David Brooks’ latest piece is quite offensive. It’s also grossly inaccurate. Let’s start with his opening paragraph:
Let’s say you are president in a time of a sustained economic slowdown. You initiated a series of big policies that you thought were going to turn the economy around, but they didn’t work — either because they were insufficient or ineffective. How do you run for re-election under these circumstances?
Here we are asked to concede that 28 consecutive months of job growth and 24 months of consecutive retail sales growth are indicative of a “sustained economic slowdown.” I don’t think that is technically accurate. What we have is sustained high unemployment as corporations sit on record amounts of cash. Needless to say, Mr. Brooks is not off to a good start here, as his premise asks too much. His point, however, is that Obama is going negative on Romney because he can’t defend his own record.
Instead of defending the policies of the last four years, the campaign has begun a series of attacks on the things people don’t like about modern capitalism.
They don’t like the way unsuccessful firms go bust. Obama hit that with ads about a steel plant closure a few months ago. They don’t like C.E.O. salaries. President Obama hits that regularly. They don’t like financial shenanigans. Obama hits that. They don’t like outsourcing and offshoring. This week, Obama has been hitting that.
Let’s start with that steel plant. It was called GS Technologies and it was acquired by Bain Capital in 1993. It went bankrupt in 2001. You could call it an unsuccessful firm, but it failed because Bain Capital loaded it up with ten times its annual revenue in debt. It spent all its money paying management fees and dividends to Bain’s partners and interest on their debt. When it went bankrupt, the federal government had to inject $44 million into their pension fund. Romney’s firm (he was still CEO in 2001) walked away with $9 million in profit. Why, we might ask, wasn’t Romney on the hook for any of that pension money? Because he engaged in vulture capitalism, which means you make investments with borrowed money and then arrange things so that you get paid regardless of what happens to the companies you’ve invested in. In Good Fellas, this was described as the “Fuck you, pay me” business plan.
How about those CEO salaries? In 1980, when Jimmy Carter was still president, CEO’s were being paid 42 times what an average blue-collar worker was making. By 2011, that ratio had become 380:1. Did the voters ever get together and pass some initiative authorizing this change? Was our country less capitalist in 1980 than it is today? Are CEO’s making nine times as much money for their shareholders as they did 32 years ago?
This next bit is a doozy:
The president is now running an ad showing Mitt Romney tunelessly singing “America the Beautiful,” while the text on screen blasts him for shipping jobs to China, India and Mexico.
The accuracy of the ad has been questioned by the various fact-checking outfits. That need not detain us. It’s safest to assume that all the ads you see this year will be at least somewhat inaccurate because the ad-makers now take dishonesty as a mark of their professional toughness.
Mr. Brooks can’t specify or cite the fact-checking outfits? Nor can he make an independent determination on the ad’s accuracy? But he asks us to assume the worst? He should be flogged by his editor for submitting this garbage. And his editor should be flogged for letting it stand.
And, get this. Despite the ad being inaccurate (probably, in Mr. Brooks’ estimation), it attacks a system that Mitt Romney “personifies.” Does that sound inaccurate to you?
This ad — and the rhetoric the campaign is using around it — challenges the entire logic of capitalism as it has existed over several decades. It’s part of a comprehensive attack on the economic system Romney personifies.
Throughout this piece, Mr. Brooks works very hard to equate Romney’s activities at Bain with capitalism. If you attack Bain, you attack the whole system of capitalism. But it is possible to oppose certain business decisions and practices without opposing the principles of free enterprise. When President Obama talks about outsourcing, he talks about perverse tax incentives that reward it. He doesn’t talk about making it a crime to hire Indians to help people with their software problems.
But, politically, this aggressive tactic has worked. It has shifted the focus of the race from being about big government, which Obama represents, to being about capitalism, which Romney represents.
Just as Republicans spent years promising voters that they could have tax cuts forever, now the Democrats are promising voters that they can have all the benefits of capitalism without the downsides, like plant closures, rich C.E.O.’s and outsourcing.
So, now the president of the preeminent capitalist country in the world does not represent capitalism. How dishonest can you get? The president is saying that we should not incentivize plant closings and outsourcing through the tax code, and that we ought to have more reasonable CEO compensation. He’s also suggesting that vulture capitalists like Mitt Romney have enriched themselves by loading up profitable companies with debt and fees until they go bankrupt. Where’s the efficiency in that?
But we’re getting to “efficiency.”
Romney is going to have to define a vision of modern capitalism. He’s going to have to separate his vision from the scandals and excesses we’ve seen over the last few years. He needs to define the kind of capitalist he is and why the country needs his virtues.
Let’s face it, he’s not a heroic entrepreneur. He’s an efficiency expert. It has been the business of his life to take companies that were mediocre and sclerotic and try to make them efficient and dynamic. It has been his job to be the corporate version of a personal trainer: take people who are puffy and self-indulgent and whip them into shape.
That’s his selling point: rigor and productivity. If he can build a capitalist vision around that, he’ll thrive. If not, he’s a punching bag.
Good luck going into blue collar America and telling people that you’re an “efficiency expert” who practices the kind of virtuous capitalism that puts rigor and productivity over the interests of the workers. But it’s not even true. Mitt Romney was not a venture capitalist or an efficiency expert. He feasted on companies. A bankrupt company is not an outsourced company. It’s just broke, with a broken pension plan and unpaid vendors.
For people who have trouble understanding complex business schemes, this visual representation will help you understand how Romney earned a quarter of a billion dollars in only fifteen years.
That’s capitalism, too. You wanna defend it?