economy | who is willard milton romney?

[…] “Neither Hillary nor McCain can claim the economy as an especial preserve,” argues Dick Morris in a http://www.dickmorris.com blog titled McCain may win, Romney can’t

Can Romney? Inexplicably, the McCain campaign has not spoken of the layoffs that must have accompanied Romney’s efforts to “turn around” failing companies. Hedge funds are notorious for cutting jobs and the Clintons will make Mitt eat every single one. McCain has no such vulnerability and, hopefully, will make Romney’s layoffs an issue before Super Tuesday.So McCain can win and Romney won’t. That’s the long and the short of it […]

More on this issue:

“On the stump in economically struggling Michigan and South Carolina recently, Mitt Romney has been making the case that ‘it always makes sense to fight for every single good job,'” writes Lisa Lerer for the Politico in an article titled Romney changes tune on layoffs

But this position seems to be at odds with the Republican contender’s one-time role as chief executive officer of Bain Capital, a large private equity firm.

In 1992, the firm acquired American Pad & Paper. By 1999, the year Romney left Bain, two American plants were closed, 385 jobs had been cut and the company was $392 million in debt.

The next year, Ampad was forced into bankruptcy.

Bain Capital and Goldman Sachs bought Dade International for about $450 million in 1994.

The firm quickly fired or relocated at least 900 workers. Over the next several years, it sunk increasingly into debt and laid off 1,000 workers.

In 2002 — after Romney had left Bain — it filed for Chapter 11 bankruptcy protection.

A 1997 buyout of LIVE Entertainment for $150 million resulted in 40 layoffs, roughly one in four of the company’s 166 workers.

The job cuts affected all aspects of the company, from production and acquisition to legal and public relations.

In 1997, Bain bought a stake in DDI Corp., a maker of electronic circuit boards.

Three years later, Bain took the company public and collected a $36 million payout.

But by August 2003, the company filed for bankruptcy protection, laying off more than 2,100 workers.

Four months after the bankruptcy, unhappy shareholders sued company executives, the initial public offering underwriters and Bain for mismanaging the IPO and failing to disclose company financial information. (Romney was not named in the suit.)

In March, all the defendants settled for $4.4 million.

Some job losses can be a natural part of the private equity business.

Firms like Bain Capital buy controlling stakes in troubled companies, then revamp them and sell them for a profit — a process that can include management changes and “cost-cutting,” often code for job cuts […]

Yuh-huh. See:

yours &c.
dr. d.g.

[…] “It’s the perfect opportunity for a Wall Street Republican to make the case that what the country needs now is good business mind, not a former war hero,” writes Rex Nutting, Washington bureau chief of MarketWatch, in a MarketWatch article titled Romney running for tycoon in chief; Commentary: Will business background be a plus?

Unfortunately for Romney, that appeal isn’t working in the Republican primaries.

Polls show that national security concerns continue to rank much higher among Republican voters, even if worries about the economy are growing. According to the Rasmussen Poll, Republican voters in Florida would rather pick a commander in chief than a chief executive for the U.S. economy.

Romney’s support has soared over the past two weeks, especially in Florida. He’s tied with Sen. John McCain in the latest polls ahead of Tuesday’s vote. But the Romney surge isn’t related to the bad news about the economy; rather, he’s picking up conservative voters stranded by Fred Thompson’s withdrawal from the race and Huckabee’s partial pullback from Florida.

Romney leads McCain among conservative voters, and he’s hoping that his message of economic competence could gain him support among voters who see themselves as moderates, where McCain holds a sizable lead.

Romney has been going directly after McCain, his chief rival for the nomination, accusing him of being out of touch on the economy. He has mocked McCain for saying “economics is not something I’ve understood as well as I should.”

McCain has fired back, saying that while Romney was making millions and working for “profit,” he was serving “patriotism.”

So far, the economic themes haven’t been registering for Romney.

According to pollster Scott Rasmussen, “McCain actually holds a slight lead over Romney among voters who name the economy as the top issue.” Seven of 10 Republicans say the best thing the government can do to help the economy is get out of the way, which is more McCain’s view than Romney’s.

Maybe Romney understands the economy, but it looks as if it’s McCain who understands Republicans.

If Romney can get past McCain and win the nomination, he’ll try to persuade independents and hesitant Democrats that his business background qualifies him to be president.

But if he does make it past the convention, it’ll be an uphill struggle to run as a tycoon after the mess Wall Street has made of the economy, with its overhyped dotcoms, its phony accounting, its bloated bonuses, and its toxic mortgages […]

The emphases are ours, all ours.

We heartily concur. See:

yours &c.
dr. g.d.

