Friday, June 15, 2012

Testosterone Surge

In the area of political satire and humor, Jon Stewart and Stephen Colbert have few peers.   But one man is far, far more amusing.    Have you heard this one from Mitt Romney?

And they have manipulated their currency to make their products artificially inexpensive. It's hallowed out many of our manufacturing companies in this country.    That's unacceptable. And I will label China as it is, a currency manipulator, and I will go after them for stealing our intellectual property. And they will recognize that, if they cheat there is a price to pay.

That was from a debate last September 6 with his Repub competitors but the former governor has repeated the pledge since then.     And it is about as likely the presumptive GOP presidential nominee will follow through as it is that he declare himself a "socialist" at his first debate with President Obama.

During ABC's This Week on June 3, senior campaign adviser Eric Fehrnstrom asserted that a President Romney would declare that China is a currency manipulator," after which Paul Krugman slapped him down, explaining

I was very much for that. I've been demanding that we declare -- but the window for that has passed. Right now, the Chinese economy is tanking. So if you were thinking you were going to get a big boost out of beating up on the Chinese now, two years ago I thought was really a good time to do that. But my god, now that is totally out of date.

In April, Reuters had found "The Chinese currency has risen 31 percent against the dollar over the past seven years, eroding a chunk of the price advantage Chinese exports once enjoyed on world markets. At the same time, China's huge trade surplus with the world has shriveled."   But it's not as if the get tough on China policy is second nature to the former governor.     Earlier this month, The Huffington Post's Rachelle Younglai reported  

From his early days at private equity firm Bain Capital to his time as Massachusetts governor, Romney welcomed investments from China, and bought and expanded companies that benefited from its low labor costs and controlled currency. As chairman of the 2002 Winter Olympics, he also said Beijing should not be punished for human rights abuses...

Bain, the private equity firm Romney founded in 1984 and ran through 1999, invested in companies that have, like many U.S. corporations, taken advantage of cheaper Chinese manufacturing costs while also investing in the country to tap rapidly growing consumption there.

Romney and his campaign have often talked about how three companies that Bain invested in during this period - the Staples Inc, Sports Authority Inc and Domino's Pizza Inc chains - have gone on to create more than 100,000 jobs combined.

What he does not discuss is the role China is playing in these businesses. For example, of 80 items randomly chosen in a Sports Authority store in Washington, D.C., earlier this month, about two-thirds were Chinese produced - including tennis balls, bikes and boxing gloves.

At a Staples outlet in New York, the figure was more like 40 percent, including staplers, glue and rulers. The percentage may be bigger on a sales basis because a lot of the higher-priced goods, like computers and other electronic gear, come from China...

Other Bain investments also have China connections.

For example, in 1996, Bain invested $2.1 million in customized doll maker Lifelike Co, which had operations in the United States and Hong Kong, according to "The Real Romney," a 2012 biography of the candidate by Boston Globe reporters Michael Kranish and Scott Helman. The book said Lifelike filed for bankruptcy in 2004. It was not immediately clear if the company manufactured in mainland China.

In 1997, Bain invested $8.36 million in Midwest of Cannon Falls, a company that sells novelties such as holiday ornaments to small retailers. Former Midwest Chief Executive Officer Kathleen Brekken told Reuters that at the time, most of the company's products were made in China, but she declined to comment on Romney or Bain.

In his own words, Romney has supported China in the past.

Recalling a visit to a factory there in 1998, Romney praised the Chinese work ethic. "They cared about their jobs," he told a forum on the future of U.S. cities that year. "They wouldn't even look up as we walked by."

Skeptics in both Washington policy circles and the business community see Romney's current rhetoric as designed to play on the fears of economically frustrated Americans, who worry that China has been stealing jobs from the United States.

However, a look at Romney's tenure as Massachusetts governor between 2003 and 2007 also suggests that he may be more measured towards China if he becomes president.

Romney welcomed Chinese Premier Wen Jiabao to Boston's port in 2003 and boosted Massachusetts' exports to China by 235 percent, according to state figures. The governor also praised the role of Beijing-controlled China Ocean Shipping Co in building the trade relationship.

When Romney was chairman of Salt Lake City's 2002 Winter Olympics and Beijing was vying for the 2008 summer games, he said he was against denying China an opportunity to host the event because of the nation's human rights abuses.

"They have practices, as reported in the media, that violate my sense of human rights, but we should not build walls even if we vehemently disagree with many of their practices," Romney said at a 2001 news conference, according to the Chicago Tribune. "Building bridges increases the possibility for spreading the ideas of civil societies."

If anything, HuffPo was a little conservative in suggesting that Mitt Romney's words may not ring true.       Sheldon Adelson, who bankrolled Newt Gingrich's abortive presidential bid to the tune of $21 million, met privately with Romney in late May and now has contributed $10 million to the Romney SuperPac, Restore Our Future.      He is, CNN notes, "the chairman and CEO of the Sands Corporation, which owns three casinos in Macau along with multiple properties in Las Vegas. The Sands Macau opened in 2004, followed by the Venetian Macao in 2007 and the Four Seasons Hotel Macao in 2008."   With a net worth exceeding $20 billion, Adelson is considered by Forbes Magazine to be among the ten wealthiest Americans.

More assistance is likely from, as The Wall Street Journal described him, the "chairman and chief executive of Las Vegas Sands Corp., which includes the famous Venetioan casino in Las Vegas, as well as casinos in Macau and Singapore.   " With a net worth exceeding $20 billion, Adelson is considered by Forbes Magazine among the ten wealthiest Americans.

It should come as no surprise, then, that John McCain, long an advocate of campaign finance reform, has questioned Adelson's generosity to Romney, remarking "That is a great deal of money.   And again, we need a level playing field and we need to go back to the realization that Teddy Roosevelt had that we have to have a limit on the flow of money, and that corporations are not people."     The Arizona senator maintained "Maybe in a roundabout way, foreign money is coming into American political campaigns."

Maybe, and quite likely.    If elected president, Mitt Romney might recognize mainland China as a totalitarian state ruled by its communist party which threatens the existence of a sovereign nation, perpetrates economic sabotage and builds up its military for no apparent reason, bolsters the regime in Tehran, is uncooperative on Syria, and far more enamored of child labor than baby girls.    Or he might consider the interests of a guy who has chipped in several millions of dollars to his presidential campaign, with a likelihood of additional support. Can you guess which option he'll choose?

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