“The Spine Holding The Book Together”: Bain Is Just Chapter One In The “Book Of Romney”
The real Mitt Romney is finally running for president — but not in his own first television spot, a superficial checklist of issues which provides no insight into who he is or what makes him tick. It’s the Obama commercial on Bain and the destruction of GST Steel that starkly reveals the real Romney as a vulture capitalist. And this is just the beginning of what we will hear about Bain, and of a narrative arc that will position Romney as the candidate of the few, by the few, and for the few.
The Obama ad is so powerful because, like the Ted Kennedy ads in Romney’s losing 1994 Senate race, the story is told not by a smoothly modulated professional narrator, but by working people whose jobs and lives were shredded so Mitt and his men could amass their millions. One of the workers voted for John McCain in 2008 and for George W. Bush before that. Now these authentic blue-collar voices, these Reagan Democrats, are talking directly to swing voters — to folks who could be brothers or sisters, friends or cousins — in the battleground industrial states. It’s a different kind of political media — gritty, unslick, and therefore quite convincing.
My then-partner Tad Devine and I conceived and produced the Kennedy spots in 1994. They hit the Massachusetts airwaves with devastating force. In that landmark Republican year, Romney had a slight lead in September, but he swiftly fell in the polls and then melted down in a televised debate that outdrew the statewide audience for most Super Bowls. On Election Day, the boy from Bain lost in a landslide — by 18 points.
It was fascinating to watch how Romney responded as his campaign unravelled. In fact, he mostly didn’t. He seemed paralyzed — a guilty guy caught in the act. In a token push-back, his spokesman alleged that we had “put words in people’s mouths.” The Boston Globe checked and slapped down the story. The workers were spontaneous and unscripted. No political consultant could ghostwrite the rebuke of a packer laid off after 29 years, who looked into the camera and addressed Romney directly: “If you think you’d make such a good senator, come out here to Marion, Indiana, and see what your company has done to these people.”
The workers boarded a bus for Massachusetts and demanded a meeting with Romney. For days, he refused — which kept the episode in the headlines. When he finally sat down with them, he coldly said he’d consider their comments.
He wasn’t ready then, but that was 18 years ago — and he had to know this was coming at him again in 2012. Newt Gingrich stumbled onto the issue in South Carolina, where Romney was routed. But it was never going to be as devastating in Republican primaries as in the contest with Barack Obama. And the presumptive GOP nominee once again appears unready or unwilling to answer beyond offering up ritualistic bromides about “free enterprise”.
This is the false banner under which he campaigns — the claim that he is a job-creating businessman. The total has oscillated from 10,000 jobs to 100,000, to maybe not exactly that. But the abstract number, unsubstantiated and as soulless as Mitt himself often seems, is no match for a steel worker named Jack Cobb, discarded in Romney’s profiteering deal, but sad and defiant now: “To get up on national TV and brag about making jobs… he has destroyed thousands of people’s careers, lifetimes, just destroying people.”
The ads shatter the candidate’s fundamental rationale — that with his business experience in creating jobs, he’s Mr. Fix-It for the economy. It’s a thin rationale, but voters might have believed it. Now disbelief will deepen as the Obama campaign rolls out a dishonor roll of Bain’s depredations. The campaign already has a website that state by state — just coincidentally the battleground states, of course — pinpoints other companies exploited and extinguished by Bain.
I suspect that Romney will eventually have to abandon his strategy of treating the election as a referendum and not a choice — and attempt to defend his business record in paid media. The 1994 outcome suggests that any other course is a road to defeat.
I doubt he will make an ad repeating his disingenuous and dangerous claim that Obama also cut jobs while saving the auto industry. It’s disingenuous because the president saved GM and Chrysler — and Romney frequently did precisely the opposite to other companies. It’s dangerous because if he hopes to compete at all in Michigan and Ohio, he shouldn’t mention the auto bailout outside a confessional. His approach would have doomed the industry.
