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Romney/Ryan And The Fiscal Cliff

Tyler Durden's picture


Romney's selection of Paul Ryan as his veep clarifies the policy debate (forcing typically middle-of-the-road voters to become more polarized to the size of government) into the November election and materially changes the odds of the fiscal cliff's resolution. As Morgan Stanley's Vince Reinhart notes, "by tying one side to an explicit plan for fiscal consolidation, the Ryan selection makes it much more likely that the campaign will focus on the appropriate role of the government.  That is, the debate will be about the right level of federal expenditure relative to national income, the progressivity of the tax system, and the extent to which family incomes are protected on the downside by Washington, DC." Although theoretically the Ryan pick raises the chance of a benign, before-the-election resolution to the fiscal cliff 'issue', it also worsens the likely outcome if the legislative stand-off continues into 2013 - which the odds suggest is the case.



Morgan Stanley: Ryan Pick Clarifies the Policy Debate

November election now focused on the role of government.  Mitt Romney has now defined his likely economic policies by proxy through his vice presidential pick. 

By tying one side to an explicit plan for fiscal consolidation, the Ryan selection makes it much more likely that the campaign will focus on the appropriate role of the government.  That is, the debate will be about the right level of federal expenditure relative to national income, the progressivity of the tax system, and the extent to which family incomes are protected on the downside by Washington, DC.

Before Ryan Pick... voters largely indifferent to role of government decision...


After Ryan Pick... more polarized...


The Ryan plan envisions a 14 percentage point lower debt-toGDP ratio by 2022 than the president's budget (see my first exhibit in Appendix).  This entails a cumulative $5 trillion cut to expenditures relative to the White House plan.  The drama on Medicare is postponed, but when it comes, it is significant. Obamacare would end in favor of a market-related exchange.  Fannie and Freddie are to be ended, and Dodd-Frank is to be rolled back.  The Fed would be given the single mandate of price stability.

Among the plans in play, Paul Ryan’s would shrink the government the most – if his plan's arithmetic could be trued up.  Regarding the fiscal cliff, we think the Ryan pick raises the chance of a benign, before-the-election resolution.  But it also probably worsens the likely outcome if the legislative stand-off continues into 2013. 


First, the cooperative outcome.  A robust debate about fiscal policy will draw voters’ attention to the harm caused by the cloud of uncertainty from the failure of politicians to find a legislative solution.  The deadweight loss includes the elevated risk of recession, potential changes in tax rates that make planning more difficult, and potential adverse effects on local communities from deep cuts in the defense budget if sequestration kicks in.  The latter issue looms particularly large in important swing states with critical Senate contests, including Florida, Massachusetts, and Virginia.  More vigorous voter scrutiny might force politicians to temporarily settle the issue in the run-up to the election. 

Contesting the election on big fiscal principles, however, also raises the chance of a punishing 2013 outcome. Individual election victors will view themselves as having a mandate from voters who had been given a clear choice.  But what happens if, in the aggregate, voters opt for a divided government?  The latest quotes from Intrade (see below) suggest that is the likely outcome.  If the control of the White House and the Congress continues to be split, it might be even harder to compromise next year, even compared to this year’s polarized results.


Not much chance of Fed action.  We've consistently held that the Fed would prefer to keep on hold in the election season.  Since the most recent meeting, financial conditions have eased and data have been a bit more upbeat.  Indeed, our tracking estimate of GDP growth has moved up threetenths.  In addition, there has been no mention by Fed officials of a lending program.  Accordingly, we marked our assessment of action at the September meeting down to 30 percent.

Fiscal Cliff Trades

Under current law, the US federal government will implement severe fiscal tightening at the beginning of 2013.  The potential impact of this ‘fiscal cliff’ includes legislative gridlock, falling economic indicators, downward pressure on GDP growth, and declining disposable income.  The potential impact to markets could include rising systemic risk, the US Treasury 10-year yield moving past historical lows, flat earnings growth, and rising short-term hedging demand.  

So uncertainty reignsIn interest rates we would be long duration in the 10-year sector and suggest a 2s10s curve flattener.  In FX we would be short USD/JPY on tighter yield differential.  But in my view, now is a great time to put on hedges around the looming uncertainty.  In the credit space, for instance, we favor buying MCDX as macro hedge.


Source: Morgan Stanley


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Wed, 08/22/2012 - 13:14 | 2727880 radicall
radicall's picture

You would think so but it is NOT TRUE. Romney/Ryan are attacking Obama that he will cut Medicare spending and defense budget.


R&R is for INCREASING deficit by handing out bigger tax cuts to their buddies. There is no spending cut there except cut some social programs and siphon the money to people who can actually "donate" to their cause. The End.  

Wed, 08/22/2012 - 13:24 | 2727890 Comay Mierda
Comay Mierda's picture

there is a big elephant in the room that no one is talking about

and his name is Hyperinflation

MSM keeps pretending endless deficit spending in a consumption-based economy has no consequences

Entitlements and the Military Industrial Complex will cause the dollar collapse.

And they will say NO ONE saw it coming

Wed, 08/22/2012 - 13:25 | 2727929 LetThemEatRand
LetThemEatRand's picture

The one grain of truth in all of this is that if I am legitimately raped by the Fed, I cannot become pregnant.  

Wed, 08/22/2012 - 14:01 | 2728074 Spastica Rex
Spastica Rex's picture

Funniest comment in days. Priceless.

Wed, 08/22/2012 - 14:39 | 2728240 Manthong
Manthong's picture

Yeah, +1..

However, you are left infected with many nasty terminal STD’s including the new one.. aggressive Bernankebola of the butt.  

Thu, 08/23/2012 - 09:30 | 2729954 sessinpo
sessinpo's picture

Congradulations! You are the proud parent of a +$16 Trillion dollar debt baby.

Wed, 08/22/2012 - 13:34 | 2727972 DoChenRollingBearing
DoChenRollingBearing's picture

Going off the "Fiscal Cliff" means holding CA$H, real long green, becomes King.  Very deflationary.

However, my guess (worth zero) is that yet another phony deal will be made, another ugly "compromise".  THAT would be inflationary.  

