POLITICS JANUARY 25, 2012
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Randy Lavallee is a proud member of the American working class. A New Hampshire resident, he works as a calibration inspector for a jet-engine plant just across the state line in Maine. Four years ago, the plant went through a downsizing that resulted in the layoffs of one-sixth of its 1,600 workers. After the cuts, Lavallee told me, the “CEO and management got big bonuses.”
I met Lavallee, 58, recently in Rochester, New Hampshire, where he lives. A registered Democrat who sometimes votes Republican in presidential races, he is exactly the kind of swing voter who will decide this November’s election. Moreover, given his recent workplace experience, he is exactly the kind of voter who should be receptive to attacks on Mitt Romney’s business history—namely, the layoffs he presided over at Bain Capital. So what, I wondered, did Lavallee think of Romney’s business record? When I asked, he just laughed. “I’d like to have his success,” he said. “I’m just not as ambitious as he is.” But what about the layoffs that followed many of Bain’s deals, even as Romney and his colleagues made big profits? “That’s just how business works. Would I like it if my business shut down? No. But that’s what businesses sometimes need to do.”
A few days later, I called Lavallee back and pressed further, but he held firm. “He’s a businessman, and, if I was a businessman, that’s what I’d do. I’d be in business to make money for me and my company,” he said. I was curious if he knew what Romney’s business involved. “Just from watching TV, it looks like his company would purchase other companies that were going bankrupt, reorganize them, get rid of what’s not needed, and keep the good part of the business,” he replied. But what about when the businesses failed and Bain made money anyway? “They did make an investment and had to recoup the money they could,” he said. If Romney didn’t snare profits like that for himself, Lavallee said sympathetically, he “wouldn’t be in business. He’d be working in a factory like me.”
Again and again on the campaign trail in recent weeks, I spoke to voters whose positive attitudes toward Romney’s wealth and business background surprised me—people who had every reason to resent his success but in fact were inclined to celebrate it. In Council Bluffs, Iowa, I met Dan Strietback, 32, a manager at a Panera café, who told me that, while he knew Bain had laid off plenty of workers, he saw the economic model it was part of as “the best method for the United States of America.” “Everyone’s going to fail now and then,” he said. “It’s when you pick yourself up and carry on.” But what about the sheer scale of Romney’s wealth? “I look at Romney as someone who got some help from his family but worked his butt off for it,” he told me. “It makes me want to work hard, too, and maybe get some money for myself, too.”
Then there was Anne Field of Concord, New Hampshire, a Barack Obama voter who is planning on switching to Romney in November. Field, 64, told me that business has been pretty good at the small plumbing firm where both she and her husband work and that, in any case, she did not blame Obama for the slow recovery. But she is worried about her retirement savings and her daughter’s difficulty finding a job, and she thinks Romney’s business experience is well-suited to a moment when “we need to be tough” and “cut things.” When I asked what she made of the less appealing side of Bain’s work, she shrugged. “That’s what his business was,” she said. “More power to him.”
As the campaign has unfolded, I’ve kept returning to these conversations in my mind. For weeks now, Newt Gingrich has been hammering Romney for having presided over leveraged buyouts at Bain. And, while it remains to be seen whether Gingrich can sustain the momentum from his South Carolina upset, it’s already clear that Obama’s reelection strategy will pursue a similar tack, assuming Romney eventually wins the nomination. The president, it appears, will seek to portray Romney as a plutocrat who made tens of millions of dollars by slicing and dicing companies, regardless of the collateral damage—depicting him, in Mike Huckabee’s memorable 2008 description of his then-rival, as “the guy who fires you.” Obama political guru David Axelrod recently provided a preview of this strategy when he told CNN: “Saving an industry, as the president did, is different than strip-mining companies in order to—in order to profit off of them, which is, in many cases, what Mr. Romney did. ... The question is: Is that the philosophy that you want in the White House?”
Among Beltway liberals, there is currently an unquestioned assumption that these attacks will work in the general election: that Romney’s wealth and business background are indeed major political liabilities. But talking to people like Lavallee, Strietback, and Field made me wonder: Would such attacks really stick? Is it actually possible to win an election by portraying your opponent as a plutocrat? Or will many American voters respond to Romney’s financial success with a simple shrug?
AMERICANS are of famously mixed minds when it comes to matters of wealth and fairness. We venerate economic freedom and the self-made man, yet we also harbor populist suspicions of wealthy elites and big business. In a volatile time, our ambivalence on this point has remained remarkably steady: A Pew study released in early January that found a sharp increase in the perception of class conflict also found that respondents had barely budged from four years earlier on the question of whether the rich “are wealthy mainly because they know the right people or were born into wealthy families” or “mainly because of their own hard work, ambition or education.” Forty-six percent chose the former, 43 percent the latter. “What this adds up to, to me, is a public that’s paying attention to these issues and is cross-pressured on these issues,” says Pew’s Paul Taylor. “There is some part of the American public that loves the free enterprise system and believes that the ability to get rich is part of the American Dream, and there is a part of the American public that cares about issues of fairness and that believes that, when things gets out of whack, it’s time to say, ‘Whoa, that’s too much.’”
