Facebook has dominated the headlines today with the news that it has raised $500 million from Goldman Sachs and Digital Sky Technologies at a $50 billion valuation.
In addition, the social network intends to raise another $1.5 billion through a “special purpose vehicle” that Goldman Sachs will be setting up to allow some of its clients to indirectly invest in class='blippr-nobr'>Facebookclass="blippr-nobr">Facebook.
There have been a lot of questions about the Goldman Sachs “special purpose vehicle” since the news broke. The key questions: Why is Facebook choosing to raise more money through Goldman Sachs? Will the SEC allow this move, or will it force Facebook to start disclosing its financial results to the public? And when will Facebook finally have an IPO?
SEC regulations and the nuances of private investment are complicated subjects, so we thought we’d try to clarify some of the issues surrounding the Facebook-Goldman Sachs deal, including figuring out the likely date of the Facebook IPO.
1. Why Are Facebook and Goldman Sachs Creating a “Special Purpose Vehicle”?
There is an SEC regulation, set by The Securities Exchange Act of 1934, that requires companies with 500 or more shareholders to disclose their earnings to the SEC. The SEC then publishes this financial information, making it public knowledge.
Facebook doesn’t want that headache at all. It doesn’t want to go through the audits, create the reports, or let its competitors know the details of its earnings and expenditures. However, the social network still wants $2 billion in fresh resources, so Goldman Sachs has come up with a very clever workaround; instead of having thousands of individual investors, Goldman Sachs will represent them all and invest on their behalf.
This is essentially what most brokers do on behalf of their clients, the shareholders. Instead of making a person an investor of record in class='blippr-nobr'>Googleclass="blippr-nobr">Google, Goldman Sachs will invest money on that individual’s behalf, making him or her a benefitting investor
The New York Times‘ Steven Davidoff provides a stellar overview of the SEC regulations in question, but it essentially boils down to this: Goldman Sachs is helping Facebook circumvent the system so it doesn’t have to report earnings or raise money via an IPO.
2. Will the SEC Allow It?
The SEC isn’t stupid; it knew that brokerage firms would try these types of workarounds. The New York Times dug up the SEC’s definition of a record holder, which includes a provision that says if a company creates a vessel for holding securities of record primarily to circumvent The 1934 Securities Exchange Act, then it will deem beneficial owners as record owners.
In other words, the SEC could deem that Goldman Sachs is circumventing its regulations with its “special purpose vehicle” and thus consider all of the investors within it “record owners” of Facebook. That would mean that the social network would be required to report its earnings.
We think it’s likely that the SEC will intervene. The SEC is already investigating the private secondary markets for potentially violating the same 500 shareholder regulation. It wouldn’t be much of a jump for the SEC to tell Facebook that its investment vehicle doesn’t preclude it from publicly disclosing its financial information. In fact, it’s likely to tell Facebook the opposite.
3. So, When Will Facebook IPO?
Now here’s where it gets interesting. Facebook and Goldman Sachs are setting up this “special purpose vehicle” to raise a ton of cash for the social networking company. They’re absolutely aware that the SEC will not be happy with their arrangement, and they also know that the SEC will likely step in and tell Facebook to disclose its earnings to the public due to the existence of the Goldman Sachs vehicle.
So why would Facebook go through all this trouble when the SEC is going to shoot them down anyway?
The answer is that this move buys Facebook more time to grow and prepare itself for an IPO. The SEC regulation wouldn’t take effect until May 2012 because the SEC only requires private companies to start reporting its financial information within four months after the end of its current fiscal year. So if Facebook violates the 500 shareholder rule this year, then it won’t have to start reporting its earnings until May 2012, 120 days after December 31, 2011.
That’s more than enough time for Facebook to prepare for its IPO. When the day comes that Facebook is required to release its financial information to the public, it will probably decide to just go all-in and become a public company, raising even more money in the process.
Essentially, Facebook has set the clock for its IPO to occur on May 2012 or earlier. Part of the reason we predicted no Facebook IPO in 2011 is because 2012 is the year most of our sources say the Facebook IPO is likely to occur. It all fits.
