Outgrowing “Friends” As We get Older and Our Values Change

It’s Not Me, It’s You

WHEN Jeryl Brunner, a writer in Manhattan, was in her 20s, she had a friend who was just the sort of acquaintance people scoop up in their social net when they are young and trying to carve out a life in a new city. The friend was fun, outgoing and stylish, and always up for a night of dancing at Area, or a weekend jaunt to a Neiman Marcus outlet in New Jersey.

But as Ms. Brunner neared 40, the reasons for their spending time together became less clear. “It’s almost like we were in different movies,” said Ms. Brunner, now 46. “We didn’t connect on this fundamental view of what was important. I don’t obsess about material things. I’m the kind of person, if I had $100, I’d see a play; I’d have an experience. Her sense of joy came from owning a Gucci bag.”

She decided it was time to let her friend go. So Ms. Brunner took the “bad-boyfriend approach” and just stopped calling. After the friend made a few spurned overtures — and after some awkward conversations about why Ms. Brunner was always too busy to get together — the friend got the hint. Years later, however, the breakup still feels unresolved.

“I wish I would have handled it differently,” Ms. Brunner said. “I think you owe it to that person, rather than keeping them guessing.”

Is there a right way to tell a friend it is time to go?

Thanks to Facebook, the concept of “defriending” has become part of the online culture. With a click of a mouse, you can remove someone from your friends roster and never again see an annoying status update or another vacation photo from a person you want out of your life.

Not so in the real world. Even though research shows that it is natural, and perhaps inevitable, for people to prune the weeds from their social groups as they move through adulthood, those who actually attempt to defriend in real life find that it often plays out like a divorce in miniature — a tangle of awkward exchanges, made-up excuses, hurt feelings and lingering ill will.

Even the most omnivorous collectors of friends acknowledge that sometimes it is necessary to cross out some names from their little black book.

Roger Horchow is the Broadway producer made famous in Malcolm Gladwell’s “Tipping Point” as a pre-eminent “connector,” a social web-spinner whose hidden expertise is maintaining a vast network of friends. But even for him, some must fall by the wayside.

People start “dropping ‘starter friends’ from the early bachelor days, or early work associates, or early couples with little children like yours,” said Mr. Horchow, who wrote  “The Art of Friendship: 70 Simple Rules for Making Meaningful Connections” (St. Martin’s Press, 2006), with his daughter, Sally.

Psychologists consider it an inevitable life stage, a point where people achieve enough maturity and self-awareness to know who they are and what they want out of their remaining years, and have a degree of clarity about which friends deserve full attention and which are a drain. It is time, in other words, to shed people they collected in their youth, when they were still trying on friends for size.

The winnowing process even has a clinical name: socioemotional selectivity theory, a term coined by Laura L. Carstensen, a psychology professor who is the director of the Stanford Center on Longevity in California. Dr. Carstensen’s data show that the number of interactions with acquaintances starts to decline after age 17 (presumably after the socially aggressive world of high school) and then picks up again between 30 and 40 before starting to decline sharply from 40 to 50.

“When time horizons are long, as they typically are in youth, we’re collectors, we’re explorers, we’re interested in all sorts of things that are novel,” Dr. Carstensen said. “You might go to a party that you don’t want to go to, but know you should — and it’s there you meet your future spouse.”

One thinks of Joan Didion’s essay “Goodbye to All That.” In it, Ms. Didion recalls a cab ride when she was 23 during which she tried to talk an older male friend into accompanying her to a party where there would be “new faces.”

“He laughed literally until he choked,” she wrote. She continued, “It seemed that the last time he had gone to a party where he had been promised ‘new faces,’ there had been 15 people in the room, and he had already slept with five of the women and owed money to all but two of the men.”

This is not, however, an issue that arises only as the temples start to gray. People approaching 30 — many of them dealing with life changes like marriage and a first child — often tend to feel overwhelmed with responsibility, so they lose patience with less meaningful friends, said Dr. Carol Landau, a clinical professor of psychiatry at Brown University’s medical school.

The process does not always have to be painful. Annie Cardi, a 27-year-old author of children’s books in Boston, recently discovered that an old college friend and she were defriending each other simultaneously at a University of Virginia reunion when they were chatting with mutual friends and awkwardly discovered that neither had invited the other to her coming wedding.

“It wasn’t anything personal; we had just grown apart,” Ms. Cardi said. “It was actually a relief to have that conversation. It completely cleared the air, and neither of us left with bad feelings. I know that when I see pictures of her wedding posted on Facebook, I’ll be happy for her.”

But when the impulse is not mutual, it helps to undertake it with careful consideration.

“The first step before you end a friendship is to consider, very carefully and seriously, if you want to end a particular friendship or if you just want to wind it down,” said Jan Yager, a friendship coach and author of “When Friendship Hurts: How to Deal With Friends Who Betray, Abandon, or Wound You” (Simon & Schuster, 2002). “It will usually be a lot more pleasant to just pull away, and stop sharing as much privileged information.”

The passive approach can work, sort of. Marni Zarr, 46, a substitute teacher in Mesa, Ariz., employed it when she decided that a friend she had picked up in parents’ circles was starting to drag her down with her neediness and constant competitiveness. Ms. Zarr gave less of herself in conversations, stopped talking about her feelings, became vaguer about future aspirations.

“I took the route of distancing myself: not immediately answering texts,” she recalled. “I answered the important things, but not the ‘Hey, how are you doing, what’s up tonight?’ ones.”

While the passive approach worked, ultimately (slowly, the friend started to behave less like an intimate and more like a casual acquaintance), Ms. Zarr felt guilty about sentencing her ex-friend to a painful round of self-doubt.

“She went to friends of ours and asked: ‘Do you know what’s going on? Is Marni upset with me?’ ” Ms. Zarr recalled. “The friends just said, ‘Oh no, she’s just really busy.’ I was. Anyone can be busy. But when you really want to have people around, you make time for them, even if it’s a few minutes.”

Mr. Horchow, who at 83 has been carefully adding and dropping friends since Franklin Roosevelt was president, prefers the gentlemanly approach.

“At any age, dropping a friend is a delicate matter and should be handled kindly,” he said. “You don’t want to have to make a pronouncement that your friendship is declining or over; you don’t want to have to say anything. If asked why you haven’t seen each other for a while, be vague. ‘I’m just so busy’ or ‘I’m traveling a lot.’ ”

Indeed, honesty may not be the best policy, Dr. Landau of Brown said: “Remember that white lies are O.K. in the service of not hurting feelings.”

The passive approach works with friendships in which the bonds are tenuous, said Jeff Newelt, a social media consultant in Manhattan. In his line of work, he considers it his job to make friends, but a couple of years ago, decided he needed to prune the overgrowth.

His solution was to divide his social base into two categories: “linear” friends (lasting relationships based on a deep connection) and “nonlinear” (situational friends based only on shared past experience, like an old job).

“I had some work friends where we used to go out after work, to blow off steam, for the sake of bonding as a team or because someone was my superior,” Mr. Newelt, 40, recalled. “After I left, these people still pursued my friendship. I did not hate them. I liked them. So I dropped them. Not harshly, because I like them; I did not want to hurt feelings. I just said I had other plans when they asked me to hang out, each time, time and time again, repeatedly, and they got the point. There was no conversation, no gnashing and wailing.”

But not all friends (or ex-friends) will go easily. By the time she was in her mid-30s, Carolyn Miller, an office manager in Norwalk, Conn., found herself unwilling to put up with an old friend’s domineering ways, so eventually she sent her an e-mail listing her grievances and asking for space. The friend called her and begged her to reconsider. Ms. Miller stood her ground.

A few weeks later, when Ms. Miller’s grandfather died, the friend sent her a letter saying, oddly, that he had been a wonderful veteran (he had never been in the service), and not long after that, an invitation to her wedding. When Ms. Miller sent back the enclosed card declining the invitation, the friend called her and asked why.

During that call, Ms. Miller knew it was time to administer the friendship equivalent of the lethal injection. “I wish you love, joy, peace and happiness, but this friendship is over,” Ms. Miller recalled saying. “I said goodbye and hung the phone up. I met another friend for drinks that night and honestly, I was sad. I divorced a friend.”

Dorree Lynn, a psychologist in Washington, recalled that one woman she pulled away from because she felt they no longer shared the same values responded by spreading gossip in their social circle.

“There were rumors about me, that I had become a snob,” she said. “It was brutal.”

TO avoid backbiting and lingering bad feelings, many relationship experts recommend the same sort of direct approach that one would employ in a romantic breakup. To get around nagging questions, an honest letter, or even an e-mail, is the minimum (forget texting; that’s just cruel). A heartfelt face-to-face talk is better, said Erika Holiday, a clinical psychologist in Encino, Calif., who has discussed relationship issues on television shows like “Dr. Phil.”

“Schedule a time where you can sit down with them,” Dr. Holiday said. “It’s not about putting the other person down, but telling them, ‘You don’t fit into my life, you’re not on same path as me.’ ”

A trial separation can soften the blow.

“You might also want to suggest a cooling-off, or a revisiting your friendship in X number of weeks or months,” said Dr. Yager, the friendship coach. “Your former friend will probably put more time and energy into the other friendships that are working and will forget about contacting you in time.”

Such a direct approach ultimately may be effective, but it still engenders the same pain and awkwardness as an actual breakup, said Erika Johnson, a blogger who lives outside Boston. A couple of years ago, she found herself running a cost-benefit analysis of a friendship from her early 20s that was starting to grind her down.

Every new choice she made in her life — whether it was to return to graduate school or move to the suburbs — was greeted with dismissive scorn by the friend. Ms. Johnson decided to end the relationship with a telephone call.

“My main point was that life is very short and fleeting, and I value my happiness enough to eradicate the negative energy,” Ms. Johnson recalled. For months, the ex-friend continued to try to contact her. Ms. Johnson felt terrible, especially as mutual friends would tell her about the pain she had caused the woman.

Eventually, however, the reports from the mutual friends started to change in tenor. The old friend had been doing a lot of soul-searching after the breakup, they said. The mutual pain might have been worth it, Ms. Johnson concluded — to the point where she might consider another attempt at friendship with her.

Which raises this question: is a friendship ever really over?

More than a decade before social networking Web sites introduced “defriending” into the vernacular, Scott Laing, a strength and conditioning coach in Toronto, attempted it in real life. He had enjoyed going to bars and pool halls with a certain friend when he was in his 20s, but now thought he and the man were growing apart. As an endgame tactic, Mr. Laing, now 46, seized on an extended trip to Europe as an opportunity to put both physical and emotional distance between the two of them. He sent a couple of postcards over the course of three months, then nothing. It was over, he thought.

Last spring, however, he was surprised to find that the friend was reaching out, for the first time in 15 years. He friended him on Facebook.

Why Romney Had to Resort to NEGATIVE Campaigning in Florida

Facing Second Loss to Gingrich, Romney Went on Warpath 

Failing to do so would have resulted in his loss of the States 50/25 delegates at the Convention and a possible derailment of his  entire campaign, yet Romney himself only approved it… reluctantly…. his advisers are the ones who told him he had to or else. Romney was actually clueless and in denial as to the shambles his candidacy was turning into. Now he seems to have a new found Hubris… which may not be taken well with the rest of the country. 

MIAMI — Facing the unthinkable here just seven days ago — a second loss in a row to Newt Gingrich  — Mitt Romney’s campaign team hatched a two-part plan to win in Florida: make Newt mad and Mitt meaner.

In a call last Sunday morning, just hours after Mr. Romney’s double-digit loss to Mr. Gingrich in the South Carolina primary, the Romney team outlined the new approach to the candidate. Put aside the more acute focus on President Obama and narrow in on Mr. Gingrich.

Find lines of attack that could goad Mr. Gingrich into angry responses and rally mainstream Republicans. Swarm Gingrich campaign events to rattle him. Have Mr. Romney drop his above-the-fray persona and carry the fight directly to his opponent, especially in two critical debates scheduled for the week.

The results of that strategy, carried out by a veteran squad of strategists and operatives assembled by Mr. Romney to deal with just this kind of moment, have been on striking display here.

By this weekend, Mr. Romney’s aides were on the offensive and increasingly confident, with some combination of their strategy and Mr. Gingrich’s own performance swinging polls in Mr. Romney’s direction. Even as it acknowledged the damage inflicted on Mr. Romney by the past several weeks, his team suggested that it had learned a lesson about never letting up on rivals, especially if Mr. Romney wins the nomination and confronts Mr. Obama in the general election.

On Saturday, Mr. Gingrich vowed to fight on to the Republican convention, backed by a well-financed “super PAC,” the enthusiasm of grass-roots conservatives and sympathetic statements from the likes of Sarah Palin, who in a Fox Business interview late last week said the “establishment” was trying to “crucify” Mr. Gingrich.

With the Florida primary two days away, Mr. Gingrich is now facing the full capabilities of a Romney team that was built for battle, but that by several accounts became so confident during primary season that it failed to see Mr. Gingrich’s latest resurgence coming, presuming that he had been left for dead in Iowa.

“We had a moment where we kind of started drinking our own Kool-Aid, and it looked like we were just going to blow through it,” said John D. Rood, a chairman of Mr. Romney’s Florida finance team. “There is a little humility in getting your butt kicked in South Carolina, and all of the sudden it’s a wake-up call.”

Behind the scenes, it was more than that. It was a call to arms employing all the visible and invisible tactics of political warfare. As recently as Wednesday, several Romney advisers, donors and supporters were speaking in terms of what losing in Florida would mean and how they could survive it.

If Mr. Romney does win here on Tuesday, it will have been through a blistering and unrelenting series of attacks. His campaign has pressed everything at its disposal into service to eviscerate Mr. Gingrich, painting him as an erratic, unreliable Washington insider in mailings and television advertisements, at two critical debates here (where his team made sure Mr. Romney had ample and vocal supporters in the audiences) and even by sending supporters to mock him at his own events.

On Saturday, it released a new ad featuring a 1997 NBC News segment in which the anchor Tom Brokaw reported that Congressional peers of Mr. Gingrich, then speaker of the House, had “found him guilty of ethics violations.”

David Kochel, an adviser who arrived here from Iowa to oversee the pressure campaign, described the strategy as “let’s go rush the quarterback.” A team of Romney boosters started infiltrating nearly every Gingrich campaign stop to offer instant rebuttals. Representative Jason Chaffetz of Utah showed up to challenge Mr. Gingrich’s record to reporters and at one point tangled with Mr. Gingrich’s press secretary as the cameras rolled. Bay Buchanan, a longtime conservative activist, worked on the Romney campaign’s behalf to win over voters and commentators.

Mr. Romney, meanwhile, had been receiving help from a new debate adviser — Brett O’Donnell, a longtime leader of the Liberty University debate team who advised Representative Michele Bachmann of Minnesota in her campaign last year — and assumed a new role as the campaign’s chief attacker, relinquishing his old approach of leaving the dirty work to supporters and a friendly super PAC.

