Back in 1963, when some of us were still in high school, Nat King Cole had a big hit with Those Lazy-Hazy-Crazy Days of Summer – the title song from the album, an album which also included On a Bicycle Built for Two, In the Good Old Summertime, and On the Sidewalks of New York. It was schlock – Nat King Cole descended to that now and then – and it certainly wasn’t cool. Jan and Dean had been singing about Surf City, and Leslie Gore was singing something about it being her party and she could cry if she wanted, damn it, and the Chiffons insisted He’s So Fine – but in June of that year there was a market for nostalgia, for the good old days – for what summer was supposed to be.
There was too much going on. That month, in Saigon, that Buddhist monk set himself on fire to protest oppression of Buddhists by our buddies, the Diem administration, and George Wallace stood in the door down at the University of Alabama, to protest integration of course, before meekly stepping aside, and Kennedy delivered his careful civil rights address and promised a civil rights bill, one day – and then Medgar Evers was murdered over in Jackson, Mississippi – and then the Supreme Court ruled that state-mandated Bible reading in public schools was unconstitutional, and, at the end of the month, Kennedy popped up in West Berlin and announced “Ich bin ein Berliner” – the citizen, not the pastry. It made your head spin and Nat King Cole timed it right. It was summertime, a time to watch the kids catch fireflies at twilight and that sort of thing. Forget the rest.
It’s the same now. It’s the middle of July and baseball has resumed after the All-Star Game, and things are as they should be, with the hot first-half teams, the Dodgers and the Pirates, sinking to where they should have been all along, and the Yankees, with by far the highest payroll in baseball, way out in front of everyone. If you have the cash you can win it all – it’s sort of a Mitt Romney thing. And it’s hot as hell, record hot, with the worst and widest drought since the Dust Bowl of the thirties. But it’s not global warming or massive climate change as George Will brilliantly clarified – “How do we explain the heat? One word: summer.” He prefers Nat King Cole, and nostalgia, to science – “We’re having some hot weather. Get over it.” So yes, all is as it should be – large groups of strangely attired grown men are peddling tiny bicycles up and down the mountains of France, as they do every July.
But something is wrong. Yes, it’s an election year, but it’s only July and things weren’t supposed to get this nasty so fast – not yet. It all started off having to do with about six thousand jobs lost, and many others outsourced, and plants closed, and lives ruined. But it wasn’t Mitt Romney’s fault. He had left Bain Capital long before all that happened, in spite of what the SEC filings said, the filings he himself had signed. Yes, Obama is implying that Romney is lying and there’s a lot of evidence that’s true, but there are subtle counterarguments that it isn’t true at all, and others saying it doesn’t matter. It’s a pickle – Romney was the nominal CEO of Bain for the whole time, sort of – and the Republicans seem a bit panicked.
If Romney were to release his full tax returns that might clear it all up – just where he made his money, when – but he won’t release those. And thus he’s reduced to spending all his time defending himself, not attacking the other guy, and certainly not talking about his agenda of wonderful things he’ll do for the country when he’s elected, as he knows he will be. That’s deadly. Romney has asked for an apology from Obama – Romney said he wasn’t lying – but that’s panic. Romney seems to be rattled and angry about these Bain charges, but can’t seem to defend himself or strike back.
And then we got the July attack dogs:
President Barack Obama “hates this country,” and his philosophy appeals to “people with miserable, meaningless lives” and “people who don’t count,” Rush Limbaugh said Monday.
“I think it can now be said, without equivocation – without equivocation – that this man hates this country,” the conservative radio host said. “He is trying – Barack Obama is trying, to dismantle, brick-by-brick, the American dream. There’s no other way to put this. There’s no other way to explain this.”
Obama had said this:
There are a lot of wealthy, successful Americans who agree with me, because they want to give something back. Look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something: There are a whole bunch of hardworking people out there.
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business – you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
Limbaugh said that was un-American and aimed at “depressives who needed to belittle successful people to feel better” and so on:
This is a bunch of people that don’t count. This is a bunch of people with miserable, meaningless lives who are lying to themselves; trying to tell themselves that they matter.
