Brian Reeder

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Mitt Romney: A nightmare for the economy?

By: Brian Reeder Wednesday January 11, 2012 5:47 pm

As Republican candidates slam Mitt Romney for his crony capitalism and being an unscrupulous corporate vulture, the Obama campaign must be taking this opportunity to jot down some notes. Newt Gingrich and Rick Perry are prematurely poking holes in Romney’s already flimsy platform.

Basically the ex-Massachusetts Governor claims he can save the economy because of his success doing what the 99 percent have been protesting since September.  Romney’s Bain Capital is the epitome of Wall Street. It buys out corporations and reorganizes them to benefit a handful of investors—not the company and absolutely not the American workers. The Wall Street Journal reported that 22 percent of the 77 companies Romney’s Bain invested in filed for bankruptcy or closed their doors.

This comes as the economy fights to climb out of the Great Recession brought on by an irresponsible and unregulated financial industry. It’s important to note that 40 years ago, the financial sector earned just 16 percent of domestic corporate profits. It currently earns 41 percent. This financialization of the U.S. economy has driven 14 million workers out of a job, while corporate raiders such as Romney have gotten disgustingly rich.

Yet Romney says his experience making a handful of people rich will help him create jobs. In fact, he claims that he created 100,000 jobs through investing in companies like Staples, Domino’s and Sports Authority—although he can’t provide any real numbers because those are large companies that literally hire, fire and layoff employees at an astronomical rate. What Bain Capital does—makes a few investors rich while people doing real work lose money and jobs—is a model of what has happened to the U.S. during the past four decades. I’m just waiting for Romney to tell us all that “greed, for lack of a better word, is good,” and that greed will save that “malfunctioning corporation called the USA.” (Gordon Gekko—Wall Street)

Mitt Romney saying that his work at Bain proves that he can create jobs is like saying the guy who discovered asbestos has the cure for cancer. Companies like Bain are the reason America’s unemployed can’t find jobs and U.S. small businesses—the nation’s chief job creators—don’t have any customers.

Bottom line is that I don’t trust Romney, and I don’t think anyone really does. His proof as an effective leader on economic policy (Bain experience) is weak and suspicious. He seems heartless, cold and phony. The image in my head is of the consultants from Office Space that fire everyone or the well-fed gentlemen from Oliver Twist.

“Please, sir, I want some more.”

 

They’re your tax dollars: How the government lies about where it spends your money

By: Brian Reeder Thursday December 15, 2011 4:36 pm

Your government is not spending your tax dollars where they say they are and it’s preventing millions of people like you from getting a job.

The federal acquisitions budget is listed at about half a trillion dollars (excluding classified spending), which means the U.S. federal government is the largest purchaser of goods and services in the world. A minimum of 23 percent of the acquisitions budget is required by law to be spent buying goods and services from U.S. small businesses. Every year the government claims to almost hit that goal, and every year it’s a lie.

During FY 2010 alone, 60 of the top 100 small business federal contractors were not small businesses. The American Small Business League estimates that, because contracts reported as allocations to small businesses were actually awarded to large companies such as Lockheed Martin, AT&T and ‘Miscellaneous Foreign Contractors,’ legitimate small businesses actually received less than 6 percent of federal contracts during FY 2010.

Politicians love to talk about small business as the backbone of our nation’s economy—and rightfully so—small businesses create more than 90 percent of net new jobs, generate more than half of GDP and employ half the private sector workforce.

I can already hear the cynical voice saying, “Yeah but half of small businesses fail.” So let’s be clear—net new jobs means jobs gained versus jobs lost, which means regardless of their failures, small businesses still create jobs at a greater rate than they destroy them, which can’t be said about large businesses.

While politicians pretend to back small business, few will support legislation to prevent abuse of small business federal contracting programs. Georgia Congressman Hank Johnson introduced legislation this year titled the Fairness and Transparency in Contracting Act that would finally prevent the federal government from counting contracts awarded to large corporations as small business contracts. Not surprisingly, Republican leadership has already voiced opposition.

Why would politicians, who are supposedly all about small business, be opposed to this legislation? The answer is obvious. It takes merely a glance out the window on the drive from Dulles International Airport to Capitol Hill to see that corporate giants own Washington. It’s expensive to hold a seat in Congress and big businesses foot the bill.

Even President Obama promised to stop giving large corporations federal small business contracts on the campaign trail when he stated, “It is time to end the diversion of Federal small business contracts to corporate giants.” That statement was removed from his website and never mentioned again.

Imagine if you were the federal government and had $500 billion to spend on goods and services. Knowing that 98 percent of U.S. companies have fewer than 100 employees and those companies are responsible for almost all of the net new jobs, where would you spend your money? Every year your tax dollars are spent on large Fortune 500 companies that don’t create U.S. jobs and that don’t stimulate local economies. And yet the federal government has the nerve to tell you that they are spending your money on the nation’s chief job creators.

Stopping federal contracting fraud is a deficit-neutral way to stimulate the economy. It requires no new taxes and no new spending and is based on existing federal contracting law. The government simply needs to stop awarding small business contracts to large corporations.

In Response to Grim Labor Report, Nation’s Chief Job Creators Demand Government Contracts

By: Brian Reeder Friday July 8, 2011 11:24 am

As the nation’s 14.1 million unemployed demand jobs and paychecks, the nation’s 27 million small businesses demand government contracts. According to the U.S. Census Bureau, small businesses create 90 percent of all new jobs. However, the hiring power of these businesses is shelved as more than $200 billion a year in federal contracts intended for small businesses actually go to some of the largest companies in the U.S. and Europe.

This comes as the Labor Department reports that job growth hit a wall in June, capping at a meager 18,000 jobs. The federal government has a congressionally mandated goal of awarding 23 percent of contracts to legitimate small businesses. Yet, through fraud, abuse, loopholes and lack of oversight of government contracting programs, large businesses acquire the majority of these contracts. Government agencies exacerbate the problem by counting contracts to large businesses toward their federal small business contracting goals.

In July 2008, the Department of Interior Office (DOI) of Inspector General (IG) found that the DOI was misstating the achievement of its small business-contracting goal by including Fortune 500 corporations. The DOI IG reviewed only a sample of DOI contracting and found companies like Dell, Home Depot, and Xerox were receiving federal small business contracts. (Report)

And it is not just DOI. Since the first congressional hearing on the issue in 2003, a series of federal investigations have uncovered the diversion of billions of dollars in federal small business contracts to corporate giants. The government’s most recent contracting data includes companies such as Lockheed Martin, Raytheon, Hewlett-Packard, British Aerospace (BAE), Dell and AT&T as recipients of small business contacts. Small business contracts have been awarded to large businesses by agencies like the Department of Defense, NASA, the Department of the Army, the Department of the Navy and many others.