A team of some of the most fearsome researchers in the business, led by Mr. Romney’s campaign manager, Matt Rhoades, spent days dispensing negative information about Mr. Gingrich, much of it finding its way to the influential Drudge Report, which often serves as a guide for conservative talk radio and television assignment editors and to which Mr. Rhoades has close ties.

The effort hit a peak by Thursday, when the site was virtually taken over by headlines assailing Mr. Gingrich, whose advisers said they eventually gave up on trying to persuade the Drudge staff to spare them, acknowledging, in the words of one aide, that “very little can be done.”

The Romney team was also carefully tracking Mr. Gingrich’s every utterance for a potential opening. What an aide described as a “eureka moment” came just hours before the debate on Thursday night. At a Tea Party rally in the Central Florida town of Mount Dora that day, Mr. Gingrich had opened a new line of attack, noting that Mr. Romney had investments in funds that included shares of Fannie Mae and Freddie Mac, the government-sponsored mortgage lenders.

Mr. Romney’s opposition-research team in Boston quickly dug into Mr. Gingrich’s own publicly disclosed holdings to find that he, too, had mutual funds invested in Freddie Mac and Fannie Mae. The information was quickly fed to Mr. Romney during his private debate preparation session at a hotel in downtown Jacksonville.

When Mr. Romney delivered the attack against Mr. Gingrich that evening, Mr. Gingrich was left with no substantive response, a killer blow that helped keep Mr. Gingrich from commanding the debate stage as he had in South Carolina.

Mr. Gingrich’s unsteady posture was a significant change from just two days earlier, when he and his staff had been giddy over crowds of thousands that greeted him in Sarasota and Naples, which led one aide to recall a scene from “The Making of the President.” That account of the 1960 election by Theodore H. White described John F. Kennedy being greeted by throngs in Connecticut.

“You have to imagine looking out over this crowd and what it does to make you feel good about Florida,” Mr. Gingrich said, looking out at one of his biggest rallies of the campaign.

Mr. Gingrich’s team of advisers — a tiny and evolving band compared with the much larger and more seasoned Romney team — predicted that he would show that a strong message and momentum would trump their rival’s more corporate, more expensive operation. “The candidate who wins isn’t going to be the candidate who spends the most money,” Jose Mallea, Mr. Gingrich’s state director, said in an interview at the Sarasota rally, his voice at times overwhelmed by the excitement of the crowd.

The size and enthusiasm of Mr. Gingrich’s events scared supporters of Mr. Romney, who had struggled to build similar audiences. Local activists backing Mr. Romney complained that his Boston team was too regimented and slow to meet the challenge.

But, in fact, as early as the day of the primary in South Carolina, the Boston team had returned to the drawing board, realizing that it had erred in leaving Mr. Gingrich to resuscitate his candidacy. “There was a belief among some that he was done; clearly that wasn’t the case,” said one Romney aide, speaking on the condition of anonymity. He likened the unanticipated comeback of Mr. Gingrich to a character from a horror movie who refuses to die.

Even as Mr. Gingrich was cruising to victory in South Carolina last Saturday, Mr. Romney’s team was meeting, setting aside its focus on Mr. Obama to treat Mr. Gingrich as its chief obstacle, realizing that a loss here in Florida could cripple the campaign.

Breaking into teams, they divided duties for a new plan to put unrelenting pressure on Mr. Gingrich, hoping to make him angry enough to throw him off track and remind voters about the most unflattering aspects of a record forgotten during a decade in which he solidified his status as a wise man in the party.

The Romney research department began studying Mr. Gingrich’s vulnerabilities, specifically the attacks, many of them employed by a pro-Romney super PAC, that had led to Mr. Gingrich’s collapse in Iowa. There, the team had observed that Mr. Gingrich seemed to become distracted and angry over negative advertisements and attacks on issues like his ethics problems in Congress and his work on behalf of corporate clients in Washington after he left the House.

Russ Schriefer and Stuart Stevens, Mr. Romney’s senior strategists, also know Florida well as onetime advisers to former Gov. Charlie Crist, former Senator Mel Martinez and George W. Bush. They unleashed their first negative advertisement early last week. It links Mr. Gingrich’s work for Freddie Mac to the housing crisis here.

But, most of all, the attempt to regain an advantage rested on Mr. Romney’s own shoulders and his ability to deliver sharper distinctions, as an aide put it.

Mr. Romney was still in South Carolina when the team, led by Mr. Rhoades, presented the plan to him. “He was on the road, and there was a call with him on Sunday morning where we laid out all the different pieces of what was going on,” Mr. Schriefer said. “He asked questions, but it wasn’t a particularly long call; it was very calm, sort of ‘O.K., guys, let’s go win in Florida.’ ”

The Money Man Behind Newt Gingrich

The Man Behind Gingrich’s Money

The trip to Jordan by a group of United States congressmen was supposed to be a chance for them to meet the newly crowned King Abdullah II. But their tour guide had a more complicated agenda.

The guide was Sheldon Adelson, a Las Vegas casino magnate who helped underwrite trips to the Middle East to win support for Israel in Congress. On this occasion in 1999, as the lawmakers enjoyed a reception at the Royal Palace in Amman, Mr. Adelson and an aide retreated to a private room with the king.

There, the king listened politely as Mr. Adelson sat on a sofa and paged through his proposal for a gambling resort on the Jordan-Israel border to be called the Red Sea Kingdom.

“This was shortly after his father, King Hussein, died, and he was grateful to me,” Mr. Adelson explained later in court testimony, recalling that he had lent his plane when the ailing monarch sought treatment in the United States. “So they remembered.”

The proposal never went anywhere — Mr. Adelson later said he had feared that a Jewish-owned casino on Arab land “would have been blown to smithereens.” But his impromptu pitch to the Jordanian king highlights the boldness, if not audacity, that has propelled Mr. Adelson into the ranks of the world’s richest men and transformed him into a powerful behind-the-scenes player in American and international politics.

Those qualities may also help explain why Mr. Adelson, 78, has decided to throw his wealth behind what had once seemed to be the unlikely presidential aspirations of Newt Gingrich. Now, in no small measure because of Mr. Adelson’s deep pockets, Mr. Gingrich is locked in a struggle with Mitt Romney heading into Florida’s Republican primary on Tuesday.

Mr. Adelson, by some estimates worth as much as $22 billion, presides over a global empire of casinos, hotels and convention centers whose centerpiece is the Venetian in Las Vegas, an exuberant monument to excess with canals, singing gondoliers and acres of slot machines. That fortune is a wellspring of financial support for Mr. Gingrich, who has benefited from $17 million in political contributions from Mr. Adelson and his wife, Miriam, in recent years, including $10 million in the last few weeks that went to a “super PAC” supporting him.

The question of what motivates Mr. Adelson’s singular generosity toward the former House speaker has emerged front and center in the campaign. People who know him say his affinity for Mr. Gingrich stems from a devotion to Israel as well as loyalty to a friend. A fervent Zionist who opposes any territorial compromise to make way for a Palestinian state, Mr. Adelson has long been enamored of Mr. Gingrich’s full-throated defense of Israel.

In December at an event in Israel for a charity he supports, Mr. Adelson made a point of endorsing Mr. Gingrich’s assertion that the Palestinians have no historic claim to a homeland.

“Read the history of those who call themselves Palestinians and you will hear why Gingrich said recently that the Palestinians are an invented people,” Mr. Adelson said at the event for Birthright Israel, which takes young Jews on trips there.

Mr. Adelson is hardly a household name. He avoids the limelight and rarely speaks to the press, remaining something of an enigma. He declined to be interviewed for this article, but he and his wife issued a statement saying friendship and loyalty are “our motivation for helping Newt.”

Through interviews and a review of Mr. Adelson’s testimony in legal disputes with former associates, a portrait emerges of a formidable and determined striver who lifted himself out of childhood penury in working-class Boston. He has a sentimental streak — on one of his first trips to Israel, he wore the shoes of his late father, a cabdriver from Lithuania who was never able to visit there — and he has given hundreds of millions of dollars to Jewish causes, medical research and injured veterans.

But his rise has not been without controversy. The Justice Department is investigating accusations by a former casino executive that Mr. Adelson’s operations in Macao may have violated federal laws banning corrupt payments to foreign officials. Also, a Chinese businessman accused Mr. Adelson of reneging on an agreement to share profits from the Macao project.

Mr. Adelson also has a reputation for irascibility and has left a trail of angry former business associates. Even his two sons sued him at one point, accusing him of cheating them, though they lost. He filed a libel suit against a Las Vegas newspaper columnist, John L. Smith, who eventually had to declare bankruptcy, and he waged a bitter court battle with a former employee whom he accused of spreading lies about him.

Nevertheless, his concern for his image was apparent in a deposition he gave in a court case, which also hints at the risk for Mr. Gingrich in accepting so much financial help from Mr. Adelson.

Complaining that negative things said about him were winding up in news articles, Mr. Adelson said his charitable donations had “been rejected a couple of times” because of the bad publicity: “Nobody ever says in such an article: ‘Oh, he’s a very nice guy. He helps old ladies across the street. He pets dogs behind the ears. He’s a hugely charitable person. He gives away hundreds of millions of dollars.’ ”

Early Ambition

Mr. Adelson likes to recount how his first business breakthrough came when, at age 12, he bought a newsstand in downtown Boston, eventually parlaying his earnings into a brief teenage career operating candy machines.

After high school, he had stints working as a mortgage banker, running a business packaging toiletries for hotels and operating a charter travel company. But he hit the jackpot with a computer trade show, Comdex, which he started in Las Vegas in 1979. Comdex became the signature annual event for the computer industry, attracting more than 200,000 visitors at its peak.

Jason Chudnofsky, who knew Mr. Adelson growing up in Dorchester, Mass., and became chief executive at Comdex, said his friend always had outsize ambition. He recalled Mr. Adelson’s telling him decades ago that one day they would be “talking to ministers” and heads of state.

“He was thinking big even back then,” Mr. Chudnofsky said.

Big thinking led Mr. Adelson to set his sights on a project that would transform both the Las Vegas casino trade and his own life in ways that seem to have surprised everybody but him.

In 1988, Mr. Adelson and his partners bought the historic Sands Hotel and Casino and built a convention center to accommodate their thriving trade show. Eight years later, after they sold Comdex for $862 million, Mr. Adelson used his profits on a risky new venture: tearing down the aging Sands and spending $1.5 billion to develop a lavish hotel and casino modeled after Venice.

Accepted wisdom had it that building both a hotel-casino and a convention center was a money loser. Mr. Adelson proved otherwise. As his reputation as a successful developer grew, he explored opportunities for overseas expansion. But his attempts to build a casino in Israel met resistance despite his connections, according to court records.

“I went to see the chief rabbi,” Mr. Adelson testified in 2009 in a lawsuit he brought against a former employee. “There was no chance the religious bodies were going to allow a casino in Israel.”

He turned his attention to Asia. China in 1999 reclaimed the former Portuguese colony of Macao, and a few years later ended a casino monopoly that had existed for many years. Mr. Adelson’s company, the Las Vegas Sands Corporation, bid for one of the licenses offered by the Chinese and won, leading to the opening of the $240 million Macao Sands in 2004.

The resort was so successful that its first-year profits exceeded the cost of the project, according to industry analysts. Mr. Adelson, who was also building a casino in Singapore, was riding high. But with so much money on the line, disputes arose with former associates looking for a share of the profits.

He was sued by a Hong Kong businessman, Richard Suen, who said he had been promised a “success fee” for introducing Mr. Adelson and his team to Chinese officials. A jury awarded Mr. Suen $44 million, but the award was overturned on appeal and the case sent back for a retrial, which is still pending.

In his suit, Mr. Suen asserted that while visiting Beijing in 2001, Mr. Adelson had been asked to use his influence in Congress to derail a human rights resolution that Chinese officials feared could complicate their bid to host the Olympic Games. Mr. Adelson acknowledged calling several congressmen, including Tom DeLay, who was the House majority whip at the time, but he and Mr. DeLay denied undermining the bill, which died in committee.

Still, a Sands executive testified that he had relayed a message to the Chinese taking credit for it.

The most damaging accusations have been made by a former Sands executive, Steve Jacobs, who sued after being fired in 2010. He alleges that he was pressed to exert “improper leverage” with Macao government officials to get approvals needed by the company, which Sands officials have denied. His assertions are now the subject of the federal investigation.

Passion for Israel

When Mr. Adelson appeared at the Birthright event in December and spoke approvingly of Mr. Gingrich, he had earned his place on the stage by virtue of his donations to the organization — more than $100 million in all.

He is also the single largest donor to Yad Vashem, Israel’s Holocaust memorial and museum, with gifts totaling $50 million. Mr. Adelson’s generosity to Jewish causes is especially striking given that for most of his life he was relatively uninvolved in that world.

Mr. Adelson’s business partners in his early days at Comdex were all much more active in Jewish affairs. But friends say Mr. Adelson experienced something of an awakening after his first visit to Israel in 1988, when he was in his mid-50s.

“He fell in love with the country,” said Ted Cutler, an early business partner.

This coincided with his divorce from his first wife, Sandra. Not long after his trip, he encountered a friend, Sara Aronson, at a Boston restaurant. Mr. Adelson talked excitedly of Israel and mentioned that he was interested in meeting Israeli women, Ms. Aronson recalled.

Ms. Aronson introduced him to her best friend, Dr. Miriam Ochshorn, a divorced physician from Israel in her 40s who was completing a fellowship in addiction medicine at Rockefeller University in New York. As it turned out, Mr. Adelson’s two sons from his previous marriage both struggled with drugs. One would die in 2005.

After the couple married in 1991, Mr. Adelson’s visits to Israel became so frequent that he told friends he was contemplating settling there. His increasing wealth gave him the means to make a lasting imprint on causes important to him and his wife, including the establishment of drug treatment centers in the United States and Israel.

He also became one of the biggest donors to the American Israel Public Affairs Committee, the powerful pro-Israel lobby, and joined its executive committee.

Friends point out that his staunch Zionist beliefs are consistent with his take-no-prisoners personality. They also said the views of his wife, who had lived through so much tumult in Israel, including the 1967 war, undoubtedly helped shape his.

Over time, Mr. Adelson made his conservative views felt not only within the committee, but also in Israel. He started a free daily newspaper in 2007, Israel Hayom, that is widely viewed as supportive of Prime Minister Benjamin Netanyahu, a close friend who shares his hawkish outlook.

Ehud Olmert, who was prime minister from 2006 to 2009, got a taste of the newspaper’s treatment of politicians who fall short of Mr. Adelson’s expectations. He and Mr. Adelson had been friendly, he said, but grew distant after Mr. Olmert tried to negotiate a two-state solution with Mahmoud Abbas, the president of the Palestinian Authority.

