“Blind To Every Human Virtue”: Mitt Romney And Bain Capital Create Their Own 47% “Victims”
Here’s the 47% Question: If the hedge fund founded by the Republican candidate for president buys a company in a small Midwestern town and then sends all its jobs to China, do those workers thereby become the “victims” Mitt Romney had in mind when he dismissed those who “do not take responsibility for their lives” because they are “dependent” on government?
That’s the situation facing 170 workers at an auto sensor manufacturing plant in Freeport, Illinois after a Bain Capital-owned company, Sensata Technologies, bought out their factory and then decided it would be cheaper to board up the plant and send its parts to China — but not before subjecting workers to the final humiliation of training their Chinese replacements.
In response, some workers have set up a camp across from the factory and are calling “Bainport” to protest the move, according to Dave Johnson at Truthout. Others have asked Mitt Romney to intercede on their behalf with his former company, foolishly taking Romney at his word that, as president, he would “get tough” with China and fight for every American job. Good luck with that.
It’s not as if the company is hurting for money. According to a company financial statement quoted by Johnson, Sensata’s net income last year was $355 million, up 16% from 2010. Its total revenues were $1.8 billion in 2011, up almost 19% from the year before.
Yet, Romney’s former colleague, Sensata board chairman Paul Edgerley, says Bain’s responsibilities to investors demands shuttering the Freeport plant and shipping operations to Asia.
Johnson says the layoffs will surely have a ripple-effect in this small town of about 25,000 that has only three principal employers and a poverty rate well above the national average. And so, Bain’s decision to move the plant to China is a dagger in the heart of this community, says Johnson, and represents “the epitome of corporate America’s lack of patriotism, [with] it’s capital unmoored from any sense of responsibility for the people that make the profits or the communities where they live.”
In moving the plant to China, Sensata is simply operating according to the business strategy mapped out for the hedge fund by Romney himself: Buy assets with little money down. Load them with debt. Raid their pension funds. Break their unions. Then “harvest them” for profits.
On that infamous video disrespecting the bottom 47%, Romney makes a dubious value judgment when he says individuals who are not resourceful or self-reliant enough to make it in the survival-of-the-fittest jungle created for them by cut-throat capitalists like those at Bain Capital are therefore “irresponsible” when they lean on others in hard times, especially when it’s the crutch of government.
That’s the same self-serving justification we hear from conservative economists like Charles Murray who ignore the consequences of globalization and technological change and blame instead the middle class for its own shrunken prospects when average Americans stray from the traditional family values and old-fashioned American work ethic Murray thinks is all that separates rich from poor.
Romney’s is an ethic that equates “morality” with “success.” This may help explain a presidential campaign that justifies egregious falsehoods and elaborate fabrications if they win Romney a point or two with a gullible public.
Newt Gingrich was right when he called out Romney during the Republican primaries as a “predatory corporate raider” who only pretends to be a real capitalist.
A real capitalist, said the original Austrian-school economist Joseph Schumpeter, would know that the fruits of the free market’s dynamic innovations could only be harvested by societies prudent enough to make provision for the victims of capitalism’s relentless change.
Schumpeter, Austria’s finance minister in 1919 and the originator of the famous phrase about capitalism’s “creative destruction,” believed public relief during Hard Times was “imperative on moral and social grounds” and also important to stabilize demand, writes Hans-Michael Trautwein.
“Schumpeter was in favor of unemployment relief as the best way to counteract the effects of the business cycle on workers’ welfare,” says Trautwein in a paper on the great economists’ views on unemployment.
Predators like Mitt Romney, in contrast, want to have their cake and eat it too. They want the benefits that go with destroying other people’s lives for their own profit but without the responsibility to pay the least in compensation.
A real capitalist concerned about the viability of a free market capitalist system in a democratic society would be far more alert to the caveats Schumpeter laid out. And the fact that Romney isn’t, as he speaks contemptuously of the victims his Bain Capital business model have created, exposes Romney as someone who cares little about the free market beyond his own ability to profit spectacularly from the very same unregulated and lightly taxed rigged system he would promote as president.
The irony of the rapacious worldview Romney shares with many in America’s plutocratic class is that it fails as both morals and economics. This is one reasonRomney’s peculiar brand of buccaneer capitalism has so often had to be rescued from itself.
How can it be possible, for example, that a company like Citibank could sell securities it knows to be toxic to one set of customers while at the same time betting on those very same securities to default – and then only getting a $285 million fine from regulators, which is a slap on the wrist considering the monstrous sums involved?