More likely, Romney will trot out workers — say, from Staples — to highlight jobs he claims to have created. The problem here is that during his tenure, Bain had two businesses. One was venture capital investing in start-ups. The other, which Romney drove, consisted of buying out a firm, hollowing it out, loading it up with debt, cutting wages — and making millions before the firm went belly-up. The one endeavor doesn’t redeem the other: What’s at issue here is not an accounting question, some mere matter of addition and subtraction, but the crass calculation of pillaging jobs and oppressing workers as a conscious business plan while occasionally grabbing a government bailout along the way.
Moreover, the response irresistibly invites a challenge: Romney should release the records of all Bain transactions from which he profited. He probably can’t afford to because the picture could be pretty grim. Presumably, he’s about as likely to risk this kind of full disclosure as he is to release tax returns for years when he may have paid little or no taxes.
There’s a (literally) rich vein to mine in Romney’s record at Bain. But it’s just the beginning of the narrative arc because the Obama campaign will move from the vulture capitalism of his private endeavors to his failures as a public official and the unfairness of his far-right agenda.
Thus the financial manipulator who decimated jobs in the private sector was a governor whose policies left his state 47th in job creation.
The takeover artist who slashed health benefits for workers would end Medicare as we know it, subject seniors to the harsh mercies of insurance companies, and raise their costs by approximately $6,500 a year.
The mega-millionaire with his offshore bank accounts would slash taxes for the very wealthy, and everything from education to food safety for the middle class.
The rapacious Romney, who in business took a government bailout and then would have let the auto industry collapse, now rails against bailouts and calls for rolling back financial regulation for the Wall Street firms that benefited from them.
The list goes on. The narrative is compelling. We haven’t heard the end of Bain — and we won’t until the end of the campaign — despite the inexplicable comments of Newark’s “Democratic” Mayor Cory Booker, who must be spending too much time cozying up to Republican Gov. (and potential running mate) Chris Christie. On Meet the Press, Booker equated the race-baiting, anti-Obama ads about the Rev. Jeremiah Wright that were recently proposed to billionaire clown Joe Ricketts with Obama’s Bain attack: “It’s nauseating.”
Well, Ricketts and his now-renounced smear job certainly was nauseating. But with Romney, what’s nauseating is what happened at his hands to ordinary hardworking Americans thrown out of work so he could rake in the bucks. And what’s worrying is Romney’s austerity agenda that would drive the U.S. into a double-dip recession, which is what such policies have already done to Great Britain.
Within hours, Booker retracted his comments and conceded the point: It is Romney who has made his business experience the centerpiece of his campaign. Bain is the spine that holds the whole Book of Romney together. As one of the workers in that Obama commercial put it, “If he’s going to run the country like the way he ran our business, I wouldn’t want him there. He would be so out of touch… How could [he] care?”
By: Robert Shrum, The Week, May 21, 2012
“There Are Known Unknowns And Unknown Unknowns”: What We Don’t Need To Know About Bain Capital
We’re asking the wrong questions about private equity.
The debate over Mitt Romney’s tenure at Bain Capital has moved through a number of phases, from “Did Mitt Romney do awful things at Bain Capital?” to “Should the Obama campaign be criticizing Mitt Romney for what he did at Bain Capital?” and now, “Is private equity a good thing or a bad thing?” Shockingly, people in the private equity business think the answer to the last is that it’s quite good. The predominant opinion from other people is that it’s sometimes good and sometimes bad, which from what I can tell it’s a pretty good summation of Romney’s PE career. At times, he helped start companies that went on to thrive, or helped companies perform better and survive. And at other times, he acted as what Rick Perry called a “vulture capitalist.”
But while it may be an interesting discussion for economists and economic writers to mull over, “Is private equity good or bad?” really isn’t a question we need to answer in the context of this presidential campaign. The question we need to answer is, “Does running a successful private equity firm mean you’ll be a successful president?” Mitt Romney’s answer to this question is, “Yes, because running a successful private equity firm means you know how to create jobs.” Barack Obama’s answer to this question is, “No, because being president is nothing like running a private equity firm. And also, Mitt Romney is a jerk for profiting while all those people got pink slips.”