“Once, after I was already prime minister, he asked to come see me with his wife, Miri,” Mr. Olmert recalled in a telephone interview. “He already had his newspaper, and every day it attacked me viciously.

“Toward the end of our meeting, I asked him, ‘Aren’t you ashamed of what your paper is doing to the prime minister?’ ” Mr. Olmert said, referring to himself. “He said, ‘I don’t read Hebrew.’ And Miri said, ‘I do, and I must tell you that we are very aggressive against him.’ ”

Mr. Olmert added that he had heard from senior American officials that Mr. Adelson had advocated firing Condoleezza Rice as secretary of state and getting rid of Mr. Olmert because both were “betraying Israel.”

Shared Conservatism

As Mr. Adelson was experiencing his awakening on Israel, Mr. Gingrich was ascending the Republican ranks. He was also endearing himself to stalwart supporters of Israel.

In early 1995, newly elected as speaker of the House, Mr. Gingrich caused a stir when he called for moving the United States Embassy from Tel Aviv to Jerusalem. He later backed legislation endorsing the move. It was at a reception celebrating the measure that Mr. Gingrich first met Mr. Adelson, according to an associate of Mr. Adelson.

From then on, Mr. Adelson was among a cadre of pro-Israel advocates with whom Mr. Gingrich had regular interactions. The casino magnate also frequently lent his Gulfstream jet to Mr. Gingrich for cross-country trips, a former Gingrich adviser recalled.

Beyond Israel, the two men shared a conservative philosophy on matters important to Mr. Adelson’s businesses, including limiting the ability of labor unions to deduct money from members’ paychecks for political activities.

Mr. Gingrich also backed legislation sought by casino owners in 1998 to preserve tax deductions beneficial to the industry. That same year, Mr. Adelson hosted a Republican fund-raiser at one of his Las Vegas venues, headlined by Mr. Gingrich, and donated $300,000 to the party for the midterm elections.

Getting Involved

In 2006, when Mr. Gingrich began laying the groundwork for a possible run for the presidency, Mr. Adelson provided $1 million in seed money for his political committee, American Solutions for Winning the Future. Mr. Adelson donated an additional $2 million the next year; his contributions to the group have totaled more than $7 million.

During the 2008 election cycle, Mr. Adelson became recognized as a top-tier donor to the right and a moneyed villain to the left. He was the primary financier of a conservative nonprofit group, Freedom’s Watch, which trumpeted plans to spend as much as $200 million on the presidential election. Those plans, however, fizzled as internal problems paralyzed the organization, with Mr. Adelson micromanaging the group’s efforts, Republican operatives familiar with the organization said at the time. The group still spent about $30 million through early 2008, almost all of which came from Mr. Adelson, according to the operatives.

Today, the Venetian and the adjoining Sands Convention Center have become default destinations for Republican events in Las Vegas.

“I call it the Republican headquarters on the Strip,” said Jon Ralston, the political columnist for The Las Vegas Sun.

The Venetian will also be the official headquarters hotel for Saturday’s Nevada presidential caucuses. And in deference to observant Jews, the Clark County Republican Committee has scheduled a special caucus on Saturday night at the Adelson Educational Campus, a Jewish school financed by the Adelsons, six hours after the rest of the state is done caucusing.

When it came time to picking sides for this year’s Republican presidential nomination, Mr. Adelson made clear to friends early on that if Mr. Gingrich decided to run, he would back him. When Mr. Gingrich’s campaign faltered, friends who supported other candidates put pressure on Mr. Adelson to stay out of the race.

Nevertheless, Mr. Adelson made an initial $5 million contribution to Winning Our Future, a pro-Gingrich super PAC, before the South Carolina primary, which proved pivotal in Mr. Gingrich’s victory there.

Fred Zeidman, a Texas energy executive active in Jewish and Republican circles, said he talked to Mr. Adelson early last week, before it became public that Mrs. Adelson, 66, had also donated $5 million to the super PAC. Mr. Adelson told his friend that he was going to give more money and seemed to signal that he was willing to keep it flowing.

“I think what he’s trying to say is, ‘Newt ain’t going away, and I’m going to make sure of it,’ ” Mr. Zeidman said.

Who Makes Money for the Romneys

Makes Money for the Romneys

David Goldman/Associated Press Mitt Romney’s campaign stopped in Conway, S.C., earlier this month.

After a long, controversial wait, Mitt Romney released details of his federal tax returns on Tuesday, inciting a flurry of wide-eyed analysis from those curious to see exactly how Mr. Romney’s personal finances stack up.

Deal Book perked up when it saw that many of the assets described in Mr. Romney’s returns were held in blind trusts managed by Goldman Sachs.

As beneficiaries of a blind trust, Mr. Romney and his wife, Ann, would not have picked the individual stocks contained in their trusts’ portfolios. But by examining the trusts’ 2010 returns, a picture emerges of how the Romneys have benefited from – and been hurt by – Goldman’s investment decisions.

 In that year, two Romney trusts – the Ann and Mitt Romney 1995 Family Trust and the W. Mitt Romney Blind Trust – made nearly $2.8 million in combined capital gains from their Goldman investments, according to the trusts’ filings. Almost all of those gains, nearly $2.7 million, were long-term gains made by selling securities that the trusts had owned for more than a year.

The trusts sold a combined 7,000 shares of Goldman’s own stock, which was purchased in May 1999 when the firm went public. The shares, offered at the time of the I.P.O. to Goldman’s most important clients, including Mr. Romney, were issued at $53 a share. But they had zoomed up to $161.45 apiece by the time the trusts sold them in December 2010.

Aside from the Goldman I.P.O. shares, the Romneys’ trusts sold several financial stocks in 2010. A January 2010 sale of Bank of America and JPMorgan Chase stock produced a small loss and a small gain, respectively. More common were sales of retail companies like Target, Unilever and Apple.

Mr. Romney’s trusts made money on Research in Motion. His brokers bought shares in the BlackBerry maker in 2006 and 2008, long before the company’s stock began its precipitous slide. Before the worst hit last year, the trusts sold 1,027 shares in RIM, notching gains of more than $30,000.

Other investments didn’t work out so well. The trusts sold shares of Comcast class A stock in January 2010, near the stock’s multi-year low, for thousands of dollars in losses.

But the majority of the trusts’ sales in 2010 posted a profit. (This is not surprising – wealth managers often hold on to underperforming stocks in the hopes that they will recover in value.)

The Romneys’ trusts even owned shares of LVMH Moët Hennessy Louis Vuitton, which controls beverage brands like Dom Pérignon and Veuve Clicquot as well as fashion brands like Marc Jacobs and Fendi.

As a Mormon, Mr. Romney is prohibited from consuming the alcohol in Dom Pérignon. Luckily, his trusts were allowed to own its stock. A January 2010 sale of LVMH shares from the family trust produced a profit of around $20,000.

A Black Woman’s Story of Her First Birthing Experience

There are a ton of things I’ll never forget about the first time I gave birth — showing up with a Donny Hathaway CD in one hand, a beautiful “going home” dress and blanket handpicked special for my daughter in the other, being scared to death of the epidural needle but grateful that it smoothed me out almost immediately, waiting for what seemed like an eternity to see my baby’s beautiful face, how I seriously believe I saw a white light over my OB-GYN’s head when she entered the room to help me deliver the love of my life. My daughter’s baby soft skin against my breast — her breath as sweet as Heaven. I imagine Beyonce, who gave birth just a few weeks ago to Blue Ivy Carter, her baby with husband Jay-Z, will have good memories, too, when the R&B superstar thinks back to the day she gave her most incredible performance, yet: giving birth.

But that is probably where our memories of that special day part. What I most remember? That the hospital and workers where I had my first daughter sullied what should have been one of the most amazing days of my life.

I gave birth at a hospital in upper Manhattan — a renowned teaching hospital that, because of where it’s situated, caters to a poor, uninsured community, but, because of its leading specialists, modern facilities and state-of-the-art technology, also is frequented by well-to-do patients who consider it one of the best hospitals in New York. They made it very clear in the brochures and birthing plans that a regular ol’ birth there was neither more nor less than what a pregnant women could get elsewhere, but if you were willing to fork over an additional $800 or so, you could get the Cadillac birthing experience: a private room, extra personal time with your significant other, a special waiting room for family members replete with free refreshments, and a complimentary congratulatory meal — two steak and lobster (!) dinners and champagne for two — for the new parents. I promise you this: the words were so pretty I was convinced I was about to give birth in a posh hotel.

I did not.

Despite an incredible birthing experience facilitated by my personal angel/OB-GYN, from almost the moment my baby took her first breath, her mother was treated like a 14-year-old drug-addicted welfare queen, there to push out yet another daddy-less baby. Seriously.

• They tested my newborn for drugs (though I’ve never taken an illicit substance in my entire life) without my consent — something I later found out hospitals do at disproportionately higher rates with black babies than white ones.

• Despite the fact that I paid for the private room and meals, I was immediately put in a massive post-birth room with three other women and their newborns. I was moved only after I asked why I wasn’t in a private room — a question that elicited scowls and foot-dragging from the nurse until she bothered to check my paperwork to see that, indeed, I’d paid for a private room. It took three hours for my room to be changed.

• Once in the private room, the nurses disappeared for nine hours! Seriously. Nine. I had no diapers. No idea how to breastfeed properly (and no bottle or milk to feed my baby if I chose to formula feed). No instructions on what to do to care for my post-birth body (was it okay to walk? Pee? Wash?). Nothing. I seriously thought I was being punished for asking (nicely) for what I’d paid for. When a nurse finally did show up, she came with a “gift bag” full of formula and coupons for… formula.

• The private “suite” was disgusting. The bathroom smelled like cheap, potent cleaning chemicals. The shower tiles were grimy and the shower curtain was full of mold. There wasn’t so much as a picture on the bland walls. (I begged my back-up OB-GYN to let me go home after one night; thank God, she signed off on it).

• The nursing staff was genuinely surprised (!) that the guy by my side, Nick, was my husband — and actually said that stupid ish out loud.

• Our special meal arrived only after we pointed out to the nurses that the fees we paid included it, and by the time it got to us, our dinner was cold and our champagne (a tiny hand-held bottle we could have finished with one big sip from the straw) was warm.

• I couldn’t get out of that place fast enough. And when it came time for me to have my second child, I stayed far, far away from that hospital — even changed my ob-gyn, which really broke my heart to do — to avoid it like the damn plague.

I wondered then what I know to be true now: It didn’t matter how much money I had in my bank account or how good my insurance was, or that I had a ring on my finger, or that I was smart and accomplished, or that I tried to pay my way out of substandard service. At the end of the day, to almost everyone in that hospital, I was just another black girl pushing out another black baby and neither of us deserved to be treated with dignity or respect, much less special. That human beings charged with caring for new life and the people who ushered in that miracle could traffic in this kind of reprehensible treatment of anyone, much less a new mother — no matter her race, financial or marital status, or background — is beyond my level of comprehension.

But it happens. A lot. And there are studies that show that my birthing experience is a lot like that of other African-American women who’ve had babies in hospitals.

I bring up these things because earlier this week, the New York Times ran its story, “Chefs, Butlers, Marble Baths: Hospitals Vie for the Affluent,” about how hospitals are creating special wings and services to attract and cater to the wealthy. The story, no doubt dreamed up in an editor’s meeting after the whole debacle created after folks got wind of the opulent birthing suite and special treatment Beyonce got when she gave birth to Blue Ivy Carter at Lenox Hill Hospital, kind of makes it seem like this is some kind of new phenomenon. I know better, though. V.I.P. treatment, for those willing to pay for it, is not new. Neither is disrespecting and giving sub-par care to people, those extending care think are not worthy of VIP treatment.

And if you look like I did when I gave birth to my baby girl — like an African-American woman giving birth to a black baby — you are decidedly not V.I.P. Unless, of course, you are Beyonce. Then maybe you and your baby have a chance. This is, perhaps, the saddest of all.

Governmental Austerity Does NOT Work In Times Like These

Paul Krugman Calls it:  The Austerity Debacle  And he is right AGAIN! Unfortunately Politics and ideology trump basic economics and common sense.

Last week the National Institute of Economic and Social Research, a British think tank, released a startling chart comparing the current slump with past recessions and recoveries. It turns out that by one important measure — changes in real G.D.P. since the recession began — Britain is doing worse this time than it did during the Great Depression. Four years into the Depression, British G.D.P. had regained its previous peak; four years after the Great Recession began, Britain is nowhere close to regaining its lost ground.

Nor is Britain unique. Italy is also doing worse than it did in the 1930s — and with Spain clearly headed for a double-dip recession, that makes three of Europe’s big five economies members of the worse-than club. Yes, there are some caveats and complications. But this nonetheless represents a stunning failure of policy.

And it’s a failure, in particular, of the austerity doctrine that has dominated elite policy discussion both in Europe and, to a large extent, in the United States for the past two years.

O.K., about those caveats: On one side, British unemployment was much higher in the 1930s than it is now, because the British economy was depressed — mainly thanks to an ill-advised return to the gold standard — even before the Depression struck. On the other side, Britain had a notably mild Depression compared with the United States.

Even so, surpassing the track record of the 1930s shouldn’t be a tough challenge. Haven’t we learned a lot about economic management over the last 80 years? Yes, we have — but in Britain and elsewhere, the policy elite decided to throw that hard-won knowledge out the window, and rely on ideologically convenient wishful thinking instead.

Britain, in particular, was supposed to be a showcase for “expansionary austerity,” the notion that instead of increasing government spending to fight recessions, you should slash spending instead — and that this would lead to faster economic growth. “Those who argue that dealing with our deficit and promoting growth are somehow alternatives are wrong,” declared David Cameron, Britain’s prime minister. “You cannot put off the first in order to promote the second.”

How could the economy thrive when unemployment was already high, and government policies were directly reducing employment even further? Confidence! “I firmly believe,” declared Jean-Claude Trichet — at the time the president of the European Central Bank, and a strong advocate of the doctrine of expansionary austerity — “that in the current circumstances confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today.”

Such invocations of the confidence fairy were never plausible; researchers at the International Monetary Fund and elsewhere quickly debunked the supposed evidence that spending cuts create jobs. Yet influential people on both sides of the Atlantic heaped praise on the prophets of austerity, Mr. Cameron in particular, because the doctrine of expansionary austerity dovetailed with their ideological agendas.

Thus in October 2010 David Broder, who virtually embodied conventional wisdom, praised Mr. Cameron for his boldness, and in particular for “brushing aside the warnings of economists that the sudden, severe medicine could cut short Britain’s economic recovery and throw the nation back into recession.” He then called on President Obama to “do a Cameron” and pursue “a radical rollback of the welfare state now.”

Strange to say, however, those warnings from economists proved all too accurate. And we’re quite fortunate that Mr. Obama did not, in fact, do a Cameron.

