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Sunday, October 23, 2016

When asked for my reaction to the spectacular failure of Team Romney’s Get Out The Vote (GOTV) computer system touted as the secret weapon that would defeat Team Obama on Election Day, I thought it was like beating a dead horse.

The way Team Romney failed and tried to hide it explains why Karl Rove and Fox News refused to believe what was happening election night, and for that, there is something to learn. As part of the campaign post-mortem, the bust that was Romney’s ORCA system simply underscores the fact that Romney’s business success wasn’t based on productive business purposes.

Bain’s success consisted of taking advantage of a tax arbitrage from issuing junk bonds and paying massive fees to the arrangers via offshore tax-advantaged investment funds. That’s true for all LBO deals, and one of the fundamental failures of our tax policy for the past four decades. When a company’s profits are turned into interest payments on newly issued junk bonds, that company stops paying any income tax. Think of it as an easy way to increase profits by just over 50% by not paying a 35% tax rate on those profits.

We also reward monetizing and extracting prior earnings such as fully funded pension funds and company-owned factories with far lower tax rates than we reward creating new earnings, and that has made some huge fortunes for those like Mike Milken who recognized the arbitrage.

But Team Romney did blow it on Election Day with its GOTV system, and as a former large-scale system developer, I can see why.

First and foremost, they didn’t test the system before deploying it. A test, by the way, doesn’t consist of having the developers show off the screens and reports they expect the system to produce. A test of a real-world data aggregation and analysis system consists of end-to-end simulation of the operation, with the actual people who will use it at each node where a human being is involved.

Any competent business manager knows this.

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Copyright 2012 The National Memo
  • Some people think it should be illegal for folks like Bain to make the kind of money they did. Here is where I shock my liberal co-readers. I do not think it should be illegal. I do thing they should tax the holders as Income, not Investment, and they should be penalized for every job they offshore as a result of their “Restructuring”. Romney touts being a job creator. Maybe, in China, but the best he did in the US of A is to create a bunch of minimum wage jobs with less than minimal benefits.

    • nobsartist

      I think they should tax both types of income equally AND charge medicare and SS on all of it.

      Thats what I call “fair tax”.

      by the way, willard the rat is in business with the chinese government and his job is to move as many business to china as possible.

  • daniel bostdorf

    Baron Cormac….Apologist for Bain and Romney?

    What Romney/Bain did was greedy, soulless “vulture capitalism,” not venture capitalism that creates American jobs and keeps them here, not exporting to China…

    So let’s not argue this simple truth. It may be legal, but it simply is immoral, unethical and a downright lie for Romney and Karl Rove playing spin doctor to say Romney had nothing to do with Bain after “retiring” in 1998.

    If Romney “retired” from Bain Capital, why did Bain continue to describe him as its chairman and CEO since? If he was Bain’s “sole stockholder,” he could NOT have been as detached from its activities as he and Karl Rove claimed?

    The Boston Globe reported Roberta S. Karmel, a former S.E.C. commissioner who teaches at Brooklyn Law School as saying:

    “It doesn’t make a whole lot of sense to say he was technically in charge on paper but he had nothing to do with Bain’s operations…Was he getting paid? He’s the sole stockholder.”

    Romney owned Bain, had his tax returns to cover it up, and DID have say in its investments, as well as directing the “vulture capitalism.”

    Therfore, The Attorney General of the USA and SEC should investigate these fraudulent claims that Romney “retired” from Bain Capital.

    Here is the real point of this article:

    “Mitt Romney is a lousy business manager compared to Barack Obama. This is just another example. So let’s bury this horse and stop beating it….I would suggest that we take note of the names of the senior staffers who sold Romney on this particular failure, and watch whether they reappear in future campaigns. After all, the voter registration contracts for six important states in 2012 were outsourced to a man who had already been accused of voter fraud in prior election cycles, yet the Republican National Committee seemed genuinely surprised when his “new” company committed voter fraud in several states.”

    • latebloomingrandma

      This is a pretty good example of the new tendency to “contract out” certain functions, usually to save money–in business, the miltary, etc. Too many failures if the main entity loses control of the issue. Remember the soldiers in Iraq electrocuted in the shower after a “contracter” did faulty wiring? Not to mention Blackwater. Businesses need to reconsider all this outsourcing stuff.

      • Lisztman

        Outsourcing certain functions has another advantage. When the resultant product is substandard, unethical, or downright illegal, the contractee is able to distance himself from the contractor: “Oh. Sorry. We didn’t know that this contractor has a history of cheating.” And make himself (or themselves, as in the case of the Republican Party) out to be a victim of circumstance.

        I believe the FBI is within the DoJ — which lies in the Executive Branch of the government. I sure as heck hope that they’re building a file to put Nathan Sproul out of business and into the cell he so richly deserves.

        • Along with a few more Republican big wheels.

    • Romney was supposed to have retired from Bain in 1999 yet all the paperwork and stuff that had to be sent to the SEC listed him as the CEO, President and sole stockholder of Bain until the first of 2003. He and his partners tried to say he retired retroactive back to 1999. Has anyone ever hear of anyone retiring retroactive going back 3 or more years? He needs to be investigated for how his 401 K pension got to be in the millions, I thought there was a limit as to how much money one can put in a 401 K yearly. Romney also made the statement that in his 25 years with Bain they created 100,000 jobs.(means 4000 jobs a year) since Bain was not started until 1985 or 1987 and he supposedly retire in 1999 which if true he would have only been at Bain either 14 or 12 years in 1999, yet he stated in his 25 years with Bain so that means he was a part of Bain until at least 2010. Yep he and his partners in Bain need to be investigated for tax fraud and several other things.

  • nobsartist

    A couple of hundred thousand? Try much more than that. the whole romney campaign was a laundry job.