Research on Americans’ instincts about money and class has mostly been left to social psychologists; but political scientists have started branching into this area, hoping to better understand how wealth and class inform voting. Recently, Meredith Sadin, a doctoral candidate in politics at Princeton, set out to try to gauge how voters respond to candidates’ class backgrounds. She asked voters to rate some imagined congressional candidates, each of whom had been assigned different origins (son of a factory worker or son of a surgeon) and different adult backgrounds (works as an ambulance driver or works as a cardiologist). Not surprisingly, she found that Democratic voters were more likely than Republican voters to attribute negative characteristics to a GOP candidate’s privileged origins or current upper-class status. But her most interesting finding was that independents—those crucial voters who invariably seem to determine the outcome in close races—tended to act like Republicans when it came to candidates’ origins and current wealth.
Both independents and Republicans, for instance, perceived a GOP candidate with current upper-class status as slightly more intelligent than a Republican of unknown status. Independents and Republicans also did not seem to hold an upper-class candidate’s wealthy origins against him. That is, if they knew both the origins and current status of a Republican or Democratic candidate, they didn’t see many differences between one who’d worked his way up and one who’d been born rich—whereas Democratic voters strongly favored one who’d climbed the ladder.
There was one caveat to this last finding: When independents were only given information about a Republican candidate’s origins, and not current class, they felt more warmly toward a candidate with humble roots. But presidential elections are “high information”—voters learn a lot about the candidates—and, in the upcoming general election, voters will know both where the candidates started and where they ended up.
Sadin’s findings sound like good news for Romney, since they suggest that independent voters aren’t all that inclined to punish a candidate for being wealthy and may even prefer him on these grounds. But does it matter if a candidate made his money by buying up and restructuring other companies? Sadin deliberately did not give her imagined candidates a business background, knowing that this brought in a whole layer of voter biases on top of their notions of class. Mark Smith at the University of Washington has spent years looking at voters’ perceptions of politics and business. His overriding conclusion? “Being very rich by itself is not an advantage, but it’s not a disadvantage, either. It gets you in the game, it gets you noticed. But, if you turn out to be a bad candidate, it doesn’t guarantee you anything.” Here again, good news for Romney.
BUT, BEFORE Democrats conclude that there is nothing to be gained from portraying Romney as a plutocrat, consider the research being conducted by John Sides, a George Washington University political scientist. Sides has been doing surveys on Romney’s and Obama’s wealth and on perceptions of whom the candidates “care about.” Many of the findings are pretty intuitive: Nearly three-quarters of respondents in an early January survey thought that Romney was “personally wealthy,” while fewer than half said so of Obama. And, among independents, 84 percent thought that “cares about the wealthy” described Romney, while only 64 percent described Obama this way. But Sides also found some things that weren’t necessarily intuitive. For one, voters who saw Romney as caring about the wealthy were less likely to think he cares about other groups (“middle class,” “poor,” “people like me”), whereas people who saw Obama as caring about the wealthy were actually more likely to see him as caring about other groups. Moreover, Sides found a far higher correlation for Romney than for Obama between voters’ perception of a candidate’s personal wealth and their belief that the candidate cares about the rich.
Why would voters react this way? The obvious explanation is that Romney’s wealth is accentuating some unflattering stereotypes about Republicans. “To my mind, what is problematic about Bain for Romney is that it seems to be consistent with preexisting ideas about this candidate ... and the Republican Party,” Sides explains. “You’re not asking voters to entertain a counterintuitive idea when you’re talking about his business experience or when you’re talking about him being more interested in protecting business or the wealthy as opposed to the middle class or the little guy. And, if a message is going to be effective, it has to persuade [voters] of something they already think they know.”
That was exactly what Democrats did 18 years ago, when Romney ran for the Senate in Massachusetts against Ted Kennedy. Romney had pulled even in the polls in September, when Kennedy campaign advisers Bob Shrum and Tad Devine began what Devine recently described to me as an elaborate, multistage process to undermine Romney’s image. First, they ran ads pointing out that Romney had made “a lot of money” during the previous two years--$11 million. Then the campaign started talking about the fact that even employees at the companies considered Bain successes were often temp and part-time workers with low wages and no health benefits. Then came the story of a company whose jobs Bain had sent from Massachusetts to Texas. Then came an examination of Bain itself, noting that 23 of its top 24 people were men. (“His kind of damning quote was that there were not a lot of women who were qualified enough,” Devine recalls.) Then the Kennedy team started bringing in relevant platform contrasts, noting that Romney was against raising the minimum wage. Says Devine, “It was $11 million for himself but $4.25 for working people.”
