His first pledge stunned America, caught off guard by the bold detail expressed when Romney overlooked Obamacare and leaped forward to announce the first detailed cut included in his budget and tax plan. Kept tightly secret; no leaks, no rumors or predictions; no one was suspicious that something big was about to break.
The self-styled jobs creator’s first announced act, in line with his budget criteria, was to cut Big Bird. Old habits die hard. Always the venture (many say vulture) capitalist, Romney knows how to target and dismantle valuable enterprises to extract value and create outsized capital returns that others miss. He casts a hard eye. With government funds, cuts can reduce the deficit, be used as subsidies, consultant fees, put into private contracts, be given away as tax breaks, or lower debt.
The problem is Big Bird’s annual federal share is less than 1/10th what the Justice Department prosecuted in 2012 federal health care fraud cases against private and corporate doctors and service providers who stole $4 billion in taxpayers’ money. United Technology was fined $75 million early this year for violating US trade laws in selling highly classified, prohibited military materials to China that, if trafficked outside of the company, would have amounted to espionage of state secrets; its fine was 1/6th of Big Bird’s and his whole crew’s annual budget. Big Bird is small potatoes when it comes to federal funding.
As the shock died and recovery began, Romney later emphatically stated his goal to strengthen education. That bullet point offered evidence of the Romney fissure, the old disconnect of his warring, divided vision, the way he separates rather than combines things. He can point out valued pieces, but he can’t put them in combination. Synergy is less his strength than demolition; salvaging, extracting value.
He had just pledged to use the power of government to cut the best the government had to offer in early education—a program in the most crucial time—an innovation so original it stimulated learning, reduced childcare costs for working families, taught life lessons, and moved an eight-year-old after the debate to write a powerful letter pointing out what should have been obvious even by Romney’s blind criteria.
According to Romney, the costumed character and legendary early childhood educator—one of the nation’s best and most cost-effective, the wildly successfully Big Bird—is bad, wasteful, off-target government; Romney implies only private education, offered as public subsidy, is able and effective—and can be strengthened with your taxes. To Romney, their overwhelming broadcast success confirms Big Bird and Sesame Street belong in the private sector; he ignores the suitability and match of the content and purpose of their goals to public and non-profit markets, and the unique protection these markets offer to Sesame Street’s creative ways and means.
Big Bird is a big entrepreneur, but he took a different path than Romney’s. In 40 years, Big Bird has grown. Along the way, he created jobs. Sesame Street, his home place, is exported for broadcast to 140 countries, adapted to each country’s culture; Nigeria, for example, offers Zobi the Cookie Monster. Early countries included New Zealand, Norway, Germany; it was the top children’s program in Kuwait for 15 straight years. Big Bird’s home territory created hundreds of different products, generates income, excise, and sales taxes, meets a high wage payroll, supports ancillary jobs in a wide variety of industries.It has no offices outside of America. It is a universal early foundation of later workforce training.
By exporting broadcast and other products, Sesame Street helps lowers the US trade imbalance. It now offers leading edge, new media products and a full catalogue of traditional fare: games, toys, clothes, and a publishing division that publishes books and magazines, along with DVDs and other media. Approximately 60% of its annual revenues are license-generated.
But one of its broadcast licensing demands directly contradicts the demands of the private market: all of its broadcast materials must be commercial-free. This reinforces the strong social impact of its mission in countries like Israel and South Africa. China wants in—with Big Bird. Frankly, Sesame Street brings a lot to the table for the government. I would be trying to embrace the program the world loves; it’s peanuts in the national PR budget, its good will is inviolate, and I wouldn’t want word to get out around the world that my first act was to put Big Bird on the chopping block, killing the $1.25 a year per capita the program indirectly receives from station fees.
Its low debt and strong annual cash flow makes Sesame Street the perfect takeover target were it not protected as a non-profit.
But most importantly, Sesame Street sets the global standard for media-crafted early childhood education in every region and language. It has won 143 Emmy and 8 Grammy awards. Although the show continually innovates in its markets, it is a lower-cost producer than the private sector.
It began by capitalizing on a vision outside of its highly successful, positive balance sheet, a big idea best suited and pursued in the non-profit marketplace. With large grants from the Carnegie Foundation, and later the Ford Foundation, Sesame Street also established an endowment rather than leveraging its assets through borrowing, a high risk, capital reward and extraction strategy Romney repeatedly employed at Bain. It wisely did not put itself in danger by borrowing against assets—as did Lehman Brothers, JPMorganChase, and others that racked billions in losses and required government bailouts.
In large part, the show’s 40-year stability is because it is outside of the capital markets and does not serve its masters. But Romney doesn’t understand markets focused on value, not profits. He wants to eliminate those markets. He’s okay if the government transfers money through services or contracts, but values mean, for him, picking “winners and losers.” He picks against values. That why Romney wants to punish the Bird’s neighborhood (it can’t be sold or outsourced!) and make it an example of waste rather than an example of huge value and global good will, an amazing American brand reaped from a minor investment of government aid, at a current per capita cost of less than a $1.25 a year.
