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January 10, 2012 1:25 PM Taking a sledgehammer to the foundation

By Steve Benen

Mitt Romney has run into quite a bit of scrutiny lately, most notably about his background as it relates to jobs.

He said there have been times he worried about getting fired, and that wasn’t true. He said he “likes being able to fire people,” and that became a big headache. He’s being haunted by many of his unemployed victims. Romney’s also made all kinds of claims about President Obama’s jobs record, all of which have been debunked.

But the one claim that really matters is Romney’s insistence that he deserves credit for creating “over 100,000 jobs” at his private-equity firm.

The Romney campaign initially refused to substantiate the claim, which is never a good sign. Then it said the number is accurate just so long as one excludes all of the layoffs Romney’s firm made, and includes jobs created after he left the firm. Then Romney himself said the figure is a net total, after the layoffs are factored in.

Glenn Kessler returns to the subject today, and his assessment is less than kind.

Romney never could have raised money from investors if the prospectus seeking $1-million investments from the super wealthy had said it would focus on creating jobs. Instead, it said: “The objective of the fund is to achieve an annual rate of return on invested capital in excess of the returns generated by conventional investments in the public equity market and the private equity market.”

Indeed, the prospectus never mentions “jobs,” “job,” or “employees.”

Second, it has become increasingly hard to understand how Romney’s personal involvement played a role in creating these jobs, especially years later. He clearly is adding up all the jobs now at the companies that are thriving, arguing these numbers far outweigh the job losses at companies that failed. But as the Wall Street Journal reported Monday, the failure rate one can attribute to Bain Capital changes significantly if one counts five years from an investment or eight years from an investment.

Bain, in fact, rejected the Journal’s analysis, saying it “uses a fundamentally flawed methodology that unfairly assigns responsibility to us for many events that occurred in companies when we did not own or control them, and disregards dozens of successful venture capital investments.”

In other words, Bain appears to be rejecting a central premise of Romney’s calculation — that years after the investment ended, one can attribute either good news or bad news about the company to Bain’s involvement.

Kessler’s analysis concludes no part of Romney’s claim is credible or supported by evidence, and that much of the candidate’s argument fails to “pass the laugh test.”

This is no small revelation. As Jonathan Cohn put it, “The linchpin of Romney’s most powerful argument has turned out to be bogus.”

That’s not an exaggeration in the slightest — this analysis is taking a sledgehammer to the foundation of the Republican frontrunner’s entire campaign. Romney’s message can be summarized in one sentence: “I’m a successful businessman with a track record of creating jobs.” Romney doesn’t like to talk about health care (his plan was mirrored by the president); he doesn’t like to talk about his gubernatorial record (he failed miserably to create jobs); and he doesn’t like to talk about social issues (he was a liberal on these issues up until quite recently). The raison d’etre for Romney’s effort comes down to his private-sector record and the “over 100,000 jobs” he created.

And that talking point has been debunked, leaving Romney with no credibility on his campaign’s top issue.

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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  • Danp on January 10, 2012 1:33 PM:

    Oh well, at least he's still been married 25, er, make that 42 years. And no one is challenging the DNA of his look-a-likes.

  • DAY on January 10, 2012 1:33 PM:

    All this arcane examination of Romney's business practices causes the Average Voter's eyes to glaze over.

    What they really want to know is, why is he such a jerk?

  • vvano on January 10, 2012 1:36 PM:

    Anyway, this whole line of "job creator" is drivel. I am so tired of hearing repugs talking about "job creators".
    An investor in a small or large enterprise never invests to create job. They invest because they have demand for their product and therefore hire to produce and meet that demand.
    Job creation is NEVER to goal of any enterprise. Money for the shareholder/owner is the goal.
    I realize that in a small company, people might become close. Other companies might have goals to treat their employees well to improve moral and retention, but they do not do that from the goodness of their heart. They do it because it improves productivity.

    seems that they all missed on Economy 101 in college

  • c u n d gulag on January 10, 2012 1:39 PM:

    And none of this will matter to Conservatives.

