Pants On Fire-- In this Case, Mitt Romney's Well-Pressed Jeans
I retired from Warner Bros before Bain formed a consortium of "investors" to come in and take over the company. AOL's Steve Case and his cronies had pretty much pillaged it and left it on the side of the road heaving; Bain was there for whatever could be picked off the bones. It was painful, even from afar, to watch one of the iconic companies of the country being utterly destroyed for the ruthless greed of the vulture capitalists Mitt Romney had forged into an ugly weapon. I hope you already watched The King of Bain, but it's just a fraction of the story.
This is hardly the first time I've told the story, so unless you're new here, you already know that I was a Warner Music divisional president. I ran Reprise Records. The key to running a record label, like running almost any business, is to balance short-term viability with long-term investment. Without a successful short term, you're out of business. Without a successful long term, you have no future. When Bain came along, the decision was made that there would be no future.
Investing in the future, like developing new artists, costs money. But Bain wanted to drain every available cent out of the company and into their own pockets. No future-- not for the employees, not for the artists, not for actual investors (as opposed to the predators) and, in this case, not for our nation's culture. They killed a company that took decades to build and that was interwoven in the dreams of countless people, generations of people. But Mitt Romney and his cronies had different dreams, dreams of sociopathic, unrelenting greed. Ari Berman at The Nation hammered out some of the unsavory details Friday:
In recent days Mitt Romney has strenuously defended his tenure at Bain Capital, lauding his former employer as a classic success story of free-market capitalism and lambasting his opponents on the left and right for practicing the “bitter politics of envy.”
In his New Hampshire primary speech, Romney claimed that “President Obama wants to put free enterprise on trial” and “turn America into a European-style entitlement society.” In Romney’s telling, Obama relies on government for his solutions, while Mitt draws his inspiration from the power of the free market. There are winners and losers in the free market, this argument goes, and it’s not the government’s job to determine who they are. At a recent debate, Romney said that government “by and large…gets in the way of creating jobs.”
But a closer look at Bain’s record under Romney reveals that the company relied on the very government subsidies that Romney and Tea Party conservatives routinely denounce as “crony capitalism.” The Los Angeles Times ran a big story yesterday about Bain’s investment in Steel Dynamics, which received $37 million in subsidies and grants to build a new plant in DeKalb County, Indiana. An analyst at the Cato Institute called it “corporate welfare.”
Romney has recently pointed to Steel Dynamics as one of his success stories at Bain, including in a new ad, which contributed to the 100,000 net jobs he’s claimed to have created at the firm (an incorrect figure he’s subsequently had to walk back). He never mentions that government subsidies played a major role in ensuring that success.
If the gentlemanly Berman doesn't come out and call Romney a flat-out liar, Paul Krugman has no such compunctions. Yesterday he penned an unambiguous blogpost, Untruths, Wholly Untrue, And Nothing But Untruths, pointing out that Romney is "running a campaign so dishonest that it makes Bush look like a model of truth-telling."
I mean, is there anything at all in Romney’s stump speech that’s true? It’s all based on attacking Obama for apologizing for America, which he didn’t, on making deep cuts in defense, which he also didn’t, and on being a radical redistributionist who wants equality of outcomes, which he isn’t. When the issue turns to jobs, Romney makes false assertions both about Obama’s record and about his own. I can’t find a single true assertion anywhere.
And he keeps finding new frontiers of falsehood. The good people at CBPP find him asserting, with regard to programs aiding low-income Americans, thatWhat unfortunately happens is with all the multiplicity of federal programs, you have massive overhead, with government bureaucrats in Washington administering all these programs, very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them.which is utterly, totally untrue. Administrative costs are actually quite small, and between 91 and 99 percent of spending, depending on the program, does in fact go to beneficiaries.
At this rate, Romney will soon start lying about his own name. Oh, wait.
And that was right on top of Krugman's Friday column correcting Romney's idiotic, if self-serving, assertion that America is just like-- or at least should be run just like-- a corporation. The key to Romney's campaign is his assertion that "what we need to fix our ailing economy is someone who has been successful in business."
In so doing, he has, of course, invited close scrutiny of his business career. And it turns out that there is at least a whiff of Gordon Gekko in his time at Bain Capital, a private equity firm; he was a buyer and seller of businesses, often to the detriment of their employees, rather than someone who ran companies for the long haul. (Also, when will he release his tax returns?) Nor has he helped his credibility by making untenable claims about his role as a “job creator.”
But there’s a deeper problem in the whole notion that what this nation needs is a successful businessman as president: America is not, in fact, a corporation. Making good economic policy isn’t at all like maximizing corporate profits. And businessmen-- even great businessmen-- do not, in general, have any special insights into what it takes to achieve economic recovery.
