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Edward Wyckoff Williams

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The Romney Hypocrisy: Bain, Job Creation Fallacies and the Working-Class White Vote

Posted: 05/18/2012 5:04 pm

Mitt Romney is a hypocrite at best, and a liar at worst.

A recent video released by Obama's re-election team reveals the truth behind Romney's assertion that his business experience qualifies him for the presidency. In particular, Romney has maintained he created jobs both as an executive at Bain and as governor. His record in Massachusetts has already been fully scrutinized, and found wanting: dropping to 47th of the 50 states in job creation during his tenure. But now the same myth regarding Romney's purported private sector acumen is being debunked.

In an effort to sell Mitt as someone who "understands the economy", unsubstantiated figures of over a "100,000 jobs created" became regular talking points early in the primary season. Curiously, the campaign never provided evidence, causing even the likes of Fox News celebutante Sarah Palin and former GOP candidate Newt Gingrich to question Romney's veracity. The Former House Speaker once referred to Romney's role at Bain as "exploitive" and "not defensible."

Romney was forced to walk back prior assertions. BuzzFeed's Zeke Miller reported the former governor's campaign now claims an obscure "thousands of jobs" at Bain: another embarrassing example of the candidate's flip-flopping. Alex Seitz-Wald of Think Progress reported that even the "thousands of jobs" figure is suspect considering the only evidence offered was a vague editorial reference by right-wing newspaper Washington Examiner that lacked any verifiable statistical data. Romney and his surrogates are fully on the defensive, as the Obama campaign has finally chosen to play hardball.

The new Obama ad highlights Romney's role in now-bankrupt GST Steel. As CEO in 1993, Romney and his partners purchased Kansas City's GST plant, a successful company with a 105 year history, and thousands of workers. Romney's team extracted profits, reduced employee levels, and by 2001 the company was forced into liquidation. Workers -- many of whom had been with GST for decades -- lost pension and health benefits. By contrast, Romney, Bain executives and investors reaped millions in profits. The result? A bailout in which the federal government was forced to guarantee the pension fund to a tune of $44 million.

The video features quotes from former GST workers whose livelihoods were lost."They came in and sucked the life out of us," one worker said. "It was like watching an old friend bleed to death."

The strategic value of the Obama team's approach cannot be under-estimated; they are speaking to working-class white American voters who are crucial in swing states like Pennsylvania, Ohio, Colorado and Indiana. This important demographic was devastated by the policies of the Bush era, but have been manipulated by Republican and Tea Party dogma and Fox News propaganda to vote against their own economic interests. It is imperative that the president relay his message and reveal Romney for the out-of-touch tycoon he is.

That fine point was not lost on Romney, who immediately responded with a video of his own: pointing out the story of a similar firm, Steel Dynamics, which experienced relative success after investment from Bain Capital in 1994.

But a deeper look into Steel Dynamics reveals the company's success is largely due to $37 million in government grants and subsidies, compared to the $18.2 million Bain invested. An investigative report published by Los Angeles Times showed Indiana's DeKalb County provided $23.4 million in tax abatements, finance bonds and economic development funds. The state added $13.6 million in tax credits, energy grants, road and workforce development. In addition the state raised taxes on county residents in order to finance infrastructure improvements, and Bain was only one of eight investors - though Romney wants voters to believe he was the sole mastermind.

Given Bain's critical reliance on public funds, it is ironic that candidate Romney constantly espouses a platform for smaller government, less regulation and decreased federal oversight. In fact, the Steel Dynamics deal conveys the truth many of Romney's critics already knew: it would have been impossible for him to amass the $250 million fortune he enjoys without the largesse of government spending and subsidies. In fact, Romney's reluctant Tea Party and GOP allies often decry it as "corporate welfare."

Five years after buying Steel Dynamics, Romney and his investment partners sold their stake for $104 million-- reaping a profit of $85 million. But today, the governor backs Paul Ryan's budget which maintains the loopholes and tax credits for private equity firms like Bain, while slashing social welfare programs for the poor and middle-classes. Mitt boldly declares his disregard for federal investment in Pell Grants and Stafford Loans, which offer the less fortunate an opportunity to achieve higher education, and gain access to a world of opportunity that Mitt, his wife Ann, and all their five sons were born into. At a time when half of all American families are poor or low-income, Romney uses smokescreen tactics to deflect from the truth he is a poster child for the GOP's reckless attitude toward average American families.

And herein lies the rub: perhaps Romney insists on making the 2012 campaign a referendum on President Obama's record, in an effort to ignore his own.

A quick look at Obama's presidency reveals net-positive job increases, surpassing the 5 million jobs lost during the Bush-Cheney recession. Obama delivered Healthcare Reform, offering coverage to millions, and widening America's social safety net. The president's sharp business acumen led to capital investments in Detroit; and now GM is the number one automaker in the world, and Chrysler is profitable. Brave veterans returned from Iraq. DADT is dead and so is Osama bin Laden. And for the first time in American history black, brown and white alike can imagine a future in which their children can grow up to become president.

Ben LaBolt, Obama's campaign press secretary, said it best when he explained, "Mitt Romney has asked Americans to elect him based on his tenure as a corporate buyout specialist, where he profited off of outsourcing jobs and bankrupting companies."

The stark contrast between Barack's legacy and Mitt's lies could not be more apparent.

 

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