    After all, they believe that 'government has never created even a single job,' and Mitt will be part of the government if he's elected - so, "where's the beef?"

    Mitt won't and can't be expected to create jobs as President. And you shouldn't expect him to, either.

    All jobs come from the great "Job Creators" (all kneel) in private industry.

    And if they didn't, don't, can't, or won't, create jobs, then you can be sure that they must have their reasons.

    You're just not rich or powerful enough to understand them.
    So, SHOOOOOO!
    Get along!
    I said "GIT!"
    Nothing to see here...

  • JMG on January 10, 2012 1:42 PM:

    The linchpin of Mitt Romney's campaign is that the economy sucks, Obama is President, and Romney isn't. That's all voters know. The rest is just stuff they don't listen to.

  • ifthethunderdontgetya™³²®© on January 10, 2012 1:43 PM:

    this analysis is taking a sledgehammer to the foundation of the Republican frontrunner’s entire campaign.

    It's not like this clown has any chance of winning.

    The outcome of the 2012 elections has already been decided: the plutocrats win, the rest of us lose.

    Again.
    ~

  • Chris on January 10, 2012 1:44 PM:

    Why does the businessman/MBA silliness even appeal to some? Shouldn't their experience with "businessman" George Bush have taught them what a bunch of bunk that is?

    (Note: ThinkProgress reports that Bain was also bailed out by the federal government.)

  • Josef K on January 10, 2012 1:45 PM:

    And that talking point has been debunked, leaving Romney with no credibility on his campaign’s top issue.

    Romney had credibility? When was this?

  • Kane on January 10, 2012 1:48 PM:

    The plutocrat has no clothes.

  • John T. on January 10, 2012 1:56 PM:

    I'm surprised Steve think Romney's 100,000 jobs claim was the linchpin of his campaign. It was just a throwaway line. He used the same line back in 1994 and when the press called him on it then he didn't hesitate and just stopped using it and switch to a different one.

  • John in TX on January 10, 2012 2:02 PM:

    Anyway, this whole line of "job creator" is drivel. I am so tired of hearing repugs talking about "job creators".
    vvano on January 10, 2012 1:36 PM

    The GOP's use of "job creators" is not only drivel, it is pure Orwellian Newspeak (like "compassionate conservative"), used to confuse the malleable "low information" voters. It's usage was probably suggested by that proto-creep Frank Luntz.

  • Danp on January 10, 2012 2:09 PM:

    I am so tired of hearing repugs talking about "job creators".

    Me too. However, the issue here is whether Romney's experience is an example of how vibrant capitalism expands the economy - creating jobs, demand, innovation, etc., or whether sometimes greed is merely used to destroy the economy. I don't think the debate over the 100,000 jobs does justice to the issue. But at some point the discussion will change to Bain's actual role in the economy. And Romney is not going to look so good.

  • schtick on January 10, 2012 2:14 PM:

    Yanno, I look at Willard's pics with him grinning and I don't see a smile in his eyes. I see evil in that face. The "just wait til I get my hands on the controls and see what happens" face. He just gives me a bad feeling when I look at his face. So I do my best not to look. Then when I turn the sound off, he doesn't exist!!!
    You want to make people's eye glaze over and stop them in mid-sentence, ask them why all these people spend double-digit millions to get a job that pays low-end six figures and full benefits/retirement for life.

    Hey! How did crapcha get my phone number?

  • marty on January 10, 2012 2:22 PM:

    "This is no small revelation. As Jonathan Cohn put it, “The linchpin of Romney’s most powerful argument has turned out to be bogus.”

    As was obvious from the start to anyone outside the reality-free and bullshit loaded zone that is modern Republicanism

  • MCA on January 10, 2012 2:31 PM:

    What Danp said - Romney can't even make the simplest rebuttal to all this job creation craziness (the existence of which is, of course, his own doing), because it takes the discussion directly to exactly that place. I'm sure he wants to note that the role of an equity company like Bain is not to create jobs, it's to get as high of an investment return as possible for its investors (so as to entice them to put their money in the next fund). End of story. Only it's not, because then people will see he's really just an investment manager, making the wealthy wealthier, he and his company make enormous management fees regardless of the longterm success of their targets, and he's never sat and actually run a company that, you know, makes stuff, but is still worth a quarter of a billion dollars. This stuff matters to low info voters who vote on their idea of a candidate's persona. I think Gingrich showing the frame of differentiating Romney's massive fortune and that of Bill Gates is a gift that will keep on giving. It resonates emotionally.