That is what New York Times columnist Thomas Friedman wants to know when he says of Citibank’s fraud” “It doesn’t get any more immoral than this.”
Romney complains about the 47% he says are parasites. Yet, as Friedman notes, “there is in our economy now a disconnect between pay and performance,” which is a fairly serviceable definition of “parasite” in my book.
Under the rules now in place, says Friedman, Romney’s Bain Capital can make tens of millions of dollars on firms it buys that go bankrupt. A bank like Citigroup can sell toxic securities to a hedge fund that loses hundreds of millions of dollars on the deal while Citigroup still makes $160 million in fees and trading profits betting against those same assets.
Despite the wrong turns it has taken in recent decades, Friedman still believes capitalism and free markets are the best engines for generating growth and relieving poverty — “provided they are balanced with meaningful transparency, regulation and oversight.”
What we’ve lost in the last decade, he says, is that balance. “And if we don’t get it back — and there is now a tidal wave of money resisting that — we will have another crisis. And, if that happens, the cry for justice could turn ugly.”
Mitt Romney sells himself as a successful businessman who “knows” how to create jobs because he “understands” what it takes because Romney himself is rich. In place of policy, in other words, all that Romney has to offer is biography.
Mitt Romney wants to be our president. Yet as Chrystia Freeland reminds us, Romney embraces a “ravage capitalism that is loyal to no nation-state and blind to every human virtue but profit” – a win-at-all-costs ethos that has a familiar, if dangerous, pedigree among history’s self-destructive ruling classes.
What separates successful states from failed ones, says the author of Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else, are governing institutions that are either inclusive or extractive.
Extractive states are those controlled by ruling elites whose sole objective is extracting as much wealth as they can from the rest of society, says Freeland, while inclusive states “give everyone access to economic opportunity.”
Greater inclusiveness creates more prosperity which, in turn, creates an incentive for ever greater inclusiveness, says Freeland
Elites themselves prosper from these inclusive systems, says Freeland, but there also comes a time when these elites face the self-destructive temptation to pull up the ladder behind them once they’ve extracted wealth from the broader community “to such a degree that the society becomes dysfunctional and mired by social problems.”
Marx’s famous warning about capitalism containing the seeds of its own destruction may be the danger America faces today, says Freeland, as the 1% percent “pulls away from everyone else” by cannibalizing the broad Middle Class Republic that America has built up since the Second World War — with its public investments in education, infrastructure, basic research and development and health and retirement security — and as these elites pursue “an economic, political and social agenda that increases that gap even further and ultimately destroys the open system that made America rich and allowed its 1 percent to thrive in the first place.”
This is the absurdity of Mitt Romney’s comment about the 47% who are “dependent upon government,” says Freeland, since it’s those at the “top of the economic pyramid who have been most effective at capturing government support — and at getting others to pay for it.”
Today’s super-rich may be different from you and me but they are no different from their plutocratic predecessors throughout history, says Freeland.
“Now, as then, the titans are seeking an even greater political voice to match their economic power,” she writes. “Now, as then, the inevitable danger is that they will confuse their own self-interest with the common good. The irony of the political rise of the plutocrats is that they threaten the system that created them.”
By: Ted Frier, Open Salon, November 3, 2012
“Binders Full Of Lies”: Mitt Romney Doubles Down On Auto Industry Lies
Mitt Romney has tried to dodge, bob, weave, change the subject, and pretend it didn’t happen when it comes to his position on the automobile companies.
But obfuscation is not enough for Mitt Romney: Now he is resorting to an outright lie in his speeches and in his last minute, desperate advertising. In fact, two big lies.
Lie No. 1: Contrary to Romney’s claim, Detroit and Chrysler are not moving jobs and the making of Jeeps to China. In fact, they are selling Jeeps to China and they are adding $500 million and 1,100 workers to their Ohio Jeep plant. Chrysler smacked down Romney’s lie when he first said it and now Romney is up with an ad repeating the lie, ignoring Chrysler.
Chrysler Chief Executive Sergio Marchionne was forced to send employees an E-mail Tuesday afternoon: “I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China.”
Hello, Mitt? Apologize and take down your TV ad. Instead, he is buying more air time and putting up radio ads with the same lie.
But it gets worse.
