The Frog and the Scorpion

The following is a folk tale retold by people around the world. The origin of this story is not clear and several cultures have taken credit for it, but the meaning never changes. It offers a valuable lesson, and it goes like this:

A frog and a scorpion both came to the river bank. The frog was frightened by the scorpion, but the scorpion spoke to him and said. “Don’t be frightened. You see, I need to get to the other side of the river and I can’t swim. I would like you to help me get across.” The frog was still frightened, but reluctantly he asked how he could help. The scorpion said that we wanted to climb on the frog’s back and have the frog swim him across the river. The frog said “I’m scared that you’ll sting me if I let you get on my back”. Then the scorpion said the frog’s help would be a big favor, and he wouldn’t sting him.  The frog thought about it for a while, then agreed to help the scorpion cross the river. The scorpion crawled on the frog’s back and they started swimming to the other side. About half way across the river the scorpion stung the frog.  The scorpion’s sting was painful and the venom was starting to kill the frog. The frog looked back at the scorpion as he was dying and said, “why did you sting me? Now we will both die. I did as you asked and I helped you”. The scorpion just looked at frog and said, “look, you knew I was a scorpion- it’s my nature”.

This story tells us that sometimes, no matter what someone says, we need consider their nature. Is it the scorpion’s fault that he stung the frog? No, probably not, because it was simply his nature. The frog should have trusted his first instinct and let his natural fear of the scorpion guide him away from danger, and not be persuaded by what the scorpion said. I often think that we let ourselves be convinced by words that are both persuasive and pervasive; when it would be better to just consider someone’s nature and let our natural instincts guide us, along with our knowledge. I’m a big proponent of thinking through situations, and not being drawn in by heated rhetoric or easy slogans meant to persuade. One way to be thoughtful is to consider “the nature of things” when our best decisions are required. Nothing has brought this point home to me more over the last week or two than the Mitt Romney Presidential campaign.

Let’s consider what Mr. Romney told us about why he should be President. His most persistent claim is that he should be President because he has the business experience we need to fix the economy. He doesn’t talk much about his time as Governor, because he was a pro-choice, moderate, (Obama style) health care guy then. So let’s look at that business experience. He was a very successful venture capitalist at Bain Capital. Nothing illegal about that- and by all accounts he was great at it. But, what is a venture capitalist? Venture Capital firms use investor’s funds to search for troubled companies . They calculate whether they can buy these firms at a low price and make money from short-term ownership. They do this by employing one of several methods. If an infusion of cash can make the company healthy again, they simply beef up investment until the company regains market share- then re-sell. Another way is to evaluate the company’s assets to determine if liquidating remaining assets (like inventory, properties, pension funds etc.) will produce a positive return on their investment. Break-up value can often be more valuable than the actual business- but of course the company and its employees are gone in the end. Another method is to re-make the company by re-directing the business model and turning it into another business. This usually involves restructuring the business model and existing cost structures (like wage and benefit reduction- outsourcing jobs- plant closures and/or relocation). That’s venture capitalism in a nut shell. More importantly that’s Mr. Romney’s nature. It is who and what he is. He told us so, and he said that’s why he should be President. And because he’s been so good at it we have to take him seriously on this point. He comes from wealth. He has created enormous wealth for himself. It is his nature to behave like the very wealthy behave.

Now let’s look at the examples of his behavior and statements that illustrate this nature:

U.S. Auto Loan Program: Mr. Romney was pretty clear on this issue at the time. “Let Detroit Go Bankrupt”. That was the editorial he wrote in response to the Obama plan to loan GM and Chrysler money to stay in business-and we shouldn’t be surprised. It’s exactly what a Venture Capitalist would do. They would allow a company (or an industry) to go broke, then pick it up on the cheap and force all sorts of concessions. They would then either restructure the business (including worker compensation packages), or sell off the assets. This is a businessman’s solution, but it would have been devastating for the country.

Mortgage Crisis: Mr. Romney said we should just let the foreclosure process takes its course. There should be no government program to assist homeowners who are underwater- even those put there by predatory lenders. Again, no surprise. A Venture Capitalist would behave that way in order to allow investors and other profiteers to pick up real estate very cheaply. This course shows no regard for the unfortunate homeowner who is now out of a home, and saddled with a foreclosure on his credit report and no personal assets left. But, people with money could profit nicely by acquiring under-valued property. That's business!

