Sensata: Romney's Hypocrisy

[John_Stamos_Left_Ear]

Here is the latest from The Huffington Post which should encapsulate the story thus far and introduce this issue to those who might not be aware:

Right now a company named Sensata is moving equipment out of a factory in Freeport, Ill., and shipping it to a factory in China. Sensata will be laying off all of the American workers, but first they are making the workers train their Chinese replacements. The workers’ last day is the day before our election. Here’s the thing: This company is owned by Bain Capital, and Mitt Romney – who says he is against shipping jobs to China – will make a fortune from the move to China.

The Sensata employees have set up a camp outside the factory that they call Bainport and are trying to stop the Bain trucks that are moving the equipment out for shipment to China. These soon-to-be-jobless workers have asked Romney to come help them.

But Romney has refused.

While Mitt Romney no longer manages Bain Capital, he still has millions of dollars in Bain funds and will personally make a fortune from this company moving to China – both from profits and from tax breaks. (What you and I consider a fortune, Romney might consider a drop in the bucket.)

According to his recently released 2011 tax returns, Romney transferred $701,703 worth of Sensata stock to the Tyler Charitable Foundation, a 501(c)3 tax-exempt nonprofit controlled by Romney. The gift is listed on page 323 of the pdf, on form 8283 (below).

Moving the stock to his nonprofit brings Romney twin benefits. First, he gets to deduct the full value of the stock. At a 35 percent tax rate, that’s nearly a $250,000 benefit. At 15 percent, it’s just over $100,000.

Second, Romney is able to avoid paying capital gains taxes on the stock price increase. Romney’s returns list no cost for the stock, and indicate he obtained them as part of a partnership interest in Bain. Avoiding capital gains taxes on the full increase would save an additional $100,000. In 2010, Romney gifted $170,000 worth of Sensata stock to his charity, saving $25,000 in capital gains taxes that year.

Cheryl Randecker, a Sensata worker facing an imminent layoff, said, “I could pay off my house with that [$25,000], and he doesn’t need it anyway.”

So there you have it. Mitt Romney says he opposes sending jobs to China, and says he will “crack down” on China. But he refuses to do things that he could do right now that would make an actual difference right now. And it turns out that right now he is making big money from Sensata and other companies that are sending people’s jobs to China right now.

I really don’t care that Romney no longer owns Bain Capital, he makes a ton of money to this day so he is profiting from this. It seems trivially easy for Romney to either use his obvious connections with Bain to deal with this or have a big press conference where he divests himself of Bain stock because they refuse to listen to him plead with them to do the right thing.

Yet, his response is… Maneuver Sensata stock for a tidy profit, continue to make an even tider windfall from Bain itself and ignore the pleas of American workers losing their jobs to Chinese outsourcing.

My question to the Romney supporters: How can you trust his tough talk on Chinaand job outsourcing there when he cannot even stop it from happening within his own portfolio?

[adaher]

Obama’s portfolio also includes outsourcers. Chances are, yours does too unless you don’t own stock at all or are extremely selective without caring much about returns.

Might as well complain about companies that use automation.

[vaultermn]

@John_Stamos_Left_Ear

when he cannot even stop it from happening within his own portfolio?

You do know that his portfolio is in a blind trust, don’t you? He is not making any of the investment decisions.

The whole point of the blind trust is to avoid conflicts of interest. In this case it seems to be working perfectly. He might have personal investments in China, but it’s not impacting his public policy.

[running_coach]

@vaultermn

You do know that his portfolio is in a blind trust, don’t you? He is not making any of the investment decisions.

The whole point of the blind trust is to avoid conflicts of interest. In this case it seems to be working perfectly. He might have personal investments in China, but it’s not impacting his public policy.

NPR-Just How Blind Are Blind Trusts, Anyway?

Of course, there’s an easy response from a less wealthy opponent. In fact, there’s a video going around of Mitt Romney from 1994, when he was challenging another very rich candidate with a blind trust: Ted Kennedy.

“The blind trust is an age-old ruse, if you will,” Romney said. “Which is to say, you can always tell a blind trust what it can and cannot do.”

Vanity Fair-Purdum On Politics

As a freshman senator, Barack Obama—whose wealth comes almost entirely from his book royalties—set up a blind trust but later that same year sold all of his stocks and closed the trust because he decided that even such an arrangement could not protect him from the appearance of a conflict. Most of his wealth is now invested in U.S. Treasury bonds and diversified funds—about the most transparent option available. What’s good for the country is good for Obama, and vice versa, to coin a phrase.

[John_Stamos_Left_Ear]

@adaher

Obama’s portfolio also includes outsourcers.

More of your bullshit false equivalencies.