“In early 1995, as the Ampad paper plant in Marion, Ind., neared its shutdown following a bitter strike, Randy Johnson, a worker and union official, scrawled a personal letter to Mitt Romney, pouring out his disappointment that Romney, then chief executive of the investment firm that controlled Ampad, had not done enough to settle the strike and save some 200 jobs,” writes Robert Gavin of the Boston Globe in an article titled As Bain slashed jobs, Romney stayed to side

“We really thought you might help,” Johnson said in the handwritten note, “but instead we heard excuses that were unacceptable from a man of your prominent position.”

Romney, who had recently lost a Senate race in which the strike became a flashpoint, responded that he had “privately” urged a settlement, but was advised by lawyers not to intervene directly. His political interests, he explained, conflicted with his business responsibilities.

Now, Romney’s decision to stay on the sidelines as his firm, Bain Capital, slashed jobs at the office supply manufacturer stands in marked contrast to his recent pledges to beleaguered auto workers in Michigan and textile workers in South Carolina to “fight to save every job.”

Throughout his 15-year career at Bain Capital, which bought, sold, and merged dozens of companies, Romney had other chances to fight to save jobs, but didn’t. His ultimate responsibility was to make money for Bain’s investors, former partners said.

Much as he did when running for Massachusetts governor, Romney is now touting his business credentials as he campaigns for president, asserting that he helped create thousands of jobs as CEO of Bain. But a review of Bain’s investments during Romney’s tenure indicates that job growth was not a particular priority.

Romney’s approach at Bain Capital was more reflective of the economic philosophy articulated by his opponent, John McCain: to acknowledge that some less efficient jobs will be lost and concentrate on creating new jobs with potential for higher growth.

In many cases, such as Staples Inc., the Framingham retailer, and Steel Dynamics Inc., an Indiana steelmaker, the companies expanded and added thousands of jobs. In other cases, such as Ampad and GS Industries, another steelmaker, Bain-controlled companies shuttered plants, slashed hundreds of jobs, and landed in bankruptcy.

But in almost all cases Bain Capital made money. In fact, the firm earned substantially more from Ampad than Staples. Staples returned about $13 million on a $2 million investment; Ampad yielded more than $100 million on $5 million, according to reports to investors.

“It’s not that employment grows, it’s that their investment grows,” said Howard Anderson, a professor at MIT’s Sloan School of Management. “Sometimes its expansion, and sometimes it’s shutting things down” […]

[…] Bain acquired GS Industries in 1993. The steelmaker borrowed heavily to modernize plants in Kansas City and North Carolina, as well as pay dividends to Bain investors. But as foreign competition increased and steel prices fell in the late 1990s, the company struggled to support the debt, according to Mark Essig, the former CEO. GS filed for bankruptcy in 2001, and shut down its money-losing Kansas City plant, throwing some 750 employees out of work.

Ampad, too, became squeezed between onerous debt that had financed acquisitions and falling prices for its office-supply products. Its biggest customers – including Staples – used their buying power and access to Asian suppliers to demand lower prices from Ampad.

Romney sat on Staples’s board of directors at this time.

Creditors forced Ampad into bankruptcy in early 2000, and hundreds of workers lost jobs during Ampad’s decline. Bain Capital and its investors, however, had already taken more than $100 million out of the company, in debt-financed dividends, management fees, and proceeds from selling shares on public stock exchanges.

By the time Ampad failed, Randy Johnson, the former union official in Marion, Ind., had moved on with his life. After the Indiana plant shut down, he worked nearly six months to help the workers find new jobs. He later took a job at the United Paperworkers union.

“What I remember the most,” said Johnson, “were the guys in their 50s, breaking down and crying.”

In his reply to Johnson’s letter, Romney said the Ampad strike had hurt his 1994 bid to unseat Senator Edward M. Kennedy, and no one had a greater interest in seeing the strike settled than he.

“I was advised by counsel that I could not play a role in the dispute,” Romney explained, adding, “I hope you understand I could not direct or order Ampad to settle the strike or keep the plant open or otherwise do what might be in my personal interest” […]

Yuh-huh. See:

yours &c.
dr. g.d.

“MIAMI — As the economy takes center stage in the Republican presidential race, Mitt Romney spoke in unusually personal terms about his own business experience during remarks to the Latin Builders Association this morning,” writes the credulous Scott Conroy in a cbsnews blog burst titled Romney: Making Layoffs “An Awful Feeling”

“I’ve had settings where I’ve had to lay people off,” Romney said. “It’s an awful feeling. No one likes laying people off. Someone who thinks you’re a bad person if you lay someone off doesn’t understand. You feel bad. It’s probably the hardest thing I’ve done in business was asking a person to be let go.”

