Political Animal


January 11, 2012 1:10 PM I once caught a job this big

By Steve Benen

As recently as five months ago, Mitt Romney boasted about having created “tens of thousands of jobs” at his vulture-capital fund.

“When I was at Bain Capital, we invested in about 100 different companies. Not all of them worked…. But I’m very proud of the fact that I learned about how you can be successful with an enterprise, why we lose jobs, how we gain jobs and overall, in those 100 businesses we invested in, tens of thousands of jobs, net-net, were created.” [emphasis added]

That was the same line Romney took three months ago, in early October.

By December, Romney had come up with a new number.

“In the real economy, some businesses succeed and some fail,” said Romney. “That’s how that works and you try and encourage the more successful and fortunately for many people, tens of thousands of jobs, actually over a hundred thousands of jobs were created by the investments that we were able to help make.” [emphasis added]

The 100,000 figure quickly became the standard talking for Romney and his supporters, but it’s been definitively debunked. The number simply has no basis in reality, leaving the Republican frontrunner with a weak foundation for his entire campaign.

Which leads us to the new/old line, which Romney shared on CBS this morning:

“People here in the state know that in the work that I had, we started a number of businesses, invested in many others, and that over all created tens of thousands jobs so I’m pretty proud of that record.” [emphasis added]

So, over the course of a few months, Romney went from five-figure job growth, to six-figure, and then back to five-figure. Anyone who finds the former governor’s line persuasive isn’t paying close enough attention.

Why is Romney proving to be so incoherent on what’s supposed to be his top issue? After all, as we discussed yesterday, this is supposed to be the raison d’etre of his entire campaign: elect him president, the argument goes, because he created so many jobs in the private sector. If this is his top selling point, why can’t Romney keep his own story straight? What’s with all the fuzzy math?

The answer is, Romney is trying to turn his private-equity firm into something it’s not. Bain Capital and its executives weren’t in the job-creating business — its purpose was to make money for its investors, not grow businesses and create jobs. What’s wrong with wealth creation? In theory, nothing. The problem, though, is when Romney decides to describe his firm in ways that are at odds with reality.

As Glenn Kessler explained, the Bain prospectus “never mentions ‘jobs,’ ‘job,’ or ‘employees.’” Ezra Klein added, “Those simply aren’t the objective. Sometimes, in fact, they’re collateral damage.”

Again, this is just how private-equity firms work. It’s a feature, not a bug.

But Romney wants to repackage reality in a way voters might find more appealing, since the truth doesn’t quite work. The result is a series boasts that completely fall apart under scrutiny.

Or as Ezra concluded, “Romney invited the electorate to judge his economic chops by judging his success at something he wasn’t trying to do and that isn’t relevant to the policies he would pass as president. The more energy he invests in this narrative, the larger his eventual losses will be.”

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


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  • Robert on January 11, 2012 1:22 PM:

    "Why is Romney proving to be so incoherent on whatís supposed to be his top issue?"

    Because this claim, just like everything else in his campaign is Bull Shit. Next question?

  • Quaker in a Basement on January 11, 2012 1:22 PM:

    As long as we're on the subject of what is or isn't a productive line of debate, Steve, I don't see much profit in quibbling over the difference between "tens of thousands" and "one hundred thousand." As any third-grader will tell you, one hundred thousand is exactly ten "tens of thousands."

    More to the point, what are the principles of job creation Romney thinks he learned at Bain? I think the general principle is to slash payrolls, set the survivors adrift and see what happens.

    That's fine for the castaways, in the unlikely event they don't founder, but it's certain doom for the castoffs.

  • c u n d gulag on January 11, 2012 1:24 PM:

    Give Mitt time.

    By summer, he will have created MILLIONS of jobs.

    And by late October, it'll be BILLIONS!

    In truth, he probably did help create hundreds-of-thousands of jobs.
    In Mexico.
    In China.
    In India.
    In Thailand.
    In The Philippines.

  • Josef K on January 11, 2012 1:33 PM:

    Anyone who finds the former governorís line persuasive isnít paying close enough attention.

    You've just described roughly 90% of likely Republican voters.

  • Mitt "Tommy Flanagan" Romney on January 11, 2012 1:48 PM:

    "I thought I was gonna lose my job once, but then I fired 10,000 people and everything worked out alright."

  • Danp on January 11, 2012 1:54 PM:

    More to the point, what are the principles of job creation Romney thinks he learned at Bain? Quaker

    Bingo! And what does the Bain strategy have to do with improving the economy, for that matter? Or the balance of debt? It's not like he can merge North and South Dakota and have an IPO. Or downsize Texas to make it more efficient.

  • Quaker in a Basement on January 11, 2012 1:58 PM:

    Or downsize Texas to make it more efficient.

    Nice thought, though.

  • DAY on January 11, 2012 1:58 PM:

    "And then finally, when there's nothing left, when you can't borrow another buck from the bank or buy another case of booze, you bust the joint out. You light a match.Ē

    -Henry Hill, Goodfellas

  • RalfW on January 11, 2012 2:06 PM:

    Let's also talk about the wages and benefits at Staples or Sports Authority.

    I'm pretty sure they're a lot lower than the wages in the manufacturing sector Romney and Bain managed to rather successfully shut down here and move abroad.

    I think his job creation idea is bunk - particularly as he's trying to take credit for jobs that arose years after he left Bain - but the switch to lower-wage retail/service jobs has exacerbated the growing income gap in this country.