Mark your calendars and set your watches, everyone: The Facebook IPO is likely coming in 12 to 16 months.
For more Business coverage:
class="f-el">class="cov-twit">Follow Mashable Businessclass="s-el">class="cov-rss">Subscribe to the Business channelclass="f-el">class="cov-fb">Become a Fan on Facebookclass="s-el">class="cov-apple">Download our free apps for Android, iPhone and iPad
As we get ready for John Boehner to take the gavel from Nancy Pelosi on Wednesday, I find myself thinking back to the last time a Republican speaker took control of the House from a Democrat -- and reflecting on how far down the wrong road we have traveled since then.
It was January 1995, and Newt Gingrich, now considered a right-wing bomb thrower, was taking the gavel from Tom Foley. After taking the oath of office, he delivered a speech that praised FDR as "the greatest president of the 20th century" and presented concern for the least among us as a shared national objective. "The balanced budget is the right thing to do," he said. "But it does not in my mind have the moral urgency of coming to grips with what is happening to the poorest Americans."
For the incoming Republican speaker, reducing poverty and lifting the poor into the middle class was a moral imperative beyond the left vs. right battlefield -- not just the purview of lefties, socialists, and community organizers:
I say to those Republicans who believe in total privatization, you cannot believe in the Good Samaritan and explain that as long as business is making money we can walk by a fellow American who is hurt and not do something.... If you cannot afford to leave the public housing project, you are not free. If you do not know how to find a job and do not know how to create a job, you are not free. If you cannot find a place that will educate you, you are not free. If you are afraid to walk to the store because you could get killed, you are not free.
So now, with poverty higher than it was 16 years ago, with greater income inequality, and with the middle class struggling to hold on, what will Speaker Boehner make his number one priority? According to the
Washington Post, it's "cutting spending," followed by repealing the healthcare law, and "helping get our economy moving" (no specifics on how he plans to do that).
Yet we saw on
60 Minutes that he's very aware of how fragile the American Dream has become, telling Lesley Stahl, "I can't go to a school anymore. I used to go to a lot of schools. And you see all these little kids running around. Can't talk about it." And he choked up when he did try to talk about "making sure these kids have a shot at the American Dream, like I did. It's important."
Interestingly, in his first speech as speaker, Gingrich also talked about being moved by the woes of school kids.
I have seldom been more shaken," he said, "than I was after the election when I had breakfast with two members of the Black Caucus. One of them said to me, 'Can you imagine what it is like to visit a first-grade class and realize that every fourth or fifth young boy in that class may be dead or in jail within 15 years? And they are your constituents and you are helpless to change it?' For some reason, I do not know why, maybe because I visit a lot of schools, that got through. I mean, that personalized it. That made it real, not just statistics, but real people.
But the trajectory of our political discourse over the last decade and a half has meant that taking on poverty has gone from a moral imperative and shared national objective to an afterthought -- or no thought at all.
The question is, is there anything that can be done to help Boehner make the connection between the policies he supports and the effect those policies have on the kids who bring him to tears?
Newt Gingrich failed to follow through on the moral imperative he identified in his first speech as speaker, trading in his moral vision and replacing it 15 months later with an announcement that the Republican agenda could be reduced to six words: "Earn more, keep more, do more."
Will Boehner's take be "Earn more, keep more, cut more"? Or is there a chance he will surprise us? Maybe it's because it's close enough to Christmas that I still believe in miracles, but wouldn't it be great if the John Boehner who takes the gavel on Wednesday is the one who weeps at thought of kids denied a shot at the American Dream?
robert shumakeSean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
LONDON After a 2010 that saw the Korean peninsula edge towards the brink of nuclear Armageddon,
Read our news of Moore: EA not backing away from Tiger.
robert shumake detroitSean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
LONDON After a 2010 that saw the Korean peninsula edge towards the brink of nuclear Armageddon,
Read our news of Moore: EA not backing away from Tiger.
robert shumakeFacebook has dominated the headlines today with the news that it has raised $500 million from Goldman Sachs and Digital Sky Technologies at a $50 billion valuation.