Remarks:

(1) Follow Romney’s “reasoning”

(a) Someone who thinks you’re a bad person if you lay someone off doesn’t understand.

(b) You feel bad.

(c) It’s probably the hardest thing I’ve done in business was asking a person to be let go.

Note the passive voice in (c)—Romney’s awkward attempt to obscure his own agency—not lay a person off, or let a person go, but “ask a person to be let go.” But this bizarre locution implies consent, as if those “to be” laid off were given a choice!

(2) So we should not resent those who like Romney lay people off because they feel bad about it? Is Romney serious? Is Romney really making the case that his feelings are more important that peoples’ jobs?

(3) Does it not follow that Romney can excuse himself of any act by referring to his hurt feelings? Yes, I campaigned negatively against McCain and Huckabee—I lied, and I distorted their records—but anyone who would call me a bad person just doesn’t understand—I felt really bad about it.

(4) How do you reconcile Romney’s appeal to the sufferings of fund managers who engineer layoffs to benefit investors at the expense of workers with Romney’s repeated promise “to fight for every job”:

[…] [Romney:] “You’ve seen it here, in furniture. You’ve seen the textile industry, where Washington watched, saw the jobs go and go,” the Republican presidential contender told a group of senior citizens at the Sun City Hilton Head Retirement Center.

“I’m not willing to declare defeat on any industry where we can be competitive. I’m going to fight for every job,” Romney said […]

Answer: You can’t. The two positions cannot be reconciled.

Back to the credulous Conroy:

Throughout the campaign, Romney has touted his success in the consulting and venture capital fields in contrast to the “lifelong politicians” in the race. But yesterday, Mike Huckabee alluded to a negative impact of Romney’s days at Bain Capital, as the former Arkansas governor continues to brandish his own brand of economic populism.

“And I would also suggest one needs to look very carefully at what exactly the business record is,” Huckabee said. “If it’s taking companies who are in serious trouble, buying them when they are in pain, selling off their assets, and then making a huge profit off of it, that’s not something a lot of Americans can relate to, except those who have lost their jobs because of those kinds of transactions. If that’s the turnaround, there are a lot of Americans who would really not like to see their own lives turned around quite like that” […]

Yes. We have harped on these finely tuned strings for a long, long time:

Back to the credulous Conroy:

[…] “If you haven’t changed and improved the way you provide your product to the marketplace, your competitor will, and ultimately you’ll be gone,” Romney said. “Constant improvement, constant change is called for. And that’s where I spent my life, where you have, in the private sector” […]

Here is the problem: the marketplace operates according to different rules than the state. Citizens have a right to expect continuity from the decisions and operations of a state. Citizens also have a right to expect continuity from their elected officials. For example, Romney’s sudden conversion to the notion of Washington supervising industry, here neatly summarized and commented upon by the estimable Daniel Larison:

[…] There is a developing conventional wisdom that Mitt Romney primarily appeals to and represents “economic conservatives” within the Republican coalition, a view that has not been shaken very much by the candidate’s interventionist promises to quintuple government spending on technology research to benefit Michigan’s battered auto industry. Romney backers seem to be unfazed by this, just as his record of signing universal, government-mandated health care into law did not deter them from labeling him sound on economic and fiscal policy, but among those not already declared for the former governor, Romney’s latest round of telling his audience whatever they wanted to hear has gone over very badly.

Romney must be one of the first Republican candidates ever to be likened to a Soviet premier on account of his economic proposals […]

[…] There are two things particularly striking about Romney’s appeal to Washington for the solution to Michigan’s economic woes. The first is that Romney has partly built his “transformation” campaign around the argument that the federal government has been overspending, but has vowed to increase spending within the “first 100 days” in a transparent (and successful) effort to buy votes in Michigan—his own fortune is no longer sufficient to buy supporters, so now he must draw on our money as well. The second, more telling problem is that Romney embodies not only the image of corporate America, but also possesses the mentality and ideology of the free-trading globalists who policies have worked to reduce manufacturing in Michigan and across the Midwest and the country to its present state. Even if Romney’s proposals were sincere (doubtful) and even if they were efficacious (unlikely) in ameliorating some of the damage of broader trade policy, he has stated that he has every intention of pushing for additional free-trade agreements and exacerbating the causes of de-industrialization and job losses. It is therefore all the more disturbing that someone who embraces the policies that have contributed to the economic ravaging of his home state can win over a plurality of voters based on little more than sentiment and promises to make them more dependent on the government that has failed them […]

yours &c.
dr. g.d.