Why isn’t a national economy like a corporation? For one thing, there’s no simple bottom line. For another, the economy is vastly more complex than even the largest private company.
Most relevant for our current situation, however, is the point that even giant corporations sell the great bulk of what they produce to other people, not to their own employees-- whereas even small countries sell most of what they produce to themselves, and big countries like America are overwhelmingly their own main customers.
Yes, there’s a global economy. But six out of seven American workers are employed in service industries, which are largely insulated from international competition, and even our manufacturers sell much of their production to the domestic market.
And the fact that we mostly sell to ourselves makes an enormous difference when you think about policy.
Consider what happens when a business engages in ruthless cost-cutting. From the point of view of the firm’s owners (though not its workers), the more costs that are cut, the better. Any dollars taken off the cost side of the balance sheet are added to the bottom line.
But the story is very different when a government slashes spending in the face of a depressed economy. Look at Greece, Spain, and Ireland, all of which have adopted harsh austerity policies. In each case, unemployment soared, because cuts in government spending mainly hit domestic producers. And, in each case, the reduction in budget deficits was much less than expected, because tax receipts fell as output and employment collapsed.
Now, to be fair, being a career politician isn’t necessarily a better preparation for managing economic policy than being a businessman. But Mr. Romney is the one claiming that his career makes him especially suited for the presidency. Did I mention that the last businessman to live in the White House was a guy named Herbert Hoover? (Unless you count former President George W. Bush.)
And there’s also the question of whether Mr. Romney understands the difference between running a business and managing an economy.
Like many observers, I was somewhat startled by his latest defense of his record at Bain-- namely, that he did the same thing the Obama administration did when it bailed out the auto industry, laying off workers in the process. One might think that Mr. Romney would rather not talk about a highly successful policy that just about everyone in the Republican Party, including him, denounced at the time.
But what really struck me was how Mr. Romney characterized President Obama’s actions: “He did it to try to save the business.” No, he didn’t; he did it to save the industry, and thereby to save jobs that would otherwise have been lost, deepening America’s slump. Does Mr. Romney understand the distinction?
America certainly needs better economic policies than it has right now-- and while most of the blame for poor policies belongs to Republicans and their scorched-earth opposition to anything constructive, the president has made some important mistakes. But we’re not going to get better policies if the man sitting in the Oval Office next year sees his job as being that of engineering a leveraged buyout of America Inc.
But leave it to Steve Benen to come up with an awesome list of Romney's Top 10 lies... of this week.
1. Romney told voters in New Hampshire, “I know what it’s like to worry whether you’re gonna get fired. There were a couple of times I wondered whether I was going to get a pink slip.”
That’s not true.
2. Romney argued in a debate, “[W]hat unfortunately happens is with all the multiplicity of federal programs, you have massive overhead, with government bureaucrats in Washington administering all these programs, very little of the money that’s actually needed by those that really need help, those that can’t care for themselves, actually reaches them.”
This is the exact opposite of the truth.
3. After winning the New Hampshire primary, Romney said of the president, “He lost our AAA credit rating.”
In reality, it was congressional Republicans who were responsible for the downgrade.
4. In the same speech, Romney said of Obama, “He apologizes for America”
Romney’s still lying.
5. Romney told a debate audience why he didn’t seek re-election as governor: “That would be about me. I was tryin’ to help get the state in best shape as I possibly could. Left the world of politics, went back into business.”
He’s lying-- Romney didn’t re-enter the private sector after leaving the governor’s office; he transitioned to a presidential campaign.
6. Romney talked about savings he’d find in the budget: “[T]he number one to cut is Obamacare. That saves $95 billion a year.”
Actually, that’s backwards. Repealing the Affordable Care Act would cost the nation billions and increase the deficit.
7. Romney argued that the Dodd-Frank financial regulatory bill “makes it harder for community banks to make loans.”
No, it doesn’t.
8. Romney argued during a debate, “[I]n the business I had, we invested in over 100 different businesses and net-net, taking out the ones where we lost jobs and those that we added, those businesses have now added over 100,000 jobs.
That’s so blatantly untrue, the Romney campaign has started moving the goal posts.
9. After being pressed on ads being run by his Super PAC, Romney said, “With regards to their ads, I haven’t seen ‘em.”
Romney then proceeded to recite the attacks in the ad, almost verbatim, making clear he’d both seen and memorized the ad.
10. Campaigning in New Hampshire, Romney insisted “European-style welfare” countries end up with a system that “creates poverty.”
Not only is that wrong, but when asked to support his statement, Romney lied and pretended he never said it.