Mitt Romney is pinning his chances of becoming the 45th President of the United States on his years as a “job creator” and not a “job killer” at Bain Capital. Newt Gingrich’s super-PAC has released a brutal 28-minute video exposing him as a “job killer”, which has a number of inaccuracies in it, but the damage has been done. Obama is sitting back, taking in the GOP warfare without spending a dime.
Mitt is the son of George Romney, and the life parallels between the two are eerie: both were Mormon missionaries in Europe; both pursued their high school sweethearts aggressively until they succumbed to marriage years later; both had families with 4 or 5 children; both had successful business careers and specialized in turning around distressed companies or organizations; both presided over a regional branch of the Mormon Church; both achieved their first elected position at age 55, as a Republican governor of a Democrat majority state; they looked amazingly alike, and both “looked Presidential”; they both had their first Presidential campaign in the year they turned 60; and both were not trusted by the hard-line Republican conservatives.
Willard Mitt Romney was named for his father’s best friend, hotel tycoon J. Willard Marriott, and his father’s cousin, Milton “Mitt” Romney, quarterback for the Chicago Bears in the late 1920s. His father was born in a Mormon colony in Chihuahua, Mexico, after the Romneys moved there in the late 19th century so they could continue the Mormon practice of polygamy after it was outlawed in the U.S. Mitt was born in Detroit, Michigan, so there is no “birther” issue here. After attending an expensive, upper class Michigan prep school, Mitt went to Stanford for a year, and then spent two years in the late 1960s as a Mormon missionary in France. In spite of the criticism of Obama as being a “European socialist” at heart, it is Mitt who has developed a lifelong love for France and its people, and speaks French fluently.
When he returned to the U.S. in December, 1968, he transferred to Brigham Young University to be near his sweetheart, Ann Davies, and they were married in March, 1969 in a Mormon ceremony. He maintained his draft deferment, and escaped serving in the Vietnam War, graduating from BYU in 1971, earning a B.A. in English. Ann started producing sons in 1970, finishing up with #5 in 1982, and Mitt enrolled in the joint J.D./MBA program at Harvard, a four-year program. He graduated from the law school cum laude in 1975 in the top- third of his class, and was named a Baker Scholar for graduating in the top 5% of his business school class.
He was initially hired by the Boston Consulting Group, but two years later he was hired away by Bain & Company, a Boston managing consulting company, becoming a VP in 1978, and in 1984 he co-founded the Bain spin-off private equity investment firm, Bain Capital. Bain helped start Staples in 1986, earning 700% on its investment, and he soon switched Bain’s focus from startups to the new business of leveraged buyouts, buying existing firms with money mostly borrowed against their assets, partnering with existing management by teaching them “the Bain way”, and then selling them off a few years later.
During the 14 years Mitt headed the company, much of their average rate of return on investment of 113% was earned from a relatively small number of buyouts, with Bain’s overall success v failure rate about even. Among the companies invested in or acquired were Accuride, Brookstone, Domino’s Pizza, Sealy, Sports Authority, Artisan Entertainmant, and lesser known industrial and medical enterprises. Maximizing the value of acquired companies and return on investment, not job creation, was Bain’s primary goal. Its acquisition of Ampad resulted in a handsome early profit, but it later ended up in bankruptcy. Bain received an 800% return on its investment in Dade Behring, but the company was thereafter saddled with debt and laid off over 1,000 employees before Bain exited the company, which subsequently went into bankruptcy, with more layoffs, before ultimately bouncing back and prospering. Mitt claims that Bain created a net 100,000 jobs while he ran the company, but if you back out the 90,000 new jobs in the startup Staples, that leaves only 10,000 jobs, not a great number over 14 years.
Romney left Bain in February, 1999 to serve as President and CEO of the scandal-ridden 2002 Salt Lake City Olympic Games Organizing Committee, but he worked out a deal with Bain allowing him to receive a passive profit share in some of Bain’s entitles as a retired partner, which earned him millions each year, giving him a net worth of between $190 and $250 million by 2007, most of it held in blind (and including offshore) trusts. His wealth remains about the same today. He recently announced that he has paid federal income tax at a rate of only 15% in recent years, since most of his income comes from past investments.
Turning to politics, Mitt ran against Teddy Kennedy in 1994 for the U.S. Senate; Kennedy was reelected with 58% of the vote.
In 2002, he ran for Governor of Massachusetts as a political outsider, saying he was “not a partisan Republican”, but rather was a “moderate” with “progressive views”. He was elected with 50% of the vote, to 45% for his Democratic opponent. In January, 2003, when he was sworn in, both houses of the Massachusetts legislature had large Democratic majorities. The state, in improving economic times, saw a $600-$700 million surplus by 2006, achieved through a combination of spending cuts, increased fees, and removal of corporate tax loopholes.
