as a U.S. company. We consider Cree to be a global company with local wisdoms." And the firm's plans to further expand into foreign countries are only just beginning, asserts Swoboda. "We will continue to invest here for both human talent and the most state-of-the-art technologies," he said, adding, "We have committed that in the coming 3-5 years, we will continue to expand our operation in Huizhou."

Another foreign investment scheme spurred on by Obama's stimulus law involves Japanese wind energy firm Eurus Energy, whose American subsidiary, Eurus Energy America, collected $91 million in stimulus funding to initiate construction of a wind farm in Texas. As it turns out, the wind farm was allegedly built using turbines manufactured by Mitsubishi — another Japanese company.

"Eurus Energy America, the U.S. subsidiary of a Japanese firm, received $91 million in stimulus money for its Bull Creek wind farm in Texas," cited a 2010 report by American University. "The farm consists of 180 Mitsubishi turbines."

Furthermore, the Energy Department's insatiable appetite for "green" investments has become a chief stimulant to job creation in foreign countries. Solar power firm Sempra Energy, for example, was awarded a whopping $337-million loan guarantee to supply panels for a solar power array in Arizona. However, while Sempra is based in California, the company purchased its solar panels from the Chinese solar giant Suntech.

Perhaps the most damning paragon of the Obama administration's subsidization of foreign companies involves a $500-million loan guarantee siphoned to Finnish automaker Fisker Automotive. A component of the Energy Department's alternative-fuel vehicle program, the loan was intended to bolster Fisker's presence in the U.S. manufacturing market. However, claiming it was unable to find a viable location in the United States, Fisker never built a domestic facility, deciding instead to cease its U.S. operations and continue building vehicles in Finland.

"There was no contract manufacturer in the U.S. that could actually produce our vehicle," founder Henrik Fisker told ABC News. "They don't exist here." Fisker said Finland was a more efficient and economical place to carry out his operations. "We're not in the business of failing; we're in the business of winning. So we make the right decision for the business," he affirmed. "That's why we went to Finland."

In response to these damning new revelations, the Republican Party is ramping up efforts to expose the President's record on outsourcing jobs. In fact, the Republican National Committee just unveiled a new website, entitled Obamanomics Outsourced, which highlights how federal dollars under Obama have funded foreign projects, as it includes a map with pop-up details about the administration's numerous foreign investment projects.

"Over his four years in office, Obama promised that he would focus on creating 'jobs that pay well and can't be outsourced,'" the site reads. "However, as he racked up trillions in new debt, billions of dollars did go to create jobs that were outsourced or spent overseas. Whether it is electric cars made in Finland or solar panels in Mexico, taxpayers would be astonished to learn that their hard-earned money went abroad for jobs that weren't created in the United States."

Even the ultra-liberal Sen. Charles Schumer (D-N.Y.) has expressed discontent over the president's economic stimulus, indicating to ABC News that the law was falsely advertised to Congress. "In all due respect I remind the secretary [of Energy] there is a four-letter word associated with the stimulus — J-O-B-S," Schumer charged. "Very few jobs here, lots of jobs in China. That is not what I intended or any other legislator who voted for the stimulus intended."

[nathanm]

Learn the rules Conan.

1. You can only be successful by defrauding others, therefore, wealth is evidence of a crime.
2. If you are a Democrat, you are always the victim, even if it is you who commits the fraud.
3. If you are not a Democrat, accusation, subpoena, or implication is equal to a conviction.
4. If you are a Democrat, accusation, subpoena, or implication is a vicious attack.

Romney is an evil man for several reasons. He is wealthy, forces his wife to stay home and take care of the children, goes to church, and is a gifted businessman.  Any of these traits by themselves makes him nauseating to Democrats, but all of them together make him a monster.

Is there a particular reason you think that being the head of an LBO shop means Romney has a good understanding of economics? Seems to me he's probably got great experience with leveraged buyouts, but I don't think that the USG is an LBO shop.