Corporations: “Corporations are people, my friend”. This speaks for itself. In the land of the very wealthy, corporations are people- very rich people don't distinguish a human entity from their corporate identity. It's their nature. In the real world, real people know the difference.

Middle Income: Last week Mr. Romney was asked where the income limit of the middle class was. He responded that you are middle class if you earn $250,000.00 or less. For the very rich it’s their nature to assume this. A middle class earner in Mr. Romney’s reality earns a million dollars every four years. Median income in the US is now about $26,500.00. It would take that person 37.7 years to earn a million. The average US income is about 47,000.00 (and that average includes the millionaires), and it would take that earner 21.2 years to earn a million. When his detractors say he can’t relate to middle class economics and realities, this is why. One's view of "the middle" is influenced by the perch from which one views it. 

His Income Taxes: Mr. and Mrs. Romney have simply refused to release their full tax records. The reason they’ve given is that they “would be attacked” if they released them. Let’s face it; rich people don’t want their records exposed. It’s their nature. To expose their records would likely cause the rest of us to be upset at the tax advantages they have, and average folks don’t have. Last Friday’s release of the partial 2011 return doesn’t count much now (it leaves more questions than it answers). Mr. Romney has calculated that showing us his full tax history would be far worse for him than the heat he takes for not showing them. Of course, he wanted see 10 years-worth of returns on the VP hopefuls. It’s his nature to play by a different set of rules. That is the entitlement of the rich.

College Assistance: Mr. Romney has advocated for higher interest on student loans, and limiting student loans and Pell Grants as part of the Ryan budget he supports. His solution: “shop around then borrow the money from your parents” if you want to go to college. Mr. Romney, middle class parents have to borrow money too. Middle class families usually don’t have an extra 30k a year lying around- we’re not rich like you. But to the very wealthy, this reality just doesn’t occur to them. It’s not in their nature.

Lack of Specifics (on anything): Wealthy people don’t like to be questioned by the little people. It is their nature to simply decree their wishes. Mr. Romney’s lack of specific policy solutions to the country’s problems are no surprise. I’m sure in making his case for his Presidency he knows that detailing his plans would either cost him support from his wealthy base, or cause the rest of us to vote for the other guy. The point is that very rich people hate to share specifics because they just don’t believe the rest of us will get it, or we're not entitled to comment on it. (rich folks tend to get enamored with their own success) He’s as much as said so in answering the critics who have begged for specific answers.

The 47%: Last week was the big one. Mr. Romney was caught on tape telling a small group of wealthy investors (eh, donors) that 47% of all Americans will vote for Mr. Obama because we see ourselves as victims and we don’t pay taxes. He said we are satisfied to be “entitled” to government hand-outs, get dependent on government, and that’s why we will vote for Obama. He went on to say is not his role to worry about those people. He later said he was “in-elegant” in the way he said it- but he means it. He said he was speaking “off the cuff” or what the rest of us call, BEING HONEST. It probably doesn’t occur to Mr. Romney that those who don’t pay income taxes, pay other forms of taxes, and the group he so roundly dismissed and disrespected include the working poor, (Earned Income Credit) students, many single working parents, disabled military vets, 16 million seniors and a few of his rich pals. I might add that we purposely set up a tax structure that allows our seniors a way to avoid taxes in old age. (remember IRAs and Roth IRAs?) It’s just his nature to assume all those he was referring to are just lazy (read: welfare-minority) people looking for a hand-out- you know, “those people”; people satisfied sit on their butts and be dependent on the government. This was a pretty wrong-headed thing to say if you want to be President of all the United States. It is also just wrong. After courting Latino business people earlier in the day the tape came out, he also made some insulting remarks about being Mexican during the same discussion with his investors- sorry, “donors”.

I’ve always believed Mr. Romney is probably not an evil guy, and I believe that. But I do believe he is true to his nature, just as the scorpion was true to his nature. His nature is to behave like the very wealthy, entitled man he is. He has also demonstrated that he doesn’t possess the “core” values that lifted an FDR or a JFK beyond their wealth to loftier national ideals. His own party has always mistrusted him and disliked him for this reason. There is no greatness in Mr. Romney beyond the ambition of a successful businessman. He constantly shifts his positions from day to day, but they are always shrouded in the secrecy of generality.  There is never a real plan or a specific remedy. If Mr. Romney gets elected because enough people just don’t like President Obama, at least we should never claim that we didn’t know his nature. We can never be the frog who ignored Mr. Romney’s nature because we believed what he said in public, instead of seeing what he is.

Thanks for looking in.