When all else fails, there’s always the “you do it too” defense.

(T)here is a substantive difference between Romney’s relationship to his retirement account and Obama’s to the Illinois pension fund.

As far as we know, Obama has never taken an active role in managing the assets of the pension fund. He suggested during the debate that he doesn’t pay much attention to it.

Romney’s retirement account, on the other hand, includes investments worth up to $30 million in a company he used to run. Those investments are actively managed for his and his wife’s personal financial benefit. And while Romney claims he has no control over the blind trust that manages his retirement account, it is hard to see how those investments would differ much if he were in charge.

(A)ccording to their 2011 tax returns, Romney and his wife Ann had invested more than $1 million in Bain Capital Fund VIII LP, a shell company that “intends to conduct its operations … so that it will not be subject to United States federal income or withholding tax on its income from United States sources,” according to a prospectus obtained by Gawker.

To be clear: this is a fund that invests in the U.S. and is controlled by investors at least partially based in the U.S., but doesn’t pay U.S. taxes. Remarkably, this is all perfectly legal, according to the Internal Revenue Service, even though Congress clearly never intended to create this tax loophole.

Romney has tried to avoid talking about this issue.

The Huffington Post

We can even put a dollar difference on your bullshit false equivalency:

Mitt Romney’s campaign first started trying to deflect attention from the $8 million Romney has in the Bain fund that controls Sensata Technologies to President Barack Obama’s pension as an Illinois state senator a couple weeks ago. Then Romney himself ramped up the attack on Obama’s pension at Tuesday night’s debate. Romney didn’t name Sensata, but that’s clearly what’s putting him so ridiculously on the defensive about his own Chinese investments. How ridiculous is this line of attack? Ludicrous. Absurd. Farcical. Preposterous.

There’s a number that illustrates this: $11. See, the Illinois State Board of Investment, which invests for not only the General Assembly pension plan that Obama is a part of but also for the State Employee Retirement System, has a $1 million loan to Sensata. With roughly 90,000 people in the pension systems holding that loan, each of them, including former state Sen. Barack Obama, has $11 of Sensata. He can’t collect that $11 until he turns 62, in 11 years.

Daily Kos

Even if you were right and both sides were equal (note: they are not, you are idiotically and astoundingly wrong. What you said was dumb and you should feel dumb for saying it.) you still don’t answer my question:

How can you trust (Romney’s) tough talk on China and job outsourcing there when he cannot even stop it from happening within his own portfolio?

I’ll wait for an answer that doesn’t hilariously indict Obama’s $11 windfall as the same thing…

[John_Stamos_Left_Ear]

@vaultermn

You do know that his portfolio is in a blind trust, don’t you? He is not making any of the investment decisions.

The relevant Mitt Romney view on blind trusts comes at 0:28 of this video. The parts you like to believe are true are the rest of the video.

Despite the difference of opinion, all of the quotes are from Mitt Romney.

I know, I was really surprised too.

[Czarcasm]

@adaher

Obama’s portfolio also includes outsourcers. Chances are, yours does too unless you don’t own stock at all or are extremely selective without caring much about returns.

Might as well complain about companies that use automation.

Are you still going with the unsubstantiated “They do it toooo!” defense? Next time, bring facts.

[John_Stamos_Left_Ear]

@Czarcasm

Are you still going with the unsubstantiated “They do it toooo!” defense? Next time, bring facts.

I already brought the facts against his assertion. I just want him to answer my question… I don’t think it’s unfair. Do you?

[Czarcasm]

@John_Stamos_Left_Ear

I already brought the facts against his assertion. I just want him to answer my question… I don’t think it’s unfair. Do you?

Not unfair at all. Probably not going to happen, though.

[Fear_Itself]

@adaher

Obama’s portfolio also includes outsourcers. Chances are, yours does too unless you don’t own stock at all or are extremely selective without caring much about returns.

Might as well complain about companies that use automation.

So your point is, neither candidate should pretend they have any incentive to get tough on China? Is that what you are saying?

[Stratocaster]

@John_Stamos_Left_Ear

My question to the Romney supporters: How can you trust his tough talk on Chinaand job outsourcing there when he cannot even stop it from happening within his own portfolio?

I don’t think outsourcing to foreign countries should be stopped. Let capital flow to the cheapest source–that’s what creates the biggest favorable impact on our economy for the most people. By far. Trying to stop the practice is a fool’s errand. You don’t want jobs to go offshore? Be competitive. You can’t be competitive? Then you ain’t stopping the practice.

It is appropriate, as Romney points out, to demand that countries play by fair rules, including not manipulating their currency. Beyond that, the best thing that can happen to the U.S. economy is for companies to find the cheapest source to create their goods, including if that’s overseas.

