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January 08, 2012 12:00 PM Romney flubs his own standard on job creation

By Steve Benen

In last night’s debate, Mitt Romney made a new boast about his record on job creation at Bain Capital.

“[I]n the business I had, we invested in over 100 different businesses and net-net, taking out the ones where we lost jobs and those that we added, those businesses have now added over 100,000 jobs.

“I have a record of learning how to create jobs.”

When George Stephanopoulos pressed a little on this point, Romney said he’s a good “numbers guy,” and insisted the “over 100,000” figure was accurate. He added, “[T]here’s a steel company called Steel Dynamics in Indiana, thousands of jobs there. Bright Horizons Children’s Centers, about 15,000 jobs there; Sports Authority, about 15,000 jobs there. Staples alone, 90,000 employed.”

This is largely the basis for Romney’s entire presidential campaign, so it’s important to understand the extent to which he’s trying to deceive the public.

First, when Romney rattles off the jobs created by these companies, he’s referring to jobs that were created after he left his own private-equity firm. For him to take credit for them is, at best, a misleading stretch.

Second, Romney is making it sound as if he alone turned those companies into success stories — and that’s just not the case. Staples and Sports Authority, for example, had several other outside investors.

But the real problem here is Romney’s claim about “net” gains. To hear him tell it, if we added up all of the jobs gained through his investments, and subtracted all of the jobs lost through his investments, the result would show “over 100,000” gains.

Offering a detailed response is, as a practical matter, impossible — neither Romney nor his firm has provided enough information to do that kind of analysis. If it were true, presumably Romney and/or Bain would want to help prove the candidate right, and release the data to bolster the boast, but so far, the evidence is nonexistent. We’re apparently supposed to take Romney and his campaign’s word for it.

But that’s also impossible because Romney and the Romney campaign are now contradicting each other. Last week, the Republican’s chief spokesperson said the “over 100,000” figure is based on some companies that created jobs after Romney left Bain, but it simply excludes all job losses from the equation. As of last night, Romney is arguing that his own campaign is wrong, and the figure is a net figure.

Which side should we believe, Romney or the Romney campaign? I don’t know, but one of them isn’t telling us the truth.

It’s easy enough to resolve the controversy. All Romney has to do is offer a detailed disclosure and let us do the arithmetic. It’d be pretty easy to substantiate the claim with the relevant information.

What do you say, Mitt?

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.

Comments

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  • j on January 08, 2012 12:11 PM:

    I want to see the tax returns, but I know most of the money is in the Cayman Islands to avoid US taxes.

  • Texas Aggie on January 08, 2012 12:13 PM:

    What do you say, Mitt?

    Steve, don't ask Mitt to come up with anything you can't check out independently. If he gave you numbers, you can be sure that if the real numbers contradicted his statement, you would never see them. Mr. Romney is definitely ethically challenged when it comes to telling the truth, the whole truth, and nothing but the truth.

    The fact that the Mormon church generally frowns on deceit and lying suggests that we don't have to worry about Mitt's religion. He has shown himself to be what is known as a jack Mormon, one who was born into the church and for all intents and purposes, is not a practicing member.

  • NHCt on January 08, 2012 12:18 PM:

    By Mitt's own logic, where he gets credit for all jobs now at companies he may have helped launch, than George Washington personally created about 200 million jobs, i.e. the entire current US workforce. Elect George, the true job creator!

  • stormskies on January 08, 2012 12:18 PM:

    Jesus also taught that one of the biggest sins was lying and 'bearing false witness' ........

    buffoon Romney fails miserably on both counts ....

    Jesus also taught that it is our duty to help those in need, the poor, the downtrodden, and the persecuted ...

    again, buffoon Romney fails beyond miserably on both counts ..........

    AS DO ALL THE REPIGLICANS ........

  • Danp on January 08, 2012 12:24 PM:

    Staples and Sports Authority, for example, had several other outside investors.

    True. Including state and federal government. The core to Bain strategy was NOT hiring innovative consultants. It was manipulating tax/accounting loopholes and getting government grants.

  • devore on January 08, 2012 12:26 PM:

    Romney also neglects to account for the jobs lost at any (small) companies put out of business by the big box stores (i.e., Staples and Sports Authority) that they invested in. Few would argue that Staples is especially innovative, just more efficient (lower cost) due to economies of scale at delivering office supplies. If anything, one could assume that the emergence of Staples caused an overall net loss of higher paying (small business) jobs in the US economy - but created more minimum wage jobs.

  • c u n d gulag on January 08, 2012 12:32 PM:

    For Conservatives, "math" is a 4-letter word - unless it's Rovian math.

  • Scott Morrison on January 08, 2012 12:33 PM:

    I'm a bit peeved at Ron Paul for accurately attacking Gingrich for being a draft-dodging "chickenhawk" while ignoring Romeny for the exact same thing. Romney just stood there next to Paul grinning while Newt prattled on about being an army brat. Then the moderators switched topics completely, giving Romney a pass on what should be a character flaw at least as significant as Newt's.

