I wrote this piece back in January on my old blog, A Night In The Box, and thought it would be appropriate to recycle in anticipation of the upcoming RNC corporate orgy.
For all of his bumbling, incompetent magnificence, Rick Perry may have illuminated a key contradiction inherent in the American Character. God only knows it would take a troglodyte cowboy like Perry to accuse Mitt Romney of being a fiscal bully. I mean, it’s not like his entire party’s economic platform is based off of the infallibility of the free market or anything, right? Now, I’d like to give the governor full credit for the attack on Romney, but the thing is so damned clever that a staffer had to have written for him. Perry’s attack was levied at Romney’s history in the private sector when he was at the helm of Bain Capital, a private equity company that acquires struggling or fledgling companies with the intent of re-purposing them in a way that benefits their investors. In an attempt to paint Romney as some sort of villainous, job-cutting succubus for small businesses, Perry stated that, “There’s a real difference between venture capitalism and vulture capitalism.” For those at home wondering, that sound you hear is the violent ripping up of donation checks by 65% of Perry’s exorbitantly rich backers.
The weird thing is that I totally understand why Perry would make a crippling statement like that. This man, who as recently as September was the frontrunner for the Republican nomination, got a miserly 0.7% of the votes in the New Hampshire Primary. Perry did so poorly that he lost to “Other” by nearly a 2-to-1 margin. The man had no choice but try and take Romney out at the knees, even if it meant submarining his own party’s central economic tenet. It’s like a defensive back in football yanking a wide receiver down by the back of his jersey after he’s been thoroughly burned off the line. Yeah, he’s going to take a huge pass interference penalty, but if he didn’t grab the guy, our DB friend would be watching his man doing the Cabbage Patch in the end zone. It was a desperate act buy a desperate man, but that doesn’t mean there isn’t truth to what he says, although I disagree with his choice of metaphorical animal.
It is both alliterative and politically convenient for men like Perry and Gingrich to refer to Romney as a “Vulture Capitalist,” but that would be overly simplistic and unfair to Mitt and to Bain Capital. It would be more appropriate to say that Bain Capitol is akin to a lion or an alligator; basically any predatory animal that you’d want to watch in super slow motion on the Discovery Channel. And, as all of nature’s hunters have learned to do over the years, Bain Capital goes after the small and the weak. No one would ever chastise a Cheetah for going after the gazelle with the bum leg lingering in the back of the herd. Why would you criticize a money-making enterprise for buying up a company when it’s the economic equivalent of a slow, inattentive water buffalo? As a businessman, Mr. Romney appears to have been very effective, making himself and his investors much richer in the process. Of course, while Romney is touting the supposed “100,000” new jobs Bain created under his watch, the truth is that these “new jobs” are—at best—an ancillary benefit. Romney’s only real duty was to his investors. The fact that formerly Bain-run companies like Staples, Domino’s Pizza or The Sports Authority created jobs was just as immaterial to Romney and his investors as were the 22% of companies that either filed for bankruptcy or dissolved within eight years of being acquired by Bain. What mattered was the fact that out of the $1.1 Billion given to the company by investors, Bain gave out a return of $2.5 Billion by the time Romney left the firm in
While Romney may be a successful businessman by most accounts, does that necessarily mean that he would make a great president? Here is where Perry’s Vulture Capitalism dig picks up a little more momentum. If you attack Romney’s business acumen, then you are sure to lose because he was playing by the rules of the (kinda-sorta-almost) free market. Capitalism is a Hobbesian get-up where the biggest and the strongest are encouraged to beat the ever-living piss out of whosoever has the poor sense to get in their way. There ain’t no damn sense in crying “foul” when you’re playing on big business’ turf, especially when many of those same big businessmen are filling the coffers of your campaign’s war chest. Any attempt to paint Romney as unfit for the presidency shouldn’t focus on his capabilities as a businessman, which are difficult to fault. Rather, any argument concerning the skill set and experience Romney brings with him from the private sector should try to show why these qualities aren’t necessarily germane to being an effective leader of the men, or at the very least, convincing said men to vote for you come November.
Let’s take a look at Staples Inc to from the point of view of Romney the businessman and Romney the candidate. Of the 100,000 jobs that Romney has repeatedly claimed to have created while at Bain, roughly 90% of them came from Staples Inc, a company that they invested in at its inception back in 1986 at its sole location in Framingham, Massachusetts. Today, Staples Inc. has over 2,000 stores and 89,000 employees, making it the largest and most profitable office supply company on the planet. From a business standpoint it was phenomenal deal for Romney: Bain Capital ended up reaping a sevenfold increase on their return and Romney himself served on the Staples Board of Directors for over a decade. And now, candidate Romney can claim a stellar job creation record because of , in large part, one crucial investment. The only thing is, did Romney and Staples Inc. actually create new jobs or did they simply redistribute them?