In addition, the social network intends to raise another $1.5 billion through a “special purpose vehicle” that Goldman Sachs will be setting up to allow some of its clients to indirectly invest in class='blippr-nobr'>Facebookclass="blippr-nobr">Facebook.
There have been a lot of questions about the Goldman Sachs “special purpose vehicle” since the news broke. The key questions: Why is Facebook choosing to raise more money through Goldman Sachs? Will the SEC allow this move, or will it force Facebook to start disclosing its financial results to the public? And when will Facebook finally have an IPO?
SEC regulations and the nuances of private investment are complicated subjects, so we thought we’d try to clarify some of the issues surrounding the Facebook-Goldman Sachs deal, including figuring out the likely date of the Facebook IPO.
1. Why Are Facebook and Goldman Sachs Creating a “Special Purpose Vehicle”?
There is an SEC regulation, set by The Securities Exchange Act of 1934, that requires companies with 500 or more shareholders to disclose their earnings to the SEC. The SEC then publishes this financial information, making it public knowledge.
Facebook doesn’t want that headache at all. It doesn’t want to go through the audits, create the reports, or let its competitors know the details of its earnings and expenditures. However, the social network still wants $2 billion in fresh resources, so Goldman Sachs has come up with a very clever workaround; instead of having thousands of individual investors, Goldman Sachs will represent them all and invest on their behalf.
This is essentially what most brokers do on behalf of their clients, the shareholders. Instead of making a person an investor of record in class='blippr-nobr'>Googleclass="blippr-nobr">Google, Goldman Sachs will invest money on that individual’s behalf, making him or her a benefitting investor
The New York Times‘ Steven Davidoff provides a stellar overview of the SEC regulations in question, but it essentially boils down to this: Goldman Sachs is helping Facebook circumvent the system so it doesn’t have to report earnings or raise money via an IPO.
2. Will the SEC Allow It?
The SEC isn’t stupid; it knew that brokerage firms would try these types of workarounds. The New York Times dug up the SEC’s definition of a record holder, which includes a provision that says if a company creates a vessel for holding securities of record primarily to circumvent The 1934 Securities Exchange Act, then it will deem beneficial owners as record owners.
In other words, the SEC could deem that Goldman Sachs is circumventing its regulations with its “special purpose vehicle” and thus consider all of the investors within it “record owners” of Facebook. That would mean that the social network would be required to report its earnings.
We think it’s likely that the SEC will intervene. The SEC is already investigating the private secondary markets for potentially violating the same 500 shareholder regulation. It wouldn’t be much of a jump for the SEC to tell Facebook that its investment vehicle doesn’t preclude it from publicly disclosing its financial information. In fact, it’s likely to tell Facebook the opposite.
3. So, When Will Facebook IPO?
Now here’s where it gets interesting. Facebook and Goldman Sachs are setting up this “special purpose vehicle” to raise a ton of cash for the social networking company. They’re absolutely aware that the SEC will not be happy with their arrangement, and they also know that the SEC will likely step in and tell Facebook to disclose its earnings to the public due to the existence of the Goldman Sachs vehicle.
So why would Facebook go through all this trouble when the SEC is going to shoot them down anyway?
The answer is that this move buys Facebook more time to grow and prepare itself for an IPO. The SEC regulation wouldn’t take effect until May 2012 because the SEC only requires private companies to start reporting its financial information within four months after the end of its current fiscal year. So if Facebook violates the 500 shareholder rule this year, then it won’t have to start reporting its earnings until May 2012, 120 days after December 31, 2011.
That’s more than enough time for Facebook to prepare for its IPO. When the day comes that Facebook is required to release its financial information to the public, it will probably decide to just go all-in and become a public company, raising even more money in the process.
Essentially, Facebook has set the clock for its IPO to occur on May 2012 or earlier. Part of the reason we predicted no Facebook IPO in 2011 is because 2012 is the year most of our sources say the Facebook IPO is likely to occur. It all fits.
