Mitt Romney's history at the helm of Bain Capital tells us a lot about the kind of leader he would make as president.
First, of course, it demonstrates conclusively that he has absolutely no experience "creating jobs." Bain Capital was not in business to "create jobs" -- it was in business to "create wealth" -- for Mitt Romney and his fellow Wall Street investors. When Bain bought businesses that happened to create new jobs, that was entirely incidental. And when Bain-owned businesses laid off workers, cut wages, eliminated pensions or health care benefits -- or went bankrupt -- that was incidental as well.
Romney and the Bain crew couldn't have cared less whether their actions created jobs, eliminated jobs, or destroyed entire communities so long as they served their one and only purpose: making themselves and their colleagues very, very rich.
Now I'm not arguing that there is anything wrong with making yourself rich. But it has absolutely nothing to do with "creating jobs" -- as the 750 workers at the 100-year-old GST Steel in Kansas City discovered when, after Bain took over their company, Bain loaded it with debt -- milked it of cash and bankrupted the company -- but still walked away with millions.
And whether or not there are other "success stories" where new jobs were created is completely irrelevant to the central point that Romney has never demonstrated he "knows how to create jobs in the private sector." Romney was very good at extracting wealth for himself and his friends. He viewed the workers with about as much concern as you might give to a fly you flick off your desk or swat on a hot summers day.
To Romney, workers -- and the jobs they filled -- were nothing but expendable means to an end.
But that's not all his experience with Bain can teach us about Willard Mitt Romney. It tells us that he is used to playing by a different set of rules from ordinary Americans. Romney and Bain helped to create a new rulebook for the American economy -- one that ultimately helped lead to the economic disaster that came to a head in September 2008.
Most people think it's great for businesses and investors to make money. The ability to own a business and make money provides one of the major engines that has made the American economy the largest and most innovative in the world.
And we all know that some businesses fail and others succeed.
But in order for the rules of the economic game to send the right signals to incentivize innovation and efficiency, they have to work both ways. Investors win if they create successful, productive, growing businesses. They lose if they invest in businesses that are unsuccessful, inefficient or unproductive.
Romney and Bain played by a different set of rules. Their rules were simple: heads I win, tails you lose.
What ordinary Americans find so outrageous is not that people in American can make money, but rather that the folks on Wall Street make millions on businesses that fail.
Bain often did leveraged buyouts. It used the businesses it intended to buy as collateral to borrow the money to buy them. Then the partners at Bain transferred cash from the companies they bought into their own pockets -- in the form of fees and "returns on investment." If the company ultimately ran out of cash, shut down, laid off its workers, too bad -- they still walked away with millions. If they succeeded and stayed in business, so much the better.
Bain structured deals where they couldn't lose.
The problem is that ordinary Americans don't play by rules that allow them to make money whether or not they succeed.
If most Americans are fired from their jobs, with the exception of unemployment insurance, their income stops.
In fact, most Americans are not guaranteed financial security, even when they do work hard and play by the rules. Ask everyday middle class people what happened to them after they had worked diligently for years and then the recklessness of a bunch of speculators on Wall Street they never heard of -- or voted for -- crashed the economy and they lost their jobs.
Their good-paying jobs disappeared, their pensions evaporated, and the value of their houses plummeted. Now mind you that that ordinary middle-class working family didn't do anything to cause this calamity. But they paid the price regardless.
That's bad enough. But the sight of the speculator class who caused this disaster walking away with millions is beyond infuriating.
Ordinary Americans believe it is simply wrong for people like Romney to make money by bleeding companies dry and then leaving them to die.
Middle class people believe -- correctly -- that our economy works when success is rewarded -- where workers and owners benefit together.
And it works when the pain of failure is shared by workers and owners alike.
What infuriated ordinary Americans about the bailout of Wall Street was not the fact that government stepped in to save our financial system. It was that many of those whose recklessness caused the collapse of our economy walked off with billions in bonuses.
For everyday people, this is not just a question of economics -- it's a question of right and wrong.
In fact, the central question of this election is whether we are all in this together and play by the same rules, or whether there is one set of rules for the lucky few and another for ordinary Americans.
No one is arguing that you shouldn't be able to get rich in America.
I have a friend whose father made a lot of money in the 1940s and '50s -- back when the top tax rate ranged from 70% to 90% -- back when the income gap between Americans was shrinking and most people, rich and poor alike, were better off the next year than the year before. My friend recalls his father saying: "We paid a lot of taxes, but we built a hell of a country."
Warren Buffet, who advocates the "Buffet Rule" that would prevent millionaires from paying lower tax rates than their secretaries, has made a fortune investing in companies because of their underlying value -- their ability to generate profit from their operations -- from their ability to add value to products and services. Buffet does not buy companies as speculative investments. He makes money by investing in ongoing, productive businesses -- not by gambling or bleeding companies dry and leaving them to die.
In contrast, Romney economics is an economics of impunity for the lucky few. It is an economics of entitlement where those at the very top of the income ladder structure the rules of the economic game to guarantee their own success -- whether or not everyone succeeds.
Romney economics inevitably results in exactly the kind of increasing income inequality that more than any single factor caused the Great Recession. It guaranteed that the "lucky few" could siphon off all of America's income growth for decades. That, in turn, guaranteed that ordinary people would not have the increasing incomes to buy the new goods and services that were produced by an increasingly productive economy.
Henry Ford knew you had to pay your workers enough so they could buy the products they produced -- otherwise there would be no customers for a growing economy and the result would be economic stagnation. Romney economics has turned the Henry Ford Rule on its head. As a result, Romney economics guarantees more and more for the lucky few and a shrinking middle class.
Next November we face a choice between President Obama's vision of a society where everyone has a fair shot, gets a fair share, and plays by the same set of rules -- or a society where the rules are rigged for the few at the top. It is a choice between a society where we all succeed together or a society where the lucky few get a guarantee of success and ordinary people are simply pawns in their economic game.
That's why Mitt Romney's history at Bain Capital is so important. It not only demonstrates he has no experience as a "job creator." It is emblematic of the choice we face over the kind of economy and society want to leave to our children.
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