If we get something similar to the Ryan Plan, well, longer run that certainly would be good, more .gov spending IS the problem.

Wed, 08/22/2012 - 13:57 | 2728061 spine001
spine001's picture

Incorrect, Ben Bernanke mentioned when asked by the Finance committee of the House that "Financial Instability risk" increases with more QE and that they are looking into that. I do know as a fact that it is in their models. The system could start oscillating out of control and that is scaring them shitless... :)


Until next time,


Wed, 08/22/2012 - 14:29 | 2728189 lasvegaspersona
lasvegaspersona's picture

The Fed prints, not to improve the ecomony but to fund the USG.

The government MUST spend or the GDP will fall.

There is no way the budget can be cut without disasterous effects on the economy.

....and yes, then we will get the hyperinflation....everyone knows (of those paying attention)

please do not panic those in stearage, their fate is bad enough, no reason to add  fear to their last moments...

Wed, 08/22/2012 - 16:21 | 2728459 odatruf
odatruf's picture

The people in steerage should know that at this point their choices are to stay where they are / keep on watching Dancing Idol / hoping someone else is smart enough and wants to fix the problems OR they can get off their asses, recognize the ship is going down and put some ores (haha, see what I did there?) in the water. As in: stop sucking up the SNAPs, stop expecting everything in exchange for nothing and get to work by taking action. Learn issues, vote accordingly, and hold those in power accountable. And ultimately, they ought to be prepared to to take actions that are not unlike those taken 236 years ago in Concord, Lexington and elsewhere.

Wed, 08/22/2012 - 17:40 | 2728798 sessinpo
sessinpo's picture

"The government MUST spend or the GDP will fall."


Both Sides Fail. End Game

Wed, 08/22/2012 - 13:23 | 2727919 kaa1016
kaa1016's picture

Why anyone believes anything these people say is beyond me.

Wed, 08/22/2012 - 14:37 | 2728224 Watauga
Watauga's picture

Good grief what an Obama shill you are.  Did you read that direct from the Democrat talking points memo?

Wed, 08/22/2012 - 18:47 | 2728933 nmewn
nmewn's picture

Yes, he did...followed by LTER doing an "illegitimate" dance on the table wearing a doctors smock throwing "free pills" into the

Good times ;-)

Wed, 08/22/2012 - 20:22 | 2729068 monoloco
monoloco's picture

Any savings realized from cutting social programs is likely to be eaten up by military spending and a war with Iran. Tax cuts and a big war, where have we seen that movie before?  No matter who gets in we're fucked.

Wed, 08/22/2012 - 13:15 | 2727883 mrktwtch2
mrktwtch2's picture what do we do..??

Wed, 08/22/2012 - 13:18 | 2727895 slaughterer
slaughterer's picture

"okay... now what do we do..?"

For the next 2 hours, you short silver.  

Wed, 08/22/2012 - 13:26 | 2727932 1100-TACTICAL-12
1100-TACTICAL-12's picture

BLAH>>>BLAH>>>BLAH>>>  It does'nt matter who's playin the violin , the show is almost over.

Wed, 08/22/2012 - 13:17 | 2727889 10mm
10mm's picture

If R&R are in,you for sure do not want to be in the BIG Citys.

Wed, 08/22/2012 - 15:04 | 2728352 10mm
10mm's picture

I agree.Im not Red Team/Blue Team.But im prep team,and i know R&R are not big city friendly.

Wed, 08/22/2012 - 19:02 | 2728947 nmewn
nmewn's picture

You're not supposed to use same ID when agreeing with yourself.

Nice touch with the Red Team/Blue Team meme though ;-)

Wed, 08/22/2012 - 13:18 | 2727893 fijisailor
fijisailor's picture

Don't fool yourself into believing there will be any significant difference between an Obama or Romney presidency. 

Wed, 08/22/2012 - 13:21 | 2727909 CClarity
CClarity's picture

Agree with regards to the economy.  Disagree with respect to women's reproductive health.

Wed, 08/22/2012 - 13:24 | 2727924 Vooter
Vooter's picture

If the Republicans take office and pass draconian reproductive health laws, IGNORE THE LAWS. The United States government and corporate America have made it perfectly clear that lawlessness is a good thing, and the American people should definitely take them up on it, in spades...

Wed, 08/22/2012 - 13:54 | 2728048 Everybodys All ...
Everybodys All American's picture

the wall st outlaws have flourished under Obama unfortunately.

Wed, 08/22/2012 - 14:32 | 2728203 lasvegaspersona
lasvegaspersona's picture

dude if you are going to break the law you'd better own a bank or be a former Senator or governor or someone else above the law ...we take laws seriously in this country if you are just a poor dumb schmuck

Wed, 08/22/2012 - 15:10 | 2728374 Vooter
Vooter's picture

"we take laws seriously in this country if you are just a poor dumb schmuck"

FUCK this country...

Wed, 08/22/2012 - 13:28 | 2727943 kridkrid
kridkrid's picture

Wedge issue, meant to keep people divided. Divide and conquer. I doubt things will change on that front, but who knows.

Wed, 08/22/2012 - 14:03 | 2728080 Spastica Rex
Spastica Rex's picture

Precisely. And what ever rally changes with a change in party - have abortions gone down during Republican adminstrations? Have rubbers become harder to buy? 

Wed, 08/22/2012 - 16:29 | 2728626 odatruf
odatruf's picture

See, there you go denying my reproductive choices.  You just said so when you suggested that people ought to be buying their own rubbers.

Wed, 08/22/2012 - 13:49 | 2728033 AT
AT's picture

What?! You mean Republicans are opposed to gynecologists? Oh, wait. I get it. You really mean "disagree with respect to babies' rights not be killed". All clear now.

Wed, 08/22/2012 - 14:06 | 2728092 Spastica Rex
Spastica Rex's picture

Have Republicans ever reduced the incidence of abortion? Ever? Seriously - I would like to know. I know they say they want to, just like the Democrats say a lot of things they want to do and don't do them.

