Mitt Romney Was Right About ...EVERYTHING!

I was recently shown an article in Rolling Stone from August 29, 2012. Written by Matt Taibbi, it was titled  "Greed and Debt: The True Story of Mitt Romney and Bain Capital". I remember that one very well, having read it while on vacation in Kauai during the middle of September 2012 just after learning of an attack on the U.S. Consulate in Benghazi. That attack had occurred on the 11-year anniversary of 9/11, something the Obama seemed to attribute to being coincidental to a fantastic and far from believable reason. Interested in  additional sources of information regarding the attack, and also looking for something to read while relaxing on the beach, (I was convalescing from a recent shoulder injury and surgery - so no surfing) I had bought the Rolling Stone at the Outrigger on Waikiki during a day trip to Oahu, along with a USA Today, a Vanity Fair and the Economist.  That article sticks in my mind precisely because of what had just happened in Benghazi, an event that had occurred the week that issue hit the newsstands.

Kicked back on on beach chair, I threw the USA Today down on the sand and sipped on a Mai Tai I just been served. The newspaper had run through a fuzzy timeline of the murderous events in Benghazi, conducted by a "wound up group" the president of the United States and his Secretary of State had repeatedly described as "protesters angered because of an anti-Mohammed video." Having recently been to that very location in  Libya, I wanted to know more about that event and what had lead to it. Disgusted with the flimsy explanation offered so far, I wanted something "light" to read. I decided I'd go for the Rolling Stone. Intrigued by the ridiculousness of the cover story, I opened the magazine and went straight to the story. 

Although I found the article well written and entertaining, as most of the contributions in Rolling Stone generally are, it still doesn’t change the fact that it was a very cynical, and biased piece, published in a magazine that was publically endorsing President Obama in 2012. There was plenty of name-calling, character assassination, but no real substance or accuracy, instead, from start to finish exaggeration and overkill, as well as conveniently using obvious hyperbole as sincerity.

“Last May, in a much-touted speech in Iowa, Romney used language that was literally inflammatory to describe America's federal borrowing. "A prairie fire of debt is sweeping across Iowa and our nation," he declared. "Every day we fail to act, that fire gets closer to the homes and children we love." Our collective debt is no ordinary problem: According to Mitt, it's going to burn our children alive.”

Really? Mitt Romney actually means the National Debt will literally “burn our children alive?” The writer even slammed Bill Clinton while he was at it, which wasn’t alarming since it’s well known Barack Obama and Bill Clinton despise each other.

As the founder and editor of Rolling Stone, Jann Wenner's can publish what he wants. That’s his prerogative. And since he has a readership that is predominately northeast and west coast, a demographic that trends heavily towards very liberal points of views, and always has, his writers will therefore have an exceedingly left-leaning slant. When that issue came out at the end of August 2012, both the Democratic and Republican conventions were over, and the campaigns were in the heat of battle. The media heavily supported Obama, and there was some serious ugliness being thrown at Romney from every corner, warning of the evil that lurked within, the Darth Vader that ran Bain Capital like the Evil Empire, killing Alderaans by the bushels. According to the mythology perpetuated by Taibbi and the 99% (occupy Wall Street and every other street you’ve cost millions of tax payer dollars to clean after wrecking) he was trying to fire up, Mitt Romney was forcing companies to take on unrealistic amounts of debt, then syphoned off that debt as investing banking fees until the company either filed for bankruptcy or fired most of its workers. That’s fallacy, and one of the examples of such unethical “fee layering” that Taibbi sites occurred in 2000 when Romney was in fact no longer even with Bain Capital, he was heading up the turnaround of the 2002 Winter Olympics financial meltdown, which Taibbi also paints as evil work because Romney got the U.S. Treasury to help. Huh?

Romney at opening of 2002 Salt Lake City Olympics. 

