Romnesia is “A potent myth is being used to justify economic capture by a parasitic class”

Old Explorer Map and Compass wallpaper

Occasionally I’m not going to list the daily graphic in the post title. Just assume that almost everyday I post there will be some kind of graphic – wallpaper, map, historical photograph etc.

By way of Mike Norman Economics an explanation of a new word that is defining this election cycle, Romnesia: The Ability of the Very Rich to Forget the Context in Which They Made Their Money

A potent myth is being used to justify economic capture by a parasitic class.

We could call it Romnesia: the ability of the very rich to forget the context in which they made their money. To forget their education, inheritance, family networks, contacts and introductions. To forget the workers whose labour enriched them. To forget the infrastructure and security, the educated workforce, the contracts, subsidies and bail-outs the government provided.

Every political system requires a justifying myth. The Soviet Union had Alexey Stakhanov, the miner reputed to have extracted 100 tonnes of coal in six hours. The United States had Richard Hunter, the hero of Horatio Alger’s rags-to-riches tales(1).

Both stories contained a germ of truth. Stakhanov worked hard for a cause in which he believed, but his remarkable output was probably faked(2). When Alger wrote his novels, some poor people had become very rich in the United States. But the further from its ideals (productivity in the Soviet Union’s case, opportunity in the US) a system strays, the more fervently its justifying myths are propounded.

One of the things the notorious Romney video implied, a prejudice about how U.S. economic culture works, was that Romney would not be your president, but there was little reason for the 47% to work hard, because hey, you’re going nowhere fast. While getting as much education as possible and having a good work ethic still increase one’s chances of moving up the economic ladder, upward mobility is not what it used to be in the U.S. –

 But the reality is very different, according to a University of Michigan researcher who is studying inequality across generations around the world.

“Especially in the United States, people underestimate the extent to which your destiny is linked to your background. Research shows that it’s really a myth that the U.S. is a land of exceptional social mobility,” said Fabian Pfeffer, a sociologist at the U-M Institute for Social Research and the organizer of an international conference on inequality across multiple generations being held … in Ann Arbor.

Pfeffer’s own research illustrates this point based on data on two generations of families in the U.S. and a comparison of his findings to similar data from Germany and Sweden. … He found that parental wealth plays an important role in whether children move up or down the socioeconomic ladder in adulthood. And that parental wealth has an influence above and beyond the three factors that sociologists and economists have traditionally considered in research on social mobility—parental education, income, and occupation.

“Wealth not only fulfills a purchasing function, allowing families to buy homes in good neighborhoods and send their children to costly schools and colleges, for example, but it also has an insurance function, offering a sort of private safety net that gives children a very different set of choices as they enter the adult world,” Pfeffer said.

“Despite the widespread belief that the U.S. provides exceptional opportunities for upward mobility, these data show that parental wealth has an important role in shielding offspring from downward mobility and sustaining their upward mobility in the U.S…”

Recent findings show that children from low income families even have a biological disadvantage with genes affected by income. Obviously some people make in spite of these hurdles, but they are the exception, not the rule. Back to Romnesia,

The crudest exponent of Romnesia is the Australian mining magnate Gina Rinehart. “There is no monopoly on becoming a millionaire,” she insists. “If you’re jealous of those with more money, don’t just sit there and complain; do something to make more money yourselves – spend less time drinking, or smoking and socialising and more time working … Remember our roots, and create your own success.”(3)

Remembering her roots is what Rinehart fails to do. She forgot to add that if you want to become a millionaire – in her case a billionaire – it helps to inherit an iron ore mine and a fortune from your father, and to ride a spectacular commodities boom. Had she spent her life lying in bed and throwing darts at the wall, she would still be stupendously rich.

The rich lists are stuffed with people who either inherited their money or who made it through rent-seeking activities: by means other than innovation and productive effort. They’re a catalogue of speculators, property barons, dukes, IT monopolists, loansharks, bank chiefs, oil sheikhs, mining magnates, oligarchs and chief executives paid out of all proportion to any value they generate.

Looters, in short. The richest mining barons are those to whom governments sold natural resources for a song. Russian, Mexican and British oligarchs acquired underpriced public assets through privatisation, and now run a toll-booth economy(4). Bankers use incomprehensible instruments to fleece their clients and the taxpayer. But as rentiers capture the economy, the opposite story must be told.

Scarcely a Republican speech fails to reprise the Richard Hunter narrative, and almost all these rags-to-riches tales turn out to be bunkum. “Everything that Ann and I have,” Mitt Romney claims, “we earned the old-fashioned way”(5). Old-fashioned like Blackbeard perhaps. Two searing exposures in Rolling Stone magazine document the leveraged buyouts which destroyed viable companies, value and jobs(6), and the costly federal bail-out which saved Romney’s political skin(7).

Romney personifies economic parasitism. The financial sector has become a job-destroying, home-breaking, life-crushing machine, which impoverishes other people to enrich itself. The tighter its grip on politics, the more its representatives must tell the opposite story: of life-affirming enterprise, innovation and investment, of brave entrepreneurs making their fortunes out of nothing but grit and wit.