Wed, 08/22/2012 - 14:20 | 2728153 CommunityStandard
CommunityStandard's picture

With the way the future is looking for kids, an abortion is an act of kindness.

Wed, 08/22/2012 - 14:50 | 2728288 blunderdog
blunderdog's picture

Undereducated kids born out of wedlock to poor parents are as likely to turn out Republican as Democrat.  The children are the future.

Wed, 08/22/2012 - 20:44 | 2729106 ersatzteil
ersatzteil's picture

Too true; the abortion issue, like gay marriage and immigration, seems very much like a planned and timed distraction from the issues that would unite the hoi poloi against the status quo, such as where that Social Security surplus went...


Wed, 08/22/2012 - 14:54 | 2728306 11b40
11b40's picture

Babies already have the right not to be killed.  They are people, and people have rights, although around 15% of the population, mostly older white males, seem to want to take rights about control over their bodies, their families, and the their future life plans away form the female gender.

Eggs are not people, and neither are corporations.

Wed, 08/22/2012 - 15:52 | 2728527 object_orient
object_orient's picture

Your estimate of anti-abortion demographics is way off. America is roughly split in half on the issue, according to Gallup. There is a slight pro-life skew among 55+, but no real difference in gender. In my personal experience, the picketers outside Planned Parenthood are almost all women, and cultrually/racially diverse. Doesn't mean that they're right, however. Just sayin.

Wed, 08/22/2012 - 18:04 | 2728857 11b40
11b40's picture

No, you are wrong.  It all depends on how you ask the question.  It's really not "are you for or against abortion?"  Almost everyone finds it distasteful and unfortunate.  The question is about personal liberty and rights.

Do you believe a woman has the right to an abortion?

Do you believe a woman has the right to an abortion in the case of rape (forced, legit, or whatever else kind you can dream up)?

Do you believe a woman has the right to an abortion in the case of incest?

Do you believe citizens have the right to control their own bodies, or should politicians have that right?

If the answer to anyof the above is yes, then, even if you would never have one, or if you find it sad, immoral, or anthing else, you are not in favor of outlawing abortion, and should not approve of efforts to remove or restrict rights.

In other words, everybody should just mind their own business.  How's that for policy?

Wed, 08/22/2012 - 14:39 | 2728234 object_orient
object_orient's picture

You are probably trolling (and it's working), but abortion services are already unavailable in most of the country. Low-income women are especially effected. Even if Romney wins, appoints anti-abortion SCOTUS judges and gets Roe v. Wade overturned, abortion would still be legal in most states. And why would the GOP eliminate one of its most galvanizing issues, in terms of national get-out-the-vote efforts and fundraising?

Wed, 08/22/2012 - 13:18 | 2727894 Unprepared
Unprepared's picture

<--- Obama/Biden

<--- Romney/Ryan

Your best bet to inadvertedly push the systemic reset button instead of the 'atomic' button.

Wed, 08/22/2012 - 13:22 | 2727915 camaro68ss
camaro68ss's picture

Wheres your Ron Paul botton? I wont that one

Wed, 08/22/2012 - 13:44 | 2728008 Unprepared
Unprepared's picture

Do you honestly believe he'll make it down there?

And just to clarify, I meant who would bring the collapse faster.

Wed, 08/22/2012 - 13:54 | 2728049 kridkrid
kridkrid's picture

Ron Paul would bring about the collapse the fastest, which is why I support him.

Wed, 08/22/2012 - 13:35 | 2727970 FL_Conservative
FL_Conservative's picture

Is there a reason you didn't prepare a Ron Paul alternative?


Given the choices provided, I'll vote against Obama due to:

(1) the Keynsian economic focus; and

(2) his continuing insistence on using Executive decree to circumvent our Constitution.

Wed, 08/22/2012 - 15:50 | 2728523 bobnoxy
bobnoxy's picture

Yet you voted for Bush who did the same thing?

Wed, 08/22/2012 - 15:54 | 2728532 FL_Conservative
FL_Conservative's picture

And what choices were there?  W and E-Gore / Kerry?  Talk about slim pickins'.

Wed, 08/22/2012 - 14:50 | 2728282 krispkritter
krispkritter's picture

  <---- Burn it down

  <---- SSDE: Same Shitheads, Different Election


Wed, 08/22/2012 - 20:51 | 2729130 ersatzteil
ersatzteil's picture

I chose Romney/Ryan for laughs and just got a letter of thanks from the campaign, which included a cc offer from Chase with 25% apr...anyone get similar results from choosing Obama/Biden?

Wed, 08/22/2012 - 13:20 | 2727901 slaughterer
slaughterer's picture

<-- SILVER UP after FOMC


Wed, 08/22/2012 - 13:29 | 2727948 fonzannoon
fonzannoon's picture

There is no way silver has been running up on qe expectations lately. Whatever is driving the euro higher is taking silver with it. I fully admit I don't know what is driving the euro at this point. If Draghi has not been proven to be full of shit by now I guess he will never be.

Wed, 08/22/2012 - 13:35 | 2727971 slaughterer
slaughterer's picture

Watch silver experience a temporary crash dive from 1:30 onwards today. The raid already started slowly at $29.541 a few minutes ago.  

Wed, 08/22/2012 - 14:05 | 2728089 PiratePawpaw
PiratePawpaw's picture

Wow! you were right. It crashed up to 29.67.

Quit it some more.

Wed, 08/22/2012 - 14:46 | 2728271 PiratePawpaw
PiratePawpaw's picture


Wed, 08/22/2012 - 17:34 | 2728788 narapoiddyslexia
narapoiddyslexia's picture

Why are they letting it rise? What is the motive of the market manipulators? Is a critical person sick? Car crash? Drunk? What?

Wed, 08/22/2012 - 14:09 | 2728115 PiratePawpaw
PiratePawpaw's picture

<$40 is cheap for silver.

Wed, 08/22/2012 - 13:21 | 2727905 Vooter
Vooter's picture

Anyone who's not voting third party--ANY third party--is simply PART OF THE PROBLEM. The two-party system needs to be destroyed, by any means possible. Grow a spine, have a shred of dignity, and STOP VOTING for the scumbags who are spitting in your face over and over again and laughing about it. If you pull the lever for a Democrat or a Republican, you are an ASSHOLE....

