The Misery of Mitt Romney
Ten years ago, George W. Bush was sworn in as America's first MBA President. Now, Mitt Romney wants to be the second. Two years after President Bush completed the worst economic record since Herbert Hoover, Romney the perpetual White House hopeful declared, "I spent my career in the private sector. I know how jobs are created and how jobs are lost." Especially, it turns out, the part about how jobs are lost.
Addressing New Hampshire Republicans Saturday, Governor Romney decried the state of the U.S. economy. "This is the Obama Misery Index, he said, "and it is at a record high. It's going to take more than new rhetoric to put Americans back to work--it's going to take a new president." In a Boston Herald op-ed Tuesday, Mitt regurgitated both his Obama Misery Index and "I know a thing or two about how jobs are created and how they are lost" talking points. At CPAC last month, Romney was clear about who that new president should be:
If I decide to run for President, it won't take me two years to wake up to the job crisis threatening America. And I won't be asking Tim Geithner how the economy works-or Larry Summers how to start a business.
If Mitt's line sounds familiar, it should. In his latest incarnation, the man Michael Kinsley deemed "the most transparent candidate" is once again campaigning to be America's CEO.
On the stump in Florida three years ago, Romney made the case that his Harvard MBA, his tenure at Bain, his Salt Lake Olympics experience and his stewardship of Massachusetts made him uniquely qualified him to lead during tough economic times. The multimillionaire venture capitalist told Florida voters:
"I know how America works because I spent my life in the real economy...I won't need a briefing on how the economy works. I've been there. I know how the economy works."
Days earlier, Romney offered the reader's digest version of his resume:
"I've spent my life, 25 years...in the world of business. I know why jobs come and go."
As his record shows, Mitt Romney is all too familiar with why jobs go - out of state, out of the country or just go altogether.
In 1994, Romney's career as a vulture capitalist boomeranged against him in his Senate race against Ted Kennedy. The tale of SCM, a northern Indiana-based stationery company purchased by Ampad, a firm owned by Romney and a group of investors, came to dominate the campaign. As the New York Times recounted, in that instance in the vulture capitalist label was well-earned in the subsequent crackdown on the workers there:
Management has shed 41 of 265 blue-collar jobs, cut wages, tripled some workers' health insurance payments, abolished most of their seniority rights and junked the prior management's union contract, which had two years to run.
Romney's record in Massachusetts also loses some its luster upon closer inspection. While his campaign this week boasted of creating 57,600 jobs during Romney's tenure from 2003 to 2007, Northeastern University economist Andrew Sum pointed out that Massachusetts' performance lagged well behind the national average. As Reuters reported:
"The state lagged the U.S. average during that period in job creation, economic growth and wage increases.
As a strict labor market economist looking at the record, Massachusetts did very poorly during the Romney years, he [Sum] said. "On every measure you've got, the state was a substantial under-performer."
Two weeks ago, the New York Post, surely no friend of Democrats, documented Mitt Romney's career as a vulture capitalist. As John Kosman detailed, Romney didn't merely produce a "spotty jobs record" when he ran Bain Capital. During a time when he retained a controlling stake, his company reaped huge paydays on investments in firms that later went belly up.
For example, the leveraged buyout of medical testing company Dade Behring by Bain and Goldman Sachs in 1994 was followed eight years later by Dade's failure in 2002. But not until Bain Capital had extracted a rich reward:
Bain reduced Dade's research and development spending to 6 to 7 percent of sales, while its peers allocated between 10 and 15 percent. Dade in June 1999 used the savings as part of the basis to borrow $421 million. Dade then turned around and used $365 million from the loan to buy shares from its owners, giving them a 4.3 times return on their investment.
Bain's slash and burn business model didn't end there. As Kosman explained in the Post:
Bain in 1988 put $5 million down to buy Stage Stores, and in the mid-'90s took it public, collecting $100 million from stock offerings. Stage filed for bankruptcy in 2000.
Bain in 1992 bought American Pad & Paper (AMPAD), investing $5 million, and collected $100 million from dividends. The business filed for bankruptcy in 2000.
Bain in 1993 invested $60 million when buying GS Industries, and received $65 million from dividends. GS filed for bankruptcy in 2001.
Bain in 1997 invested $46 million when buying Details, and made $93 million from stock offerings. The company filed for bankruptcy in 2003.
Of course, Romney's tenure at Bain also produced some big wins - and job gains - at firms like Staples and Domino's Pizza. But as it turns out, Romney's old employer was also creating jobs in Iran.
That revelation came to light four years ago in the run up to Romney's failed 2008 bid for the Republican nomination. His pathetic 24-hour crusade for disinvestment from Iran lasted just as long as it took the press to uncover Bain's business connections with Tehran.
Following the lead of once and future Israeli Prime Minister (and one-time colleague at Boston Consulting Group) Benjamin Netanyahu, Romney began his grandstanding on Iranian disinvestment by targeting the Democratic-controlled states of New York and Massachusetts. On February 22, 2007, Romney sent letters to then New York Governor Eliot Spitzer, Senators Chuck Schumer and Hillary Clinton as well as state comptroller Thomas P. DiNapoli urging a policy of "strategic disinvestment from companies linked to the Iranian regime."
As it turns out, scrutiny begins at home. As the AP detailed, Romney's former employer (Bain and Co.) and the company he founded (Bain Capital) had links to very recent Iranian business deals. Caught flat-footed by his hypocrisy that took the AP less than a day to uncover, Romney feebly responded that his crusade didn't apply to him:
"This is something for now-forward. I wouldn't begin to say that people who, in the past, have been doing business with Iran, are subject to the same scrutiny as that which is going on from a prospective basis."
As Chuck Todd and his NBC News colleagues suggested Monday, the "now-forward" Romney 3.0 launched this weekend in New Hampshire looks a lot like the buggy 1.0 version. After his flip-flopping failure as a hard right social conservative in 2008 and comic retreat from his signature achievement on health care, Mitt Romney is returning to his political roots as a proven business leader. Unfortunately for Romney, Americans have already seen this picture and already know how it ends.
Mitt Romney may want to be the Second MBA President. But Americans still haven't recovered from the first one.
UPDATE: The DNC responded to Romney's latest attack with a catalog of Mitt's dismal record of job creation in Massachusetts and job destruction at Bain. In a nutshell, "Romney's private sector career consisted of profiting off of laying off thousands of workers. Romney's job creation record in Massachusetts was one of the worst in the country."
- Juan Cole/Informed Comment
- Steve Benen at MaddowBlog
- Sam Seder
- The Political Carnival
- The Moderate Voice
- rude pundit
- skippy the bush kangaroo
- Mock, Paper, Scissors
- Politics TV
- Talk Left
- Bob Cesca
- Raw Replay
- Arthur Silber
- Nicole Sandler - Radio or Not
- Whiskey Fire