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Monday, June 11, 2012

Mentally Challenged Media Attacks Obama for Not Compromising with Republicans

Mentally Challenged Media Attacks Obama for Not Compromising with Republicans










Despite the fact that President Obama has spoken of compromise throughout his presidency, CNN attacked the president for not compromising with Republicans.


 Here is the video:

http://cnn.com/video/data/2.0/video/bestoftv/2012/06/10/exp-sotu-axelrod-part-1-june-ten.cnn.html



Transcript via CNN:

CROWLEY: Let me — since you brought up the $250,000 tax cut, should they or should they not be extended for those making over that amount –
AXELROD: Let me just — let me just — let me just clarify something. He wants $250,000 above and beyond the extension of the Bush tax cuts so let's make that clear, but anyway, go ahead.
CROWLEY: Let me just read you something that Claire McCaskill, Democrat from Missouri facing a tough re-election, had to say. "If you want to do something in the spirit of compromise, you don't start out by saying, I refuse to do this or I refuse to do that. It's not my preference to extend tax cuts to millionaires, but I want to keep every option open in the spirit of compromise." So it's not just Republicans. As you know, there are others, Bill Nelson of Florida, who have said I don't know, I don't know that we shouldn't go ahead and extend those tax cuts.
AXELROD: Candy, Candy –
CROWLEY: You've got problems in the Democratic Party as well, correct?
AXELROD: Candy, first of all let me say I agree with Senator McCaskill, that we ought to have a spirit of compromise, I watched –
CROWLEY: But the president said he'd veto it.
AXELROD: — I watched Governor Romney on the stage saying that he wouldn't accept one dollar of new revenue even for $10 of tax cuts. That's not the spirit of compromise. That's what is animating the Republicans in Congress. They share that view.
CROWLEY: Is the president veto threat a spirit of compromise?
AXELROD: Let me ask you a question, if we want to compromise, why don't we compromise on the thing that we all agree on? We all agree that we should renew those tax cuts for the middle class. Ninety — if they sent him a bill that would renew those tax cuts for 97 percent of the American people, the president would sign it today. If we want to –
CROWLEY: Sure, they'd agree to it –
AXELROD: Let's compromise on the things we can agree on.
CROWLEY: But obviously they know they would then lose their leverage because you wouldn't go back to do it for those that they want to continue –
AXELROD: Leverage for tax cuts for the wealthy. We have to make a choice as a country, Candy. We do have deficit issues, we do have debt issues. Are tax cuts for the wealthy more important than bringing down the deficits and investing in things like education and research and development and energy? The things that are going to grow our economy and grow the middle class. That's really what the debate is about.

Candy Crowley is becoming a Sunday regular when conservative media bias is discussed, but her claim that if Obama vetoes an extension of the Bush tax cuts, he is rejecting compromise was preposterous by even her standards. Crowley’s intentional ignorance would not be so aggravating if her profession was something other than a reporter at a national cable news network.

The fact is that this president spent more than half of his first term working towards compromise, and has been routinely bashed for it by the media and members of his own party. Obama was accused of caving by extending the Bush tax cuts. He was accused of caving again on the debt ceiling. Until the second half of 2011, the most common complaint from the left was that Obama "caved."
Over the past month and a half the media has complained about Obama attacking Romney's record, and criticized the president for being too aggressive, (As you know an aggressive Democrat goes against the right wing stereotype, which depending on the day of the week is that all Democrats are tyrants who are looking to run their lives, or Democrats are flower waving, weak kneed hippies who are afraid of a fight).

Crowley's latest adventure in pandering is a fine example of what happens to the media when they decide to check their intelligence at the door in order to appeal to a certain audience. A presidential veto does not signal an unwillingness to compromise. A veto a strictly an Executive Branch decision. An willingness to to compromise would occur if the president and legislative branch entered into negotiations and one side refused to give a single point, as the Republicans have done.

