JB Holston's Blog

As a reformed Republican and successful middle-aged white business guy, I’m often asked by my wealthy business friends why in the world I wouldn’t support Romney.

(Of course, many of my other friends  are astonished anyone would bother to ask me ;-))

Here are some of the main reasons I consider it a mistake even for wealthy white business guys to vote for Romney:

1. Trust.  I don’t find Romney at all trustworthy, and that’s frightening in a President.  His colleagues and friends have characterized him as what I consider a classic-Harvard Business School-Private Equity-guy  A lot of my good friends are ‘that guy’, all about transactions and getting the deal done.  These folks aren’t experienced managers of diverse workforces – they transact.  They don’t slow deals down over considerations of ‘core values’ or ‘principles’ — it’s about leverage, transaction speed, deal volume, ROI….    Romney regards the election process as identical to deal-making in the private sector with a recalcitrant seller —  you promise whatever it takes  to ‘win the deal’, then do whatever you want post-close.  Reports indicate he’ll use the most wide-ranging invocation of Executive Powers in American history in his first 90 days to do whatever he decides needs to be done.  This impression of Romney’s character is confirmed by his extreme ‘etch-a-sketch’ on everything substantive (47% reversal this morning; education funding, tax cuts for the wealthy, pre-existing conditions (walked back 15 minutes ex-post) in the debates;  immigration rights earlier this week).  He’ll say whatever he thinks will close the deal; we can’t trust what he’ll actually do post-close …. except…

2.  Tax cuts.   Ryan has reiterated that regardless of the impact on deficits –  Romney will immediately — by Executive Order if ‘necessary’ — dramatically cut taxes  (“I will cut tax rates by 20% across the board”).  I have not found a rational economist or senior banking executive in the world who does NOT think this will massively increase deficits in the short-term.  Romney implies this will suddenly create jobs (he’s promised 12 million new jobs next four years); the reality is that corporate taxes as a share of U.S. GDP are at an all-time low; corporate profits are at an all-time high; decreasing taxes for the wealthy and profitable corporations will have zero marginal impact on hiring as cash flow and profitability are NOT what’s holding folks back now (even if trickle-down wasn’t debunked by history) … ….     Romney has said he’ll ‘revise the tax code’ to make his cuts revenue-neutral — there aren’t enough deductions for the wealthy to come close to doing so and everyone knows those changes will take a LOONG time to address — if in fact Romney’s backers ever allow him to address them.  I’ve had conversations in the last week with two CEOs of significant Wall Street investment banks — they’re hoping Romney really will increase revenues short-term to avoid exploding deficits —  but it’s not in the plan:

“We’ve seen, under Presidents Ronald Reagan and George W. Bush, where such wishful thinking gets you. This time, as the population ages and demands on government grow, the ending could be a lot scarier.”

3.  Investment cuts.  It’s all just math, but here we go….. In addition to the tax cuts, Romney has said he’ll increase defense spending by $2 trillion over what the military wants.  Who knows if this is more than pandering, but assuming so we get $5 trillion less revenue from tax reduction, $1 trillion less revenue from extending the Bush tax cuts (which he’ll certainly do), and $2 trillion more defense spend than forecast — $8 trillion less revenue/increased cost vs. baseline today.   Assume he miraculously gets serious about deficits down the line.  He’ll either raise revenue by increasing the tax burden of those earning less than $250k per annum dramatically (e.g. eliminate the mortgage deduction, or cap all deductions at $17k per annum), or he’ll  whack investments in infrastructure, energy, education, research — and of course Medicare, Medicaid and Social Security.    You have to hack attack (think at least 40% reductions)  every non-Defense program to get close.  Impact on joblessness??  More importantly from my point of view — if we reduce our investment in the country’s vital infrastructure (just focus on education, research, infrastructure and energy) we’re accelerating America’s competitive decline in the world.  Dumb. (Sidenote;  Romney floated the $17k per annum deduction cap Monday.  Much pushback that this would increase tax burden on middle class hugely.   By the debate he’d increased that to ‘$45k.  Or, maybe $55k’  Deficits??  Trust?!?)

4.  Energy and global warming. “I love Coal!”  “Wind and alternative energy investments are a disaster”  “I want to open our national lands to much more aggressive oil and gas exploitation”.  ‘Nuff said — terrible environmental position,  dangerous short-term thinking,and arguments entirely based on made-up stuff…. .

5.  Medicare, Medicaid, and Social Security. “Repeal Obamacare Day One! (via Executive Order — he won’t negotiate with Congress on this)” Don’t be fooled, these guys love vouchers, privatization, and shoving basic care programs back to the States.  This will increase the burden dramatically on seniors; drive tremendous inequity between States; and probably double income inequality which is already at its greatest level since 1774…   I’m sure we all have lots of examples, but my 78 year-old Dad lives independently and much more happily — and is likely alive at all — due to Social Security and Medicare.  And he’s in no position to haggle vouchers with insurance companies, and manage a privatized Social Security account through unregulated high-speed trading capital markets…. . “Shove it to the States” means 72 million uninsured in America, according to a report out this week by the Commonwealth Fund.  That’s two Canadas …

6.  America’s future.  America’s diversity (racial; sexual orientation; every other imaginable measure) is increasing dramatically.  GOP Senator Lindsay Graham put it succinctly, “The GOP isn’t manufacturing enough angry white guys to keep up”.  A Government focused entirely on the needs and wants of wealthy religiously conservative white guys … will be dangerously out of touch with the reality of America.  That’s bad for social stability — and capital markets. What’s in Romney’s plan for the increasingly dystopic American Middle Class??  Women, minorities of any sort, immigrants, non-Christians, and believers in an independent judiciary among other 99%ers all find the GOP platform repellant.   Reuters published an article yesterday that said that ‘Europe is shaken by prospect of a Romney Presidency“.  Think back to America’s reputation and position in the world at the end of the Bush era vs. today.   A  Government narrowly focused on increasing the wealth of the fortunate few means more isolation in an increasingly complex world.  Sprinkle on top  the return of the Bush NeoCons, Netanyahu’s war-mongering on Iran, and GOP’s historical propensity to push war as the foreign policy answer every time …. oy ….

If Romney wins, we’ll have a wild card deal-guy CEO who will unilaterally and dramatically increase deficits in the short term, and in the medium term drive unprecedented levels of socioeconomic (and every other type) disparity and disunion across America.  He’ll be a rookie loose cannon isolationist internationally.

My family will pay less taxes for sure — and be much the poorer for it.

P.S.  I also find the systemic GOP, ALEC-driven efforts to use state legislatures and Secretaries of State to systematically suppress the vote — abhorrent.  Don’t you??

(JBH: A friend pointed out that the stats I tweeted yesterday relate, too:  S&P 100 up 17%, NASDAQ 100 up 25% YTD 2012. From Bush trough, market up 130%…..)

Comments on: "Why Wealthy White Guys Shouldn’t Vote for Romney" (2)

  1. Chris tower said:

    Thanks. Fantastic summary of his positions that were obfuscated in the debate.

  2. Eric Strayer said:

    All great points. Glad you can hammer the practical economics as well as the socio-political aspects. I’m terribly limited in economics but I think in this case I do “get it.” Point being that between those “with security” ( sometimes called the wealthy” and those without (I’ll call most of the middle class, all of the working class and you know the rest) there seem very few bridges of either communication or identity. Thanks for the effort.


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