Wed, 08/22/2012 - 13:45 | 2728015 Everybodys All ...
Everybodys All American's picture

Call me a whatever you want but we are kind of stuck with the two party system. Ross Perot went absolutely no where and was a very viable third party presidential candidate. That large sucking sound he talked about with NAFTA was real and we see the outcome of that sound today. A viable third party needs to emerge first before that kind of vote is even relevant. Look at how hard it has been for the tea party for instance to be taken seriously whether you agree or disagree with their politics no one has taken them seriously as a party.

Which side of the aisle do you think a third party candidate will vote alongside in committee? Bernie Sanders is a good example. He is a third party candidate all by himself but 99% of the time votes as a democrat and he caucuses with the democrats. So by most measures he is a democrat.  The same can be said of a tea party candidate. They are simply a more conservative republican.

A vote for third party simply waters down the election and the incumbent will nearly always win. You want to change the election outcomes or process then start asking or demanding term limits for all politicians.

Wed, 08/22/2012 - 14:04 | 2728082 kridkrid
kridkrid's picture

Such a programmed response... You don't mean it to be, and it sounds thoughtful enough, but it's used to ensure the one party hold on power that is masqueraded as our two party system. It's all a lie. By the way, the tea party has been completely co-opted by he republican party. Whether it was ever a legit movement is debatable, but what it is now is pure republican sideshow antics.

Wed, 08/22/2012 - 15:08 | 2728368 Vooter
Vooter's picture

I don't care if my third-party vote changes anything--I'm not going to vote for a traitor, and both parties are filled with traitorous scum. Fuck 'em all--I want chaos, fear and collapse. It's time to be unreasonable...

Wed, 08/22/2012 - 15:10 | 2728378 object_orient
object_orient's picture

The real threats to the two (one) party system are either shut down like Perot, or coopted like the Tea Party. Perot won lots of public support in the 1992 debates so the CPD banned him in 1996. The early Tea Party was about Ron Paul and End the Fed. Now it's an adjunct to the GOP. How are term limits going to limit the D/R stranglehold on Congress? The D/R presidential rotation is still working fine, despite a two-term limit. What does "waters down the election" even mean?

Wed, 08/22/2012 - 16:10 | 2728578 Everybodys All ...
Everybodys All American's picture

If you cant see the possibility of term limits in limiting or dismantling the power and money structures of career politicians then what hope is there in any party system. Three or more parties in European countries still doesn't change the fact that even those parties have to come to a consensus of opinion in order to pass law. So adding a third party doesn't really change the dynamics of how laws are passed that much. I think you tend to get more gridlock. BTW many European countries have up to ten different parties.

A watered down election may not be properly named. What I believe and what experience tells me is that a vote for a third party candidate is the same as a vote for the incumbent. The incumbent will win more often than not when a third party candidate runs in the election. It therfore infurs that fewer people end up actually deciding the election.

Wed, 08/22/2012 - 13:58 | 2728066 FL_Conservative
FL_Conservative's picture

Vooter, you get an "A" for principle but an "F" in pragmatism.  Most here agree that our system is fucked up and, while I continue to harbor hope that something positive will happen with Ron Paul in Tampa, the reality is that the progressives/statists have been planting their infectious roots since Woodrow Wilson hoping to eventually get their utopia.  Even if Ron Paul were to somehow come away with the nomination (or significant influence on R&R) coming out of Tampa, we're still turning this cruise ship with a teaspoon.  One election will NOT get the job done.  Fortunately, more and more voters are getting turned on to "Paulism" and it gives me hope that we will eventually win out.  But, if things remain the same with the choices, a third-party vote in November will guarantee that we go off the cliff at 100 mph.  If nothing else, I at least want some hope that we can weigh anker before we get there. If that makes me an asshole in your eyes, so be it.

Wed, 08/22/2012 - 15:00 | 2728332 Vooter
Vooter's picture

"But, if things remain the same with the choices, a third-party vote in November will guarantee that we go off the cliff at 100 mph."


Wed, 08/22/2012 - 16:00 | 2728550 FL_Conservative
FL_Conservative's picture

(Certain) Failure is NOT an option.  With the right person in place, this patient can be resuscitated.  I just wish that person was out there.  The only one that comes close is RP.  But I won't support "nuking it for morbid" until I'm sure that is the only option remaining.

Wed, 08/22/2012 - 13:23 | 2727913 Bay of Pigs
Bay of Pigs's picture

No need to even post this garbage. Morgan Stanley? lol...

Wed, 08/22/2012 - 13:22 | 2727914 Dr. Gonzo
Dr. Gonzo's picture

Since Romney/Ryan are so great at managing money and cutting unneccesary wasteful costs I wonder how much of the War Machine mbudget they'll cut? My guess. A BIG FAT ZERO! So I guess we can all cheer when they cut all our benefits and raise our taxes to a somewhat balanced budget so the Amerikan War machine can keep on going. At all costs keep this military indust police state going so we can all pledge allegience to the Police State. I say lets just let the Empire die and start over.

Wed, 08/22/2012 - 13:25 | 2727928 kridkrid
kridkrid's picture

Everyone has a plan until they get punched in the face. These plans are meaningless... Fodder for the charade. The haymaker landing on the chin is the reality of a monetary system that loans money into existence with interest. The "money" to pay the interest on top of the principle doesn't exist, so the system must create more money in the form of new loans... I.e. more debt.

Nothing in this worthless debate is anything more than rearranging deck chairs. Someday this war's going to end...

Wed, 08/22/2012 - 13:31 | 2727958 12ToothAssassin
12ToothAssassin's picture

+1 for a Mike Tyson quote

Wed, 08/22/2012 - 13:46 | 2728019 kridkrid
kridkrid's picture

The man was a poet.

Wed, 08/22/2012 - 13:50 | 2728037 1C3-N1N3
1C3-N1N3's picture

And his defense was impregnable.

Wed, 08/22/2012 - 14:59 | 2728324 MachoMan
MachoMan's picture

I wonder if he's faded to bolivia yet?