This sort of journalistic abandonment of basic human intelligence is why CNN has lost 52% of their viewers, and this is why Democrats should fall to the floor in convulsions of laughter when the right breaks out their tired old liberal media bias Trojan Horse.

As Democrats and progressive pick their jaws up off the floor as they absorb the latest media attack on facts and reality, understand that broadcasters are in bed with the GOP. They have billions of dollars in profits on the line in the 2012 elections. Media bias is real, and they will go to any absurd length to protect their financial interests.

Sunday, June 10, 2012

The Corporate Media Conspires With Republicans to Strengthen Citizens United

The Corporate Media Conspires With Republicans to Strengthen Citizens United






At the behest of corporate broadcasters, a single subcommittee vote by House Republicans killed an FCC disclosure guideline and strengthened the role of secret money in American politics.

The new FCC rule would have required broadcasters to post online who is buying advertising for political candidates. Currently, the only way those records can be inspected is by requesting to inspect them in person at each television station. By making the records accessable to all this new rule would have blown the veil of secrecy off the Citizens United based spending, which meant that Republicans had to kill it as soon as possible.

Republicans accomplished their goal by attaching a rider on to the FCC’s budget that prohibited them from spending any funds on disclosure rules.

The intrigue in this story comes from who was behind the effort to kill the new FCC rule. The National Association of Broadcasters (NAB) was behind the push to kill the new rules. Last month the NAB filed a lawsuit against the FCC claiming that the new rules were, “arbitrary, capricious, in excess of the commission’s statutory authority, inconsistent with the First Amendment, and otherwise not in accordance with the law.”

The FCC argued that, “The public file rules are a common-sense update by the FCC to move from paper to online access to public information in the digital age. The rules are consistent with Congress’s directive to ensure public availability while providing cost-savings for broadcasters."

Surprise!!! The corporate media doesn’t want you to know how much money they are making off of the Citizens United ruling.
Media reform advocates Free Press summed up the situation, "Some members of Congress, working at the behest of the broadcast industry, want to keep the public in the dark. The FCC's online political file rules will shine a brighter light on the political ads that have inundated local airwaves this year. Broadcasters spent nearly $14 million on lobbyists in 2011. Now they’re spending millions more on campaign contributions to buy support from some members of Congress — but that's a drop in the bucket compared to the over $3 billion in political ad revenues that television stations stand to pull in this election cycle…It's clear that the broadcast industry is pulling out all the stops to bury information about political ad spending on the public airwaves. What's more appalling is that some elected officials are willing to help them do it."

House Committee chairman Rep. Hal Rogers (R-KY) unbelievably argued that, “television station fiscal matters are private and should be kept private.” The Republican position is that even when broadcasters are using public airwaves, the American people have no right to know who is paying for the political ads that they are seeing.

It should be crystal clear now why House and Senate Democrats who are advocating for disclosure can’t get their message on television. Corporate broadcasters are spending millions of dollars to keep the American people in the dark about the impact of Citizens United. With the exception of Sen. Bernie Sanders sneaking in his plea for disclosure, broadcasters limit their discussion of Citizens United to its impact on elections.

However, the sordid story of the demise of the FCC disclosure rule reveals that there is a third player at the table with corporations and Republicans. America’s broadcasters have skin in the game, and if their choice is between an informed public and billions in profit, the broadcasters are going to sell out the American people and stand by their cash.

Tuesday, June 5, 2012

How the Corporate Media Obscure the Truth About Mitt Romney's 'Vulture Capitalism' at Bain

AlterNet.org

  ELECTION 2012  

The media's knee-jerk hostility to criticism of Wall Street is muddying the waters.

 
Photo Credit: ShutterStock.com
 
 
Were it not such a sad statement about how superficial our political discourse has become, the indignant defenses of Bain Capital by self-flattering “centrists” in the media would be almost comical.