It would actually help us understand this better if Mitt Romney talked more specifically about what exactly he learned at Bain that he’ll bring to the Oval Office. Unfortunately, he doesn’t get into much detail about his time there. If you asked him the question, he’d almost certainly say he learned that taxes should be cut and regulations should be scaled back, and that will create jobs. In other words, he’d repeat the standard Republican economic arguments, which really tells us nothing. But maybe I’m not giving him enough credit. Maybe there are some surprising insights about the working of the economy that he could only have gleaned at Bain. If there are, he hasn’t shared them yet.
And that’s really the rub. President Obama is right when he says that the presidency is a very different job from being a private equity CEO. Just when it comes to the economy, creating the right conditions for widely shared growth is not only a matter of wanting to do the correct things, it’s also about being able to accomplish them–convincing Congress to go along with your agenda, insuring that it’s implemented properly, balancing the competing interests that press on a president, and so on. Romney says he knows what to do because of his time at Bain (even if the substance of what he wants to do is the standard Republican wish list) but he hasn’t explained how his time at Bain taught him how to do it. He might argue that he learned that being governor of Massachusetts. But he almost never talks about his time as governor—it’s his time in the private sector that he says is the reason he can be a good president. And that’s not even mentioning all the other aspects of the presidency, like foreign policy, that I assume not even he would claim you prepare for by buying and selling companies.
Chances are slim that Romney is going to get too far into the details of what a private equity firm like Bain does, because the picture is mixed. Yes, he can point to some successes, companies Bain helped build or saved from decline. But that means he’ll also be asked about the failures. And as Tim Noah explains, the whole genius of private equity is that guys like Mitt Romney win either way. If the company they buy succeeds, they’ll get spectacularly rich. But if the company fails, they’ll still get rich, because the money they used to buy it was borrowed, and they were raking in huge management fees all along the way. That’s a story Romney would rather not tell. So he’ll stick to simple assertions, like “I know how the economy works.” Which leave us not knowing what he really knows, or doesn’t.
By: Paul Waldman, Contributing Editor, The American Prospect, May 23, 2012
“Why Bain Questions Matter”: Free Markets Should Serve All The People
Who are the dastardly enemies of free enterprise who decided to make an issue of Mitt Romney’s tenure at the private-equity firm Bain Capital? Er, those would be his fellow Republicans.
Listen to what Newt Gingrich said in January: “The Bain model is to go in at a very low price, borrow an immense amount of money, pay Bain an immense amount of money and leave. I’ll let you decide if that’s really good capitalism. I think that’s exploitation.”
Or what Rick Perry said that same month: “There is something inherently wrong when getting rich off failure and sticking it to someone else is how you do your business. I happen to think that that is indefensible.”
When Democrats say things like that, they’re accused of being Bolsheviks who want to destroy capitalism. But even in the context of the GOP primary battle, where “moderate” was the ultimate epithet, Romney’s actions at Bain were seen as raising a legitimate and important question: Shouldn’t free markets serve the American people, rather than the other way around?
President Obama is right to raise this issue now. I wish he had done so during the debate on financial regulatory reform — only now is he posing the kind of fundamental questions that needed to be asked — but better late than never. In his defense, a tough reelection campaign does tend to focus the mind.
There’s nothing inherently wrong with private equity, which plays an important role in the economy. And, of course, there’s nothing wrong with wealth; those who risk their capital in private-equity ventures should be rewarded when those deals pay off. No one begrudges Romney his offshore investment accounts, his mansions or his wife’s Cadillacs.
But as Romney himself acknowledges, free markets need rules and regulations in order to function. Some kinds of dealings are prohibited or even criminalized — insider trading, for example, because of the way it benefits a select few at the expense of other investors.
It is reasonable to ask whether some highly leveraged buyout deals, of the kind that Bain and other private-equity firms often conduct, should fall into the same thumb-on-the-scale category as insider trading.
