I Love You Women

Ann Romney’s speech at the Republican National Convention had a well conceived message and she performed it generally without the kind of nervous, mannered delivery that typifies political spouses.  The primary theme was (directly stated) love and how that broad concept relates to women generally, but especially for women under stress.  What that stress might be was less defined, certainly including financial stress but also touching on everything from rearing screaming kids to eating off of ironing boards to breast cancer.  I was quite broke during college and shortly after, hardly received a penny from my parents, but I never had to eat off an ironing board – I feel incomplete.

The fact that Romney polls so poorly among American women, which is as much a malady of the Republican Party as it is for him, was the obvious motivation for the message she gave.  Like predictable movies; that message was expected and at the same time a bit boring, primarily because it didn’t equate the least with the reality of whom she is and what her husband supports.  With such a movie, one considers at the end that his eight dollars and two hours might have been more wisely spent.

However, her embrace of women on behalf of her husband wasn’t what interested me.  What fascinated me was how she continues to demonstrate a critical aspect of what she and her husband represent and how that may be a window on a Romney presidency.

In July I wrote of an important response Ann Romney gave to ABC news entertainment personality Robin Roberts during a special interview.  When asked about why her husband would not make public prior year tax returns (she files separately from Mitt) she said with some ire “we’ve given all you people need to know”.  I believe this was one of the most important statements made thus far in this presidential year.  What she meant by “you people” might be argued several ways, but I believe that “you people” to the Romney’s has no specific definition. I feel that to the Romney’s “you people” is anyone who isn’t “us”.  This reality has surfaced time and time again with Mitt and generally has been laughed off as his bumbling inability to relate to the so called common man.

Republicans argue repeatedly that the effort to increase top income tax brackets, even just slightly toward what they have historically been, is class warfare. What makes that such an interesting retort is that the concept of “class” doesn’t really exist in the US for a majority of Americans.  Throughout this Nation’s history the model of individual achievement has chipped away at a class structure that existed in western culture into the 20^th century, as nearly defined as the Indian caste system.  It was manifest in many ways not the least of which was who was eligible for financial resources and who was allowed to vote.  With the rise of the great Middle Class after the depression of the 30’s, class identification essentially disappeared for those Americans in that Middle Class.  In fact, the term “middle class” is really an oxymoron since the term middle more accurately describes a lack of social and economic class. The truth is that the only Americans who still view themselves as a distinct social entity are the financially privileged, and especially those who are second or third generation.  There is an irony that those who repel at “class warfare” are the only ones who believe there is “class” at all…or at risk.

When Ann Romney said with heightened passion “I love you women” she really wasn’t saying; I love you..women, she was saying I love..you women, conspicuously leaving herself out of the group.  Her husband is the same, quite a bit different than John Kennedy or Franklin D. Roosevelt, the two previous second generation privileged Presidents, who successfully became populous leaders even before their elections.  You’d have to go back to Howard H. Taft to find a second generation upper class President who embraced his elite stature, notably with little success as a President.

Mitt and Ann Romney have difficulty in connecting with average Americans because they themselves in reality feel no connection, no honest empathy.  The exclusivity and hierarchical nature of their Mormon Church and Mormon faith only intensifies this them and us attitude.  We can laugh and make fun of Mitt’s comments about his connections (NASCAR), his matter-of-fact consumption, or that “corporations are people”, for example.  We can squint at Ann Romney’s subtle “you people’ comments.  The reality is that their governance will be elitist; they will reign more than lead. They will also surround themselves with those of like kind, since their perceived class has always been fearful of those who don’t know the difference.   

The Gift

Where I work in a fitness center there is a member that caused me to pause the first time I saw him.  I had only been working there a short while when he crossed my path.  He didn’t recognize me, nor did I expect him to.  I recognized him immediately and just as immediately had to deal with unpleasant emotions.  This member had been my doctor at least one and a half decades earlier.  He called himself an internist, but he was really just a GP with a one man practice. I’ll call him Bob, not his real name of course.  I’d guess he’s currently in his 70s and likely retired.