Then came the final move: devastating ads shot with workers from a company in Marion, Indiana—SCM Office Supplies—that had suffered layoffs after being taken over by Bain-owned American Pad & Paper (AmPad). “We had a camera guy, a sound guy, and a producer, and we drove for an hour and a half through the corn fields to get to Marion,” Devine recalls. “Shrum and I had written teleprompter scripts for the workers. But, when I got there and talked to them for five minutes, it became clear to me that these scripts were a complete waste of time. I told the teleprompter guy that this would be the easiest day of work in his life—here’s your check, now you can leave.” The only instruction was that, if the workers were going to refer to Romney or anyone else, they should use his name, not “he.” And that was all that was needed. “The very first question I would ask just set them off. All you had to do is ask that question and the floodgates opened for everybody.” One by one, they told their version of how Bain had come in the previous July and laid everyone off, before rehiring 75 percent of them, typically the younger and healthier ones. (“It was social Darwinism: The weak went by the wayside,” Devine says.) He took the tape back to a video editor in Philadelphia, and “we locked ourselves in a room for two days.” The result was a string of indictments from people who exuded authenticity. Some of the workers came to Massachusetts to campaign for Kennedy, who ended up winning by 17 points.
The AmPad story was effective, Devine says, “because we put it in context.” While he’s not sure whether such a maneuver would have quite as much impact today—“America’s gone through the worst economic downturn since the Great Depression, and, as a result, people aren’t nearly as shocked by stories of job loss as they were in 1994”—he argues that, if it’s going to work at all, it needs to be part of a broader narrative about what has gone wrong in the country. “If you can convince [voters] that Republicans want a return to failed economic policies and the guy you’re running against is part of the problem,” he says, “you can hurt [Romney] badly.”
AT SOME LEVEL, the various studies plus the experience of 1994 add up to a muddled picture. Clearly, there are reasons to believe that attacks on a candidate’s wealth won’t work and reasons to think that such a strategy can succeed. Still, it is possible to draw some broad, albeit tentative, conclusions. One lesson is that these attacks may be most likely to work if they are linked to a broader ideological critique of the candidate’s platform. Another is simply that an attack on a candidate’s business background or wealth has to be well-crafted and savvy. Just being told that a politician is wealthy or that he fired people during his years in business isn’t, contra the hopes of many liberals, going to be enough to turn off most voters. Yet this does not mean voters will refuse to register specific, persuasive arguments about a candidate’s background.
Given all this, it’s worth noting that, among the voters I spoke to, even some of those inclined to give Romney a pass for his business background came up short on one issue: taxes. It was wrong, they said, that Romney had paid no more than 15 percent on his fortune, thanks to the lower rates for capital gains and private-equity income. “That does bother me. Everyone should have to pay their fair share,” Field said. Echoed Lavallee: “That bothers me, because I think that people that earn more ... should pay the taxes just like you and I would have to do.”
This fits with polling data. Shortly before releasing its survey showing the sharp split on Americans’ view of wealth, Pew released another one showing that Americans’ biggest complaint about the tax system is not how much they themselves pay—only 11 percent cited that—but rather the fact that the wealthy don’t “pay their fair share,” cited by 57 percent. And it was Romney’s equivocating about releasing his tax returns that, more than anything, was offered to me by Republican voters in South Carolina as a reason for not supporting him. Even if they were not exercised about the rate he was paying, they were bothered by his presumption that it was nobody’s business.
Perhaps, then, taxes offer a targeted issue where the Obama campaign could align its personal critique of Romney with its ideological one. What remains to be seen is whether it is possible to go further: to portray the outsized gains at Bain as symptoms of an economic system that has gone seriously awry. “What it’s going to take,” Devine says, “is for people to find out the difference between traditional investment banking ... and leveraged buyout firms, which are really not there to create jobs and companies; they’re there to create profit.” But are voters capable of grasping such distinctions? “After $250 million in ads, yes, they are,” he says. We’ll find out.
Alec MacGillis is a senior editor for The New Republic. This article appeared in the February 16, 2012 issue of the magazine.
35 comments
did you advertise that you wanted to talk to stupid people? How the hell does cutting jobs lead to more employment? What is the logic to Mitt Romney will fire his way to full employment? If Americans are stupid enough to vote for Mitt Romney, then they deserve the cluelessness he will bring to the Oval office. We just better hope that the deleveraging of the past few years and any upswing in the economy because of it will allow America to survive whatever supply side nonsense he foists on America. Romney has no solutions as to how to raise the wages of the poor and middle class, we only exist to bask in his reflected glory, and if we don't bask, well then we are surely just envious. Mormons believe that after they die they become gods, I guess Romney thinks he didn't need to die first to achieve that status.