  • Fox News what a joke ,,lol they think they know every thing lol maybe Rush L will run next time lol

  • MasterWes

    This is not going to sit well with all of the Tea Party trolls – they will say this is nothing more than liberal hog wash. I guess they know hogwash, since they bathe in it constantly when the get their evening news…

    • northroader1775

      I seriously hope they do think it’s all liberal hogwash…I see no point at all in educating them. Let’s let the teabaggers believe they know just how to win and start planning to wipe them out now…the combination of two years of “hard work ground game” and just letting these idiots keep up the talk, should be enough to crush them and take some decent repubs with them probably. If I was a moderate republican centerist I would be distancing myself from the teabaggers as fast as possible…I would be jumping across the aisle to find bipartisan ground or even changing parties.

  • William Deutschlander

    In truth Romney is a starched shirt who vandalizes companies and rapes all of the assetts of the companies, that is not capitalism nor is it management! That is how he accumulated his multi million dollar I RA and filled his initial offshore accounts. Today they aquire profitable companies, layoff the employees, steal the pension fund, ship the equipment to China, get a tax refund for so doing and hire chinese labor, without benefits or safety, ignore pollution and pay the chinese $1.00 per hour without overtime pay.
    Romney is the 21st Century, Robber Baron of the 1920’s! Do you understand why Romney hates COLLECTIVE BARGAINING in government and the workplace?

    • latebloomingrandma

      I can finally sleep at night, knowing that the country dodged the bullit of a Romney adminsitration. It’s difficult enough to “trust” those high elected officials who effect our lives in so many ways, but Romney, the guy of so many personalities and positions was in a class by himself.

  • alsoavietnamvet

    Regarding the testing of Mitt’s GOTV system, Howard Hill wrote: “Any competent business manager knows this”. Well, the testing of GOTV did not involve firing people, stealing pension contributions, and shipping jobs to China; Mitt was, obviously, out of his element!!!

    • I hear Mit’s wife, Ann is glad she doesn’t have to move into such a small house, [rent free, with servants and top cheffs.]

      • She was, reportedly, seen on 5th Ave just this morning, returning her tiara to Tiffany’s!


    Final Word

    So hopefully we can now hear the end of RoMoney and “how he saved the Winter Olympics.”

    Fact is, Mittens didn’t save anything except a few of his Mormon buddies butts who tapped the till to the point that Federal Funds were needed to replace the money they had secretly squirreled away.

  • commserver

    I would tell a story about system development.

    I was hired to replace a person who was very anxious to leave. He was told to make sure that what he was to work on was completed and accurate. He “did” so and gave a “demo”.

    When I started I was to told to make sure that the new code was able to be consolidated with the old code properly.

    The 1st thing I did was to assemble the source code to get a complete listing. To my surprise there were numerous assembly errors.

    To make a long story short, my predecessor had rigged the code so that the “demo” was just that. He made sure that it worked by entering exactly what was needed to work. No more.

    The moral is that you need to have complete system test to make sure that everything works. That is not what happens in many cases.

    It is obvious that Team Romney missed that point. They only “demo” with the expected results that they wanted.

    • I was reading somewhere that Romney might be finding himself in jail because he got money ferom GM to the tune of 15 million dollars putting it all in his wife’s offshore account.

  • Romney is a crook and we almost made him President.

  • anyasnote

    As I said before. USA is not a Business and can not be run as such. I did say that Romney will wine because of all the money being spend and the Billionaires don’t like to lose and will buy the USA. They ALWAYS want ROI. This time the LAZY, 47% good for nothing, who wants free housing, food, medical etc SPOKE and finally voted for their benefit not the rich.LOL However WE DID not finish the job, House is in the hands of Repukes and Bonehead made it clear that it will go on, McConnell will say that their objective is to DENY Obama Third Term . LOL. LOL. LOL.
    Obama is a better choice and we know how he stands on things. Both parties tried to show their best in favor of the middle class, but Obama won hands down. A rich man who never walked in a poor man shoes have no idea how some times the walk is tight, but he is walking. Give a rich man poor man shoes and he will stop walking, too painful and uncomfortable. His feet NEVER experienced the lack of comfort, therefore have no idea
    how far he can go if ever.
    Now is the time to get rid of Bat crazy (sorry bats U have more common sense than her)
    Bachman, and few others, KING for one should have not been reelected.. HE IS THE MOST VIOLENT, CRUEL PERSON AGAINST ANIMALS and not so far from being indifferent to a humans. Iowa, thank you for voting for Obama but thumbs down for keeping King, get rid of him, he is no good. Just watch how some of them to keep their jobs will swing, to make you believe they changed. Leopard NEVER change his spots, he change his hunting tactics.

  • His first and last failure is that he lied from the start,and lied in the end.

  • ayayaboy

    I have been telling you guys for the past six years that Romney is fake and fictitious. This election was a clear warning to Republicans. The Republicans have fooled ordinary Americans for centuries. The time is up. Politicians must get real. If republicans continue following Romney, ryan, Cantor and Trump, they will certainly fall again on the sharp edge of their blade in the next midterm election. If they continue with capital “NO” as usual, they will lose in Arizona, Tenesee, Alabama, South Carolina and Mississippi. The House is the last chance for Republicans to become responsible or they may have that party on life support or on vegetable status. Their ploy has been discovered.

  • Tsk. Tsk. Tsk.Romney is a horse’s end! HPHLMAO!

  • Thank God, we dodged a bullet in this last election! The body which is composed of the American people cannot afford one more affront to its entity.

  • The Robbers Barons were predatory but at least they created things: railroads, steel mills, banks. What does this 21st century financial engineering create? Vulture finance merely redistributes income and assets. There is much discussion of the need for tax reform and this is a good place to start