Romney’s case shatters

By Max J. Castro
majcastro@gmail.com

A funny thing happened to Mitt Romney’s talking point that as a successful businessman he would do a much better job in creating jobs in the U.S.A. than Barack Obama, community organizer, corporate lawyer, and professional politician has done or could ever do. Truth intruded.

The reality check came in the form of a Washington Post article that describes how Bain Capital, the company that Mitt Romney founded and ran, indeed was very good at creating jobs – in India, China, and other low-wage countries.

In a June 21 piece in the Post, Tom Hamburger wrote:

“Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.

“During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission.”

Mitt Romney’s self-proclaimed prowess as a job creator had been exposed as a farce long before the Post came along to make minced meat of what remained. During the period that Mitt Romney was governor of Massachusetts, which in a knowledge-based, high-tech global economy has the formidable advantage of hosting Harvard, MIT, and TUFTS, among many other top centers of higher learning, job creation in the state ranked among the very lowest in the nation. If Romney couldn’t cut the mustard in the state with the highest percentage of PhDs in the country, what could he do for Indiana, Alabama, Kansas, and Nevada?

If, in normal times, Romney did a lousy job creating jobs in a place with an endowment of human capital unequalled in the world, how can he claim he could create millions of jobs in a nation with an economy still suffering from the devastation wrought by financial wheeler-dealers cut from the same profit-over-all cloth as the Republican contender?

Far too few in the corporate media have posed such elementary questions because their overlords are of the same stripe as Romney and/or because they are terrified that the right-wing propaganda machine would attack them as members of the (non-existent) liberal media cabal.

The information valued-added of the Washington Post story is considerable, not only because it breaks with the norm but also because it exposes in detail the mendacity and hypocrisy at the core of Romney’s main sales pitch to the American people.

The Post piece reports that regarding outsourcing …“Romney in recent months has lamented the toll it’s taken on the U.S. economy. He has repeatedly pledged he would protect American employment by getting tough on China.

“‘They’ve been able to put American businesses out of business and kill American jobs,’ he told workers at a Toledo fence factory in February. ‘If I’m president of the United States, that’s going to end.’

“Speaking at a metalworking factory in Cincinnati last week, Romney cited his experience as a businessman, saying he knows what it would take to bring employers back to the United States. ‘For me it’s all about good jobs for the American people and a bright and prosperous future…’”

To say that the Romney campaign’s response to the Post story is lame would be far too generous. Romney claims the article confounds outsourcing – to which he admits – and off-shoring, which he decries. It is a case of a distinction without a difference – to the third power.

Both outsourcing and off-shoring pursue the same objective: a cheap, powerless labor force. In some cases a company who was the beneficiary of a Bain outsourcing deal may have decided to relocate jobs from a high-wage, strong-union state such as New York not to China but to say, Texas. Texas may be more convenient because it is closer to the company’ market and the supply chain is simpler and shorter. Plus, in corporate-dominated Texas, unlike China in which the Communist Party still has the last word, for an American company to navigate the governmental bureaucracy is a cinch. Best of all, Texas has one of the lowest wages in the country, unions are virtually powerless, and the state and federal legal systems can be relied on to protect property rights. What’s not to like?

Still, companies with different circumstances who received outsourced jobs from Bain chose at one point or another to send some or all of the jobs overseas. In either case, for American workers, it amounted to basically the same thing: a raw deal.

As usual, Paul Krugman, Princeton Professor, Nobel laureate in economics, and New York Times columnist nailed it:

“Why, for example, do many large companies now outsource cleaning and security to outside contractors? Surely the answer is, in large part, that outside contractors can hire cheap labor that isn’t represented by the union and can’t participate in the company health and retirement plans. And, sure enough, recent academic research finds that outsourced janitors and guards receive substantially lower wages and worse benefits than their in-house counterparts.
“Just to be clear, outsourcing is only one source of the huge disconnect between a tiny elite and ordinary American workers, a disconnect that has been growing for more than 30 years. And Bain, in turn, was only one player in the growth of outsourcing. So Mitt Romney didn’t personally, single-handedly, destroy the middle-class society we used to have. He was, however, an enthusiastic and very well remunerated participant in the process of destruction; if Bain got involved with your company, one way or another, the odds were pretty good that even if your job survived you ended up with lower pay and diminished benefits.

“In short, what was good for Bain Capital definitely wasn’t good for America.”

Moreover, for all his pseudo-nationalist threats to “get tough on China,” Romney is no economic nationalist. He has enormous wealth deposited in many countries of the world. Almost all are tax havens so the amounts are secret. Romney is no job creator; he doesn’t put his money where his mouth is or uses it to put his fellow citizens to work. He is, however, a master at avoiding taxes.

Romney’s senseless chatter has gotten to the point that harsh criticism is even cropping up in conservative business circles, as this bit from Forbes reveals: "Mitt Romney regularly reveals his own economic illiteracy; his constant bashing of China potentially more harmful than anything Obama’s so far dreamed up. "

But folks at Forbes need not worry. Romney won’t take on China. The man is not suicidal, and not so long ago some of his good friends were Chinese manufacturers. Romney’s talk is all phony baloney, like almost everything else about him. The only real thing about Mitt is his money and, perhaps, his hair.