Month: January 2012

The Bain Method

James Surowiecki's critique of private-equity firms deserves a read. The bottom line:

[H]istorically private-equity firms have in principle had a powerful incentive to make companies perform better. In the past decade, though, that calculus changed. Having already piled companies high with debt in order to buy them, many private-equity funds had their companies borrow even more, and then used that money to pay themselves huge “special dividends.” This allowed them to recoup their initial investment while keeping the same ownership stake. Before 2000, big special dividends were not that common. But between 2003 and 2007 private-equity funds took more than seventy billion dollars out of their companies. These dividends created no economic value—they just redistributed money from the company to the private-equity investors.

Joe Klein tosses in his two cents. If you want to see how this kind of thing was central to how Bain operated and operates, see this.

This matters. The question to me is how Bain's methods – with some greatly varying results – nonetheless gave Bain investors increasingly massive rewards, buttressed by tax breaks in a lobbyist-run tax code. That combination is politically toxic. And should be.

Has The GOP Officially Dropped The Two-State Solution?

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Last week the RNC unanimously adopted a resolution that suggests so. The RNC is now downplaying the resolution as non-binding. Buzzfeed's take: 

The resolution does … indicate the extent to which the party's grassroots will back Israel in basically any event, and would support a far more maximal Israel position than that held by any but the most hawkish Israeli parties.

Now consider who rescued Newt's candidacy with millions of dollars. That's Sheldon Adelson, a gambling business billionaire, who is a Greater Israel enthusiast, and deeply involved in Israeli politics on the far right. Wayne Barrett has a must-read on Adelson's politics:

Adelson even pulled his money out of AIPAC, the top-pro Israel lobbying group, when it appeared to support a 2007 peace initiative championed by Olmert, President Bush, and Secretary of State Condoleezza Rice, an effort denounced by Gingrich at the time. "I don’t continue to support organizations that help friends committing suicide just because they say they want to jump," explained Adelson, who was already spearheading a coup designed to replace Olmert with Netanyahu.

Adelson has given $13 million to Newt's PACs and campaigns to date. And Newt's position on the Israel-Palestine question has shifted dramatically, as Barrett notes, in that period. Here is Newt from 2005:

The desire of some Israelis to use security as an excuse to grab more Palestinian land should be blocked by Washington even if that requires employing financial or other leverage to compel the Israeli government to behave reasonably on the issue of settlements. It is vital to our credibility in the entire Middle East that we insist on an end to Israeli expansionism.

Now, the Palestinians are an "invented people" and no pressure should be put on Israel at all, with respect to its accelerating colonization and de facto annexation of the West Bank.

I just think we should recognize what we now have: a Republican party whose policies on the Middle East are to the right of the Likud party, and whose front-runner has been financed by a man who regards the settlements as a non-issue. Just as important is Adelson's eagerness for a war against Iran:

In Connie Bruck’s extraordinary New Yorker profile of Adelson, she reported that as early as June 2007, Adelson was so ready for war with Iran that he separated the men from the boys on the basis of their willingness to strike Iran. At a conference in Prague sponsored by his own Adelson Institute for Strategic Studies, he dismissed the son of the former shah because, he told one participant, “he doesn’t want to attack Iran.” He said he liked another Iranian dissident at the conference “because he says that if we attack, the Iranian people will be ecstatic.” He attributed his own lust for an attack to his love of Israel, adding that he didn’t care what happened in Iran.

Against all this, Goldblog is exercized most of all by descriptions of Adelson as an "Israel-Firster." Marc Tracy is candid enough to note that "in Connie Bruck’s profile, Adelson is portrayed as basically a single-issue guy."

Well: he is, isn't he?

(Photo: Sheldon Adelson, chairman of Las Vegas Sands Corp., speaks during an interview in Hong Kong, China, on Monday, Nov. 30, 2009. Sands China Ltd. dropped on its first day trading after raising HK$19.4 billion ($2.5 billion) in the city's biggest initial public offering this year. By Jerome Favre/Bloomberg via Getty Images.)

Gingrich Wants Another War

Ackerman studies his statements on Iran:

How to overthrow the Iranian regime? Gingrich has floated a variety of tactics. Some days, he suggests unleashing bombs and cyber attacks. Other days he thinks all you need are a few radio broadcasts, deniable assassinations, the good intentions of the Iranian people — and, just maybe, the moral force of the leader of the Catholic Church. Either way, Gingrich is promising a reckoning with Tehran. And he’s going to have "so much fun" doing it.

This is the candidate Republicans trust most on foreign policy. Beinart likewise looks at the GOP's rhetoric on Iran:

The extraordinary thing about today’s Iran debate is that being wrong about Iraq has barely undermined the hawks’ influence at all. In 2012, as in 2002, Republicans are driving the political discussion, and in 2012, as in 2002, Democrats are petrified about being seen as too soft. Once again the media, which did not cover itself with glory in the run-up to Iraq, bears part of the blame. To allow Gingrich, Santorum and Romney to saber-rattle on Iran, as they have in debate after debate, without forcing them to confront the consequences of their saber-rattling on Iraq, is professional malpractice.

