Please follow my new Twitter persona, @MrElectable

Some time ago, I posted a list of top-ten songs I wanted to see covered by Laibach. The time has come to amend said list.

The song I want to add to the list is the theme song to the show Super Why. You can watch below:

As you can see, it makes perfect sense that this song be added to the list. Moreover, It also makes sense that the song wasn’t on the list previously, as it didn’t exist at the time that the original list was published.

I know that the idea that the federal government should mandate paying for contraception by means of health insurance seems odd to many of you. Indeed it is odd, and were it not for the fact that I’ve spent most of my life in deep blue enclaves, I too may find myself perplexed by the notion. And while I avowedly disagree with the idea, I am not perplexed by the notion. It’s something I’ve heard liberal women screech about for about a decade or so. So allow me to share with you my understanding.

The first part is that leftists have this fantasy that they will be able to walk into a clinic or pharmacy and get whatever they need in a timely fashion and just walk out, without thinking about it and more importantly, WITHOUT PAYING. This is a fantasy, and free stuff ultimately doesn’t work as a public policy (see Free Stuff vs. Freedom). And in light of that fantasy, contraception is just one more health related thing they want for free.

But ultimately, it’s more than that. It’s tit for tat sexism, coupled with an utter lack of understanding as to what insurance actually is. I want to show you a tweet that someone in my timeline retweeted. It’s been retweeted over 50 times, which is a fair number for an individual tweet. But it’s a meme I’ve heard from women around blue parts for some time now:

Why aren’t erectile dysfunction drugs as controversial as contraceptives? If God wanted you to have that erection, He’d give it to you.

2/10/2012 10:47 am via Twitter for iPhoneReplyRetweetFavorite

@_joycastro

Joy Castro

The meme is offensive on a number of different levels. First up is the God reference. Certainly, few Christians believe in faith healing (though I wonder if those who do, such as Christian Scientists, get waivers from the penalties Obamacare imposes on the uninsured). And more importantly, few people who oppose Obamacare or even the contraception mandate do so on specifically Christian grounds. It is fascinating to me that the author should feel the need to load her comment with the reference to God at all.

And of course, the author completely misunderstands what insurance is. Insurance is a bet you make that something bad might happen to you. Obviously, you hope to lose the bet. The insurance company (or cooperative) charges based on the likelihood of the bad thing occurring and the cost of dealing with the bad thing when it does occur. Any extra money is either profit to the company or a dividend to the cooperative shareholders.

But what you can’t do is insure against an eventuality. All that amounts to is a weird kind of financing scheme. Even life insurance isn’t insuring against one’s death (a certainty) but against the timing of one’s death (an uncertainty). By way of example, imagine going to your insurance company to obtain toilet paper. Literally, everyone poops, on a more or less predictable schedule. Therefore. there’s literally nothing to insure. You’d be paying a premium to a company to handle your money and give it back to you in the form of toilet paper. Such a scheme can’t possibly make sense, and can only run up the cost of toilet paper for everyone involved. (Conversely, if for some reason you stopped pooping, then that would be an insurable event.)

But the real reason for the Obama administration mandating that contraception be covered by insurance is that they perceive men getting sex pills paid for, and so they feel their sex pills should be free too. Never mind that one is for a disfunction, and the other is for a normal, properly functioning body. It’s tit for tat over minutiae of the sort that plagues child siblings and those stuck in dysfunctional marriages. “Dad, he got more french fries that me!” “Mom, he’s played with it for 5 minutes, it’s MY TURN!!!” It’s the sort of attitude that causes a parent to yell at their child, to tell them to zip it. Life isn’t precisely fair, and attempts to make it so are futile and distracting. As they say in Alcoholics Anonymous:

God, Give us the grace to accept with serenity
the things that cannot be changed, Courage
to change the things which should be changed,
And the wisdom to distinguish the one from the other.