Also, your list only makes sense if you don't actually listen to the specific complaints about Romney. Not surprising, coming from you. You have this strange belief that I and others have an issue with wealthy people merely because they're wealthy. No, I take issue with wealthy people who use offshore accounts to avoid taxes. I take issue with the wealthy people who evade their taxes, like the most recent Republican president.

That Romney happened to make much of his money by stiffing banks is just icing on the cake. I guess your idea of a good plan is to stop redeeming Treasuries? That would fit well with Romney's experience.

[Teatownclown]

Where'd you steal that from, Conan?

[nathanm]

Funny how it's some kind of tragedy that US subsidiaries of foreign companies receive money for services or DOE loans or whatever the complaint du jour is, but it's not at all a problem when US subsidiaries of foreign companies (or large US retail chains) get massive state tax breaks for building factories or stores or whatever.

[heironymouspasparagus]

I care far less about private enterprise investing in jobs overseas than I do an administration who repaid contributors with "stimulus" funds from unwitting taxpayers which ended up creating jobs overseas. 

Do you mean like the bailouts that Bush gave the big banks - who then promptly sent a couple hundred billion to their European buddies?

Or maybe the Bush initiated bailout of bankrupts GM and Chrysler, where one just keeps on outsourcing to foreign locations (GM) and the other is an Italian company now?

[Conan71]

Do you mean like the bailouts that Bush gave the big banks - who then promptly sent a couple hundred billion to their European buddies?

Or maybe the Bush initiated bailout of bankrupts GM and Chrysler, where one just keeps on outsourcing to foreign locations (GM) and the other is an Italian company now?

This discussion isn't about Bush, but since you mentioned it, GM and Chrysler are a couple of shining moments our current president likes to take credit for.  Secondly, Chrysler was partly owned by a German company prior to being owned by an Italian company (Daimler-Chrysler), BFD.

Secondly, Senator Obama voted for all of these programs.

Third, the secret lending to European banks continued well after Jan 20, 2009 and under the watch of, you guessed it: Tim Geithner, Treasury Secretary under the Obama Administration.

Now, did you have a point about private enterprise investing and employing overseas?

In a monster report for its January issue, Bloomberg Magazine compiled previously secret Fed data on the size and scope of the bank bailouts during 2008-2009.   Among other things, we learn that the Federal Reserve under Ben Bernanke and Tim Geithner (previously head of the New York Fed) secretly loaned over seven trillions dollars to arguably insolvent banks and financial institutions to keep them afloat, while concealing the scope of the lending from Congress and even member of the Treasury Department charged with allocating TARP bailouts.

Much of this information on the Fed's lending programs was already known in summary form as a result of the successful "audit the fed" legislation pushed by a coalition that included Firedoglake.  That effort led Bloomberg to further successful Freedom of Information Act requests that retrieved another 29,000 pages of more detailed documents.

The Bloomberg report compiles and analyzes this information to reveal the staggering effort undertaken by the Federal Reserve in 2008-2009, both to keep the financial system, including the nation's largest banks, from collapsing and to keep the details secret from Congress as it was considering the TARP legislation in 2008 and the financial reform legislation and regulations in 2009-11.

Among the most dramatic findings:

– While the the Fed and Treasury frequently boast that virtually all the TARP money was paid back, the major banks also received a "gift" of an estimated $13 billion in profits resulting from the difference between near zero interest rate loans and market rates.

– The publicly debated TARP funding request was for $700 billion to be administered by the Treasury, but the Federal Reserve Bank had committed 11 times that much — $7.77 trillion — to its secret guarantees and lending facilities by March 2009. (Eventual totals may have been over twice that much.)

– The heads of the major banks routinely misled investors, without corrections from federal officials, about their utter dependence on the Fed's loan facilities. For example,

"On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed "one of the strongest and most stable major banks in the world." He didn't say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day. . . ."