In April, 2006, Mitt signed into law the Massachusetts healthcare reform law, requiring nearly all Massachusetts residents to buy health insurance coverage or face escalating tax penalties, and it established means-tested state subsidies for poor people. Mitt characterized the legislation as “liberal in the sense that we’re getting our citizens health insurance” and “conservative in that we’re not getting a government takeover”. This legislation became the model for what Republicans now call “Obamacare”, but is more accurately called “Obamneycare”.
His popularity declining as the 2006 election approached, he decided not to seek reelection, and focused thereafter on his run for the Republican Presidential nomination in 2008, which he lost to Sen. John McCain after a month of intense campaigning ending on Super Tuesday, held on February 5, 2008. In all he won 11 primaries and caucuses, and spent $110 million, including $45 million of his own money. Romney then endorsed McCain, and was on his short list for vice presidential running mate.
Since the 2008 election, Romney has never stopped running for President, and kept much of his political staff. He has maintained a Massachusetts voting registration, but spends most of his time when not on the road campaigning at his Wolfeboro, N.H. summer home and his beachfront estate near La Jolla, CA.
An Independent until his 1994 Senate race against Teddy Kennedy, his political philosophy followed that of his predecessor, the popular Massachusetts Republican Governor William Weld: restraint in spending and taxation, tolerant or permissive on social issues, protection of the environment, tough on crime, and the appearance of being post-partisan. But is this the Romney that we see today? And is the Mitt Romney we see today the Mitt Romney we will see as President, if he is nominated and wins?
The Consummate Flip-Flopper
Romney has not shaken charges that he has no “core values” and will take any position, even those contrary to his prior stated positions, to gain favor with the voters. Here is a partial list of his flip-flops:
*For the stimulus package *Said he never supported it
On January 4, 2009 on September 28, 2011
Pro-choice on Oct. 29, 2002 Wants to preserve the sanctity
of marriage and overturn Roe v
Wade on Dec. 11, 2007
Said he was an independent Said the principles of Reagan
during the time of Reagan- “are as true today as when he
Bush in 1995 spoke it” – May 25, 2010
Healthcare – in 2009 he said Said Obamacare is bad news
the President is copying his and he will repeal it – Oct. 18
idea – he is glad to hear that. 2011
Immigration – Oct. 2011 – said Minutes later, said his lawn
he never hired an illegal company did
Global warming – In June, In Oct. 2011: “We don’t
2011: “I believe the world know what is causing climate
is getting warmer, and change”
humans contribute to that”
No tax pledge – Mar. 2002: Oct. 2007 – “proud to be the
He says he will not sign a only candidate for President
“no-tax” pledge to sign the tax pledge”
Assault weapons – In Aug. In Jan. 2012: “I don’t support
2004, signed legislation any new legislation of an
to extend the ban on certain assault weapon nature”
TARP – in Dec. 2009, he said In June, 2010: “TARP got paid
that TARP ought to be ended back and it kept the financial
system from collapsing – it was
the right thing to do”
Auto rescue – Jan. 2008: I’m In June, 2011: “That’s exactly
not willing to sit back and what I said – let Detroit go
say too bad for Michigan, bankrupt”
too bad for the car industry”
Gay marriage – Don’t Ask Now does not support gay
Don’t Tell “a step in the marriage
right direction” -2002
His Mormon Faith
No Mormon has ever been elected President, and many conservative Evangelical Republicans consider The Church of Jesus Christ of the Latter-Day Saints to be a “cult” and not a Christian religion. That is a big problem for Mitt. I have met some “Jack Mormons” over the years, Mormons who have fallen off the wagon and now drink, smoke, whore-around, and generally act like…Clinton/Edwards/Gingrich-style Christians. Once you leave the Mormon faith, you are ostracized, and have to make you own way in life without the support network the Mormons provide to their faithful. There is no evidence that Mitt is a “closet Jack Mormon”, and by all accounts, he is a true believer, and does not even swear, and certainly does not drink, smoke or cheat on his wife, and he tithes 10% of his income each year to the Mormon church. One finds it hard to believe that he has ever masturbated or watched porn, but John Edwards seemed like such a clean-cut guy, and compared to Newt “Open Marriage” Gingrich, Mitt is a latter-day saint.
Wall Street Capitalist
Bain was headquartered in Boston, but it acted just like a Wall Street “vulture capitalist” (to use a phrase coined by Rick Perry), taking control of companies with leveraged buyouts, picking over what they bought, selling off assets, shipping jobs overseas, and closing unprofitable divisions (given the new debt-ridden status of the company and the resulting often unreasonable profit goals that Bain set for the new company). As Mitt said himself, Bain practiced “destructive capitalism”, with profit, and not the well-being of employees, the only goal. More will come out on Mitt’s role in Bain, and how Bain has affected the lives of those Americans who worked for companies taken over by Bain during Mitt’s tenure, over the next nine months.