BTW, Obama, Romney, and their economic advisers all fully understand this. But it doesn’t make for a good sound bite. Then we can all pretend that obstructing offshoring won’t significantly raise prices for everyone and rant about who can be trusted to “save our jobs.”

[John_Mace]

@John_Stamos_Left_Ear

My question to the Romney supporters: How can you trust his tough talk on Chinaand job outsourcing there when he cannot even stop it from happening within his own portfolio?

IANARS, but can you quote the part of your link where he talks tough on job outsourcing?

[adaher]

@Fear_Itself

So your point is, neither candidate should pretend they have any incentive to get tough on China? Is that what you are saying?

What does every candidate promise to do in regards to China? What does every President actually do?

[Chefguy]

@John_Mace

IANARS, but can you quote the part of your link where he talks tough on job outsourcing?

I see none in the link. The hypocrisy the OP mentions is that Romney talks tough on creating jobs, while at the same time knowingly profiting from outsourcing to China. My only hope in this is that the national media decide to report on this company and have on-air interviews with the employees.

[John_Mace]

@Chefguy

I see none in the link. The hypocrisy the OP mentions is that Romney talks tough on creating jobs, while at the same time knowingly profiting from outsourcing to China. My only hope in this is that the national media decide to report on this company and have on-air interviews with the employees.

I see no hypocrisy unless Romney has said he would not allow any jobs to be outsourced to China. I’m sure he hasn’t, and I doubt Obama would take that stance either.

Obama is president right now. Why doesn’t he stop this injustice? This is going to happen whether Romney profits or not. But Obama can actually do something about it.

[adaher]

There is no conflict between creating jobs and outsourcing. Plenty of outsourcing going on during the Clinton years, yet net job creation was amazing. Exporting jobs doesn’t mean we have less on net anymore than exporting some of our oil means we have less to use. It’s called trade. We buy Chinese goods, they buy our goods. The balance is bad right now, but do you think workers would be better off if there was just less trade overall with China? Would workers benefit from paying higher prices as consumers?

China is engaging in some questionable activity and by all means a President should get tough. But trade isn’t the only consideration. Foreign policy matters too. I never get people who want us to tread lightly on every issue so as to avoid offending other countries, but want us to kick other countries in the gonads when it comes to trade.

[Chefguy]

It’s likely not an easy task to ‘get tough’ with a country that is holding your markers. One way to do that is to prevent the off-shoring of jobs without penalty (or at least without giving tax breaks to companies that do). Romney is profiting from putting Americans out of work, and getting a giant tax break by having the money go to a non-profit company. Surely, you don’t think this is a moral way to act.

[John_Mace]

@Chefguy

It’s likely not an easy task to ‘get tough’ with a country that is holding your markers. One way to do that is to prevent the off-shoring of jobs without penalty (or at least without giving tax breaks to companies that do). Romney is profiting from putting Americans out of work, and getting a giant tax break by having the money go to a non-profit company. Surely, you don’t think this is a moral way to act.

I don’t think it’s “moral” to favor Americans over Chinese wrt jobs. In fact, since the US has a better safety net that China, one could argue that it’s immoral to prevent the jobs from going to China.

At any rate, both candidates know that all outsourcing is not bad. Neither candidate will actually say that, though.

[Chefguy]

@John_Mace

I don’t think it’s “moral” to favor Americans over Chinese wrt jobs. In fact, since the US has a better safety net that China, one could argue that it’s immoral to prevent the jobs from going to China.

At any rate, both candidates know that all outsourcing is not bad. Neither candidate will actually say that, though.

While at the same time decrying the unemployment numbers? Seems fairly disingenuous to me. “Outsourcing” is one of those dehumanizing terms created by politicians and CEOs to mask the misery of families losing their incomes. Of course all outsourcing is not bad, but to give tax breaks to companies (and individuals) that do it is just wrong. Why give incentives for that sort of activity, when the companies will reap huge profits by doing so anyway? What companies like Bain are doing is really no different from what mobsters do: busting out a company by reaping maximum profits at the expense of bankrupting the company and putting the workers on the street. The only difference is that what Bain does is legal and on a much larger scale. Neither of them have the moral high ground.

[John_Mace]

There’s a “Stupid Republican Idea of the Day” thread in the BBQ for general bitching. This thread is about alleged hypocrisy of Romney wrt what Bain is doing and what Romney’s policies are. No one has as yet demonstrated any actual hypocrisy in that area. And as already noted, outsourcing and domestic employment are not zero sum games.

Where I live (Silicon Valley), we’ve got an improving economy and lots of job creation. And we’re the kings of outsourcing!