Taibbi uses a number even larger than what was touted by the DNC at their 2012 Convention, $1.3 billion. Taibbi’s figure is $1.5 billion; money that Taibbi claims was more taxpayer money than the previous seven U.S. hosted Olympic games combined. What Taibbi and the DNC failed to clarify was that most of the money was federal money previously earmarked for “Federal Highway Spending” on roads and interstate highway and bridges. According to the U.S. GAO report the government actually spent $342 million on direct costs related to the Olympic games, which was primarily associated with post 9/11 security measures. One other caveat mentioned in the GAO report, and overlook by Taibbi, who obviously has a problem writing the truth, was that the federal share of the costs associated with hosting the Olympic games has gone down over time. In1980 the federal government picked up 50% of the overall tab, and in 2002 it was 18%. If Romney hadn’t sought all sources of money, including that from local, state, and federal sources, he wouldn’t have been doing his job, but the far left tends to not support political candidates that can - Obama case in point. 

Another favorite misnomer of the hypocritical left, and Obama himself during the 2012 campaign, was the false claim that Governor Romney didn’t pay his “fair share” of taxes. Senator Harry Reid went even so far as to go on the floor of the Senate, make up a straw man, who he claimed he had from a reliable source that Romney “hadn’t paid any taxes” for the tax return years not made public. Unfortunately it’s not a crime to tell lies on the floor of the Senate. Taibbi called Romney a “private equity pirate,” who “pays less than half the tax rate of most American executives – less, even, than teachers, firefighters, cops and nurses,” which again, is grossly inaccurate. Taibbi continues, “Asked about the fact that he paid a tax rate of only 13.9 percent on income of $21.7 million in 2010, Romney responded testily that the massive windfall he enjoys from exploiting the tax code is ‘entirely legal and fair.’"

Not having a degree in accounting or finance, and having worked only as a journalist his entire career, I would hardly a view the calculations of Matt Taibbi as a credible source for financial accuracy, even though he’s considered an authority on financial matters, unfortunately only by obscure, rather dubious and irrelevant cable programs and magazines. Matt Taibbi’s accounting shouldn’t be trusted for even the simplest of tax returns. Forbes explained the Romney taxes based upon the latest tax return available at the time of the election this way:

“There are two reasons that the Romneys’ tax bill is below 15%. According to their 2010 tax return (the latest available), Mr. and Mrs. Romney reduced their taxable income by the $3 million they gave to charities. 

The second and most important reason is the majority of the Romneys’ income is taxed twice – first at the corporate level, and a second time when they report it on their personal income tax return. 

Taxable interest income accounted for $3.3 million of their $21.7 million in total income. Since companies are able to reduce their income dollar for dollar with the interest they pay out, interest income is not taxed at the corporate level, but only once as personal income.  In the case of the Romneys, it was taxed at 35%, the top marginal personal income tax rate. 

The Romneys also reported $4.9 million in ordinary dividends, of which $3.3 million qualified for the 15% tax rate.  Unlike interest payments, corporations may not deduct dividends from their income.  Dividend income therefore is taxed twice, first at the corporate level, and then again when it is reported on an individual’s personal income tax return. 

A precise calculation of this double tax is impossible to make because the tax rates paid by different corporations vary widely – from 0% by GE and General Motors to the top corporate tax rate of 35%.  A rigorous economic analysis would use the top marginal tax rate because that is the rate that affects economic decisions. However, for the purpose of this analysis, a reasonable estimate would use the average U.S. corporate tax-rate, which over longer periods of time, has been 25%. 

Based on a 25% tax rate, for every $133 a corporation earned, it had to first pay $33 in federal income taxes before it could distribute $100 in dividends.  Next, on every $100 of dividend income received, the Romneys paid an additional $15 in taxes.  The combined tax of $48 totals out to a 36% rate on dividend income ($48/$133), which approximates the top personal income rate imposed on interest income.”

In layman’s terms, what that means is that Romney’s actual “effective tax” before charitable donations, is greater than 30%.  Thus, the Romney’s total income and taxes paid must also be adjusted up by 33% (1.33-(.25*1.33)=1) of the amount of their $12.6 million in capital gains income, or $4.2 million.  After this adjustment, the Romney’s “Adjusted Total Income” is $27.0 million, and their “Adjusted Total Federal Income Tax Payments” are $8.3 million, $5.3 million more than reported on their tax return and 30.7% of their Adjusted Total Income.