Now one may argue that erectile dysfunction in men above a certain age is so common that it shouldn’t be covered by insurance. But that is a dangerous argument if you believe in the likes of Obamacare. That is an argument for catastrophic coverage, as opposed to comprehensive coverage. And in that kind of world, the sort I argue for in my Grand Plan, anything short of cancer would likely be paid for out of pocket. I would argue that such a setup would result in health care costs coming down dramatically. But such a setup would not be in keeping with the “get my healthcare for free” fantasy. Not that leftists won’t make the argument. Consistency has never been one of the left’s strong suits.

I’ve become convinced that a fair amount of modern leftist ideology is little more than thinly veiled man hatred. Count this argument as one more data point in favor of that argument.

Mitt Romney has been running on the idea that he is “electable”. The idea is that he’s so clean cut and well spoken that he was able to win the governorship in one of the most liberal states in the country. And while his narrative has taken a bruising lately, it still holds because he’s claiming to just be more electable than the other candidates. This is utter nonsense, and the notion needs to be dispelled.

Mitt Romney is in fact the least electable candidate in the race. His past performance in Massachusetts indicates as much. The only thing required to understand this is a touch of knowledge about Massachusetts political history.

When Mike Dukakis left government after attempting to run for President, he left state government in shambles. He lied about having balanced the budget, and the people of Massachusetts were fed up with him and the Democrats. Into this environment, the people of Massachusetts elected Republican Bill Weld as governor, and gave him enough of a minority in the legislature so as to be able to sustain a veto. That was in 1990. Bill Weld was re-elected in 1994, and grew bored with being governor, and resigned in 1997, leaving the office to his Lt. Governor Paul Cellucci. Cellucci was a real local (locals would call his sort a “townie”), who ran up an extraordinary amount of personal credit card debt, calling into his question his ability to be a good manager. Nevertheless, he managed to get elected to the governorship in his own right in 1998. Cellucci resigned in 2001 to become the US ambassador to Canada, leaving the office to Jane Swift, who gave birth to twins while serving as acting governor, and chose not to run for the office herself.

It was into this string of Republican wins that Mitt Romney threw his hat into the ring. In other words, he was the third Republican governor in 12 years of continuous Republican governors in the state. So his win was not nearly as impressive as he made it sound. Massachusetts had Republican governors for 12 years running before he showed up. So they were used to it.

But really, he provided no reason for people to vote for him in 2002. He ran a similar campaign to what he’s running now, that he’s a good manager who can help fix problems. The real reason why he won was because his opponent, Shannon O’Brien imploded after likening teenage abortions to getting a tattoo, and then tried to make light of it by offering to show her tattoos on the campaign trail. In light of such rank idiocy, Massachusetts opted for Romney.

I’m going to skip over how he governed, except to point out that Romney made a real effort to get Republicans elected to the state legislature, and his effort was a complete and utter failure. Republicans lost seats while he was governor.

After being governor for four years, Romney could see the writing on the wall. he would lose re-election. And so he made the preposterous argument that he’d accomplished everything he’d wanted to accomplish as governor and that as a result he was going to go. And he set up his Lt. Governor to be the next Republican nominee, a woman named Kerry Healey.

Now Kerry Healey was someone few had heard of prior to Romney picking her to be his Lt. Governor. She’d never held political office before, but she’d had a good showing in some race or another before Romney tapped her. She held a PhD in criminology and married a centimillionaire. She was a caricature of herself and of a pearl wearing country club Republican. In fact, she was such a caricature that she was donned the nickname “Muffy”, not from her adversaries, but from the state’s premier right-of-center columnist, Howie Carr.

But that is not all, oh no that is not all. See Muffy had what would have been a primary challenger, a man by the name of Christie Mihos. Mihos was a self made businessman in Massachusetts, having started a chain of convenience stores from scratch. And he had been active in Republican politics for some time. He deserved a spot on the primary ballot. but Romney’s henchmen played games with the Massachusetts State Republican convention, refusing to let Mihos’ supporters in. As a result, he didn’t get the requisite 15% of the vote required to get on the ballot. In response, Mihos went apoplectic.

