During this week’s interview with Time magazine’s Mark Halperin, Mitt Romney remained emphatic that his Bain experience makes him the best man to run the US economy. During the exchange, the GOP presumptive nominee stressed that his business experience imbues him with special knowledge of “how the economy works.” knowledge that failed to yield positive results when he governed Massachusetts. His first opportunity to prove himself and he failed the acid test – Bain’s Mitt Romney simply forgot how to “grow jobs.”
Yet Mr. Romney told his interviewer (story continues below the video):
Twenty five years in business, including business with other nations, competing with companies across the world, has given me an understanding of what it is that makes America a good place to grow and add jobs, and why jobs leave America – why businesses decide to locate here, and why they decide to locate somewhere else. What outsourcing causes – what it’s caused by, rather. I understand, for instance, how to read a balance sheet. I happen to believe that having been in the private sector for twenty five years gives me a perspective on how jobs are created – that someone who’s never spent a day in the private sector, like President Obama, simply doesn’t understand.
Long after his 2003-2007 governorship, Romney still fails to realize that government is not run like a business. The Obama ads depicting the impact of harsh decision making on people’s lives highlights exactly what is wrong with the “government-business” model. In a business, the primary concern is for the wealth of the business; employees lose their humanity and become business assets that can be dumped, recycled, and downgraded. Employees often become collateral damage as management does what it must to protect the bottom line. These circumstances are in apposition to what citizens expect from their government. Everyone must thrive.
Working class Americans drive the economy through consumer spending. People make businesses thrive. As Greece is finding out in the most arduous way, people cause banks to exist, not the other way around. In Greece, lack of confidence in the nation’s financial system caused Greeks citizens to pull 800 million euros out of the banking system in a single day. The Greek banks are now on the verge of collapse as a result of this continuing trend, and the rest of Europe is nervously dreading the ripple effect on their economies. When consumers are able to make deposits, banks prosper. In general, when consumers spend, businesses prosper. They hire, prices are kept reasonably low, and consumer confidence rises. The result is a booming economy. The key, then, is keeping money in the hands of the confident consumer. This is the opposite of the business model – no business seeks to keep their employees well-paid, that’s overhead. America’s current business model of rewarding the top earners with tax breaks, and declaring it an incentive for hiring people, does precious little to help the economy.
While Mr. Romney’s self-applied pats on the back make for great interview sound bites, he’s forgetting something. I can read a balance sheet too; so can my accountant. Neither of us thinks that this skill qualifies us to run the country. We also understand why jobs leave America – being taxed less on income earned outside the US is a great incentive for most corporations. Mr. Romney, as he embraces the Paul Ryan budget, intends to wipe out those taxes completely. Under a Romney presidency, it would be infinitely enticing for American corporations to set up shop outside of the US. But are we doing enough to encourage companies to expand production within the US borders?
Mr. Romney had this to say:
When the President is making it harder to mine coal, to use coal, to take advantage of our gas resources, to make it harder to get our oil resources – all those things combined to make our cost of energy higher than it needs to be, and it drives away enterprises from this country. It sends it to places that have lower-cost energy. I understand the impact of those kinds of factors on job creation. I will have a very different policy. My policy on energy is to take advantage of coal, oil, natural gas, as well as our renewables, and nuclear – make America the largest energy producer in the world.
Since Romney apparently missed the good news about recent US energy production, we need to give him a crash course. Mitt Romney, please take good notes, you might need to improve the integrity of your stump speech:
- Current US oil production is at an eight-year high.
- US exported more gasoline than it imported last year.
- Fuel is the top US export for the first time in 60 years.
- Imports of crude oil and related products fell 11% last year, reaching a level not seen since 1995.
When Halperin asked if Mr. Romney welcomed scrutiny of his Bain record, he responded thus (story continues below the video):
The fact is that I spent twenty five years in the private sector. And that obviously teaches you something that you don’t learn if you haven’t spent any time in the private sector. If you were to say to me, tell me what you learned from your schooling that would help you be a President, it’s like, how do I begin going through a list like that? You learn through life’s experience. The President’s experience has been exclusively in politics and as a community organizer. Both of those are fine areas of endeavor, but right now we have an economy in trouble, and someone who spent their career in the economy is more suited to help fix the economy than someone who spent his life in politics and as a community organizer.
Ha! Jamie Dimon has private sector experience too, and I’d bet $100,000 that Americans don’t want him near the White House because of it. On the other hand, Romney’s criticism of President Obama as being an “inexperienced community organizer” does not pass muster. Since his community organizing days, Barack Obama served as a state senator, was a US senator, and has been POTUS for more than three years. That’s three years more experience than Mitt Romney has as leader of the free world. For an “inexperienced community organizer,” President Obama accomplished what two presidents before him could not do – he got Bin Landen! On the other hand, Romney’s government “experience” received a failing grade from his constituents, who gave him a final job approval rating of 34%. When polled in 2005, only 13.7% of the Bay State thought he should be elected president. The very people who experienced Mitt Romney’s “governing” first hand did not think he should be POTUS.
In one convoluted statement proffered in the interview, Romney mentioned that as president, he would “bring back manufacturing jobs.” While he was governor of Massachusetts, manufacturing jobs in that state decreased at a rate of 14%, compared to a rate of 7% nationally. According to the Boston Globe, this was the third worst record on manufacturing jobs in the nation. President Obama on the other hand, realized the best resurgence of US manufacturing jobs since the late 1990s.
Another key issue that Romney and the Republican Party like to harp upon is the nation’s debt. Recently in Iowa, Mitt Romney falsely accused President Obama of “runaway spending.” However, the following chart (on right) lays waste to that particular claim.
While we all want to see a significant decrease in the national debt and a reduction in the deficit, we must attack this problem in a way that will not make matters worse. A recent Congressional Budget Office (CBO) report highlights a fiscal dilemma. Current policies will not generate enough revenues to offset government spending. On the other hand, immediate spending cuts or tax increases would present an added drag on our weak economic expansion. So, what does this CBO study deem to be the best course of action?
It finds that reducing or eliminating the fiscal restraint would boost economic growth in 2013, but that adopting such a policy without imposing comparable restraint in future years would have substantial economic costs over the longer run
CBO analyzed what would happen if lawmakers changed fiscal policy in late 2012 to remove or offset all of the policies that are scheduled to reduce the federal budget deficit by 5.1 percent of GDP between calendar years 2012 and 2013. In that case, CBO estimates, the growth of real GDP in calendar year 2013 would lie in a broad range around 4.4 percent, well above the 0.5 percent projected for 2013 under current law.
Translation: it would be far better for the economy if we did not impose those spending cuts contained in current law. Government needs to spend now and cut later, in order to give the economy a much-needed short-term boost that would set us on a path of significant growth. The current plan for fiscal restraint, due to take effect in January 2013, would have substantial economic costs in the short run.
What this study shows is that Romney’s bluster about his business background somehow imparting special insight into the workings of the economy is patently false. If that were true, he would have been calling for a more stimulus on the stump instead of demanding cuts to imaginary “runaway spending.” He would have been calling for more government jobs, not fewer. And he would have proposed letting the Bush tax cuts expire to generate revenues. In short, he would have allowed the developments in Europe to guide his good judgment. That said, his blind embrace of the Ryan budget in the face of the unfolding economic landscape across the Atlantic is telling. It provides irrefutable proof that private sector experience does not make Mitt Romney ready for prime time.