“NEW YORK (Reuters) – Recalling his days as a businessman, Republican U.S. presidential contender Mitt Romney often cites the 25 years he spent in the private sector creating jobs,” which apparently isn’t true, writes Michael Flaherty of reuters.com in an analytical discursus titled Private equity past may cloud Romney’s jobs pitch

But as the leader of private equity firm Bain Capital from 1984 to 1999, Romney’s record shows that while some of the firm’s investments helped companies grow, others ended in thousands of layoffs, and in some cases, bankruptcy.

Layoffs are a common result of private equity takeovers, with Bain Capital no exception. Although Romney is credited with helping make Bain the private equity powerhouse it is today, buyout firms are known more for cutting jobs — not creating them.

“I believe most Americans want their next president to remind them of the guy who they work with, not the guy who laid them off,” Republican rival Mike Huckabee said in a campaign ad and in many campaign speeches.

Companies such as office supplier Staples Inc. and pizza company Domino’s were successful Bain investments under Romney.

But medical test maker Dade Behring, circuit board maker DDi, American Pad & Paper and auto parts company Cambridge Industries are among the companies that went bankrupt after Bain invested in them with Romney at the helm.

“The bottom line of a private equity buyout is not to create jobs. The point is to make money,” said Marisa DiNatale, senior economist at Moody’s Economy.com. “In many cases, the point is to pare down the company and make it run as efficiently and as profitably as possible. Oftentimes that includes cutting jobs.”

Private equity firms buy companies by borrowing most of the money, and sell them later, keeping about 20 percent of the profit on the sale and giving the rest back to their institutional investors.

Romney worked as a consultant at Boston-based Bain & Co before he was tapped to run Bain Capital. The firm started out with more of a venture capital strategy and later moved more toward traditional leveraged buyouts.

The private equity model is built on loading companies up with debt — which can ultimately prove too heavy a load for the business, as was the case with DDi […]

Precisely. This is not jobs creation or even wealth creation. Private equity is about gaming the system; it is about optimizing, eking out hairline efficiency gains, discovering opportunities for consolidation or liquidation etc. We harp on these strings often around here:

Romney in FL wants credit for being a major player in the financial services sector—at the very moment that that sector is crashing and taking the US economy down with it

This is what interested us the most in Flaherty’s analysis:

[…] Romney knows a lot about the economy, says a former Bain Capital employee who worked under him. But on the topic of jobs, he says Romney was never one to put expanding a company’s payroll ahead of keeping costs low.

“It’s fair for him to claim that he spent 20 years of his life in the private economy. And therefore he understands what makes businesses succeed and fail,” said the former Bain employee, who did not want to be identified. “But that’s different from saying he was in a position to oversee job creation as a whole. Bill Gates grew a business from scratch. That’s not what you do in private equity. You’re an investor” […]

A former Bain employee willing to speak frankly?

yours &c.
dr. g.d.

First, let us pass in review:

(1) As Romney-apologists tell the story, Romney wanted to run as a competent technocrat, an outsider with the business experience and native genius necessary to “fix Washington.” Only Romney could never stay on message. So what the campaign emitted was unintelligible noise.

Luo: “Ever since Mr. Romney began his presidential bid, his campaign has oscillated between two distinct, some would say contradictory, themes—Mr. Romney as a conservative standard-bearer and him as a pragmatic problem-solving businessman”

Bartlett: Romney miscalculated the primary field, hence his many flip-flops—OK., but what does this say about Romney’s character or competence?

In the opinion of observers Romney had tried early on to position himself as a social conservative, only this ridiculously revisionist line never withstood any encounter with the facts of Romney’s record. Romney responded by tacking ever further to the right.

Romney outflanks himself yet again!–poll indicates Romney’s pull to the right alienates independents, centrists, and moderates

(2) After Iowa returned its decision for Gov. Mike Huckabee, Romney suddenly transformed into the “change” candidate.

Romney’s new theme of “change in Washington” developed by same super-genius advisors who delivered Romney’s Agony-in-Iowa US$10 million dollar rout

Romney cross-dresses as Sen. Barack Obama in NH—Romney is a better Sen. Barack Obama than Barack Obama, Romney implies

Martin and VandeHei: “[Romney] blame[s] reporters—not his advisers—for forcing him to focus intensely on his conservative views instead of the message of change”

(3) After New Hampshire returned its decision for Sen. John McCain, Romney transforms himself yet again. Romney abandons his social and economic conservative line altogether. Suddenly Romney wants to nationalize an ailing industry, only in the post-industrial, post-progressive era this assumes the form of a Washington-Detroit “partnership” combined with massive subsidies.

This is Romney himself from a Transcript of Romney’s Speech to the Detroit Economic Club

[…] “First of all, we have to be honest about the problems we have and tackle them head on. If I’m President of this country, I will roll up my sleeves in the first 100 days I’m in office, and I will personally bring together industry, labor, Congressional and state leaders and together we will develop a plan to rebuild America’s automotive leadership. It will be a plan that works for Michigan and that works for the American taxpayer.