Which is not to say that all is well with U.S. policy. True, the federal government has avoided all-out austerity. But state and local governments, which must run more or less balanced budgets, have slashed spending and employment as federal aid runs out — and this has been a major drag on the overall economy. Without those spending cuts, we might already have been on the road to self-sustaining growth; as it is, recovery still hangs in the balance.

And we may get tipped in the wrong direction by Continental Europe, where austerity policies are having the same effect as in Britain, with many signs pointing to recession this year.

The infuriating thing about this tragedy is that it was completely unnecessary. Half a century ago, any economist — or for that matter any undergraduate who had read Paul Samuelson’s textbook “Economics” — could have told you that austerity in the face of depression was a very bad idea. But policy makers, pundits and, I’m sorry to say, many economists decided, largely for political reasons, to forget what they used to know. And millions of workers are paying the price for their willful amnesia.

….. PAUL KRUGMAN 1/29/12

2012 The Year of the 3rd Party Candidate ??

Pundits scoff at the notion of a viable independent presidential candidate. Normally, they have good reason. Independent candidates face many hurdles, which is why only two in the past 170 years have managed to get even 20 percent of the popular vote. But these are not normal times.

Our two-party system is buckling under the weight of its dysfunction. Exhausted by partisan gridlock, Americans are finally ready to embrace a centrist, pragmatic, independent candidate free from the demands of special interests and ideologues.

Research shows that the electability of an independent candidate primarily depends upon: (1) the degree of voters’ alienation; (2) funding; (3) voters’ affection for the major party candidates; and (4) the independent candidate’s likability.

In 2012, these conditions are aligned in ways that could rocket an independent candidate to new heights.

– Voters’ trust in the federal government has plunged in recent years, with just 10 percent of Americans saying they trust the federal government to do what’s right, and Congress’ approval rating flirting with single digits.

These expressions of distrust have no precedent in the modern era.

– The sharp decline in party registrations is another indication of political alienation. More than 2.5 million voters have left the Democratic and Republican parties since the 2008 elections, driving the percentage of registered independents to an all time high — 40 percent. That’s a bigger chunk of the electorate than either party can claim. No wonder sizeable majorities of Americans now say they would be willing to support a third-party or independent presidential candidate.

– The major parties no longer have a stranglehold over money. The Internet has democratized fundraising and enables independent or previously unknown candidates who capture the public’s imagination to raise large sums of money. In recent years, Howard Dean (2004), Jim Webb (2006), Barack Obama (2008), Ron Paul (2008 and 2011) and Rand Paul (2010), among others, have all attracted supporters and quickly raised prodigious amounts of cash on the Internet.

– In 2008 Obama and John McCain enjoyed broad popularity for much of the election cycle. This year the candidates are likely to be less popular. President Obama’s approval ratings have dropped throughout much of his presidency, and they are now low-to-middling; much of the Democratic base has lost enthusiasm for him and most independent voters no longer support him.

– Meanwhile, the candidates vying for the GOP nomination are considered uniformly unimpressive by most Americans. The “thermometer ratings” of all Republican candidates — an important measurement of likeability — are significantly lower than those received by past candidates. The favorability ratings of the remaining GOP presidential candidates are anemic. A CBS News surveyfound that a full 58 percent of Republican primary voters want more presidential choices, while just 37 percent said they are satisfied with the current field.

Electoral dynamics in 2012 should allow a respected, well-financed independent to perform better than Ross Perot, a deeply-flawed candidate who dropped out of and re-entered the 1992 race, and stillreceived 19 percent of the popular vote. Americans are now more distrustful of the federal government than they were in 1992; they are less partisan now than they were then; the misery index is higher; Congress and the two parties are less popular; and the major parties’ candidates will likely be less popular as well.

Ironically, the only factor now preventing a historic independent presidential run is the lack of an actual candidate. But no independent voice has risen to satisfy voters’ hunger for alternatives — yet.

In his recent book, Washington, Ron Chernow depicts our first president as a flawed but fiercely independent leader, who shunned political parties and unified a fledgling nation often at war with itself.

Is there a modern-day Washington now in our midst? If not, we will remain hunkered in our trenches as the noxious fumes of partisan warfare continue to descend upon us. If so, he or she could prevail on the political battlefield, propelling us forward. Conditions have never been better.

Republicans Hating On Romney For Good Reasons

Romney May win Florida but that does not mean that most republicans like him. In fact Most republicans DO NOT Like Romney.

It’s never good news when Mitt Romney comes to town.

It wasn’t good news when Romney was in the business world, experience upon which he has staked his entire candidacy. Just ask the folks at Dade Behring.

After Romney’s investment firm bought the profitable medical-equipment company and ran it into the ground, 850 workers in Miami — and twice as many nationwide — lost their jobs. For most businesses, that would count as a devastating failure. For Romney and his fellow corporate raiders at Bain Capital, it was a rousing success: they made nearly $250 million by driving Dade Behring into bankruptcy.

Romney is running as a self-described “job creator,” but the facts at that factory and so many others across the country tell a much different story. His own business partner even admitted the idea was never to put people to work — it was to put money in their pockets by making profit at any cost. Like one of Romney’s victims at Dade Behring said, “He didn’t create jobs. He slashed and burned jobs.”

As voters discover the truth about the kind of business Romney practiced, the candidate is finding out that coming to town now means bad news for his popularity. The more voters learn about him, the less they like him. It’s not hard to see why.

Romney has profited handsomely at the expense American taxpayers, enriching himself off Medicare fraud at another medical business that he oversaw. Damon Corporation pleaded guilty to defrauding the Medicare system of $25 million while Romney served on its board of directors, which cost taxpayers $40 million. The U.S. Attorney called it a case of “corporate greed run amok” and the company was fined $119 million. Again, not an experience most business leaders would remember fondly. But when Damon was sold, Romney walked away with $473,000.

Of course, Romney doesn’t want Floridians to think about the workers he laid off, the greed for which the companies he oversaw were punished, or the fortune he made in the process. So he’s running on what he calls a record of job creation.

But Romney has flailed and failed while trying to explain that claim. He used to claim Bain created more than 10,000 jobs, then “tens of thousands.” In recent weeks he’s offered figures ranging from 100,000 to 120,000 to just “thousands.” His gyrations inspire more dizziness than confidence.

And Floridians should ask themselves: if Romney’s time at Bain prepared him so well to create jobs from elected office, why did Romney leave Massachusetts 47th in job creation and bleeding manufacturing jobs at double the national average?

This week the Florida sunshine will expose even more of Romney’s record and ideas. They’ll pale in comparison to the president’s record of creating more than 3 million jobs over 22 straight months of private-sector growth, and his vision of a fair, job-creating economy that’s built to last and rewards hard work and responsibility.

Just last week the president came to Disney World to announce new support for our travel and tourism industry. His campaign has already been here for months, with nine offices across the state and an army of volunteers who have held thousands of one-on-one conversations and planned hundreds more events in the coming weeks.

After the Republicans go home next week and the national media follow them out, the president’s campaign will still be here talking with Floridians about his record of job-creation, transparency and restoring the values that made America great. For Mitt Romney, that’s just more bad news.

Has Obama Suffered More Disrespect Than Most Presidents

Republican Gov. Jan Brewer insults the president with a finger-wagging tarmac rant in Arizona. As a result, sales of her book soar.

American presidents have always been fair game for public criticism. But isn’t it past time that we challenge the campaign of insult, racial slur and utter disrespect that has been unleashed on Barack Obama?

Consider just the Republican presidential contenders. The campaign started with Donald Trump’s ugly nonsense about Obama’s birth certificate, suggesting that he was un-American. Newt Gingrich devoted a book, To Save America, to denouncing Obama’s “secular socialist machine that represents as great a threat to America as Nazi Germany.”

Gingrich began his comeback from life support when he reasserted his claim that Obama was the “food stamp president,” a pure dog whistle to the unreconstructed among South Carolina voters.

Mitt Romney is no exception, saying Obama wants to lead America into a “European social welfare society” while he would take us back to an “American opportunity society.” Obama, the theme is, isn’t like us. He takes his cue from Europeans, not Americans. One of Romney’s ads in South Carolina criticized Obama for adopting “un-American” economic policies.

But the presidential candidates are simply the top of a cesspool. Rep. Doug Lamborn (R-Colo.) said of Obama that he didn’t “even want to have to be associated with him. It’s like touching a tar baby and you get it, you’re stuck.”

Rep. Joe Wilson (R-S.C.) made a name for himself insulting the president in the middle of his health care address to Congress in 2009. This year, House Speaker John Boehner scorned Obama’s agenda in his State of the Union address as “un-American.” Rep. James Sensenbrenner (R-Wis.) was both blind and a cad when he suggested that Michelle Obama shouldn’t talk about eating healthily given her “posterior.”

The activists and pundits are worse. Rush Limbaugh scorned Obama as an “affirmative action candidate” and a “Halfrican-American.” “Obama’s entire economic program,” Limbaugh slurs, “is reparations.”

The Republican kids get the clues. Hours after a 21-year-old Idaho man was arrested for shooting an AK-47 rifle at the White House, the president of the University of Texas College Republicans tweeted: “Y’all as tempting as it may be, don’t shoot Obama. We need him to go down in history as the WORST president we’ve EVER had!” Her successor apparently wasn’t chastened by the ensuing furor, tweeting, “My president’s black, he snorts a lot of crack.”

What’s going on here?

Rep. James E. Clyburn (D-S.C.) considers this a version of the Republican “Southern strategy.” “It tends to equate the president of the United States with dependency, with a lack of status, …” he said in an interview. “I believe it’s another way to separate his presidency from the presidencies of all the others before him.”

“That’s more than a dog whistle,” Fox News analyst Juan Williams said. “It’s a hoot and a holler.”

This is dangerous. Angry and upset people, frightened by an African-American in the White House, feed on the signals, the hatred and the fantasies of Obama as un-American, a Kenyan socialist, an illegitimate president. Threats on the president’s life are up. John Kennedy faced the same kinds of hatred and slurs of his Catholicism.

No one wants to censor speech. But we can and should call out those who are breeding hate or appealing to it. The majority of the American people elected Barack Obama. He deserves the respect and the dignity of his office, even if you disagree with his policies.

NO! There is NOT a Housing Bottom Now or anytime soon

Robert Shiller: A Housing Bottom? What Are They Thinking?

By Henry Blodget | Daily Ticker – Mon, Jan 30, 2012 8:41 AM EST

Provided by Business Insider:

I spoke with Yale professor Robert Shiller in Davos earlier this week.

Shiller has correctly identified (in advance) two major price bubbles in recent decades—the stock market bubble of the late 1990s and the housing bubble of the late 2000s.

One of the key attributes of most bubbles is that, when they finally burst, prices tend to “overshoot” on the downside, crashing well below fair value until all the exuberance is wrung out of the system.

So is that what’s going to happen to house prices this time? Or, as many people think, are house prices finally “bottoming” and getting ready to blast higher again?

BLODGET: A lot of people have just called the bottom in the housing market in the United States, and there’s been some okay data recently. Is that your take? That finally housing prices are bottoming?

SHILLER: When people phrase is that way, they say ‘we’ve reached the bottom.’ That suggests that we have the expectation of a major turning point right now. But I don’t see that. I don’t see any reason to think that prices are going to start heading up dramatically now. We do have some good news. Permits are up. Notably, the National Association of Homebuilders Housing Market Index is up and that’s a forward-looking index. But it’s not up very much. If you look at the rate of change it looks dramatic but it’s still at a low level.

BLODGET: One thing that people are saying is that we have finally absorbed the excess inventory, and with just the general growth of the population and families in the United States, we’re getting close to where we are meeting supply and demand. Is that true?

SHILLER: Well, one simple model of home prices is the construction-cost model. Traditionally, home value was about 15 percent land and 85 percent construction costs. The land component has gotten bigger with the bubble. That might be kind of a long run equilibrium. If you believe that, that’s an oversimplified model, then it probably suggests we’ll just stay where we are.

BLODGET: And where are house prices relative to long-term historical trends? I’ve tracked at a lot of measures and it looks to me like we’re finally starting to close in on fair value. But it’s not as though we’ve crashed way below fair value.

SHILLER: It depends what you mean by fair value. If you take account of the very low interest rates, you might think that housing prices should be higher than historically. But then on the other hand, that model hasn’t worked very well historically. That would be like the Fed model applied to housing. But it doesn’t seem to fit. But I think the construction costs model says that housing should track the costs of construction. It doesn’t depend on interest rates, doesn’t depend on the economy. That’s a model, I’m not saying it’s the only model.

BLODGET: And what about price-to-income and price-to-rent?

SHILLER: Those things have come down a lot. I don’t know exactly where the middle is but it’s not like we’re overpriced anymore. Now the question is whether we’ll overshoot, which is a common thing that happens after bubble burst.

BLODGET: And you’re an expert in bubbles and I’ve looked at some on your work going back several hundreds of years on housing. Have you ever seen a bubble where there wasn’t a major overshoot?

SHILLER: Well, the problem is we’ve never had, in the United States, a bubble like this, of this magnitude before. That’s the problem. That’s the fundamental problem of economics. We’d like to be statisticians but in fact the world is always changing on us. So we end up having to use judgment. We’re not very good at that.

BLODGET: Going back to the point about interest rates… People make a huge to-do about the affordability of houses. In your research on house prices, do interest rates actually matter? Or is mortgage finance such a new concept in the history of home ownership that you just don’t have enough data?

SHILLER: I think historically, if you look at it, interest rates don’t seem to matter very much in determining home prices. In terms of forecasting, which you’re asking me to do, to forecast the change, the big thing in forecasting home prices is momentum. It’s different than the stock market. So if it’s been going up it will continue going up and if it’s been going down it will continue going down. By that model, which is the most successful forecasting model for home prices, prices will keep going down.

BLODGET: That’s encouraging! And what about stocks? You pioneered, or at least have really popularized, the “cyclically adjusted price-earnings ratio,” which looks at prices relative to smoothed earnings over ten years. Recently, over the last few years, a lot of people have come back and said, oh no, it should be sixteen years or it should be five years. Your friend Jeremy Siegel says no, you shouldn’t normalize them at all and so forth. Are you still comfortable with the CAPE as a good measure of base value?

SHILLER: It’s a powerful predictor of the market. John Campbell and I, my former student who is now the chair of the econ department at Harvard…

BLODGET: Congratulations, you taught him well!

SHILLER: That’s why I am proud of my former students! We found that price divided by ten year average earnings predicts price changes. It really does. Over a long time. It may not say what will happen next year. Right now that ratio is kind of high in the United States and that is a suggestion that its not the greatest, but it’s not super high. So if you look at what our model predicts, it would still predicts positive, good substantial returns, better than the 2 percent on ten-year Treasuries.

BLODGET: A lot of people argue to me that the CAPE includes 2009 which was a terrible year and includes other aberrational years and that’s skewing the average somehow. Is that not the case?

