 Democratic leaders have accused wealthy Republican presidential candidate Mitt Romney of being pioneer of outsourcing jobs to overseas and stacking his money in foreign banks."Mitt Romney, he lives by a different code. To him, American workers are just numbers on a spreadsheet. To him, all profits are created equal whether made on our shores or off," former Ohio Governor Ted Strickland said. "Romney proudly wrote an op-ed entitled, let Detroit go bankrupt. You know, if he had had his way, devastation would have cascaded from Michigan to Ohio and across the nation. Romney never saw the point of building something when he could profit by tearing it down. If Mitt was Santa Claus, he would fire the reindeer and outsource the elves," Strickland said. Mary Kay Henry, International President of the Service Employees International Union (SEIU), said when Romney was starting out in business, he invested in the companies that were pioneers in outsourcing. "He loaded up companies with debt, and, when they went bankrupt, he walked away with profits while workers lost their health care, their pensions and even their jobs,". "Instead of improving public safety and public education like President Obama, Mitt Romney says we need less police officers, firefighters and teachers. Instead of safeguarding our seniors, Romney and Ryan would end the guarantee of Medicare and replace it with a voucher in order to give bigger tax breaks to billionaires. Instead of investing in America, they hide their money in Swiss bank accounts and ship our jobs to China!" alleged the Maryland Governor, Martin O'Malley. "Swiss bank accounts never built an American bridge. Swiss bank accounts don't put cops on the beat or teachers in our classrooms. Swiss bank accounts never created American jobs!" he said. Never in the modern US history, alleged Senate Majority Leader Harry Reid, someone is trying so hard to hide himself from the people he hopes to serve. "When you look at the one tax return he has released, it's obvious why. It's obvious why there's only been one. We learned that he pays a lower tax rate than middle-class families. We learned he chose Swiss bank accounts and Cayman Island tax shelters over American institutions," Reid alleged. Why Romney Can't Run Away From the 47 PercentThe Obama campaign is running a brutal new ad against Mitt Romney. The ad simply replays Romney's secretly recorded "47 percent" fundraiser remarks -- culminating with Romney saying, "My job is not to worry about those people." Romney is also up with an ad walking back those remarks, emphasizing that both he and President Barack Obama care about struggling Americans, but that Romney's approach to helping them is better because it emphasizes getting people back to work and supporting themselves, rather than depending on the government. This is a rhetorical switch Romney needs to make, but he faces three barriers that stop him from doing so effectively. One is that this new line of argument contradicts his earlier remarks. There is a classic conservative case to be made that the government traps people in persistent poverty when safety net programs are not designed to encourage work. That's the argument that Jack Kemp built his career on. But in his "47 percent" comments, Romney didn't blame the government for fostering dependency. He attacked beneficiaries of government programs for lacking the motivation to work. The second problem is that this is the wrong economic time to worry about government-fostered dependency. It's true that incentives matter: If you pay people not to work, whether in the form of Medicaid, food stamps or unemployment benefits, they become less inclined at the margin to work. When the economy is strong, those effects can inflate unemployment. But today there are several job seekers for every job listing, so it's unlikely that work disincentives are significantly reducing employment or output. The key economic challenge today is making employers more inclined to hire, not making individuals more inclined to work. Which brings us to the third problem: Romney has no clear argument that his economic policies will lead to more employment than Obama's. His 59-point economic agenda is a rehash of George W. Bush-era economic policy, and the Bush administration featured middling economic growth followed by a spectacular crash. Romney can say he's more concerned about getting people jobs than Obama, but he can't say how he'll do that. Romney could beat back the impression that he doesn't care about the economic well-being of the masses if he could point to a specific and convincing agenda to grow the economy and cut unemployment. Since he doesn't have that agenda, he won't be able to shake the impression that he has nothing to offer the bottom half of America's wage earners. And that's why you can expect to see the Obama campaign use the "47 Percent" speech over and over between now and Election Day. Read more opinion online from Bloomberg View. Subscribe to receive a daily e-mail highlighting new View editorials, columns and op-ed articles.
 The Obama campaign has questioned the foreign policy credentials of Mitt Romney, alleging that the Republican presidential candidate's world view seems to be stuck in the Cold War, in the past."Mitt Romney has failed to lay out a clear set of plans for what he would do as commander-in-chief." "He has embraced some of the most extreme elements in his party on national security as well as economic issues, which would only return us to the failed policies of the past which weakened our standing internationally and made us less secure here at home," Michele Flournoy, Obama For America Advisor, told foreign journalists at a news conference here as the three-day Democratic national convention kicked-off. The allegations were strongly denied by the Romney Campaign. Flournoy, who served the Obama Administration as Under Secretary of Defence for Policy for two years said that the US President Barack Obama has said in his two major foreign policy speeches during the campaign, that Romney failed to mention al-Qaeda even once. "In his recent convention speech, he was the first Republican presidential candidate in 60 years not to mention an ongoing war, the war in Afghanistan." "He spoke for nearly 45 minutes without even mentioning Afghanistan, even though we have tens of thousands of American troops in harm's way at this moment," Flournoy alleged. "Governor Romney said that ending the war in Iraq and bringing our troops home was tragic, and yet he has failed to outline any plan for how he would bring the war in Afghanistan to an end and bring our troops home." "When Governor Romney took his foreign trip earlier this summer, let's just say that it didn't go so well," she said. Flournoy said that Romney likes to talk tough. "But when you scratch the surface of details, there's not a lot of there. So for example, during the Republican Convention, Senator John McCain had some very muscular language on Syria, and you know he's on record in terms of supporting no-fly zones and airstrikes and everything else. That's not where Governor Romney is on this issue," she said. "Romney is basically that to help the opposition to get rid of Assad, which is not all that different from where the current Administration is." "The difference is that the Obama Administration actually has to govern on this issue and therefore understands the complexity of diving headlong into Syria's evolving civil war, and so for all the right reasons has been extraordinarily cautious about what we're doing," she said. "I think that's what the American people want and expect from a commander-in-chief, not just more bluster." "We had enough of that the last go around. Romney's world view seems to be stuck in the Cold War, in the past," Flournoy said. Where the Money Lives For all Mitt Romney's touting of his business record, when it comes to his own money the Republican nominee is remarkably shy about disclosing numbers and investments. Nicholas Shaxson delves into the murky world of offshore finance, revealing loopholes that allow the very wealthy to skirt tax laws, and investigating just how much of Romney's fortune (with $30 million in Bain Capital funds in the Cayman Islands alone?) looks pretty strange for a presidential candidate. Nicholas Shaxson  
© Ruth Tomlinson/Robert Harding World Imagery/Corbis (beach); by Justin Sullivan/Getty images (inset). BURIED TREASURE Grand Cayman, where Bain Capital maintains at least 138 funds. Inset, Mitt Romney tries to spot his La Jolla home from the campaign plane. A person who worked for Mitt Romney at the consulting firm Bain and Co. in 1977 remembers him with mixed feelings. "Mitt was … a really wonderful boss," the former employee says. "He was nice, he was fair, he was logical, he said what he wanted … he was really encouraging." But Bain and Co., the person recalls, pushed employees to find out secret revenue and sales data on its clients' competitors. Romney, the person says, suggested "falsifying" who they were to get such information, by pretending to be a graduate student working on a project at Harvard. (The person, in fact, was a Harvard student, at Bain for the summer, but not working on any such projects.) "Mitt said to me something like 'We won't ask you to lie. I am not going to tell you to do this, but [it is] a really good way to get the information.' … I would not have had anything in my analysis if I had not pretended. "It was a strange atmosphere. It did leave a bad taste in your mouth," the former employee recalls. This unsettling account suggests the young Romney—at that point only two years out of Harvard Business School—was willing to push into gray areas when it came to business. More than three decades later, as he tried to nail down the Republican nomination for president of the United States, Romney's gray areas were again an issue when he repeatedly resisted calls to release more details of his net worth, his tax returns, and the large investments and assets held by him and his wife, Ann. Finally the other Republican candidates forced him to do so, but only highly selective disclosures were forthcoming. Even so, these provided a lavish smorgasbord for Romney's critics. Particularly jarring were the Romneys' many offshore accounts. As Newt Gingrich put it during the primary season, "I don't know of any American president who has had a Swiss bank account." But Romney has, as well as other interests in such tax havens as Bermuda and the Cayman Islands. To give but one example, there is a Bermuda-based entity called Sankaty High Yield Asset Investors Ltd., which has been described in securities filings as "a Bermuda corporation wholly owned by W. Mitt Romney." It could be that Sankaty is an old vehicle with little importance, but Romney appears to have treated it rather carefully. He set it up in 1997, then transferred it to his wife's newly created blind trust on January 1, 2003, the day before he was inaugurated as Massachusetts's governor. The director and president of this entity is R. Bradford Malt, the trustee of the blind trust and Romney's personal lawyer. Romney failed to list this entity on several financial disclosures, even though such a closely held entity would not qualify as an "excepted investment fund" that would not need to be on his disclosure forms. He finally included it on his 2010 tax return. Even after examining that return, we have no idea what is in this company, but it could be valuable, meaning that it is possible Romney's wealth is even greater than previous estimates. While the Romneys' spokespeople insist that the couple has paid all the taxes required by law, investments in tax havens such as Bermuda raise many questions, because they are in "jurisdictions where there is virtually no tax and virtually no compliance," as one Miami-based offshore lawyer put it. That's not the only money Romney has in tax havens. Because of his retirement deal with Bain Capital, his finances are still deeply entangled with the private-equity firm that he founded and spun off from Bain and Co. in 1984. Though he left the firm in 1999, Romney has continued to receive large payments from it—in early June he revealed more than $2 million in new Bain income. The firm today has at least 138 funds organized in the Cayman Islands, and Romney himself has personal interests in at least 12, worth as much as $30 million, hidden behind controversial confidentiality disclaimers. Again, the Romney campaign insists he saves no tax by using them, but there is no way to check this. Bain Capital is the heart of Romney's fortune: it was the financial engine that created it. The mantra of his campaign is that he was a businessman who created tens of thousands of jobs, and Bain certainly did bring useful operational skills to many companies it bought. But his critics point to several cases where Bain bought companies, loaded them with debt, and paid itself extravagant fees, thereby bankrupting the companies and destroying tens of thousands of jobs. Come August, Romney, with an estimated net worth as high as $250 million (he won't reveal the exact amount), will be one of the richest people ever to be nominated for president. Given his reticence to discuss his wealth, it's only natural to wonder how he got it, how he invests it, and if he pays all his taxes on it. Ironically, it was Mitt's father, George Romney, who released 12 years of tax returns, in November 1967, just ahead of his presidential campaign, thereby setting a precedent that nearly every presidential candidate since has either willingly or unwillingly been subject to. George, then the governor of Michigan, explained why he was releasing so many years' worth, saying, "One year could be a fluke, perhaps done for show." But his son declined to release any returns through one unsuccessful race for the U.S. Senate, in 1994, one successful run for Massachusetts governor, in 2002, and an aborted bid for the Republican Party presidential nomination, in 2008. Just before the Iowa caucus last December, Mitt told MSNBC, "I don't intend to release the tax returns. I don't," but finally, on January 24, 2012—after intense goading by fellow Republican candidates Newt Gingrich and Rick Perry—he released his 2010 tax return and an estimate for 2011. These, plus the mandatory financial disclosures filed with the Office of Government Ethics and released last August, raise many questions. A full 55 pages in his 2010 return are devoted to reporting his transactions with foreign entities. "What Romney does not get," says Jack Blum, a veteran Washington lawyer and offshore expert, "is that this stuff is weird." The media soon noticed Romney's familiarity with foreign tax havens. A $3 million Swiss bank account appeared in the 2010 returns, then winked out of existence in 2011 after the trustee closed it, as if to remind us of George Romney's warning that one or two tax returns can provide a misleading picture. Ed Kleinbard, a professor of tax law at the University of Southern California, says the Swiss account "has political but not tax-policy resonance," since it—like many other Romney investments—constituted a bet against the U.S. dollar, an odd thing for a presidential candidate to do. The Obama campaign provided a helpful world map pointing to the tax havens Bermuda, Luxembourg, and the Cayman Islands, where Romney and his family have assets, each with the tagline "Value: not disclosed in tax returns." Romney's personal tax rate is a particular point of interest. In 2010 and 2011, Mitt and Ann paid $6.2 million in federal tax on $42.5 million in income, for an average tax rate just shy of 15 percent, substantially less than what most middle-income Americans pay. Romney manages this low rate because he takes his payments from Bain Capital as investment income, which is taxed at a maximum 15 percent, instead of the 35 percent he would pay on "ordinary" income, such as salaries and wages. Many tax experts argue that the form of remuneration he receives, known as carried interest, is really just a fee charged by investment managers, so it should instead be taxed at the 35 percent rate. Lee Sheppard, a contributing editor at the trade publication Tax Notes, whose often controversial articles are read widely by tax professionals, is nonplussed that the Obama campaign has been so listless on the issue of carried interest. "Romney is the poster boy, the best argument, for taxing this profit share as ordinary income," says Sheppard. In the face of such arguments, Romney's defense is that he never broke the rules: if there is a problem, it is in the laws, not in his behavior. "I pay all the taxes that are legally required, not a dollar more," he said. Even so. "When you are running for president, you might want to err on the side of overpaying your taxes, and not chase every tax gimmick that comes down the pike," says Sheppard. "It kind of looks tacky." The assertion that he broke no laws is widely accepted. But it is worth asking if it is actually true. The answer, in fact, isn't straightforward. Romney, like the superhero who whirls and backflips unscathed through a web of laser beams while everyone else gets zapped, is certainly a remarkable financial acrobat. But careful analysis of his financial and business affairs also reveals a man who, like some other Wall Street titans, seems comfortable striding into some fuzzy gray zones. The Caped Avoider!One might perhaps accept an explanation by Romney's campaign spokeswoman, Andrea Saul, that the candidate's failure to include his Swiss account in earlier financial disclosures was merely a "trivial inadvertent issue." But deeper questions do emerge. All the assets on Mitt's financial disclosures are in blind trusts or retirement accounts held by him and Ann. Blind trusts are designed to avoid conflicts of interest for those in public office by having politicians' assets managed by independent trustees. The Romneys' blind trust was created when Mitt was elected governor of Massachusetts. Curiously, the Romneys appointed Bradford Malt as their trustee. It's certainly true that under Malt the trusts don't appear to be as blind as they might be: for instance, in 2010 the Romneys invested $10 million in the start-up of the Solamere Founders Fund, co-founded by their eldest son, Tagg, and Spencer Zwick, Romney's onetime top campaign fund-raiser; Solamere is now in the Ann Romney blind trust. Malt has said he invested in Solamere without consulting Mitt or Ann and explained he liked Solamere because of its diversified approach and because he knew the founders and had confidence in them. Likewise, the Romneys were reported to have invested at least $1 million in Elliott Associates, L.P., a hedge fund specializing in "distressed assets." Elliott buys up cheap debt, often at cents on the dollar, from lenders to deeply troubled nations such as Congo-Brazzaville, then attacks the debtor states with lawsuits to squeeze maximum repayment. Elliott is run by the secretive hedge-fund billionaire and G.O.P. super-donor Paul Singer, whom Fortune recently dubbed Mitt Romney's "Hedge Fund Kingmaker." (Singer has given $1 million to Romney's super-pac Restore Our Future.) It is hard to know the size of these investments. Romney's financial disclosure form lists 25 of them in an open-ended category, "Over $1 million," including Solamere and Elliott, and they are not broken down further. Romney hides behind a disclaimer that the fund managers "declined to provide such information" about their underlying assets. Many of these funds are set up in tax havens such as the Cayman Islands, where a confidentiality law states that you can be jailed for up to four years just for asking about such information. Andrea Saul said of these investments, "Everything … was reported correctly." Joseph Sandler, a Democratic lawyer who has worked with candidates on disclosures for more than two decades, is skeptical. "The law is the law," Sandler says. "[Romney] says, 'Well, you know, they won't tell me.' But when you run for office in the U.S. and are not prepared to comply with