“And as part of this, we will directly address and rectify the enormous product cost and capital cost disadvantages that currently burden the domestic automakers. From legacy costs, to health care costs, to increased CAFE standard costs, to the cost of embedded taxes, Detroit can only thrive if Washington is an engaged partner, not a disinterested observer. The plan is going to have to include increases in funding for automotive related research as well as new tax benefits including making the Research and Development Tax Credit permanent.

“I am not open to a bail out, but I am open to a work out. Washington should not be a benefactor, but it can and must be a partner […]

In an article titled Romney on the Ropes, Byron York of the National Review comments:

[…] [Romney’s] plan is to make the United States government a virtual partner of Ford, GM, and Chrysler. “If I’m president of this country, I will roll up my sleeves in the first 100 days I’m in office, and I will personally bring together industry, labor, Congressional and state leaders and together we will develop a plan to rebuild America’s automotive leadership,” Romney tells the Economic Club. “It will be a plan that works for Michigan and that works for the American taxpayer.”

The plan would involve easier-to-reach mileage standards, increased funding and extended tax breaks for research and development, worker health care reforms, and more. “Detroit can only thrive if Washington is an engaged partner, not a disinterested observer,” Romney says. “I am not open to a bail out, but I am open to a work out. Washington should not be a benefactor, but it can and must be a partner.”

Romney’s proposals might not be music to the ears of free-market conservatives who believe Detroit made its own problems and needs to fix itself. But it’s what a lot of people in Michigan want to hear […]

Might not be music to our ears? Here be the problem, and it has little to do with Romney’s tone deafness: Not only does Romney’s plan to nationalize the US automobile industry reflect yet another complete ideological reversal for the hapless candidate—Not only is Romney’s proposal impracticable and nearly impossible on its face, just the worst possible public policy imaginable—Not only will Romney’s proposal issue into in a furious race to the bottom as Romney himself and the other candidates are forced to out-bid each other promising to bail-out, subsidize, or protect from competition other ailing industries and entire economic sectors—but Romney’s plan for MI is also based on a risibly inaccurate and historically flawed assessment of an already globalized and post-industrial US automobile “industry”. Micheline Maynard of NYT’s The Caucus outlines the case against Romney’s proposals in an article titled Romney Address a Car Industry That Has Changed:

[…] Mr. Romney’s speech to the Economic Club of Detroit on Monday seemed more rooted in a time when Detroit companies dominated the automotive scene, rather than now, when Toyota is No. 2 behind General Motors.

For example, Mr. Romney vowed that if elected, “in my first 100 days, I will roll up my sleeves, and I will personally bring together industry, labor, Congressional and state leaders to develop a plan to rebuild America’s automotive leadership.”

But America’s auto industry now is no longer exclusively American. It includes Toyota, Honda, Nissan, as well as the leaders of European and Asian automakers. All have built factories in the United States over the past 25 years, particularly in states across the South. Collectively, foreign companies held 48.9 percent of American sales last year, when Detroit’s market share slipped to 51.1 percent, its lowest ever.

Mr. Romney also referred to a series of areas where the industry ought to engage with Washington, ranging from its pension and health care expenses, known as legacy costs, to mileage standards, known as corporate average fuel economy, or CAFE.

“From legacy costs, to health care costs, to increased CAFE standards, to embedded taxes, Detroit can only thrive if Washington is an engaged partner, not a disinterested observer,” Mr. Romney said.

However, G.M., Ford Motor and Chrysler reached contracts with the United Automobile Workers union last fall that will shift their burden for retiree health care costs, the major portion of legacy costs, to an independent trust that will be administered by the U.A.W. Moreover, the companies and the union pledged to spend money creating a new think tank that will lobby for federal health care reform.

Speaking of fuel economy, Mr. Romey said, “Of course fleet mileage needs to rise, but discontinuous CAFE leaps, uncoordinated with the domestic manufacturers, and absent consideration of competitiveness, kills jobs and imperils an industry,”

Mr. Romney added: “Washington-dictated CAFE is not the right answer.”

But the auto companies just finished taking part in a spirited Congressional debate over CAFE during 2007. And while they fought increases in fuel economy standards early on, the automakers wound up supporting the new law that requires them to achieve 35 miles per gallon by 2020.

Mr. Romney also had a vintage perspective on his father’s former company, American Motors.