I don’t know about y’all, but when I hear talk about creating new jobs, I envision jobs that had not previously existed and which added to the overall size and health of the job market. For instance, the first “health food store” I can remember seeing in Cincinnati was a Wild Oats that sprang up with the construction of the Rookwood Commons shopping center. Now, all of the jobs that were filled at that Wild Oats, along with the other new stores in the shopping center, represented a tangible growth in the overall labor market. In 2007, Whole Foods Market Inc. completed their buyout of Wild Oats for $565 million and the Rookwood Commons’ Wild Oats was no more. All of their signage and and merchandise and the whole bit was pitched and replaced with Whole Foods swag. Today, despite the fact that the U.S. Court of Appeals reversed their decision on the merger and Whole Foods was forced to sell Wild Oats, the space in Rookwood Commons is still a Whole Foods. And if you ask anyone who works for the business side of Whole Foods if those are “new jobs”, they’re going to say yes. Ask anyone who actually worked inside that Wild Oats/Whole Foods when the merger took place if there were new jobs created and they’d probably go tell you to fuck yourself.
What does this have to do with Romney’s 100,000 new job claim? Well, I for one don’t buy that Staples Inc. magically pulled 89,000 jobs out of their ass without effecting decimating or absorbing countless other businesses. Since 1987, Staples Inc. has made 52 separate acquisitions., including but not limited to, Business Depot Ltd. (’94), Quill Corporation (’98), Medical Arts Press (’02), Chiswick (’06), American Identity (’07) and Corporate Express (’08). To put that into perspective, when Staples Inc. acquired Corporate Express and re-branded it as Staples Advantage, they did so to the tune of $2.6 Billion and, at the time of the merger, almost 18,000 “new” employees. I couldn’t find anything stating the status of those employees since the acquisition, but even if they all still have their exact same positions, that represents over 20% of the jobs “created” by Staples Inc. For Romney the businessman, that acquisition did create 18,000 new jobs for a company he invested heavily in, but for Romney the candidate, all that represents is a new boss for his more fortunate constituents and unemployment for the rest.
Beyond the direct links between Bain and Staples’ job growth, there are the natural ebb and flow of the new global and hyper-digital marketplace. When Staples was conceived in the mid-eighties, how many typewriter distributors and manufacturers do you think there were? What about cameras? There has been talk about former photo giant Kodak filing for Chapter 11 bankruptcy as soon as February. In 1982, Kodak had over 60,000 employees at the headquarters in Rochester, NY. Today, they’re down to a paltry 7,400. The digital camera may have been a boon for office superstores like Staples, but when Romney campaigns through upstate New York, “job creation” at places like Sony or Nikon doesn’t really mend any fences (especially considering both companies are Japanese).
The image that got me thinking about Bain Capital so much was that of Lionel Barrymore as Mr. Potter in It’s A Wonderful Life, sitting behind his ornate desk in his wicker-back wheelchair, making tents with his fingers and trying to figure out some way to stop old George Bailey. If ever there were a more pure distillation of unbridled capitalism, I’ve never seen it. But, despite being a “scurvy little spider,” Mr. Potter was a hell of a businessman and if he were running Bain Capital, I don’t know if he’d have done anything much differently. But ask anyone which fictional man they’d rather have for president and they’d all tell you they want Jimmy Stewart. As a businessman, he was absolutely dreadful and that was the entire point: he barely made a red cent off of all of his investments at the Building and Loan because he cared so much about his community and charged microscopic interest to his clients. Hell, the man gave out his damned honeymoon savings when the Depression hit and all the banks were closing and even biggest simpleton could have told you he was going to take a bath on the thing. Which leads us to the contradiction that I tried to start this whole damned thing with:
Despite what everyone on the campaign trail might tell you, Republican or Democrat, there is no compassion in capitalism. The principal reason that Mitt Romney was such a successful businessman is because he thought in terms of corporations instead of individual people. He has gone so far as to say on multiple occasions over the past few weeks that “corporations are people” too. His spurious argument is that since corporations are made up of people and since everything created by a corporation goes to people, then it follows that corporations are people. By this, “whatever we’re made of, we are” argument, it can be inferred that Romney believes that hospitals are doctors and zoos are animals. But, the bigger point is this is simply one more way of dehumanizing the American electorate. If it stands to reason that corporations are people, then it must also be true that all people are simply bits and pieces of corporations. The bigger bit or piece that you represent, the greater your personal worth. In this worldview we are all the bastard children of Henry Ford. America is one big, synchronized, ever-changing assembly line and if you don’t like it you can get the hell out ’cause there are millions of people all over the world and within these borders that would kill to be making $7.25/hr screwing the the caps on tubes of toothpaste. Romney, Gingrich, Paul, Obama…they’re all foreman who give us our marching orders and the truth is those orders don’t vary much. However, with what limited say I have in the process, I’d at least like to vote for the guy who at the very least pretends to side with the worker every once in a while.
Categories: US Politics