disclosure requirements, you should either divest yourself of the assets or don't run." The Washington Post summarized the opinions of experts across the political spectrum by saying Romney's disclosures were "the most opaque they have encountered." Mysteries also arise when one looks at Romney's individual retirement account at Bain Capital. When Romney was there, from 1984 to 1999, taxpayers were allowed to put just $2,000 per year into an I.R.A., and $30,000 annually into a different kind of plan he may have used. Given these annual contribution ceilings, how can his I.R.A. possibly contain up to $102 million, as his financial disclosures now suggest? The Romneys won't say, but Mark Maremont, writing in The Wall Street Journal, uncovered a likely explanation. When Bain Capital bought companies, it would create two classes of shares, named A and L. The A shares were risky common shares, to which they would assign a very low value. The L shares were preferred shares, paying a high dividend but with the payoff frozen, and most of the value was assigned to them. Bain employees would then put the exciting A shares in their I.R.A. accounts, where they grew tax-free. With all the risk of the deal, the A shares stood to gain a lot or collapse. But if the deal succeeded, the springing value could be stunning: Bain employees saw their A shares from one particularly fruitful deal grow 583-fold, 16 times faster than the underlying stock. The Romneys won't tell us how, or even if, they assigned super-low values to the A shares, but there are a couple of ways to do it. One is to use standard options models to price the shares—then feed inappropriate assumptions into those models. Romney could alternatively have used a model called liquidation valuation, which Kleinbard says would have been "completely inappropriate." Without seeing the assumptions used on Romney's tax returns from the years when those lowball A shares were squirted into his I.R.A., we cannot know how he did it. Whatever methods he used, however, the valuations were, according to Andrew Smith, of Houlihan Capital in Chicago, "pushing the envelope." (Andrea Saul retorts, "Why should successful investments be criticized?") Mitt's and Ann's I.R.A.'s have also been receiving profit interest from (mostly Cayman Island–based) Bain Capital funds that were set up long after he had left the company, in 1999. For example, the 2010 return reveals a profits interest in a Cayman-based fund called Bain Capital Partners (AM) X LP, which was transferred to the Ann D. Romney trust in October 2010. An attachment to the return says the Ann D. Romney trust is "performing services" to the partnership, which is boilerplate language for these kinds of filings. Her blind trust could receive lightly taxed income from Bain Capital for years to come, well into the presidential term her husband hopes to win. But administrative guidance says you can do this kind of thing only if the compensation is in recognition of past services you have provided. "This should not mean retired from the mother ship 10 years out and getting profits you had nothing to do with," Sheppard says, adding that Romney can get away with it because of excessive "administrative indulgences" that have allowed a "perversion of the law in favor of a small class of overcompensated investment managers." Romney's I.R.A. also appears to have invested in so-called blocker corporations in the Cayman Islands and elsewhere. U.S. pension funds, foundations, and even I.R.A.'s routinely use offshore blocker corporations to avoid something called the Unrelated Business Income Tax, which was designed to keep nonprofits from competing with ordinary companies in areas outside their core purpose: if you invest directly you get hit with the tax, but if you invest in a blocker, which then invests in the U.S. business, you escape it. Romney's I.R.A. appears to have employed this lawful escape route, and his campaign has used language suggesting that it has. But that would mean the Romney camp's claim that Mitt's tax consequences of investing via the Cayman Islands is "the very same" as it would have been had he invested directly at home is simply not true. (Romney spokesperson Andrea Saul says Romney "gets the same benefit anyone would get from an I.R.A.," but she did not respond to questions on whether his I.R.A. had used blockers or avoided taxes by investing via tax havens.) A Deutsche Bank analysis of 68 Bain deals Romney was involved in calculated an internal rate of return—a standard private-equity benchmark—at a staggering 88 percent annually (though after fees and inflation, investor performance may have been little more than half that). It is substantially on this stellar record that Romney is now running for president. His work at Bain was unquestionably good for himself and for Bain, but was it also good for the businesses he acquired, for their workers, and for the economy, as he claims? A report by Bain and Co. itself, looking at the period from 2002 to 2007, concluded that there is "little evidence that private equity owners, overall, added value" to the companies they took over: nearly all their returns are explained by broad economic growth, rising stock markets, and leverage. Josh Kosman, who researched the subject of private equity for his book The Buyout of America, singles out Bain Capital in particular. "They take pride in pushing the leverage envelope [i.e., use of borrowed money, which magnifies returns, while off-loading the risks onto others] more than their peers," he says. "I have heard that from limited partners in Bain's funds. I have heard that from bankers who lend money to finance their leveraged buyouts. Bain always prided itself on 'We'll push leverage more than the others.' They brag about that, behind closed doors." Dade Behring is a cause célèbre for Romney's and Bain's critics, and it illustrates the leverage problem clearly. In 1994, Bain bought Dade International, a medical-diagnostics company, then added the medical-diagnostics division of DuPont in 1996 and a German medical-testing company called Behring in 1997. Former Dade president Bob Brightfelt says the operation started well: the Bain managers were "pretty smart guys," he recalls, and they did well cutting out overlap, and exploiting synergies. Then brutal cost cutting began. Bain cut R&D spending to an average of 8 percent of sales, a little more than half what its competitors were doing. Cindy Hewitt, Dade's human-resources manager, remembers how the firm closed a Puerto Rico plant in 1998, a year after harvesting $7.1 million in local tax breaks aimed at job creation, and relocated some staff to Miami, then the company's most profitable plant. Based on reassurances she had received from her superiors, she told those uprooting themselves from Puerto Rico that their jobs in Miami were safe for now—but then Bain closed the Miami plant. "Whether you want to call it misled, or lied, or manipulated, I do not believe they provided full information about what discussions were under way," she says. "I would never want to be part of even unintentionally treating people so poorly." Bain engaged in startling penny-pinching with the laid-off employees. Their contracts stipulated that if they left early they would have to pay back the costs of relocating to Miami—but in spite of all that Dade had done to them, it refused to release the employees from this clause. "They said they would go after them for that money if they left before Bain was finished with them," Hewitt recalls. Not only that, but the company declined to give workers their severance pay in lump sums to help them fund their return home. In 1999, generous pensions were converted into less generous benefits, wages were cut, and more staff members were laid off. Some employees contacted Norman Stein, then the director of the pension-counseling clinic at the University of Alabama law school, with a view to challenging the conversions. Stein says the employees were "extraordinarily nervous," so fearful, in fact, that they refused to let lawyers even make copies of pension documents. "I have been dealing with pensions issues for over 25 years and I never saw anything like this," recalls Stein. The spooked employees did not go to court. Stein says that, while breaking pension contracts like this was not unheard of, the practice at that time was "questionable," adding that Dade may have saved $10 to $40 million from converting its pensions. The beauty—or savagery—of leverage is that it can magnify any and all cash-flow boosts, such as this one. Take $10 to $40 million squeezed from a pension pot, then use that to create new, rosier financial projections to borrow several times that amount, and then pay yourself a big special dividend from the borrowed funds, many times the size of the pension savings. That is just what Bain Capital did: the same month it converted the pensions, it created new financial projections as a basis to borrow an extra $421 million—from which Bain, its co-investor Goldman Sachs, and top Dade management extracted $365 million in dividends. According to Kosman, "Bain and Goldman—after putting down only $85 million … made out like bandits—a $280 million profit." Dade's debt rose to more than $870 million. Romney had left operational management of Bain that year, though his disclosures show that he owned 16.5 percent of the Bain partnership responsible for the Dade investment until at least 2001. Quite soon, however, a fragile Dade faced adverse conditions in the currency markets, and it had to start in effect cannibalizing itself, cutting into the core of its business. It filed for bankruptcy in August 2002 and Bain Capital departed. When Dade emerged from bankruptcy, its new owners invested in long-term R&D, and it flourished again. Nor was this an isolated incident: Kosman lists five other "formerly healthy" companies—Stage Stores, Ampad, GS Technologies, Details, and KB Toys—Bain helped drive into bankruptcy, while making big profits. (Despite numerous entreaties from Vanity Fair to Bain Capital to address on the record points in this article with which it might disagree, the firm refused to do so and instead provided this statement: "When politics overwhelm fact, some will distort or cherry-pick our record and launch unfounded allegations and insinuations. The truth and the full record show that Bain Capital operates with high standards of integrity and excellence in compliance with all laws. Any suggestion to the contrary is baseless.") Tax Haven U.S.A.The term "financialization" describes two interlocking processes: a disproportionate growth in a country's deregulated financial sector, relative to the rest of the economy, and the rising importance of financial activities with a focus on financial returns among industrial and other non-financial corporations, often at the expense of real innovation and productivity. Some see the rising influence of finance and financial models in epochal terms. Author of Financialization and the U.S. Economy Özgür Orhangazi summarizes academic literature that sees financialization "as one of the indicators of the decline of the hegemonic power": imperial Venice, Genoa, Holland, and Britain all saw their power rise on the back of productive industrial capitalism, followed by domination by the financial sector, which eventually began to cannibalize the productive sector in pursuit of financial returns—a process that ended in weakness and collapse. Little noticed in the academic discussions of financialization is the role of offshore tax havens, one of the big reasons the financial sector has become so powerful. In 1966, Michael Hudson, a young Chase Manhattan balance-of-payments economist, was in a company elevator when he was handed a memo by a former State Department operative. The memo came from the U.S. government, and Hudson was tasked with figuring out how much foreign money the U.S. might attract. "They were saying, 'We want to replace Switzerland,' " Hudson explains. "All this money will come here if we make this the criminal center of the world. We wanted foreign criminal money, which was patriotic, but not American criminal money." In the years since then, almost unknown to most Americans, the United States has turned itself into a giant tax haven for foreigners, just as the memo suggested. Federal and state tax laws have been deliberately shaped to give foreigners special tax exemptions unavailable to Americans, plus financial secrecy and exemptions from regulatory restraints. "We have criticized offshore tax havens for their secrecy and lack of transparency," said Senator Carl Levin. "But look what is going on in our own backyard." In this grand scenario, tax havens such as the Caymans serve as feeders of foreign savings into Tax Haven U.S.A. from abroad, providing foreign investors with additional ways to skip around tax, disclosure, and regulatory requirements that they might trigger if they invested directly. The money sucked into Tax Haven U.S.A., often via the "feeder" tax havens, is frequently tax-evading and other criminal foreign money, in the spirit of Hudson's 1966 memo, and it is predominantly channeled not into productive investment but into real estate and financial business. One cannot properly understand Wall Street's size and power without appreciating the central role of offshore tax havens. There is absolutely no evidence that Bain has done anything illegal, but private equity is one channel for this secrecy-shrouded foreign money to enter the United States, and a filing for Mitt Romney's first $37 million Bain Capital Fund, of 1984, provides a rare window into this. One foreign investor, of $2 million, was the newspaper tycoon, tax evader, and fraudster Robert Maxwell, who fell from his yacht, and drowned, off of the Canary Islands in 1991 in strange circumstances, after looting his company's pension fund. The Bain filing also names Eduardo Poma, a member of one of the "14 families" oligarchy that has controlled most of El Salvador's wealth for decades; oddly, Poma is listed as sharing a Miami address with two anonymous companies that invested $1.5 million between them. The filings also show a Geneva-based trustee overseeing a trust that invested $2.5 million, a Bahamas corporation that put in $3 million, and three corporations in the tax haven of Panama, historically a favored destination for Latin-American dirty money—"one of the filthiest money-laundering sinks in the world," as a U.S. Customs official once put it. Bain Capital has said it did everything required by the U.S. government to check that the investors were not associated with unsavory interests. U.S. law doesn't require Bain to enforce the tax laws of its investors' home countries, but the presence of Swiss trustees, Bahamas trusts, and Panama corporations would raise red flags with any tax authority. Many Americans might react with a shrug to the idea of shady foreign money such as Robert Maxwell's being invested here. But, says Rebecca Wilkins, of the Washington, D.C.–based nonprofit Citizens for Tax Justice, "It is shocking that a presidential candidate should think that is O.K." $100 Million in Romney's IRA and Other Bain Mysteries: Where's the Media Swarm?Back when Bill Clinton was President there was a huge media-swarm controversy because a decade before her husband was elected Hillary Clinton had made $100,000 over ten months by investing in cattle futures. Now, skip forward to 2012. Report after report circulates about a candidate for President who owns a secret company in Bermuda, Swiss and Cayman Islands bank accounts and an IRA containing as much as $100 million -- and who may have filed SEC documents containing false information (a felony). Huge media swarm this time? Not so much. Cattle Futures? In the 1970s Hillary Clinton made some speculative investments. Over a period of 10 months she made investments in cattle futures that did well, earning $100,000. Later when her husband was President, the media wanted to find out how she was able to make such a large, huge, gi-normous sum from speculative investments. Take a look at the 350,000-or-so web references to cattle futures trades made by Hillary Clinton way back in the 1970s. This might give you an idea of how big a deal it was back in the mid-90's that Hillary Clinton had made $100,000 (!!!) on speculative investments back in the 1970s. (The number of stories located online is possibly reduced by the fact that the media swarm happened in the mid-1990s --largely before the Internet.) Look at the outlets that assigned teams of reporters to investigate: All the TV networks, the Washington Post, New York Times, Newsweek, and all of the rest of the journamalism crowd were all over what was considered to be a major story. This story was investigated, written about, investigated, written about, and investigated. No evidence of any wrongdoing was ever found -- which many in the media took as clear proof that there had been a massive cover-up. Today - Not So Much Today things are different. Compare the magnitude of Hillary's $100,000 profit to the recent disclosure of as much as $100,000,000 -- one hundred million dollars -- turning up in Mitt Romney's IRA which is a personal retirement investment vehicle that is limited to a few thousand in contributions each year. (Remember, the gains made in an IRA is not taxed.) Romney is already retired, and the one completed tax return he has disclosed shows that he currently has an income of approximately $450,000 per week. So how did $100 million end up an an IRA that is limited to deposits of a maximum $6,000 a year (after you reach a certain age)? How many reporters has each major news organization assigned to find out why he has up to $100 million in an IRA? Compare Hillary's $100,000 profit to the disclosure that Mitt Romney has a Swiss bank account. A candidate for President of the United States has a Swiss bank account? (And a Caymans bank account? And others?) Why? What is the explanation? How many reporters has each major news organization assigned to find out? Compare it to the disclosure that Mitt Romney owns a secret company in Bermuda, which was transferred to his wife the day before he had to disclose it, or what it is or does. How many reporters has each major news organization assigned to find out why he has a secret company in Bermuda, and what that company does, how much it pays in taxes and how much money it holds, and why it was transferred to his wife the day before he took office as Governor? Compare it to the more recent disclosure that after 1999 Romney's company Bain Capital was telling the government and other parties that Romney owned all the shares, was President and CEO and managing the place, but now says that was all a scam and he wasn't really! (That's illegal -- a felony -- by the way.) How many reporters has each major news organization assigned to find out if he lied on his SEC forms? ONE news organization did report this story -- well, actually they reported information originally uncovered by a progressive website and a progressive magazine. Where Is Our Media? News media. Information. Informed decision-making in a democracy. Investigative reporting. The public's need to know. What has happened to these concepts? They seem alien in today's media environment. Our news media's purpose is supposed to be to provide the public with the information that is needed to make informed decision. It is supposed to be investigating our leaders to find out if they are really acting in our interest. Why are they not doing this at this crucial time? Checking the facts about Romney and Bain CapitalBy Angie Drobnic Holan Published on Tuesday, July 17th, 2012 at 6:23 p.m. Related rulings: Says Mitt Romney "had millions in a Swiss bank account."Barack Obama, Saturday, July 14th, 2012. Ruling: True | Details  "Mitt Romney's companies were pioneers in outsourcing U.S. jobs to low-wage countries."Barack Obama, Tuesday, July 3rd, 2012. Ruling: Half-True | Details Says Mitt Romney "has a corporation in Bermuda (but) failed to disclose that on seven