  • plim on January 11, 2012 2:13 PM:

    What is more important is his record as Governor. Afterall, he is running for President, not CEO. His job creation record (or lack thereof) in the private sector would be important to me if I were hiring him to run a company. But since we would be hiring him to run the country -- under all the constraints of public office -- it is his private sector job creation record (or lack thereof) during his tenure as an elected public official that truly matters.

    The Bain job creation stuff is totally irrelevant.

  • Okie on January 11, 2012 2:24 PM:

    From Wikipedia:

    "Beginning in 1989 (Bain Capital), which began as a venture capital source investing in start-up companies, adjusted its strategy to focus on leveraged buyouts and growth capital investments in more mature companies."

    In short, they left venture capital (the Staples experience) for the more profitable realm of corporate raiding. Vulture capitalists.

  • exlibra on January 11, 2012 2:29 PM:

    The Bain job creation stuff is totally irrelevant. -- plim, @2:13

    It might have been, had not Mittens dragged it into the "conversation" by bragging about the numbers of jobs he created there. What's the term? "Unenforced error"? Mittens seem especially good at creating those.

    "edomates 66021-4". Edomite mates? And the artfully hidden 666 (+1)? All on a Romney-related thread?

  • Perspecticus on January 11, 2012 2:47 PM:

    I want to add one more aspect to this discussion. Let's take him at his word and say yes, he created 100,000 jobs at Bain Capital. In what way would that have any bearing on his becoming President of the UNited States? Carrying it further, let's say Mitt Romney created McDonald's, a business that has created many wealthy people and employed millions. So what? How does the ability to create jobs in one company, small or humongous, bear any realtionship to the job of president?

  • just bill on January 11, 2012 2:56 PM:

    but steve, the point isn't whether it's 10,000 or 100,000 jobs. the point is that both numbers are complete f**king lies! net net? with all of the bankruptcies and layoffs, his net net was probably thousand of jobs in the negative!

  • Jimo on January 11, 2012 3:21 PM:

    It is also important to remember that even if you credit Romney (and Bain) the occasional success (usually Staples is cited) in creating jobs that this "creation" comes at the expense of job destruction in competitors.

    Sure, Staples employs a lot of people today but it does so because the company put a lot of (inefficient) 'mom and pop' office supply businesses out of business. Romney can argue that Staples provides consumers both more selection and lower costs but not more jobs because that efficiency is largely the consequence of fewer net jobs in the retail office supply industry. The true number of jobs created almost certainly are negative. (This is the 'Wal-Mart' dilemma: efficiency but at a cost.)

    The only serious potential off-set is if the winners from this process (the Bain investors) take that money and, instead of wasting it on consumption like caviar or running for President, invest it in new technologies or capacities (such as the next Apple or building a more modern power plant or applying modern resource recovery techniques to old oil or gas fields). Whether these 'winners' did that -- let alone whether they created this investment within the U.S. where the jobs created would be American -- is anyone's guess. The odds, however, say: a mixed bag. This is especially so given that we know the macro statistics are for fewer American jobs overall.

  • k l m on January 11, 2012 5:20 PM:

    Steve, your writing is among the best anywhere. But I think your headlines may be THE best!!

  • Tom Dibble on January 11, 2012 6:09 PM:

    Simple rule of thumb:

    You go to a restaurant, get served a nice meal. The service is excellent. You still don't hire the waiter as head chef. Just because someone is in an industry and does well at their job doesn't mean they are good at everything the industry is associated with (rightly or wrongly).

    Romney is a waiter vying to become head chef. His excellence at his job has earned him a lot of tips (although many would say it's more his excellence at stealing money from peoples' wallets while they are in the restroom that made up his "tips"). But that doesn't mean he'll do better at making the restaurant profitable while cooking the food.

  • stevestory on January 11, 2012 6:34 PM:

    Sorry but this is a bullshit post. 100,000 is, as pointed out above, tens of thousands of jobs.

  • Texas Aggie on January 11, 2012 8:28 PM:

    Whatís wrong with wealth creation?

    It depends on how it is done. In Romney's case, he "earned" multimillions in management fees for driving companies into bankruptcy while selling off the parts that were still viable. The companies probably could have used that management fee money to improve the business rather than Romney's bank account. In other words, what we have here is the same as malpractice. He didn't create anything and he didn't provide a worthwhile service, just like Wall St. when it drove the economy into the pits.

    On another note, Romney is counting jobs added to companies he didn't destroy in the years after he left Bain. By the same token we should be able to subtract the jobs that the companies he drove bankrupt would have created if he hadn't messed with them. That would be a lot more job destruction than just the people working who he fired and who suffered when their employers went under.

  • ed delaney on January 12, 2012 12:05 AM:

    Staples, Sports Authority? So employees moved from an existing company to a new company that was backed by Bain's millions, If Bain had used it's resources to create a new industry, that would be something, but another Office Max or Athletes Foot with just a new name? Nobody cares and nobody wins except Bane and their investors. Bane: Soulless rich people who look for opportunities to make more money, nothing else.

  • mvc on January 12, 2012 2:23 PM:

    Even if we give Romney credit for creating 100,000 jobs while at Bain (and even since he left Bain as Romney is taking credit for the jobs Staples, etc, have created since he left) isn't 100,000 jobs in 22 years (1989-2011) extremely weak job creation??