“Why Bain Is Back”: The Folks On The Receiving End Of Capitalism’s Creative Destruction
A month ago, conventional wisdom had it that the Bain attacks on Mitt Romney were somehow failing terribly — notwithstanding the fact that they’ve been key parts of every other campaign Democrats and Republicans have run against Romney going all the way back to 1994. And yet all of a sudden, the Obama campaign is going full outsource/Bain attack on Romney at every opportunity. So they think it’s working great. New polling suggests they may be on to something. And in the most telling development, in the days leading up to the surprise Supreme Court ruling, the Romney campaign itself is mounting a mammoth pushback, signaling more clearly than anything that they think it’s working too.
So what happened?
Consider three basic factors. First, round one of the Bain Wars was almost entirely hashed out in what you might call the Acela corridor — an insular community, overwhelmingly affluent and educated, and decidedly not the audience for the message or the folks who find themselves on the receiving end of capitalism’s creative destruction.
Sen. Sherrod Brown (D-OH) visited TPM’s DC offices last week as part of our Newsmaker interview series and said basically: trust me, this message worked in Ohio. Maybe he was right all along. I suspect he was.
But there was another rhetorical dimension. ‘Private equity’ is a weird phrase. Most people have no idea what it does or doesn’t mean. And the Romney campaign through it’s surrogates was able to hit its opponents with something like ‘Hey, it’s poor form to be going all Nation magaziney and pretending that private equity isn’t awesome!’
And within that community, it worked. Thus Cory Booker, Bill Clinton, and a lot of other Democrats. ‘Private equity’ means a lot of different things. My own sense is that some parts of it are incredibly destructive while others create efficient allocations of capital. But who cares what I think? Wherever you come down on that question there’s simply no question that private equity is at the tip of the the spear of creative destruction in our society. So in a country where everybody gets to vote, it’s sort of crazy to think criticizing something like that would somehow be beyond the pale like attacking the Pope or crapping on motherhood and apple pie. But there it was.
‘Outsourcing’ though and ‘Offshoring’ — these are just more graspable words, more concrete concepts. Everybody understands them. Everybody knows what they mean. I’m pretty sure the Romney campaign wants to say something like, ‘C’mon, our whole economy today is based on stuff like this and we all know it and everybody accepts it so don’t pretend otherwise.’ But they can’t. And what really got them all boxed up was when they got themselves into this ridiculous debate over whether Mitt’s an ‘outsourcer’ or an ‘offershorer’. As I said Monday, that’s an argument you lose by winning. Or lose by losing. Whichever way, you lose.
Even really smart strategists manage sometimes to charge into a brown paper bag like this. But this was a bad move because it opened Romney up to that most lethal political weapons: ridicule and mockery. The Obama camp seemed to get this early and just decided to drive a freight train right through him. Holding out for this distinction seemed incredibly stupid and more than that wildly out of touch since the difference is basically immaterial to people who lose their jobs as a result of it. And, as always, weakness which invites attacks.
In a country afflicted for decades by loss of high-paying manufacturing jobs and chronically stagnant working class and middle class wages it’s crazy to think that Romney’s history as a private equity king — especially one working the lower tiers of the private equity world — wouldn’t be a liability for a lot of voters. But it was something that DC reporters were best positioned to miss.
By: Josh Marshall, Talking Points Memo, July 2, 2012
“Offshored And Outsourced”: Mitt Romney’s Bain problem
While the Supreme Court’s upholding of the health-care law was last week’s most important event in historical terms, it will not be the decisive event of the 2012 election. In the long run, polling in swing states suggesting that Mitt Romney’s tenure at Bain Capital is hurting him could have larger implications for where this campaign will move.
It’s certainly true that had the court knocked down President Obama’s signature domestic achievement, the defeat would have been woven into a narrative of ineffectual leadership and mistaken priorities. Instead, the president found vindication not only from the court’s liberals but also from Chief Justice John Roberts.
But precisely because the decision saved the president from disaster on health care, it only reinforced the importance of the economic argument Obama and Romney have been having for months. And here is where Romney’s Bain problem kicks in.
