Mitt Romney’s detractors accuse him of destroying jobs or creating low paying jobs. Mitt’s defenders argue that he brought free market discipline to the companies that he and Bain Capital purchased and that by restructuring these companies he saved jobs and created new ones.

Lost in the political jousting is a discussion of the complex business of restructuring and refinancing failing businesses. Business begin to fail because they mistime investments, deploy capital unwisely, misjudge markets, fail to adapt to changing markets and demand and because they are undercapitalized. Management is too often inadequate and too frequently overpaid. Structural costs weigh down profit potential.

Every job in a failing business is at risk if the business cannot be turned around.

Mitt was and is a turnaround expert, skilled in analyzing whether distressed companies can be saved. He brought management savvy and fresh capital needed for essential investments, like technology needed to make companies efficient and competitive.

Of course, underperforming and redundant employees were fired because their very presence made the company unprofitable.  Other employees got clearly defined job responsibilities and a chance to prosper as the reorganized business prospered. So, some were fired and others were hired. Big deal. Anyone running a small business knows the drill.

Mitt’s critics conveniently ignore that he and his partners at Bain Capital provided new risk capital to rescue and restructure the businesses that they purchased. By providing essential capital that preserved the jobs worth preserving they created the opportunity for new jobs filled by new employees with appropriate skills. It is perhaps understandable that politicians used to filling jobs with unqualified cronies and family members are stupiefied by Mitt’s business like approach to job creation.

Restructure or Die

A financially distressed business that is unable to change or obtain adequate working capital in the financial markets has few choices: restructure in an out of court workout; restructure by swapping debt for equity or new debt; and restructure in Chapter 11. None of the restructuring options are viable without new capital, and none work without drastic changes to how the business has been run. Companies that do not restructure are liquidated.

Management changes, union concessions, revisions of contracts always take place in a restructuring—just look at the chapter 11 cases of GM and Chrysler. Mitt criticized and still criticizes the secured loans to GM and Chrysler on philosophical grounds because the loans were made by theUSA. As a distressed debt guy, Mitt may feel a tad jealous that he and his private equity friends did not have enough capital to make the $100 billion of profitable secured loans to GM and Chrysler that got priority in repayment in the bankruptcy court proceeding. In predicting the failure of the government loan package, Mitt missed the business point which was that GM and Chrysler (and their employees) were able to change and that they could be reorganized with the right lender. And, Mitt missed the point that hundreds of thousands of decent jobs inAmerica’s heartland were at stake.

By sticking to his guns during his campaign, Mitt appears to lack concern for workers in America’s core manufacturing industries.


Mitt also argues that using the bankruptcy courts was inappropriate and that the holders of the bonds (many his friends in the world of private equity and restructuring) were treated unfairly. Mitt is naïve. His finance friends surely know that in every Chapter 11 case the lender making a dominant secured loan that has a first priority lien on all the assets of a Chapter 11 company like GM, has considerable influence and control on how the company is reorganized and who and how creditors are paid. GM’s sophisticated bondholders knew the bankruptcy strategies; this time they were outmaneuvered, so they should stop Mitt from his surrogate whining about the result. Putting aside the legal jargon and jockeying for priority, bankruptcy laws are a framework for settlement of disputes, and Mitt’s insistence on some non-existent principle of bankruptcy law makes him look inexperienced. If Mitt and his advisors can’t understand the bankruptcy laws, how will they possibly be able to lead the country in the next decade in solving far more complex matters of finance and social conscience?

It is time for Mitt to admit that his abstract principles were worth formulating, but that he was wrong about the practical merits of lending money to Chrysler and GM.



As a restructuring expert Mitt had to be smart, intuitive and decisive, and he had to make hard decisions. As a leader at Bain he needed to be well-informed and forward thinking. Our next President will be restructuring the military, restructuring Social Security and trying to reorganize Congress so that our elected officials stop acting like packs of snarling wolves. Maybe the country needs a restructuring expert like Mitt?

Michele Bachmann is a meteor of misinformation who is flaming on an atmosphere of facts. In some respects she is a good, calculating politician who has found the limelight by acting as a Tea Party spokesperson. She does a good job on TV, understands that the message of her party needs props and has a lawyer’s skill in staying on point. She understands that once on TV she can repeat her points, and just like all politicians is free to ignore the actual questions she is asked. However, she is a hypocrite and her hypocrisy will not play well on the national political stage

Michele grew up living off state supported  education and got a job with the federal government enforcing federal tax laws. Bachmann’s socialist leanings are transparent if inconsistent. She and her family are on the public dole, having taken over $210,000 of federal farm subsidies, while she opposes use of federal tax dollars for hospitals. Taking farm welfare payments may be commonplace in Minnesota and Iowa, but she will have a hard time defending these welfare payments.