Mark your calendars and set your watches, everyone: The Facebook IPO is likely coming in 12 to 16 months.
For more Business coverage:
class="f-el">class="cov-twit">Follow Mashable Businessclass="s-el">class="cov-rss">Subscribe to the Business channelclass="f-el">class="cov-fb">Become a Fan on Facebookclass="s-el">class="cov-apple">Download our free apps for Android, iPhone and iPad
As we get ready for John Boehner to take the gavel from Nancy Pelosi on Wednesday, I find myself thinking back to the last time a Republican speaker took control of the House from a Democrat -- and reflecting on how far down the wrong road we have traveled since then.
It was January 1995, and Newt Gingrich, now considered a right-wing bomb thrower, was taking the gavel from Tom Foley. After taking the oath of office, he delivered a speech that praised FDR as "the greatest president of the 20th century" and presented concern for the least among us as a shared national objective. "The balanced budget is the right thing to do," he said. "But it does not in my mind have the moral urgency of coming to grips with what is happening to the poorest Americans."
For the incoming Republican speaker, reducing poverty and lifting the poor into the middle class was a moral imperative beyond the left vs. right battlefield -- not just the purview of lefties, socialists, and community organizers:
I say to those Republicans who believe in total privatization, you cannot believe in the Good Samaritan and explain that as long as business is making money we can walk by a fellow American who is hurt and not do something.... If you cannot afford to leave the public housing project, you are not free. If you do not know how to find a job and do not know how to create a job, you are not free. If you cannot find a place that will educate you, you are not free. If you are afraid to walk to the store because you could get killed, you are not free.
So now, with poverty higher than it was 16 years ago, with greater income inequality, and with the middle class struggling to hold on, what will Speaker Boehner make his number one priority? According to the
Washington Post, it's "cutting spending," followed by repealing the healthcare law, and "helping get our economy moving" (no specifics on how he plans to do that).
Yet we saw on
60 Minutes that he's very aware of how fragile the American Dream has become, telling Lesley Stahl, "I can't go to a school anymore. I used to go to a lot of schools. And you see all these little kids running around. Can't talk about it." And he choked up when he did try to talk about "making sure these kids have a shot at the American Dream, like I did. It's important."
Interestingly, in his first speech as speaker, Gingrich also talked about being moved by the woes of school kids.
I have seldom been more shaken," he said, "than I was after the election when I had breakfast with two members of the Black Caucus. One of them said to me, 'Can you imagine what it is like to visit a first-grade class and realize that every fourth or fifth young boy in that class may be dead or in jail within 15 years? And they are your constituents and you are helpless to change it?' For some reason, I do not know why, maybe because I visit a lot of schools, that got through. I mean, that personalized it. That made it real, not just statistics, but real people.
But the trajectory of our political discourse over the last decade and a half has meant that taking on poverty has gone from a moral imperative and shared national objective to an afterthought -- or no thought at all.
The question is, is there anything that can be done to help Boehner make the connection between the policies he supports and the effect those policies have on the kids who bring him to tears?
Newt Gingrich failed to follow through on the moral imperative he identified in his first speech as speaker, trading in his moral vision and replacing it 15 months later with an announcement that the Republican agenda could be reduced to six words: "Earn more, keep more, do more."
Will Boehner's take be "Earn more, keep more, cut more"? Or is there a chance he will surprise us? Maybe it's because it's close enough to Christmas that I still believe in miracles, but wouldn't it be great if the John Boehner who takes the gavel on Wednesday is the one who weeps at thought of kids denied a shot at the American Dream?
robert shumake
robert shumakeSean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
LONDON After a 2010 that saw the Korean peninsula edge towards the brink of nuclear Armageddon,
Read our news of Moore: EA not backing away from Tiger.
robert shumakeSean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
LONDON After a 2010 that saw the Korean peninsula edge towards the brink of nuclear Armageddon,
Read our news of Moore: EA not backing away from Tiger.