But that’s just Limbaugh. You’re supposed to shrug. Maybe the heat got to him. But then it became official:
A top Mitt Romney supporter went on a rampage against President Obama Tuesday morning, bringing up his teenage drug use and urging him to “learn how to be an American.”
John Sununu, the former governor of New Hampshire and a leading Romney surrogate, told reporters that Obama’s recent defense of public infrastructure shows he “doesn’t understand how America works.”
“I wish this president would learn how to be an American,” Sununu said later. …
The media firestorm was immediate and fierce. Almost immediately another Romney surrogate, Tim Pawlenty, the former Minnesota governor, distanced himself from Sununu – calling the other guy a god-damned foreigner who doesn’t understand America at all might be a bit much. Late in the day Sununu himself walked back the comments – “I made a mistake. I shouldn’t have used those words, and I apologize for using those words.” At least Sununu didn’t go full-Limbaugh. He didn’t scream that Obama hates America. He just screamed.
July wasn’t supposed to be like this. The nastiness was supposed to come later, after the conventions. And to make things even odder, Mitt’s friends were ganging up on him at the same time:
One of the most venerated institutions in the conservative establishment has joined the chorus calling on Mitt Romney to release more of his tax returns. In an editorial posted late Tuesday, the editors of the National Review said it’s time for Romney to release his tax returns, and condemned the presumptive nominee for making excuses…
On Tuesday, Texas Gov. Rick Perry reportedly became the latest prominent Republican to call on Romney to release more tax returns, something he and other presidential candidates also did on the primary campaign trail. “I think anyone running for office, if they get asked within reason to give people backgrounds about what they have been doing, including tax returns,” Perry said at a press conference. …
Ron Paul also called on Romney to release his tax returns Tuesday.
And in a flashback to the last election there was this:
Asked why he chose not to go with Romney, McCain said: “Oh come on – because we thought that Sarah Palin was the better candidate. Why did we not take Tim Pawlenty, why did we not take any of the other 10 other people? Why didn’t I? Because we had a better candidate, the same way with all the others! Come on, why? That’s a stupid question.”
Digby comments on that:
I don’t think he knows what he’s saying there, do you?
I would have thought that Palin would be worse than Romney in virtually every way, but I’ll take McCain’s word for it. He’s the one who vetted both of them and concluded that Mitt was second rate.
Well, he did. McCain said he had no issue with Romney’s tax returns when vetting him for the VP slot but said he thought Sarah Palin was just a better candidate.
Romney didn’t need this, and if he gets hammered any more, by the folks on his side, perhaps there will be a Tea Party uprising at the Republican convention and the party will toss Mitt aside and nominate Sarah Palin. She wasn’t invited to participate and THAT would be sweet revenge. Tina Fey would be happy, as would Obama. After all, the far right never liked Romney, and the establishment right has decided he’s a jerk – and Obama is needling him – “So, Mitt, just what the hell is your ‘fix-it’ business experience, exactly? Tell us, damn it. Put up or shut up.”
That puts Mitt back on his heels, trying over and over to explain stuff no one really understands, or, when they do understand it, it sounds nasty – and his tax returns will kill him. There’s lots of speculation that, for a few years, he paid no taxes at all, as rich people can pull that off easily enough. Of course that’s legal, and often proper, and politically deadly. Voters know what they paid. Overwhelming resentment follows.
July wasn’t supposed to be like this – but David Brooks is with Mitt, with this column defending capitalism of the sort Romney practiced, and Brooks certainly is miffed at Obama:
Instead of defending the policies of the last four years, the campaign has begun a series of attacks on the things people don’t like about modern capitalism. They don’t like the way unsuccessful firms go bust. Obama hit that with ads about a steel plant closure a few months ago. They don’t like CEO salaries. President Obama hits that regularly. They don’t like financial shenanigans. Obama hits that. They don’t like outsourcing and offshoring. This week, Obama has been hitting that.
The president is now running an ad showing Mitt Romney tunelessly singing “America the Beautiful,” while the text on screen blasts him for shipping jobs to China, India and Mexico.
