Is the ability to successfully manage a private equity firm the defining criterion for determining whether such an equity fund manager, as president of the United States, will manage and operate our federal government better than someone who has not been a private equity fund manager? This was the theme of Mitt Romney's successful primary campaign. It is now the centerpiece of his bid to replace President Obama.
Okay, so what are some of these presumed advantageous managerial skills that Mitt Romney would bring to the presidency?
We assume Governor Romney has taken a look at the "balance sheet" of the federal government. Accordingly, as a former private equity manager, has he configured what a healthy operating debt to equity ratio the government should have? Is a household income of less than a million dollars equivalent to a common stock holder; everyone above a million, a preferred shareholder?
Has Romney looked at the annual revenues of the federal government to determine if they are sufficient to pay short-term liabilities and annual interest on our long term debt? Has he determined what annual operating cash flow is needed to cover the federal government's annual operating expenses?
Romney's skills as a business manager at Bain Capital would be an abstract and intellectual exercise of conjecture, but for his actual tenure as governor of the state of Massachusetts following his years at Bain.
What were his achievements as governor that demonstrated the successful transfer of his management skills developed at Bain?
When Romney was governor of Massachusetts, he had one of the worst economic records in the nation. His state ranked 47th in job creation.
- "During Romney's tenure as governor, Massachusetts' economic performance was 'one of the worst in the country' on 'all key labor market measures' [Boston Globe, 7/29/07].
- "In Romney's four years as governor, Massachusetts ranked 47th out of 50 in jobs growth [Marketwatch, 2/23/10]." "'No matter how we sliced the data,' Massachusetts was 47th out of 50 states in job creation under Romney [Politifact, 6/22/11]."
- "Under Romney the wages of the average worker in Massachusetts fell by nearly 2 percent [Boston Globe, 7/29/07]."
- Romney increased state spending by 6.5 percent annually [New York Times, 12/31/07]. He "proposed 8 percent higher spending per person in Massachusetts [Factcheck.org, 10/12/07]" and he "raised fees and faxes on individuals and businesses between $740-750 million a year [Boston Globe, 9/27/06]."
- "During Romney's tenure, the Massachusetts tax burden increased from 10 percent to 10.6 percent of per capita income [Boston Globe, 6/29/07]." "State and local tax burden increased 6.5 percent during the Romney administration [The Tax Foundation, 8/7/08]."
- "Romney's claim to have closed a $3 billion budget gap is 'misleading' as the gap was closer to $1.2 billion [Factcheck.org, 9/6/07]. Romney left a $1.3 billion budget gap [New York Times, 3/16/07]."
Romney supporters who claim his Bain Capital management experience can be successfully transferred to his "management" of the federal government omit the empirical evidence of his "transferred management skills" as governor of Massachusetts. Most importantly, no one seems to talk about that critical aspect of exercising management skills as president of the United States: prudent judgment.
The president of the United States is not guided by achieving an acclaimed internal rate of return or management of the government "annual operating cash flow" to protect the interest of "preferred stockholders." President Obama, like presidents before him, must be concerned about all of the people he governs.
While the media and blogosphere have been pre-occupied with the issue of Romney's time at Bain Capital, there is a more ominous challenge to President Obama's re-election. Last week I wrote a post called "Managing Disappointed Expectations: A Major Challenge to President Obama's Re-Election." Since then, I have come to believe that the greatest challenges to his re-election are the unlimited spending against him permitted by the Citizens United decision of the Supreme Court and the various "voter suppression laws" enacted or pending in several States.
Citizens United v. Federal Election Commission, a landmark decision by the United States Supreme Court, held that the First Amendment prohibited the government from restricting independent political expenditures by corporations and unions. Responding to the 24/7 "carpet bombing" of negative ads by "super PACs" funded by corporations and wealthy individuals in key states like VA, Florida, Ohio, North Carolina, and Pennsylvania will require lots of time and energy by the Obama re-election campaign.
Similarly, the threat of "voter suppression laws" will have to be addressed. In 2011, more than 30 states' legislatures considered legislation to make it harder for citizens to vote. The Brennan Center for Justice reports, "These new restrictions fall most heavily on young, minority, and low income voters, as well as voters with disabilities."
- "These new laws could make it significantly harder for more than 5 million eligible voters to cast ballots in 2012."
- "The states that have already cut back on voting rights will provide 171 electoral votes in 2012-63 percent of the 270 need to win the presidency."
- "Of the 12 likely battleground states, as assessed by an August Los Angeles Times analysis of the Gallup polling, five have already cut back on voting rights, (and may pass additional restrictive legislation), and two more are currently considering new restrictions.
The proposed or enacted voting restrictions in several states consist of:
- Registration restrictions: limiting when citizens can register, restricting who is permitted to assist them and tougher beaurocratic requirements to register; ending highly popular Election Day and same-day voter registration.
- Residency restrictions
- Limiting early and absentee voting
- Voter ID laws: mandating individuals must have certain kinds of government-issued ID at polls before being allowed to vote. These "ID laws," in 34 states, would disenfranchise an estimated 21 million voters
In 2008, 15.1% more African Americans voted than in 2004. 28.4% more Hispanics voted in 2008 than in 2004.
There was a complaint regarding my use of a quote by Matthew Vadum in an earlier version of this blog. The correction was made because the quote I used by Mr. Vadum did not explicitly say or use the phrase or words "racial minorities." Instead, the words I quoted from Mr. Vadum referred to "poor people."
In a September 2011 article in the American Thinker, entitled "Registering the Poor to Vote is Un-American," Mr. Vadum wrote:
"Registering them to vote is like handing out burglary tools to criminals. It is profoundly antisocial and un-American to empower the nonproductive segments of the population to destroy the country -- which is precisely why Barack Obama zealously supports registering welfare recipients to vote."
Apparently, the complainant believes the correction redemptive when it makes clear that his comments were about poor people or people on welfare, and not explicitly about "racial minorities."
Only in America.
Dr. Clarence B. Jones
Correction: An earlier version of this post stated incorrectly that columnist Matthew Vadum has compared registering minorities to vote with "handing out burglary tools to criminals." Mr. Vadum was in fact writing about the poor, not racial minorities.