Lie No. 2: This is the one Romney has been repeating over and over about the American auto industry—he would have saved it with his “managed bankruptcy.” I worked for GM; there was no way the auto companies could have survived without Barack Obama’s rescue and with the decision to provide bridge loans and government help. Romney’s plan was not Obama’s plan—as he would try and make you believe. His plan was to get private capital, and as Steve Rattner, who ran the rescue team, and everyone else has stated, there was no private money. Even the conservative Detroit News praised President Obama and referred to Romney’s “wrong-headedness on the auto bailout…he was wrong in suggesting the automakers could have found operating capital in the private markets.”
When Romney called for letting Detroit go bankrupt, he meant it, because his view was the popular one at the time—no more bailouts, no more government money or intervention, enough already. Romney was playing politics. And he knew no one would buy a car from a bankrupt car company, unless the government stepped in to help
Now that the hard decision that President Obama made to provide government loans is popular, Romney is singing a different tune. He is not only trying to give voters the impression that he would have saved Detroit, which is absurd, he is implying that Obama is part of a plot to ship Jeep jobs to China.
Romney will lie and say anything to get elected. Let’s hope the people of Ohio and the United States see through it by next Tuesday.
By: Peter Fenn, U. S. News and World Report, October 30, 2012
“Fantasy And Fear Based”: Why Mitt Romney’s Bogus Jeep Claims Matter
Mitt Romney campaigned in Defiance, Ohio, last night, and rolled out a new argument. “I saw a story today that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China,” he said. “I will fight for every good job in America, I’m going to fight to make sure trade is fair, and if it’s fair, America will win.”
There are a few problems with this line of attack, starting with the simple fact that Romney wasn’t telling the truth. As Chrysler itself explained, the company intends to build Jeeps in China to be sold in China, but isn’t moving American jobs abroad.
On Oct. 22, 2012, at 11:10 a.m. ET, the Bloomberg News report “Fiat Says Jeep® Output May Return to China as Demand Rises” stated “Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio. Manley (President and CEO of the Jeep brand) referred to adding Jeep production sites rather than shifting output from North America to China.”
Despite clear and accurate reporting, the take has given birth to a number of stories making readers believe that Chrysler plans to shift all Jeep production to China from North America, and therefore idle assembly lines and U.S. workforce. It is a leap that would be difficult even for professional circus acrobats.
Let’s set the record straight: Jeep has no intention of shifting production of its Jeep models out of North America to China. It’s simply reviewing the opportunities to return Jeep output to China for the world’s largest auto market. U.S. Jeep assembly lines will continue to stay in operation. A careful and unbiased reading of the Bloomberg take would have saved unnecessary fantasies and extravagant comments. [emphasis in the original]
All of this, incidentally, is rather ironic given the successful efforts of the Obama administration when it comes to China and Jeeps, specifically.
Greg Sargent explained well why this matters: “Romney may very well be the next president. That’s a position of some responsibility. Yet he and his campaign rushed to tell voters a story designed to stoke their fears for their livelihoods without bothering to vet it for basic accuracy. This is not a small thing. It reveals the depth of Romney’s blithe lack of concern for the truth — and the subservience of it to his own political ambitions.”
Indeed, we can take this a step further.
Romney specifically urged business leaders to give their employees voting instructions — many took Romney’s suggestion seriously — and as a consequence, workers in a growing number of businesses are being told their jobs may be dependent on the outcome of the election.
Romney’s comments in Defiance are part of the same kind of fear-based argument: vote the right way or you’ll be unemployed. Your livelihood is at stake, so support the candidate who opposed President Obama’s successful rescue of the auto industry and got rich laying off American workers.
For additional context, it’s worth noting that the Detroit News reports today that Chrysler is adding an additional 1,100 new jobs. Why? To build more Jeeps right here in the United States.
By: Steve Benen, The Maddow Blog, October 26, 2012
“If Those Dolls Could Talk”: Even The Mitt Romney Bobblehead Dolls Were Made In China
Have you ever seen a Mitt Romney lookalike bobblehead doll? Or the parody video, since removed from the Internet, with former Republican candidate Jon Huntsman’s three daughters interview a nodding Mitt bobblehead?
This year, the Romney bobbleheads are marketed on the Internet, along with Barack Obama bobbleheads that are reportedly selling faster. But the original Mitt bobblehead first appeared four years ago and was produced—by Ann Romney’s brother at a factory in China—as a party favor for big donors.
Last January, when former Utah governor Jon Huntsman was still in the GOP presidential primary race, his three daughters “went rogue” and produced the video, with two of them donning blonde wigs to imitate Fox News anchors, and “interviewed” a Romney bobblehead doll. As they studied their nails and asked sarcastic questions — “Governor Romney, people accuse you of being stiff. Do you agree?” — the bobblehead would rapidly oscillate, indicating yes or no.