- blackton
January 26, 2012 at 1:45pm
Many working people are also invested in the stock market. Maybe they want workers in the companies they have stock in to fire employees, so they can get bigger dividends from a leaner and meaner company. I remember hearing in the early Nineties (I think) about a stockholders meeting where it was announced that the company had been taken over (maybe by Bain) and 25,000 of its employees fired. The stockholders rose as one and gave the announcement a standing O. I'm sure some of them were working people. Money that you don't work for has become the American Dream. But Lavallee did mention that lower tax rates for the rich are unfair. The best situation for a working person is to invest in their own company. Then when he or she is fired to make it leaner and meaner, at least their dividends will go up. With all the jobs that are being outsourced and insourced in America, that may be the only thing they have. These same working people who admire lean-and-mean capitalists may get a surprise if they vote for Romney and he wins in November. He will be forced by the Republican Right to deregulate Wall Street completely again, like it was under Bush, and BOOM! Most people's dividends and their pensions could be gone overnight. I won't feel the least bit sorry for any fool who votes for Romney (okay, a twinge for my Republican friends).
- magboy47.
January 30, 2012 at 12:35am
I don't believe Obama is the right messenger for a message that divides between the favored and the unfavored, the haves and the have nots. For Kennedy it was a challenge, but for Obama it is beyond a challenge. Many, especially those elusive Independents, are angry that somebody is receiving preferential treatment over hard-working real Americans. And who receives preferential treatment? Is it the wealthy who help themselves or is it the unions and minorities helped by their friends in Washington? This may come as a surprise, but many in the heartland blame unions, not capitalists, for the loss of jobs to China and elsewhere. What may work in Massachusetts won't work in the heartland. Kennedy's message brought left-leaning voters in Massachusetts home to the Democratic Party; in the heartland, voters are not left-leaning, and the same message may have the unintended consequence of bringing the right-leaning voters home to the Republican Party. In other words, don't expect the angry voters to turn their pitchforks on Romney.
- rayward
January 30, 2012 at 8:22am
Right, rayward, many people in Michigan (a union state), where I was raised, blame unions for outsourcing. Of course, these are people who vote Republican and watch Fox News. They're not giants, when it comes to political thinking. One of my relatives in Flint blames unions for everything, including the collapse of our economy. He's a near-genius in IQ (he teaches math in college, among other things), but he's a dummkopf when it comes to politics. IQ, it seems, is compartmentalized. Now Fox News says that unions killed the Twinkie. But Twinkies kill, too. Remember Dan White in S.F.? I bet Michelle Obama's not sad the Twink is gone. Obesity was mentioned peripherally on Fox as a cause of his demise.
- magboy47.
January 30, 2012 at 10:27am
I'd like to know how the following would go over with voters like Anne Field described above: The economy is suffering from severely depressed spending. How do the Republicans propose to respond to inadequate spending: cut spending.
- sighthnd
January 30, 2012 at 10:31am
I'm not surprised that merely pointing at Romney and saying "He's rich!" doesn't work. Despite the hyperventilating of the Fox News right, very few Americans are motivated by hatred or envy of the rich, per se. Besides, Obama is also rich by any reasonable definition--he isn't anywhere near Romney's class, but he's not ever likely to have to worry about having a house foreclosed or being bankrupted by medical expenses. What I think will resonate is the idea that Romney's wealth comes from a) ruthlessly exploiting workers at companies he took over and b) financial shenanigans involving the abuse of bankruptcy laws and tax loopholes. The second item may be even more toxic than the first. A lot of Americans have (mistakenly) come to accept the idea that ruthless exploitation of workers is necessary to compete in the modern age, but we're kind of allergic to Wall Street financial shenanigans just now.
- Dausuul
January 30, 2012 at 11:00am
Romney's wealth isn't his problem - it's his godawful personality.
- WandreyCer
January 30, 2012 at 11:01am
Bain and Romney made their money by changing organizations that were operating inefficiently and/or not dealing effectively with changing competitive environments. Sound familiar? Existing U.S. middle class wage jobs are becoming devalued because of automation and global competition. Those jobs and wages aren’t coming back, ever, and things will get worse until we recognize this fact and begin a national effort to elevate the skills of our workers. Maybe Romney is just who we need for a `turnaround'. He could start by talking about restoring an emphasis on excellence in math, science and reading comprehension at the K-12 level, while also stating that (much to the displeasure of teachers unions) excellence in teaching should be the only criteria for advancement and compensation in that profession.
- rvogel
January 30, 2012 at 11:24am
Ray is right that the populist strategy won't necessarily win for Obama in those places where liberal base voters are not enough to influence elections, and where many voters blame unions or lazy minorities for the loss of well-paying jobs. On the other hand, Obama's strategy is not necessarily to win over those voters (many of whom haven't voted for a Democrat for President since 1996, or, in many cases, since 1976). The strategy will be to peel off enough persuadable voters away from Romney, whether into votes for Obama, third-party votes or simply staying home undermotivated by Romney's stiff personality and inability to articulate a coherent difference between his economic policies and the unpopular Bush economic policies. Add to that the widespread outrage among Hispanic voters in the Southwest and Mountain West due to Romney's full-throated embrace of nativist anti-immigrant politics, the continued strong support of African-Americans (especially in the electorally mixed Upper South) and a still-motivated liberal base, and Obama gets re-elected by the same margin that Bush did in 2004. Not a great victory, but a victory nevertheless -- and a victory which should have been out of reach against a better opponent.