“I used to ask my dad, ‘How in the world can you compete as head of America Motors when you’ve got such huge competitors, GM, Ford, Chrysler, the Big Three — how do you possibly think you can succeed?’” Mr. Romney said. “And he’d say in a way that I have not forgotten: ‘Mitt, there’s nothing as vulnerable as entrenched success. There’s nothing as vulnerable as entrenched success.’”

Yet it was A.M.C. that was vulnerable in its final years. It first turned to Renault of France for a rescue, selling a 46 percent stake to the French auto company in 1980, earning it the nickname, “Franco-American Motors.” In 1987, Chrysler purchased A.M.C. from Renault, and the company vanished from the automotive scene […]

Back to Byron York:

[…] From the beginning of his campaign, Romney has argued that he is the only candidate who can unite the three main elements of the Republican party: economic conservatives, national-security conservatives, and social conservatives. But Romney is really mostly an economic conservative; his foreign-policy credentials aren’t much, and his social conservatism — highlighted by the famed flip-flop over abortion — has earned him as many critics as fans. That hurt him in Iowa and New Hampshire, but on the last day of the campaign in Michigan, it’s economy, economy, economy, and that is where Romney is strongest […]

Remarks:

(1) Contra York, the National Review itself argues that Romney “is the only candidate who can unite the three main elements of the Republican party: economic conservatives, national-security conservatives, and social conservatives.” See:

Shocker: “In this most fluid and unpredictable Republican field,” the super-geniuses at National Review endorse the most fluid and unpredictable Republican, Willard Milton Romney

NRO organizes conference call to defend questionable decision to endorse Romney—eyeon08.com reports that they received not one supportive question, and no one spoke in favor of the endorsement

So here you have York, a writer for the National Review, arguing that Romney really isn’t a conservative at all—correction: York argues that Romney is really only an “economic conservative,” even though Romney’s policies, as York admits with his “music” comment, are anything but conservative. What does this say about the goof-balls at the National Review!?

(2) Romney’s proposal for the US automobile industry is not economic in content or in character—this is not an economic proposal.

It is a political proposal.

It assumes in advance that the performance or non-performance of a US industry is a political question. It assumes in advance the priority of political agency over private activity. And it arrives at the conclusion that the US taxpayer should subsidize the wrongheaded and shortsighted decisions of US automobile executives, and that Washington should supervise—as a partner—and assume the costs of, an entire economic sector.

So why should Romney’s proposal not apply also to e.g. US agriculture, or the technology sector? This is the logical contradiction of Romney’s proposal: it admits of no conceptual limit or limit in principle. It is not enough to argue that the automotive industry is the “canary in the coal mine” for the US economy and therefore deserves special attention—every sector of the economy, it can be argued, is vitally important—that’s part of what it means to be an economy—every sector is interrelated, interdependent.

The empirical contradiction of Romney’s plan is this: it cannot be done. History has already returned its verdict on heavy industry as an economic driver. The cash value of manufactured goods has declined for the past 25 years. Industrial capacity is more generally distributed in the world. Information processing technology and technique drives up productivity so more can be made with less labor, and this drives down prices—etc., etc.—no longer can heavy industry be the material basis of the US middle class. It is simply impossible at this historical stage.

Romney’s plan is not merely government activism, it is government atavism. It is an attempt to reverse history.

Our conclusion: Romney is not a conservative. Not in any sense of the term. Also: Romney has successfully bought a primary contest by issuing a check he cannot possibly cash.

Michigan belongs to Romney now. He can have it.

yours &c.
dr. g.d.

P.S. Credit goes to eyeon08.com for the Byron York article.

“WASHINGTON — Republican presidential hopefuls Rudy Giuliani and Mitt Romney are tussling for the title of “strongest fiscal conservative” as they seek to portray themselves as tax-cutting, bureaucracy-slaying champions of small government,” writes Erin Kelly in a Garnett News Service release titled Romney, Giuliani tussel on taxes

…. “I think both Romney and Giuliani are singing off the same song sheet by advocating less federal spending, lower taxes and less regulation of the economy,” said Patrick Toomey, president of The Club for Growth, which endorses fiscally conservative GOP candidates. “But if you look just at the bottom line and say who accomplished more, I think you have to give the edge to Mayor Giuliani” …

On Giuliani:

As New York’s mayor for eight years, Giuliani eliminated more than a dozen taxes, held spending to less than the rate of inflation and population growth, and cut the workforce of most city departments while adding uniformed police officers and teachers.

“He was dealing with a lot deeper problems and a lot less power (than Romney),” Pitney said. “That makes his accomplishments all the more impressive.”

On Romney:

Romney, who served one four-year term as governor, tried to reduce the Massachusetts state income tax rate from 5.3% to 5% but was thwarted by the Democrat-controlled state Legislature. He vetoed more than 800 spending measures he considered excessive, but lawmakers overturned more than 700 of them. Like Giuliani, he held spending to less than the rate of inflation and eliminated many government jobs … etc.