He puts an immense importance on detail, at least when it comes to his workout, walking around with a virtual notebook in which he records every set, repetition, weight, and probably heart rate – every visit.  I would suspect that he is not a particularly spontaneous individual and likes the control that comes from compartmentalizing specifics.  He wasn’t my physician long, maybe 3 years or so.  I saw him infrequently and therefore cannot honestly say whether he is (or was) good at what he did relative to his peers.  I do know his one employee, his nurse/receptionist, was so unpleasant that we’ll just refer to her as nurse Ratched.

My animosity toward this man (and his sidekick) evolved from my last communication with them both.   I got sick – very sick.  I had flu-like symptoms which over a period of a couple of days would crescendo to levels of crappiness I couldn’t recall reaching before.  I resisted but finally called Bob’s office and asked to come in.  Miss Ratched receptionist switched to nurse Ratched and said coming in probably wasn’t necessary and I should first try a liberal application of aspirin and clear liquids.  At that point I was actually getting too weak to consider arguing. 

After another half day of feeling really bad I called back and asked if I couldn’t come in to see Dr. Bob as soon as possible.  I was rebuked for not waiting long enough to give aspirin and soup time to work.  I then started to plead (an embarrassing thing to recall).  Ratched finally said she’d talk to the Doc and he would call me back.  He did and essentially continued to rebuke me for my insistence and lack of metal, I suppose, for not dealing better with a simple flu.  He ended by saying I could come in…if I really had to.  It was the last words I would ever hear him speak.

Going to an emergency room didn’t seem like an option at the time.  Bob had convinced me that it was an ordinary illness and, besides, there isn’t too much in life I hate more than a hospital emergency room.  I felt lost and decided to ride it out. 

I stayed in bed maybe a couple of more days before I started to feel better, with one notable condition – I lost most of my hearing.  More accurately I lost some range to my hearing entirely.  This continued a week even as the rest of me began to feel quite normal.  I remember driving around in my little Ford pickup and having it sound like I was driving a Mercedes C-Class.  I wasn’t worried assuming the hearing would come back in time, which it did.  However, when it did come back something remained:  a loud “ringing” in my ears.  I had developed Tinnitus (pronounce tin-ah-tus or tin-eye-tus, either way).  It’s a non-threatening malady which is relentless and incurable, and can drive some people into mental illness.

There is also no magic pill to make it go away.  The only method that had any success was an odd one: it suggested that the victim of the “ringing” simply not listen to it.  It was odd because it isn’t a ringing that you actually “hear”.  Rather it’s an internal noise, not unlike that sound you hear by placing conch shells on both hears…only louder.  The idea was to accept the reality of the noise, then just pay no attention to it.  That sounded absurd.  Yet it wasn’t.  It took me months, but I learned to do it.  The hardest part was, of course, accepting it.  Now when it’s quiet and I’m suddenly aware of the loud “ringing” I stop, listen for a while as an observer, then get on with life.  The ringing has no power over me, so it’s pretty much the same as not being there at all.

More importantly, it taught me, in a very dramatic way, the importance of both accepting and not resisting.  One can intellectually know that not resisting and consequently accepting robs the force behind misfortune or conflict. Therefore, not being controlled by circumstance frees one to find solutions to deal with it.  However, it sometimes takes a real experience to make such knowledge intuitive.  This happened to me with my tinnitus and it was a gift.  It allowed me to have a multitude of similar experiences since and life, in general, is just plain better. 

Now when I see Dr. Bob I still think of him as a horse’s ass, but I also smile as he passes me with all his little notes and figures and silently say thanks.

Why Romney Won't Reveal His Taxes

(A reader of mine informed me that my blog of Aug 17^th, as it regarded taxes, was confusing.  I thought about it and concluded that writing a clarification was in order.  When a person is reasonably knowledgeable of a particular discipline or field  they can have difficulty in seeing the complexity of that which to them appears simplistic.  I don’t consider myself an expert in the tax field.  In the 31 years I worked either directly or indirectly with taxes I learned to respect, if nothing else, the vast amount tax information I would never have the chance to know.  Still, there are some things I’m comfortable in sharing and will try to do it better here.)