But before we get to Mihos’ response, let us recall that much the same thing has been happening in this current race. Romney’s cronies got the FLorida primary moved up in contravention of Republican Party rules, as a firewall of sorts to stop any possible challengers. And they are rumored to have had a hand in keeping Perry and Gingrich off the ballot in Virginia.

When you win a primary legitimately, opposing candidates tend to get in line and endorse you. But when you win by dirty tricks, you engender permanent opposition. Which brings us to Christie Mihos’ justified jihad against Mitt Romney.

Mihos ran an independent candidacy, running exclusively against Muffy, ignoring the Democrat in the race (whom we’ll get back to). Mihos ran what has to be one of the most outrageous ad campaigns in the history of televised politics. His ad literally depicted Beacon Hill politicians sticking their heads up their own asses, in cartoon form. And not just generic representations of politicians, literally, Mitt Romney and Muffy. See for yourself:

I shudder to think what newt Gingrich is going to do to this man in the general election once he has nothing left to lose.

So back to our story. Muffy’s real opponent in the general election was a man named Deval Patrick. He was a well spoken black lawyer, who had served on some major corporate boards and has been in Clinton’s justice department for a period of time. He ran on a theme of “Yes We Can!” If that sounds familiar, it should. His campaign manager was David Axelrod and the campaign he ran for Deval Patrick was a dry run for the one he would eventually run for Barack Obama. Which is to say, 2012 will not be the first time that the Romney and Obama teams will have faced off. They faced off in 2006, and the result was NOT pretty.

The key to understanding Massachusetts politics is to know how much of the vote is really up for grabs in any election. In Massachusetts, 30% of the voters will vote for the Republican candidate no matter what, and 40% for the Democrat. This leaves 30% up for grabs, the independent vote so to speak. While at first glance it doesn’t seem like that big of a difference, if you do the math you will see that a Republican needs to win 2/3 of the independent vote to win an election. This is what Scott Brown did. So that fact that Muffy lost and Deval won shouldn’t be a serious concern, at least if the independent vote was reasonably split.

But it wasn’t.

Here’s how the vote broke down:

• Muffy: 779,807 35%
• Mihos: 161,012 7%
• Patrick: 1,230,065 56%
• Green: 43,032 2%

Let’s translate this. Assume that Mihos’ votes were really republican votes, and the Green Party’s votes were Democrats and run the percentages. We get:

• Muffy/Mihos: 42.5%
• Patrick/Green: 57.5%

And to get the independent vote breakdown, we subtract 30% from the right and 40% from the left:

• Independents voting right: 12.5%
• Independents voting left: 17.5%

Or put differently, the independent voters split as follows:

• Independents voting right: 41.6%
• Independents voting left: 58.3%

If Republicans lose the independent vote 58% to 42%, they will lose. And that’s not even considering the fact that Mihos in fact took 7% of the vote for himself. I think we could expect similar results if Gingrich goes rogue and runs third party.

So I hope you’re a bit more informed about Mitt Romney’s electability now. Nominating Mitt Romney will, I believe, lead to a massive loss in November. My hope is that is doesn’t have an effect down ticket.

So I’ve been waiting for someone to write the definitive piece on this whole Obamacare/Catholic/contraception kerfluffle. There is much to write about it, but to date I have yet to see anyone spell out the central lesson that needs to be learned. So here, in a nutshell, is that lesson:

Free stuff and freedom are inherently incompatible concepts. You can choose the free stuff, or you can choose the freedom, but if you choose the free stuff, you will eventually lose the freedom. Here’s why:

