Thursday, 23 October 2014 / TRUTH-OUT.ORG

Mitt Romney: Not Exactly a Captain of Industry

Tuesday, 17 July 2012 14:58 By Paul Krugman, New York Times News Service | Op-Ed

It appears that the Obama campaign has decided to ignore the queasiness of Democrats who have Wall Street ties and go after Mitt Romney's record at Bain Capital. And rightly so!

After all, what is Mr. Romney's case — that is, why does he want us to think he should be president? It's not about ideology: Mr. Romney offers nothing but warmed-over right-wing platitudes with an extra helping of fraudulent arithmetic and it's fairly obvious that even he himself doesn't believe anything he's saying.

Instead, his thing is competence: Supposedly, his record as a successful businessman should tell us that he knows how to create jobs. And this in turn means that we have every right to ask exactly what kind of businessman he was.

Now, the truth is that even under the best of circumstances, the case for electing a businessman as president would be very weak. A country is not a company — does any company sell more than 80 percent of what it makes to its own workers, the way the United States does? — and competitive success in business bears no particular relationship to the principles of macroeconomic policy. So even if Mr. Romney were a true captain of industry, a latter-day Andrew Carnegie, this wouldn't be a strong qualification.

In any case, however, Mr. Romney wasn't that kind of businessman. He didn't build businesses, he bought and sold them — sometimes restructuring them in ways that added jobs, often in ways that preserved profits but destroyed jobs, and fairly often in ways that extracted money for Bain but killed the business in the process.

And in a front-page article in June, The Washington Post added a further piece of information: Bain invested in companies that specialized in helping other companies get rid of employees, either in the United States or overall, by outsourcing work to outside suppliers and offshoring work to other countries.

The Romney camp went ballistic, accusing the Post of confusing outsourcing and offshoring, but this is a pretty pathetic defense. For one thing, there weren't any actual errors in the article. For another, it's simply not true, as the Romney people would have you believe, that domestic outsourcing is entirely innocuous. On the contrary, it's often a way to replace well-paid employees who receive decent health and retirement benefits with low-wage, low-benefit employees at subcontracting firms. That is, it's still about redistribution from middle-class Americans to a small minority at the top.

Arguably, that's just business — but it's not the kind of business that makes you especially want to see Mr. Romney as president.

Or put it a different way: Mr. Romney wasn't so much a captain of industry as a captain of deindustrialization, making big profits for his firm (and himself) by helping to dismantle the implicit social contract that used to make the United States a middle-class society.

So now he proposes bringing the skills and techniques he used in business to the White House. Somehow, I'm not enthusiastic about the prospect.

© 2014 The New York Times Company
Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.
Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008. Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including "The Return of Depression Economics" (2008) and "The Conscience of a Liberal" (2007).
Copyright 2014 The New York Times.

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Mitt Romney: Not Exactly a Captain of Industry

Tuesday, 17 July 2012 14:58 By Paul Krugman, New York Times News Service | Op-Ed

It appears that the Obama campaign has decided to ignore the queasiness of Democrats who have Wall Street ties and go after Mitt Romney's record at Bain Capital. And rightly so!

After all, what is Mr. Romney's case — that is, why does he want us to think he should be president? It's not about ideology: Mr. Romney offers nothing but warmed-over right-wing platitudes with an extra helping of fraudulent arithmetic and it's fairly obvious that even he himself doesn't believe anything he's saying.

Instead, his thing is competence: Supposedly, his record as a successful businessman should tell us that he knows how to create jobs. And this in turn means that we have every right to ask exactly what kind of businessman he was.

Now, the truth is that even under the best of circumstances, the case for electing a businessman as president would be very weak. A country is not a company — does any company sell more than 80 percent of what it makes to its own workers, the way the United States does? — and competitive success in business bears no particular relationship to the principles of macroeconomic policy. So even if Mr. Romney were a true captain of industry, a latter-day Andrew Carnegie, this wouldn't be a strong qualification.

In any case, however, Mr. Romney wasn't that kind of businessman. He didn't build businesses, he bought and sold them — sometimes restructuring them in ways that added jobs, often in ways that preserved profits but destroyed jobs, and fairly often in ways that extracted money for Bain but killed the business in the process.

And in a front-page article in June, The Washington Post added a further piece of information: Bain invested in companies that specialized in helping other companies get rid of employees, either in the United States or overall, by outsourcing work to outside suppliers and offshoring work to other countries.

The Romney camp went ballistic, accusing the Post of confusing outsourcing and offshoring, but this is a pretty pathetic defense. For one thing, there weren't any actual errors in the article. For another, it's simply not true, as the Romney people would have you believe, that domestic outsourcing is entirely innocuous. On the contrary, it's often a way to replace well-paid employees who receive decent health and retirement benefits with low-wage, low-benefit employees at subcontracting firms. That is, it's still about redistribution from middle-class Americans to a small minority at the top.

Arguably, that's just business — but it's not the kind of business that makes you especially want to see Mr. Romney as president.

Or put it a different way: Mr. Romney wasn't so much a captain of industry as a captain of deindustrialization, making big profits for his firm (and himself) by helping to dismantle the implicit social contract that used to make the United States a middle-class society.

So now he proposes bringing the skills and techniques he used in business to the White House. Somehow, I'm not enthusiastic about the prospect.

© 2014 The New York Times Company
Truthout has licensed this content. It may not be reproduced by any other source and is not covered by our Creative Commons license.
Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008. Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including "The Return of Depression Economics" (2008) and "The Conscience of a Liberal" (2007).
Copyright 2014 The New York Times.

Hide Comments

blog comments powered by Disqus