different financial disclosures."Robert Gibbs, Sunday, July 8th, 2012. Ruling: True | Details  After they bought GST Steel, "Mitt Romney and his partners loaded it with debt, closed the Kansas City plant and walked away with a healthy profit, leaving hundreds of employees out of work with their pensions in jeopardy."Barack Obama, Monday, May 14th, 2012. Ruling: Mostly True | Details Mitt Romney "supervised a company guilty of massive Medicare fraud."Winning Our Future, Friday, January 27th, 2012. Ruling: Half-True | Details In July 1996, Mitt Romney helped locate the missing teenage daughter of a partner at Bain Capital.Chain email, Monday, January 30th, 2012. Ruling: True | Details "While Romney was a director of the Damon Corporation, the company was defrauding Medicare of millions."AFSCME, Friday, January 20th, 2012. Ruling: Mostly True | Details Mitt Romney is worth "at least a quarter billion dollars" and the bulk of his wealth "remains in blind trusts and overseas bank accounts."Winning Our Future, Tuesday, January 10th, 2012. Ruling: Half-True | Details  Says Romney and Bain Capital drove KB Toys into bankruptcy by loading it up with debt.Winning Our Future, Wednesday, January 11th, 2012. Ruling: Mostly False | Details Mitt Romney's and Bain Capital's profits from KB Toys, which later went out of business, were "described by the Boston Herald as 'disgusting.'"Winning Our Future, Thursday, January 12th, 2012. Ruling: Mostly False | Details Says he "helped save" the Olympic games.Mitt Romney, Tuesday, December 6th, 2011. Ruling: Mostly True | Details Share this article:The Obama campaign released an ad attacking Mitt Romney. Mitt Romney has presented himself as a candidate who understands free markets and getting the economy on track, and he's pointed to his time at Bain Capital as evidence. President Barack Obama's campaign, meanwhile, had taken that point of ostensible strength and targeted it for relentless attacks. Sorting fact from fiction isn't always easy when it comes to private equity's complex transactions and Romney's far-reaching wealth. Many of these issues also have implications about job creation, regulation and taxation. Here, we review our recent fact-checks to sort out Romney's Bain record. Is it accurate to say Bain still Romney's company after 1999? In an ad, the Obama campaign said, "Mitt Romney's companies were pioneers in outsourcing U.S. jobs to low-wage countries." We looked at this question carefully, and the answers aren't so clear cut. Romney left day-to-day management of the company in 1999, but he was Bain's founder and assembled a team that looked to make high returns. Some of those returns were achieved by investing in companies that outsourced or promoted outsourcing. We rated Obama's claim Half-True. A corporation in Bermuda -- Obama's former press secretary Robert Gibbs said that Romney, "has a corporation in Bermuda" but failed to disclose that on seven different financial disclosures. The corporation in question was the Bain-related Sankaty High Yield Asset Investors, Ltd. , and there were seven financial disclosures where it was not listed. We rated Gibbs' statement True. Swiss bank account -- Another Obama ad charged that Romney "had millions in a Swiss bank account." It's accurate that Romney had about $3 million in a bank account Switzerland; the account is now closed. Swiss bank accounts have a reputation for secrecy, but we found nothing to indicate Romney did anything illegal or improper with the account. We rated the statement True. Bain's investment in GST Steel -- Another Obama TV ad accused Bain of leaving GST Steel in poor shape. "Mitt Romney and his partners loaded it with debt, closed the Kansas City plant and walked away with a healthy profit, leaving hundreds of employees out of work with their pensions in jeopardy." We found that claim was largely accurate, but needed some clarification. The plant's closure happened after Romney had left daily management at Bain, though he led Bain during six years of its majority investment in the plant. And other, outside factors were at work that made the steel industry a tough business. We rated this statement Mostly True. Bain's investment in Damon Corp. -- Back in the primary, a super PAC supporting Newt Gingrich attacked the Bain record on Damon Corporation, a medical testing company. The super PAC, Winning Our Future, said Romney "supervised a company guilty of massive Medicare fraud." The company was defrauding Medicare, but Romney was serving on the board of directors, not managing the company's billing practices. We rated this Half True. The public employees union AFSCME was more precise in its claim: "While Romney was a director of the Damon Corporation, the company was defrauding Medicare of millions." We rated that Mostly True, noting that it was difficult to assess whether Romney knew about the fraud or should have known, and what he did to stop it. Bain's investment in KB Toys -- The same pro-Gingrich PAC charged that Romney and Bain Capital drove KB Toys into bankruptcy by loading it up with debt in a much-discussed video attack called "King of Bain." There are a lot of reasons we rated this Mostly False: Bain Capital bought KB Toys in 2000, after Romney retired. He wouldn't have been involved in financial decisions, though he would have profited from them. Also, toy industry analysts told us KB Toys was a troubled company before Bain bought it, and Bain wasn't able to fix it. Likewise, we rated Mostly False the claim that the Boston Herald called the KB Toys events "disgusting." The newspaper was quoting a laid-off worker, not speaking through an editorial as the claim implied. Romney's net worth -- Finally, the "King of Bain" video said Romney is worth "at least a quarter billion dollars" and the bulk of his wealth "remains in blind trusts and overseas bank accounts." Romney's wealth likely ranges somewhere between $190 million to $250 million. But we didn't find good evidence that "the bulk" of Romney's money is in overseas accounts. In fact, the documents we reviewed suggested a relatively small share of Romney's wealth is overseas. We rated that claim Half True. Finally, two Bain-related statements focused on more positive aspects of Romney's record and received more positive ratings. Missing teen -- A chain email claimed that in July 1996, Romney helped locate the missing teenage daughter of a partner at Bain Capital. Romney did help find the girl, who disappeared after going to a rave party in New York City, where she took the drug Ecstasy. She had told her parents she was playing tennis. We rated the statement True. Saving the Olympics -- The Romney campaign reminded voters of the reason he left Bain: to "help save" the 2002 Winter Olympic games. We rated that Mostly True. By all accounts, he did help the city's Olympic committee reverse its fortunes after an embarrassing scandal. Republicans assail Obama on 9/11 attack in LibyaBy | Associated Press – Thu, Sep 27, 2012
WASHINGTON (AP) — Republicans lashed out at President Barack Obama and senior administration officials over their evolving description of the deadly Sept. 11 attack on the U.S. Consulate in Libya, a late campaign-season broadside challenging the veracity and leadership of an incumbent on the upswing. Desperate to reverse the apparent trajectory of the White House race, Republicans sense a political opportunity in Obama's reluctance to utter the words "terrorist attack" as well as the varying explanations emerging from the administration about the assault in Benghazi that killed Ambassador Chris Stevens and three other Americans. Talk of Watergate-style scandal, stonewalling and cover-up echoed in the GOP ranks on Thursday, from the head of the party to members of Congress to Mitt Romney's campaign staff. This full-throated criticism comes five days before the first debate between Obama and Romney, with Republicans determined to cast the president as dishonest and ineffectual on both foreign and domestic policy. "Amid Middle East turmoil and six weeks before the election, President Obama refuses to have an honest conversation with the American people," Reince Priebus, chairman of the Republican Party, wrote in an article for the website Real Clear Politics. "The country deserves honesty, not obfuscation, from our president." Republicans say the administration has been slow to call the assault a terrorist attack and has criticized its initial insistence that the attack was a spontaneous response to the crude anti-Islam video that touched off demonstrations across the Middle East. Since then, it has become clear that the Benghazi assault was distinct from the mobs that burned American flags and protested what they considered the blasphemy in the movie, but didn't attack U.S. personnel. Republicans have also suggested that the administration had intelligence suggesting the deadly attack might happen and ignored it. "I think it's pretty clear that they haven't wanted to level with the American people. We expect candor from the president and transparency," Romney told Fox News this week. The White House and Democrats accused the GOP of politicizing national security, with officials specifically mentioning Romney's quick swipe at Obama as an extremist sympathizer as the crisis was still unfolding in North Africa around Sept. 11. "The Republican approach is to shoot first and ask questions later," Rep. Adam Smith of Washington state, the top Democrat on the House Armed Services Committee, said in an interview. "The administration wants to do an investigation and be as accurate as possible. That's the difference between partisan politics and trying to govern." Democrats also used the criticism to recall the former Massachusetts governor's missteps during his summertime overseas trip and his omission in his prime-time speech at the Republican National Convention of any mention of U.S. military forces fighting in Afghanistan. "Every time Mitt Romney has attempted to dip his toe into foreign policy quarters, it's been an unmitigated disaster," Obama campaign press secretary Jen Psaki said aboard Air Force One. National security has provided few political openings for Romney and the GOP as Obama has shed the Democrats' past reputation for weakness by ordering the successful raid that killed terrorist leader Osama bin Laden and undercut al-Qaida. An Associated Press-GfK poll earlier this month found Obama with an edge over Romney on who Americans think can do a better job of protecting the country, 51 percent to 40 percent. The economy and jobs are the dominant issues in the election, with few voters likely to cast their ballots based on events in Libya or conflicts overseas. Underscoring the general weariness after more than 10 years of war, some of the fiercest GOP defense hawks in Congress have suggested the United States withdraw its forces from Afghanistan, an even bolder step than Obama. But the administration has struggled to present a coherent description of the assault in Libya, prompting questions from Republicans and Democrats about whether the United States had prior intelligence, whether the attack was planned and whether security was sufficient. In that same AP poll, Americans approved of Obama's handling of Libya by just 45-41 percent. The poll was conducted within days of the assault. Defense Secretary Leon Panetta on Thursday called it a terrorist attack. "What terrorists were involved I think still remains to be determined by the investigation," he told reporters at the Pentagon. "But it clearly was a group of terrorists who conducted that attack." Secretary of State Hillary Rodham Clinton and White House press secretary Jay Carney called the violence a terrorist attack last week. But Obama has declined several chances to call the incident a terrorist attack. He said last week that extremists used an anti-Islam video as an excuse to assault U.S. interests. And just five days after the attack, U.S. Ambassador to the United Nations Susan Rice said the attack was a spontaneous reaction to the video. Her assessment was at odds with Libya's interim President Mohammed el-Megarif, who said there was no doubt the perpetrators had predetermined the date of the assault. Panetta said Thursday it was a "planned attack." The FBI is investigating, but the apparent contradictions have prompted demands for information from Congress and a flurry of scathing letters to the administration. So far, U.S. intelligence has indicated that heavily armed extremists numbering 50 or more attacked the consulate, relying on gun trucks for added firepower. They established a perimeter, limiting access to the compound. A first wave of attacks forced the Americans to flee to a fallback building, where a second group of extremists attacked with mortar fire. Stevens died of apparent smoke inhalation when he was caught inside one of the consulate buildings, which had been set on fire. Officials have not singled out one responsible group, but have focused their attention on Ansar al-Shariah, a Libyan militant group led by a former detainee at the U.S. military-run prison in Guantanamo Bay, Cuba. Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, said Thursday that there has been a "thread of intelligence reporting" about groups in eastern Libya trying to coalesce, but no specific threat to the consulate. Since the fall of Libyan leader Moammar Gadhafi last year, militias, weapons and terrorists are common in Libya. "It was just unbelievable that Ambassador Rice and Secretary Clinton and the White House spokesman and others would say that there was no evidence — that this was a spontaneous attack, yet they say, 'come on, honey, bring your mortars, we're going to a spontaneous demonstration,'" Sen. John McCain, R-Ariz., said on CBS' "This Morning." McCain, who called the administration's statements "disgraceful," joined three other Republican senators this week in a letter to Rice pressing her on her "troubling statements that are inconsistent with the facts." Eight Republicans who head House committees sent a letter to Obama criticizing a "pre-9/11 mindset" of "treating an act of war solely as a criminal matter." They said they would return to Washington from their nearly two-month recess for briefings beyond the back-to-back sessions Clinton and others held last week. Sens. Bob Corker, R-Tenn., and Johnny Isakson, R-Ga., have asked for communications between the State Department and the U.S. mission in Libya leading up to the attacks. Senate Foreign Relations Committee Chairman John Kerry, D-Mass., has written the State Department's Thomas Nides asking him to provide the panel with a detailed accounting of the attacks on U.S. missions in Libya, Egypt and Yemen on Sept. 11, information on security and whether there was any prior intelligence. Sen. Chris Coons, D-Del., a member of the panel, said the purpose of this letter is a bipartisan effort to get information. "I do think it is legitimate and appropriate to ask questions," Coons said in an interview. "Some have sadly overreached and clearly are politicizing this incident." The Real Problem With Romney's Offshore InvestmentsForget the 47 percent. Foreign tax havens—and investment vehicles like those the GOP candidate established at Bain Capital—are robbing world treasuries of billions.| Tue Sep. 25, 2012 3:00 AM PDT  Mitt Romney's taxes are once again in the news thanks to Friday's release of his full 2011 tax return. As with his 2010 filings, the documents highlight the GOP candidate's extensive overseas holdings, which some tax experts believe has allowed him to lessen his tax liability. But the problem with Romney's reliance on offshore tax havens goes beyond his own tax bill. The Internal Revenue Service and many members of Congress have sought for years to close some of the loopholes that are draining billions of dollars from the federal treasury and shifting the tax burden from wealthy corporations to average individuals. Yet through his work at Bain Capital and his personal investments, Romney has supported a shadowy financial system with far-reaching ramifications for the US and foreign governments. To date, Romney has refused to answer questions about why, for instance, he needs to keep some of his money in places like Bermuda, rather than a bank in Belmont, Massachusetts, or in a US-based investment vehicle. When he dodges these types of questions, Romney's not just depriving voters of critical information about his own taxes. He's sidestepping a much larger policy question about this unaccountable financial system that has been a key driver of global inequality. Offshore tax havens are better known for facilitating money laundering and tax evasion than legitimate business. They are jurisdictions that generally offer extremely low tax rates to foreign investors (zero in the case of the Cayman Islands). They also offer sanctuary to people or entities looking to avoid other rules and regulations or seeking to shield their assets from lawsuits in their home countries. And, of course, tax havens provide secrecy. They hide owners, partners, and investors from tax authorities or jilted spouses and often refuse to comply with criminal investigations by other countries, which is one reason they're popular with both drug kingpins and Americans tax evaders. Romney has investments in a number of well known tax havens, including Ireland, Luxembourg, the Cayman Islands, and Bermuda. Until 2010, he held a few million in the Swiss bank UBS, which in 2009 was forced to pay the US $780 million in fines and penalties for helping more than 17,000 Americans commit tax fraud by hiding as much as $20 billion overseas. The total value of Romney's offshore investments is unknown, but his tax returns have revealed that he has at least $30 million invested in the Cayman Islands, in at least 12 different Bain Capital funds. When pressed about the relationship between his offshore investments and his low tax rate (he paid 14.1 percent on $13 million in income, according to his 2011 tax return), Romney has largely declined to answer questions about his overseas holdings other than to say, "I pay all the taxes that are legally required, not a dollar more." Romney has also denied getting tax benefits from his offshore accounts. He told Fox News, "[T]here was no reduction, not one dollar reduction in taxes by virtue of having an account in Switzerland or a Cayman Islands investment. The dollars of taxes remained exactly the same. There was no tax savings at all." Similarly, a Romney campaign spokeswoman told Mother Jones that Romney's foreign investments "are taxed in the very same way they would be if the shares were held in the US rather than through a Cayman fund. No taxes are avoided or reduced. These funds are registered with the IRS and report all income to investors and the IRS, just like domestic funds." Romney's assertion that his offshore investments have not reduced his tax bill has been met with skepticism by tax experts. But assuming he's telling the truth, his involvement in the offshore system and that of the company he started, Bain Capital, is still no less significant. That's because while Romney may have done everything by the book with his offshore accounts, Bain's other offshore investors may not have. "The Cayman Islands jurisdiction for the Bain funds primarily makes it easy for their investors to cheat on their taxes." Bain's has had investment funds located in the Cayman Islands since at least the 1990s, when Romney was still in charge. And the company has made clear that many of its funds there are designed to avoid US taxes. According to documents released by Gawker in August, one fund in which Romney still has money invested notes in a financial statement that it "intends to conduct its operations so it will…not be subject to United States federal income or withholding tax."