1. As any economist can tell you, appetites are unlimited, but means are not. Which is to say, we all can consume unlimited amounts of stuff, but we don’t because we don’t have the money. Thus when you tell somebody that you’re not going to interfere with their freedom to consume, you’re just going to foot the bill, it should come as no surprise that they gorge like pigs at the trough. When the bill comes due, you are then forced to make a choice: curtail the freedom or the free stuff. Either you end the subsidy or you put all sorts of limits on how it can be used. Or, I suppose, you go bankrupt like Europe is doing now, and like the US is about to do soon, in which case the free stuff will go away.
2. Even if the people consuming the free stuff don’t gorge at the trough, even if they are limited in the amount of free stuff they’re given, eventually the choices they make in consuming their free stuff will offend somebody. And because it’s their tax money, indeed everyone’s tax money, that is paying for the free stuff, those people will seek redress that their tax dollars not go to fund the free stuff that so offends them. Likewise, others will believe that because some free stuff is funded that they for some reason or another cannot put to use, that their other free stuff must also be funded in order for things to be fair. This creates endless conflicts and fights. One may think that these fights are mostly between prudes and libertines. Yet one can easily imagine passionate fights between vegetarians and Atkins dieters, or between Mayor Bloomberg and anyone who enjoys anything whatsoever. Literally, the available permutations are endless.

   Moreover, there will invariably be people whose economic interests are at stake as well. They want the stuff they produce available to be purchased as free stuff, and the stuff their competitors make eliminated. This means that they too will lobby, and adopt the arguments of their idealogical brethren mentioned in the preceding paragraph as their own.

   Eventually, someone wins out. That someone is either the lobby with the most to gain financially or the lowest common denominator amongst public opinion. But whatever it is, the freedom to choose for the person receiving the free stuff has been curtailed.

If you want to see this work in a concrete way, find a teenager at the mall and hand him your credit card. Tell him he can do with it what he wants for the time he is at the mall. By the time the bill comes due, the teenager will undoubtedly have spent more than you would have foreseen, and would have spent it on items that you would not likely have approved of. The same thing happens in the public sphere.

You can see these forces play out whenever some politician calls for banning the use of food stamps for candy and cigarettes. But food stamps are a program for the poor only. Obamacare, by contrast, is designed to manage everybody’s health care. The goal is for everybody, or at least most people, to be able to get whatever health care they need without paying for it themselves. The bill is picked up by the employer or the state. And because every decision you make in your life has an impact on your health, and the state is paying your health bill, the state will presume to have a say on those decisions. Put aside the specific reasons why the Obama administration wants contraception covered by insurance (a subject for a later blog post). The fact is that these kinds of fights and loss of freedoms will become a normal part of our life under a state run health care system. The loss of our personal freedoms, religious included, is inevitable. Just wait until the state starts monitoring your daily routines with technology like this. It will happen, it’s only a matter of time.

So apparently the Catholic Church were big boosters for Obamacare when it was being passed, being fans of free stuff for the poor and all. One should hope that they have learned something from this episode about the incompatibility of free stuff and freedom. Though I’m not holding my breath. But perhaps the rest of us might learn something instead.

Again, I’m not holding my breath.

So Newt Gingrich’s allies have funded a movie attacking Mitt Romney’s record at Bain Capital, called “When Mitt Romney Came To Town.” You can watch it here. It scratches the surface and shows a lot about the toll that Bain Capital took on the people who worked for the companies that Bain would purchase. It’s worth viewing.

But I wanted to delve into a bit more detail about what private equity is, how it works, and why it bears so little resemblance to what people think of as building a business. Private equity, fueled by massive debt, is much more akin to strip mining than to growing a business. And it is fueled by the easy money available from the Federal Reserve. So I think it’s worth taking a moment to understand it, and how it applies to Mitt Romney’s record as a businessman, a record that is mixed at best.

Private equity generally buys companies by way of a mechanism called an LBO, which stands for “Leveraged Buy Out”. This is not significantly different from how a person might by a small business normally. As the buyer, you would make your down payment, and use a bank to borrow money using all the hard assets of the business as collatoral. Finally, you would obtain a note from the seller for the remainder of the business. Obtaining a note from the seller is necessary because few parties if anybody will loan money against the future cash flows of a business. And the buyer needs some assurances that the business is functioning as presented by the seller. Therefore, making the seller take a note puts him in a positon where he loses if he’s lying about the cash flows of the business, and he has every interest to make sure the business is running profitably after he’s gone. Finally, oftentimes a bonus will be paid to the seller if certain financial milestones are met after the transactions take place. That bonus is called an “earnout”.