As Democrats, mostly from Washington and New York, debated the efficacy of attacks on Romney’s role in Bain, an entirely different conversation was being driven in the swing states, courtesy of ads broadcast by the Obama campaign and especially by Priorities USA Action, the pro-Obama super PAC. The ads portray highly sympathetic workers who lost their jobs and companies that collapsed even as Bain’s principals made substantial profits.
An NBC News/Wall Street Journal poll last week provided surprisingly dramatic evidence of how much these commercials are wounding Romney.
In the country as a whole, 23 percent said they viewed Romney more positively because of his experience “managing a firm that specializes in buying, restructuring and selling companies,” while 28 percent said this made them view Romney more negatively. But in this year’s 12 battleground states, many of which have gotten a heavy run of the anti-Bain ads, only 18 percent viewed Romney’s business experience positively; 33 percent viewed it negatively. Obama led Romney by three points nationally but by eight in the battlegrounds.
This is disturbing news for Romney, who hoped his business experience would be an unalloyed asset. The numbers also underscore voter resistance to the core conservative claim that job creation is primarily about rewarding wealthy investors and companies through further tax cuts and less regulation. Americans are not anti-business, but they are skeptical that everything that is good for corporations is also good for their employees, and for job creation itself.
The Bain ads have done double-duty, specifically undermining Romney but also serving as a parable for how aspects of the current financial system hurt workers and local communities. Profits and productivity can rise even as real wages stagnate or fall, and jobs can be offshored and outsourced. The Romney campaign’s response to a recent Washington Post story describing Bain’s record on outsourcing — the campaign sought to “differentiate between domestic outsourcing versus offshoring” — sounded more like bureaucratic gobbledygook than an effective answer. Obama picked up on the story immediately, calling Romney an “outsourcing pioneer.”
But can the Obama campaign turn the argument over Romney and Bain into a broader challenge to the Republican claim that the only thing government can do to spur job creation is to get out of the way? “Jobs” will remain the Romney battle cry for the rest of the campaign, but the success of the anti-Bain offensive points to an opportunity for Obama to engage in a kind of political jujitsu. He can argue that Romney’s primary interest is not in job creation at all but in low-tax and deregulatory policies he would favor whether the economy was soaring or flat.
In a recent talk at the Center for American Progress, Stefan Löfven, the new leader of the Swedish Social Democratic Party, outlined a way to turn the debate around, arguing that job creation worldwide should be the focus of center-left parties. New policies on job creation should also be concerned with the quality and conditions of the jobs, how quickly the unemployed can be moved to new work and how the unemployed are treated and assisted toward new opportunities.
Here are the questions voters should be encouraged to ask in 2012: Should government focus directly on innovative approaches to creating good jobs in a new economy? Or should it be relegated to a position of powerlessness in which its only option is to concede ever more benefits to those — including the financial wizards at Bain — who are already doing very well indeed?
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, July 1, 2012
“Nice Work If You Can Get It”: Why Mitt Romney Likes Firing People
Mitt Romney would prefer for you to recall just one number regarding his record at Bain Capital. That would be 100,000 — the number of jobs that the Republican candidate claims he created during 15 years at the private equity firm.
But now there is a more interesting, plausible and relevant number: $20,000. That’s how much money Romney is estimated to have made from each worker laid off during Bain’s many corporate takeovers.
In fairness, Romney’s goal at Bain was never to create jobs but to reap the biggest returns for their valued investors. Judging by that metric, he did exceedingly well, as even Bill Clinton accidentally admitted when discussing Romney’s “sterling” business career. And of course, Romney’s fortune, estimated somewhere between $190 million and 250 million, attests to that assessment.
But over the course of the Romney’s years at Bain Capital, at least five of the companies he took over eventually went bankrupt, while still rewarding Bain investors handsomely:
• American Pad & Paper: Bain invested $5 million in the Ohio paper company in 1992, and reportedly collected $100 million in dividends on that investment. But AMPAD went bankrupt in 2000, resulting in 385 employees losing their jobs.