Wed, 08/22/2012 - 13:31 | 2727963 centerline
centerline's picture

Abortion policy was all over the news this morning.  The usual distractions are being warmed up.  

Wed, 08/22/2012 - 14:36 | 2728219 Bob
Bob's picture

Yup, same as it ever was.  Media malpractice continues to piss of Nader:

Wed, 08/22/2012 - 15:11 | 2728381 11b40
11b40's picture

How is this for media malpractice?

Bain Capital Owns Clear Channel (Rush Limbaugh, Sean Hannity, Glenn Beck, Michael Savage, Etc.)

Wouldn't it be great if a Republican presidential candidate could just buy the support of just about every major conservative talk show host in America?  Well, it may not be as far-fetched as you may think.  Clear Channel owns more radio stations (850) than anyone else in the United States.  They also own Premiere Radio Networks, the company that syndicates the radio shows of Rush Limbaugh, Sean Hannity, and Glenn Beck, among others.  Needless to say, Clear Channel basically owns conservative talk radio in the United States.  So who owns Clear Channel?  Well, it turns out that Bain Capital is one of the primary owners of Clear Channel.  Yes, you read that correctly.  The company that Mitt Romney ran for so long is one of the "big bosses" over virtually all conservative talk radio in America.  Of course Mitt Romney is not running Bain Capital anymore.  He is a "retired partner", but he still has a huge financial stake in Bain Capital.  We're talking about millions upon millions of dollars.  If you doubt this, just check out page 34 of this public financial disclosure report.  So if you have been wondering why so many conservative talk show hosts are being so incredibly kind to Mitt Romney, this just might be the answer.

In the media world, there is a clear understanding that you simply do not bite the hand that feeds you.  Some of the most prominent conservative talk radio hosts are earning tens of millions of dollars a year.

If you were making tens of millions of dollars a year, wouldn't you be very careful to avoid offending your boss?

The deal in which Bain Capital became one of the owners of Clear Channel was initiated just a short time before Mitt Romney's first run for president.  The following comes from Wikipedia....

On November 16, 2006, Clear Channel announced plans to go private, being bought out by two private-equity firms, Thomas H. Lee Partners and Bain Capital Partners for $18.7 billion, which is just under a 10 percent premium above its closing price of $35.36 a share on November 16 (the deal values Clear Channel at $37.60 per share).

The deal was finalized in 2008.  Today, Bain Capital is still one of the primary owners of Clear Channel.

One of the subsidiaries of Clear Channel is Premiere Radio Networks.

Premiere Radio Networks distributes a whole host of conservative talk radio shows.  Everyone in the conservative world knows names such as Rush Limbaugh, Sean Hannity and Glenn Beck.  Clear Channel also controls some other conservative talk radio hosts (such as Michael Savage and Mark Levin) that are not part of the Premiere Radio family.

The power that Premiere Radio Networks has is absolutely staggering.  The following is directly from the official Clear Channel website....

Premiere Radio Networks Inc., a subsidiary of Clear Channel Communications, syndicates 90 radio programs and services to more than 5,000 radio affiliations and reaches over 190 million listeners weekly.  Premiere Radio is the number one radio network in the country and features the following personalities:  Rush Limbaugh, Jim Rome, Casey Kasem, Ryan Seacrest, Glenn Beck, Bob (Kevoian) & Tom (Griswold), Delilah, Steve Harvey, Blair Garner, George Noory, John Boy and Billy, Big Tigger, Dr. Dean Edell, Bob Costas, Sean Hannity and others. Premiere is based in Sherman Oaks, California, with 13 offices nationwide.

So do you think that any of those hosts is going to risk viciously attacking Mitt Romney and Bain Capital during this election season?

Not likely.

One of the controversies that has plagued Premiere Radio Networks in recent years has been the uproar over their use of paid actors to call in to their radio shows.

The following comes from Wikipedia....

Clear Channel, through its subsidiary, Premiere Radio Networks, auditions and hires actors to call in to talk radio shows and pose as listeners in order to provide shows, carried by Clear Channel and other broadcasters, with planned content in the form of stories and opinions. The custom caller service provided by Premiere Radio ensures its clients they won't hear the same actor's voice for at least two months in order to appear authentic to listeners who might otherwise catch on.

So perhaps that explains where some of the "Romney callers" come from.

There is nothing illegal about what Romney and Bain Capital have done, but it sure does not pass the "smell test".

Conservative talk radio has the potential to sway millions of conservative voters in one direction or another, and it is just not proper for Bain Capital and Romney to have such an overpowering financial interest in conservative talk radio.

And yes, Mitt Romney is still bringing in lots of money from Bain Capital.  The following comes from a Wikipedia article about Mitt Romney....

At the time of his departure, Romney negotiated an agreement with Bain Capital that allowed him to receive a passive profit share as a retired partner in some Bain Capital entities, including buyout and investment funds.[62][57] With the private equity business continuing to thrive, this deal would bring him millions of dollars in income each year.[57] As a result of his business career, by 2007 Romney and his wife had a net worth of between $190 and $250 million, most of it held in blind trusts.[62] An additional blind trust existed in the name of the Romneys' children and grandchildren that was valued at between $70 and $100 million as of 2007.[63] The couple's net worth remained in the same range as of 2011, and was still held in blind trusts.

In addition, Bain Capital and Bain & Company continue to pour huge amounts of money into Romney's campaign coffers.

Just check out the following list of the biggest donors to the Romney campaign.  These numbers come from

Goldman Sachs $367,200
Credit Suisse Group $203,750
Morgan Stanley $199,800
HIG Capital $186,500
Barclays $157,750
Kirkland & Ellis $132,100
Bank of America $126,500
PriceWaterhouseCoopers $118,250
EMC Corp $117,300
JPMorgan Chase & Co $112,250
The Villages $97,500
Vivint Inc $80,750
Marriott International $79,837
Sullivan & Cromwell $79,250
Bain Capital $74,500
UBS AG $73,750
Wells Fargo $61,500
Blackstone Group $59,800
Citigroup Inc $57,050
Bain & Co $52,500

As with anything, whenever you want to get to the real truth you just need to follow the money.