* "The Cayman Islands jurisdiction for the Bain funds primarily makes it easy for their investors to cheat on their taxes," says Rebecca Wilkins, the senior counsel for federal tax policy at the nonprofit Citizens for Tax Justice. "Because of that they can attract more investors and they can earn bigger management fees. " Because of the secrecy laws in the Caymans and other offshore tax havens, Bain investors are hidden from tax authorities like the IRS. Unless they choose to report their holdings and income, as Romney has, there is no way for tax officials in the US or other countries to know that such holdings exist, much less find a way to tax them. James Henry, a former chief economist at McKinsey & Co., describes offshore tax havens like the "bar scene in Star Wars." He explains, "Dictators and kleptocrats used them to conceal stolen loot. Arms dealers and drug dealers use them to launder their deals. Google and Apple and Pfizer use them to park their intellectual property and pay themselves tax-free royalties. Banks use them to park lousy loans and stash the offshore accounts and assets under management of their wealthy individual clients, many of which are paying zero taxes back home…And so on." Some of those sorts of shady clients have been part of Romney's portfolio at Bain. Nicholas Shaxson has written one of the most comprehensive stories about Romney's offshore investments in a lengthy article in the August issue of Vanity Fair. It explored the nature of some of Romney's early Bain investors. They included the late Czech-born British media tycoon Robert Maxwell, a fraudster and notorious tax evader who put $2 million into one of Romney's first Bain funds, as well as a trio of anonymous corporations from another notorious tax haven, Panama. Other early investors, according to numerous news accounts, were members of the wealthy Salvadoran oligarchy with ties to right-wing death squads. Romney has credited Salvadoran investors for helping him get his company off the ground. Obama says he works 'for everybody, not just for some' White House CorrespondenThe Ticket – 13 hrs ago Appearing on the "Late Show" with David Letterman, President Barack Obama scolded Mitt Romney over his caught-on-camera remarks, declaring that "if you want to be president, you gotta work for everybody, not just for some." Letterman had asked Obama on Tuesday about Romney's remarks at a fundraiser several months ago in which the Republican standard-bearer essentially wrote off the president's core supporters as having a victim mentality and depending on government handouts. "Is that what rich guys at country clubs are talking about?" Letterman asked. "I don't know what he was referring to," the president said. "But I can tell you this: When I won in 2008, 47 percent of the American people voted for John McCain," Obama said. "They didn't vote for me. And what I said on election night was: 'Even though you didn't vote for me, I hear your voices, and I'm going to work as hard as I can to be your president.'" "And one of the things I've learned as president is you represent the entire country. And when I meet Republicans as I'm traveling around the country, they are hard-working family people who care deeply about this country. And my expectation is, is that if you want to be president, you gotta work for everybody, not just for some," Obama said. Acknowledging his own 2008 gaffe in which he said Americans "bitter" about their lot in life "cling" to religion and gun rights, Obama said "I immediately said I regret this" because it "sent the wrong message to the country." (Not really. He first stood by them, then eventually worked his way to "I didn't say it as well as I should have." It was, not surprisingly, messy.) "All of us make mistakes, all of us say the wrong thing once in a while," Obama told Letterman. "People understand you're going to make mistakes on the campaign trail. What I think people want to make sure of, though, is that you're not writing off a big chunk of the country." "This is a big country. And people disagree a lot, but one thing I've never tried to do--and I think none of us can do in public office--is suggest that because someone doesn't agree with me that they're victims or they're unpatriotic." "There are not a lot of people out there who think they're victims," he said. "There are not a lot of people who think they're entitled to something." Republicans have worked to paint the election as a battle between their plans for an "opportunity society" and what they deride as Obama's "entitlement society," which they claim is an approach in which government knows best. Romney made a variation on that argument in an interview Tuesday with Fox News Channel's Neil Cavuto. "What I think the majority of people, Democrats and Republicans, believe is is that we've got some obligations to each other, and there's nothing wrong with us giving each other a helping hand," Obama said. "I think that's a good investment for America, and that's—if you want to be president and you want to bring people together, I think that's the attitude that you've got to have." Secret Video Worsens Mitt Romney's September NightmareBy MICHAEL FALCONE and AMY WALTER | ABC OTUS News – 22 hrs ago
ANALYSIS: No matter what Mitt Romney wanted this week to be about, it's clear that it's going to be about one thing: A campaign that is off message and in disarray. The series of stories Monday morning that laid bare latent tensions within the Romney campaign, and in particular, displeasure with the one of the GOP candidate's trusted advisers, Stuart Stevens, turnout out to be just the beginning. Get more pure politics at ABCNews.com/Politics and a lighter take on the news at OTUSNews.com But it was the late-day hidden camera dump by Mother Jones' David Corn and video researcher James Carter that turned out to be the day's real atomic bomb. The leaked videos showed a series of candid moments from a May Romney fundraiser at which the presidential candidate said, among other things, that no matter what" he does, 47 percent of the population is going to vote for Obama because they are "are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it." In the video, Romney is also shown saying, "My job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives." Even so, voters are clearly waiting for the debates to make a final judgment on Romney. At least that was the take away from a focus group of suburban swing voters from Northern Virginia voters conducted last night in Fairfax, Virginia by Peter Hart for the Annenberg Public Policy Center at the University of Pennsylvania. Despite being inundated with campaign ads, neither candidate has satisfied these voters' desire for a cogent plan for implementing all of his proposals and promises. These voters are hoping, even though some admit it may be naïve to do so, that these debates are finally going to cut through the clutter and the attacks and the talking points. For Romney, who has had a terrible September, the old Green Day song -- "Wake Me Up When September Ends" -- seems to apply because October 3rd can't come soon enough.  John • Report Abuse
Mitt Romney Attended Bilderberg 2012: Charlie Skelton Reports Published on Jun 6, 2012 by TheAlexJonesChannel Four separate eyewitnesses inside the Westfields Marriott hotel in Chantilly Virginia told London Guardian writer Charlie Skelton that Mitt Romney was in attendance at Bilderberg 2012, suggesting the Republican candidate could be the elite's pick for the upcoming U.S. presidential election. "Four eyewitnesses on the hotel staff told me Willard Mitt Romney was here at Bilderberg 2012. My four eyewitnesses place him inside. That's one more than Woodward and Bernstein used. Romney's office initially refused to confirm or deny his attendance as Bilderberg is "not public". They later said it was not him," writes Skelton. The London Guardian writer adds that the fact Romney's name did not appear on the official list of attendees is meaningless. Numerous power brokers, including Bill Gates, were photographed arriving at the event yet were not included on the list of participants, as is routinely the case. With speculation already raging that Romney's potential VP -- Indiana Governor Mitch Daniels -- was already being groomed by Bilderberg cronies, Romney's appearance at the secretive confab of global power brokers suggests that he is being favored by the elite, who have seemingly lost faith in Barack Obama. As Skelton noted in a separate report, on Saturday afternoon a limousine arrived at the hotel surrounded by a police motorcade, signaling the arrival of a "heavyweight politician". Could this have been Mitt Romney? It's unlikely given the fact that he was appearing at fundraisers on the west coast all weekend, but Romney's schedule for Thursday, the first day of the Bilderberg meeting, was clear. An invite to the Bilderberg conference has routinely proven beneficial to future Presidents and Prime Ministers. Four years ago during a heated battle on the campaign trail, Barack Obama and Hillary Clinton gave reporters the slip to attend the 2008 Bilderberg meeting at the same hotel. On precisely the same weekend as the confab was taking place, the Washington Post announced that Hillary was withdrawing from the presidential race and would support Obama. Bill Clinton and Tony Blair were both groomed by the secretive organization in the early 1990′s before rising to prominence. Portugal's Pedro Santana Lopes and Jose Socrates attended the 2004 meeting in Stresa, Italy before both going on to become Prime Minster of Portugal. Bilderberg also played a key role in selecting John Edwards and John Kerry's running mate in 2004 and Bilderberg luminary James A. Johnson also hand-picked Joe Biden as VP in 2008. Confirmation that Romney attended Bilderberg 2012 may be hard to come by, but news that the former Governor of Massachusettes email account was compromised by a hacker could offer proof, although no emails have been leaked thus far. http://www.infowars.com/eyewitnesses-mitt-romney-attended-bilderberg-2012/ by Paul Joseph Watson ROMNEY was at BILDERBERG Global Mafia Confab Chantilly Virginia 2012 Published on Jun 7, 2012 by ricthuse Mitt Romney Attended Bilderberg 2012 September 18th, 2012 Sep 23, 2012 6:51pm..... 01:35 PM ET Clips From Last Night: Jesse Ventura on Romney, super PACs and 9/11On Monday, Piers Morgan returned from assignment across the pond, welcoming former professional wrestler, and Minnesota governor, Jesse Ventura for a primetime exclusive interview. Speaking before a live studio audience, the man who describes himself as an Independent had some strong words for Mitt Romney. On the heels of the controversial comments caught on tape at a closed-door fundraiser, "The Body" concluded that the GOP presidential candidate was alienating voters who do not pay their income taxes: "It shows me that Mitt Romney probably lives in a world that I don't live in," said Monday's guest. "He comes from wealth. And most people I find that are born with that kind of money truly don't know what it's like to be out there." Speaking with his trademark brand of candor, Ventura went on to share his views on campaign financing, and super PAC's: "Their entire political system is based upon bribery," said Ventura about the current M.O. in Washington. "Who can bribe and give the most money to the politician and now, thanks to our illustrious Supreme Court that ruled that corporations have the same right as individuals and that money is free speech," he continued. Engaging in spirited debate with Piers Morgan, Ventura also weighed in on 9/11, suggesting that the terror attacks were not a "failure of intelligence," but more so tied to the notion that the "Bush administration ignored the intelligence." "We knew before. Condoleezza Rice's memo on August 6th when it stated right in the memo, [Osama] Bin Laden to steal planes and run them into buildings. And more stuff is coming out now," said the 61-year-old. "It was almost like they ignored it because they wanted it to happen." Watch the clips, and listen to the interviews, as Ventura – with the studio audience hanging on every word – further challenges Morgan on specifics of September 11th. Comments: Sean Miller Last night we saw what happens when you put a lamb in the coliseum with a lion. Piers truly showed last night with Mr. Ventura how brainwashed himself and a whole lot of people are in regards to politics and the world in general. I doubt very much you will have a field-day with this like you did the Robert Blake interview because last night you were truly put in your place by a better man. Maybe from now on just stick to the easier interviews like celebrities and leave the harder ones for your boss Ted Turner. I think next time he should interview Mr Ventura instead of yourself. AGREE BUT..... Dear Sean Miller, I agree with you regarding Mr. Venturas interview! Loved this interview, very intelligent , very Honest!!! But I have to mention that Ted Turner no longer has ANY control over CNN. Last I heard (2012) he was trying to buy back majority interest in CNN, since CNN has been performing soo..................Miserably. The Mac Last night PM called Jesse a liar when he said the BBC was doing a report on building seven falling with building seven still standing in the background 20 minutes BEFORE it fell. MMmmmmmmm........This was a pretaped BBC report. How did the BBC know seven was to fall? THIS VIDEO IS ON YOU TUBE. Chut Pata PM described BBC as the most trustworthy news agency. I will tell you of a similar broadcast. In 1965 war between Pakistan and India, BBC aired news report that Indian Army has conquered the Pakistani city of Lahore. People in India celebrated on this news, only to find later that Indian army was stuck on the other side of BRB river due to an unexpected blowing of the bridge. This is how credible BBC is. Paul Welch Jesse: I was trained by Don Eagle and his father War Eagle. I spent many days on the reservation in Canada. I watched you on Piers Morgan Monday nite. I see that he also has become one of the Paid Off news media liars. I support you 110%. BRAVO! Keep up the good work, we can eradicate these Marxist Fascists in Washington and wherever. Thank You Brad Jesse Ventura is a nut, wouldn't vote for him for class clown. I too have a lot of questions about 9/11, but just don't see that our government was in on it. Read the Popular Mechanics report Jesse.... Why? Who gained from 9/11 not the poor one million Iraqs that Bush butchered ? Chat Pata I believe those were real terrorist, but more like rogue CIA agents. Apparently they did not know that Bush administration was aware of what they were planning to do, but let them do it so that they can attack Iraq and profit the oil companies of George Bush, Condalisa Rice, Donald Rumsfeld, Dick Cheney etc. These terrorist did not know they were acting on the agenda of Bush admin. Wake up! Before you call any one a lier please check your facts. How many times has Pierce or any reporter invited Alan Hart ( BBC reporter ) to tell us about his finding on 9/11 ? Why do we need foreign reports to tell us what happened ? The Patriot act was to suppress and scare Americans from questioning. Please wake up your country needs you. Please check out Alan Hart on youtube or google him. Sally How many of you have heard of Annie Machon of MI 5 whistle blower? How many have been silenced and why? Please see Annie Machon on YouTube, or read about her on google or Bing. Why won't CNN and other net works afraid to interview Annie Machon? I tried posting her web page but CNN won't let me. Nancy Because Netanyahu is the almost God of the Rupublican party. Chat Pata Jesse the Body Ventura body slammed PM. LOL. 123pink Piers Morgan was arrogant towards Jesse Ventura. It was offensive watching him attack Ventura and "put him in his place." I had been a Piers Morgan fan but after watching that interview and the interview of Chief Justice Scalia, I am convinced that PM lacks integrity and respect for others . All razzmatazz and no substance! sandra Daniella No one can put A good man down- The real –un-programed will see the truth . Pierce is just another "Media Mouth " programed like millons to attack A decent man –As he speaks the truth –(Evil will always attack ) I like pierce –but he knows nothing but what pays his check. Sorry Old Boy "' but Jesse Rules in this interview. redintherainbow I couldn't agree with you more. And Jesse was so gentlemanly in his treatment of PM. Piers fell to very low terms in my estimation. Boo HISS Piers bolognese47 MR JESSE VENTURA is americas next prophet......i sure hope he does run for prez in 2016 and wins he is esxactly what this country needs.......NO NONSENSE, INTELLIGNET AND RADICAL ENUFF TO GET OUR HONOR BACK U HAVE MY VOTE JESSE, I SURE HOPE I AM STILL ALIVE SO I CAN VOTE FOR U GOD BLESS U BROTHER
John Admit it Piers Morgan, you got your ass handed to you by Jesse Ventura. It was so ovbious that you wanted out of the 9-11 topic that you immediately rushed into break. I'm sure you saw BBC's Jane Standley standing in front of WTC 7, claiming it fell and did not, and yet you had the nerve to dismiss this fact as fraudulent-with out any thought or constructive reasoning on your part. Your pathetic denial of what Jesse was telling the world was self evident, and to top it off, as usual Jesse was a total gentleman and PATRIOT. Like a frightened child you resulted to inappropriate name calling and shallow insults. Just following marching orders, right? You are an absolute propaganda SHILL for CNN; and if you were not a shill, you would have been exterminated from that CIA front operation the second you hit the parking lot. Your live audience was 100% more professional and HONEST than you were ever allowed to be. You failed your journalistic responsibility in America, and the evil of your ways is all over your face. You, along with the rest of CNN are nothing more that handlers of disinformation and mind control. Got to go, the NWO is calling..... Lanis Piers Morgan demonstrated he has not spent any time studying 9/11 and as the majority of journalists, pundits and editors is FULLY VESTED in the government's narrative. This is to be expected because what would any of these people do if it were determined 9/11 was an inside job. If this concept became main stream who would want to hear from these many people in the profession of journalism WHEN THEY MISSED THE BIGGEST STORY OF THEIR LIFETIME. Piers obviously believes that a group of independent Muslim terrorists with no support from a competent intelligence agency ran a complex operation that resulted in the 9/11 attacks getting past a dozen US and Foreign intelligence agencies. The fact that he believes the above to be true given all of the evidence to the contrary is a bigger sign of the mainstream media's purposeful ignorance of 9/11. These same media people are not in the slightest way perplexed as to why all of these bamboozled intelligence agencies did not lift a finger to find out why and how they were made to look so incompetent. The government launched a political commission instead of a criminal investigation that resulted IN NOT A SINGLE PERSON BEING HELD ACCOUNTABLE. The US Joint Chiefs, CIA, NSA, DIA actually obstructed the investigation that was started a full year after the attacks. Think about that... the Pearl Harbor Attack on Dec 7 1941 had an investigation that began in Dec 1941 while 9/11's investigation started more than a year after the attacks. Also the Commission on Pearl Harbor resulted in an admiral and general being charged with dereliction of duty while 9/11 resulted in nothing. I think Piers did a great job of demonstrating to the public his depth of study regarding the biggest history changing event of his lifetime. I took his not knowing about the BBC reporter (Jane Standley) stating Building 7 had collapsed with the building standing behind her the equivalent of Don Rumsfeld staying "what?" when he was asked about building 7 because he did not know what it was. I would guess Bush, Cheney, Rice etc.. never read any of the reports produced about the 9/11 or Anthrax attacks that took place on their watch. Why would they need to read a detailed report about what happened when they already know what happened because they are the perpetrators.