When a private equity firm buys a company, they will utilize all of these methods as well, but they have access to much deeper reservoirs of cash, which affords them the opportunity to outbid other potential buyers. Buyers tend to come in two varities, financial and strategic. A financial buyer is someone like a private equity firm. Their interest is in the cash flows of the enterprise. A strategic buyer, on the other hand, typically is already in the same business or an adjacent business as the company that is for sale. Under normal circumstances, a strategic buyer should be able to offer the highest price for a company, because they will integrate the new company’s product lines into their own, and cut out nearly all the management and overhead. Moreover, they strategic buyer will often need to make the purchase in order to be competitive in their industry, which can incent them to bid even higher for the company being sold.

So why does a financial buyer such a private equity firm even have a chance? The answer, I’m afraid, stems from loose money flowing from the Federal Reserve spigot. Here’s how it works: The private equity firm issues bonds to conduct the buyout. These bonds are underwritten by the major banks, the ones with the free access to the Fed spigot. These banks have asset to loan ratios that they need to maintain, and they also are “too big to fail”. The loan ratio limits how many loans they can make, which incents them to make the highest yield loans they can possibly find (and ironically, eschew loans that are more conventional, safer bets).  And because they are too big to fail, they worry little about the consequences in loading up on these risky loans.  Not that they want to fail, but having that backstop makes them feel like they can take risks that they would not otherwise take.

So the banks find buyers for the bonds, and buy the remainding bonds themselves. Because these bonds are incredibly risky (because the financial buyer is likely overpaying for the comapany) they pay astronomical interest rates. In polite parlance, these bonds are termed “high yield”. In common parlance, they are called “junk”.

So using these bonds, the private equity firm acquires the company. But they still have money stuck in the company. So they do something that would never be possible for a small business to do: they take on more debt in order to pay themselves a dividend. In technical parlance this is called a “dividend recap”. In common parlance, it’s called “completely insane.”

Can you imagine being a small business owner, say with a small chain of restaurants, or a couple of gas stations, what have you, and asking the bank to loan your business money so that you can take your own equity out? Every small business owner knows full well what kind of reaction they would get from the bank. That’s because the small business owner is dealing with a bank that is not “too big to fail”. And if they are dealing with a bank that large, they still won’t take on that kind fo risk for a penny ante player.

So how does the private equity firm do it? Well, part of how they do it is by cutting fat They call in the consulting firms of the world, names such as Bain, Boston Consulting Group, and McKinsey, to come in and find fat to cut. Since no business in the world operates at 100% efficiency, they invariably find some, which generates more cash flows to borrow against. But that’s not the whole story. Invariably, they mess with the company’s product pipeline.

In a normal company, products have a certain life cycle.  It goes something like this:  in conception the company spends money on research and development, while earning no money from the product, only earning money from older products.  They launch the new product, which is priced high to recoupe development costs.  Over time, the price drops as the cost of producing the product drops, and the volume of sales increases.  Profits increase as well, as the product goes mainstream.  But then, the product becomes commonplace, copy cats are out in the market, and with increased competition sales drop, as do prices.  Eventually, the product dies.  If you’ve managed your product pipeline correctly, you will have a new product coming out before your existing product begins dieing its natural death, and you will have steady increasing profits over time.  Companies like Apple and Gillette are masters at this sort of thing.  If you fail, then your company may die, and a rival company will take your place.  This process, of replacing old products with new products, was described by Josef Schumpeter as “creative destruction”.

But if you’re looking to do a dividend recap, then you need to find additional cash flows with which to pay the back the money you’re borrowing.  So if you’ve already cut out all your fat, you now need to start cutting muscle.  And there are two sources for this: you can degrade the quality of your current product lines by cutting corners, or you can cut R&D for future products, or both.  Either way, what you wind up doing is juicing the numbers today at the expense of future productivity.  Farmers might call this “eating one’s seed corn”.  

