The Bain of Mitt’s Existence?
by Josh Hedtke | UCLA
As summer 2012 kicks off, President Obama has begun to ramp up attacks on Romney’s record at Bain Capital and has announced plans to further attack the GOP candidate’s record as governor of Massachusetts. Recently, the Obama campaign released two videos relaying the points-of-view of those who lost jobs because of Bain Capital purchases. In response, the Romney campaign released a video relaying accounts of job creation and growth due to Bain’s involvement at an Indiana steel company.
The chief criticisms leveled by Obama and the left at Romney’s record at Bain are demagogic and illogical. The Romney campaign’s defense thus far of his record at Bain has been misguided.
From a political standpoint, I would say the reason why Romney’s record at Bain is drawing so much fire (especially lately) is because it’s what he is primarily running on. He can’t run on his record as governor because he knows it’ll be compared to Obama’s; think Romneycare vs. Obamacare. That’s a losing formula when you take into account the fact that, in a direct comparison, the vogue Obama would surely crush a reserved, filthy rich, hyper-traditional Mormon at the polls. And so the Romney campaign is trying to draw this contrast instead: on one side a man who knows business, on the other side a man who knows only government.
The man who knows only government has criticized Romney by calling him a “job destroyer.” In a video on the Obama campaign website, former GST Steel workers from Missouri talk about how Bain purchased GST Steel and then ultimately ran it into bankruptcy. Former workers say that what Bain did “wasn’t capitalism” but rather “bad management.” One worker describes Romney as a “vampire who sucked the life” out of the steelworkers. Another worker describes watching the last bit of steel being made before the plant’s closing as like “watching a friend bleed to death.” And so on. Phrases such as “the middle class will go extinct” and “job destroyer” echo throughout the six-minute video. According to the video, 750 jobs were lost when GST Steel closed down.
Now for the rebuttal. The Romney campaign released a video proclaiming that Bain’s work with Steel Dynamics in Indiana helped create 6,000 jobs. A worker in the video calls the company “a perfect entrepreneurial story.” The Romney video is one-sixth as long as the Obama video and one-twelfth as demagogic, but it’s 100 percent as misguided.
So what is one to think of these videos? Well, uh, geez… um 6,000 jobs created minus 750 jobs destroyed equals 5,250 total jobs created. Well alright then, Romney’s going to make a great president because he’s created jobs overall! This debate over whether Romney was either a job destroyer or job creator at Bain means nothing in terms of Romney’s efficacy as the potential president. The notion that he’s a job destroyer is simply a demagogic appeal to the pathos of the (mainly unionized) working classes. The rebuttal that he’s a job creator is a misguided attempt to portray Romney as something he’s not.
It’s as if Romney’s performance at Bain relates directly to his performance as the would-be president. It’s as if a President Romney could either press a “job create” button or a “job destroy” button. It’s as if the federal government is anything like a business, for that matter. The arguments fomented by the left are illogical and the defense offered by the Romney campaign has done nothing to assert that.
The Romney camp has done one thing correct so far, though. They have highlighted that Bain Capital had a hand in creating many jobs, perhaps more than it “destroyed.” Romney’s top-advisor Eric Fehrnstrom went as far as saying Romney has created more net jobs in his lifetime than Mr. Obama has as president. Whether or not this statement is factually correct is beside the point. It’s funny; whenever there is a political debate about economics, discussion regarding the fundamental laws of economics is dropped in favor of emotionally-charged rhetoric. When GST Steel closed, 750 people lost their jobs. That must have been terrible for them. But what about all the people that would never have secured good jobs if it weren’t for businesses started with the help of Bain? The fundamental laws of economics teach about the allocation of resources. If they are not allocated in one place (GST Steel), they will be allocated elsewhere (Steel Dynamics). Yet we only hear about the people who lost jobs, not the people who never got them.
But, as I’ve said, the job creator vs. job destroyer argument is still a ridiculous one for Mitt to get into. Instead of counting the number of jobs he’s created, Mitt should respond forcefully to attacks like this from Obama: “If your main argument for how to grow the economy is ‘I knew how to make a lot of money for investors,’ then you’re missing what this job is about,” and “It doesn’t mean you weren’t good at private equity, but that’s not what my job is as president. My job is to take into account everybody, not just some. My job is to make sure that the country is growing not just now, but 10 years from now and 20 years from now.” The lofty implications here are that Mr. Obama indeed knows exactly how the job of president should be approached and that he has thus far successfully “taken everybody into account.” The most glaring fallacy here being that the country’s economy is currently growing and that, under the crushing burden of $4.9 trillion of debt added by Obama (for a total of about $15.5 trillion), the economy will continue to grow 10 to 20 years from now. Mr. Romney should continue to emphasize points like these and stay away from the emotionally-charged and difficult-to-win “job destroyer” debate.
There is nothing about Mr. Romney’s experience at Bain that makes him the wrong choice for this country (as Mr. Obama has stated). Moreover, there have been noteworthy comparisons made between Romney’s time at Bain and Mr. Obama’s cavalier spending on projects like Solyndra. Romney picked winners and losers as head of Bain, and those that were laid off as a result of his decisions undoubtedly lost. But how is that so different from spending $535 million of taxpayers’ money on a failed company? If instead the taxpayers were allowed to keep that money, they may have used it to purchase goods and thus provide employment at some retailer. Perhaps the wasting of $535 million tax dollars resulted in the loss of a few unseen jobs.
The Bain Capital issue is a sticky one for both Romney and President Obama. Nevertheless, Mitt’s history at Bain is far from the bane of his existence.Josh is from San Diego