- wildboy
January 30, 2012 at 11:26am
If Romney's the right guy for a turnaround, what inefficient parts of the US is he going to sell off, and to whom? What redundant or unproductive citizens is he going to fire, and what other country will take them in? Since he doesn't think the state can produce anything, how will he make it more efficient at producing that nothing? I understand that the President=CEO metaphor is compelling to people, but it doesn't make any sense to me at all. Unless the idea is effectively to nationalize industrial operations while leaving the profits in private hands, so that the state polices and trains the workforce (to a standard of "excellence," no doubt) for the benefit of private capital (a system that was tried in Italy and Germany in the first half of the last century to generally mixed reviews), how is this supposed to work?
- rmutt
January 30, 2012 at 11:47am
Besides taxes and Bain's practices, which are clear ways to attack Romney for undeserved wealth, there is the issue of offshore accounts. It's been getting some attention, but there's an entire narrative to unravel there: about Romney (and corporations and the Republican Party) being more concerned about sending their money to the place it makes the most money than to the place that helps Americans. Obama's proposal to roll back tax breaks for offshoring is going to be part of this narrative.
- polcereal
January 30, 2012 at 11:53am
I would not attack Romney for his wealth, but his tax rate does effectively raise an issue where Republicans hold the wrong position. In the other hand, when Romney tries to express common cause with suffering middle class Americans by complaining about the decline in his investments, he makes a spectacle of just how remote he is from the middle class. Even more to the point, I am disgusted at Romney benefiting from the assumption that as a businessman he has superior knowledge of how to foster growth in the economy. The truth is that when one separates the dishonest miss-characterization of President Obama's policies from his economic plan, what remains betrays a vacuousness matching Sarah Palin's.
- aduncanson
January 30, 2012 at 11:54am
RMutt, Actually I think Romney is the perfect candidate to "turn America around" from the slow, steady climb out of the Big Recession it has been on the past year or so and quickly drive us back down hill. He can start by downsizing all of Congress and then rehiring the youngest and healthiest people back, and then quickly spend, err, reinvest, the savings from not paying out the life-time benefits packages to the ousted Congress members, on the outsized performance bonuses for the Romney Cabinet or as his CFO & COO like to call him. The HMFIC. After that quick turn around, Romney can focus his scapel-like business skills on tackling the bigger inefficiency problems plaguing America Corporation, Inc. by exporting our underemployed and unemployed workers as temporary hires for FOXCONN where they can assemble ipads. After all, if America sucks at making things and we need to transition to a service economy, then exportation of our unskilled, high-school drop outs is a great product! Heck, Romney could even find a way to leverage our prison population as exported 'thug consultants' to the burgeoning Strong Man markets opening up in developing 3rd world countries. After Romney has 'downsized' Congress and increased our service exports abroad, only then will America Corporation, Inc. or as it's known on the NASDAQ (USA!USA!) will become the lean-machine of capitalism that all those hardworking, blue-collar 'shareholders' dreamed about when they bought stocks in as citizens while they reap higher dividends whilst installing microchips into the newest iphone 5BS.
- singlspeed
January 30, 2012 at 12:52pm
My previous comments on `turnaround’ may have been taken too literally. I’m only suggesting that the Post WW II U.S. boom really over and we need to be intellectually honest with regard to the economic realities of the present and future. By virtue of his previous private and public experience Romney seems to at least have the right mindset and perspective to provide the pragmatic leadership we could use at this time. The private sector can buy, sell and produce wherever in the world it wants. It can not only export or automate low skill jobs but, increasingly, higher skilled ones. What the state can (help to) ‘produce’ is an atmosphere in which American individuals and businesses have the motivations and resources to be the best in the world at what they do. That requires a collaborative (not coercive) effort between the private and public sector. Romney seems to be more likely to be able to work effectively with varying constituencies than the other Republican candidates, or the current president.
- rvogel
January 30, 2012 at 1:19pm
Well. I think rmutt has put his finger on the problem. The USA is not a business. If you want to run it like one and get leaner and meaner, you can start by rounding up the excess citizens, ie those who are poor, "defective," old, not Christian, so forth, and putting them in labor camps. This will save a fortune on wages and reduce the deficit also since we will no longer have a need for the old, disabled, the very young, the non Christian etc. Ergo, no more payments to Medicare and SS. Bingo: improved deficit situation. Second, we will be more competitive with China, overnight! Third, we can take a page from the book of history and realize the economy just boomed during WWII. Defunct auto plants went into full scale production of tanks and bombers! Do the math, business is easy!