robert shumake This article is to act as an honest review of Spacebankers: The Guide to Making Money with Myspace and is based solely upon my opinion after implementing the techniques within the guide and accompanying materials. For those of you who are unfamiliar with the product, it seeks to do just as it implies-teach you how to harness the power of Myspace in order to make money. It should be noted that although this e-book and its accompanying materials were designed specifically with Myspace in mind, the majority of the techniques in enclosed can only be used with Myspace but other similar social networking sites as well. This is because of the fact that many social networking sites share many of the same functions such as being able to comment one's friends, send bulletins, blog and much more. In my opinion, this is what makes Spacebankers: The Guide to Making Money with Myspace so valuable. In addition, Spacebankers: The Guide to Making Money with Myspace also features the bonus e-books, the Spacebankers forum, one-on-one coaching and advice per the creator of Spacebankers, Ryan Moran, and a 30 day unconditional money back guarantee.
When you purchase Spacebankers: The Guide to Making Money with Myspace, you also receive three bonus e-books at no cost to you. These e-books include The Joel Method, which teaches you how to make money through the utilization of affiliate marketing, landing pages and groups and forums. You also receive the e-books The Silver Lining...to every Squidoo Cloud and The Niche Blogging E-book: Finding a Profitable Niche and Capitalizing on it. The Silver Lining...to every Squidoo Cloud teaches you how to make the most of Squidoo, a really popular article site that Google.com seems to love and is something that every online entrepreneur should make use of whether he or she is trying to make affiliate sales or just spread the word about something. The Niche Blogging E-book: Finding a Profitable Niche and Capitalizing on it teaches people how to both find niches, which is something every internet marketer needs to learn to do in order to be successful and make money through blogging. This e-book is really interesting because it kind of gives you your first look at how to develop multiple income streams of money. This is important because not every technique in the Internet marketing world works for everybody, so it is a good idea to have a back up plan in place.
Upon joining Spacebankers, you also receive access to the Spacebankers forum. The Spacebanker's forum is a really nice accompaniment to the e-book because the like the Internet the rules and guidelines one must follow in the realm of social networking are constantly evolving. The Spacebankers forum allows you to keep abreast of those changes so that you do not feel left behind. The forum is also a good place to share experiences and stories and learn from those who are perhaps more advanced and knowledgeable than you. Many times, it is in places like these that you learn things that you will not find anywhere else on the Internet.
When you need help or advice, you cannot only turn to the other members in the Spacebankers forum but to Ryan Moran, the creator of Spacebankers as well. I have personally spoken to Ryan on many occasions, so I can say without a doubt that whenever you need something, Ryan is only e-mail away. He is really nice and caring and incredibly knowledge about the techniques he writes about, as he utilizes the same techniques himself. He wants nothing more than to see you succeed. Every time I had a question, comment, suggestion or anything of that nature and e-mailed Ryan about it, he e-mailed me back with a response either the same day or the day after. He provides awesome customer service. Speaking of which, if you are for any reason not satisfied with the product, all you have to do is ask for a refund. Spacebankers comes with a 30-day unconditional money back guarantee, so you literally have nothing to lose.
Given all the good things I have had to say about Spacebankers, I bet you are wondering about the flaws I found in the program. Well, to be honest, although Ryan does hold your hand from start to finish, it would be good if you had some experience as an Internet marketer. I only say this because I think it would allow you to progress more quickly. Also, it took me longer to see results than I would have liked. I am not certain I would call this a flaw though. After all, achieving success in anything, especially Internet marketing requires hard work and dedication.
For those of you interested in becoming online entrepreneurs, I would highly recommend Spacebankers: The Guide to Making Money with Myspace. Ryan holds you hand from start to finish and gives you all the tools necessary to succeed. All you have to do is implement them. For those of you who already have experience making money online, I recommend that you add Spacebankers to your list. Making money through social networking is a skill that every Internet marketer should have in his or her arsenal.
robert shumakeSean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
LONDON After a 2010 that saw the Korean peninsula edge towards the brink of nuclear Armageddon,
Read our news of Moore: EA not backing away from Tiger.
robert shumake
robert shumake detroitFacebook has dominated the headlines today with the news that it has raised $500 million from Goldman Sachs and Digital Sky Technologies at a $50 billion valuation.