Suppose a company is failing and appears beyond rescue. Suppose a private-equity firm buys the company with borrowed money, burdens it with more debt, and then spends the next few years firing workers, selling assets, eliminating pension plans — all while collecting handsome “management fees.” Then the company fails anyway, as it was fated to do.
What higher economic purpose has been served? Why is this not what Perry memorably called “vulture capitalism”?
The discussion we should be having goes far beyond the relatively small world of private equity. Look at the mounting losses at the nation’s largest and supposedly best-run bank, JPMorgan Chase — at least $2 billion and perhaps much more.
The transactions that produced the losses are numbingly complex, but essentially they involved betting both ways on the direction of various economic and business indicators. The idea was to balance the bets so that if the bank’s predictions were right it would make a lot of money; if the predictions were wrong, it would lose money, but not so much.
The bank got on a winning streak, so it made bigger and bigger bets. Then the bank’s luck turned, and Chairman Jamie Dimon discovered that the betting positions were unbalanced — instead of losing a little money, the bank was set up to lose a lot. Sharp-eyed traders at hedge funds noticed what was happening and jumped in to take advantage of a big spender on the skids.
That’s a classic Las Vegas story, but why should it be a Wall Street story? Should a bank whose deposits are federally insured — a bank big enough to crash the financial system — be standing at a craps table in the middle of the night yelling, “Baby needs a new pair of shoes”?
This is what Rick Santorum said in March: “I heard Governor Romney here called me an economic lightweight because I wasn’t a Wall Street financier like he was. Do you really believe this country wants to elect a Wall Street financier as the president of the United States? Do you think that’s the kind of experience we need? Someone who’s going to take and look after, as he did, his friends on Wall Street and bail them out at the expense of Main Street America?”
Good question. I’d like to hear Romney’s answer.
By: Eugene Robinson, Opinion Writer, The Washington Post, May 24, 2012
“The Governor Behind The Curtain”: Bain Capital Is Not Just Fair Game, It’s Beyond Fair Game
Obama supporters are seething and the RNC is dancing with delight in the aftermath of Newark Mayor Cory Booker’s nonsensical comparison of ads exposing Mitt Romney’s real record on job creation with racially tinged attacks on Barack Obama’s former pastor.
The RNC thinks that it caught the Dems with their pants down, inadvertently admitting that Romney’s work at Bain Capital should be off limits. But the indisputable fact is that Romney’s experience at Bain is completely fair game — Romney himself made that choice when he decided to present it as his chief qualification for the presidency. In fact, it’s beyond fair game: if this election is truly about jobs and the economy, then Bain is one of the only games in town.
Romney, attempting to shed his record as Massachusetts governor as fast as he can, has chosen to run almost exclusively on his record as a “job creator” at Bain. Pay no attention to the governor behind the curtain, whose state ranked 47th of 50 states in job creation during his term! In the process, he’s mixed up some of his “job creation” numbers and cherry-picked the facts he’s chosen to tell the American people. Romney keeps telling us his side of the Bain story. But are we to completely ignore the very real stories of factories shut down and American jobs lost? Let’s hear all sides of the story. Isn’t that what elections are all about?
And let’s also have an honest conversation about whether or not Romney’s success in making money for investors through his position at Bain qualifies him to be president. Venture capital and private equity have a role to play in our economy. But making money for investors doesn’t mean that you know how to make the economy work for all Americans. As President Obama pointed out yesterday, the goal of a private equity firm is to create wealth, not jobs — most often, to make as much money as possible for a few investors. The goal of a president needs to be an economy that works for everybody. That’s a critical difference.
Both candidates agree that this election is about the fundamental direction that our country will take for the next four years. We should embrace this. How about this simple concept: Let’s have that full debate about all aspects of the relevant experience of both candidates and let the voters decide.
By: Michael B. Keegan, The Huffington Post, May 22, 2012
“Swiss Cheese Candidate”: Mitt Romney’s Campaign Places Most Of His Life Off Limits
It’s hard to escape the impression that Mitt Romney’s campaign is about everything but Mitt Romney.