- Sophia
January 30, 2012 at 2:07pm
Along with Sophia, I am impressed by rmutt's comment. To build on her comment about WWII, lots of people became employed fighting WWII. (My father spent the war in India waiting for for the Japanese to invade.) In our time, lots of Americans (both men and women) were busy in places such as Iraq and Afghanistan. Now as they come home, where are the jobs for them? More wars! More wars! More boots on the ground, fewer drones in the air! Isn't war what humans evolved for?
- skahn
January 30, 2012 at 2:41pm
Sounds like a plan to me, Sophia.
- magboy47.
January 30, 2012 at 4:15pm
From the article "We venerate economic freedom and the self-made man, yet we also harbor populist suspicions of wealthy elites and big business. " Actually, I think America adores hard driving CEO. The Steve Jobs, the Bill Gates. They understand that poor men never will give them a job. They understand that if Steve Jobs doesn't do what he does in the US, then a parallel Steve Jobs will just do it someplace else. What is comical here is that John Kerry paid lower effective tax rates that Romney. How many in the popular press every said word one about that? And Kerry didn't even give a fraction to charity that Romney did. Biden kicked in a fantastic $369/year (average) to charity in the decade before he became vice president. Al Gore gave $353 in 1997. Romney donated a staggering $7M to charity--16% of his income last year alone. Has anyone been in a tizzy about the Kennedy's tax rate? Which was probably very similar to Romneys assuming they spent $ on accountants too. Most funny in all this is how the left celebrates Buffet as some sort of saint. And yet Berkshire has been locked in a 10 year fight to claw back $642M in taxes they claim they are due. It is this long list of inconsistencies that make the guy on main street realize this is only posturing. Nothing more. He understands his employer will give him a great salary and benefits if he's doing a great job for the company (creating value) and if the company is doing well. Everything else is just noise.
- seattleeng
January 30, 2012 at 4:41pm
Seattle, I think you're missing all or part of the point when you describe Mitt Romney in the same company as Steve Jobs and Bill Gates. Those guys were adored by Americans because their companies actually created things that most Americans use and which make their work and personal lives materially simpler and more efficient. In that sense, their public perception was similar to that of Bell, Edison and Ford. In an additional plus side of the ledger, both Jobs and Gates kept their noses out of partisan politics and have not earned the automatic disapproval of 50% of the population by doing so. Compared to Jobs, Gates or other famous entrepreneurial capitalists of yore, what has Mitt Romney accomplished for the American people? In all his many years in business, the best he can do is point to three companies in which Bain invested that created some 100,000 total jobs since the original investment -- Staples, Domino's and The Sports Authority. Of course, we all like convenient office superstores, pizza delivered in 30 minutes or less and a competitively-priced sporting goods retailer -- but let's be fair, those are not the kinds of businesses that the guy on main street desires to work for and not the kind of businesses that set pulses quickening. If Romney's stated goal is to reverse the perceived slide of American goods in the global economy and American competitiveness against China and the rest, how is it helpful to trumped his experience growing jobs in the service sector which are barely above minimum wage (if that)? If he had highly successful investments in some breakthrough technology, or some sort of advanced manufacturer or IT innovator, that would be one thing -- that could convince the guy on main street not just that Romney knows what kinds of businesses succeed and fail, but would also validate the main street guy's optimistic view that Romney's successes are associated with the kinds of businesses that make people's lives better and that support American economic and technological preemince. Instead, one gets the perception from Romney's business success, that he thinks successful American businesses are the ones that sell cheap goods-and-services to the general public and pay low wages to their workforce. That may be comforting to a rich person, who makes his money from investments worldwide and couldn't care less if the US manufactures or innovates anything anymore or not. But it's obviously not comforting to the guy on main street, even if he is otherwise conservative and believes that free entreprise and big business are good for America. For all of his bluster and ineptitude, I think that some of Gingrich's support represents the latter category of voters -- the ones who are afraid or unwilling to stare into the abyss of Mitt Romney's business success and conclude that the highest and best form of American capitalism is to make a lot of money off investments in service sector businesses while manufacturing and innovation go to the dogs.
- wildboy
January 30, 2012 at 5:02pm
Also seattle misses an important point about class. Which Americans don't like to discuss of course. Nevertheless it is real. Maybe you had to be a scholarship student at a high end college to really get this. Being the "diversity" in a school full of preppies, entitled, there because they were BRIGHT ENOUGH but mostly because they were rich enough - oh, you got the class thing and you got it hard. Look. It's one thing to be an inventor, a great athlete, or just plain lucky - and another thing to start the race 100 miles in front from the get go. Why is this so hard to figure out?