SHILLER: The analysis Campbell and I did, didn’t include that year because we did it in 1996. But you have to look at the anomalous years. They have to be part of the analysis. Sometimes you have very big movements in one year.

BLODGET: And that’s the whole point of the analysis—to smooth it out.

SHILLER: Right. I don’t know why people keep using one year earnings. That is the time it takes the earth to go around the sun. I don’t see any other significance.

BLODGET: Part of your argument there is that profit margins tend to regress to means and right now we’re at an all-time high profit margin or very close. Do you think that profit margins can continue going up for U.S. companies?

SHILLER: Profits have been very volatile over the last ten years. They look much more strongly mean-reverting than in the past. So that suggests that the current strong profits might turn out to be misleading.

BLODGET: When you think about smoothed earnings as a way of predicting prices, do you think about it as a predictor of what the price is going to do or is it better to think about it as the likely ten year return for the market is ‘x’ at this particular price?

SHILLER: You could go either way… I think that the returns that we could see going forward are not lousy, they’re low…

Thanks to BI’s Ben Walsh for transcribing this interview.

Silly Child …. The FED Does NOT Print Money…. Time to LEARN

The Fed starts a two-day meeting Tuesday. And while Ben Bernanke isn’t expected to change rates, a lot is on the line.

You probably have a sense the Fed is super important and powerful, but here’s something you probably don’t know: The Fed doesn’t print money.

Yes, that’s right. Despite all the chatter on the campaign trail (hello, Ron Paul) and on cable TV, the Fed is actually not in the business of printing money.

In America, the actual, physical printing presses are owned and operated by the Treasury Department…not the Fed.

A lot of people are confused about this. That’s probably because the Fed does control the money supply. But “money supply’ is not the same as actual physical dollars — and yet another reason why economics is known as “the dismal science”.

The money supply equals the amount of physical cash plus the amount of credit circulating throughout the economy, which is where the Fed comes in a very big way.

Think of the Fed as a bank — but just for other banks. The Fed lends money to banks, which determines the rate which banks charge the rest of us for everything from car loans to mortgages to credit card rates and pretty much every other loan you can think of (and some fees only a banker can dream up.)

By setting the rate banks can borrow from the Fed, non-ironically called “the discount rate”, the Fed helps determine whether rates are high or low for the rest of us. And those rates help determine whether people want to borrow money or not.

In addition to the discount rate, there’s the fed funds rate, which is the rate you usually hear people talking about when it comes to the Fed. The fed funds rate is the rate banks charge to other banks for overnight loans, which is common practice in the world of high finance. Technically, the Fed sets a ‘target’ fed funds rate, and currently it’s between 0% and 0.25%, where it’s been since December 2008.

Another way the Fed controls the money supply — again, which is different than the actual amount of dollars in circulation — is via its “open market operations”, through which it buys and sells bonds in the open market. If you’ve read news stories about the Fed buying Treasuries to help boost the economy, that’s an example of ‘open market operations’ in action and is an example of “quantitative easing” or QE, which is not to be confused with a ship.

When it buys bonds, the money supply increases because the banks exchange their bonds for cash and then have more money — aka liquidity — to lend to businesses or individuals. The opposite occurs when the Fed sells bonds to the banks, who typically can’t refuse any offer from the Fed.

In addition, the Fed controls the money supply by raising or lowering “reserve requirements,” which is the amount of money banks are required to keep “on reserve” at the Fed, sort of like a rainy-day fund for the banking system. Raise those requirements and banks have less money for other stuff — like lending; the opposite is true when the Fed lowers reserve requirements…or keeps them low as has been its recent practice.

For more detail on how this all works, see the Fed’s comic book: The Story of the Federal Reserve System.

So while the Fed doesn’t technically (or actually) print physical dollars, it has an enormous impact in the amount of money and credit in our economy. The real scandal is the banks pretty much have to do what the Fed wants, which makes Ben Bernanke the equivalent of a “Godfather” figure in the world of high finance.

And you thought Wall Street was powerful?

‘A Nation of Moochers’

‘A Nation of Moochers’: Is the ‘Take Care of Me’ Society ‘Wrecking the USA?’

recently interviewed Milwaukee radio talk host Charles Sykes about his new book “A Nation of Moochers: America’s Addiction to Getting Something for Nothing.”

moochers1

The folks over at The Fiscal Times have also talked to Sykes — here’s how they set up the conversation:

 

You’ve played by the rules. Worked hard to put yourself through school. You’ve gotten a decent job and you pay your taxes. You’re faithfully paying down your mortgage and saving money in a 401(k) – all to secure your finances and your future. But now there are a lot more “takers” than “makers” in this country – and the impact is systemic and long-lasting.

A prevalent new “moocher culture” is changing the character of this nation – that’s the core message of A Nation of Moochers: America’s Addiction to Getting Something for Nothing, a new book by Charles J. Sykes, senior fellow at the Wisconsin Policy Research Institute and the author of six previous books.

“This has been the flash point in American politics for the last several years,” Sykes toldThe Fiscal Times in an interview this week. “In the wake of the Great Recession, we’ve shifted from a culture of celebrating and encouraging those who are productive and hardworking, to a culture where handouts, bailouts, freebies and entitlements dominate.

You start to wonder, Why am I paying the freight for those who have been reckless and irresponsible, whether it’s on Wall Street or in Washington or anywhere else in the community? I think we’re becoming a very different nation.”

Obviously, Sykes is also not a fan of governments giving tax incentives to big Hollywood movie production.

Study: Safety net misses many jobless in Nevada

Las Vegans Dylan Wikoff and Jorge Suescun Hijuelos know firsthand the downward spiral that occurs once you lose your job and then exhaust your unemployment benefits without finding work.

“I ended up homeless on Fremont Street,” said Wikoff, a 36-year-old Marine Corps veteran who was laid off more than two years ago from a sales job at a construction supply company.

“It was a slow downward spiral for me,” said Hijuelos, 51, a longtime union construction worker who had never been without work for more than a few weeks until the completion of the CityCenter project. “I sold my car, sold my bedroom set, sold everything to pay my rent. I went from a beautiful condo to renting rooms by the week. I slept in a couple of fields.”

These polite and bright men are not unusual. They actually are some of the lucky ones in the never-ending recession in Nevada. The men, interviewed by phone in Las Vegas, are now pulling their lives back together through Catholic Charities of Southern Nevada. Wikoff works at the charity program’s thrift store, while Hijuelos is a dorm monitor at the residential living center.

Like many of the unemployed, they found the safety net programs provided by the state were not enough, or not worth the trouble.

Just 27 percent of the Nevadans who exhausted their unemployment benefits turned to the state for assistance through the Medicaid, food stamp and welfare programs, a new study has found.

But the state Division of Welfare and Supportive Services study does not address what happened to the other 73 percent, people who could be without any means of support.

Officials who deal with the un­employed and other poor people, though, have a pretty good idea.

Some live with a spouse or partner who still is working and live off the one income.

Others move in with family members or friends, or move out of the state.

More than 30 percent are not aware that state and local social service agencies and charitable organizations can offer them help.

Some have cut their living expenses by just not paying their mortgages. They know they will face foreclosure and eventual expulsion from their homes but it is the best they can do for now.

And still others never have accepted help before and simply are too proud to ask.

Wikoff and Hijuelos received un­employment for 99 weeks, the maximum allowed, could not find jobs or enough benefits to stay afloat, and ended up homeless.

Wikoff said he spent too much time “chasing for programs to keep the lights on,” sold his car and belongings and still became homeless.

“I lost my sense of productivity. I chased my tail trying to get assistance and ended up a drifter. It was incomprehensive to me that I ended up on the street.”

“When you are on unemployment, it is only enough to sustain you,” Wikoff said.

“I got food stamps and a voucher (from the county) for $400 for rent,” Hijuelos said. “It was just not enough. The voucher was for one month. But I am persistent. I am super grateful to Catholic Charities. “

RIDING OUT THE STORM

“This is far different than past recessions,” said Miki Allard, staff specialist of the state Division of Welfare and Supportive Services. “We are seeing people who never thought they would be in a welfare office.”

Allard said some unemployed people are simply “riding out the storm.” They don’t believe it’s worth the effort to apply for Medicaid, the free health care program for the poor, disabled and some elderly, as long as their health is good.

She pointed out that if members of an unemployed family suddenly suffer health problems, they still can apply for Medicaid. If they are approved, the program will cover medical bills starting up to three months before they were participants.

If one spouse in a family is working, she added, it might not be worth the time to apply for food stamps — now called the Supplemental Nutrition Assistance Program (SNAP).

A family of four with no income could qualify for as much as $668 a month in SNAP benefits, but typically if one spouse is working, their benefit if any, could be less than $20 a month.

In the study, welfare officials looked at a list provided by the state Department of Employment, Training and Rehabilitation of 1,643 people who exhausted their unemployment benefits between January 2010 and February 2011. They matched those names with names in their caseloads.

MOST DON’T SEEK STATE HELP

Twenty-two percent of the people who exhausted unemployment enrolled in the nutrition assistance program. Four percent were enrolled in the SNAP and Medicaid programs. And 1 percent were receiving welfare, SNAP and Medicaid benefits. But 73 percent were not enrolled in any of these programs.

They still could end up in the caseload statistics. The study found most of the people who exhausted unemployment waited seven months before applying for SNAP.

One of every seven people in the state now receives some sort of state assistance, according to Allard.

The latest figures show a record 303,814 people in Nevada are receiving Medicaid assistance, up 23,000 in the last year. SNAP help now is being given to a record 353,737 people, up 29,000.

Mae Worthey, a spokeswoman for the Department of Employment, Training and Rehabilitation, said the statistics on unemployed people exhausting benefits is not a true indication of how bad it has become for the unemployed in Nevada.

Of the unemployed, only about half received compensation in the first place, she said. People who quit jobs are not eligible for unemployment.

Worthey’s agency administers un­employment benefits and operates Job Connect offices where people can find what jobs are available.

CHARITIES OFFER FOOD, HELP

Jodi Pyson, research and public policy manager for the Three Square Food Bank in Clark County, said many of the people she sees today are former middle class people “who may not even know where to start” in looking for benefits.

They also may lack the transportation or be reluctant to apply for food stamps or other programs at the welfare office.

“They are overwhelmed that they are in such a situation,” she said.

Three Square, which provides food for poor people through nonprofit agencies, organizations and schools, has set up a bilingual team through a contract with the Division of Welfare and Supportive Services to help people fill out SNAP applications. They have enrolled about 7,500 people over the past two years.

Team members meet people in places such as libraries and grocery stores.

Catholic Charities spokeswoman Leslie Carmine said many of her organization’s clients are people who no longer or never qualified for unemployment benefits.

Catholic Charities runs many programs to help the poor, including the St. Vincent Lied Dining Room where meals are available to the homeless or anyone who walks in the door.

It also gives two bags of ready-to-eat food once a month to any Nevada resident who asks.

Tim Burch, interim director of the Clark County Department of Social Services, said his agency is the “bottom rung” for poor people who have lost unemployment benefits, sold their cars and depleted savings and could not find sufficient help from charities.

The department’s budget comes from property taxes, which have been declining. Burch said his agency has experienced a 26 percent cut in funds and staff at a time when the need is at a record high.

“We work with Catholic Charities and other community partners and try to cobble together the services needed to keep people off the street,” Burch said.

FRESH HOPE FOR JOBS

Wikoff and Hijuelos figure the storm is about over for them.

With the training he has received at Catholic Charities, Wikoff hopes he can now find a sales job that pays at least $15 an hour.

Hijuelos sees himself returning soon to construction work. He has kept up his union dues and now stands No. 10 on one callback chart. When he was laid off, he was No. 3,000.

Being a veteran isn’t enough, added Ryan Germain, 33, another trainee at Catholic Charities. After a stint in the Army and working in warehousing in Texas, he moved to Las Vegas last year thinking it would be exciting to find employment in the gaming industry. He never found a job. An alert police officer took him to Catholic Charities.

“Employers may want to hire veterans, but they get 500 people turning in applications for one job. I would take anything. I would shovel manure,” he said.

WHERE TO FIND HELP
■ Call 211 anywhere in the state to find people who can direct you where to find services you need. You also can visit the website: nevada211.com.
■ Visit the Nevada Division of Welfare and Supportive Services website: dwss.nv.gov. The site offers locations by ZIP code of welfare offices across the state, application forms in Spanish and English, and eligibility requirements for programs.
■ Visit the Catholic Charities of Southern Nevada website: catholiccharities.com. The website describes programs to help people, including senior citizens and families, and includes telephone numbers to call for more information.
■ Visit the Three Square Food Bank website: three square.org. The food bank provides food and grocery products equivalent to 16 million meals a year to nonprofit organizations and schools in Clark County and other counties in Southern Nevada. The site has a “get help” link that people can use to find food.

A new study shows that just 27 percent of the Nevadans who have exhausted their unemployment benefits turn to the state for assistance through the Medicaid, food stamp and welfare programs

UNHAPPY Republicans Go to Polls in FEWER Numbers

What does Mitt Romney have to do to make Republican voters like him—hand out free treats? With the Republican field cut down to just four candidates, voters are more unhappy than ever. Our guide to today’s polls and why they matter.

Findings: Republicans are more dissatisfied with their presidential candidates than ever, and for the first time, more Republicans (52 percent) are unhappy with the field than are happy with it (46 percent). Just before the New Hampshire primary, 51 percent said the candidates were good or excellent. And going all the way back to May 2011, Republican voters have seen their candidates more positively than negatively. Further, in January 2008, 68 percent of those voters saw the field as excellent or good.
Pollster: Pew Research Center
Methodology: Survey of 1,006 adults, among them 341 Republican and lean-Republican registered voters between January 26 and January 29.
Why it matters: You people are never satisfied! The Republican field has been cut in half, with the least popular people dropping out. And yet voters are less satisfied than ever. It seems like the negative ads the candidates have been running against each other have turned off not only independents, but Republicans as well. A poll from Rasmussen finds that 45 percent of likely voters think there have been too many debates.
Caveat: Republicans are still more enthusiastic to vote this fall than Democrats are, a Gallup poll shows. The “enthusiasm gap” is blamed for the size of Republicans’ victory in 2010.

Findings: Romney is beating Obama in swing states, though the president has caught up since the fall. Obama gets 47 percent to Romney’s 48 percent nationally, while in November Obama last 43 percent to Romney’s 48 percent, and in October lost 46 percent to Romney’s 47 percent. Nationally, they tie with 48 percent. Obama easily beats Gingrich in swing states, 54 percent to Gingrich’s 40 percent.
Pollster: Gallup
Methodology: Telephone interviews conducted between January 24 and January 28 with 737 registered voters in Colorado, Florida, Iowa, Michigan, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Pennsylvania, Virginia, and Wisconsin.
Why it matters: Swing states pick the presidents.
Caveat: In a close election, turnout matters a lot, and Republicans still have an advantage as their voters are more enthusiastic. The poll shows 62 percent of swing state Republicans are very or extremely excited to vote — 35 percent in the extremely category — while 54 percent of swing state Democrats are extremely or very excited to vote, just 23 percent of them extremely. 