The simple reality that has been totally obscured in most of the coverage of what has been reduced to a “political flap,” is that finance is what's known as an “intermediary good” – it doesn't produce anything directly. It can -- and does -- stimulate the larger economy. But the financial sector can also extract wealth from the real economy, at a cost.

The lion's share of Mitt Romney's fortune was made doing the latter through leveraged buy-outs (LBOs), a reality that Romney doesn't like to talk about on the campaign trail. Instead, he wants to talk about Staples, or Sports Authority -- two among a small handful of his venture capital deals -- and just about every mainstream media report elides the distinction between those very different things.

Perhaps the media, like much of the American public, doesn’t understand what LBO artists like Romney really do. Here’s a quick refresher.

Venture capital deals represent a very basic free-market transaction. Investors put money into a company at its early stages in exchange for a share of the company. If the start-up doesn't pan out, the investors lose their stake; if it grows and matures, they make a healthy profit. In venture capital deals, investors only make a profit when the company they put their cash into does well.

Leveraged buy-outs are a different creature entirely. LBO firms also deal with risky companies – usually those struggling to stay afloat – but they don't actually take on much risk themselves as they structure the deals so that they profit whether the target company becomes healthy and grows, or collapses, often under the weight of debt piled onto it by the private equity firm itself.
Here's how the deal works. The leveraged buy-out firm will put down a fraction of the cost of buying an ailing company. The balance of the transaction is borrowed, but the debt goes onto the books of the target company, not the private equity firm – the struggling company basically finances the lion's share of its own sale.

The target company's debt payments then increase significantly, and that debt service is written off, reducing its tax burden a great deal. This subsidy increases short-term revenues (at the expense of long-term debt) and that, in turn, is paid out to the firm's investors along with a fat stream of management fees that Romney and his partners skimmed off the top.

(The industry-standard structure of these deals is known as “2 and 20.” Management gets 2 percent of the capital they invest as a fee, and 20 percent of the profits that the fund realizes. That 2 percent represents between two to four times what the average management fees for a mutual fund usually run, and is collected regardless of how the fund does.)

This is a win-win deal for the leveraged buyout firm. A recent study by researchers at the University of Chicago estimated that the average tax benefit of these companies' increased debt-loads in 1980s equaled “10 to 20 percent of firm value,” which, as Mike Konczai noted recently, “is value that comes from taxpayers to private equity as a result of the tax code.

Now look at how this story has been covered. Let's focus on CNN, which is supposedly the most “neutral” of the cable news outlets.

Consider a remarkably obtuse “Letter to the President” penned by CNN political correspondent Tom Foreman – “an Emmy award-winning journalist whose experience spans more than three decades.” The thrust of it was that Newark Mayor Cory Booker “spoke truth to power” when he said he was “nauseated” by Democrats' criticism of Bain. Of course, nobody knows what was in Booker's heart, but we do know that he got $565,000 in campaign funds from Wall Street to get elected, with at least $36,000 coming from Bain and its employees, and in that context one has to be willfully naïve to jump to the conclusion that he was just speaking the truth as he sees it.

Then there was host Christina Romans saying that “what private equity does” is “comes in, cleans up a company, sells it, or moves it forward.” When Bain “cleans up” companies, more often than not it means looting pension funds, laying off workers, and saddling the firms with huge amounts of debt before flipping them.

Another anchor, Ashleigh Banfield, attacked Ben La Bolt, the Obama campaign's press secretary, saying, “Ben, come on, you and I also know that he had plenty of success, as the Washington Post has outlined many successes... that Bain Capital has had in creating jobs, in saving people's companies from going under.”

But Bain Capital was not in the business of creating jobs, or even saving companies over the long-term. Its model had a relatively low rate of success. A study by Deutche Bank found that 33 out of 68 major deals cut on Romney's watch lost money for the firm's investors. Its richest deals made up for the flops, however, and Bain's partners were guaranteed hefty fees regardless of how the businesses they “restructured” ultimately performed.