Our past Presidents over the past hundred years have largely come from the government sector, and not the business world, the only exceptions being Republicans George W. Bush (figurehead President of the Texas Rangers baseball team), his father (who ran Zapata Industries, an oil services firm, in Texas before entering politics), and Herbert Hoover (a successful mining engineer before he became Secretary of Commerce in the Coolidge Administration and then was elected President in 1928). Hoover presided over the start of The Great Depression, and his policies as President are widely regarded as making the Depression much worse, as he largely insisted that the private sector would correct the problem without strong government intervention. He was the original proponent of the Republican mantra of “trickle-down economics”, as Will Rogers so cogently put it in 1932:
The money was all appropriated from the top in hopes that it would trickle down to the needy. Mr. Hoover didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night anyhow. But it will at least have passed through the poor fellow’s hands.
So would Mitt Romney be an effective President with his extensive past business experience? History seems to show that business expertise is rarely translatable to government, as a CEO expects absolute obedience from his employees (and board of directors), at least until he is fired. A President has to deal with Congress, and a President without experience in this body has a difficult road. No Administration in the past century or so has had a President/Vice President team without extensive prior experience in Congress.
So will the 2012 Republican ticket be Romney and Gingrich or Santorum (but certainly not Ron Paul)? Time will tell.
Mister One Percent
Mitt Romney has led a privileged life, and is very wealthy today. But this has not disabled individuals from becoming President, as George W. Bush, his father, JFK, and FDR, among other recent examples, were born into wealth and were rich when they became President. But in the midst of a major economic downturn that has gone on since the waning days of the Bush Administration, are the American voters ready to elect as President someone who thinks a $10,000 bet is “chump-change” and who calls $350,000 or so in speaker fees “not that much”?
The Danger of a Republican President and Congress
The Republicans currently have a 25 seat majority in the House, and control the redistricting apparatus in a majority of states, and even though a number of the Tea Party Republicans elected in 2010 seem vulnerable in 2012, will the Democrats be able to gain over 25 seats? In the Senate, Republicans have 10 seats up for reelection, and the Democrats have 23, with a thin majority in the Senate currently. So it is possible that both houses of Congress will be controlled by the Republican Party in 2013.
If Mitt Romney is also elected President, what can we expect him to do his first year in office? No one knows, but here are some possibilities, based on his recent positions:
- He would start to dismantle “Obamneycare” by exempting states from as many of its requirements as possible (done by Executive Order).
- He would fast-track oil drilling permits in the Gulf of Mexico, Alaska, and, presumably, California offshore (by Executive Order).
- He would eliminate all Obama regulations “that unduly burden the economy or job creation” (by Executive Order).
- He would eliminate all regulations that favor organized labor (by Executive Order).
- He would designate China as a currency manipulator, possibly triggering a trade war with China (by Executive Order).
- He would urge Congress to pass legislation to reduce the corporate income tax rate to 25%, and to reduce the capital gains tax even further.
- He would urge Congress to pass legislation reinstating the President’s power to fast-track trade deals.
- He would urge passage of legislation to speed up leasing in all areas approved for energy exploration.
- He would urge legislation to return worker-retraining programs to the states.
- He would seek to cut non-security discretionary spending by 5%, reducing the annual deficit by $20 billion.
- He would try to block-grant Medicaid funds to the states and cap funding on the program.
- He would try to make Social Security pensions more viable, including raising the eligibility age beyond the current 67 years.
- He would expand health saving accounts.
- He would seek to repeal the Dodd-Frank financial regulation laws.
- He would gut the new Consumer Protection Agency.
- He would seek to eliminate taxes on capital gains, interests and dividends for those earning less than $200,000 per year.
- He would initiate mass deportations of illegal immigrants, no matter how long they have lived in the U.S. or if they have family members who are citizens.
- And finally, he would make significant changes in the composition of the U.S. Supreme Court (and the lower federal courts) by nominating anti-abortion justices pledged to vote to overturn Roe v Wade.
Mitt’s march to the nomination has been stalled by Gingrich’s blowout victory in South Carolina, but the Republican political pros cringe at the idea of Gingrich winning the nomination. They will work hard to undercut him in the weeks and months ahead, so that Romney will be their nominee, in spite of his Bain baggage.
Ted Vaill is in his second term as an elected Delegate to the State Democratic Party Convention, and is a lawyer and filmmaker in Los Angeles.