- Sophia
January 30, 2012 at 5:10pm
Further as to Boots On The Ground: war is an awesome way to transfer the people's money to private industry. Oh how I long for an accounting of Afghanistan and Iraq. Who got rich from what (the people got poor!) (somebody made out like a bandit!) You know a cynical person would call this "blood money," but maybe that's putting too fine a point on it. Regardless after WWII there were VERY HIGH TAXES to pay for said war, which wasn't in any case a war of choice, unless you are Ron Paul probably or, maybe, Pat Buchanan. But that's another story.
- Sophia
January 30, 2012 at 5:13pm
Your point about democrats and their allies who are millionaires being left alone on the issue of money is moot because they are for increased capital gains taxes. And the retort of them giving money to the IRS to pay down the debt is moot because it would be downright stupid to disadvantage themselves disproportionately in the marketplace in order to prop up an unsustainable system. And that goes double for Berkshire and possible over-taxation. The point is to establish a sustainable system with appropriate taxation; your argument that these people should disadvantage themselves to prop up the unsustainable system is absurd. And, if there are any democrat allies who aren't in favor of the increased capital gains tax, they aren't important because they're not seeking nomination as the GOP candidate for POTUS in the 2012 general election. The funny part is that the only inconsistency is in your wildly overactive imagination.
I wondered how long it would take for someone to bring up organized religion as the answer to the United States of America's problems. How easily people forget that America was specifically designed to be the answer to organized religion's problems! Or perhaps you never knew in the first place, and should study a bit more history?
- GSpinks
January 30, 2012 at 5:48pm
Bain's investment seed money in Staples was 10% - that Romney has used that example over and over as an example of something meaningful, let alone momentus, is actually pitiful.
- WandreyCer
January 30, 2012 at 6:42pm
wildboy - just wanted to say that you are on fire man, really tight. Thank you.
- WandreyCer
January 30, 2012 at 6:43pm
One thing the Panera guy was not told. Romneys privileged friends used borrowed money to invest in some very cash rich firms, just to take the cash to pay off their bets and pay themselves a huge profit. After cutting jobs and closing plants, they created an incentive for the companies to pay them 200 to 300 cents on the dollar to get Bain management OUT. This left the companies debt-laden. Some of them went out of business, others kept cheap workers and produced cheap products or put mom and pop businesses out of business. And for the last twelve years where has Romey's wealth come from? It is likely from the not-so-blind trust, the funds with America's five biggest banks (collecting taxpayer bailouts) and the tax breaks Bain lobbies for. The low doc and no doc loans securitized and renamed "sub prime" to disguise their true nature. Romney and his investment bank buddies profit on the front end by selling MBS to the world at rapid MERS speed and by short selling MBS on the back end to explode the economy. When the American people find out how he makes 100 times more than Americans make, they won't admire him so much. Americans will wonder how we ever let him get off scot-free for so long.
- MaryLGrier
January 30, 2012 at 7:26pm
Firstly, seattle, the "charity" that Romney gives the lion's share (60%) of his "staggering" contributions to is his own church, and I'm sorry but I am very loathe to count that as charity in the normal sense of the term. If you take away that you're left with about $3m, which I'm happy to honor as a good deed, but it's not really what sets someone apart as presidential material. Secondly it was also the case in 2004 that the economy was doing fairly well, the financial markets appeared to be healthy, and our attention was focused on Iraq and terrorism, and for those reasons the relative wealth of presidential candidates was not a big blip on the radar screen -- it's different now in 2012. One might also point out that Kerry had served in Vietnam as a young man and took some political risks to honestly oppose the war he had come to believe was a disaster -- the last time Mitt Romney took a principled position on anything whatsoever was . . . when, exactly? Finally, if anyone in private industry out there believes that, in the early 21st century, all he has to do is work hard and please his boss, and for that he (or she) will be well paid and in secure employment for the duration, then that individual is either working for their dad or is living in some Mad Men-induced fantasy of the 1960s. Now that's noise.
- ironyroad
January 30, 2012 at 8:13pm
I have read and seen enough data on the much heralded "independent" voter. They are nothing but Republicans who vote Democrat when there is a particularly charismatic or powerful one like Kennedy, Johnson, Clinton or Obama I. Too much time and effort is spent trying to plumb the depths of the soul of this voter class. Truth be told, there isn't much depth, there's too little soul and they're too unschooled to even be a class.
- lspfred
January 31, 2012 at 3:02am
Seattle- we know that you believe that this is all envy, but bringing up Kerry and Kennedy's wealth, tax rates and charitable contributions are complete red herrings. What is relevant here is not how rich Romney is, but rather how he made his money and whether that would translate well to public policy. After all, Bain capital made an awful lot of money not by creating a superior product or service, but using money to make money. That is, they would buy a controlling share in company A, and then immediately make themselves whole and then some by having said company borrow money to pay them. They then continued to extract management fees from the company, again often with borrowed money. Capitalism isn't really supposed to work as. I've never seen really compelling argument about exactly what risks Bain was taking here except the possibility that they might buy a company that went insolvent before they could pay themselves out. If the company improved as a result of this process, then they make more money. If it happened to collapse, possibly due to the new debt burden, then no great loss for them. This is really a case of heads I win, tails I've already won. That's the problem. I am also still waiting to see a reasonable argument about how this would translate to public policy.