That gets to a crucial difference between venture capital and leveraged buy-outs. With the former, the private equity firm only makes money if the companies it invests in succeed. By using loopholes in the tax code, LBO firms are essentially guaranteed to make money – for their partners, if not always their investors – regardless of how their investments do. Yet David Gergen suggested on “Out Front with Erin Burnett” that attacks on Bain are attacks on “free enterprise.” “There has been, as you know, an anxiety, a fear and anger on the part of many in the business community by what they regard as a hostility toward private enterprise, toward business,” he said. “And the messages to -- that many are taking away from the president's campaign right now is not just about Bain Capital. It's about people who are in private sector.”

Erin Burnett crowed about a study, which found that “companies bought out by private equity firms lose about one percent of their workforce.” For Burnett, those layoffs “support the more positive view of private equity which is that firms like Bain take over weak or faltering companies where everyone might lose their jobs, build a stronger company where the remaining jobs are more stable.” But as Paul Krugman noted, “The real complaint about Mr. Romney and his colleagues isn’t that they destroyed jobs, but that they destroyed good jobs.”
When the dust settled after the companies that Bain restructured were downsized — or, as happened all too often, went bankrupt — total U.S. employment was probably about the same as it would have been in any case. But the jobs that were lost paid more and had better benefits than the jobs that replaced them. Mr. Romney and those like him didn’t destroy jobs, but they did enrich themselves while helping to destroy the American middle class.
And Burnett was echoing Bain's own talking points. The firm has claimed that only 5 percent of the companies it acquired went bankrupt “while under our control.” As the Washington Post pointed out, those were “the operative words in the Bain statement” That's because, as the Wall Street Journal discovered, once saddled with mountains of debt, more than four times as many companies with which Bain was involved – 22 percent – “either filed for bankruptcy or liquidated by the end of the eighth year after Bain invested.”

We hear a lot about how this is a good debate for the American people to have. And it should be. We should consider how our financial sector has become bloated, swimming in capacity the larger economy doesn’t need. Historically, it’s grown and contracted along with the business cycle. When the economy was going gang-busters and businesses were expanding, it was there to provide capital and insurance and connect investors with entrepreneurs and innovators. Then, when the business cycle took its inevitable turn and the economy slowed down, it would contract. But as the Associated Press noted, "when the Internet bubble burst in 2000, the sector never stopped growing. Instead, it ballooned over the past eight years to around 10 percent of the U.S. economy, puzzling economists."

We should also have a discussion of the influence the financial sector has on the behavior of the rest of the corporate economy. The original function of the financial markets -- to link investors’ capital with innovative firms -- has been turned on its head by Wall Street. Today, corporate behavior is very much dictated by the markets -- quarterly earnings, stock prices and the like -- and not the other way around. That’s not a good thing.

Lawrence Mitchell, a professor of business law at George Washington University, notes in his book, The Speculation Economy, that a survey of CEOs running major American corporations found that almost 80 percent would have "at least moderately mutilated their businesses in order to meet [financial] analysts’ quarterly profit estimates."
Cutting the budgets for research and development, advertising and maintenance and delaying hiring and new projects are some of the long-term harms they would readily inflict on their corporations. Why? Because in modern American corporate capitalism, the failure to meet quarterly numbers almost always guarantees a punishing hit to the corporation’s stock price.
These dynamics are epitomized by leveraged buy-out artists like Mitt Romney. So, yes, this would be a very valuable discussion to have, but the traditional media's mewling about people daring to criticize Bain, and their instinctive deference to Big Finance, are doing more to obscure the issue than illuminate it. And that's preventing us from having a real debate.

Joshua Holland is an editor and senior writer at AlterNet. He is the author of The 15 Biggest Lies About the Economy: And Everything else the Right Doesn't Want You to Know About Taxes, Jobs and Corporate America. Drop him an email or follow him on Twitter.