Various responsa, reflections:

(1) Note the contrasting political behaviors born of contrasting political cultures. Giuliani governed a weary-twilight, multi-ethnic, multi-cultural, post-western, world-historic megalopolis—a fabulously wealthy and desperately poor plural-municipal-entity—composed of multiple and overlapping administrative districts, and riddled with accumulated capital, vested interests, polyglot ethnic diasporas, social and class boundaries—also a major harbor-city entrepot and the northern pivot-point of the US east coast megalopolitan corridor, a global logistical epi-center of trade, finance, and commerce. Romney governed a major north-eastern state, also plural and diverse, but he ruled it at a far more abstract level.

(2) Romney’s attempts to reduce taxes were thwarted by the MA state legislature; Giuliani, by way of contrast, reduced taxes by 17% and reduced government and regulatory burdens. Pitney claims that Romney and Giulinai opearted within different social and organizational environments: “[Giuliani] was dealing with a lot deeper problems and a lot less power.” So what may we infer from this?

(a) Lacking formal power as a mayor, Giuliani developed as a balance of power player, a political bloc builder, i.e. he tends to play existing interests off of one another to pursue his own goals. He is a master of the subtler instruments of social influence. He thrives in a crowded field. He depicts himself as a stern and capable administrator, but his habits of mind are those of an arguer, persuader, compromiser, and coalition builder. He adapts to his terrain—even a hostile terrain—and he tries to use whatever he discovers to his advantage. He is comfortable working quietly behind the scenes.

(b) Romney is comfortable with authority, the instruments of authority, and has developed himself as a binary thinker; you are either for him or against him. His positions and rhetorical lines allowed e.g. the MA legislature to unite against him, something Giuliani’s mayoral administration could never allow and continue to function. Romney famously depicts himself as (i) a data-driven empiricist, an applier of business principles to political problems, or (ii) as a principled defender of true or right positions. These are not social roles that invite or even allow compromise or middle-ground positions. How can you oppose data? (Consider any simple datum; is it (x) or is it not (x)?) Or: how can you stand against a true or a right position?

Hence: Romney’s strangely solitary ways.

Hence: Romney’s comfort with staking out extreme positions, see:

Romney outflanks himself yet again!–poll indicates Romney’s pull to the right alienates independents, centrists, and moderates

Question: which political player, Romney or Giuliani, is better adapted to operate successfully with a hostile congress or a federal-level government apparatus—the so-called permanent government—that has its own interests, constituencies, and agendas? Which figure is better adapted to guide the United States in the world-arena post-Bush?

Also see:

AP: “As governor, Mitt Romney’s efforts raised the tax bill on Bay State businesses by $300 million”

yours &c.
dr. g.d.

AP: “As governor, Mitt Romney’s efforts raised the tax bill on Bay State businesses by $300 million”

November 5, 2007 in 2008, election 2008, GOP, mitt romney, republicans, romney, the dark soul of Mitt Romney, triumph of unreason
Tags: AP, Associated Industries of Massachusetts, associated press, boston herald, economy, former mayor giuliani, Massachusetts, revenue, taxes

“As governor, Mitt Romney’s efforts raised the tax bill on Bay State businesses by $300 million as he worked to eliminate a state budget deficit estimated from $2.5 billion to $3 billion,” or so reads an AP release carried by the Boston Herald titled Biz leaders say Mitt hiked taxes as gov

Now running for president, Romney says he never raised taxes, only closed loopholes. Brian Gilmore, executive vice president of Associated Industries of Massachusetts, the state’s largest business lobbying group, disagrees.

“These certainly were tax increases and a new source of revenue,” Gilmore said.

“His indicating that he balanced a budget without raising taxes is misleading at best,” Gilmore said. “We respectfully disagree” …

Also see:

The Brody File: “Romney campaign won’t beat Giuliani on who cut taxes more as a public official.”

yours &c.
dr. g.d.

“MARSHALLTOWN, Iowa (AP) — Republican Mitt Romney said Friday he wants to help displaced workers with special accounts they can use to pay for more education and training,” writes Amy Lorentzen for the AP in a story titled Romney Wants Help for Displaced Workers

Romney’s plan is part of a free trade proposal he’s touting this week. In it, he seeks more authority for the president to negotiate trade deals, and calls for a new alliance of foreign partners that are committed to opening more markets.

“I want to make sure that trade is fair and our workers are trained properly for the jobs of tomorrow,” Romney told about 150 people at a hotel in central Iowa.