– There were virtually no strings attached to the institutions that received the loans.

– The Fed essentially decided which banks would receive TARP funds from Treasury, but the amounts were dwarfed by Fed loans.  "The six biggest U.S. Banks, which received $160 billion of TARP funds, borrowed as much as $460 billion from the Fed . . ."

– The big six — JP Morgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley — "accounted for 63 percent of the average daily debt to the Fed" for all publicly traded financial firms, far more than their total market share.

– Ben Bernanke and Hank Paulson insisted the loans were made only to "sound institutions," even though the largest firms were essentially supported by Fed loans and TARP.

– Congress members working on the financial reform law claim to have been kept in the dark about the extent of the Fed lending programs and the degree of reliance by the largest financial institutions.  The concealment played a major role at a time when Senators Kaufman and Brown were fighting unsuccessfully to break up the TBTF banks.  The Administration opposed any breakup, arguing that larger sizes were essential for efficiency and international competition, the same position taken by bank lobbyists.

– While there was much publicity about Bush Treasury Secretary Hank Paulson "forcing" the largest banks to accept TARP funds, all of them were already relying heavily on low-interest Fed loans, which were not disclosed to Congress:

"Bank of America and New York-based Citigroup each received $45 billion from TARP. At the time, both were tapping the Fed. Citigroup hit its peak borrowing of $99.5 billion in January 2009, while Bank of America topped out in February 2009 at $91.4 billion. . . .

Lawmakers knew none of this.

They had no clue that one bank, New York-based Morgan Stanley (MS), took $107 billion in Fed loans in September 2008, enough to pay off one-tenth of the country's delinquent mortgages."

– Democratic Senators Kaufman, Brown and Dorgan argue that Congress would have been much tougher on the banks in the financial reform legislation if the extent of the lending had been revealed.  Instead, the largest banks grew even larger, increased compensation to executives, and increased spending on Congressional lobbying to limit the scope of financial reforms and subsequent regulation.

"Total assets held by the six biggest U.S. banks increased 39 percent to $9.5 trillion on Sept. 30, 2011, from $6.8 trillion on the same day in 2006, according to Fed data."

The entire Bloomberg report is worth reading.  It does not argue that the lending programs were unnecessary or too large; it includes quotes from those who believe they were necessary.  Instead, the thrust of the story is that information about the massive size and scope of these efforts was deliberately concealed from Congress and the American people during a critical period.

That concealment shielded the financial industry from more drastic reform efforts and accountability, leaving the industry even larger and too big to regulate.  I'd add that the concealment also shielded federal regulators on how massive a rescue effort they believed was required to make up for their regulatory failure.

More from Yves Smith, Quelle Surprise! Everyone lied.

David Dayen's take:

The banks were able to access emergency lending facilities, or change themselves into bank holding companies overnight, to borrow at next to nothing, and if they chose, lend back to the government at a tidy profit. You didn't have to think at all to make money. And you didn't have to worry about that toxic balance sheet, because the government was going to help you grow your way out of it. They will also facilitate mergers to help decimate your competition. The money that the banks borrowed for nothing could have just as easily gone to underwater homeowners.

http://my.firedoglake.com/scarecrow/2011/11/27/explosive-bloomberg-report-details-feds-monster-bank-bailouts-7-77-trillion/

[heironymouspasparagus]

This discussion isn't about Bush, but since you mentioned it, GM and Chrysler are a couple of shining moments our current president likes to take credit for.  Secondly, Chrysler was partly owned by a German company prior to being owned by an Italian company (Daimler-Chrysler), BFD.

Secondly, Senator Obama voted for all of these programs.

Third, the secret lending to European banks continued well after Jan 20, 2009 and under the watch of, you guessed it: Tim Geithner, Treasury Secretary under the Obama Administration.

Now, did you have a point about private enterprise investing and employing overseas?

Goes to the point of how we are being sold out by both sides. 


Sure, I do.  It's bad for us, in great part.