If those dolls could talk, they might have a lot to tell about their country of origin and who made them there. Although Romney now complains frequently that China has unfairly “taken American jobs,” the Chinese bobblehead Mitts are yet another example of Romney’s propensity to invest in the People’s Republic—and to enrich family members such as Roderick Davies, his brother-in-law, who oversaw the creation of the dolls in China through a Utah company called Asian Sources, Inc.
Asian Sources was one of a string of failed businesses formed by Davies — Ann Romney’s older brother — in Michigan, Florida, Colorado and Utah, culminating in his bankruptcy in 2010. (Mitt Romney’s older brother, Scott, performed legal services for at least two of Davies’ failed ventures. Davies’ son and Mitt’s nephew, Ryan Davies, would eventually join Asian Sources, Inc. after leading a Utah alternative energy company into bankruptcy and being pushed out by the directors amid allegations of embezzlement, tax fraud and securities fraud.)
When Roderick Davies got the campaign doll deal, he already had the connections and experience to handle the job. Among other Asian outsourcing tasks, Davies had worked for Lifelike Doll Company, a Colorado firm that made custom dolls to look like the little girls who received them as gifts (just as bobbleheads are supposed to resemble specific individuals). Davies got that job, too, via Romney — and Bain Capital. After Davies allegedly helped run Lifelike into the ground, attempted a hostile takeover, and was sued by the company, he founded Asian Sources, the firm that went on to create and import Romney’s 2008 bobblehead dolls.
Along the way, Davies traded constantly on his famous brother-in-law’s name, with Mitt Romney’s encouragement. Indeed, Romney and Davies went together into the Lifelike doll business — a venture that not only illustrates their exploitation of China outsourcing but their ruthless corporate style. The Wall Street Journal first broke the Lifelike Doll Co. story last January. But after a single brief report the Journal promptly dropped the thread before unraveling the China connection. The Journal story also missed Romney’s and Bain’s fascination with several other doll and toy companies, not just Lifelike, all of which were also connected with bankruptcies.
The Wall Street Journal’s lead summarized the issue:
“Mitt Romney rarely got personally involved in individual deals toward the end of his time as chief executive of Bain Capital. But he was closely involved in a failed investment in a company that sold expensive dolls semi-customized to resemble the girl they were bought for. Mr. Romney was brought the idea by a friend from Brigham Young University and Harvard Business School who was one of the original partners of the doll company, which was called Lifelike Co. and used the brand name My Twinn.”
“As far as I can recall, Lifelike was the only investment that Mitt originated from his personal network,” former Bain executive Marc Wolpow told the Journal. “He said other Bain partners weren’t enthusiastic, but ‘it was a small investment, so no one really seemed to care that much.”
That “small” investment was $2.1 million, most of which Bain lost after Lifelike went bankrupt in 2003. What the Journal story missed was the fact that between 1997 and its financial collapse the company turned more and more to Asia for parts and after a disastrous 2001 holiday season “the Lifelike Company shifted all operations to China in an effort to reduce production costs,” according to its owners.
When Romney invested Bain’s money in Lifelike, he joined its board of directors and facilitated the hiring of his brother-in-law. Roderick Davies moved from Florida to Colorado to take the job. (Like Mitt Romney in Massachusetts, Davies had served as a Mormon stake president in Florida.)
The Journal quoted former Lifelike CEO Kenn Thiess, Romney’s friend, as saying that Mitt Romney did not pressure the firm to hire his brother-in-law. Interviewed subsequently for this article, Thiess, who had served as a Mormon stake president in Colorado said when Romney brought Davies in, Thiess agreed that the company should expand its use of Chinese suppliers. And because Davies had strong Chinese manufacturing connections, Romney said Davies could be hired to help.
According to the Journal, Lifelike eventually sued Davies, accusing him of trying to subvert its business “by conducting secret dealings with suppliers and trying to set up a competing entity.” While that charge may be valid, at least in part, Thiess fired Davies mainly because Davies was trying to buy controlling shares of Lifelike and then push him out. Thiess said Davies was acting with “Romney family money.” But he would not say whether he thought Mitt Romney was part of the coup attempt.
But in a recent interview Thiess said it was clear at the time—after Romney was elected governor—that “Mitt was setting things up to run for president.” He recalls Davies telling prospective Chinese suppliers that, through him, they were not only establishing a link to the chief executive of Massachusetts (who held an interest in Lifelike) but also, potentially, a future president of the United States.
By: Lynn Packer, The National Memo, October 24, 2012
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