• Dade Behring: Bain invested $415 million in a leveraged buyout in 1994, borrowed an additional $421 million, and ultimately walked away with $1.78 billion. Dade filed for bankruptcy in 2002, and laid off 2,000 employees.
• DDI Corporation: Bain reportedly invested $46.3 million in the electronic parts manufacturer 1997, earning $85.5 million in profits plus $10 million more in management fees. When the company went bankrupt several years later, 2,100 workers were laid off.
• GS Industries: In 1993, Bain invested $60 million in the Kansas City steel maker, borrowed a lot of money, and then took $65 million in dividends. But GS eventually went bankrupt in 2002, and 750 workers lost their jobs and pensions.
• Stage Stores: Bain invested $5 million to purchase the Houston-based retailer and took it public in the mid-’90s, reaping $100 million from stock offerings. In 200o, following Romney’s departure from Bain, Stage filed for bankruptcy and 5,795 workers were reportedly dismissed.
While it is true that some of those companies went under after Romney had left Bain, the job growth for which he now seeks credit also occurred after his departure in 1999. But the bankruptcies — and the bust-out scenario that helped Bain to profit anyway — are not news. What AOL’s Daily Finance has contributed to the Bain debate is a simple calculation: Bain Capital booked $1.995 billion in profits from the layoffs of 11,030 workers at various firms. And by that scoring, Romney earned roughly $20,000 himself for each of those fired employees. Nice work if you can get it (or take it away from someone else).
By: Axel Tonconogy, The National Memo, June 15, 2012
“An Implausible Argument”: Mitt Romney’s Other Health-Care Contradiction
In vowing this morning to do what the Supreme Court didn’t—repeal Obamacare—Mitt Romney trotted out all his arguments against the newly constitutionally sanctioned health care law. Among them were these two points: First, that Obamacare would cause 20 million Americans to lose their health insurance, and second, that it would be a job-killer to boot.
Problem is, these two arguments directly contradict each other.
The 20 million Americans who presumably would lose their health insurance would do so because their employers would decide to cease offering it, letting their employees fend for themselves on the health-insurance exchanges. Why would these employers opt to do that? The only conceivable reason is that it would be cheaper for them to do that. And if it was cheaper for them to do that, they’d then have more money to hire more employees, creating rather than killing jobs.
You can argue, with serial implausibility, that Obamacare will cause millions to lose their health insurance or that it’s a job-killer. You can’t argue both.
With today’s ruling, the fate of Obama’s health-care reform will be up to the voters in November’s election. For voters who hate Obama and all he stands for, that’s one more reason to go to the polls—but those voters are probably going to the polls in any event. If Romney decides to ride this issue, it’s not clear he’ll gain any more votes than he already has locked up. He may motivate some Republicans who don’t particularly care for him but will vote out of their hatred of Obama to care for him somewhat more. (Polling shows that a higher percentage of pro-Obama voters support the president because they like him than pro-Romney voters like Romney.) But I doubt that raising his positives among voters who are already determined to vote for him anyway matters.
Republicans will doubtless exploit the court’s upholding the mandate under the Congress’s power to tax rather than under the Constitution’s commerce clause. There’s that t-word again! It’s unlikely that more than a couple percent of the American people, those with incomes adequate enough to decline to buy insurance, will ever be subject to that tax, but you can count on Republicans to depict it as a mass confiscation worthy of Lenin. Obama and the Democrats need to be able to counter this with real numbers—in Massachusetts, the one state that has already adopted a similar law, just 1 percent of taxpayers are subject to the penalty—even as they focus on the benefits most Americans will derive from the law, which was the tack the president took in his statement this morning.
By: Harold Meyerson, The American Prospect, June 28, 2012
“A New Definition Of Irony”: The GOP-Style Jobs Program
“Here in the House,” Speaker John Boehner announced after meeting with his caucus Wednesday morning, “Republicans are going to continue to stay focused on jobs.”