In addition, the social network intends to raise another $1.5 billion through a “special purpose vehicle” that Goldman Sachs will be setting up to allow some of its clients to indirectly invest in class='blippr-nobr'>Facebookclass="blippr-nobr">Facebook.
There have been a lot of questions about the Goldman Sachs “special purpose vehicle” since the news broke. The key questions: Why is Facebook choosing to raise more money through Goldman Sachs? Will the SEC allow this move, or will it force Facebook to start disclosing its financial results to the public? And when will Facebook finally have an IPO?
SEC regulations and the nuances of private investment are complicated subjects, so we thought we’d try to clarify some of the issues surrounding the Facebook-Goldman Sachs deal, including figuring out the likely date of the Facebook IPO.
1. Why Are Facebook and Goldman Sachs Creating a “Special Purpose Vehicle”?
There is an SEC regulation, set by The Securities Exchange Act of 1934, that requires companies with 500 or more shareholders to disclose their earnings to the SEC. The SEC then publishes this financial information, making it public knowledge.
Facebook doesn’t want that headache at all. It doesn’t want to go through the audits, create the reports, or let its competitors know the details of its earnings and expenditures. However, the social network still wants $2 billion in fresh resources, so Goldman Sachs has come up with a very clever workaround; instead of having thousands of individual investors, Goldman Sachs will represent them all and invest on their behalf.
This is essentially what most brokers do on behalf of their clients, the shareholders. Instead of making a person an investor of record in class='blippr-nobr'>Googleclass="blippr-nobr">Google, Goldman Sachs will invest money on that individual’s behalf, making him or her a benefitting investor
The New York Times‘ Steven Davidoff provides a stellar overview of the SEC regulations in question, but it essentially boils down to this: Goldman Sachs is helping Facebook circumvent the system so it doesn’t have to report earnings or raise money via an IPO.
2. Will the SEC Allow It?
The SEC isn’t stupid; it knew that brokerage firms would try these types of workarounds. The New York Times dug up the SEC’s definition of a record holder, which includes a provision that says if a company creates a vessel for holding securities of record primarily to circumvent The 1934 Securities Exchange Act, then it will deem beneficial owners as record owners.
In other words, the SEC could deem that Goldman Sachs is circumventing its regulations with its “special purpose vehicle” and thus consider all of the investors within it “record owners” of Facebook. That would mean that the social network would be required to report its earnings.
We think it’s likely that the SEC will intervene. The SEC is already investigating the private secondary markets for potentially violating the same 500 shareholder regulation. It wouldn’t be much of a jump for the SEC to tell Facebook that its investment vehicle doesn’t preclude it from publicly disclosing its financial information. In fact, it’s likely to tell Facebook the opposite.
3. So, When Will Facebook IPO?
Now here’s where it gets interesting. Facebook and Goldman Sachs are setting up this “special purpose vehicle” to raise a ton of cash for the social networking company. They’re absolutely aware that the SEC will not be happy with their arrangement, and they also know that the SEC will likely step in and tell Facebook to disclose its earnings to the public due to the existence of the Goldman Sachs vehicle.
So why would Facebook go through all this trouble when the SEC is going to shoot them down anyway?
The answer is that this move buys Facebook more time to grow and prepare itself for an IPO. The SEC regulation wouldn’t take effect until May 2012 because the SEC only requires private companies to start reporting its financial information within four months after the end of its current fiscal year. So if Facebook violates the 500 shareholder rule this year, then it won’t have to start reporting its earnings until May 2012, 120 days after December 31, 2011.
That’s more than enough time for Facebook to prepare for its IPO. When the day comes that Facebook is required to release its financial information to the public, it will probably decide to just go all-in and become a public company, raising even more money in the process.
Essentially, Facebook has set the clock for its IPO to occur on May 2012 or earlier. Part of the reason we predicted no Facebook IPO in 2011 is because 2012 is the year most of our sources say the Facebook IPO is likely to occur. It all fits.