Bachmann is a Tea Party Sympathizer

Michele’s embrace of the Tea Party is robotic. Like a good socialist follower she hews to tea party ideology, never wavering from the party line, mechanically repeating ad nauseum rhetorical slogans and ignoring facts. Our Congress of cowardly lionesses has no shame. Bachmann is allowed to stand at the podium, blue eyes shaded by dark lids, and spout endless nonsense—a true party member, never  showing independent thought. If Joseph McCarthy still held the floor, his inquisition would hold Bachmann in contempt for refusing to answer questions, and sentence her to life as a commentator on Fox News interviewing Sarah Palin.

Michele has cleverly infiltrated our democratic government by disguising herself as a Tea Party sympathizer. The voters of Minnesota miscast votes for her. Now Michele will start cutting their benefits, while she rolls in federal tax welfare to enrich herself. Let’s hope she balances the budget by reducing farm subsidies, restoring the free market to agriculture. Fat chance. Meanwhile socialist Michele is feeding out of the government trough of wages and free healthcare. Paying Bachmann her Congressman’s salary is like continuing to pay Bernie Madoff for investment advice. At least Sarah Palin is an American who is earning her own keep.  Bachmann’s greedy grasping at federal handouts shows she lacks the American virtue of independence.

Bachmann is a Meteor of Misinformation flaming out on an atmosphere of facts. If you do a survey of which Republicans comment on which subjects, you have to conclude that Bachmann is being misused by her party. Senior male politicians get to pontificate on important issues like Libya, foreign policy and provide analysis and debate over serious issues like funding entitlements. Michele is given the sad task of going on various “news” programs and spouting nonsense facts about clever Obama misleading Republicans, assertions that make her look uninformed and manipulative. I struggle to understand why Bachmann allows herself to be manipulated and sidelined, when she is smart enough to actually make an informed contribution to important public policy debates. The Supreme Court says that Michele can say whatever she wants, and the media will pounce happily on her ignorance. If Bachmann wants to be taken seriously outside of Minniowa, then she needs to be serious and participate in the public debate of the serious issues confronting the Untied States.

Howling Patriot

After my father’s second heart attack, while he was close to death in the hospital, he confided a secret that shows that President Barack Obama was not born in Hawaii. 

After his service in the Pacific, my dad moved to Hawaii, where he was stationed in Honolulu, working at Pearl Harbor, the Naval Air Station. His main job was keeping the naval base radar up and running, and updating the equipment. He pulled a lot of night duty, and since he was pretty senior, he could select his staff from civilians or sailors, and let’s just say he liked blonde employees who wore dresses. On slow nights he would delegate control of the radar unit and take some of his blonde employees on submarine watching exercises.

Anyway, one dark night they were at the beach “submarine watching”, when he heard a crying baby. Still being a responsible officer he decided to explore and waded into the surf where he found a native outrigger canoe with three adults and a baby swadled in a cloth and resting on palm fronds at the bottom of the outrigger. He said he spoke to the men who said they had been on the seas, starting from Micronesia, and had been caught in a storm. After resting on an atoll in the Pacific they used the stars to find Hawaii, where they had relatives. At Pearl Harbor in 1961 there were serious concerns about Russian spies, but arresting illegals was simply too much trouble. Plus, my dad had a lot of native girlfriends, so he didn’t much care where the adults and the newborn baby had come from.

 Anyway, he still had his diary showing that he met these immigrants and their baby on the night of August 3,1961. The next day, August 4, 1961, the birth of Barack Obama was recorded in Honolulu. While baby Barack was not born on the actual island of Hawaii, perhaps Barack was born within 2 miles of the coast, which is close enough for me to recognize him as a legitimate President.

After he died, I searched for my dad’s diary, and inquired of the Navy about his service record and whether he was even on duty the night in question. The response was that there were no detailed records, but it was confirmed that he served in the Night Radar Unit at Pearl Harbor.

  Jesus Christ was born in  a manager and Barack Obama was born in  a native canoe  under the Pacific stars. God Bless the President of the United States, even if he is an illegal immigrant born under celestial stars.

Howling Patriot

Judge Vinson’s Florida decision to declare the Affordable Healthcare Act unconstitutional primarily relies on his view that the mandate that individuals purchase healthcare insurance is not an activity that Congress can regulate under the Commerce Clause of the Constitution. There is no plain meaning or simple explanation of the Commerce Clause, which has itself been subject to varying interpretations.

Vinson’s approach  was to selectively review cases interpreting the Commerce Clause, while making little attempt to put the past decisions of the Supreme Court in historical and political context. It is not surprising that Vinson seems puzzled in his analysis since he is not the first federal judge (or Supreme Court Justice) to flail at understanding the Commerce Clause or to find selective meaning from prior decisions.

Felix Frankfurter, a noted jurist, lectured about the Commerce Clause before he joined the Supreme Court. His lectures were later published in a book, “The Commerce Clause Under Marshall, Taney and Waite.”One consistent theme is the deference of the Justices to political decisions by Congress.