- Nari224
January 31, 2012 at 8:22am
oopes "...to work as" should read "... to work that way". Additionally, there is sufficient anecdotal evidence that a number of companies borrowed money to get rid of Bain to believe that they may not have been fantastic managers. And as Iowa beauty noted above, if a 10% non-controlling share in staples is the best success story they have, even Romney's campaign recognises there is not a lot positives to be made of these activities.
- Nari224
January 31, 2012 at 8:25am
Capitalism is about people freely making decisions to buy and sell based on perceived value. In a free market economy those that successfully recognize and/or create great value for others are usually richly rewarded. Steve Jobs understood the value of creating a brand that would raise the value of his company’s products far above their actual utility. Bill Gates understood the value of software vs. hardware and thereby set the direction of the personal computer industry for many decades. Ditto for many other modern day multimillionaire businessmen and entrepreneurs. Bain capital found companies that had low value and tried, if possible, to make them more valuable by changing them, or finding buyers who saw greater value in them than did the sellers. I see no difference between the capitalism of Romney, Gates and Jobs, or for that matter a big name entertainer or sports figure. The relevance of Romney’s very successful private sector experience to the office of the president may be in several areas: he probably listens to lots of opinions before making a decision; he’s probably able to define and set goals and map a path to achieve them; he’s probably able to change his mind if circumstances change; he’s probably not hard-wired to political dogma not substantiated by evidence (although that is tough to demonstrate in today’s campaign environment). Those seem like good qualities to me.
- rvogel
January 31, 2012 at 11:28am
rvogel, I think one of the big differences is that people in the arts, media, sport, or similar arenas are often very willing to admit that luck and being in the right place at the right time were as much part of their success as their hard work (or were important components at least). Business people seem absolutely loathe to admit there was anything other than their own individual smarts and application behind them. Hence a lot of arts and sports folks are liberal-inclined because they know that they could easily have missed the curve, and they want to spread the luck around.
- ironyroad
January 31, 2012 at 2:18pm
ironyroad, I certainly agree with you about the important role of luck in life. I have the feeling that Romney knows he has been pretty lucky and that he would like for every American to have the good luck he has had. Though I suppose he might subscribe to that old saying: “Luck is what happens when preparation meets opportunity.”
- rvogel
January 31, 2012 at 4:41pm
rvogel - that is somewhat true, but I'm still not seeing what Bain put at risk here, which is going to be pretty important to people. All of your other examples invested in creating things or providing services which could have gone bad or not being providable due to, say, personal injury. Bain on the other hand saddled the various companies with all of the risk (debt). Now one observation is that that's a pretty damned good business model; lots of upside and little (close to zero as far as I can see) downside. However it's not really "no downside"; just "no downside for Bain". As for the relevance you note for Romney's private sector experience, those are basically things that we think we are observing due to the success of the enterprise. However if it's a setup that's pretty hard to fail in (my contention) the success doesn't indicate their presence. And what we know about how he managed the Olympic Games doesn't tend support any of the attributes that you listed. Now obviously the current campaign does make things a little hard to discern, but if there's one thing that he's been consistent is being wed to non-evidence based political dogma (cut taxes!).
- Nari224
January 31, 2012 at 6:23pm
Sorry but I disagree rvogel, if Romney wanted every American to have the luck HE has had, then he would want everyone born into a family like his. That's what got him started in life, and he seems obsessed not with its chance fortune but with its rightness. He strongly believes that he's entitled to the presidency because he's the kind of individual who should be president -- if he has any new ideas about the future of the country, I haven't heard them. I have never heard Romney say anything such as, for instance, that society for its own good needs to provide balances (e.g. student grants, universal health coverage [other than in Mass.]) against the dangerous tilt toward the very wealthy. Indeed he seems to regard even mentioning the issue as a breach of decorum.
- ironyroad
January 31, 2012 at 10:04pm
Well, I'm not going to try to read Romney's mind too much, but I can't imagine why he would not want everyone to be born into the good family circumstances that he had. HOW to bring about those circumstances for more people is of course the issue of contention in our political debates. As for his sense of entitlement, perhaps he thinks a lot about his father's failed presidental effort and that gives him additional motivation. I am as disgusted as anyone with the low level of campaigning that is taking place in the Republican primaries. My sense is that Romney is more `moderate' than his Republican campaign requires him to be. He's no doubt smart enough to know that in the general election campaign he will need to move his campaign rhetoric closer to the political center and come up with more specific ideas as to how he would deal with critical issues.
- rvogel
February 1, 2012 at 1:26pm