Lorne A. Thank you Jesse Ventura for bringing up the gaps in 9/11 Truth on mainstream media.Someone with an inquisitive and open mind can discover some very troubling facts about 9/11 on the internet in a very short time. For instance, take a look at " 9-11: Explosive Evidence, Experts Speak Out" on You Tube. This is evidence given by highly credentialed architects and engineers. Also take a look at "Pilots for 9/11 Truth" which is evidence given by pilots of distinction, many who are high ranking officers in the U.S Air Force. Jesse Ventura Secret Societies Full Length Published on May 12, 2012 by TheReturnofLurker15 December 30 2009 - Jesse speaks with Bilderberg expert, Daniel Estulin. DT Guest Lecture Series - Ian Fletcher on NAFTA & North American Integration Published on Sep 20, 2012 by 001HR This was our first ever live classroom interview with an expert and author, in this case, economist Ian Fletcher, back in 2011. We discussed NAFTA, North American Integration, trade issues as well as the undemocratic nature of interests like Bilderberg who have worked on integrating the continent for decades. U.S. intelligence takes blame for mixed Libya attack messages White House Correspondent The Ticket – 18 hrs ago Director of National Intelligence James Clapper's office on Friday tried to explain the shifting public explanations for who was behind the deadly Sept. 11 attack on the American compound in Benghazi, Libya. DNI public affairs director Shawn Turner said U.S. intelligence concluded "in the immediate aftermath" of the assault that it had begun "spontaneously" in the wake of violent protests in Egypt. "We provided that initial assessment to Executive Branch officials and members of Congress, who used that information to discuss the attack publicly and provide updates as they became available," Turner said. "As we learned more ... we revised our initial assessment to reflect new information indicating that it was a deliberate and organized terrorist attack carried out by extremists." The statement could take some of the heat off the White House over some of its early explanations for what happened in Benghazi, which claimed the lives of American Ambassador to Libya Chris Stevens and three colleagues. White House press secretary Jay Carney, noting that an FBI investigation was ongoing, repeatedly tied the attack to public anger at an Internet video that insults Islam. The White House drew fire from Republicans who rejected that early explanation and said the attack was clearly terrorism. Carney accused the president's political foes of trying to score partisan points with the attack. But by late last week, Carney was saying it was "self-evident" that it was a terrorist attack. White House officials say his explanation changed as new evidence came to light. Still, a knowledgeable source told Yahoo News last week that the U.S. intelligence community had reached the conclusion that the attack was the work of terrorists on "Day One." The source repeated that assessment on Thursday. Top Libyan officials came out shortly after the assault to describe it as a terrorist attack. President Barack Obama, in September 12 remarks about the tragedy, vowed that "no acts of terror will ever shake the resolve of this great nation." Turner also said in his statement that "it remains unclear if any group or person exercised overall command and control of the attack, and if extremist group leaders directed their members to participate. However, we do assess that some of those involved were linked to groups affiliated with, or sympathetic to al-Qaeda. "We continue to make progress, but there remain many unanswered questions," he said. "As more information becomes available our analysis will continue to evolve and we will obtain a more complete understanding of the circumstances surrounding the terrorist attack." It was unclear how long the "immediate aftermath" scenario remained in force, and when the intelligence community revised its assessment. An email to Clapper's press office seeking more details on that front went unanswered. Are bad jobs at bad wages better than no jobs at all? Should the US demand third world economies pay "living wages"? If so, and if countries don't oblige, should the US impose tariffs so the US does not lose jobs to such countries. Moral Outrage Over Free Trade This is what I think.... Moral outrage is common among the opponents of globalization--of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. These critics take it as a given that anyone with a good word for this process is naive or corrupt and, in either case, a de facto agent of global capital in its oppression of workers here and abroad. But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers. Workers in those shirt and sneaker factories are, inevitably, paid very little and expected to endure terrible working conditions. I say "inevitably" because their employers are not in business for their (or their workers') health; they pay as little as possible, and that minimum is determined by the other opportunities available to workers. And these are still extremely poor countries, where living on a garbage heap is attractive compared with the alternatives. And yet, wherever the new export industries have grown, there has been measurable improvement in the lives of ordinary people. Partly this is because a growing industry must offer a somewhat higher wage than workers could get elsewhere in order to get them to move. More importantly, however, the growth of manufacturing--and of the penumbra of other jobs that the new export sector creates--has a ripple effect throughout the economy. The pressure on the land becomes less intense, so rural wages rise; the pool of unemployed urban dwellers always anxious for work shrinks, so factories start to compete with each other for workers, and urban wages also begin to rise. Where the process has gone on long enough--say, in South Korea or Taiwan--average wages start to approach what an American teen-ager can earn at McDonald's. And eventually people are no longer eager to live on garbage dumps. The benefits of export-led economic growth to the mass of people in the newly industrializing economies are not a matter of conjecture. A country like Indonesia is still so poor that progress can be measured in terms of how much the average person gets to eat; since 1970, per capita intake has risen from less than 2,100 to more than 2,800 calories a day. A shocking one-third of young children are still malnourished--but in 1975, the fraction was more than half. Similar improvements can be seen throughout the Pacific Rim, and even in places like Bangladesh. Why, then, the outrage of my correspondents? Why does the image of an Indonesian sewing sneakers for 60 cents an hour evoke so much more feeling than the image of another Indonesian earning the equivalent of 30 cents an hour trying to feed his family on a tiny plot of land--or of a Filipino scavenging on a garbage heap? The main answer, I think, is a sort of fastidiousness. Unlike the starving subsistence farmer, the women and children in the sneaker factory are working at slave wages for our benefit--and this makes us feel unclean. And so there are self-righteous demands for international labor standards: We should not, the opponents of globalization insist, be willing to buy those sneakers and shirts unless the people who make them receive decent wages and work under decent conditions. This sounds only fair--but is it? Let's think through the consequences. First of all, even if we could assure the workers in Third World export industries of higher wages and better working conditions, this would do nothing for the peasants, day laborers, scavengers, and so on who make up the bulk of these countries' populations. At best, forcing developing countries to adhere to our labor standards would create a privileged labor aristocracy, leaving the poor majority no better off. And it might not even do that. The advantages of established First World industries are still formidable. The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. Deny them that ability, and you might well deny them the prospect of continuing industrial growth, even reverse the growth that has been achieved. And since export-oriented growth, for all its injustice, has been a huge boon for the workers in those nations, anything that curtails that growth is very much against their interests. A policy of good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no favor to its alleged beneficiaries. You may say that the wretched of the earth should not be forced to serve as hewers of wood, drawers of water, and sewers of sneakers for the affluent. But what is the alternative? Should they be helped with foreign aid? And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard--that is, the fact that you don't like the idea of workers being paid a pittance to supply rich Westerners with fashion items. In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty. Purposeful Plagiarism to Make a Point By the way, I need to point out that everything written above following "This is what I think...." was not written by me (but it does reflect my exact beliefs). Believe it or not, Paul Krugman wrote that, and here is the link: In Praise of Cheap Labor. Mind to Mush Paul Krugman won his Nobel Prize for trade, and in terms of trade, I agree with everything above he said. In fact, there is nothing at all in the article I would disagree with. At some point since he wrote that, his mind turned to complete mush. Now he is in agreement with Mitt Romney about the need for the US to raise tariffs on China. All [Freely Entered] Trade is Good! The fact of the matter is all [freely entered] trade is good. It has to be. For there to be trade, both buyer and seller get something they want at a price they agree on. However, assume for a second that is not true. Assume China or whoever is willingly selling us good "too cheap". Who benefits from that? Why the American consumer of course. Would "Fair Trade" Bring Back Jobs? Unfortunately, Krugman and Mitt Romney alike would rather the cost of underwear, auto parts, toys, shoes, etc. cost double what they cost, in the foolish belief it would bring back US jobs. Well it won't. Manufacturing would simply move jobs from China to Vietnam or other places unless the US is willing to start a trade war with the world. Assuming Romney-sponsored tariffs worked (they wouldn't) and even assuming the jobs returned (that wouldn't happen either), would the tradeoff be worth it? The answer is of course not. A protected few union workers might benefit, but the cost of everything would skyrocket. Those on fixed income and those in non-protected jobs would be hammered. Unemployment would soar. And that is looking on the bright side. The jobs would not come home, even if the manufacturing itself did. The first reason is robots, and the second reason is a too cheap cost of money. Blame the Fed Flip-flop the order if you like. In a yield starved world with Bernanke pushing down interest rates, the cost of money is ridiculously cheap (assuming of course businesses can find a legitimate use for it). And what better use is there for money at 1% than for manufacturers to buy robots to replace humans, especially when Krugman and Romney are united in driving up the cost of labor? I have written about robots before. Here are parts one and two of a recent set of posts I did.
Now consider another article that just came my way: This Robot Could Transform Manufacturing. Please read that article at your leisure. The point is tariffs are not going to bring jobs back to the US, at least jobs by living, breathing human beings. Rather all tariffs will do is slow global trade and raise costs on everyone. Krugman and Romney in Same Boat No one will benefit from a trade war, except perhaps a miniscule percentage of union workers. Everyone else will lose big time. This is exactly why Romney should be a champion of free trade. Instead he agrees with the new "conscious of a liberal" Paul Krugman who somehow forgot everything he ever knew about the benefits of free trade. Fair Trade is Unfair The unions howl they want "fair trade". Fair to whom? The answer is fair to their self-interests, damn the enormous costs to everyone else. Romney should see that, but he doesn't. Alternatively he does, and is pandering for votes. So which is it? Here is a key question of the day: Does Mitt Romney Really "Know Better" Than the Silly Things He Says? You tell me. I don't know if Romney believes the foolish things he says or not. What I do know is Romney and Krugman are now in the same boat in regards to tariffs on China and both of them are completely wrong. Addendum: I modified the line "All Trade is Good!" to "All Freely Entered Trade is Good!". It should have been clear from the context, but when I said "All Trade is Good!" I was talking about "freely entered" trade. If someone forces you to sell your cow for $10 and you do not want to, that is not "free trade". Wage and price controls are not "free trade" and either. Sure enough, someone brought up slave trade in an email. Speaking of which, forced collective bargaining, forced union membership, and union rules that apply to the general population are all forms of slavery and should be abolished. For details, please see Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own Yo Read more at http://globaleconomicanalysis.blogspot.com/2012/09/fair-trade-is-unfair-in-praise-of-cheap.html#buDrHe8WSUcXSwpo.99 Why governments intervene in international business by Jesse VortonCreated on: June 26, 2010 Last Updated: July 09, 2010 Governments often impose restrictions on free trade for three reasons: political, economic, or cultural, or some combination of the three. On occasion, nations intervene in trade when they provide support to their domestic business' exporting activities. Further, governments may intervene during tougher economic times, when workers lobby their government to reduce imports, at a time when they feel they will be laid off work, or worse their positions get eliminated. Political Motives: Most commonly suited to this category is that government officials often make trade oriented decisions based on their personal and their political party's motives. The main political motives responsible for government intervention in international trade include: +Protecting Jobs: China Lucky Film had to compete with a much more dominant Kodak for a larger share of the photographic film market in China. Fearing the annihilation of China Lucky Film, the Chinese government then offered to CLF $240 million in cash and low interest loans, and further initiated a ban of joint ventures in film manufacturing within the country. +To Preserve National Security: Industries essential to a nations security will often find themselves in assistance of government funding; this is true for both imports and exports. +Responding to other nations' unfair trade practices: Many economists would agree that free trade is not fair, when one country is actively seeking to protect their own industries, i.e. by instituting reasonably sized tariffs and quotas. +Gaining influence over other nations: Those governments of larger and more dominant nations often establish trade relations with smaller nations' to gain influence over the latter. For example, the United States has obtained over the last century strong trading relationships with those countries in South America and North America as well the Caribbean, who in which are strongly dependent on the business provided by the U.S. A disruption in political relationships could inadvertently decrease economic activity between the US and one of their trading partners. Economic Motives: the most common economic motives for government intervention in trade are: +To Protect Infant Industries: Infant organizations need government protection from international competition during their developmental phases until they become sufficiently competitive globally. The reasons why this is important because the business needs time through growth and maturity to acquire the knowledge necessary to become more innovative, and efficient, thus increasingly the likelihood of becoming a more competitive force in the market. +To Pursue Strategic Trade Policy: This argument often suggests that strategic trade policy can lead to increased levels of national income. Firms should see greater profits generated when they begin to reap first-mover advantages, further solidifying their position in their markets globally. Cultural Motives: Often nations are restricting trade on goods and services as to reach a cultural objective; the most common is the protection of the nation's national identity. An unwanted cultural influence in a country can cause great concern from the citizens, resulting in the government having at times to block certain imports deemed cultural offensive from getting into the country. A perfect example is that in Canada, 35 percent of all music aired on Canadian radio stations must be music played by Canadian artists. Should governments restrict or promote trade? As the aforementioned would illustrate, government intervention is most commonly found to satisfy those motives of government. Although only one argument was presented here, it is quite clear that government intervention offers job security to those nations domestic workers. Free Trade Vs. Fair TradeFrom the Archives Posted on October 26, 2005 Previously filed under: Trade PLEASE NOTE THAT THIS ARTICLE IS FROM 2005. VISIT OUR HOMEPAGE FOR NEW CONTENT. Free trade refers to a general openness to exchange goods and information between and among nations with few-to-no barriers-to-trade. Fair trade refers to exchanges, the terms of which meet the demands of justice. Proponents of fair trade argue that exchanges between developed nations and lesser developed countries (LDCs) occur along uneven terms, and should be made more equitable. The Fair Trade Federation's Annual Report describes the fair trade movement as "a global network of producers, traders, marketers, advocates and consumers focused on building equitable trading relationships between consumers and the world's most economically disadvantaged artisans and farmers." Fair trade organizations, such as the Fair Trade Federation and the International Federation for Alternative Trade maintain that fair trade practices alleviate poverty, enhance gender equity, improve working conditions, the environment, and distributive justice. By contrast, free trade proponents believe that under a system of voluntary exchange, the demands of justice are met. Although free traders hope to alleviate poverty and improve conditions around the world, they prefer measures that are less intrusive than fair traders, who regard the unfettered market as injurious to these same goals. Free traders argue that in the long run markets will solve - that is, when permitted to come to equilibrium, both rich and poor nations will benefit. In this way, free traders hold that free trade is fair trade. The Case for Fair Trade The Dependency Thesis Proponents of fair trade maintain that trade between and among nations occurs in coercive and uneven ways. Even if nations trade freely, smaller nations become increasingly reliant on richer states, whose interaction with smaller countries depletes natural resources in those countries, and slows their progress. Dependency theory has many variations, and has undergone changes over several decades.