Earlier this week, Sean Hannity told Rick Perry that his attacks on Mitt Romney's time at Bain Capital sounded like something that "Occupy Wall Street" would say.

Just the other day, Rush Limbaugh compared Rick Perry to Fidel Castro and rabidly defended Mitt Romney on his radio program....

“There’s no way you can try to dress that up,” Limbaugh fumed. “I don’t understand it. Well, politically I understand it, but that’s just absurd. It’s sad. ‘Cause I really, really, really like Rick Perry! I really do. I had such hopes! I did. I’ll tell you, I did, but all of this talk about “corporate raiders,” and as I listen to politicians start talking about capitalism, lights are going off in my head. “Maybe they don’t really know what it is. Maybe they’re under some misconception about what capitalism is, because this characterization of it? A distinction with venture capitalism and vulture capitalism? This bite from Perry doesn’t compute.”

Michael Savage has been one of the worst offenders of all.  He made national headlines when he offered Newt Gingrich one millions dollars to drop out of the race so that Mitt Romney would have a clear path to the nomination.

When he announced this offer, Savage wrote the following on his own website....

"Mitt Romney is the only candidate with a chance of defeating Barack Obama, and there is nothing more important than that for future health, safety, and security of the United States of America"

So why are these conservative talk show hosts defending Mitt Romney so furiously?

I think now we know.

It is all about the money.

When you have enough money, you can get conservative talk show hosts to promote an extremely liberal candidate.

Yes, of course Bain Capital does not "control" what these talk show hosts say.

Yes, of course some of the talk show hosts toss some light criticism at Romney from time to time.

But they simply do not go after Romney like they should be.

The truth is that Mitt Romney is really a Democrat that is masquerading as a Republican.  When you closely examine his record, he is very similar to Obama.

There is no way in the world that any self-respecting conservative should ever cast a single vote for him.

But right now Mitt Romney is running away with the race for the Republican nomination.

If Republicans can be fooled this badly, is there any hope for the future of the Republican Party?

Wed, 08/22/2012 - 16:48 | 2728685 divide_by_zero
divide_by_zero's picture

Actually most of the so-called right-wing radio hosts appeared to have been against Romney from the beginning. Unfortunately Romney was picked by the Progressive MSM which is joined at the hip with Obama, they get talking points every morning thru WH Progressive Media Czar using Media Matters and the rest of the Soros network down thru to liberal/progressive bloggers CNN/NBC/CBS/ABC and especially MSNBC which doesn't even pretend anymore(seriously Sharpton ?!?!? WTF??!!). Romney is not very popular with the base because as you pointed he is a RINO, and has actually run in the past as a Progressive Independent. Another Bloomberg POS, Dem -> Repub -> Ind but always the same.

Wed, 08/22/2012 - 19:09 | 2728958 11b40
11b40's picture

Curious as to your definition of Progressive?  You think Romney is a Progressive?  Obummer isn't even a Progressive.

I have no idea who the right-wing radio talk show community was for or against in the beginning....but I know who they have lined up for now.

Actually, Sharpton is rather amusing, extremely well informed, and, as many backs are, expert at identifying hypocrisy and condescension masked as racism, was MSNBC's answer to Glenn Beck....but Sharpton is smart enough to know better than to jump of the deep end.  Glenn Beck, not so much.

Now, Reverend Al is the antidote to Reverend Huckabee.

Wed, 08/22/2012 - 16:50 | 2728688 Bob
Bob's picture

No more hope than exists for the Dimocrat Party, where DINO POTUS BarryO enjoys the mindblowing pretense of being a "liberal."

Which is to say that the future of the blue-red political duopoly looks bright!  Owning the media has serious advantages.  Thank Bill Clinton for that one:

Strip mining the population by any means possible is the script for both of these freaks. Fortunately for them, the corporate media ensures that nobody else gets heard. 

Damn, that was good investigatory journalism in the form of a forum comment!  Much appreciated.  You a professional?

Wed, 08/22/2012 - 18:51 | 2728942 11b40
11b40's picture

Yep...the corporate media is controlled a handful of major corporations.

Dig deeper & see what you discover.

Not a professional, just scared shitless.  Afraid people like me are a dying breed....and there are a few folks on here that would be happy to see that happen ;-) 

I am always dismayed to see fact based comments get junked, regardless of which way those comments lean politically, economically, socially, ethnically, etc.  We need to get Dragnet re-runs back on TV....just the facts M'am, just the facts.

Thu, 08/23/2012 - 06:49 | 2729578 i-dog
i-dog's picture


"Damn, that was good investigatory journalism in the form of a forum comment! Much appreciated."

Don't get sucked in, Bob. That post is simply a reprint of an old post from 7 months ago on a Luciferian-affiliate website:

Thu, 08/23/2012 - 10:04 | 2730097 11b40
11b40's picture

Is there one fact in this article that is wrong?  Please point out any and all inaccuracies for us.  The media consolidation and the immense propaganda machine that is controlling the electoral process is good with yuou, I guess.  You prefer to sick your head in the sand and not be bothered with facts....and don't want otheres to be, either, it seems.

Thu, 08/23/2012 - 11:06 | 2730196 i-dog
i-dog's picture

LOL ... that article came out when the CNP was still trying to get Santorum up over Romney. Now that Santorum has crashed and burned, it's been dragged out again for re-use in the cause to motivate Obomber voters. They all work for the same masters, you idiot. As somebody else here said: "Even the GOP hates Romney!".

Irrespective of the content (all disinfo and cowbell ringing is fundamentally accurate), you're either a shill for the Luciferians or an exceptionally dumb fucking sheep! (I'm going with the latter being the case).

Thu, 08/23/2012 - 12:46 | 2730759 11b40
11b40's picture

LOL is right.  I present a long list of facts, and you dispute not a single one of them as inaccurate, then call me a dumb fucking sheep or a luciferian.

Too bad for you, but most here will realize that you are either a troll or a fool.  The issue here is control of the media and getting a "fair & balanced" presentation of reality.