Let’s say that current poll trends continue. President Obama is reelected, Democrats have a small majority in the senate and Republicans mange to eck out a majority of House seats. Will that mean we’ll make any great strides in undoing forty years of the supply-side nightmare. NO, but we might make some incremental progress. We might have as many as three new Supreme Court Justices that will reconsider Citizen’s United, making it more difficult for billionaires to influence elections. Democrats and Obama were very successful with their pro middle-class legislative agenda in 2009. All of those victories for the middle-class is what pissed off the tea smokers. Go figure. There is nothing wring with incremental progress. I know we live in the age of the internet when news that happened two months ago is two years in internet time. But real progress has been historically slow. It was about 400 years as feudal lords and peasants system ended before than was such a thing as upward mobility. It was not until around 1850 that the average American could reasonably expect to have more education and material comforts than their parents. Even then it was not until the New Deal of the 1930s that America had the great expansion of the middle-class. One that most Americans now take for granted. That is they see the middle-class a something that has always been here during their lifetimes. It is assumed it appeared of its own accord and will somehow magically remain. It is taxes and the subsequent expenditures on education, scientific research, health care and other infrastructure that makes the middle-class possible. Once obtained we all have to work and think smart to keep it, but it can obviously be taken away by Wall Street parasites and their partners in crime, the political plutocrats.

I know that Romney is really ahead in the polls by 118% today and the liberal media is covering up that fact, but let’s just suppose he is behind and ask ourselves why. Sept 26, 2012 – Romney Campaign Now Says They Probably Won’t Do Their Tax Cuts After All. Sept 27, 2012 – Romney Campaign: No, We’re Not Backing Off Our Tax Plan. Having a clear and at least somewhat consistent message is a big part of what defines a political campaign in the public’s eyes. Imagine the mythical small town diner and two conservatives discussing Romney’s tax plan. Who is right the one arguing that Romney is going to cut taxes again for millionaires or the one that says Romney has abandoned that because the numbers do not add up for his plans to tackle the deficit.

I keep hearing/reading conservatives who are at a loss to explain why Romney-Ryan are not ahead in the polls by 10% or more. While part of the reason this has become the whine of the moment is the deafening affects of the conservative bubble of self delusion, the other part is that Romney is warmed over George W. Bush. The question conservatives should be asking themselves is how far behind they would be if they had to stop the politics of character assassination and run a public policy-truth based political campaign. With  the acknowledgement that Democrats are running at least a half counter-attack campaign. Over Labor Day weekend I only watched a few hours of TV. In that short time I saw half a dozen pro Romney attack ads – either from him or his PACs. Larry McCarthy, the Missing Link?

McCarthy, whom I profiled for the magazine, is best known for the notoriously race-baiting Willie Horton ad he made in 1988 that helped annihilate Michael Dukakis’s chances. Floyd Brown, a conservative Republican operative, described McCarthy to me as the Party’s “secret weapon.” The Democratic pollster Peter Hart, who has known McCarthy for years, went one step further, saying of McCarthy, “If you want an assassination, you hire one of the best marksmen in history.”

Recent F.E.C. filings show that McCarthy’s tiny Washington, D.C.,-based firm, McCarthy Hennings Media Inc., has been simultaneously involved in producing anti-Obama ads for Crossroads Grassroots Policy Strategies, a nonprofit “social welfare” group masterminded by the Republican political operative Karl Rove; the separate nonprofit “social welfare” group Americans for Prosperity, co-founded and partly funded by the conservative industrialists Charles and David Koch; and Restore Our Future, the main pro-Romney Super PAC. The filings show that during August and the beginning of September, McCarthy’s firm is identified as the “media production” company for $21.8 million worth of ad buys by Americans for Prosperity, a $21.7 million worth of ad buys for Restore Our Future, and $7. 1 million worth of ad buys for Crossroads GPS. Cumulatively, as the Times reported, these outside ads have filled huge gaps for Romney’s campaign, not just supplementing his campaign’s ad buys but at times outspending them.

Remember during the primaries when Newt Gingrich had his surge. That was partly Sheldon Adelson’s millions, but was also due to McCarthy Hennings Media Inc. Obviously Democrats did not knock out Newt. It was hit-man McCarthy. All of those ads I saw, with the only correct fact in them being that Barrack Obama is the President, came out of the Big Lie machine at McCarthy Hennings Media. If we had fact based, publicly financed presidential campaigns, Romney would be down to the hardcore wingers at 30%. The Right is playing the victim card about allegedly rigged polling even as they dominate every media. It could be you can only put so much lipstick on a pig and tell so may cowardly lies.


NEW ROMNEY VIDEO: In 1985, He Said Bain Would “Harvest” Companies for Profits

But this short clip offers a glimpse of Romney when he was at the start of his private equity career and saw businesses as targets of opportunity that could be harvested for the benefit of his investors, not as long-term job creators or participants in a larger community. His remarks were hardly surprising, but they did encapsulate the mindset of get-in/get-out private equity deal makers.