Romney’s plan would help displaced workers by creating what he calls worker empowerment and training accounts. The self-managed accounts would be for any worker entering the work force development system, not just those hurt by trade deals, according to his campaign.

The accounts could be used to purchase training and education — from community colleges or from businesses. Similar proposals from Republican congressional leaders and the Bush administration put the accounts at a range of about $2,000 to $3,000 per year. The accounts would be paid for by reallocating existing resources, the campaign said.

Translation:

1. Give me the authority to negotiate trade deals—i.e. to fast track trade deals. Who will this benefit? It will benefit organizations like Romney’s own Bain Capital. See:

Hunter on Romney: “…while it is true that you no longer control Bain Capital, the contributions you have received from its principals as its founding member indicate that your influence within the company remains strong”

2. Romney believes that his trade deals will displace US workers. Well, he’s probably right. But Romney has a plan. He wants you to subsidize special accounts that workers will be forced to pay into to protect themselves against Romney’s trade deals.

3. So: Romney, Bain Capital, and other private interests profit, and the public—i.e. workers, taxpayers—gets to absorb all the costs. As we wrote elsewhere, this is a laboratory pure example of privatizing the gains (profits that accrue to Bain Capital) and socializing the costs (subsidizing displaced workers at public expense).

No wonder Romney is so rich. He’s quite enterprising. Imagine enjoying the opportunity to plunder the accumulated capital of an entire nation.

yours &c.
dr. g.d.

“James Pethokoukis, who used to work at IBD and whose writing seems to lean pretty much to the economic right, has a consistent critique of the GOP primary so far,” writes eye of eyeon08.com in a post titled It’s the economy stupid. Redux.

His most recent post is entitled, “GOP Debate Strangely Ignores Financial Turmoil.” To be clear, he’s talking about things like the near-doubling of the unemployment rate of the South Florida economy in the last 9 months. Read him. He knows what he is talking about. He has also argued repeatedly that 2008 could be a 1992 redux. Don’t believe him?

eye provides sobering bullet points that include US loan default data, evidence that Americans are cashing in their 401(k)s etc., etc.

“Guys,” eye continues, “The economy is going to be a serious issue. Hillary Clinton is, essentially, taking Iraq off the table as a general election issue. She is going to run on health care and the economy. And the field is being set. And the economy is tanking in important swing states.”

“And we are silent.”

Well, OK., guilty, at least for the most part. But we have addressed this issue, at least obliquely. We have harped on the string of the world economy tanking—the world economy pioneering new ways to tank—all around us as way to reflect upon Romney’s non-leadership. We write about this here:

It is grimly ironic that the one candidate with anything to say on this issue is—sigh—Willard Milton Romney.

This—and it pains us to admit this—is where Romney has a genuine contribution to make to the dialogue, the dialogue that has yet to take place.

We thank G-d with out-stretched arms that Romney’s incompetence, Romney’s lack of vision, Romney’s lack of depth, Romney’s lack of purpose, resolve, clarity, or direction, Romney’s lack of imagination, the ineptness and constant bungling of Romney’s lack-wit staff, the disorder, ineffectiveness, and the baffling primitiveness of Romney’s organization, Romney’s stubborn refusal to abandon his naive and unreconstructed faux conservatism, Romney’s difficult relationship with the truth, Romney’s ideological cross-dressing, Romney’s tactical excesses combined with a complete lack of strategic foresight, Romney’s distant and remote personality, Romney’s questionable character and sense-of-self, Romney’s thuggish and apolitical instincts, Romney’s associations with people like Terry Sullivan, Cofer Black, and General James “I will stab you in the thigh” Marks, and Romney’s frequent gaffs, pratfalls, missteps, miscues, and miscarriages of otherwise sound ideas, are such as to prevent the hapless, hopeless, and helpless candidate from ever-ever-ever capitalizing on this, his one true strength, his one true claim that he has to command our attention or even—oh G-d, we hate to write this—our respect.

Sigh.

yours &c.
dr. g.d.

who is willard milton romney?

Posts Tagged ‘economy’

Lerer: “Firms like Bain Capital buy controlling stakes in troubled companies, then revamp them and sell them for a profit —a process that can include management changes and “cost-cutting,” often code for job cuts”

Gavin: “Throughout his 15-year career at Bain Capital, which bought, sold, and merged dozens of companies, Romney had other chances to fight to save jobs, but didn’t—His ultimate responsibility was to make money for Bain’s investors, former partners said.”

Romney: MY feelings are more important than YOUR jobs

Flaherty: “Layoffs are a common result of private equity takeovers, with [Romney’s] Bain Capital no exception”

candidate endorsed by the National Review, Romney, suddenly veers hard left, argues that Washington must subsidize, become “partner” with, US automobile industry