Ever since Mitt Romney’s opponents for the GOP presidential nomination started painting him as a ruthless corporate raider and vulture capitalist for his actions as CEO of the private-equity firm, Bain Capital, the Romney camp has been scrambling to spin that unsavory yarn into wholesome cloth. This morning, Fox and Friends hosted Thomas Stemberg, founder and former CEO of Staples (and originator of the idea of Romneycare, but you won’t hear that on Fox) for some classic Fox News Republican rehab.
In case you didn’t know, Mitt Romney served on the board of Staples for almost 15 years after Bain Capital invested in the fledgling office supply company in 1986, helping to take it from startup to major player in the retail office supply biz worldwide and earning Bain a tenfold return on its investment. No wonder Stemberg has been happy to stump for Romney for years .
On Fox and Friends this morning, the air was thick with bonhomie and metaphorical backslapping as Stemberg waxed effusive about his old friend and colleague. Romney is 'the single best corporate director I ever worked with’ he gushed, going on to call him an “inspirational leader.” The chyron at the bottom of the screen read, “Setting The Record Straight: Did Mitt Romney Create Jobs At Staples?” as Stemberg went on to claim, prompted by Doocey, that Romney was somehow responsible for a total of over 130,000 jobs combined at Staples, Brighter Horizons and Sports Authority. Oh, and not only did Romney create jobs, he provided significant societal benefits by saving small businesses “billions” through purchases at Staples and providing “quality daycare” through Bright Horizons which allowed women to to work without worrying about their kids. No mention, of course, of the number of local businesses that closed down because they couldn’t compete with these multinational behemoths, because hey, ain’t that America?
Yep, it sure is, according to Doocey, who in the next breath shrugged off layoffs as “a fact of life.” So, Steve-o, can we expect the monthly snark from the curvy couch towards President Obama over the unemployment figures to stop?
Yup, a CEO’s gotta do what a CEO’s gotta do, especially in the business model which Bain Capital helped to pioneer which made ever-rising shareholder dividends (and the corresponding massive CEO pay, stock, and options packages the number one goals of any company). Gotta move overseas and shed American jobs? Well, “that’s the way the world works” said Stemberg. “Exactly” said Doocey. So, Steve-o, now you’re okay with jobs going overseas? Oh, right, it’s only bad when you can blame it on unions.
None of this Foxian whitewashing or one-sidedness about Romney’s venture capital / leveraged buyout days is unexpected; and, in fairness, he was good at what he did (if amoral, but hey, ain’t that America?), and it’s natural for those who reaped the benefits to sing his praises. Some might even make the case that Fox and Friends showed just enough of the “When Romney Came to Town” ad/film (which has its own problems) to be “fair and balanced.” But in all this cheerleading, Doocey and Friend of Romney left out two important facts:
One: The goal of Bain Capital’s involvement in any company was not to create jobs but to maximize profit, for the client company and for itself. This means that in some cases more jobs were created and in others, jobs were lost. Mitt Romney cannot claim to have created these jobs; the jobs were a byproduct of the mission, not a product. There are, in fact, no hard numbers for the jobs which can be attributed to Romney – the claim for which, incidentally, has ballooned tenfold from 10,000 during his Sentate campaign in 1994 - nor are there numbers for how many jobs were lost within Bain-managed companies and in their local areas.
Two: Mitt Romney sent almost his entire career with Bain involved not in startups but in leveraged buyouts. In fact, according an article on Boston.com, Staples was Romney’s only true venture deal. So Stemberg can afford to cheerlead!
More disturbing, and probably never to be mentioned on Fox GOP News Channel, is the effect the “Bain way” may have had on the economy at large. According to MIT economist Frank Levy,
…This new shareholder-value-driven system had no built-in mechanism of regulation, and its incentives geared CEOs toward shortsightedness and recklessness. “Any profit-making organization was going to take advantage of the opportunities to lower costs and become more efficient by taking advantage of foreign producers and installing technology, both of which meant losing jobs,” he says. “But decision-makers fully exploited at every turn the market power that they had. The question is, why were we so willing to exploit everything?”
The New York Magazine article continues,
The obvious answer is financial reward. But there may have been a cultural component, too. By the time Mitt Romney left Bain Capital for good, in 1999, American CEOs looked very different from the predecessors he had met in the seventies—the genial paternalists, spending their careers at a single company. More and more, they were pure meritocrats—well-educated, well-compensated, moving frequently between jobs and industries, trained to look ruthlessly for efficiency everywhere. They look a great deal more, in other words, like Mitt Romney. If you trace the public controversies over Bain Capital over time, you can see how the obsession over shareholder value and efficiency proved not just inequitable but destabilizing.
Romney. Destablizing. Cheerlead that, Doocey.
Another F+F segment debunked. That was easy!
Bottom, video of the Stemberg segment on Fox and Friends.
Below, a trailer for the "King of Bain" attack ad.
If that’s really true, how come we never heard of a CEO or an executive position ever being outsourced? If their top priority is to the stockholders and investors then think of the millions they can make by finding a CEO in China or India, who will work for $25k a year, won’t accept a bonus, since the company comes first, and would consider it a disgrace to accept and float away with a golden parachute worth millions for failure.
It’s always us peons, isn’t it?