Findings: About 55 percent of voters think Obama understands the problems of average Americans very or fairly well, while 39 percent think Romney understands their problems. Just 36 percent think Gingrich understands their problems.
Pollster: Pew Research Center/ The Washington Post
Methodology: Survey of 1,006 adults between January 26 and January 29, 402 of them cell phone users.
Why it matters: The poll doesn’t explicitly say what those Americans think they’re problems are, but we can guess. (It definitely can’t be that they are desperate to vacation on the Moon, because Gingrich would have their votes in the bag.) The economy has long been voters’ top concern. A Rasmussen poll released last week finds that 55 percent of likely voters think the wealthy should pay at least 30 percent in taxes (Romney pays about 15 percent). Perhaps the attacks against Romney that he’s a 1 percenter have stuck. Americans still don’t blame Obama for the economy. A Washington Post/ ABC News poll this month found that 59 percent blame George W. Bush for the economy, while 29 percent blame Obama.
Caveat: Romney went from sure loser in Florida to sure winner in a week. He hasn’t started airing ads against Obama yet.

Nevada Casino’s carrying record debt and higher ratios than ever

UNLV study:

Casino debt at highest level everNevada’s casinos have taken on more debt than ever before, shifting the finances of the state’s largest industry into unprecedented territory, according to an analysis of state gambling data by the University of Nevada, Las Vegas.

The study released by the UNLV Center for Gaming Research found that total liabilities for the state’s casinos have grown 18-fold since 1984 to $51.2 billion during the fiscal year that ended in June 2011. But with $22 billion in casino revenues for that same period, the money they were pulling in was only five times the amount from 1984.

The center’s director, Dave Schwartz, said that since 2008, casinos have owed more in long-term debt than they collectively earn in revenue each year.

“This says that the growth that we saw and the investment that we saw in the middle of the decade was quite different from what we saw in the middle of the ’90s,” Schwartz said.

The years just before the Great Recession were the best — and most optimistic — years for Las Vegas casinos, as developers were eager to build more megaresorts, and casinos seemed to fill hotel rooms and slot machines as quickly as they could build.

The success led to aggressive financing for construction and the pricey privatizations of Caesars Entertainment Corp., then Harrah’s Entertainment, and Station Casinos Inc. The corporate buyouts left the companies with significant debt.

Gingrich Prepared to Fight All The Way to The Convention

Former House Speaker Newt Gingrich’s announcement that he is taking his campaign to the Republican convention in Tampa is being dismissed as typical election season bluster. How else to describe a candidate without much money, dwindling momentum, and a truly narrowing path to the GOP nomination who is pledging to stick it out for the long haul?

But what if Gingrich isn’t bluffing? The Republican primary process is, at its heart, a race for delegates: the first candidate to net 1,144 wins. By the time Floridians finish voting on Tuesday, just five percent of the total delegate pool will have been awarded. The upcoming states include a number of caucuses and southern primaries, the former of which play to Rep. Ron Paul (R-Texas)’s strengths and the latter of which work to Gingrich’s advantage. The more delegates a candidate accrues, the larger his influence becomes over the party platform.

As one top Republican Party official said of Gingrich’s proclamation: “Why would he quit?”

“We are already active in Nevada,” Gregg Phillips, a top official with the Gingrich-allied super PAC Winning our Future, told The Huffington Post, of a state that will caucus on Feb. 4. “Our team has been competing in Nevada for about a month.”

If, indeed, Gingrich refuses to dislodge himself from the process, the question then becomes just how many delegates he will be able to gain. The process of unraveling that mystery begins precisely where he and the rest of the GOP candidates currently reside: in the Sunshine State.

Just how Florida will award its delegates is currently the subject of intense debate, with a section of the Republican Party adamant that the current structure — which dictates that the winner of Tuesday’s primary gets all the delegates — is in violation of party rules.

In a letter to Florida GOP State Chairman Lenny Curry on December 21, 2011, RNC Chairman Reince Priebus noted that under committee rules, states other than Iowa, New Hampshire, Nevada, and South Carolina could not be “winner-take-all” if they held their primaries or caucuses prior to April 1, 2012. Florida violated that bylaw by moving its primary up to January 31.

Instead of forcing Florida to award its delegates proportionately, however, the RNC punished the state by cutting its number of delegates in half, from 99 to 50. This was, as Priebus noted, the punishment under the rules (emphasis ours):

Rule No. 16 imposes penalties upon any state that chooses to elect, select, allocate or bind delegates to the 2012 Republican National Convention earlier than the first day of the month in which that state is authorized to do so under Rule No. 15(b). Those penalties include a fifty percent (50%) reduction in the number of delegates that such a state is authorized to send to the 2012 Republican National Convention, as well as a prohibition on the three Republican National Committee members from the state serving as delegates or alternate delegates.

That seemed like it would put an end to the debate. But a number of GOP officials continued to argue that voters who don’t back former Massachusetts Gov. Mitt Romney, the likely winner of the Florida primary, were being disenfranchised by the way delegates were being awarded. They also said that other states chose not to jump ahead like Florida did out of a belief that their primaries would no longer be winner-take-all if they did so.

“I just want to know when the RNC members agree to a further rule change that would allow only Florida to jump the line and not have its delegates allocated proportionally,” former RNC Chairman Michael Steele told The Huffington Post. “I’m almost certain California, Michigan and Ohio didn’t agree to such a change cause I know if they could be in the mix right now they would be.”

For those, like Steele, who believe that Florida’s 50 delegates shouldn’t go squarely to Romney, planning has turned toward ways to remedy the wrong. All it would take to get a hearing on the matter is for one registered Florida Republican voter to file a protest with the RNC. The party’s contest committee would have to issue a decision at the convention.

It seems probable, at this juncture, that someone will file such a protest. Mark Cross, an Osceola County committeeman and executive board member of the state Republican Party, wrote Priebus a letter in November 2011, making the case that it would be simple for the committee to change Florida’s delegation from a winner-take-all to proportional.

RNC Rules supersede any state rules or state statutes and should be enforced as to the application of delegate allocation. The rules as to the allocation and recording of delegates at the convention are completely and solely within the authority of the RNC. The rules must be applied equally to each and every state or they become meaningless without any reasonable expectation of application to any other state.Certified results of elections are easily available from the Secretary of State for each state. The RNC can calculate, report and record the proportional vote and easily enforce this rule. The proper counting and allocation is simply a matter of mathematical enforcement of the rules and should not be confused with any penalty because a state and its voters will not be losing their voice in any way.

Even Priebus seemed to acknowledge that a challenge to the contest committee was likely. “In addition,” he wrote Curry, “it has come to my attention that one or more Florida voters may file a contest seeking proportional allocation of Florida’s delegation based on the primary taking place prior to April 1.”

Asked for comment on the matter, Kirsten Kukowski, Press Secretary at the Republican National Committee, emailed over the following statement: “Florida lost half of its delegates and received additional discretionary penalties for breaking the party rules. The contest committee is designed to look at any delegate concerns that may arise.”

But while the RNC itself is publicly deferring ultimate say on the issue for the time being, others in the party aren’t acting so ambivalent.

“Michael Steele can say all he wants, but he’s not the chairman anymore,” Brian Hughes, a spokesman for the Florida GOP, told the Tampa Bay Times. “The RNC accepted our rule and that’s it. We are winner-take-all.”

Even if a challenge is made to the contest committee, there is no telling whether it will be successful. Different states have different models for proportionality, meaning that despite what Cross wrote, breaking up Florida’s delegates would be a controversial move. Meanwhile, the odds are still likely that by the time the convention rolls around, the party will have firmly united behind one nominee with little reason to, or appetite for, refiguring the delegate count of one state.

“That’s usually an indication that you think you’re gonna lose,” Romney said, when informed of Gingrich’s proclamation that he would remain in the contest until the convention. “When you say ‘I’m gonna go on no matter what happens,’ that’s usually not a good sign.”

Even if the convention isn’t ultimately brokered, the number of delegates each candidate earns and the way in which they are allotted are still significant. With the right number, candidates can force votes on certain issues, and they can make a motion on the convention floor to amend the party agenda or change the rules. They could also make a play for a key speaking role. It’s why Rep. Ron Paul (R-Texas) has pledged to keep campaigning until Tampa and why Gingrich is now offering the same posture.

Asked on Monday whether there was a chance he would drop out if he loses the Florida primary,Gingrich declared, “None… We’ll be in every state.”

Newt Gingrich went into Florida with a wave of momentum after an upset win in South Carolina, but has been unable to maintain front runner status. The latest poll shows Gingrich’s support is sinking, with just 29 percent of Floridians backing the candidate.

Presidential rival Mitt Romney has ramped up attacks against the former Speaker, hitting Gingrich hard during the last GOP debate and with negative ads running throughout the Sunshine State. Multiple polls show Romney now leading Gingrich by a comfortable margin.

Still, Gingrich said he is in the race for the long haul, and will not drop out after Florida regardless of the results. He has promised repeatedly to take his campaign “all the way to the convention.”

Democrats take Aim At Tea Party Group of 10

WASHINGTON — A liberal super PAC is set Monday to launch what it is billing as a multimillion dollar campaign to “Take Down the Tea Party Ten.”

The effort by the progressive outfit CREDO aims to use the new big-spending super PAC model, which can accept unlimited donations, to back extensive local organizing and “education” aimed at defeating 10 members of Congress seen by the left as the worst of the worst.

“We’re talking about some of the most odious members of Congress. Even for Republicans these guys are low,” said Campaign Manager Matthew “Mudcat” Arnold in a statement.

“We’re going to empower local activists to organize their friends and neighbors to lay out the truth about their representatives in the most basic terms,” Arnold added. “They are anti-woman. They are anti-science. They are hypocritical, bigoted, and have said and done things that are downright crazy. They’ve done more to embarrass their constituents than they have to govern or work toward solutions. They are unfit for Congress, and we’re going to help their constituents hold them accountable.”

The first six lawmakers targeted by the group are Reps. Sean Duffy (R-Wis.), Steve King (R-Iowa), Allen West (R-Fla), Joe Walsh (R-Ill.), Frank Guinta (R-N.H.), and Chip Cravaack (R-Minn.). Four more will be chosen by CREDO’s members.

Although super PACs can take unlimited donations, the group is boasting that, with 11,000 donors, it is much more a grassroots organization.

The PAC plans to open offices in each of the targeted members’ districts to work with people in the communities who already oppose the legislators.

“We’re taking the traditional super PAC model and turning it on its head — to put power back in the hands of the people, instead of consolidating it in the hands of corporate executives and the ultra-wealthy,” said Becky Bond, president of the CREDO super PAC. “Where Karl Rove and the Koch brothers can use shady money from a few hidden donors to fund a barrage of TV attack ads, this super PAC will empower local voters and our list of 2.5 million activists to build a grassroots campaign that is as hard hitting as it is progressive.

“Using innovative tactics, technology, and good, old fashioned grassroots organizing, we’re going to kick some Tea Party congressmen out of office,” Bond said.

Romney’s Mexican Father Raises More Questions including Polygamy Claims

MIAMI – Mitt Romney, who rarely discusses his ancestry, has repeated a striking comment in Florida in recent days to soften his rhetoric about immigration and woo the crucial Hispanic voting bloc.

“My dad was born in Mexico,’’ Romney says at many campaign stops, as he expresses empathy and solidarity with immigrant families. It follows sharp rhetoric in places such as Iowa, where he decried what he called efforts to provide “amnesty’’ to the nation’s 12 million illegal immigrants.

The story of Romney’s father, George, is one that many Cuban-Americans can relate to in this city of immigrants: A revolution sweeps through the homeland, prompting an exodus of people who, in many cases, left behind everything to come to the United States. But in this case, George Romney’s country of birth was Mexico, not Fidel Castro’s Cuba.

The issue of immigration is especially sensitive in Florida, where Hispanics make up 11 percent of the Republican primary electorate, and could provide the key to victory in today’s primary. Romney’s chief challenger, Newt Gingrich, has called Romney anti-immigrant; Romney said the charge was repulsive.

It is in this context that Romney has mentioned that he is the child of a born-in-Mexico father. But he usually ends the story there, failing to explain the circumstances or, even more strikingly, why it might be relevant to those he is trying to win over.

Were he to tell the rest of the story, it doubtless would resonate with many here: George Romney was born in Mexico and was 5 years old when a revolution forced his family members in 1912 to flee their Mormon colony and seek refuge in the United States. The Mormon exiles lost their homes, farms, and most of their belongings, were welcomed by the United States, and benefited from a $100,000 refugee fund established by Congress.

But there are other elements to the Romney story that may explain why he doesn’t tell the full tale on the campaign trail. The reason that George was born in Mexico is that his grandfather – Mitt’s great-grandfather – had taken refuge there in order to escape US laws against polygamy. It was this family patriarch, Miles Park Romney, who established the colony and lived there with four wives.

Mitt Romney has decried what he has called the “awful’’ practice of polygamy and has never visited the colony, even though several dozen of his cousins continue to live there.

Romney’s new emphasis on his father’s roots drew the attention yesterday of a host on “Fox and Friends,’’ who said during an interview with Romney that it was the first time he had heard the former Massachusetts governor discuss that aspect of his ancestry.

Asked whether the discussion was “helping you with the Latino community in Florida,’’ Romney responded, “You know, I wish I could claim that I’m Hispanic and that would help me in the Latino community here in Florida and around the country, but my dad was born of American parents living in Mexico. So he was Anglo at the time and yet, I’m very proud of the fact that he came to this country at a critical time, was helped to get on his feet by folks in this country.’’

Romney has often declared his support for legal immigrants and said he would not try to round up those here illegally. Instead, he said he favored “self-deportation,’’ which Gingrich called a fantasy, but which Romney hopes will send a message to the Hispanic community here that he would not act precipitously.

Gingrich has cast himself slightly to the left of Romney on the issue, but Romney’s recent softening of his message may have blurred the distinction. Both men now say, for example, that they would support granting citizenship to certain illegal immigrants if they served in the US military, but they oppose a broader plan known as the Dream Act.

But even the muted rhetoric may not have gone far enough for some in the Republican Party who fear losing Hispanic support in the general election. Jeb Bush, former governor of Florida whose wife was born in Mexico and who has not endorsed any candidate, recently told The Wall Street Journal that Republicans must moderate their rhetoric about immigration.

“The tone of our message is one of ‘them and us’ sometimes,’’ he said.

Romney’s discussion of his father’s Mexican birth has prompted rounds of discussion in online forums about how his father, when he ran for president in 1968, could have met the constitutional requirement that a president be a “natural-born citizen.’’