Gabby’s Farewell

Amy Davidson reflects on the above video:

As one of her last acts as her district’s congresswoman, Giffords, according to the Arizona Daily Star, will be to complete the “Congress on Your Corner” event she started that day, with some of the people who had come to see and talk to her then, this time in a private place. Some, of course, won’t be there, including Christina-Taylor Green, a girl who was interested in politics and who died that day, at the age of nine. One hopes that Giffords’s successor will have have such open meetings, too, and neighbors will keep bringing children, who are also finding their own voices.

Full Unconcealed Panic Watch II

Frum notes that Newt's former colleagues are not among his fans:

It's striking that almost none of Gingrich's former colleagues in the House has endorsed him for president. Striking that nobody associated with a past Republican presidential association has done so. He is a candidate of talk-show hosts and local activists — and of course of Rick Perry and Sarah Palin — but not of those who know him best and have worked with him most closely. Gingrich may raise more money after his South Carolina win. But prediction: Romney will raise even more, among the great national network of Republicans who recognize that to nominate Gingrich is to commit party suicide.

Mr Chutzpah

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Victoria Toensing, Marianne Gingrich’s lawyer, unloads on Newt:

Marianne Gingrich’s interview with ABC revealing former husband and presidential candidate Newt Gingrich’s request for an open marriage was not about a wife rejected. Rather, it was an insight into the persona of Newt: When he gets power he believes the rules do not apply to him.

Nothing is more telling of this trait than Newt’s response to Marianne when she asked how he could reconcile asking for a divorce because of an affair with another woman and speaking days later about family values to a Republican women’s group. His answer? “People want to hear what I have to say. It doesn’t matter what I do.”

(Image via Dreher)

From Gingrich To Palin To Gingrich

Let us now play the tiniest violin for what is called the "Republican Establishment". I'm not sure what this phrase means or represents any more – the Chamber of Commerce? John Boehner? The Bush family? But the concept of a responsible, sane, pragmatic party leadership able to corral or coax or manage a party's base is, it seems to me, a preposterous fiction on its face, as we are seeing.

The Republican Establishment is Rush Limbaugh, Roger Ailes, Karl Rove, and their mainfold products, from Hannity to Levin. They rule on the talk radio airwaves and on the GOP's own "news" 137499505channel, Fox. They have never quite reconciled themselves to Romney since he represents a gray blur in a stark Manichean universe they have created for more than a decade now. In this universe, there is only black and white. There is only them and us. Anyone who diverges an iota from this schematic is speaking without a microphone in front of a revving airplane engine.

Listen to Gingrich's victory speech. It was completely, fundamentally, organizationally Manichean, if you'll pardon the expression. He limned a familiar battle between independence and dependence, pay-checks vs food stamps, America vs "Europe", the American people vs elites "forcing people" for 35 years not to be American, the traditional America vs the "secular, European style socialist bureaucratic system". There is no gray here. There is no nuance. And there is the imputation to the other side of malign motives, secret agendas and foreignness that has been Gingrich's hallmark since the very beginning, when he assaulted the traditions of the Congress until that institution eventually had to repel him.

Listen to Limbaugh, the GOP's chief spokesman. How does a Romney channel that level of viciousness and rage? Listen to Hannity. How does a smooth manager reach a base that wants the same Manichean approach to foreign policy, in which there is only one ally (Israel) and enemies everywhere else (Europe, China, the Arab world, Russia)? Read Mark Levin. There are only two options now on the table, as he sees it: freedom or slavery. And a vote for Obama is a vote for slavery.

This is the current GOP. It purges dissidents, it vaunts total loyalty, it polices discourse for any deviation. If you really have a cogent argument, you find yourself fired – like Bruce Bartlett or David Frum – or subject to blacklists, like me and Fox. You can find Steve Schmidt lamenting Gingrich for very good reasons, and then you realize that it was Schmidt – a moderate, sane, level-headed professional – who helped pick Sarah Palin for the vice-presidential nomination. Because he correctly realized that she would actually add base votes and prevent a total Obama tsunami. In the end, he knew what he had to do. In the end, the "establishment" knows the party they have created.

This now is the party of Palin and Gingrich, animated primarily by hatred of elites, angry at the new shape and color of America, befuddled by a suddenly more complicated world, and dedicated primarily to emotion rather than reason. That party is simply not one that can rally behind a Mitt Romney. He too knows what he has to say – hence his ludicrous invocation of Obama as some kind of alien being. But it doesn't work. He believes it – since he seems capable of genuinely believing in anything that will win him votes and power. But he doesn't have the rage to make it work. And that rage cannot be downward, as Romney's often is – toward hecklers or interviewers. It has to be upward – at vague, treasonous elites. It has to have that Poujadist touch, that soupcon of contempt, that sends shivers up the legs of the Republican faithful, reared on Limbaugh, propagandized by Fox, and coated with a shallow knowledge of a largely fictionalized past.

This is Gingrich's party; and Ailes'; and Rove's. They made it; and it is only fitting it now be put on the table, for full inspection. Better sooner than later.

Obama is a poultice. He brings poison to the surface. Where, with any luck, it dies.

(Photo: Supporters of Republican presidential candidate, former Speaker of the House Newt Gingrich celebrate at a primary night rally as he is announced as the winner of the South Carolina primary January 21, 2012 in Columbia, South Carolina. By Richard Ellis/Getty.)