  • Bj smith on January 10, 2012 2:38 PM:

    Will anyone ever understand how repubs think? There is only one man on the right that is qualified to be POTUS & that is Huntsman. More experience,truthful, & honest than ANY of the others, none even come close. They need some one who will appeal to independents. Huntsman fills that bill so much better than corporate man.Might they just be cutting off their nose to spite their face? Huntsman would be a much more formidable opponent. If they had an appealing far right candidate it might make sense, but since they don't, why not Huntsman? He is ten times the man. Just wondering.

  • rbe1 on January 10, 2012 2:47 PM:

    He'll be nominated anyway, because all the other clowns are so much worse, and given the heads up their behinds mentality of the American voters, coupled with their abysmally short memories, he stands a good chance of defeating the incumbent for the simple reason that Dubya's administration is too far back in time.

  • Bob M on January 10, 2012 2:56 PM:

    He looks a like a momma's boy and his line would only impress his momma.

  • mudwall jackson on January 10, 2012 3:07 PM:

    ifthethunderdontgetya™³²®© on January 10, 2012 1:43 PM:


    The outcome of the 2012 elections has already been decided: the plutocrats win, the rest of us lose.

    Again.
    ~

    Plutocrats! Such insight! Now instead of wasting my brain on the election, I can focus on something truly important, like who will be the next American Idol! Or will the plutocrats win that one as well?

  • j on January 10, 2012 3:39 PM:

    I had to smile today when one of my (usually republican)
    friends here in NC has picked up on the fact that the Romney family are kind of Mexican American after having run away to live in Mexico to avoid prosecution for polygamy.They lived there for many years and still have family members living there.I think Romney Sr was born there.

  • Rudy Gonzales on January 10, 2012 3:55 PM:

    Insensitivity and callousness dwarf the reality of Romney's run based on his past dealings with Bain Capital. Romney's takeover-and-restructuring firm "apparently looted the companies, left people unemployed and walked off with millions of dollars." Romney points to thousands of jobs created at companies that Bain Capital bought, invested in or restructured. Sugar-coating past actions while screaming attacks on "Free Enterprise" has all the earmarks of Wall Street's" Gordon Gekko comment: "Greed is good." But he struck a discordant note Monday, just as attention to the Bain jobs history was spiking. Speaking of insurance options before a New Hampshire audience, Romney said, "I like being able to fire people who provide services to me." Romney repeated his claim that the Bain-run companies netted a total increase of 100,000 jobs, but studies by The Associated Press and other news organizations conclude that the claim doesn't withstand scrutiny. Like any venture capital company, Bain's main purpose was to generate profits for investors, not to create jobs. The TEA-GOP-Republican fringe candidates, are out-of-touch and full of themselves still holding onto "Trickle Down Economics." Trickle down has yet to trickle down and in fact has afforded the top 1%-ers like Romney to get richer. If you don't like how the party of "NO" held the Congress hostage, register and vote.

  • Anonymous on January 10, 2012 4:17 PM:

    I'm still disheartened by the press reporting on this. They still adhere to "he said, she said" without doing any original investigation. For example, ABC News' story said:

    "Perry laid into Romney for heading a company which Perry alleged eliminated hundreds of South Carolina jobs."

    Alleged? How lazy is that? Obviously Perry *said* it, but was it true? Either Bain eliminated hundreds of SC jobs, or it didn't. Go find out, and tell us, dammit. If it's true, then say "Perry noted" or some such.

    Without a press that does its job, we must rely on/hope for the other candidates pointing these things out.

  • Gov't Mule on January 10, 2012 4:56 PM:

    Apparently the Romney campaign doesn't think the Wall Street Journal knows anything about business or analyzing businesses. Seriously.

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