Friday, August 03, 2012


The Obama Campaign is in trouble. The country's big issue is the economy and things are not doing well there. Unemployment rose to 8.3%. Only half of college graduates can find a job that requires a college degree and a quarter of them cannot find any job. Economic growth dropped between the first and second quarter of 2012 and we are now in the red zone for entering a new recession.

GM had been one of Obama's biggest success stories. Wile Romney argued that it should be allowed to go bankrupt, Obama (and Bush) stepped in to save it. Its debt was restructured and it received nearly $100 billion in debt relief and new money from the government and private investors. By 2011 it was showing a profit and had regained its title as the world's largest car maker.

Things at GM no longer look so rosy. Sales are down and it is back to losing money. Its stock has lost a third of its value. It now looks like GM's recovery was based on natural disasters in Japan temporarily crippling Toyota. Now that Toyota is recovering GM's sales are down. At the same time, Romney is running ads reminding people that part of Obama's bailout included aggressively closing dealerships which resulted in tens of thousands losing their jobs.

With all of this going on, the Obama strategy is to throw dirt at Romney. That is why they are so desperate for additional tax returns. They are hoping to find something that they can use (it is possible that they already have the tax returns but cannot use the information in them because they were obtained illegally).

With just the information they have they have accused Romney of hiding money in offshore accounts in Switzerland and the Caymans. To cover all bases, they implied that even if he had done nothing wrong he was being less than patriotic by not using American banks. They also made this argument over Romney's overseas earnings (he invested money overseas when he could have been investing here and creating American jobs). They have accused him of "forgetting" about overseas accounts and, again, implied that these are being used to funnel money to tax shelters. They complain that his tax rate was too low (it is based on capital gains) and that he earns more in one day than most Americans earn in two years.

In addition, they have accused Romney of outsourcing jobs. When it was pointed out that he was no longer at Bain when the outsourcing took place they asserted that he had committed a felony on Bain's SEC forms.

All of that came from the two years of returns (one complete, one partial) that Romney has released. Undoubtedly they will find lots more if they get additional returns.

Enter Senate Majority Leader Harry Reid who says that a Bain investor (not an officer) told him that Romney has not paid any taxes for the last ten years (apparently not counting the two years that Romney did release returns for). In order for this accusation to be true Romney would have to be bragging about his tax shelters to his former partners who, in turn, would have to be sharing that information with investors.

Keep in mind that Romney left Bain in 1999 and severed all ties with it in 2002 so he would have little opportunity to be swaping stories about tax returns with people from Bain and would have no reason to be meeting with Bain investors.

When asked to give a name, Reid refused. Instead he claimed that other people had made similar charges.

Note that Reid is not accusing Romney of cheating on his taxes. He is just accusing Romney of taking advantage of tax loopholes. (This demolishes Obama's claim that Romney wants to lower his own taxes while raising taxes on the middle class.)

The point of this is to put Romney in a bind. If he does not release his returns it looks like Reid is correct but if he does then he opens himself to more nitpicking from Obama's people.

Reid has admitted that he has no idea if his charges are true. This did not stop him from taking to the Senate floor and saying that Mitt's late father George must be ashamed. Reid has not confided how he communicates with the dead.

Keep in mind that Reid has not released any of his own tax records. He is a multimillionaire who spent most of his career in elected office and much of it representing Los Vegas casinos. Elected office does not pay that well so Reid either received illicit money from gambling concerns or benefited from insider trading. Either way he should not be making accusations about anyone else.

Normally, even if it was true, politicians would not resort to "I don't know if it is true but someone told me..." attacks. At the least they would try to substantiate the charges before making them public. But with the economy tanking Reid's main hope for clinging to his title as majority leader rests with Obama's coattails.

It is all about throwing dirt.

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