Taibbi also goes on to create a guilt by association fable, tying Romney to Michael Milken, as if by just doing business with Milken makes him guilty wrongdoing that should have landed him in the “Big House,” in fact just working at a company with links to Wall Street in the 1980’s and during the “Internet Bubble of 1997-1999,” according to the Taibbi theory of finance, is in itself corrupt. The accusations leveled at Mitt Romney of tax evasion isn't even worth the electrons Taibbi, and every left leaning news organization from Mother Jones to ABC News used to make that claim.  Here are the facts yet again:

The trustee for the Romney family’s investments -- Brad Malt of the law firm Ropes & Gray -- set up the account in 2003. There were no tax advantages to holding the Swiss account, said Malt in a conference call with reporters in January 2012, when the campaign released Mitt and Ann Romney’s 2010 tax returns.

The account contained approximately $3 million, and it was held by Union Bank Switzerland, or UBS.

"The tax is fully paid, just as if this were a U.S. bank account, nothing more complicated than that," Malt said then.

In addition to that factoid, numerous Democrats that included Debbie Wasserman Shultz and even Obama himself had mutual fund accounts or trusts with assets located in "offshore" accounts.

Such was the ways of the 2012 Obama campaign as it was getting into full swing, and with a billion dollars in the war chest, the Chicago style politics was operating on all cylinders and at peak performance. In spite of that firepower, they had the added bonus of having unashamed media support from all three major television News Networks, Public Television Networks, all Cable News Networks with the exception of one, many high circulation newspapers such as the New York Times, Washington Post, LA Times, Chicago Tribune, etc., on and one, and then a number of magazines such as Time, Newsweek, and Rolling Stone. Unfortunately for the Clintons, like Romney in 2012, the 2008 Hillary Clinton primary campaign saw some of that as well, when the Obama minions and their media surrogates so viciously, (and justifiably) attacked Hillary Clinton. Those particular wounds have never really healed, as the Clintons and the Obamas hate each other, although they do a good job of putting on a great game face when on stage and the lights for the cameras are on.  The animosity between them is so bad in fact, that among friends and in private Valerie Jarrett and Michelle Obama refer to Hillary Clinton as “Hildabeast.” And the next election campaign, 2016, will be just as ugly as 2012, if not uglier.

Romney family in 2012

I happen to personally know Mitt and Anne, and four of their sons. I first met Governor Romney the 90s after hanging up my flight helmet and G-suit for pinstripes.  Wall Street had been always been my plan following the joyrides of F-14’s while a twenty-something. I was planning on Harvard Business School, and then to seek my fortune. Desert Storm delayed that plan some, but I managed to finally get going, and perhaps with a bit more seasoning, as well as crucial character building under my belt.

I had interviewed with Bain Capital, Bear Stearns, Morgan Stanley, Goldman Sachs, and a couple of others. In an era of post Michael Milken, Ivan Bosky and the Wall Street insider trading scandals of the late 1980’s, Mitt Romney was a real anomaly. He was far from the Gordon Gekko label Matt Taibbi tagged him as. He didn’t drink he didn’t smoke he didn’t cuss. He didn’t flaunt his money. He didn’t fly around in private jets. And he drove himself around in his own crappy car. He was very affable, very kind, and very complimentary.  And very, very smart. When it came to disseminating a sophisticated deal, he could see through the clouds of structured financing confusion quickly, much like Warren Buffet, and was swift and decisive - a hallmark of leadership. His management style was equally adroit. I would have gone to Bain Capital, but since I was geared more to the trading floor rather than investment banking, and Bain was still pretty small at that time in 1993, I chose instead to go with Morgan Stanley. That’s one decision I regret.  

