[credit provider=”Bain Capital/Boston Globe” url=”http://www.boston.com/news/politics/2008/specials/romney/part3/”]
One of Mitt Romney’s campaign slogans is “Obama isn’t working.” (It’s a play off the Tory “Labour isn’t working” ad from the 1979 U.K. elections that swept Margaret Thatcher into power.) And even if the national unemployment rate should drift down to 8 per cent or so by Election Day, the president would still be forced to explain away an anemic job creation record.But what about Romney’s job creation record? During his time as governor, Massachusetts had net job growth of 1.4 per cent, as USA Today has noted. That was slower than the national average of 5.3 per cent with only Louisiana, Michigan and Ohio notching slower gains. That’s bad.
Yet the unemployment rate also fell sharply to 4.5 per cent from 5.8 per cent. That’s good.
“When Mitt came into office, the state was losing jobs every month. When he left office, the economy was generating new jobs by the thousands,” is how Romney’s website vaguely describes his jobs record as governor. But you can go to the U.S. labour Department and see the data for yourself. From January 2003 when Romney took office through December 2007, the Massachusetts economy added 61,042 jobs.
Then there’s Romney’s job creation record at Bain Capital. What was the net affect of his firm’s venture capital and private equity investments? Romney likes the nice, round number of “over 100,000″ jobs created. This is what he told Time magazine in December: “And so I’ll compare my experience in the private sector where, net-net, we created over 100,000 jobs. We created over 100,000 jobs.” And this is what Romney told Fox last month: “And I’m very happy in my former life; we helped create over 100,000 new jobs.”
Now recall how Republicans have mocked Obama for his methodologically suspect “jobs saved or created” metric. (In fact, the administration has even replaced “jobs” with “work opportunities.”) Surely Team Romney arrived at that “over 100,000″ number via some rigorous and methodologically sound calculation that takes into account Bain investments that panned out and those that didn’t.
As Romney himself said when he announced his presidential candidacy, “Sometimes I was successful and helped create jobs, other times I was not.” And given Romney’s financial acumen and that of his brainiac policy team, that “over 100,000″ number should be bullet proof.
But it isn’t. Here’s what a Romney spokesman told The Washington Post:
Eric Fehrnstrom says the 100,000 figure stems from the growth in jobs from three companies that Romney helped to start or grow while at Bain Capital: Staples (a gain of 89,000 jobs),
The Sports Authority (15,000 jobs), and Domino’s (7,900 jobs). This tally obviously does not include job losses from other companies with which Bain Capital was involved — and are based on current employment figures, not the period when Romney worked at Bain.
And here’s what the Romney campaign emailed me when I asked for some substantiation of the claim:
That’s not going to cut it. The media will continue to pound away at the validity of the 100,000 number, as The WaPo and USA Today have. So, too, the Obama campaign. There’s obviously a lot more to Romney’s Bain career than those few investments. Indeed, here is a bit from a 2000 Bain prospectus, dug up by the Los Angeles Times, for those who could invest a $1-million minimum in Bain Capital funds
I will concede that coming up with a comprehensive number and then comparing it to Obama’s jobs record isn’t simple. Not with “over 10,000 transactions” and “over 750 investments.” For instance, what should be the cutoff date? When Romney left Bain, today, or some arbitrary time period like “jobs created within 10 years of initial investment.” And I realise Bain’s goal was producing a fat return on investment, not jobs.
But Team Romney should try harder. First of all — just as a political matter — without a strong and factual counter-argument, the campaign is vulnerable to teary media stories focusing on Bain investments where jobs were lost — such as this one from Reuters about the firm’s investment in Worldwide Grinding Systems:
Soon after, in October 1993, Bain Capital, co-founded by Mitt Romney, became majority shareholder in a steel mill that had been operating since 1888. It was a gamble. The old mill, renamed GS Technologies, needed expensive updating, and demand for its products was susceptible to cycles in the mining industry and commodities markets. Less than a decade later, the mill was padlocked and some 750 people lost their jobs.
Workers were denied the severance pay and health insurance they’d been promised, and their pension benefits were cut by as much as $400 a month. What’s more, a federal government insurance agency had to pony up $44 million to bail out the company’s underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees. … “I worked hard all my life and played by the rules, and they allowed this to happen,” [one worker said].
Second, not only is Romney’s Bain record on trial here, so is the whole idea of Schumpeterian, entrepreneurial capitalism where “creative destruction” creates a massive net benefit for society. This is exactly the idea that the Obama reelection campaign is attacking as promoting unacceptable levels of inequality. (Apparently bad government investments — like in Solyndra — that lose jobs are OK.)
Romney likes to say, “I love data.” It’s time he does a better job showing it.