As much as he would like to tout it, the fact is that Mitt Romney was not a business man in the traditional sense.  He was a financier.  There is a difference.  Even the Bible differentiates the money lenders from the merchants and carpenters. The fact that he used the structure of a corporation to profit from his labors and that he and the other principals of Bain Capital employed staff to help him does not change anything.  He and his breed used an extraordinarily complex set of laws that enable “investors” to acquire, manipulate, and dispose of vulnerable businesses with very little downside risk to themselves.  Romney himself became a recognized master at it. In a simple Ron Paul-ian world of free enterprise I’m not sure a Bain Capital could have succeeded. My logical contention is that Mitt Romney has handled his own private finances in the same way, at least up until this run for the Presidency. The little he has revealed about his personal finances also supports that conclusion.

The complexity of US (and State) tax law is born of the fact that tax legislation alone cannot deal with the detail.  Certainly the legislation is voluminous and complex on its own, especially as it has been used for a century as a means of economic and social engineering.  It is the detail though that really makes one’s eyes roll.  The tax laws cannot address every type of human activity that involves money, not even close. The net result is the volumes and volumes and volumes of subsequent regulations and rulings that try to bring specificity to the tax laws.  It is a moving target and targets like Mitt Romney move pretty darn fast.

This complexity only benefits the wealthy who aggressively seek to minimize their tax liability. It is because our system is an honor system and the taxpayer is the first one to determine what is or isn’t taxable under the law. The wealthy (or wealthy corporations) have the resources to hire armies of tax attorneys whose sole jobs are to figure out ways of interpreting tax law for the benefit of their clients.  In doing so they weigh risk vs. tax benefit, and because the risk more often is just the tax that would have been owed and interest (plus a pitifully low tax penalty which is often waved) financiers like Mitt more often go aggressive. Why wouldn’t they?  It is a benefit that is available to everyone, yet exclusively theirs – the perfect paradox.

The only way aggressive tax interpretations by the taxpayer can be reigned in is through an IRS (or state) audit and, possibly, the subsequent fighting it out in Tax Court.  The IRS (and most states) must do that audit within 3 years of the date of filing. After that the taxpayer (barring negligence or criminality) is home free.  Given the nature of his value structure as demonstrated through Bain Capital, Mitt is likely to be one of those super rich who has interpreted tax law to his benefit and has done so aggressively. 

He is not overly worried about his effective tax rate, that embarrassment would be temporary, as it already has been for the one year he did publish.  No, he’s worried that Brian Williams will be interviewing respected tax authorities who will point out that Romney’s tax interpretations would have failed under an IRS audit.  What the public would take away is that he more than dodged taxes, he benefited by the vagaries of our laws at the expense of the American Taxpayer.  Not particularly Presidential or even laudable, except to the select few of the super rich who chuckle at sticking it to the “Government” (aka the American People or as Ann Romney puts it: "you people").  I have personally seen this, and it is not pretty.

Hooray for Harry

With the addition of Paul Ryan to the Republican ticket the Democrats seem initially to be making a mistake in judgment regarding their campaign.  Ryan may energize the far Right or Tea Party crowd, but it’s unlikely he would impact the election anymore than Biden has. More importantly, by redirecting attention to the multitude of Ryan ideological pronouncements they may let an important issue languish, if not die.  That issue is Romney's tax returns, which he is refusing to disclose. 

 Mitt has managed to dodge this criticism throughout his political life and he has apparently felt (to date) that he can do the same with this, his current contest.  If the issue is allowed to linger, especially by the media, Romney may again be able to neutralize it from being a relevant factor. He is hoping that people (and therefore the media) may generally just take it as a given that he will not release them and go on from there.  That would be a shame because this is a substantive issue, not just a source of embarrassment for Mitt.  It is the quantitative reality that the tax treatment of Mitt's wealth is a parallel for the constituency that likely benefits from a Romney administration. That reality is difficult for the average citizen to understand, and therefore it is extremely important that visibility be kept on the issue

Why is Mitt afraid to release the returns?  It's anybody's guess, but let me tell you mine. His fears are pretty practical, and it isn't simply the chagrin he might face from paying low taxes during any particular year. 