Mark your calendars and set your watches, everyone: The Facebook IPO is likely coming in 12 to 16 months.
For more Business coverage:
class="f-el">class="cov-twit">Follow Mashable Businessclass="s-el">class="cov-rss">Subscribe to the Business channelclass="f-el">class="cov-fb">Become a Fan on Facebookclass="s-el">class="cov-apple">Download our free apps for Android, iPhone and iPad
As we get ready for John Boehner to take the gavel from Nancy Pelosi on Wednesday, I find myself thinking back to the last time a Republican speaker took control of the House from a Democrat -- and reflecting on how far down the wrong road we have traveled since then.
It was January 1995, and Newt Gingrich, now considered a right-wing bomb thrower, was taking the gavel from Tom Foley. After taking the oath of office, he delivered a speech that praised FDR as "the greatest president of the 20th century" and presented concern for the least among us as a shared national objective. "The balanced budget is the right thing to do," he said. "But it does not in my mind have the moral urgency of coming to grips with what is happening to the poorest Americans."
For the incoming Republican speaker, reducing poverty and lifting the poor into the middle class was a moral imperative beyond the left vs. right battlefield -- not just the purview of lefties, socialists, and community organizers:
I say to those Republicans who believe in total privatization, you cannot believe in the Good Samaritan and explain that as long as business is making money we can walk by a fellow American who is hurt and not do something.... If you cannot afford to leave the public housing project, you are not free. If you do not know how to find a job and do not know how to create a job, you are not free. If you cannot find a place that will educate you, you are not free. If you are afraid to walk to the store because you could get killed, you are not free.
So now, with poverty higher than it was 16 years ago, with greater income inequality, and with the middle class struggling to hold on, what will Speaker Boehner make his number one priority? According to the
Washington Post, it's "cutting spending," followed by repealing the healthcare law, and "helping get our economy moving" (no specifics on how he plans to do that).
Yet we saw on
60 Minutes that he's very aware of how fragile the American Dream has become, telling Lesley Stahl, "I can't go to a school anymore. I used to go to a lot of schools. And you see all these little kids running around. Can't talk about it." And he choked up when he did try to talk about "making sure these kids have a shot at the American Dream, like I did. It's important."
Interestingly, in his first speech as speaker, Gingrich also talked about being moved by the woes of school kids.
I have seldom been more shaken," he said, "than I was after the election when I had breakfast with two members of the Black Caucus. One of them said to me, 'Can you imagine what it is like to visit a first-grade class and realize that every fourth or fifth young boy in that class may be dead or in jail within 15 years? And they are your constituents and you are helpless to change it?' For some reason, I do not know why, maybe because I visit a lot of schools, that got through. I mean, that personalized it. That made it real, not just statistics, but real people.
But the trajectory of our political discourse over the last decade and a half has meant that taking on poverty has gone from a moral imperative and shared national objective to an afterthought -- or no thought at all.
The question is, is there anything that can be done to help Boehner make the connection between the policies he supports and the effect those policies have on the kids who bring him to tears?
Newt Gingrich failed to follow through on the moral imperative he identified in his first speech as speaker, trading in his moral vision and replacing it 15 months later with an announcement that the Republican agenda could be reduced to six words: "Earn more, keep more, do more."
Will Boehner's take be "Earn more, keep more, cut more"? Or is there a chance he will surprise us? Maybe it's because it's close enough to Christmas that I still believe in miracles, but wouldn't it be great if the John Boehner who takes the gavel on Wednesday is the one who weeps at thought of kids denied a shot at the American Dream?
robert shumake detroitSean Ryan, who arrived at News Corp. mid-year to set up a new online gaming unit, is moving to Facebook to head partnerships at its key gaming platform, according to sources. Currently, Facebook does not create social games, ...
LONDON After a 2010 that saw the Korean peninsula edge towards the brink of nuclear Armageddon,
Read our news of Moore: EA not backing away from Tiger.
robert shumake detroit
robert shumake