Adios....I have no time to try and educate a head firmly locked in the backward, paranoid position.

Luciferian.  Ha!  Careful bud.  I might make you start growing a tail.

Thu, 08/23/2012 - 06:05 | 2729561 GCT
GCT's picture

Go back to huffpo please.  Most here know both parties are one and the same.  Get a clue there are more rich fuckers in the democratic party then the repubs.  Tough to see that though when the Dem message is for the little people. 

Personally I do not listen to either side of the fence anymore as they are are all shills.  But get your facts correct.

Wed, 08/22/2012 - 13:30 | 2727935 sdmjake
sdmjake's picture



Wed, 08/22/2012 - 13:49 | 2728030 Robot Traders Mom
Robot Traders Mom's picture

I'm glad you have that picture as your profile. Now everyone knows what I look like below the shoulders...

Wed, 08/22/2012 - 13:29 | 2727942 SheepDog-One
SheepDog-One's picture

Fuck off, Margin Stanley! Just shove that Fed free moneez teat back in your mouth why dont you!

Wed, 08/22/2012 - 13:29 | 2727945 not fat not stupid
not fat not stupid's picture

The American people don't give a crap about your debate. The ones who are voting for the black guy would never vote for a rich white guy and the the ones who are voting for the rich white guy wouln't never vote for a black guy,

Wed, 08/22/2012 - 13:40 | 2728000 kridkrid
kridkrid's picture

Think of the layers of meaningless debate one needs to wade through before reaching the real debate that will never be allowed to happen. Remarkable. Sheep.

Wed, 08/22/2012 - 13:30 | 2727953 Confundido
Confundido's picture

Here it comes....the 1:30pm ET algo to bring gold down....

Wed, 08/22/2012 - 13:36 | 2727980 Bay of Pigs
Bay of Pigs's picture

Not to be confused with the COMEX daily morning gold raid.

Wed, 08/22/2012 - 13:36 | 2727981 slaughterer
slaughterer's picture

How do you know it is an algo?  It is actualy being executed by humans in a room I am next to right now.  

Wed, 08/22/2012 - 13:33 | 2727967 GeezerGeek
GeezerGeek's picture

Morgan Stanley thinks the Ryan pick raises the chance of a benign, before-the-election resolution of the fiscal cliff. Like from -5 to -4? Or should we just consider the chances to be imaginary, like 5i to 4i (i being the square root of -1, for those not mathematically inclined.)

While I would personally like to see the Repubs control the presidency and both houses of Congress come 2013, it would be fun to see what would happen should Obama be faced with an entirely Repub Congress. What if they voted no funding for 2 billion hollow point rounds? What if they reduced Michelle's vacation funding? What if they refused to fund Obamacare and used all that Obamacare tax revenue to lower the deficit while still blaming Obama for increased taxes? The possibliities are numerous. Too bad that, regardless of who wins what elections, the joke is still on We the People.

Wed, 08/22/2012 - 13:37 | 2727984 Snakeeyes
Snakeeyes's picture

Seriously, the fiscal cliff is so daunting that Romeny/Ryan will barely put a dent in the outrageous deficit and debt.

Wed, 08/22/2012 - 13:43 | 2728010 ATM
ATM's picture

"the debate will be about the right level of federal expenditure relative to national income, the progressivity of the tax system, and the extent to which family incomes are protected on the downside by Washington, DC."


Who the fuck wrote this? When did we develop a set correlation of size of government expenditures to national income. The two are and should be independent! The size of government has zero to do with the size of GDP. What government is supposed to do it is supposed to do. If we become wealthier or poorer does not change the role of government! That line of thinking is a large part of the problem.

Progressive income taxes should rightly be unconstitutional. It is government creating laws to treat Americans differently. 

Family incomes protected by government? Where does our Constitution state that the Government can act as an insurance company or charity? I can't lay my finger on the section of the Constitution that states I can transfer my risk of unemployment or lost savings onto the government nor can I find that part which states that if I need money government will take from some to give to me, or better yet will print the money I need out of thin air thereby relieving everyone of that bothersome tax payment and realization of how much they have actually contributed! Always better to leave such nasty things to the imagination. 

Wed, 08/22/2012 - 14:09 | 2728118 sdmjake
sdmjake's picture

Don't worry, its all in the constitution...right next to the part where the POTUS can have you executed by drone strike.

Wed, 08/22/2012 - 15:02 | 2728339 blunderdog
blunderdog's picture

I can't imagine any "constitutional" argument against progressive tax rates, but if you think the idea is bad, that's all well and good.

I'd say you'd probably have to give up the "anti-progressive" tax-rates too, though.  Like FICA.  If people earn a lot, they could pay the same FICA rate as people who earn a little, right?

Wed, 08/22/2012 - 13:47 | 2728023 ejmoosa
ejmoosa's picture

I'm tired of the fiscal cliff image.  It's more a fiscal swamp.  We are stuck in it, we cannot move, and we do not even know what the hell is in that swamp that will be the even that will take us out.  The idiots that are trying to tell us how to get out of the swamp are the very ones that led us deeper into it.


By the time there is enough people that realize that we really do have a problem, it will be too late.  Hell, it's too late now.   

Wed, 08/22/2012 - 13:50 | 2728036 Inthemix96
Inthemix96's picture

As if anyone believes any of the shit we are fed daily?

Saw Ryan on TeeVee yesterday as mitt distanced himself from the retard regarding rape.  He sat there while mittens gave a grave and damning putdown of the retard with the false rape allegations, just nodding his useless head.  Looking all serious like, but sitting next to mittens like a concerned auntie would sit next to a cancer ridden family member and nob and wave, say the right platitudes and such like???

What a fucking joke these two chancers are, they are almost as good as sotero and biden.

And folk wonder why we are fucked eh?????

Wed, 08/22/2012 - 13:56 | 2728058 Schmuck Raker
Schmuck Raker's picture


Looks like the new "Obama Victory Fund 2012" attack ads are out.

To paraphrase Sir Charles:

"I'm the President of the United States of America, not a role-model."