    A p***-poor performance all around.

  • DAY on January 08, 2012 12:35 PM:

    Picky, picky.
    Helen of Troy launched a thousand ships.
    Not personally, with the champagne bottles, but she was the motivator in chief, and countless ship builders and oarsmen had full time employment.
    Benefits- not so much, but things were different, when slaves were available.
    Kind of like the "3000 year history of marriage". Just don't mention the dowry part.

  • Scott Morrison on January 08, 2012 12:38 PM:

    I'm a bit peeved at Ron Paul for accurately attacking Newt for being a draft-dodging "chickenhawk" while ignoring Romney for the exact same thing. His failure allowed Newt to prattle on about being an army brat while Romney just stood there grinning. Romney's hard duty as a missionary in Paris trying to convert the French rather than as a grunt in the jungles is IMO even more significant than Newt's deferrments. Then the moderaters switched subjects completely letting Romney off the hook on his all-time greatest character flaw.

    A p***-poor performance all around.

  • Scott Morrison on January 08, 2012 12:39 PM:

    I'm a bit peeved at Ron Paul for accurately attacking Newt for being a draft-dodging "chickenhawk" while ignoring Romney for the exact same thing. His failure allowed Newt to prattle on about being an army brat while Romney just stood there grinning. Romney's hard duty as a missionary in Paris trying to convert the French rather than as a grunt in the jungles is IMO even more significant than Newt's deferrments. Then the moderaters switched subjects completely letting Romney off the hook on his all-time greatest character flaw.

    A p***-poor performance all around.

  • Holly W on January 08, 2012 1:00 PM:

    Is Mitt claiming his motive at Bain was to create jobs and not create a profit for his own firm and himself? He had the same business resume he's now touting back when he became governor of Massachusetts and it didn't seem to do much good there.

  • Tom Johnson on January 08, 2012 1:32 PM:

    Job creation is not something that some individual does, whether that person is a capitalist Master of the Universe or President of the US. Job creation is a complicated collaboration between ideas, capital, labor and the marketplace.

    Romney claims credit for creating jobs, but job creation was at best a side effect of his actual goal. Romney at Bain worked to increase shareholder value. If that meant hiring people, he hired. If it meant laying people off and moving production to China, he did that.

    There's not anything wrong with increasing shareholder value; it's just ridiculous that he's now trying to position it as "creating jobs." And trying to quantify his contribution as "I created 100,000 jobs" seems to imply a mystical power that neither he nor any other individual has.

  • Grumpy on January 08, 2012 1:46 PM:

    Maybe "net-net" is a double negative. "Net" means count all the losses; the second "net" means don't count them.

    The other fallacy is that Romney's experience at Bain could be applied to the national economy.

  • David on January 08, 2012 1:46 PM:

    I've worked on the financial side of some of the deals in which Bain invested. So it's important to understand Bain's business model.

    Bain is in the business of leveraged buy outs, rollups, and on occasion, startups. It is also in the business of getting rich from other people's money. More specifically:

    A leveraged buyout is a deal where private investors take over, fire employees to cut costs, show more profitability, and then get a huge payoff when you take the company public with an IPO.

    A rollup is where you buy a bunch of small companies in the same business, combine the businesses to achieve "synergies," which means you fire people who are redundant, show more profitability and then take the business public.

    All of these deals are financed with huge amounts of senior debt, mostly extended by banks, plus subordinated debt, and then small slivers of equity, provided by LBO outfits like Bain. If the deal goes belly up, Bain loses very little, while the banks lose a lot. If the company goes public within 2-3 years, Bain, and also the Agent bank which receives stock warrants, makes out like a bandit. And the Agent bank is leery of doing anything that will displease the LBO sponsor, because it's looking to be awarded the next deal.

    Oh, and by the way. I never met an LBO banker whom I considered honest. The CFO of Enron, Jeffrey Fastow, started out as an LBO banker at Continental.

  • Emile on January 08, 2012 1:47 PM:

    Some needs to point out to Romney that when someone takes credit for creating jobs that materialized after they left the private-equity firm, that's the true definition of a rooster taking credit for the sunrise.

  • Matt on January 08, 2012 1:48 PM:

    Notice also the weird phrasing on what's supposed to be the soundbite: "I have a record of learning how to create jobs."

    It's like he knows someone's going to jump all over this, and he can't help but leave himself room for a mealy-mouthed "but-but-but" explanation of why what he said was technically not false.

    Grow a pair, Mitt. If you're going to lie, tell us you DID create 100,000 jobs, and also that you can dunk on a regulation rim.

