American politics
Mitt Romney
It's Mitt's world, we're just living in it
Oct 25th 2011, 13:33 by W.W. | IOWA CITY
WRITING in New York, Benjamin Wallace-Wells makes a case that Bain Capital under Mitt Romney played a significant role in creating the contemporary economy:
Mitt Romney is the real thing. He was, by any measure, an astonishingly successful businessman, one who spent his career explaining how business might operate better, and who leveraged his own mind into a personal fortune worth as much as $250m. But much more significantly, Romney was also a business revolutionary. Our economy went through a remarkable shift during the eighties as Wall Street reclaimed control of American business and sought to remake it in its own image. Romney developed one of the tools that made this possible, pioneering the use of takeovers to change the way a business functioned, remaking it in the name of efficiency. Whatever you think of his politics, you have to give him credit,” says Steven Kaplan, a professor of finance and entrepreneurship at the University of Chicago. “He came up with a model that was very successful and very innovative and that now everybody uses.”
The protests going on at Zuccotti Park now have raised the question of whether that transition was worth it. What emerged from that long decade of change was a system that is more productive, nimble, and efficient than the one it replaced; it is also less equal, less stable, and more brutal. These evolutions were not inevitable. They were the result, in part, of particular innovations developed by a few businessmen beginning a quarter century ago. Now one of them has a good chance of becoming president.
Among other things, Mr Wallace-Wells lays at Mr Romney's feet a portion of responsibility for the rise of corporate takeovers, the "shareholder-value revolution", the astonishing increase in executive compensation, the acceleration of outsourcing, the rapid rise of economic inequality, as well as a decisive shift in America's corporate culture. Mr Wallace-Wells writes:
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.
It would be quite a scoop indeed had Mitt Romney actually been such a central figure in the transformation of American business. Not to say that Mr Romney was not among those at the forefront of a number of seminal developments in the 1980s and 90s in the way American corporations were bought, sold and managed. But I daresay had Mr Romney really been the one-man force for increased efficiency Mr Wallace-Wells suggests he has been, he'd now be worth a good deal more than $250m. It seems to me Mr Wallace-Wells has rather oversold Mr Romney's influence in a rather audaciously ambitious attempt to establish the unlikely thesis that the man most likely to run against Barack Obama in 2012 was a significant force behind America's economy becoming "less equal, less stable, and more brutal". But in order to make his case, Mr Wallace-Wells also oversells Mr Romney's role in making the economy "more productive, nimble, and efficient", thereby inadvertently reinforcing the key claim of Mr Romney's campaign: that he alone has the economic know-how it takes to get America back on track. As Mr Wallace-Wells says, "Mitt Romney is the real thing". And Mr Romney's proposition is that he can do for a flagging American economy what he did for the flagging companies Bain Capital turned around. He ought to write Mr Wallace-Wells a thank-you note.
What I found oddest about Mr Wallace-Wells interesting article is the strange absence of political forces in his account of America's changing political economy. Mr Wallace-Wells tells a story of economic transformation in which private-sector pioneers such as Mr Romney play the crucial role. The story is that these corporate efficiency-seekers in effect legislated from their posh offices a new model of political economy. Thus they bear not only responsibility for displacing the "genial paternalists" once at the helm of America's companies, but also for displacing a model of corporate management that, while certainly less efficient, did a better job of protecting the welfare of all the corporation's many stakeholders. Mr Wallace-Wells mentions neither the role of public policy in facilitating these efficiency-enhancing changes, nor its role in protecting, or failing to protect, workers from the downside of efficiency-enhancing creative destruction. Yet it is a commonplace even on the non-socialist left that markets should be efficient, that corporations should maximise profits, and that democratic government should set "socially responsible" rules of the game and insure people against market volatility. Mr Wallace-Wells gets to politics and policy only at the end of his piece, wherein he discusses the way Mr Romney brings to policymaking the same non-ideological analytical pragmatism he applied in private sector:
Romney did not begin with a philosophical quest to improve American health care. He began with the idea of himself as a problem solver and asked those around him for a problem that he might usefully solve. I remembered, when I was told this story, an anecdote I’d heard from a former political staffer of Romney’s. On even basic philosophical questions like abortion, the staffer said, Romney did not try to resolve the question in the abstract, as a matter of principle, and would consider instead various hypothetical cases—for instance, a late-term abortion—and build from them a politics. The line that Romney is a flip-flopper may vastly understate the depth of the condition.
This might make conservative die-hards blanch. But many of us, left and right, would like markets to be as efficient as possible so that the people may enjoy the many blessings of innovation and abundance, including a government with abundant means at its disposal to provide its people the best possible public goods and volatility-smoothing social insurance. On these terms, Mr Romney—an efficiency-enhancing, public-policy problem-solver—sounds almost too good to be true.
(Photo credit: AFP)
In this blog, our correspondents share their thoughts and opinions on America's kinetic brand of politics and the policy it produces. The blog is named after the study of American politics and society written by Alexis de Tocqueville, a French political scientist, in the 1830s
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Mitt Romney Is trying to count jobs of companies that managed to burn the leech (Bain Capital) off and survived. Much like jobs saved ..... only god could knows the answer along with knowing the number of grains of sand in all the world. Then there is Mitt Romney's commercial trying to take credit for Staples. Staples as a start up and now Mitt Romney is claiming credit for all it's jobs. Then there is the Steel mill that local and state governments bailed out along with a sales tax increase form everybody in the area. In short Mitt Romney is a proven Liar but for some strange reason his lies are called Flip-Flops meaning he is truthful regardless how many time he tells contradicting stories about the same issue or thing. To the point Mitt Romney's claims of job creation are simply not true because he never created any jobs here. Mitt Romney out sourced jobs to China and Mexico. Mitt Romney has cost US jobs.