Now sometimes, shenanigans like this occur at the small business level as well.  A business owner looking to sell his business “juices” his numbers by cutting out repair and maintenance expenses, in the hopes he can sell his business for slightly more than it’s worth by faking a higher profit margin that he really has.  But to be sure, no small business owner cuts his own repairs and maintenance with the hopes of retaining ownership in his business.  It’s just not a long term strategy for success.

In the private equity world, some number of companies so abused by the methods described above do in fact survive.  Those companies reap enormous rewards for their private equity owners.  This is more common in good times than in bad, of course.  But nevertheless, it does happen.  But what concerns people is what happens when times aren’t so good, when the enormous risks taken do not in fact pay off.

Corporate bonds are typically issued for 5 years, after which time they must be paid back.  Now a company that is levered by 70-80% is not going to be able to pay back that much in 5 years.  So they are accepting a refinancing risk when they issue the bonds.  That is, they are risking that they can roll over their debt at the end of the five year period.  Their chances may be quite good if times are good in 5 years, or they could be poor.  But this is the risk that companies owned by private equity firms take.

As time progresses, the bank holding the company’s debt will make a judgment call as to whether or not it thinks the debt can be refinanced.  Based on this and its own portfolio management strategy, they may offload their bonds onto other parties.  In polite company these parties are typically called “foreigners” and “municipal pension funds”.  In common parlance, they are known as “suckers”.  But they may also be another kind of private equity firm, one that behaves as more of a vulture.

This second kind of private equity firm loves to buy up distressed debt.  They too are making a judgment call, as to whether or not the company is likely able to refinance its debt, and whether or not the private equity firm that owns it is likely to walk away from the company it owns and let it slide into bankruptcy.  They are also making a judgment that the assets of the company are worth more than the price of the debt on the open market.  If it is, then they buy in.

Let’s use some concrete numbers to illustrate.  Say a small manufacturing company is owned by a private equity firm.  They are purchased for $100 million.  They have assets in the form of their factory and inventory worth $25 million.  And they are levered by the private equity firm for $75 million.  While the bonds have a face value of $75 million, they are heavily discounted by the market, which believes are unlikely to be able to be refinanced or paid back.  So the second private equity firm buys on the open market for a steep 80% discount.  If you do the math, you will note that they paid $15 million for a debt worth $75 million, backed by a company with $25 million in hard assets.  If the company goes bankrupt, the new private equity firm will have earned at least a 60% profit on the deal, for essentially doing nothing, just for selling off the equipment.  Not that they will always opt for this route.  Sometimes they will in fact endeavor to turn the company around, and sell the company for the $100 million that it was worth at one time.  But that entails more risk, risk that the firm may just not want to take on.

As you can see, it is entirely inappropriate to describe the process outlined above as “creative destruction”.  In a scenario of creative destruction, there is some creation occurring that is causing the destruction: the iPhone kills the iPod, the Fusion kills the Mach III.  But here, there is no creation going on whatsoever.  Just reckless risk taking that didn’t pay off.  It is inconcievable that the economy as a whole is benefitted by overlevering profitable, working companies, and then selling the carcasses off to vultures for a profit.  It’s not creative destruction, but just plain destruction.  Or “destructive destruction” if you will.

To be sure, Mitt Romney’s record appears to be a mixed one.  He did some venture capitalism early in his career.  In particular his investment in Staples appears to be a true example of creative destruction, causing the demise of many smaller stationary stores.  And even in his private equity investing, he surely wasn’t the worst of the bunch.  From what I’ve read, he appeared to be the private equity guy with a conscience as opposed to the soulless villian.  Think Darth Vader instead of Voldemort.  Still, I have trouble wanting to vote for Darth Vader, no matter how effective he was a blowing up Alderan.