The US Tax Code is anything but black and white.  If the complexities of intimate relationships can be 50 shades of gray, the tax code is in triple digits.  The Code itself is thousands of pages alone, but much of how income and asset transfers are taxed has also been determined through thousands of court decisions which have created the US Tax Regulations and tens of thousands of IRS Letter Rulings, all of which are many times the size of the Tax Code. 

The US Tax System is essentially an honor system. Individuals are required to file with the Federal Government as tax law requires, but are allowed individual interpretations if the law is presumed unclear. Their interpretations remain unchanged unless an individual is audited and the taxpayer must defend their interpretation.  That audit must take place within 3 years of the due date of the filed return.  Barring a grossly unjustified interpretation (which might even be criminal), after those 3 years the taxpayer is free and clear. If Romney releases his returns with any time left for the army of Obama tax experts to review them I feel they would undoubtedly find errors and/or aggressive interpretations by Romney which would show he effectively (and possibly illegally) dodged a substantial amount of tax. This is a simple reality for individuals who have significant income earning assets and the means to employ expert and aggressive tax attorneys. It would be devastating to the Romney campaign and possibly a show stopper on the whole contest.

The importance of this disclosure is not simply the means to torpedo Romney’s chances at the White House.  There needs to be a demonstration to the American people just how extraordinarily vast the distance is between the wealthy and “middle class”.  Romney is a living metaphor for this problem that reaches much more deeply than a simple “class” struggle.  Nothing demonstrates this more than the way our tax laws have been weighted.

The absurdity of Romney, Ryan, and the Republicans to embrace the idea that to increase wealth for the super rich will increase jobs would be laughable in Econ 101.  Published statistics and research by scholars such as Edward Wolff of NYU show: the top 1% of households own more than 50% of all assets in America, if you factor out residential housing.  The top 20% own nearly 90%!!  The bottom 40% own about one-half of 1%.  Increasing this concentration will do absolutely nothing for the economy.  Yet, like the morbidly obese, Republicans don’t want to see that stuffing more money in their wide mouths only worsens an already dire situation.  

The primary origin of this so called “Great Recession” was the collapse of the housing market, which was quickly followed by a collapse in commercial real estate. It is also the reason for it lingering over the past 3 years.  Conversely, the great real estate bubble that extended from the late 90s to 2007 is what powered the growth in the US economy.  Why?  It did so because the driver of economic growth, and therefore employment, is a great number of people spending money, put simply. To do that a large segment of the population needs two things; a feeling of financial well being and a reasonable degree of predictability about their future.  Expanded real estate values accomplished both.

To push us in the right direction the Federal Government should force, if necessary, providers to refinance of home mortgages to current interest rates regardless of any other factors, flatten the tax rate of the middle class (not necessarily reducing taxes), increase top income tax brackets, and increase the holding period for long-term capital gains from one year to three years and disallowing long-term losses to offset short term gains (thus increasing short-term gains to be included as ordinary income).  Do you think this could happen with Romney in the White House?  The irony is, of course, by doing these things we would not only increase spending growth, more jobs, and improved budgets, but the rich (interesting) would do better themselves…but expecting Republicans to stop concentrating wealth would be like expecting Homer Simpson to ignore the plate of doughnuts laying on his belly.  By increasing the size of the pie and have most of that increase go to the middle class, everyone wins.

So when Harry Reid makes a wild accusation about Romney’s taxes keeping the issue alive I say hooray for Harry.  If it were me I’d be saying Romney earned income from child sweat shops in Malaysia, donated money to fund Gay Pride Day in Provincetown, MA, or takes child care credits for his six Mormon wives and eighteeen children in Utah – anything to keep the pressure on and the issue alive.  Forget about Ryan…he’s a jerk.