Wed, 08/22/2012 - 14:00 | 2728070 geewhiz190
geewhiz190's picture


Keep dreaming

Wed, 08/22/2012 - 14:08 | 2728109 Catullus
Catullus's picture

Uh... Ryan's budget doesn't cut anything until year 10 of a budget that 4 Congresses now will control. Didn't know a 10-20 year budget forecast could be so "polarizing". It's just fun with math and allows people to ignore the real issues behind this spending.

Ryan is a total fraud on this front as most ZH commenters already know. It's for ye old silent media that uses ZH to fish for stories. The man is a fraud. If you write that he's some sort of diametric opposite of the Obama folks, you too are a fraud.

The only way the economy is going to grow is if the public sector is shrunk and the obligations are defaulted and taxes are lowered. Private sector creates. Public sector destroys. End of story. This administration added a century's worth of debt bailing out Wall Street, the unions, and their friends in 4-5 years.

And that "inherited a mess" needs to stop. Democrats voted unanimously for TARP in 2008. It's why the republicans were blocking it in late Sept 2008. Everyone of the democrat side was all-in to bail this pig out. Including the junior senator from Illinois.

Wed, 08/22/2012 - 15:00 | 2728326 Hohum
Hohum's picture


So what's the private sector going to create?  Twice as many IPhone versions per year?

Wed, 08/22/2012 - 15:26 | 2728431 object_orient
object_orient's picture

Affordable micro-power I hope. My local electric company monopoly invents new price tiers all the time. The bills this summer are killing me.

Are you seriously insinuating that the private sector doesn't create anything worthwhile?

Wed, 08/22/2012 - 16:34 | 2728643 Whoa Dammit
Whoa Dammit's picture

Many people who could create inventions for the private sector wouldn't ever even land a job in R&D. Today, a man like Nikola Tesla would never be hired by Westinghouse as he would not have a PHD, 6 Sigma Black Belt, and all the other blah blah credentials necessary to make it past HR. 

Wed, 08/22/2012 - 20:28 | 2729081 shovelhead
shovelhead's picture

Hollow point bullets are fashionable this year.

Very big with the Washington set.

Wed, 08/22/2012 - 14:20 | 2728157 bankruptcylawyer
bankruptcylawyer's picture

Ryan during his shtick last year about wanting to reduce the deficit actually mentioned reducing the military budget------hours/days later he promptly called up the military chiefs and apologized profusely for 'misspeaking'. he was also loosley associated with jack abramoff and the republican camp of delay that was more than happy to take lobbyist money. 

he is just another controlled person---. 

he will accomplish as much to change the national debt as obama. the only difference is he might accomplish a little cost cutting that will make no difference in the long run. 

again---ZERO difference between the two candidates. 

the only question is ---when will the markets get their next QE . it will not be stopped. mathematically ending QE would be the military and cia together deciding to shut themselves down. it won't happen. the money will flow until people starve. 




Wed, 08/22/2012 - 15:10 | 2728376 LucasATX
LucasATX's picture

Spend, spend, spend away. There is absolutely no way that we are EVER going to pay off our national debt. Hookers and blow all around. Enjoy it while it lasts. Romney can't fix it. Obama can't fix it.  Little trims here and there aint never going to fix it - so spend muther fuckers, spend. Last sober one in the room, please hit the reset button before you pass out.

Wed, 08/22/2012 - 15:41 | 2728491 lizzy36
lizzy36's picture

Neither party is going to cute spending.

The only question to be decided by the election is use of proceeds.

Wed, 08/22/2012 - 15:53 | 2728528 SmoothCoolSmoke
SmoothCoolSmoke's picture

Ryan is/will be an albatross around Romney's neck.  Seniors hate Ryan on entitlements, now woman hate him because if a metally retarded troglodyte whose HIV positive impregnates them with a baby against their wishes.... ol' Paul says "Conratulations Mommie!".   Lose the Senior vote + lose the female vote  = 1 thing: YOU LOSE.

Wed, 08/22/2012 - 16:52 | 2728694 blunderdog
blunderdog's picture

Maybe a tactical decision to leave the White House in Dem control so that the masses will be more likely to blame Dems for everything that happens over the next 4 years?

I dunno.  I remember that Rove guy and his buddy Grover used to be really keen on the "permanent Republican majority" concept.

Wed, 08/22/2012 - 16:51 | 2728691 falak pema
falak pema's picture

Here is the UK's answer to the Romney rally and the Tea party blues of the Ron Paul group; Britannia Unchained.

The New Tory party now has a platform to make Atlas Shrugged have the rugged pulled out from under it, with : Britannia Unchained! 

Wowieeeee...Maggie has now spawned a new generation of neo-con Brits!

Granny, we are here to carry your torch! 

 Britannia Unchained: the rise of the new Tory right | Politics | The Guardian

Wed, 08/22/2012 - 17:53 | 2728826 Heroic Couplet
Heroic Couplet's picture

Let Rush Limbaugh do his job and try to get RoMONEY into the White House. Same for Akin. Tax cuts are in place: where are the US jobs?

Wed, 08/22/2012 - 20:35 | 2729095 toomanyfakecons...
toomanyfakeconservatives's picture

Fasten your seatbelts and do not touch that dial. The only thing getting thrown over the edge of the cliff will be the traitors to the Constitution after the MASS ARRESTS occur...

Thu, 08/23/2012 - 09:18 | 2729900 Ian56
Ian56's picture

Ryan (or Romney's budget) does NOT cut anything.

It plans to MASSIVELY increase military spending from the current $1,219bn.

It raises taxes on the poorer sections and cuts taxes for the wealthy (Romney would pay less than 1% tax under the Ryan plan).

It slows up some of the planned social spending increases, it dos not cut them.

The Ryan plan expects to close $700bn p.a. of tax loopholes by 2022 but in 98 pages of rhetoric it cannot identify a single one.

Both the Ryan and Romney budget plans forecast wildly optimistic growth forecasts, which simply will not happen. 


Both the Ryan and Romney budget plans are ABSOLUTELY INSANE.

The USSR in the 1980's and the current Greek collapse offer good models for the US in the near future. 

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