  • threegoal on January 08, 2012 1:48 PM:

    Which side should we believe, Romney or the Romney campaign? I don't know, but one of them isn't telling us the truth.

    How about neither is telling the truth? That possibility is also there.

  • j on January 08, 2012 2:16 PM:

    I heard one commenter calling Romney a regurgitated 1975 Sears mannequin, that just about sums him up.

  • zandru on January 08, 2012 2:27 PM:

    "Offering a detailed response is, as a practical matter, impossible - neither Romney nor his firm has provided enough information to do that kind of analysis. "

    As Texas Aggie (gig 'em!) said, there's no reason that Bane or Romney "need" to provide these data, nor to accept any information (uncritically) that they might provide.

    Independent analysts need to:

    1. Find out what companies were "acquired" by Bane during Romney's watch. Determine how many people they employed at the time of acquisition.

    2. Find out how many were Bane-fully de-employed. That's "jobs lost".

    3. Then determine the number employed at these (or their successor Bane-operated) companies at the time Romney cashed out and left. Compare this number with the employment level pre-acquisition to determine either "jobs created" or "even more jobs lost."

    4. Sum with "jobs lost" for the net.

  • Cardinal Fang on January 08, 2012 2:47 PM:

    Also, let's assume for the moment that Romney is telling the truth for once. Let's assume that considering all the companies Bain invested in, the total number of jobs those companies offer is now 100,000 more than it was before Bain touched them, as Romney now claims.

    Missing from the equation is-- is that good? What's the denominator here? How many jobs did the companies have before Bain came along? Is (N+100,000)/N an impressive number, considering that US employment has increased overall since Romney was at Bain?

  • Tigershark on January 08, 2012 3:38 PM:

    Not mentioned is that 100,000 is a piss poor number. That is 2,00 jobs created per state. If you throw in Puerto Rico or overseas locations, even fewer. Divide per year and you get a tiny number of jobs created. Account for jobs destroyed by Bain and it is even tinier.

  • booch221 on January 08, 2012 3:42 PM:

    What about his claim in the Sunday debate? He said he created more jobs in Massachusetts than Barack Obama has in the entire country.

    Is this another lie?

  • Kurt on January 08, 2012 3:42 PM:

    Maybe someone can help me out here:
    Romney was with Bain for something
    like 15 years, right? For the sake
    of argument, let's accept his claim
    that he helped created 100,000 jobs
    while there. Is 100K jobs in 15
    years really all that great??

  • brent on January 08, 2012 3:51 PM:

    This is not that complicated. Romney lists the companies an the number of jobs that were created. They add up, roughly, to about 100,000. So, if we accept him at his word and accept his framing despite the fact that its nonsene, 100,000 could only be the net gain, if there were never any job losses with respect to any of the firms Bain worked with. Since we know that is not the case, Romney cannot be telling the truth. Pretty simple really.

  • newtons.third on January 08, 2012 4:02 PM:

    Extending on Kurt and Booch221. Let us assume that Mr. Romney is being both truthful and accurate in his numbers. (Stop laughing, I did say assume). He is stating that in over 100 different investments, those three add up to his entire job creation total. Three out of over one hundred. About three percent success rate, as measured by the job creation metric.
    This does not seem to be a very good success rate. I mean, I would assume that they (Bain) did their due diligence and were attempting to be good job creators, at least that is Mr. Romney's story at this point. And they could only do so 3% of the time. If I thought that their prime focus is job creation, I would be appalled as an investor.
    Now if their reason to be was to make profit for a few at the expense of others, and job totals were beside the point, well then I would be a happy investor, but really quiet about my job creating.

  • R L FAST on January 08, 2012 5:02 PM:

    It doesn't matter whether Staples added jobs, what's important is where did the jobs come from. If Staples added jobs by putting their competitors out of business, and they did, then the country as a whole is not any better off. Private sector winners and losers affect investors, but they're of no importance to the American people.

  • exlibra on January 08, 2012 5:09 PM:

    What about his claim in the Sunday debate? He said he created more jobs in Massachusetts than Barack Obama has in the entire country.

    Is this another lie? -- booch221, @3:42 PM

    Ask, and the NYTimes shall answer :) They have a handy-dandy fact-checker on today's debate, which goes to that and other statements by all candidates. Unfortunately, they didn't address Gingrich's "pious baloney" lobbed at Romney, but, I guess, you can't have everything.
    http://thecaucus.blogs.nytimes.com/2012/01/08/fact-checking-the-concord-n-h-debate/?hp

    "2004 mostped". Not as I remember that race; it's this one that has the most foot(-in-the-mouth) instances

  • rbe1 on January 09, 2012 2:07 AM:

    The guy is a lying sack from bottom to top.

  • rw on January 09, 2012 6:57 AM:

    That's just Make-It-Up-Mitt being Make-It-Up-Mitt. Any connection between what he says and the truth is purely coincidental.

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