The point here though is much larger than any one candidate.  The point is that allowing for loose money from the Fed, coupled with a corporate income tax system that encourages firms to lever up, overlaid onto an economy that still has plenty of manufacturing assets to be sold off, run and operated by a banking class that seems incredibly dishonest is a recipe for looting every last bit of manufacturing out of the US economy.  And it is that that we should be concerned about if we are to survive and prosper into the future.

In my earlier post detailing the Republican candidates for the nomination, I didn’t say some things about Romney that I meant to. So consider this post a further declaration of why Romney is unfit to be the nominee. Should he get the nomination, and I think he likely will, then I will be casting my vote for Libertarian Gary Johnson.

• Family Legacy: I don’t take any issue with Romney’s religion or ethnic background. But I do take issue with the fact that his father ran for president. Given that Mitt Romney doesn’t appear to stand for anything specific, I can only guess that he is running for office to somehow satisfy his father’s legacy. For those not in the know, George Romney was a serious contender for the 1968 Republican nomination, until he claimed he had been brainwashed by US military officials into supporting the Vietnam war. This is the worst of all possible reasons to run – to restore a lost family legacy. We elected a president like that in 2000 and look what it earned us. No, anybody running for president should be doing so because they have convictions or experience that they bring to the table. They should run because they believe they are uniquely positioned to make the country better, not because they need to slay family demons.
• He Stands For Nothing: Mitt Romney appears to have no core beliefs whatsoever. His flip flopping has been covered in many places before and I feel no need to revisit the details here. But not only is it the case that he appears to have no core beliefs, but he is running a campaign that feels like an empty “Morning in America” campaign. Romney wants to make America great again, or something. Romney is incapable of arguing against the greatest abomination to come out of the last 4 years, Obamacare, because he masterminded the precursor program in Massachusetts. And despite his eloquence, he says nothing about the decade of bad legislation that has led us down this economic path, and what might be required to get us out. That’s in part because he supported TARP. He’s an establishment politician who supports establishment views at the precise moment when the establishment needs to be sent packing. As a result, he is incapable of expressing anything substantive. The result will be that he gets defined by Obama and the media, and gets run roughshod over in November.
• He Is A Liar: Romney is fond of pointing out that we have “50 laboratories of innovation” in the country. He’s right about that. But typically, when a governor runs for president, he is running on the notion that he developed in his laboratory a successful formula that should be brought to the nation as a whole to either cure its ills or propel its growth forward. Romney is the first governor to my knowledge who is running for president while claiming that what he did for his state should NOT be propagated into the nation as a whole. This alone causes too much cognitive dissonance for most people, myself included. But it is also a giant lie. Romney instituted Romneycare because the Heritage Foundation published a paper in the early 90′s, when Hillarycare was being debated, suggesting that a preferable means to achieving universal coverage would be to mandate that citizens purchase catastrophic medical insurance for themselves. Romney viewed this suggestion as a classroom assignment, and raced to be the first in the nation to institute such a thing (ignoring for the moment that what Romney mandated was comprehensive insurance be purchased, not catastrophic). This alone is problematic enough, and suggests a lack of proper thinking ability. But what’s worse is he has been lying about it the entire campaign. In his book, he wrote that what he did in Massachusetts could be a model for the nation. And in 2004 he campaigned on the fact that he implemented Romneycare in Massachusetts. Now he claims to have never said that Romneycare could be good for the country.
  