But Romney sees success as the province of only the private sector balance sheet, claiming in another bullet point that the private sector always lowers costs, increases innovation, and grows jobs, telling Barack he didn’t know of any examples that differed—ignoring the contradictory example he cited in his opening detail of items to cut. Romney, unlike Warren Buffet, was never a buy-and-hold investor. He’s only put nominal money into his own candidacy this time; he’s inclined toward leveraging and short sales, turnovers.
The program is slated for Romney’s ax or red pen, he says, because it does not meet his “one” criterion: being worth the sale of US debt to China at an average rate of 2.1 %. China’s US debt share is 13%, less than the combined 17% shares of Great Britain and Japan, the second and third largest international purchasers of US debt. Number one are the American people and domestic institutions. Apparently selling debt to China to fund battleships and rejected weaponry for the Pentagon to defend against an unforeseen military threat from China is okay. But Big Bird, used to teach China’s children, doesn’t meet that threshold.
In his bullet points, Spain was Romney’s new failed state; it has no large heritage constituency among voters and could be whipped safely, a foreign prop. It can be asked, why didn’t he use the Caymans or Switzerland as examples of success he believes in?
According to the Huffington Post, Spanish officials immediately pushed back:
Spanish reaction to Romney was swift.
“What I see is ignorance of what is reality, but especially of the potential of the Spanish economy,” said Deputy Prime Minister Soraya Saenz de Santamaria.
Maria Dolores Cospedal, leader of Spanish Prime Minister Mariano Rajoy’s Popular Party, noted that “Spain is not on fire from all sides like some on the outside have suggested.” Foreign Minister Jose Manuel Garcia Margallo called it “very unfortunate that other countries should be put up as examples” when the facts are skewed.
Once he slipped (how was it missed!?): “poor kids” quickly became the softer, kinder “low-income children.” And why are there never any shout-outs from workers he hired by creating jobs? Do they all refuse interviews? Is Romney too modest to offer real evidence? (Does he lie?)
We saw the celebratory ideological declaration of an insurgent who, unable to penetrate the centers of power, captures an outlying broadcast facility and promises the people a new vision. The blasting blather ignores the carnage and cruel will of the path behind the promise.
But margins and back stories have dominated the main political conversation this political season. The media is obsessed with any detail or impression far removed from facts and logic. Thrills lead. If lies generate thrills, they are the story, the truth be marginalized. Mitt likes truth on the margins, and never fails to offer thrills that keep it out of the conversation. (Which calls into question his own confessions!)
But careful: parents are reporting a quiet uprising at schools; word’s out that Romney will eliminate Sesame Street. Eight-year-olds are organizing, pressuring their parents round the dinner table, reminding them of how they learned early skills without paying a fortune to nursery schools. Kids are the muscle of the 47%, and it’s too late to put them back into the box. One parent tweeted, “All the kids were talking about it at school.” In his opening remarks, by revealing one long awaited secret detail, Romney’s managed to lose a whole generation, who will never forget the infamy of his attack during the family hour!
Oh, yes. Trickle-down government? Nine of ten Americans over 65 receive Social Security benefits paid in by their taxes, 36 million retired workers. It helps them provide for themselves. Social Security has a lower overhead than the private sector retirement plans and a benefit guarantee no private company (none!) matches. Romney, who wants to lead the government, never heard of its advantages and lower costs. He ignored its bedrock safety.
Bottom line? Romney lied. Lied about the private sector that destroyed 10 to 65 % of American household wealth in 2010. Lied that lower taxes will create demand. Lied 28 times in 38 speaking minutes. An eight-year-old Alabama child wrote Romney today to say when she marries she wants her children to watch Sesame Street. She went on: “Don’t hurt little kids. They need Sesame Street where they can learn from it. Save Big Bird and his friends.” Big Bird costs a small fraction of PBS’ indirect federal share. Think what he will do to you.
Paul Krugman took careful aim at what Romney will do to those with preexisting health conditions in his New York Times column:
What Mr. Romney actually proposes is that Americans with preexisting conditions who already have health coverage be allowed to keep that coverage even if they lose their job — as long as they keep paying the premiums. As it happens, this is already the law of the land. But it’s not what anyone in real life means by having a health plan that covers preexisting conditions, because it applies only to those who manage to land a job with health insurance in the first place (and are able to maintain their payments despite losing that job). Did I mention that the number of jobs that come with health insurance has been steadily declining over the past decade?
What Mr. Romney did in the debate, in other words, was, at best, to play a word game with voters, pretending to offer something substantive for the uninsured while actually offering nothing. For all practical purposes, he simply lied about what his policy proposals would do.
How many Americans would be left out in the cold under Mr. Romney’s plan? One answer is 89 million.
If you are one of the 89 million with a precondition who felt relief rather than outrage at Romney’s empty promise, his coverage of preexisting conditions simply doesn’t exist! He got style points for lies.
Parts of this post were previously published on Walter Rhett’s blog, Black History 360*.