Mitt Romney’s background at Bain Capital, the only experience the Republican presidential hopeful considers relevant to his campaign, can be pretty ugly. Romney orchestrated leveraged buyouts, flipping companies quickly for large profits, at the expense of thousands of workers who were considered collateral damage.
But for months, there’s been a standard line from the GOP campaign whenever President Obama’s team even hinted at this issue: what Romney did at his vulture-capital firm was similar to what the administration did when it saved the auto industry.
The argument has never stood up well to scrutiny. Back in January, when Romney started pushing the argument, the Democratic National Committee put together this video explaining why the comparison doesn’t make sense.
At a purely superficial level, Romney’s argument may appear to have some surface-level accuracy: in order to save GM and Chrysler, the Obama administration had to close some dealerships and make some sacrifices in order to rescue the larger companies themselves. When Bain Capital had to lay off thousands of American workers, the argument goes, Romney was largely doing the same thing.
But a closer look reveals how deeply foolish the comparison really is. Romney’s leveraged buyouts and mass layoffs were intended to do one thing: make a profit for investors. The fate of the companies, the workers, and the surrounding communities was irrelevant. Period. Full stop.
Obama, meanwhile, wasn’t motivated by profit; he was trying to save the American auto industry, the backbone of the nation’s manufacturing sector, millions of American jobs, and the economy in the Midwest.
Romney exploited the companies he gutted to line his pockets and those of his investors. That isn’t the same as what Obama did for GM and Chrysler; it’s the opposite.
Greg Sargent had a good piece yesterday, taking a look at the larger context: whether Romney realizes this or not, he’s helping “underscore the philosophical difference between the two that the Obama campaign is trying to highlight with the Bain attacks.”
Romney defends his Bain years by arguing that any criticism of it constitutes an attack on free enterprise itself. Romney does acknowledge that the layoffs that occured in cases such as that of GST Steel are unfortunate — when turning around companies, you win some, and you lose some. But his philosophy, ultimately, is that such occurences, however unfortunate, are necessary for the greater good, and don’t alter the larger truth: An unfettered free market is the best hope for expanding opportunities for those who lack them. That’s what drives his anti-government rhetoric; he continually tells us that we need to “get government out of the way” to unlock America’s “potential.” Romney believes the best way to to foster shared prosperity is with a near-total commitment to liberating the private sector.
But when Romney invokes the auto bailout, all he does is remind us of an instance where his economic worldview broke down — where his philosophy compelled him to advocate for what likely would have been a disastrous course. This worldview led him to originally argue that the bailout would guarantee the auto industry’s certain demise. This worldview obliges him to continue arguing that the auto industry would be in better shape today than it is now if Obama had not pursued a government “intervention.” Many experts dismiss Romney’s claims about the bailout as thoroughly wrong on several levels .
If Obama is lucky, Romney will keep making this counterargument, and the president’s re-election team will have additional opportunities to highlight the Republican’s misguided vision.