Brooks maintains that’s just not fair, and Alex Pareene explains:
The idea is that Obama’s ad with Romney singing, and the outsourcing headlines and so on, is an “audacious” attack on the free market that “challenges the entire logic of capitalism as it has existed over several decades,” and that Romney must immediately “define a vision of modern capitalism” persuasive enough to win over a nation seduced by Obama’s irresponsible notion that there could theoretically be a form of American capitalism that doesn’t lead to so much misery and inequality.
The ad makes Brooks mad because, as he notes (correctly!), Obama himself, as a moderate Democrat, actually has no problem with globalization as currently practiced. But it’s not just the hypocrisy! It’s the vile idea that Bain Capital’s practices were somehow not a great thing for the nation.
Yes, Brooks says this:
What matters is the ideology behind the ad: the assumption that Bain Capital, the private-equity firm founded by Romney, should not have invested in companies that hired workers abroad; the assumption that hiring Mexican or Indian workers is unpatriotic; the assumption that no worthy person would do what most global business leaders have been doing for the past half-century.
“Worthy” is an opaque word choice there, but I’m going to go out on a limb and say “global business leaders” have indeed been behaving amorally for the past half century and most of the half centuries prior. (And whether outsourcing is “good” or not, patriotism doesn’t enter into it at all. It would be bad business to let outdated notions of patriotism interfere with efficiency and shareholder value! No true capitalist would place loyalty to a nation-state above corporate best practices!)
Brooks basically says Obama has pulled a fast one and shifted the focus of the race from being about big government, which he says Obama represents, to being about capitalism, which Romney represents. Pareene argues that Romney doesn’t represent “capitalism” at all and that he represents financialization, a different thing entirely:
This is Brooks’ thesis, which is a common enough sentiment among rich folks around the middle of the ideological divide: Modern capitalism would be much more popular if its beneficiaries were better able to explain to the less fortunate why their misfortunes are, in an important, broader sense, a good thing. (You don’t understand: Working harder for less money is a productivity gain!)
That’s what Brooks is actually asking Romney to defend with eloquence and vigor, so Pareene adds this:
Mitt Romney, please, I beg you, loudly and publicly defend the form of capitalism you pioneered at Bain Capital. It would be hilarious (and possibly lead to a socialist revolution).
Pareene is of course what they call a “sprightly” writer, so forgive him his enthusiasms and read Jacob Weisberg instead:
To Romney and others who work in finance, it’s self-evident that what private equity firms like Bain do is beneficial to the economy. Private equity firms buy underperforming businesses and restructure them. With new management and investment, some of these firms thrive while others fail. As a result, investment is allocated more efficiently. This is creative destruction in its pure form and if you question it, they say, you must not believe in capitalism.
To Barack Obama and most liberals, it’s no less obvious that there’s something faulty about this model of financial capitalism as it has been practiced over the past 30 years. Leveraged buyouts, which are what private equity firms do, load companies with debt, extract value for middlemen, and displace workers. Heads-I-win, tails-you-lose practices in the financial sector, regulatory loopholes, and tax advantages produce runaway winners like Romney while middle-class workers lose ground. As the gap between economic victims and executioners grows, the resulting society becomes more unequal and unfair.
Both positions in this argument – that Obama doesn’t believe in capitalism and that Romney doesn’t care about workers – are distortions.
It’s more complicated than that. It always is. But Obama has the upper hand here, for a number of reasons:
Obama is more eager to make his case about Bain than Romney is. The president is comfortable attacking the negative consequences, if not the fundamental concept of free-market capitalism: outsourcing and offshoring, shuttered factories, cheap Asian imports, declining middle-class wages. These have been familiar resonant notes for Democratic candidates for the past 25 years. Romney, on the other hand, doesn’t much want to defend creative destruction. He boasts about building Bain, but won’t discuss it in detail because it opens up a conversation about those same unattractive consequences: lost jobs, bankruptcies, private pensions dumped onto the federal government. In the case of China, Romney has tried to out-hawk Obama, promising to launch what would amount to a trade war beginning his first day in office. When it comes to Detroit, Romney has backed away from his principled position that failed businesses should be allowed to fail. He’s in a corner, because he thinks it’s politically unsound to say what he really believes.