Being an unusually humble man, especially for a politician, who seldom uses the word “I," you’ll never hear the Governor tell you about the following personal “attributes,” facts that speaks volumes for his character, and flies in the face of the insinuations made by Taibbi and Rolling Stone. Mitt Romney can’t change who his father was, who by the way was an honorable, self-made man, and passed on many of those positive traits to his youngest child son Mitt. George Romney was himself very successful, the youngest CEO of a major automobile manufacturer, in addition George Romney was very civic minded, serving on the board of directors or chairing numerous foundations, educational committees, Children’s Hospital of Michigan, mostly within the Detroit area, and ultimately the Governor of Michigan. In spite of George Romney’s successes, his did not receive money as inheritance. What they did receive was an education, love, family structure, and values. In reality, despite the blatantly false claims made by Obama campaign surrogates in an attempt to paint him as a privileged elitist, Mitt Romney didn't take one dime of “inheritance” from his father.

As a missionary in France during his college years Romney lived on a $100 a month. When Mitt Romney was at Harvard in the MBA/Law program, Mitt and Anne lived in married-student housing. There was no doubt in my mind that Mitt Romney was the right man for the job when the 2002 Salt Lake City Olympics needed bailing out. He spent three years there and agreed to only take a salary and severance if the Games posted a profit, which they did. But instead of accepting the pay package, he gave it all to charity, plus another $1 million that he and Anne donated to the organizing committee. When he became governor of Massachusetts he refused to take the salary, instead, as before, directing it to charities, as did his lieutenant governor, which is indicative of his infectious management style. Of course by that time he was extremely wealthy from the investment banking deals done years and years ago, but his lifestyle had remained the same – simple.  Every year of his adult life and throughout his marriage to Anne, he has donated 20% of his gross income to charity. I recall that in 2011 he and Anne donated $4 million.

So it was very sad and heartbreaking to see how unfair the media was to the Mitt and Anne Romney. Especially by “hatchet job” writers, and unconscionable reporters bent on character assassination, and not one had even actually met either the governor or Anne in person. They still do it to this day, MSNBC’s Melissa Harris-Perry recently making fun of the photo of Mitt and Anne with their grandchildren because one was an adopted African American. The entire panel that was on air then joined in with Harris-Perry ugliness they saw as being funny, zeroing in on Kieran who is an infant. That prompted an apology from MSNBC, but that kind of awfulness came after the election, after the Romney’s had returned to private life. Always a class act, when asked about the scurrilous MSNBC slurs, Romney simply shrugged it of saint, "It's fine - she apologized."  

Anne and Mitt with grandchildren in 2013

Melissa Harris-Perry

In my many years of association with politicians, and it goes back away, I’ve never met better man. I worked for Governor Bob Graham, yes Senator Bob Graham when he was governor. I was an intern. My dad worked for George Bush, and I’ve met them all, knowing Jeb the best. I went to prep school with Ed Chiles, the son of Florida Governor Lawton Chiles, and was invited into their home. I’ve known Charlie Crist for over thirty years, introduced him to Carol his wife. These are personal relationships, and not simply those that I’ve met and had my picture made with that person because I kicked in a donation or two. And there are more politicians that I've known, or whose campaigns I've been associated with; John McCain, Rudy Giuliani’s. None of them are like the Romney family.

I’ll even go a step further and say that even when I include private citizens, those never having been in the public spotlight, without an iota of fame, I've never seen a more loving family in my life, a family that so deeply cares about people from every corner of life, that are deeply patriotic, and love this country with historical pride. It's brutal when the surrogates attack unflinchingly. It's a shame that the fair Mitt Romney story couldn't have been told by the majority of the media. There were accurate sources of reporting for sure, The Wall Street Journal, Forbes, Fortune, and a few others. Fox told the truth, fair and balanced, about both candidates, but NBC, CBS, ABC, and most newspapers sought smear him at best and to destroy at worst. 

The 2012 election is history, but for me now, it's about setting the record straight regarding Mitt Romney "the man," the most honorable and humble man I've ever met. I receive Christmas Cards from Mitt and Anne Romney. And let me say one last thing about Mitt Romney "the candidate," he was right on almost everything he said regarding the economy and the disastrous effects that Obamacare would have on it's fragility, the threat that Russia posed to the United States, the calamity facing the world regarding Iraq, and most unfortunately, the utter failure of Obama as a president and the decline of the United States as a leader in the eyes of the world.