Here are the basics. Richer, powerful nations are collectively known as the "core," while LDCs and other very poor countries are known collectively as the "periphery." Dependency theories entertain the idea that periphery states depend for their well-being on the core. The core produces more luxury goods, while the periphery specializes in basic and industrial goods. Although there are many putative mechanisms driving the dependency - some of them highly disputed even among dependency theorists - the general theme is that such a dependent relationship exists, and is ruinous to the LDCs. F.H. Cardoso and Enzo Faletto published Dependency and Development in Latin America in 1969, the first academic statement of dependency theory. In it, Cardoso and Faletto argue that "economic development has frequently depended on favorable conditions for exports." Argentina in 1900 looked economically very similar to the United States of 1900, but Argentina's growth was severely depressed when compared to U.S. economic growth over the twentieth century. Cardoso and Faletto attribute this decline to unfavorable terms of trade relationships for Argentina. Later versions of the dependency theory hold that governments mismanage money, while private investors regard the Third World as risky investment. So, the Third World finds itself perpetually disadvantaged. John Gray of the London School of Economics argues in False Dawn: The increased interconnection of economic activity throughout the world accentuates uneven development between different countries. It exaggerates the dependency of 'peripheral' developing states such as Mexico on investment from economies nearer the 'centre', such as the United States. Though one consequence of a more globalized economy is to overturn or weaken some hierarchical economic relationships between states - between western countries and China, for example - at the same time it strengthens some existing hierarchical relations and creates new ones. Dependency theory ultimately maintains that the terms of trade between center and periphery nations is unbalanced and therefore unfair. Alleviation of Poverty and Human Dignity Fair trade advocates maintain that nations that have limited export opportunities become poorer, and hard-working individuals and their children struggle to meet basic life needs. Fairtrade.org argues that trade introduces an exploitative mechanism which impoverishes those in the Third World: "Particularly in the field of trade, our area of attention, the law of the strongest is frequently the only law. In Asia, Africa and Latin America, both male and female craftsmen and farmers know all about this. If they cannot free themselves from the grasp of the numerous middlemen and buyers, who from their position of power prescribe the lowest prices, they will remain slaves of circumstances their entire lives." According to the principles of fair trade, the prevailing terms of trade between rich and poor nations are unjust because prevailing market prices for the goods produced in the Third World are too low for the laborers to reap a wage reflecting their dignity. Nobel Prize winning economist Amartya Sen, in Development as Freedom notes another problem of poverty: Many of the same people who have small incomes also have deficiencies in the ability to convert those incomes to useful life pursuits. In other words, there are "unequal advantages in converting incomes into capabilities." Sen continues, "the interpersonal income inequality in the market outcomes may tend to be magnified by this 'coupling' of low incomes with handicaps in the conversion of incomes to capabilities." Poorer nations are thereby perpetually punished even further as they are less able to efficiently use the income they accumulate. Fair trade organizations take up the project of buying products from Third World producers at supracompetitive prices - prices that exceed the equilibrium price, as a form of poverty alleviation. The Case for Free Trade Voluntariness Proponents of free trade argue that voluntary exchange meets the demands of justice because each party to the trade leaves the trade richer than he or she was before. Johan Norberg writes in his book In Defense of Global Capitalism: It may seem odd that the world's prosperity can be augmented by swapping things with each other, but every time you go shopping you realize, subconsciously, how exchange augments wealth. You pay a dollar for a bottle of milk because you would rather have the milk than your dollar. The shop sells it at that price because they would rather have your dollar than keep the milk. Both parties are satisfied with the deal, otherwise it would never have taken place. Both of you emerge from the transaction feeling that you have made a good exchange, your needs have been provided for. Advocates of free trade note that parties to a transaction participate freely because it improves their own lot. This lesson applies more generally to trade among nations. If producers and consumers in world markets adopt the same producing and consuming behaviors that they do as individuals, then exchange among nations is just and wealth increasing. Other academics have focused on the connection between open exchange and the larger program of freedoms in society. Nobel laureate Milton Friedman argues in Capitalism and Freedom that there is a very real connection between economic freedom and the political freedoms. In this way, voluntary exchange is a component of a larger bundle of freedoms in society. Friedman illustrates this view tellingly: No one who buys bread knows whether the wheat from which it is made was grown by a Communist or a Republican, by a constitutionalist or a Fascist... Instead of recognizing that the existence of the market has protected [the oppressed] from the attitudes of their fellow countrymen, [critics of free trade] mistakenly attribute the residual discrimination to the market. Discrimination can therefore be a self-punishing choice for producers - who select workers on the basis of something other than performance - and for consumers, for whom it is costly to determine the often anonymous sources of goods and services. Voluntariness permits incentive structures that accord with fairness. Trade Is Enriching - To Everyone Advocates of free trade find many economists in their ranks; economists nearly unanimously support measures to increase the flow of goods between nations, and thereby to make trade freer. Countries, like people, are more or less talented at producing various goods. When countries specialize in producing what they are relatively more talented at producing, they can trade with other countries doing the same thing, and all participating countries can enjoy a more extensive package of total goods and services than they did before. Economists call this the Ricardian trade model, and empirical evidence appears to confirm trade's enriching effect on participating countries. Consider two fictional countries: Here and There. Here and There each have 10 units of Labor with which to produce gin and vermouth. Here and There fought some brutish wars many decades back, but they have come to terms with each other by finding their common ground: martinis. Laborers in Here can produce gin at a rate 10 units per hour and can produce vermouth at a rate of 1 unit per hour. Over There, where grapes are abundant, Laborers produce vermouth at 10 units per hour, but produce gin at a disappointing pace of 1 unit per hour. Let's see what happens when Here and There stubbornly refuse to cooperate and make their own martinis: In Here, laborers are divided evenly between gin and vermouth. At the end of one hour, Here gin producers (five of them) each have made 10 units of gin for a total of 50. The other five work on vermouth, and they can come up with five units at the end of the hour. At the end of an eight-hour day, there are 40 vermouths and 400 gins. In There, laborers are divided evenly. They end up with 400 vermouths and 40 gins. Martinis are best when they're three parts gin to one part vermouth. That means Here can make 120 martinis before running out of vermouth to add to gin, and There can make approximately 13 martinis before running out of gin. Of course, Here will have an excess 280 gins, and There will have an excess 387 vermouths, for a possible increase of 93 martinis between Here and There per day. If they trade, Here and There can both increase its number of martinis. If they don't, those 93 extra martinis vanish as surely as today will tomorrow. This is hardly the strongest case that can be made to Here and There to trade. Instead of domestically producing gin and vermouth and selling each other some of its excess, Here could fully employ its workers in producing gin, and There could fully employ its workers at producing vermouth. When they "specialize" in what they have a "comparative advantage" in (this is econ lingo for producing what each country is least bad at producing), both countries can increase their daily martini intake. Unless expanding a country's consumption opportunities is a bad thing, free trade must be a good thing. Here will probably always have more martinis than There as long as martinis call for more gin than vermouth. But There is not likely to be upset; There unambiguously has more martinis than it would under autarchy. But what can we make of poverty in the meantime? Trade may be enriching, but what does that mean for those that are poor and will remain poor during this process. Professor Deepak Lal is a pioneer in the field of development economics. He remarks that "for most of history poverty has been the natural state of Man." On the encouraging side though, Lal argues, "a liberal economic order which promotes labor intensive growth can cure the age long problem of structural mass poverty." What Is Fair Trade Anyway? Advocates of free trade sometimes oppose fair trade on the belief that the concept is incoherent. Suppose that an initial "fair" price for a company to pay workers could be agreed upon. But would the price (or wage) be fairer if it was higher? If it was lower? If higher, workers capturing the jobs at that wage would live better. If lower, more workers could benefit from being paid that lower wage. What conditions of fairness underlie the idea of a "fair" price? University of Rochester economist Steven E. Landsburg, author of The Armchair Economist and Slate.com columnist, writes the following story which illustrates the problem of "fair" prices: My dinner companion was passionate in her conviction that the rich pay less than their fair share of taxes. I didn't understand what she meant by "fair," so I asked a clarifying question: Suppose that Jack and Jill draw equal amounts of water from a community well. Jack's income is $10,000, of which he is taxed 10%, or $1,000, to support the well. Jill's income is $100,000, of which she is taxed 5%, or $5,000, to support the well. In which direction is that tax policy unfair?...I have thought about the issue in those terms quite a bit and am still unsure of my own answer. That's why I hesitate to pronounce judgment on the fairness of tax policies. If I can't tell what's fair in a world with two people and one well, how can I tell what's fair in a country with 250 million people and tens of thousands of government services. Buyers and sellers self-select into and out of markets based upon their preferences, their willingness-to-pay, and the costs of production. When the market "clears," there is no excess demand or excess supply, so no resources are put into storage and no resources are still desired at the prevailing price. This outcome is efficient. Free marketers regard this optimal use of resources as fair. That is what they mean when they say that free trade is fair trade. More importantly, if nations trade freely and therefore have no grievances about the trade, on whose behalf do we find the trade unfair? It would seem peculiar to find the trade objectionable because of another party's disagreement, where that party was unaffected by this trade. Concluding Remarks Fair traders and free traders have a surprising amount of common ground. Both camps are concerned with global justice, both are concerned with poverty alleviation and global prosperity. The basic problems appear to be held in common. But free traders regard voluntariness as the chief component of justice. Fair traders regard the expression of human dignity as the chief component of justice. Free traders believe the best way to alleviate poverty in the long run is to permit freer trade while fair traders think that opening trade even further would entrench trends of rich nations becoming richer and poor nations becoming poorer. Fair traders think global prosperity cannot forget to include the immediate needs of those in the least well off group, while free traders regard such targeting as potentially dangerous. Contributed by Jeffrey Eisenberg, former editor of aWorldConnected.org and a graduate of the University of Virginia. Reprinted with permission from A World Connected. To read a Global Envision article about Fair Trade, see How "Fair" is Fair Trade? George W. Bush To Keynote Cayman Islands Investment Conference
Posted Sep 26, 2012 10:42pm EDT
Former President George W. Bush is set to deliver the keynote address at the Cayman Alternative Investment Summit on Grand Cayman just a few days before the election. The conference will feature Bush as the keynote speaker on the first night, and British billionaire Sir Richard Branson on the second night. "Institutional investors, private investors, asset allocators, fund managers, service providers, academics and regulators will benefit from this discussion on the future of the industry," reads to the FAQ section of the website. The timing of the conference could land awkwardly during an election season that's been marked by speculation about Mitt Romney's finances, particularly his offshore investments in tax havens like the Cayman Islands. Bush Knew More About Bin Laden's Plans Than We RealizedBy Adam Clark Estes | The Atlantic Wire – Tue, Sep 11, 2012Related Content
Now, 11 years later, new details of the attack on the World Trade Center continue to emerge from the government's vault of classified documents and the journalists who've gained access. This year, the reporter with the jaw-dropping scoop is Kurt Eichenwald, a former Timesman and present contributing editor at Vanity Fair. After reading more than one tweet with the simple instructions "Read this," we clicked on the link to Eichenwald's powerful op-ed, due to be published in The New York Times on September 11. In it, Eichenwald goes into teeth-grinding detail about how the Bush administration had even more advance notice about Osama Bin Laden's attack than we previously realized. You should read it, too. RELATED: Unanswered Questions After Pakistan Arrests CIA Informants With the infamous August 6 White House briefing as a focal point, Eichenwald walks through the months and years of warnings leading up to the September 11 attacks. Some of these are events and reports that remain classified, but Eichenwald says he's "read excerpts from many of them, along with other recently declassified records, and come to an inescapable conclusion: the administration's reaction to what Mr. Bush was told in the weeks before that infamous briefing reflected significantly more negligence than has been disclosed." Again, we already knew that Bush had some advance warning. We just didn't realize how much. This passage from Eichenwalds piece reads like a nightmare:
That was in June of 2001. Three months later, the White House didn't have the luxury of avoiding reports about Bin Laden any more. RELATED: The Government Won't Bring Charges in CIA Detainee Deaths Romney's Death Squad Ties: Bain Launched with Funds from Oligarchs Behind Salvadoran Murders:  ABOUT Amy Goodman Amy Goodman is the host of "Democracy Now!," a daily international TV/radio news hour airing on more than 900 stations in North America. She is the author of "Breaking the Sound Barrier," recently released in paperback and now a New York Times best-seller. Democracy Now! / Video Report Published: Friday 10 August 2012 "Some investors had extensive ties to the death squads responsible for the vast majority of the tens of thousands of deaths in El Salvador during the 1980s." Republican presidential candidate Mitt Romney is facing new scrutiny over revelations he founded the private equity firm Bain Capital with investments from Central American elites linked to death squads in El Salvador. After initially struggling to find investors, Romney traveled to Miami in 1983 to win pledges of $9 million, 40 percent of Bain's start-up money. Some investors had extensive ties to the death squads responsible for the vast majority of the tens of thousands of deaths in El Salvador during the 1980s. We're joined by Huffington Post reporter Ryan Grim, who connects the dots in his latest story, "Mitt Romney Started Bain Capital With Money From Families Tied To Death Squads." "There's no possible way that anybody in 1984 could check out these families -- which was the term that [Romney's campaign] used -- and come away convinced that this money was clean," Grim says. AMY GOODMAN: We begin today with new scrutiny Republican candidate Mitt Romney is facing about his record at the private equity firm Bain Capital. The latest controversy surrounding Bain concerns how Romney helped found the company with investments from Central American elites linked to death squads in El Salvador. After initially struggling to find investors, Romney traveled to Miami in 1983 to win pledges of $9 million, 40 percent of Bain's start-up money. Some investors had extensive ties to the death squads responsible for the vast majority of the tens of thousands of deaths in El Salvador during the '80s. The investors include the Salaverria family, [whom] former U.S. ambassador to El Salvador, Robert White, has previously accused of directly funding the Salvadoran paramilitaries. In his memoir, former Bain executive Harry Strachan writes Romney pushed aside his own misgivings about the investors to accept their backing." Strachan writes, quote, "These Latin American friends have loyally rolled over investments in succeeding funds, actively participated in Bain Capital's May investor meetings, and are still today one of the largest investor groups in Bain Capital." Well, for more, we're joined by Ryan Grim in Washington, D.C., bureau chief for the Huffington Post_. He's connecting the dots in the latest 1710133.html">story headlined "Mitt Romney Started Bain Capital with Money from Families Tied to Death Squads." Ryan, welcome to Democracy Now! RYAN GRIM: Thank you. AMY GOODMAN: If you could, carefully lay out the story, and set the stage in El Salvador in the early '80s, what was happening there, the carnage. RYAN GRIM: Sure. So, in 1980, there was a—there was land reform instituted by the El Salvadoran government that started to parcel up some of the farms, some of the coffee plantations and the other land holdings of the elite, and they also nationalized the international coffee trade. So, they didn't nationalize the industry, but just the foreign export of it. And so, the oligarchs responded with a vicious and a brutal campaign that included death squads and, in the first year or two, killed something like 35,000 people and, over the course of a decade, killed about 70,000 people. The U.N. has since calculated that about 85 percent of the killing was done by these right-wing death squads, so this is not one of those dirty wars where both sides were equally culpable. And the leader of this movement, Roberto D'Aubuisson, was very public about his support of death squads and that death squads were an important part of what they were doing. He would actually say that the purpose of the death squads was ultimately to diminish violence, because if you could go into a village and go into a couple houses and kill everyone in there, then it would send a message to the rest of the village that they shouldn't join the revolution, and therefore there would be less of an uprising, and then the death squads would not have to kill everyone. So that—I mean, that was the kind of macabre logic that lasted for, you know, slightly more than a decade in El Salvador. AMY GOODMAN: One of the most well-known victims of the death squads of the military of El Salvador was Archbishop Óscar Romero, known as "the voice of the voiceless." He was a prominent advocate for the poor, a leading critic of the U.S.-backed Salvadoran military government. He was killed by members of a U.S.-backed death squad while delivering mass at a hospital chapel. I want to play an excerpt from the film Romero, which stars Raúl Juliá, who played Archbishop Romero.
