Friday's NYTimes included a story that gives some insight about Mitt Romney's history and his financial dealings. Before he found his niche with Bain Capital, he and I had similar experiences with early 1980's, government-subsidized, real estate investments that were wrecked by President Reagan's 1986 Income Tax reforms. I guess omission of impact of the Reagan tax reforms represents at least subtle bias in the NYT article. You can read Mitt's story here, and mine is in an earlier posting on this blog. (Even if you aren't interested in the real estate angle, take a look at the chart in the blog posting which shows that federal tax revenue continued robust growth in spite of Reagan's cut in the top tax bracket from 50% to 28%.)
There are some interesting similarities between Mitt's story and mine:
1. Neither of us had much money, Mitt having given away his inheritance and I never having had one.
2. We were both interested in providing for our families, their five sons and our two.
3. We were both interested in minimizing our income tax bills as much as was legally possible.
4. We were both interested in low risk and responsible investments.
5. We both were future oriented, interested in living frugally at the time.
6. We both sought out "expert" investment advice.
But the similarities end there. I abandoned my investment as soon as possible and was eventually served papers for an overdue mortgage when the buyer defaulted, but Mitt stuck with his, eventually loaning a family money to buy one of his houses which they had been renting. They are still making mortgage payments on it today but had no idea who "Willard M. Romney" was until the presidential campaign heated up.
The NYT story is generally favorable, painting Mr. Romney as a disciplined, responsible, forward-looking, persistent, and financially astute individual which, in my opinion, would be positive traits in our president. But the reactions to the story clearly show the divide in the USA between those who have a sense of entitlement and those who have a sense of responsibility.
Many of the comments are in agreement with my position, but the entitlement group tends to argue that since Romney has so much more money than the family living in the home, he should just write off the remaining $50,500 balance on the mortgage, free them from the $600 per month payments, and give the house to them. One even suggests he could take a charitable deduction for it which clearly shows lack of experience in charitable giving since, unless the family home happens to qualify as a 501(c)(3) charity, such a deduction would be illegal.
It is easy to tell which group Mr. and Mrs. Stamps, the home owners, fall in. They are not whining, asking for the rich Mr. Romney to write off the loan and give them the house. They are thankful for the way he helped them out when they needed help buying a home, unable to get a loan from a traditional financial institution, and are quite happy sticking to the deal. I'm pretty sure they would feel patronized and insulted if Mr. Romney were to offer to forgive the loan. They apparently have a sense of responsibility. I bet they will vote for Romney.
Schedule for Week of May 26th
23 minutes ago