The following article is a collaborative effort between PolicyMic columnists John Giokaris and Jesse Merkel
In its latest effort to distract Americans from weak economic performance and another disappointing jobs report, the Obama campaign is launching another wave of personal attacks against Mitt Romney, using a series of TV ads to accuse him of being a “corporate raider” who “shipped jobs to China and Mexico” while he was CEO of Bain Capital, asking if voters want to elect an “Outsourcer-in-Chief.”
The non-partisan, nonprofit FactCheck.org looked into the claims and “after reviewing numerous corporate filings with the Securities and Exchange Commission, contemporary news accounts, company histories and press releases, and the evidence offered by both the Obama and Romney campaigns, we found no evidence to support the claim that Romney — while he was still running Bain Capital — shipped American jobs overseas.”
The Washington Post ended up giving the Obama campaign “four Pinocchios” for these ads, the worst rating possible, concluding, “on just about every level, these ads are misleading, unfair and untrue, from the use of ‘corporate raider’ to their examples of alleged outsourcing. Simply repeating the same debunked claims won’t make them any more correct.”
As a candidate who made his fortune and career in the private sector instead of being a career politician, Romney will have a very nontraditional record to run on. Most politicians who run for office are attorneys, military vets, or lawmakers who got their start holding a statewide office. Occasionally you may get a business owner running for office, but this will be the first time in this nation’s history where the general public will have to look at someone who comes from the business of venture capitalism, private equity, and leveraged buyouts.
I’m still waiting for a poll that asks the general public if they even know what those terms mean.
I’ll bet you a clear majority are unfamiliar with those definitions or probably have the wrong idea. With that much uncertainty among the masses, it creates a golden opportunity for Romney’s opposition to lie about his record at Bain.
Here’s the truth:
Bain Capital is a financial services company that engages in investment management. Venture capital typically involves buying a small stake in a promising start-up company and trying to help it grow and thrive. Private equity deals focus on leveraged buyouts of companies that are under heavy debt or near bankruptcy, and restructuring the troubled company’s costs, operations, and assets, which can involve anything from streamlining a company’s decision-making process to cutting some jobs, while saving others.
Now this image perpetrated by the Democrats of a Gordon Gekko-type “vampire capitalist” that liquidated companies for all they were worth and screwed “the little people” over is a bold-faced lie. Romney and Bain were anything but. They were a thoroughly respectable investment management firm that successfully discharged its responsibility of earning high returns for its investors by deploying capital in companies privately rather than by buying shares in the public market.
According to the Oxford English Dictionary, a corporate raider is “one who mounts an unwelcome takeover bid by buying up shares (usually discreetly) on the stock market.”
Specifically, several financial experts told FactCheck.org, corporate raiders are those who lead hostile takeovers of public companies by snapping up publicly traded stock. With Bain Capital, the private investments in companies came at the request of company officials.
One of the financial experts contacted by FactCheck.org was Mark Stevens, author of the book King Icahn: The Biography of a Renegade Capitalist, about perhaps the most famous corporate raider, Carl Icahn. He was asked, “Was Romney a corporate raider?”
“Absolutely not,” Stevens said, “because what a corporate raider is engaging in is a hostile activity.
“The corporate raider acquires equity in an open market on the stock exchange,” Stevens said. “He then begins to take over management, and acquire more equity, to effect dramatic change. He may ask management to leave. He may lay off workers to boost profits.
“Private equity is completely different. Private equity investments are non-hostile, non-adversarial,” Stevens said.
“Their only goal is to make back money on their investment. They are not coming in as Mother Theresa with money. But it’s not the same as raiding a company, which is simply not possible with a non-public company.
“I hate the loose language that puts things emotionally as opposed to factually,” Stevens said. “There is no parity between a hostile corporate raider and private equity. You can’t raid a non-public company.”
Of course, it’s always good to check what the other hand is doing. One of the oldest clichés in American politics is the politician that rails against something while doing the exact same thing. (Larry ‘tap-tap’ Craig, anyone?) This past week it has come to light that indeed President Obama could be worthy of the title of Outsourcer-in-Chief.
Yes, the president deserves credit for creating some jobs. Sadly, it has only come to light recently that many of those jobs were created overseas. Millions and millions of dollars went to jobs in foreign countries while the president continually promised to keep jobs in America.
$39 million was awarded to North Carolina LED manufacturer Cree Inc through a stimulus-funded tax credit program in January 2010. Unfortunately, half of the company’s employees are in China. Indeed the company opened a new plant in Huizu City, China, because Cree Inc does not consider itself an American company, but a global company. Cree CEO Chuck Swodoba also said that he planned to expand much more into China in order to take advantage of their human resources and “state-of-the-art technology.”
Then there is Finnish automaker Fisker Automotive, which received a $500 million loan guarantee to open a U.S. based plant. However, Fisker decided to instead take the money and continue building cars in Finland.
And who could forget $337 million that went to Sempra Energy for a large solar panel array in Arizona? The firm purchased 800,000 solar panels from the Chinese firm Suntech, despite the fact there were American companies that would have been up to the task. It’s a shame that ensuring that such parts being bought from American companies was never stipulated as a condition of the loan.
Then there is always the issue of how Obama has chosen to send money elsewhere around the world when it comes to energy. Did he focus on creating American jobs through increased production of American energy? Or did he decide to go and tell the Brazilians that he’d rather make America one of their best customers?
Instead of owning up to his own disastrous record, Obama has turned to smear tactics of the lowest level, such as suggesting Romney committed a felony despite the fact that the facts were already well known about such things. It came to light months ago that the Obama strategy would not be about touting his own record, as Bill Clinton did in 1996. Instead, his strategy was to simply ‘Kill Romney.’
Perhaps the president himself said it best in 2008 about people who employ such campaign tactics:
“If you don’t have any fresh ideas, then you use stale tactics to scare voters. If you don’t have a record to run on, then you paint your opponent as someone people should run from. You make a big election about small things.” That was said by then candidate Obama on August 28, 2008:
How sad it is that he became exactly what he used to crusade against. He assumes the American people will believe anything he says without doing our own homework. Relying on distractions, deceptions, and divisions will not win him a second term.