If so, that leads to this:
It’s not clear that private equity – like other forms of financial innovation – is good for America. You’d think that if private equity made businesses more efficient and valuable overall, there’d be clear evidence to support it, but there isn’t. Private equity firms earn most of their money through financial engineering. A big share of their returns comes from “tax arbitrage” – figuring out how to exploit loopholes to pay less to the government. Because interest is a deductible business expense, debt financing means they often pay little or no corporate tax. Private equity’s reliance on leverage can also magnify short-term earnings without leaving the companies they manage more valuable overall. One legal but dubious practice that private equity firms engage in is paying large “special dividends” out of borrowed money. As Jim Surowiecki of the New Yorker has written, “These dividends created no economic value – they just redistributed money from the company to the private-equity investors.” There’s some anecdotal evidence that the well-regarded Bain has been a better owner than most. But there’s no real way to evaluate that either.
Now add this:
Bain shows how Wall Street is rigged in favor of the rich. Private equity firms, like hedge funds, earn their money through a 2-and-20 structure, which means investors pay a 2 percent annual management fee, and give away one-fifth of their profits. According to one study, firms like Bain get two-thirds of their earnings from fees charged to investors, rather than from the share of profits. According to another study, private equity firms managed to keep 70 percent of all investment profits for themselves, rather than paying them out. They’ve figured out how to be hugely profitable even if they aren’t successful, and even where firms they own go bankrupt. And because their gains come in the form of “carried interest,” private equity owners are taxed at 15 percent, rather than the top corporate rate of 35 percent.
Now add this:
Romney’s Bain career is a story about rising inequality. It’s telling that George Romney, Mitt’s father, made around $200,000 through most of the years he ran American Motors Corporation. Doing work that clearly created jobs, the elder Romney paid an effective tax rate that averaged 37 percent. His son made vastly more running a corporate chop shop in an industry that does not appear to create jobs overall…
Romney’s father wasn’t embarrassed to explain what he’d done as a businessman or to release his tax returns, and that hurts, as does this:
Bain reminds everybody how rich Romney is, how different that makes him from ordinary people, and how this kind of advantage perpetuates itself. Five years ago, according to disclosure statements, he was already worth between $190 and $250 million, not counting another $70-100 million in trusts for his children and grandchildren, and not counting real estate worth tens of millions more. It’s not clear how he turned a maximum contribution of $450,000 over 15 years at Bain into an IRA worth between $21 and $102 million (where it grows tax free).
Romney’s strength is his weakness:
There’s no reason to think that Romney, in his heart of hearts, favors a version of capitalism that subsidizes financial engineering and ignores the victims of economic transformation. As governor of Massachusetts, he created a subsidized insurance system that filled the biggest hole in the safety net, and became the model of Obama’s health care plan. Take away the political context, and one can imagine the two of them agreeing about a lot else as well. But in the milieu of today’s GOP, Romney can never acknowledge the need for a better safety net. Without one, the vision of capitalism represented by Bain Capital becomes even less appealing.
The guy can’t catch a break and is reduced to this:
An energized Mitt Romney delivered one of his feistiest speeches of the campaign in Pennsylvania on Tuesday, accusing President Obama of “attacking success.”
“Our economy is driven by free people pursuing their ideas and their dreams,” Romney said. “It is not driven by government and what the president is doing is crushing economic freedom.”
And this is telling:
Romney didn’t directly address the dominant story on the campaign trail this week, a wave of Democratic attacks on his work at Bain Capital and accusations that he’s evading responsibility for investments that led to layoffs and offshoring. But he suggested that Obama was running an unnecessarily negative campaign and trying to distract from the economy.
“The president’s looking around for someone to blame, and recently, I became the reason for all the problems,” Romney said. “I was surprised, my family and me, but he’s always looking for someone out there: ATM machines, tsunamis, China, Europe. It’s always something.”
Mommy, Johnny is picking on me! Tell him to stop!
Ah, that’s the sound of summer. But forget those lazy-hazy-crazy days of summer, with lemonade in the shade and fireflies at dusk. Mitt Romney is having that other summer – that dreaded long hot summer. Nat King Cole didn’t sing about that.