In George Romney’s case, representatives of his 1968 presidential campaign argued that he fit the constitutional requirement because George’s parents, who had gone back and forth from the United States to Mexico, were US citizens.

Accounts published during the campaign indicate that questions were beginning to be raised, but the matter became moot when George Romney dropped out of the race.

A Congressional Research Report published last November that explores the issue said the Constitution did not define what it means to be a “natural-born citizen,’’ and notes that competing views were expressed when George Romney declared his candidacy.

Seth Lipsky, the author of “The Citizen’s Constitution: An Annotated Guide,’’ said that “in most past cases, Congress and the courts have been reluctant to open up doubts raised about candidates, and I think this reluctance is wise.’’

Mike Romney, a cousin of Mitt’s who lives in the Mexican colony established by their great-grandfather, welcomed his cousin’s new ancestral emphasis. “I am glad to hear that he is at least mentioning a bit of his Mexican roots,’’ Mike Romney said via e-mail.

More Women Realizing How They Have Been Mistreated and Discriminated AgainstT

I grew up in Possum Trot, Ala., chopping cotton in the springtime and picking it in the fall. The work was hard on our hands and the sun was hot on our skin. But we learned early on — boys and girls alike — that we had to do a good day’s work for a good day’s pay.

Years later I was hired as an overnight manager at a Goodyear factory. I thought the same principle I learned in my poor, rural town still was true, so I worked just as hard as everyone else.

I got some treatment you might expect as a young woman at a factory in the South — so I worked even harder to prove to the men around me that I was smart and good at what I did. I took pride in my job. And twice a month I went to my mailbox and found the paycheck I thought I’d earned.

One day I opened that mailbox and found something that would change my life. An anonymous coworker — to this day, I don’t know who — had left a pencil-written note on a torn piece of paper with some numbers on it. It showed how much more my male coworkers were making, even though they had less education, training and experience.

I’d been at Goodyear almost 20 years, and was still making 20 percent less than the lowest-paid male supervisor in my same position. I’d been praised and promoted by my bosses, but rewarded with much smaller raises than my male coworkers got.

It hit me in the gut like a ton of bricks. I immediately thought of the countless overtime hours that I worked every chance I could, and realized I was paid for them based on an unfair salary. All those good days of work hadn’t earned me the good day’s pay I deserved.

It was about fairness, and it was against the law. It was about supporting my family — school, doctors’ bills, groceries and the mortgage. It was about my local economy, and the money I didn’t have to spend in the community.

And it was about my retirement: Since that’s based on our salaries, too, I’m still shortchanged long after I’ve stopped working. Because my Goodyear pension isn’t enough to pay two bills, I burned through my small 401(k) in two years before I became eligible for Social Security.

So I went to court, and won. The company appealed and the case went all the way to the Supreme Court, where Goodyear won by one vote. The Court said I should have filed my complaint within six months of the first unfair paycheck I’d received almost two decades earlier. There was nothing the men could do that I couldn’t — but I couldn’t fight for fair pay if I didn’t even know I was being paid unfairly. Like so many women, I’ve never asked for or gotten a handout. I’ve only asked for a fair shot.

Barack Obama heard about my case and went to work. His grandmother worked in a bank her whole life, including long after she’d hit the glass ceiling. She even had to train the men who were paid higher salaries to do the work she’d showed them how to do. And he never wants his two girls to be disrespected in the same way.

As a senator he fought to give women enough time to file a complaint after we learn we’re being discriminated against and underpaid. He believes we should reward hard work and responsibility. He stands up for the middle class because he’s struggled, too. And he continues to fight because he knows what happened over a generation can’t be fixed overnight.

I had to wait more than a decade and a half before I even knew I was being discriminated against. Within a week and a half after President Obama was inaugurated, he signed his name to the law that bears mine. Three years ago today, he made it the very first one he enacted.

I’ll never see a cent of the salary I lost over all those years at Goodyear. My case is over and the Lilly Ledbetter law won’t help Lilly Ledbetter. But in recognizing what’s right and fair, President Obama’s leadership has given me a much richer reward: knowing that my daughter, my granddaughter and every other woman in America will never again feel helpless when they don’t get an equal day’s pay for an equal day’s work.

Political Ideology and Intent to Defeat Obama Creats 1 Trillion more debt

WASHINGTON — A new budget report released Tuesday predicts the government will run a $1.1 trillion deficit in the fiscal year that ends in September, a slight dip from last year but still very high by any measure.

The Congressional Budget Office report also says that annual deficits will remain in the $1 trillion range for the next several years if Bush-era tax cuts slated to expire in December are extended, as commonly assumed.

The report is yet another reminder of the perilous fiscal situation the government is in, but it’s commonly assumed that President Barack Obama and lawmakers in Congress that little will be accomplished on the deficit issue during an election year.

The first wave of statements from lawmakers had a familiar ring as each party cast blame on the other.

“Four straight years of trillion-dollar deficits, no credible plan to lift the crushing burden of debt,” said House Budget Committee Chairman Paul Ryan, R-Wis., “The president and his party’s leaders have fallen short in their duty to tackle our generation’s most pressing fiscal and economic challenges.”

“We will not solve this problem unless both sides, Democrats and Republicans, are willing to move off their fixed positions and find common ground,” said Senate Budget Committee Chairman Kent Conrad, D-N.D. “Republicans must be willing to put revenue on the table.”

The CBO study also predicts modest economic growth of 2 percent this year and forecasts that the unemployment rate will remain above 8 percent this year and next. That is based on an assumption that President Barack Obama will fail to win renewal of payroll tax cuts and jobless benefits by the end of next month.

That jobless rate is higher than the rates that contributed to losses by Presidents Jimmy Carter (7.5 percent) and George H.W. Bush (7.4 percent). The study predicts unemployment to remain above roughly 5 percent – until 2016. The agency also predicts that unemployment will remain at 7 percent or above through 2015

The new figures also show that last summer’s budget and debt pact has barely made a dent in the government’s fiscal woes.

The pact imposed $2.1 trillion in spending cuts over 10 years, but lawmakers are already talking about easing across-the-board spending cuts required under the agreement. The latest estimates predict $11 trillion in accumulated deficits over the 2013-2022 time frame if the Bush-era cuts in taxes on income, investments, large estates and on families with children are renewed. Obama has proposed largely extending them, but allowing them to expire for upper-income taxpayers.

Last year, Obama and House Speaker John Boehner, R-Ohio, tried but failed to reach a “grand bargain” on the deficit, an effort that got hung up over taxes and cuts to major benefit programs like Medicare. A subsequent attempt by a congressional “supercommittee” to find smaller saving sputtered over the same issues.

What’s left is a heap of unfinished business that comes to a head at the end of the year: expiring tax cuts and painful across-the-board cuts to the Pentagon and many domestic programs. To top it off, another politically toxic increase in the debt limit will be needed at some point shortly after the November elections.

The deficit would require the government to borrow 30 cents of every dollar it spends. Put another way, the deficit will reach 7 percent of the size of the economy, a slight dip from last year’s 8.7 percent of gross domestic product.

The CBO report shows that the deficit dilemma would largely be solved if the tax cuts enacted in 2001 and 2003 – and renewed in 2010 through the end of this year – were allowed to lapse. Under that scenario, the deficit would drop to $585 billion in 2013 and to $220 billion in 2017.

But expiration of those tax cuts would slam the economy, CBO said, bringing growth down to a paltry 1.1 percent next year.

Going Negative Costs BIG Money for Romney and SUPER PACs

A newly feisty Mitt Romney, fighting for his political life, and his loyal super PAC unloaded on Gingrich in the Sunshine State with a massive spending binge that included wall-to-wall attack ads in a repeat of the assault that knocked Gingrich from the top of the polls in the run-up to the Iowa caucus.

The biggest spender in Florida — the most expensive state in the Republican primary to date — has been the pro-Romney super PAC Restore Our Future. Run by a trio of former Romney advisers, the group has spent $16.1 million in the state. The vast majority of that — $12.9 million — has gone into a barrage of ads, on television and radio, and direct mail attacking Gingrich. That’s almost 4 times  what pro-Gingrich super PAC Winning Our Future is spending in Florida.

Florida Penalized There Are NOT 50 Delegates, Actually Only 25 at Stake

MIAMI — Florida broke the presidential primary rules – again – but officials figure it’s worth a penalty for their state to maintain a relevant voice in nominating candidates for the White House.

When Florida voters choose their candidate for the Republican presidential nomination on Tuesday, they’ll do so as the fourth state in the process. The cost: half their delegates to the GOP convention.

“I’d much rather have a say in the nomination process as opposed to the coronation process,” Florida Senate President Mike Haridopolos said.

As it did in 2008, Florida went against the national parties this year and set the last Tuesday in January as its primary date. In response, officials in New Hampshire, Iowa and South Carolina moved up their dates too.

The strategy paid off for Florida four years ago. Sen. John McCain carried the state and used the momentum from that victory to win the Republican nomination.

Florida could again play a pivotal role. With Rick Santorum barely winning the Iowa caucuses, Mitt Romney carrying New Hampshire and Newt Gingrich taking South Carolina, a victory in the winner-take-all contest for Florida’s 50 delegates could change the course of the campaign.

Seeking more influence isn’t anything new for Florida.

Hoping to share New Hampshire’s first-in-the-nation primary date, the state set its 1972 primary for the second Tuesday in March. New Hampshire responded by moving up its election, but Florida’s date remained in law until 2008.

At first, that still left Florida early in the nominating process. While several states held caucuses before the 1976 vote, Florida was the third state to choose delegates through a primary, following New Hampshire and Massachusetts. Florida chose the eventual nominees: Democrat Jimmy Carter and Republican Gerald Ford.

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Then other states began moving up their primaries. Florida soon found itself irrelevant, holding its contest after the nominees essentially had been decided.

Republican legislative leaders and then-Gov. Charlie Crist decided to change that for the 2008 primaries, arguing that Florida is more diverse in population than other early voting states. It has large populations of Hispanic and black voters, a mix of Southerners and Northern transplants and large rural areas and major cities.

The national parties weren’t happy. The Democratic National Committee stripped Florida of all its delegates. After initially making frequent stops in Florida, the Democratic candidates agreed to boycott the state.

The Republican National Committee stripped Florida of half its delegates, which, given its size, still made it an important state to win. GOP candidates spent a lot of time talking about issues important to the state, including the restoration of the Everglades, Cuba policy, offshore drilling and property insurance issues.

While McCain was able to use Florida to build momentum, the same wasn’t true for Democrat Hillary Rodham Clinton. Her overwhelming victory over Barack Obama had an asterisk next to it – there were no delegates at stake and none of the candidates had campaigned here for months before the election. She unsuccessfully argued to have the delegates fully restored before finally conceding the race. Once it was clear Obama would be the nominee, the delegates were restored at his request.

For all the complaining about Florida moving its presidential primary, the state was the first to hold a primary. Ever.

In 1904, Florida elected delegates to a national party’s nominating convention. And while they weren’t bound to follow the results of the presidential preference primary, other states began taking up the idea.

The big business of swindling people who trust you

WITH a nudge from their pastor, the 25,000 members of the New Birth Missionary Baptist Church near Atlanta opened their hearts, and their wallets, to Ephren Taylor. And why not, given his glittering credentials? Mr Taylor billed himself as the youngest black chief executive of a publicly traded company in American history. He had appeared on NPR and CNN. He had given a talk on socially conscious investing at the Democratic National Convention. Snoop Dogg, a rapper, had tapped him to manage a charitable endowment.

So when Mr Taylor’s “Wealth Tour Live” seminars came to town, faithful ears opened wide. Eddie Long, the mega-church’s leader, introduced Mr Taylor at one event with the words: “[God] wants you to be a mover and shaker…to finance you well to do His will.” Mr Taylor offered “low-risk investment with high performances”, chosen with guidance from God.

Divine inspiration, alas, has given way to legal tribulation. For many investors, the 20% guaranteed returns proved illusory. Mr Taylor (whereabouts unknown) stands accused of fraud in a number of lawsuits. Bishop Long, a co-defendant, has urged Mr Taylor to “do the right thing” and cover any losses. The charges are not the first blot on the minister’s reputation: last year he settled for an estimated $15m-25m claims that he had coerced young men into oral sex.

An essential element of Mr Taylor’s approach was to make those he targeted want to invest in him personally, says Cathy Lerman, a lawyer representing some of the victims. “He was a master of creating a marketing presence. He would say: ‘If you want to check me out, just Google me.’” He had no problem convincing them that he was an ordained minister, even though he had no formal seminary training, according to court documents.

It will take time to gauge the full extent of the losses, not least because it will require untangling a web of companies, some of them shells. Victims, many of whom entrusted their life savings to Mr Taylor, are still coming forward. Some call him “the black Bernie Madoff”.

Let us prey

Mr Madoff, whose victims lost perhaps $20 billion, perpetrated the largest “affinity fraud” ever. The term refers to scams in which the perpetrator uses personal contacts to swindle a specific group, such as a church congregation, a rotary club, a professional circle or an ethnic community. Once the scammer gains their trust, his scam spreads like smallpox. Most affinity frauds are Ponzi schemes, in which money from new investors is used to repay old ones, or is siphoned off by the promoters.

The Madoff fraud fed on multiple affinity circles: wealthy Jews in Florida and Israel, country-club types and European old money, lured with help from marketers running “feeder” funds. The next-largest alleged investment fraud of recent years, the $7 billion collapse of Allen Stanford’s empire, also concerned specific groups, including the Latin American and Libyan diasporas and Southern Baptists. Mr Stanford’s trial began on January 23rd. He denies wrongdoing.

Beneath the mega-scams swirls a mass of smaller cons, spanning the world. Any close-knit community can be a target. Last August a South Korean pastor was indicted for misappropriating 2.4 billion Korean won ($2.3m) that the faithful had handed over to set up a Christian bank. In Britain, Kevin Foster’s KF Concept targeted the former coal-mining towns of South Wales, bilking more than 8,000 victims with the help of glitzy roadshows.

The problem is a global one but best-documented in America. Besides the Madoff saga, Marquet International, a consultancy, has identified more than 300 sizeable Ponzi schemes from the past ten years, with combined losses for investors of $23 billion. It estimates that up to half of those were affinity-based. No one has a reliable number for smaller frauds over the same period, but guesses range from $5 billion to $20 billion. In all, affinity-fraud losses in America could be as much as $50 billion.

The FBI is probing some 1,000 cases of investment fraud, more than double the number outstanding in 2008. Six state securities commissioners contacted by The Economist all say the problem is growing.

 The increase is partly a result of better detection, post-Madoff. The SEC filed more than twice as many Ponzi cases in 2010 as in 2008. The number of Ponzis exposed each month began to climb just as the financial crisis struck in 2007 (see chart). Frauds are more prone to collapse in a weak economy as investors try to pull money out to cover shortfalls elsewhere.