In an era of personality-driven politics, he is running on a central idea—fixing the economy—without the personal flair and calculated charisma that often define White House contenders.
It’s not the world’s worst strategy for a guy who is never going to match Barack Obama on the charm front or feel comfortable chatting with the ladies of The View. Romney is nonetheless running almost neck and neck with the incumbent after a bruising primary battle.
But to the extent that many Americans remain uneasy with Romney, it may be because he reveals so little of himself.
Indeed, Romney has cordoned off major sections of his life, leaving him little to share beyond policy talking points.
If he has one passion in life, it’s business. But Romney barely talks about his experience at Bain Capital, because he doesn’t want to engage on the thousands of jobs lost when his former firm took over ailing companies and sometimes pushed them into bankruptcy. When he talks about Bain, it’s to play defense, as when the Obama campaign put out last week’s video featuring steelworkers who were cut loose when their Bain-owned factory shut down. (Yes, Newark, N.J., Mayor Cory Booker didn’t help the team by saying on Sunday that he is uncomfortable with such attacks on private equity, though he backtracked within hours. But how can Bain not be fair game for the president, given the nature of Romney’s campaign?)
The problem for Romney is that his job was to generate big profits for himself and his partners, not to serve as a job-creating agency, which is not exactly bumper-sticker material. So if Romney can’t talk with enthusiasm about his career as a capitalist—his central credential as a candidate—what can he talk about?
Well, he had a reasonably successful term as Massachusetts governor, the only elective office he’s ever held. But we don’t hear much about that. And the reason is hardly a mystery.
The centerpiece of his four years in Boston was a health-care plan passed with bipartisan support. But since Romneycare was the model for Obamacare, which brought the candidate so much grief during the primaries, he now treats it as radioactive.
As for the rest of his Massachusetts tenure, well, Romney doesn’t seem to be selling that either. He ran as a moderate—a pro-choicer, for example—and governed pretty much in that mold. In today’s Tea Party climate, Romney doesn’t want to remind Republicans that he was anything less than severely conservative. So that’s off the table, too.
What’s left? Romney seems determined not to talk about his faith. And there is a political downside. While The New York Times ran a largely positive and respectful front-page story on his Mormonism, it did include details that some would find off-putting, such as that he encouraged a working mother to quit her job so the church would bless her efforts to adopt a child.
My own feeling is that no one has any business demanding that Romney talk about his religion. But I don’t think he’s avoiding the subject solely because, say, evangelical Christians regard Mormonism with suspicion. He is essentially a private guy who believes that such matters are between him and his church, to the point that he won’t even boast about his missionary work as a young man.
But the expectations in our Oprahfied culture are that candidates are supposed to share, even overshare, on such matters. Asked about his favorite philosopher in one of his earliest debates, George W. Bush answered: “Christ, because he changed my heart.” (Bush also spoke about kicking the drinking habit.) Obama’s embrace of religion is such that he took his book title, The Audacity of Hope, from his pastor, Jeremiah Wright. (He also wrote about taking drugs as a young man.)
But Romney’s religion is more closed to outsiders than most, and he doesn’t seem to have many sins to confess, as Mormons don’t drink or smoke. So that part of Mitt also remains behind a curtain.
What remains is a kind of Swiss-cheese cutout of a life. Yes, Romney helped turn the Salt Lake City Olympics into a success, but that’s not enough to win the gold medal.
Romney doesn’t even talk much about his hobbies. Sports fan? I have no idea. Movie buff? Who knows? He once talked about hunting varmints, but that drew ridicule. Romney’s wife, Ann, brings a warm touch to describe the unzipped Mitt, but her husband remains decidedly zipped up.
Maybe Romney is running as the anti-charisma candidate. Maybe his team has decided to turn a weakness into a strength: if he can’t match the lofty orator, perhaps he can PowerPoint his way to the presidency by promising results. But on some level, Romney needs to find a way to move beyond bullet points in painting a picture of who he is.
By: Howard Kurtz, The Daily Beast, May 22, 2012
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