Presidential jobs debate stays interestingPublished 9:21am Friday, January 20, 2012
Column: Notes from Home
I was worried the Republican nomination battle was going to become boring, after Michele Bachmann’s departure. But the recent — unexpected — attacks on Mitt Romney’s record at Bain Capital more than makes up for her absence.
The capitalists fought back, of course, and the campaigns responded. Some candidates backpedaled, others disavowed the mudslinging from the Super PACs supporting them (I love those disavowals; they are so sincere), while still others were punished as supporters defected.
Ideas matter, but money speaks with the loudest voice in American presidential politics. Money drives media campaigns, hires the best campaign talent and pays for the best venues for rallies and speeches. Money brings access to candidates — Democrat and Republican — at intimate meals where politicians mingle with donors over wine, cheese and Boeuf bourguignon.
Money speaks with an especially insistent voice in Republican politics. Big money carries a big stick in the party; it used to speak softly, but now that judicial activists on the Supreme Court have turned corporations into people, their voices match their big sticks. Republicans attacking Romney’s record at Bain didn’t really stand a chance.
One thing I did not enjoy, however, in the debate about Romney as either job creator or job killer was the lack of honesty on the part of all involved — including Democrats supporting President Obama.
What’s the truth? Bain Capital invested in companies to make a profit for its investors. That’s it. Not to create jobs. Not out of patriotism. Not as a form of charity. It was about profit.
The companies they invested in were almost always in some kind of trouble. Sometimes the creative destruction that resulted reinvigorated, reformed or reinvented companies. Bain Capital — led by Mitt Romney — became saviors for the workers in the offices and on the assembly lines. Other times, Bain was destructive in the plain and ordinary way — Rick Perry’s “vulture” capitalists — and a company’s assets were liquidated and the workers all laid off.
Regardless of how Romney and Bain did it, their goal was always to make a healthy profit for their investors and themselves. Saving or creating jobs was never their top priority; neither is it a priority for any private equity firm that expects to be successful, whether they offer money for startups or take a chance on the weak and struggling.
Employees cost money. If the investors want to be successful, they need to maximize productivity — and the profits they generate — while minimizing the costs (including the workers) that produce those profits.
For Romney or any of his supporters (or attackers among Republican or Democratic ranks) to assert or even insinuate that the main job of investors is to create more jobs for others is either misleading voters or lying. Sometimes Bain Capital benefited American communities by saving or making new jobs. Sometimes they benefited communities (and the economies) in Mexico, the Philippines or China as manufacturing moved elsewhere. Sometimes they harvested a profit from the “flesh” of a failing company and left the bones for somebody else to clean up.
Democrats have enjoyed being on the sidelines in this debate, because they’re planning on making Romney’s work at Bain an issue. Now they can just run video clips of Perry and Gingrich during the campaign this summer (assuming Romney is the inevitable nominee).
The Democrats mislead as well, however, both in their attacks on investors, and also in their assertions about using the government to make jobs. Government’s main goal can’t be to create jobs, at least not permanent jobs. It can help society and the economy (in the short term) by creating temporary jobs for public works projects, like the WPA, when the economy is weak. Temporary jobs ease tensions when many jobless people cause serious problems, like revolutions that lead to dictatorship or anarchy, to list only a couple of possibilities.
Ultimately, only the self-employed make job “creation” a primary goal. Only the unemployed make “finding” jobs their primary goal. The government cannot “make” permanent jobs without damaging the long-term health of the economy. Companies like Bain can “make” jobs only at the cost of profits for their investors, which they are not likely to do — for some of the same reasons the government shouldn’t.
Our decision-making as voters this year will be much more “profitable” for the country if politicians on all sides speak more clearly and honestly about these issues.
David Rask Behling teaches at Waldorf College in Forest City, Iowa, and lives with his wife and children in Albert Lea.