Bad times also make get-rich-quick schemes more tempting. Desperation breeds gullibility. The median annual return offered by scammers in the Marquet study was 38%. In a case in Montana, victims were promised 800% back in a week.

Mistrust of mainstream finance helps the scammers. The big guys on Wall Street have shown they can’t be trusted, they say; better to go with someone you know. This was part of Mr Taylor’s pitch in Georgia.

Brent Baker, a former SEC lawyer who now works on affinity-fraud cases, has seen ones involving “just about every type of community you can think of”, including one where loyal listeners of a Persian-language radio show were bilked by its presenter. But religious fraud is particularly common, because people find it hard to imagine that the pastor is a perp. Joseph Borg, Alabama’s securities commissioner, reckons half of all affinity frauds in the American South are faith-based.

The problem stretches across all types of belief, and ranges far beyond the Bible Belt. In September, a 77-year-old man from Ohio was indicted for allegedly defrauding 2,700 fellow Amish of $17m (though he had somehow resisted the temptation to trade his horse and cart for a Ferrari).

The hook of Mormon

The state thought to have the most affinity fraud per head is Utah, where 60% of the population are Mormons. In 2010, regulators and the FBI were investigating cases there with 4,400 victims and perhaps $1.4 billion (or $500 for every Utahn) in losses. The numbers have surely climbed since, with the three largest cases alone involving combined losses of up to $700m, says one investigator.

Mormons tend to be both trusting and welcoming of newcomers, says Keith Woodwell, head of Utah’s Division of Securities. As soon as you pull up to your new house, neighbours appear to help you unpack. A scammer who gets his foot in the door can exploit this closeness.

LuElla Day, for example, lost $1.2m in a deal hatched by Daniel Merriman, a fellow Mormon she had known for four years. “He’d spoken at our meetings. When I sold my farm, he came and said the bishop had asked him to help me invest the proceeds,” says the 81-year-old. He told her the money would go into government debt. The transaction was done on a handshake. Ms Day never got a penny back.

Credulousness is not confined to sweet old ladies. One of Ephren Taylor’s victims was an electrical engineer with an MBA. A man in Utah was taken for $50,000 by his next-door neighbour, who offered a chance to invest in a new type of ice machine. Nothing remarkable there, except that the victim was a retired federal agent who had worked on white-collar fraud cases.

Why do such people let their guard down? “Everyone is looking for a shorthand way to judge character, and affinity settings offer that, at least in theory,” says Jeff Robinson, head of the Utah County Attorney’s investigations bureau. Tribal ties foster trust, which is usually a good thing. But it can be abused.

Another factor is the rise of “prosperity theology”, or the belief that God wants Christians to be rich as well as good. This idea has taken root fastest in black and Hispanic churches. The problem is that it puts pressure on congregations to invest successfully, which makes them more vulnerable, says Ole Anthony of the Trinity Foundation, which investigates church fraud.

Social media make affinity fraud quicker. Bonds that used to take years to establish can be forged in days on Facebook or Twitter. Fraudsters read potential victims’ online profiles, and use the information they glean to refine their pitches. In a recent case, the SEC won a restraining order against a scam targeting users of chat sites popular with the deaf.

At a federal level, the American government’s response has been inadequate. The SEC has launched some high-profile cases, but done little to educate investors. The agency “has chosen to stick some ambulances at the bottom of the cliff rather than build fences at the top,” as one former employee puts it.

American states have tried harder. Pennsylvania, for example, holds hundreds of meetings a year to teach investors how to be more careful. Utah ran a billboard campaign showing a series of respectable-looking types saying: “I’m your friend. I’m your neighbour. I’m a con man.” People should “be trusting but verify”, says Gary Herbert, Utah’s governor.

 A new law in Utah increased penalties for fraudsters who abuse a relationship of trust. Another pays whistle-blowers up to 30% of recoveries. (The SEC operates a similar scheme, but only for cases larger than $1m.) Both bills were sponsored by Ben McAdams, a state senator who returned to his native Utah from New York to help ensure that “as much energy went into shrinking the fraud economy as growing the ski economy.” In Utah, suspected fraudsters’ property can be seized before charges are brought, if there is “probable cause” that a crime was committed.

Other ideas are percolating. Sean Reyes, a lawyer who is running for state attorney-general, supports the creation of a “fraudsters registry”, similar to the one for sex offenders. “It’s amazing how many are repeat offenders,” he says. He also wants to explore the idea of reducing sentences for scammers who lead investigators to assets they have salted away. Most victims see a few pennies on the dollar returned, if that.

Investigators face strong headwinds. One is that victims are often reluctant to come forward. Some cannot admit to themselves what they have lost. Others don’t want their families to know: older victims often fear being deemed unable to manage their lives and shoved in a home. In religious cases, there is often an unwritten rule that what happens in church stays there, with disputes handled by the church elders or the minister. Many frauds are dauntingly complex. One Ponzi, at the Baptist Foundation of Arizona, used 120 shell firms to extract $590m from members.

There is only so much governments can do to protect people from their own credulity. Mr Baker thinks that private groups are better-placed to build those fences on the cliff top. He has set up a “Fraud College” in Utah (and on the web) with help from Mr Reyes. This self-styled “neighbourhood watch” for fraud offers online advice and holds events to raise awareness. The next conference, on February 15th, will hear from state and federal fraudbusters, victims and, in a first, a senior figure from the Mormon church. Amen to that.

 

 

 

I Respectfully Disagree With Prof. L. Alan Sroufe

I respectfully disagree with Prof. L. Alan Sroufe professor emeritus of psychology at the University of Minnesota’s Institute of Child Development, on the following article.

I am a single dad with an autistic child who also has ADHD  and has been taking a wide range of these drugs from Ritalin to now Addreall XR over the last 15 years … Not only have I noticed when she has not had her pills that day.. but she mostly comes to me in that unusual event telling me she is off and unfocused… and she is 20 years old now… so to say that it is no longer  necessary after a period of time is at least INCORRECT in her particular circumstance…  Your article appears to say it is useless for ALL users after time… maybe you need a larger fouces study group to better assess the effectiveness. 

Respectfully; 

Craig Eisele

Ritalin Gone Wrong

By L. ALAN SROUFE

THREE million children in this country take drugs for problems in focusing. Toward the end of last year, many of their parents were deeply alarmed because there was a shortage of drugs like Ritalin and Adderall that they considered absolutely essential to their children’s functioning.

But are these drugs really helping children? Should we really keep expanding the number of prescriptions filled?

In 30 years there has been a twentyfold increase in the consumption of drugs for attention-deficit disorder.

As a psychologist who has been studying the development of troubled children for more than 40 years, I believe we should be asking why we rely so heavily on these drugs.

Attention-deficit drugs increase concentration in the short term, which is why they work so well for college students cramming for exams. But when given to children over long periods of time, they neither improve school achievement nor reduce behavior problems. The drugs can also have serious side effects, including stunting growth.

Sadly, few physicians and parents seem to be aware of what we have been learning about the lack of effectiveness of these drugs.

What gets publicized are short-term results and studies on brain differences among children. Indeed, there are a number of incontrovertible facts that seem at first glance to support medication. It is because of this partial foundation in reality that the problem with the current approach to treating children has been so difficult to see.

Back in the 1960s I, like most psychologists, believed that children with difficulty concentrating were suffering from a brain problem of genetic or otherwise inborn origin. Just as Type I diabetics need insulin to correct problems with their inborn biochemistry, these children were believed to require attention-deficit drugs to correct theirs. It turns out, however, that there is little to no evidence to support this theory.

In 1973, I reviewed the literature on drug treatment of children for The New England Journal of Medicine. Dozens of well-controlled studies showed that these drugs immediately improved children’s performance on repetitive tasks requiring concentration and diligence. I had conducted one of these studies myself. Teachers and parents also reported improved behavior in almost every short-term study. This spurred an increase in drug treatment and led many to conclude that the “brain deficit” hypothesis had been confirmed.

But questions continued to be raised, especially concerning the drugs’ mechanism of action and the durability of effects. Ritalin and Adderall, a combination of dextroamphetamine and amphetamine, are stimulants. So why do they appear to calm children down? Some experts argued that because the brains of children with attention problems were different, the drugs had a mysterious paradoxical effect on them.

However, there really was no paradox. Versions of these drugs had been given to World War II radar operators to help them stay awake and focus on boring, repetitive tasks. And when we reviewed the literature on attention-deficit drugs again in 1990 we found that all children, whether they had attention problems or not, responded to stimulant drugs the same way. Moreover, while the drugs helped children settle down in class, they actually increased activity in the playground. Stimulants generally have the same effects for all children and adults. They enhance the ability to concentrate, especially on tasks that are not inherently interesting or when one is fatigued or bored, but they don’t improve broader learning abilities.

And just as in the many dieters who have used and abandoned similar drugs to lose weight, the effects of stimulants on children with attention problems fade after prolonged use. Some experts have argued that children with A.D.D. wouldn’t develop such tolerance because their brains were somehow different. But in fact, the loss of appetite and sleeplessness in children first prescribed attention-deficit drugs do fade, and, as we now know, so do the effects on behavior. They apparently develop a tolerance to the drug, and thus its efficacy disappears. Many parents who take their children off the drugs find that behavior worsens, which most likely confirms their belief that the drugs work. But the behavior worsens because the children’s bodies have become adapted to the drug. Adults may have similar reactions if they suddenly cut back on coffee, or stop smoking.

TO date, no study has found any long-term benefit of attention-deficit medication on academic performance, peer relationships or behavior problems, the very things we would most want to improve. Until recently, most studies of these drugs had not been properly randomized, and some of them had other methodological flaws.

But in 2009, findings were published from a well-controlled study that had been going on for more than a decade, and the results were very clear. The study randomly assigned almost 600 children with attention problems to four treatment conditions. Some received medication alone, some cognitive-behavior therapy alone, some medication plus therapy, and some were in a community-care control group that received no systematic treatment. At first this study suggested that medication, or medication plus therapy, produced the best results. However, after three years, these effects had faded, and by eight years there was no evidence that medication produced any academic or behavioral benefits.

Indeed, all of the treatment successes faded over time, although the study is continuing. Clearly, these children need a broader base of support than was offered in this medication study, support that begins earlier and lasts longer.

Nevertheless, findings in neuroscience are being used to prop up the argument for drugs to treat the hypothesized “inborn defect.” These studies show that children who receive an A.D.D. diagnosis have different patterns of neurotransmitters in their brains and other anomalies. While the technological sophistication of these studies may impress parents and nonprofessionals, they can be misleading. Of course the brains of children with behavior problems will show anomalies on brain scans. It could not be otherwise. Behavior and the brain are intertwined. Depression also waxes and wanes in many people, and as it does so, parallel changes in brain functioning occur, regardless of medication.

Many of the brain studies of children with A.D.D. involve examining participants while they are engaged in an attention task. If these children are not paying attention because of lack of motivation or an underdeveloped capacity to regulate their behavior, their brain scans are certain to be anomalous.

However brain functioning is measured, these studies tell us nothing about whether the observed anomalies were present at birth or whether they resulted from trauma, chronic stress or other early-childhood experiences. One of the most profound findings in behavioral neuroscience in recent years has been the clear evidence that the developing brain is shaped by experience.

It is certainly true that large numbers of children have problems with attention, self-regulation and behavior. But are these problems because of some aspect present at birth? Or are they caused by experiences in early childhood? These questions can be answered only by studying children and their surroundings from before birth through childhood and adolescence, as my colleagues at the University of Minnesota and I have been doing for decades.

Since 1975, we have followed 200 children who were born into poverty and were therefore more vulnerable to behavior problems. We enrolled their mothers during pregnancy, and over the course of their lives, we studied their relationships with their caregivers, teachers and peers. We followed their progress through school and their experiences in early adulthood. At regular intervals we measured their health, behavior, performance on intelligence tests and other characteristics.

By late adolescence, 50 percent of our sample qualified for some psychiatric diagnosis. Almost half displayed behavior problems at school on at least one occasion, and 24 percent dropped out by 12th grade; 14 percent met criteria for A.D.D. in either first or sixth grade.

Other large-scale epidemiological studies confirm such trends in the general population of disadvantaged children. Among all children, including all socioeconomic groups, the incidence of A.D.D. is estimated at 8 percent. What we found was that the environment of the child predicted development of A.D.D. problems. In stark contrast, measures of neurological anomalies at birth, I.Q. and infant temperament — including infant activity level — did not predict A.D.D.

Plenty of affluent children are also diagnosed with A.D.D. Behavior problems in children have many possible sources. Among them are family stresses like domestic violence, lack of social support from friends or relatives, chaotic living situations, including frequent moves, and, especially, patterns of parental intrusiveness that involve stimulation for which the baby is not prepared. For example, a 6-month-old baby is playing, and the parent picks it up quickly from behind and plunges it in the bath. Or a 3-year-old is becoming frustrated in solving a problem, and a parent taunts or ridicules. Such practices excessively stimulate and also compromise the child’s developing capacity for self-regulation.

Putting children on drugs does nothing to change the conditions that derail their development in the first place. Yet those conditions are receiving scant attention. Policy makers are so convinced that children with attention deficits have an organic disease that they have all but called off the search for a comprehensive understanding of the condition. The National Institute of Mental Health finances research aimed largely at physiological and brain components of A.D.D. While there is some research on other treatment approaches, very little is studied regarding the role of experience. Scientists, aware of this orientation, tend to submit only grants aimed at elucidating the biochemistry.

Thus, only one question is asked: are there aspects of brain functioning associated with childhood attention problems? The answer is always yes. Overlooked is the very real possibility that both the brain anomalies and the A.D.D. result from experience.

Our present course poses numerous risks. First, there will never be a single solution for all children with learning and behavior problems. While some smaller number may benefit from short-term drug treatment, large-scale, long-term treatment for millions of children is not the answer.

Second, the large-scale medication of children feeds into a societal view that all of life’s problems can be solved with a pill and gives millions of children the impression that there is something inherently defective in them.

Finally, the illusion that children’s behavior problems can be cured with drugs prevents us as a society from seeking the more complex solutions that will be necessary. Drugs get everyone — politicians, scientists, teachers and parents — off the hook. Everyone except the children, that is.

If drugs, which studies show work for four to eight weeks, are not the answer, what is? Many of these children have anxiety or depression; others are showing family stresses. We need to treat them as individuals.

As for shortages, they will continue to wax and wane. Because these drugs are habit forming, Congress decides how much can be produced. The number approved doesn’t keep pace with the tidal wave of prescriptions. By the end of this year, there will in all likelihood be another shortage, as we continue to rely on drugs that are not doing what so many well-meaning parents, therapists and teachers believe they are doing.

L. Alan Sroufe is a professor emeritus of psychology at the University of Minnesota’s Institute of Child Development.