AMY GOODMAN: That's a clip from the film Romero of Raúl Juliá, who played Salvadoran Archbishop Óscar Romero. Óscar Romero was gunned down March 24th, 1980. Ryan Grim, talk about how he died and the connection to your story. RYAN GRIM: Sure. He was assassinated the day after the clip that you played, shot through the heart while delivering mass. And we since know, conclusively, that his assassination was ordered by Roberto D'Aubuisson. D'Aubuisson, 18 months later, would found the ARENA party, which was basically at the time a vehicle for these death squads. There was really no separation between ARENA and death squads. ARENA is still around. It has become more of a conventional Latin American right-wing party, but for its first several years, it was, quite simply, the political organization which was managing the death squads. And so, Mitt Romney, in this context, knew very well what was happening in El Salvador. The U.S. ambassador, Tom White, who you mentioned, had— AMY GOODMAN: Robert White. RYAN GRIM: Robert White—had publicly accused six Salvadorans living in Miami of financing, two of them Salaverrias. So, when it was suggested to him by Harry Strachan that he go down to Miami to raise money from the exiles there, he actually said to Strachan, "Make sure that these people are not—you know, are not connected to right-wing death squads." So, it's very clear that he knew the context and he knew—you know, he knew what was going on at the time. But he was having a seriously hard time raising capital for his new enterprise, Bain Capital, and his boss, Bill Bain, told him that he couldn't use any of the investors or clients of Bain & Company, which was the very successful consulting firm, because if Bain Capital failed, he didn't want it to take everything else down with it. It's been reported in a number of places that he failed to raise capital from traditional sources in the U.S. And so, given that, he flew to Miami and, in mid-'84, just he went directly to a bank and met with a number of these families who were involved with death squads and accepted what at the time was a huge amount of money. It amounted to 40 percent of the outside capital that he was able to raise for that initial fund. And as Harry Strachan said, they continued to roll over their investments and, you know, certainly are worth tens and tens of millions of dollars in Bain Capital now. AMY GOODMAN: Just reading from your piece, Ryan Grim, when Romney returned to Miami in 2007 to launch another venture that needed funding, his first presidential campaign, Romney said, quote, "I owe a great deal to Americans of Latin American descent. ... When I was starting my business, I came to Miami to find partners that would believe in me and that would finance my enterprise. My partners were Ricardo Poma, Miguel Dueñas, Pancho Soler, Frank Kardonski, and Diego Ribadeneira." Can you talk about these men, like Poma, and their relation to the death squads in El Salvador? RYAN GRIM: Sure. Well, the Poma family was one of the—you know, one of the top families in El Salvador, and they were very tightly intertwined with ARENA. There's no question about that. The Salaverrias, you know, which we mentioned earlier, two of them were specifically named by White as specifically financing death squads. The De Solas are another family that originally invested in Bain. We know that at least four members of the De Sola family invested in Bain. We only know the names of two of them. Now, there is one man named Orlando de Sola, who the Romney campaign, and nobody else, denies was a leader of the death squad movement. There's no question about that. What the Romney campaign has relied on is that they say Orlando de Sola was a black sheep of the De Sola family. He wasn't—you know, and the fact that he was running death squads should not besmirch the four De Sola investors, even though they won't tell us who two of those four were. However, what we found is that one of the two named De Sola investors—his name is Francisco de Sola—was connected in 1990 to the assassination of two left-wing activists. Now, there was a meeting held in Guatemala that Chris Dodd, the former senator from Connecticut, moderated. He was trying to strike a peace deal between ARENA and the FMLN. And shortly after that meeting, two of the activists who had met with him were assassinated. The Guatemalan government, citing its intelligence sources, concluded that the assassinations were committed by Orlando de Sola, Roberto D'Aubuisson and Francisco de Sola. Now, Francisco de Sola is still alive, and his assistant confirmed to us that he was one of those three people who was accused of these murders. Now, he denied it at the time, and he denies it today, but just the fact that the Guatemalan intelligence services would lump him together with Orlando de Sola and Roberto D'Abuisson, who are, you know, just known as the—basically the two leaders of the death squad movement at the time, dramatically undermines the notion that the people involved with Bain are somehow deeply disconnected or that there's some bright line between the people involved in Bain and the people who were funding and operating the death squads. AMY GOODMAN: And, Ryan Grim, Mitt Romney's response to your investigation and to these allegations? RYAN GRIM: What they did is they sent me a paragraph of an article from the Salt Lake Tribune in 1999 that read, "As was Bain's policy with any big investor, they had the families checked out as diligently as possible. They uncovered no unsavory links to drugs or other criminal activity." Now, that's simply impossible to believe. These families were certainly connected to death squads. Now, Romney told the Boston Globe in 1994 something along the lines of, "We checked out the individual investors and made sure there were no, quote, 'obvious' signs of criminal activity. We didn't check out their in-laws and their cousins." So, those are two inconsistent levels of diligence that Romney is claiming to two separate papers. But if you take the one at the Tribune, which is the article that was sent to me by the Romney campaign, that's simply unbelievable. There's no possible way that anybody in 1984 could check out these families—which is the term they use, these families—and come away convinced that this money was clean. AMY GOODMAN: You quote Robert White saying, "The Salaverria family [were] very well-known." Now, Robert White was the U.S. ambassador to El Salvador. "The Salaverria family [were] very well-known as backers of D'Aubuisson. These guys were big-money contributors. ... They were total backers of D'Aubuisson and the extremist solution, including death squads." And I wanted to read an excerpt from Greg Grandin's book, Empire's Workshop. He's a professor of Latin American history at New York University. He writes, "The problem was that the military groups had very little popular support due in large part to the fact that they were 'preternaturally violent.' According to Reagan's own ambassador, Robert White, their solution to the crisis was apocalyptic: the country must be 'destroyed totally, the economy must be wrecked, unemployment must be massive,' and a 'cleansing' of some '3 or 4 or 500,000 people' must be carried out," he says. And he his quoting Robert White. Ryan Grim? RYAN GRIM: Sure. And I spoke also with the Sergio Bendixen, who is a pollster who did a lot of work in the country in the '80s for Univision and is now—coincidentally, he became a pollster for Hillary Clinton, and he's now working with the Obama campaign. He knew D'Aubuisson, and he knew lot of the people who were involved with these death squads, and he would—and he said that—and this is what I've heard from other people that are, you know, familiar with the Miami exile community, that this is not something that they would hide. Like you said, they were persuaded that they were freedom fighters, that they were on the side of justice, and that if it meant that you had to kill, you know, tens of thousands or hundreds of thousands of people, those were evil people who were supported by Castro who wanted to bring about tyranny, etc., etc., and so everything that they were doing was justified by that. And Mitt Romney even hinted at that in his 2007 talk to the Miami crowd, when he came down to raise money for his campaign. He said, you know, "Not only did these people invest in me, but they taught me a lot. And what they taught me is that these guerrillas were horrible, and they kidnapped one of their brothers and killed him, and they tortured" — Miguel Dueñas, he mentions — "They kidnapped and tortured Miguel Dueñas." And so—and there's no question that atrocities were certainly committed by both sides, but you can see in that quote that Romney is partly buying into this notion that the violence was justified. And he would not be at all be alone in the Republican Party at that time, or the Democratic Party. As you said, these death squads had the backing of the United States government. AMY GOODMAN: You know, we're talking about, as you said, tens of thousands of people. And, in 1989, the government bestowed—the Salvadoran government bestowed the—well, this was in 2009, but remembering 20 years ago the killing of the six Jesuit priests in 1989, and then there was the killing of the four American nuns, all of these part of the casualties of, as you said, the Salvadoran military and paramilitary overwhelmingly doing the killing. Now, interestingly, we started with Óscar Romero's death, March 24th, 1980, killed by the right-wing death squads in Salvador. President Obama visited Honduras—visited El Salvador and went to the grave of Archbishop Óscar Romero. RYAN GRIM: And that was an acknowledgment that what the United States and its allies in El Salvador did in the 1980s was wrong. That was—it wasn't exactly, but it was, you know, tantamount to an apology for all of the death and destruction that was brought about in the name of anti-communism. You know, Archbishop Romero is now known as one of the great heroes and martyrs of the 20th century. Now, at the same time that we're talking about Romney's association here, we ought to mention that the current occupant of the White House has—you know, operates drones that kill people on a fairly regular basis. So, you know, there is—you know, there's, unfortunately, still no shortage of killing around the globe. AMY GOODMAN: And interestingly, the question will be, will the Obama administration make something of this initial Bain investment capital? And will the Romney administration—and will the Romney campaign raise the issue of President Obama and his kill list and the operating of drones that are killing many in Yemen, in Pakistan, etc.? RYAN GRIM: Right. It will be interesting to see. And if the Obama campaign does do anything with it, I would expect that it would be—it would be done in the Latino community to help drive support for Obama there, because, you know, as you said, there are thousands and thousands and thousands of refugees who are here today because of the violence from there, and, you know, when they find out that the oligarchs who were funding that violence also helped get Romney's Bain Capital off the ground, that could influence the way they vote. AMY GOODMAN: Are these families still donating to Romney's current presidential campaign as they did to his first effort? RYAN GRIM: I didn't find any of them doing so. And Romney had a strange use of the phrase when he went down to Latin America. He called them Americans of Latin American descent. I don't know that they have become Americans in the sense of the United States of America. And if they haven't gotten U.S. citizenship, then they can't donate directly to U.S. presidential campaigns. So, I searched the few names that we do know, and they didn't come up as donors to his presidential campaign. But, as Harry Strachan said, they have become—they continue to be significant investors in Bain Capital. And throughout the '80s and '90s, Bain Capital made just absolutely extraordinary returns, something like 88 percent annual return over two decades, which is just an absolutely astounding amount of money. And if you apply that to a $9 million initial investment, you get an absolute fortune. AMY GOODMAN: Ryan Grim, I want to thank you for being with us, Washington, D.C., bureau chief for the Huffington Post_. His latest 1710133.html">story, "Mitt Romney Started Bain Capital with Money from Families Tied to Death Squads." We'll link to it at Democracy Now! This is Democracy Now! Next up, we're going to the Syria-Turkish border. Stay with us. Poll: Americans Pick President Obama Over Mitt Romney for Dinner DateBy Gregory J. Krieg | ABC OTUS News – Tue, Sep 11, 2012
The American public may be divided on "Obamacare," but when faced with choosing a candidate to care for them if illness struck, President Obama is their man. By a 13 point margin - 49-36 percent - registered voters polled by ABC News chose the president over Mitt Romney to nurse them back to health. When asked who they thought "would make a more loyal friend," the results were about the same. By a 50-36 percent count, respondents said Obama was more likely to stick with them through trying times. As for suppertime, still more ugly numbers for Romney. Fifty-two percent of registered voters polled by ABC News said they'd rather have Obama visit their homes for dinner. Just 33 percent said they'd prefer Romney at the table. But it's not a total wipeout for the Republican. On what ABC News poll chief Gary Langer calls the most instructive question - which candidate they'd rather have "as the captain of a ship in a storm" - Romney loses to Obama, but by just three points, 46-43 percent. "Obama's advantages, in turn, include a persistent lead over Romney in empathy; registered voters by 50-40 percent think Obama better understands the economic problems people are having, and continue to rate him as more personally likeable, by a broad and steady 61-27 percent," Langer reports. "When the two views are tested against each other, empathy independently predicts vote preferences to a far greater degree than does likability." These latest numbers will only build confidence among Obama and his supporters, as the Democrats appear to be enjoying a significant post-convention bump in the polls. The most recent figures have the president with a growing lead nationally, 50-44 percent, according to an ABC News/Washington Post survey. Romney had been up a single point, 47-46 percent, in a poll taken just two weeks ago. Bush Knew More About Bin Laden's Plans Than We RealizedBy Adam Clark Estes | The Atlantic Wire – Tue, Sep 11, 2012Related Content
Now, 11 years later, new details of the attack on the World Trade Center continue to emerge from the government's vault of classified documents and the journalists who've gained access. This year, the reporter with the jaw-dropping scoop is Kurt Eichenwald, a former Timesman and present contributing editor at Vanity Fair. After reading more than one tweet with the simple instructions "Read this," we clicked on the link to Eichenwald's powerful op-ed, due to be published in The New York Times on September 11. In it, Eichenwald goes into teeth-grinding detail about how the Bush administration had even more advance notice about Osama Bin Laden's attack than we previously realized. You should read it, too. RELATED: Unanswered Questions After Pakistan Arrests CIA Informants With the infamous August 6 White House briefing as a focal point, Eichenwald walks through the months and years of warnings leading up to the September 11 attacks. Some of these are events and reports that remain classified, but Eichenwald says he's "read excerpts from many of them, along with other recently declassified records, and come to an inescapable conclusion: the administration's reaction to what Mr. Bush was told in the weeks before that infamous briefing reflected significantly more negligence than has been disclosed." Again, we already knew that Bush had some advance warning. We just didn't realize how much. This passage from Eichenwalds piece reads like a nightmare:
That was in June of 2001. Three months later, the White House didn't have the luxury of avoiding reports about Bin Laden any more. RELATED: The Government Won't Bring Charges in CIA Detainee Deaths Secret Video Worsens Mitt Romney's September NightmareBy MICHAEL FALCONE and AMY WALTER | ABC OTUS News – 22 hrs ago
ANALYSIS: No matter what Mitt Romney wanted this week to be about, it's clear that it's going to be about one thing: A campaign that is off message and in disarray. The series of stories Monday morning that laid bare latent tensions within the Romney campaign, and in particular, displeasure with the one of the GOP candidate's trusted advisers, Stuart Stevens, turnout out to be just the beginning. Get more pure politics at ABCNews.com/Politics and a lighter take on the news at OTUSNews.com But it was the late-day hidden camera dump by Mother Jones' David Corn and video researcher James Carter that turned out to be the day's real atomic bomb. The leaked videos showed a series of candid moments from a May Romney fundraiser at which the presidential candidate said, among other things, that no matter what" he does, 47 percent of the population is going to vote for Obama because they are "are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it." In the video, Romney is also shown saying, "My job is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives." Even so, voters are clearly waiting for the debates to make a final judgment on Romney. At least that was the take away from a focus group of suburban swing voters from Northern Virginia voters conducted last night in Fairfax, Virginia by Peter Hart for the Annenberg Public Policy Center at the University of Pennsylvania. Despite being inundated with campaign ads, neither candidate has satisfied these voters' desire for a cogent plan for implementing all of his proposals and promises. These voters are hoping, even though some admit it may be naïve to do so, that these debates are finally going to cut through the clutter and the attacks and the talking points. For Romney, who has had a terrible September, the old Green Day song -- "Wake Me Up When September Ends" -- seems to apply because October 3rd can't come soon enough. John • Report Abuse
SECRET VIDEO: Romney Tells Millionaire Donors What He REALLY Thinks of Obama VotersWhen he doesn't know a camera's rolling, the GOP candidate shows his disdain for half of America.| Mon Sep. 17, 2012 1:00 PM PDT During a private fundraiser earlier this year, Republican presidential candidate Mitt Romney told a small group of wealthy contributors what he truly thinks of all the voters who support President Barack Obama. He dismissed these Americans as freeloaders who pay no taxes, who don't assume responsibility for their lives, and who think government should take care of them. Fielding a question from a donor about how he could triumph in November, Romney replied: There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that's an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax. Romney went on: "[M]y job is is not to worry about those people. I'll never convince them they should take personal responsibility and care for their lives." Mother Jones has obtained video of Romney at this intimate fundraiser—where he candidly discussed his campaign strategy and foreign policy ideas in stark terms he does not use in public—and has confirmed its authenticity. To protect the confidential source who provided the video, we have blurred some of the image, and we will not identify the date or location of the event, which occurred after Romney had clinched the Republican presidential nomination. [UPDATE: We can now report that this fundraiser was held at the Boca Raton home of controversial private equity manager Marc Leder on May 17 and we've removed the blurring from the video. See the original blurred videos here.] Here is Romney expressing his disdain for Americans who back the president: At the dinner, Romney often stuck to familiar talking points. But there were moments when he went beyond the familiar campaign lines. Describing his family background, he quipped about his father, "Had he been born of Mexican parents, I'd have a better shot of winning this." Contending that he is a self-made millionaire who earned his own fortune, Romney insisted, "I have inherited nothing." He remarked, "There is a perception, 'Oh, we were born with a silver spoon, he never had to earn anything and so forth.' Frankly, I was born with a silver spoon, which is the greatest gift you can have: which is to get born in America."