  It is difficult to stomach that level of dishonesty generally. But when you couple it with the fact that the issue in question is bound to be the main issue of the campaign, it becomes impossible. Especially when you couple it with the fact that nearly everyone gets a creepy sleezebag vibe from the guy. He has shifty eyes, and he looks like he’s gauging the audience while he speaks. And people from all walks I encounter say he just seems dishonest. This is a massive handicap, especially for a Republican nominee going up against a Democrat who is well regarded on a personal level.
• He will be a steward of the Status Quo: If you think that the problem with Democratic governance is that they don’t know how to balance the budget and keep the ship of state afloat, then Romney is a great pick. He will not likely repeal Obamacare, but will change it to make it more workable and less costly. At least that is what he was claiming early on in the campaign, saying he would repeal “the worst aspects of Obamacare”. Indeed, even now he promises to issue 50 waivers to every state to let them out of the requirements of Obamacare. But this is not repeal. And worse yet, it undermines the rule of law, which should apply equally to everybody. If Romney truly wanted to see Obamacare repealed, he would immediately revoke all waivers on day one of his administration. That would motivate people who got waivers to lobby for Obamacare’s repeal. But I would not expect to see a repeal of Obamacare should Romney become president, which he won’t. What we will see is the institutionalization of everything the Democrats have put into place, just run smoother. If your problem with Democrat governance is the governance, then Romney is the last guy you want to succeed Obama.
• Romney will be a Racially Charged Candidate: Mitt Romney is a Mormon, and the Mormon religion was predicated on some racist beliefs, the totality of which were not repudiated until 1978. The Mormon church taught that American Indians were descended from white Jews, and that as those jews lost their faith and ceased to be monotheists, their skin darkened. It also taught that the mark of Cain was being black. And there are no shortage of appalling quotes from Brigham Young confirming that this was a core doctrine of the early church. As a result of this, the church refused blacks full membership, under the guise that they were not worthy by virtue of their race. Moreover, they did not reverse these policies until 1978, at which time they also revised the Book of Mormon to change all the references to skin color to references about purity of one’s soul.
  
  The issue here is that Mitt Romney had already completed his 2 year missionary work prior to 1978, meaning that he spent two years of his adult life proselytizing what was at the time a racist religion. If you don’t think that Barack Obama isn’t going to confront Mitt Romney about that point blank on stage at a debate, you’re nuts. Romney may retort by playing clips of Reverend Wright, but the end result will be a scorched earth campaign at the end of which race relations in this country will be markedly worsened, regardless of who wins. If that idea appeals to you, by all means vote for Mitt Romney. If it doesn’t, then you should choose a different candidate.

I am going to address Mitt Romney’s record at Bain in another blog post. But suffice it to say, it bears little relation to capitalism or even creative destruction as commonly understood. But that is a long post unto itself. Suffice it to say that Mitt Romney is not the guy we should have standing up and defending capitalism either.

UPDATE: Clearly Squared brings up Shannon O’Brien, whom I forgot to mention previously. Everyone should understand that Mitt Romney only ever became governor of Massachusetts because the Democrat nominee, Shannon O’Brien, was a townie who literally was offering to show off her tattoos on the campaign trail. In other words, Romney only won in Massachusetts because the Democratic nominee imploded, not because the state ever really liked Mitt. Furthermore, once elected, Romney was such an asshole in office that mayors and town managers soon refused to take his calls, requiring Romney to hire an ambassador of sorts to communicate with the cities and towns of the state. Remember that when you cast your vote as well.

I think I’ve figured out what’s going on.

What we have is a three way race between the libertarian wing of the party, the religious wing of the party, and the asshole wing of the party, otherwise known as the establishment. Ron Paul is the libertarian in the race. He was hoping to bridge the gap between the libertarians and the religionists by virtue of his libertarian policies and personal religious conviction. Unfortunately, the religionists seem to be demanding a candidate who begins every sentence with reference to God and/or family. Hence the rise of Rick Santorum. However, Santorum makes no bones about his disdain for the libertarian wing of the party and their policies, and hence is incapable of attracting their votes. Romney represents the wing of the party that is bought and paid for by crony capitalist lobbyists. He is unacceptable to the majority of the grassroots. He is still the likely nominee.

One question remains: can a fusion candidate emerge in time to unite the libertarians and religionists to defeat Romney? This is why Rick Perry is staying in the race. Also Gingrich I suppose. I would guess that it is possible for one of them to emerge and unite the base against Romney, but time is running out. I still think Romney will be the nominee, but anything is possible.