It’s true. Technically, House Republicans are focused on jobs: Eric Holder’s and President Obama’s. They want to put both men out of work.
Tying up this administration is Job One for the opposition party, and never more so than this week. Republicans have been awaiting with giddy anticipation a Supreme Court decision Thursday that they expect will overturn Obamacare, the signal achievement of Obama’s presidency. “If the court does not strike down the entire law, the House will move to repeal what’s left of it,” Boehner vowed.
At the same time, Republicans decided to dedicate Thursday to a spectacle on the House floor: voting to hold Holder, the attorney general, in contempt of Congress for declining to hand over certain documents related to the Operation “Fast and Furious” guns program on the Mexican border.
Fox News Channel’s Chad Pergram asked Boehner (R-Ohio) whether he thinks “the American public is buying the narrative that you’re here to talk about jobs, when in the next 24 hours . . . everything emanating from the House floor is about contempt of Eric Holder?”
“We’re going to continue to focus on jobs,” Boehner repeated.
After that, the next jobs-related activity for House Republicans was to hold a meeting of the Rules Committee to determine procedures for Thursday’s vote on Holder.
Republicans rushed the contempt citation to the floor — the first time in history that the body has taken such action against a sitting attorney general — under “emergency” procedures. They did so even though Boehner had not yet met with Holder and even though the committee handling the investigation had not allowed a single witness whom Democrats wanted to testify publicly. Had they worked with such alacrity to create jobs, the economy would probably be booming.
Rep. Darrell Issa (R-Calif.), chairman of the panel investigating Holder, told the Rules Committee that the attorney general has been “uncooperative at every step of the way” and that the Justice Department “lied” to Congress, and he suggested that Justice officials are “covering up a crime.”
Elijah Cummings (Md.), the top Democrat on Issa’s committee, said the inquiry is “one of the most highly politicized congressional investigations in decades.” The reason for the contempt vote, he said, “is plain and simple: politics.”
It was but an appetizer for Thursday’s food fight, but even this session, in a small, ornate hearing room at the Capitol, got nasty and personal, as lawmakers addressed one another by their first names. A trio of Republicans maintained that, as Rules Committee Chairman David Dreier (R-Calif.) put it, “this is not something that is desirable for any of us.” But Issa seemed to be enjoying himself as he mixed it up with the Democrats on the panel.
“It has all the trappings of a witch hunt,” charged Louise Slaughter (N.Y.), the rules panel’s ranking Democrat.
“Looks and smells like a witch hunt,” agreed Rep. Jim McGovern (D-Mass.).
Issa retorted: “That’s been the Democratic talking point all along.”
At another moment, McGovern said Republicans “keep on moving the goal posts” in their requests of Holder.
“Not just moving the goal posts, moving the stadium,” Cummings added.
Responded Issa: “We keep moving the goal posts closer, but he can’t kick a two-yard field goal.”
Democratic complaints continued at great length: “You absolutely did not answer the question!” “Hold on, just a minute!” “A cynical maneuver.” “A disservice to the American people.” “A scripted sideshow.” “A dark, dark day.”
In response, Rep. Virginia Foxx (R-N.C.) shared with the panel lessons she had learned during her morning Bible study, and Rep. Rob Woodall (R-Ga.) shouted about serving as “stewards of the United States Constitution.” Issa taunted the Obama administration: “You own that mistake.”
Democrats did get Issa to admit that “I’ve never said Eric Holder knew anything specific” about the Fast and Furious program and that his contempt action “isn’t even about the program. It’s about the failure to tell us the details of post-lying events.” He further acknowledged that he didn’t call a George W. Bush administration attorney general to testify because he was “narrowly focused” on Holder and that he didn’t call other Democratic witnesses to testify because he was concerned about grandstanding.
“That’s the new definition of irony,” McGovern said, pleading for “the speaker to approach this in a more rational way.”
Unlikely. “I have no role in it,” Boehner said when reporters asked about the Holder vote.
Remember? He’s focused on jobs.
By: Dana Milbank, Opinion Writer, The Washington Post, June 27, 2012
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 