Romney told the contributors that "women are open to supporting me," but that "we are having a much harder time with Hispanic voters, and if the Hispanic voting bloc becomes as committed to the Democrats as the African American voting block has in the past, why, we're in trouble as a party and, I think, as a nation." When one attendee asked how this group could help Romney sell himself to others, he answered, "Frankly, what I need you to do is to raise millions of dollars." He added, "The fact that I'm either tied or close to the president…that's very interesting." Asked why he wouldn't go full-throttle and assail Obama as corrupt, Romney explained the internal thinking of his campaign and revealed that he and his aides, in response to focus-group studies conducted by his consultants, were hesitant to hammer the president too hard out of fear of alienating independents who voted for Obama in 2008: We speak with voters across the country about their perceptions. Those people I told you—the 5 to 6 or 7 percent that we have to bring onto our side—they all voted for Barack Obama four years ago. So, and by the way, when you say to them, "Do you think Barack Obama is a failure?" they overwhelmingly say no. They like him. But when you say, "Are you disappointed that his policies haven't worked?" they say yes. And because they voted for him, they don't want to be told that they were wrong, that he's a bad guy, that he did bad things, that he's corrupt. Those people that we have to get, they want to believe they did the right thing, but he just wasn't up to the task. They love the phrase that he's "over his head." But if we're—but we, but you see, you and I, we spend our day with Republicans. We spend our days with people who agree with us. And these people are people who voted for him and don't agree with us. And so the things that animate us are not the things that animate them. And the best success I have at speaking with those people is saying, you know, the president has been a disappointment. He told you he'd keep unemployment below 8 percent. Hasn't been below eight percent since. Fifty percent of kids coming out of school can't get a job. Fifty percent. Fifty percent of the kids in high school in our 50 largest cities won't graduate from high school. What're they gonna do? These are the kinds of things that I can say to that audience that they nod their head and say, "Yeah, I think you're right." What he's going to do, by the way, is try and vilify me as someone who's been successful, or who's, you know, closed businesses or laid people off, and is an evil bad guy. And that may work. (Note: Obama did not promise his policies would keep unemployment under 8 percent, and 50 percent of college graduates are not unemployed.) To assure the donors that he and his campaign knew what they were doing, Romney boasted about the consultants he had retained, emphasizing that several had worked for Israeli Prime Minister Benjamin Netanyahu: I have a very good team of extraordinarily experienced, highly successful consultants, a couple of people in particular who have done races around the world. I didn't realize it. These guys in the US—the Karl Rove equivalents—they do races all over the world: in Armenia, in Africa, in Israel. I mean, they work for Bibi Netanyahu in his race. So they do these races and they see which ads work, and which processes work best, and we have ideas about what we do over the course of the campaign. I'd tell them to you, but I'd have to shoot you. When one donor said he was disappointed that Romney wasn't attacking Obama with sufficient intellectual firepower, Romney groused that the campaign trail was no place for high-minded and detail-oriented arguments: Well, I wrote a book that lays out my view for what has to happen in the country, and people who are fascinated by policy will read the book. We have a website that lays out white papers on a whole series of issues that I care about. I have to tell you, I don't think this will have a significant impact on my electability. I wish it did. I think our ads will have a much bigger impact. I think the debates will have a big impact…My dad used to say, "Being right early is not good in politics." And in a setting like this, a highly intellectual subject—discussion on a whole series of important topics typically doesn't win elections. And there are, there are, there are—for instance, this president won because of "hope and change." Romney, who spoke confidently throughout the event and seemed quite at ease with the well-heeled group, insisted that his election in and of itself would lead to economic growth and that the markets would react favorably if his chances seemed good in the fall: They'll probably be looking at what the polls are saying. If it looks like I'm going to win, the markets will be happy. If it looks like the president's going to win, the markets should not be terribly happy. It depends of course which markets you're talking about, which types of commodities and so forth, but my own view is that if we win on November 6th, there will be a great deal of optimism about the future of this country. We'll see capital come back and we'll see—without actually doing anything—we'll actually get a boost in the economy. If the president gets reelected, I don't know what will happen. I can—I can never predict what the markets will do. Sometimes it does the exact opposite of what I would have expected. But my own view is that if we get a "Taxageddon," as they call it, January 1st, with this president, and with a Congress that can't work together, it's—it really is frightening. At the dinner, Romney also said that the campaign purposefully was using Ann Romney "sparingly…so that people don't get tired of her." And he noted that he had turned down an invitation from Saturday Night Live because such an appearance "has the potential of looking slapstick and not presidential." Here was Romney raw and unplugged—sort of unscripted. With this crowd of fellow millionaires, he apparently felt free to utter what he really believes and would never dare say out in the open. He displayed a high degree of disgust for nearly half of his fellow citizens, lumping all Obama voters into a mass of shiftless moochers who don't contribute much, if anything, to society, and he indicated that he viewed the election as a battle between strivers (such as himself and the donors before him) and parasitic free-riders who lack character, fortitude, and initiative. Yet Romney explained to his patrons that he could not speak such harsh words about Obama in public, lest he insult those independent voters who sided with Obama in 2008 and whom he desperately needs in this election. These were sentiments not to be shared with the voters; it was inside information, available only to the select few who had paid for the privilege of experiencing the real Romney. COMING SOON: More from the secret Romney video. (Romney tells his donors he doesn't believe in a two-state solution for the Israeli-Palestinian conflict, that resolving this conflict is "almost unthinkable," and that he would merely "kick the ball down the field.") Video production: James West, Adam Serwer, Dana Liebelson, and Erika Eichelberger Research assistance: James Carter Swiss Mitt Romney, Bermuda and his hidden cash problemSalon.com's Joan Walsh, The Guardian's Ana Marie Cox, and the Washington Post's Jonathan Capehart dig into why Mitt Romney is stonewalling on the subject of money located in accounts in Switzerland, the Caymans and Bermuda.Romney's Bermuda Account Raises QuestionsJuly 13, 2012 |
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[edit] History
[edit] 1984 founding and early history
Bain Capital was founded in 1984 by Bain & Company partners Mitt Romney, T. Coleman Andrews III, and Eric Kriss, after Bill Bain had offered Romney the chance to head a new venture that would invest in companies and apply Bain's consulting techniques to improve operations.[5] In addition to the three founding partners, the early team included Fraser Bullock, Robert F. White, Joshua Bekenstein, Adam Kirsch, and Geoffrey S. Rehnert.[6] Romney initially had the titles of president[7] and managing general partner[8][9] or managing partner.[10] He later became referred to as managing director[11] or CEO[12] as well. He was also the sole shareholder of the firm.[13] At the beginning, the firm had fewer than ten employees.[14] When new employees were hired, they were generally in their twenties and top-ranked graduates from Stanford University or Harvard University, both of which Romney had attended.[15]
In the face of skepticism from potential investors, Romney and his partners spent a year raising the $37 million in funds needed to start the new operation.[16][17][14][18] Early investors also included members of elite Salvadoran families who fled the country's civil war.[19] They and other wealthy Latin Americans invested $9 million primarily through offshore companies registered in Panama.[20]
While Bain Capital was founded by Bain executives, the firm was not an affiliate or a division of Bain & Company but rather a completely separate company.
Romney's Bain Capital invested in companies that moved jobs overseas
Mitt Romney's financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.
During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission.
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July 16, 2012 8:00 pm
Mitt Romney must face his Bain past
Mitt Romney's White House credentials rest on a simple foundation – he has the business nous to turn the US economy around. It is awkward therefore that he keeps backing away from his chief qualification. As the founder of Bain Capital, Mr Romney helped to pioneer the private equity business with which we are now familiar. It has its plus and minus points. By trying to wish away the latter Mr Romney is playing into the hands of the Obama campaign. Time is short. But it is not too late for the Republican candidate to reclaim what he has implicitly disowned. Indeed, his viability depends on it.
Mr Romney's biggest error is to pretend Bain had nothing to do with outsourcing– a term conflated with offshoring – while he was in charge. Some of the most notable acts of offshoring by Bain-controlled companies took place after 1999 when Mr Romney moved to Utah to resuscitate the 2002 Winter Olympics. By insisting on 1999 as the cut-off point for his tenure at Bain, Mr Romney has made two missteps. First, as the Boston Globe showed last week, he continued as chairman, chief executive and sole owner of Bain Capital until 2002. His role may have been titular. But the fact his name is included on 62 separate Bain filings to the SEC after 1999 is uncomfortable. In politics if you are explaining, you are losing.
More seriously, by drawing the line at 1999, Mr Romney has made it clear he disowns any subsequent Bain investment involving offshoring. To be sure, he also thereby escapes association with the 2001 bankruptcy of a steel company in which he had originally invested – an episode highlighted by the Obama campaign. But Mr Romney is embarrassed by any hint of offshoring. A candidate can run but he cannot hide. If Mr Romney had painted a target on his back that said "shipping jobs overseas" he could not have helped his opponent more.
Unless Mr Romney embraces the logic of the global economy he will be condemned to the losing side of a mercantilist argument. If offshoring is a bad thing, so is onshoring – and indeed, so by extension is globalisation. By accepting this logic, Mr Romney betrays his integrity and the basis of his agenda, which assumes globalisation is a good thing that America can better exploit. It is an argument worth owning. Alas his campaign has embraced the reverse by accusing Mr Obama of being "outsourcer-in-chief".
Finally, Mr Romney continues to resist calls to release his tax returns. To date, he has published only one year (2010) and estimates for another (2011). His secretiveness contrasts with most candidates, including his father, George Romney, who released more than a decade's worth. Perhaps the years after 2000 would show how much Romney junior profited from companies with global operations. All the more reason then to tout, rather than run away from, his experience of a cross-border world. Either Mr Romney has the business savvy and character to be president or he does not. At the moment the doubts linger.
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The Gateway To Africa 
- Friday, 04 March 2011 07:20
Leah Scott of Appleby discusses how to structure investments into Africa so they are tax-efficient and safe
When a foreign multinational decides to expand its foreign investments into Africa, it often considers using an offshore holding company in a jurisdiction with a good tax treaty network with African countries, in order to help reduce withholding taxes on dividends, interest and royalties, and in some instances, gains subject to tax, in the counterparty territories.
Mauritius, with its modern democracy and its established track record of political stability, is a proven route for international investors wanting to do business in Africa. Mauritius has business friendly legislation, a diversified economy with good growth rates, successful fiscal and monetary policies and no exchange regulations. There are specific advantages for setting up investment vehicles in Mauritius for foreign direct investment in Africa, some of which are discussed below.
Treaties and other Agreements
Mauritius currently has double taxation agreements (DTAs) with Botswana, Lesotho, Madagascar, Mozambique, Namibia, Rwanda, Senegal, Seychelles, Swaziland, Uganda and Zimbabwe. It has also has signed DTAs with Malawi, Nigeria, Tunisia and Zambia, with a further eight treaties awaiting ratification. Mauritius also boasts access to a number of bilateral agreements with several African countries. In addition to the DTAs and bilateral agreements, Mauritius has signed Investment Promotion and Protection Agreements (IPPA) with 15 African member states.
It is also of note that Mauritius is the only international financial services center that is a member of all the major African regional organizations such as the African Union, the South African Development Community (SADC), The Common Market for Eastern and Southern Africa, (COMESA) and the Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC). Its membership in these regional organizations, and being a signatory to all the major African conventions, can make Mauritius the best offshore financial service centre for establishing any Africa fund or holding company.
Tax Minimizaton
Capital gains tax, where imposed in Africa, is generally levied at a rate ranging from between 30 to 35%. However, with the DTAs in force, Mauritius restricts taxing rights of capital gains to the country of residence of the seller of the assets. Since there is no capital gains tax in Mauritius, the potential tax savings for the Mauritius incorporated entity are significant.
The majority of African states impose some withholding tax on dividends paid out to non-residents. These rates vary from between 10% to 20%. The DTAs in force in Mauritius limit withholding tax on dividends. The treaty rates are generally 0%, 5% or 10%, thereby creating a potential tax savings of between 5% to 20% depending on the investee country. In respect to capital gains tax, the DTAs guarantee the maximum effective withholding tax rate should changes occur in the fiscal policy in the countries on investment.
Mauritius GBCs
Mauritius now has in place a new simplified regulatory regime that distinguishes between Mauritian companies conducting business in Mauritius and those conducting business outside Mauritius. These companies are known as Global Business Company 1 (GBC1), and Global Business Company 2 (GBC2). The focus of this article will be on the GBC1 company.
The substantial advantage offered by the GBC 1 Company is that it may be structured to be tax resident in Mauritius, and may thereby access the multiple DTAs that Mauritius has. This makes it extremely attractive to invest in one of these countries through a Mauritius GBC1 Company as taxation treaties provide that profits can then be withdrawn from that country either without the imposition of withholding tax or subject to a substantially reduced rate of withholding tax.
A GBC1 company is liable to corporate tax at a rate of 15%; however, it may claim a foreign tax credit in respect of the actual foreign tax paid or 80% presumed foreign tax credit, whichever is higher. As such, a GBC1 company has a maximum effective corporate tax rate of 3%. Capital gains are exempted from tax in Mauritius.
A GBC1 company is the best vehicle to use when overseas income is predominantly in the form of interest and capital gains, royalties and dividends,and when the benefits that arise from the double taxation agreements are required.GBC1 companies can only conduct business with Mauritian residents with the consent of the Financial Services Commission. All business activities must be conducted in a currency other than the Mauritian rupee.
These companies are subject to compliance and reporting regimes similar to those of Hong Kong or UK companies.Licenses are granted on a case by case basis by the regulatory authorities in Mauritius, in respect of companies seeking to benefit from GBC1 status.This application process requires,among other things, the submission of a detailed business plan and disclosure of ultimate beneficial ownership.
GBC1 companies have commonly been used by foreign investors to structure investments and projects with those countries that have DTAs with Mauritius. It is clearly a viable structuring option that should be considered when contemplating investing in the more high risk jurisdictions.
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MAP: Here Are All Of The Big Chinese Investments In Africa Since 2010
Chinese investments in Africa have raised many eyebrows, as competitors like the U.S. argue that it's motivated by Beijing's desire to exploit the continent's resources.
Earlier this year China promised $20 billion in investments to various African countries, and U.S. secretary of state Hilary Clinton said in a speech that African countries should consider partnerships with more responsible countries as against countries that exploit resources, in an unmistakable reference to China.
This prompted Chinese state news-agency Xinhua (via the Guardian) to write, "Whether Clinton was ignorant of the facts on the ground or chose to disregard them, her implication that China has been extracting Africa's wealth for itself is utterly wide of the truth."
Given the recent debate we drew on this map from Stratfor to highlight Chinese investments offers in Africa since 2010. From Stratfor:
"While China has proposed $750 million for agriculture and general development aid and about $50 million to support small- and medium-sized business development in addition to the aforementioned projects, it has been criticized for the extractive nature of its relationship with many African countries, as well as the poor quality of some of its construction work.
However, since many African countries lack the indigenous engineering capability to construct these large-scale projects or the capital to undertake them, African governments with limited resources welcome Chinese investments enthusiastically. These foreign investment projects are also a boon for Beijing, since China needs African resources to sustain its domestic economy, and the projects in Africa provide a destination for excess Chinese labor."
We first spotted the map on The Big Picture:
Don't Miss: The Massive Chinese-Built Ghost Town In The Middle Of Angola >
China National Offshore Oil Corporation (CNOOC)
Industry:Oil and Gas
Stock Code: -- --
China National Offshore Oil Corporation (CNOOC), founded in 1982, is the third-largest oil company in China after China National Petroleum Corporation and Sinopec. It is also the largest offshore oil and gas producer, focusing on the exploitation, exploration and development of offshore crude oil and natural gas.
CNOOC mainly engages in oil and natural gas exploration, development, production, and sales. It has four major production areas in China: Bohai Bay, Western South China Sea, Eastern South China Sea and East China Sea. It is authorized to cooperate with foreign partners for oil and gas exploitation in China's offshore areas. CNOOC also has certain upstream assets in other regions in the world, such as Africa and Australia.
CNOOC's crude oil produced overseas is sold on the international market through its wholly owned subsidiary, China Offshore Oil (Singapore) International Pte. Ltd.
Headquartered in Beijing, CNOOC has a total staff of 51,000 and a registered capital of 94.9 billion yuan. CNOOC is a state-owned oil company with 70 percent of its shares owned by the government.
Headquarter Address:
No.25, Chaoyangmen Beidajie, Dongcheng District, Beijing, China
Main Telephone:
(86-10)84521010
Website:
http://en.cnooc.com.cn
- CNOOC inks deal with Qatar to explore offshore block
- A subsidiary of China National Offshore Oil Corporation (CNOOC) inked an agreement with Qatar Petroleum to explore an offshore block of the Gulf country, the Qatar News Agency reported Tuesday.
- CNOOC 1H net profit falls 55% on lower crude oil prices
- China's CNOOC Limited, the listed subsidiary of China National Offshore Oil Corporation said its net profit dropped 55% from a year ago to 12.4 billion yuan, or 0.28 yuan per share, in the H1.
- CNOOC denies involvement in US firm bribery case
- China National Offshore Oil Corporation (CNOOC) Saturday denied involvement in a bribery case of a U.S. firm, which admitted to the U.S. authority it had bribed some Chinese firms, including CNOOC.
- China discovers new offshore oilfield
- China National Offshore Oil Company Limited (CNOOC Ltd.) announced Thursday that the company has discovered a new oilfield in north China's Bohai Bay.
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