Of Justice Waite he says, “Waite was governed by his general attitude in leaving to Congress, rather than in assuming for the Court, the accommodation of the commercial interests of state and nation.”

Frankfurter is fond of Harvard Law Professor James Bradley Thayer, and a quote he selected from Thayer is quite apt to today’s heated discussion and polemics, which obscure the legal issues. Although Thayer wrote in 1899, his comments are equally apt in 2011.

Thayer said:

“In considering this matter of constitutional power, it is necessary, in view of what we are reading in the newspapers nowadays, to discriminate a little. Our papers and magazines and even the discourses of distinguished public men, are sometimes a little confused. We must disentangle views of political theory, political morals, constitutional policy, and doctrines as to that convenient refuge for loose thinking which is vaguely called the “spirit” of the Constitution, from doctrines of Constitutional law. Very often this is not carefully and consistently done.”

Today in 2011 we can read commentators telling us that Judge Vinson’s decision is going to destroy state government because of his purported ignorance of the Constitution, as well as other commentators who seem not to have the slightest grasp of the scope and limitations of his decision—the Sky is Falling commentators on the web being the most egregious offenders.

Thayer recalls that it was, in the past, seriously argued that it was unconstitutional to issue paper money and make it legal tender, arguments often voiced with vehemence. Thayer observed that:
”The trouble has been, then and now, that men imputed to our fundamental law their own too narrow construction of it, their own theory of its purposes and its spirit, and sought thus, when the question was one of mere power, to restrict it great liberty.”

Of the Constitution, Justice Thayer said:

“As it survives fierce controversies from age to age, it is forever silently bearing witness to the wisdom that went in to its composition, by showing itself suited to the purposes of a great people under circumstances that no one of its makers could have foreseen.”

Thayer also said: “Petty judicial interpretations (of the Constitution) have always been, are now, and always will be, a very serious danger to the country.”

Judge Vinson, by inserting local politics into his decision and by pandering to the Tea Party in his analysis of the Constitution, has done a grievous wrong to the drafters of the Constitution as well as an injustice to the lower court judges who undertake serious analysis of difficult issues. Vinson, like many judges before him, has insidiously inserted petty politics and polemics into a serious issue of Constitutional interpretation. Thayer might well consider Vinson to be a danger to the country.

Palin Has Earned Respect

February 17, 2011

Sarah Palin has proven to be an athletic, powerful, astute, photogenic and wealthy woman. Since her selection as a vice-presidential candidate in 2008 and her loss, she has  capitalized on her national recognition and visibility to create a media personality and earn millions of dollars.

Despite her success, her achievements as a businesswoman/politico have been criticized or ignored by both Republicans and Democrats. A bigger issue is why women generally have not celebrated her success. It is understandable that fat, old media men are befuddled by her use of power, and the ilk of Matthews, Beck and O’Reilly are understandably threatened by an attractive, aggressive woman who has amassed wealth and power without asking for or needing their blessing.

Ms. Palin is everything these media men are not. She knows how to start a snowmobile and feed sled dogs. She actually enjoys going on long hikes on cold snow days, and carries her own pack. She uses guile, brains and talent, yet Ms. Palin is subjected to snide criticism from pundits for both parties. Perhaps the TV media folks feel unloved, since they need Palin more than she needs them.

The politico media entertainers are so used to manipulating their guests by scripting fake conflicts and soliciting polarizing comments, that a real personality that is beyond their control puts them off guard. It is worth observing that there are few women commentators doing political entertainment on TV, perhaps because the supercilious male media moguls controlling content won’t deign to put an intelligent woman journalist in prime time. Rachel Maddow may be an exception, but  her anti-Palin jibes seem so unfair and inconsistent with what feminists claim to want. Sadly, Maddow’s entertainment hour needs thoughtless, manufactured polarity to get entertainment kudos and advertiser bucks from the old men who run her program

Like CNBC TV, Fox “News” is a misnomer. Fox News is a  pure entertainment show, just like CNBC. None of the hosts purport to be journalists or to have any interest in facts or objectivity. The concept of “fair and balanced” ( a calculated suggestion of objectivity) is not allowed in the studios, and to suggest otherwise is a sick joke on real journalists who try to be objective.

Sometimes Glenn Beck’s rabid rants are entertaining, with a rare fact thrown in as news so that it can be meanly distorted. What is curious is that both Fox and CNBC ignore Palin’s credentials and success. Where are the feminists who too often support candidates that are wealthy philanderers. Why are feminists such harsh critics of Ms. Palin, who has been remarkably successful in using her talents to amass prestige and wealth and power, goals that feminists espouse for women.

Ms. Palin has used her success to support other women running for office, and surely in the long run it will be better to have more women in office running the country, rather than serving tea and crumpets  to unfit, lazy men.

Ms. Palin is young and has plenty of time to decide whether and when to re-launch her political career. In the meantime we should give her the same recognition and applause that we would give to a man with similar achievements