Mitt Romney Is trying to count jobs of companies that managed to burn the leech (Bain Capital) off and survived. Then there is Mitt Romney's commercial trying to take credit for Staples. Staples as a start up and now Mitt Romney is claiming credit for all it's jobs. Then there is the Steel mill that local and state governments bailed out along with a sales tax increase form everybody in the area. In short Mitt Romney is a proven Liar but for some strange reason his lies are called Flip-Flops meaning he is truthful regardless how many time he tells contradicting stories about the same issue or thing. To the point Mitt Romney's claims of job creation are simply not true because he never created any jobs here. Mitt Romney out sourced jobs to China and Mexico. Mitt Romney has cost US jobs.
@JGradus
"isn't the government supposed to be a counter balance against the private powers to be, and not a carbon copy of them"
I think you have it right ...
The private sector makes the economy "more productive, nimble, and efficient".
Government indeed does a brilliant job of making the economy "LESS productive, nimble, and efficient"
Forbes will never forgive Romney for attacking his tax plan when Forbes ran for President. Just what did you think Forbes would do when he gave his support to Perry and basically wrote his tax plan?
This is an attempt to smear Romney in light of the Occupy Wall Street mess which is basically a Communistic anti-capitalism "anyone with money is bad". Mitt Romney is the smartest and most capable candidate. HE is the only one who can beat Obama. What is Perry really not going to debate Obama?? Horsefeathers!!
Increasing shareholder value.....this is wealth in the hands of the few....the average income in america has dropped...we don't have healthcare and a myriad of other problems...nowhere does it say that he has improved working conditions or increased employment, in fact just the opposite. He is interested in putting wealth in the fewest hands possible....
GINGRICH AND A MAN’S WORD
Gingrich makes the observation that the EPA was founded on sound ideas but has transformed into a traditional Washington bureaucracy often dispensing regulations which makes it more difficult to solve problems and innovate. He argues for the innovation of new energy approaches like clean coal technology and initiation of smaller nuclear plans. Obviously the discussions over the agency’s climate regulations will continue.
Rather than closing the agency and replacing it with a new I favor Senator John Rockefeller’s concept of offering a two year delay as an alternative to the house spending bill language. There must be give on the part of the administration to permit curtailment of the agency’s greenhouse gas emissions plan. The only caveat affecting Rockefeller’s plan to block agency emissions control...s is the fact that some senators do not want this done on a continuing resolution. I also favored representative Kristi Noem’s amendment barring EPA from making current coarse particulate matter (farm dust) regulations more stringent. That amendment was passed and if truly implemented would have a particular positive effect on Iowa agriculture.
Gingrich’s name continues to resurface as his image is remade by supporters for his benefit. The problem he faces is an unwillingness to keep a sacred oath. He is into his third marriage, his prior wives will not be supporting his candidacy. He and his present wife have done marriage seminars. Excuse me but I suspect he lacks validity and expertise in the marriage field. His claim to fame seems to be his shutdown of the government when he served as Speaker of the House.
I would not support any candidate who can’t keep a sacred oath! He seems to be one offender
Alan Phillips
Bloomington, IL
Whatever he is, he is likely our next President.
This is a fine article, which is intriguing and thoughtful, until it states near the end:
"[M]any of us, left and right, would like markets to be as efficient as possible so that the people may enjoy the many blessings of innovation and abundance, including a government with abundant means at its disposal to provide its people the best possible public goods and volatility-smoothing social insurance."
Anyone who seriously believes that government is the solution to anything has never worked in or with government, certainly in the United States. Government is a vast wasteland, which is inefficient and lazy and distorts our economy and society. In short, it is a grotesque failure and a societal nightmare.
After working in and with the federal government, and with state governments too for most of my professional life, it is fair to conclude the government that governs least governs best. While it might surprise many non-Americans, the most efficient and effective organ of U.S. government, and perhaps the only one, happens to be the Pentagon and our military.
With respect to Mitt Romney, he will make a fine president. By way of contrast, America's "Hamlet on the Potomac" and "Jimmy Carter-lite," Barack Obama, has never worked in business and his disdain for it was clear in his book, "Dreams from My Father." His anti-capitalist views and biases were admitted, for example, when he cited working briefly in New York City as a research assistant at a consulting house to multinational corporations, where he recalled feeling like “a spy behind enemy lines.”
See http://naegeleblog.wordpress.com/2009/12/05/is-barack-obama-a-racist/ (see also the footnotes and comments beneath the article)
I understand that Romney must pander to his right wing voters, but I think there is a line between pandering to voters and selling your soul just in order to win an election. Romney has flip-flopped on so many issues, such as formerly stating he would be a pro choice president to know being pro life and backing off his own "Romneycare". I mean he states how it was extremely effective in his state and an overwhelming majority of his state approved and liked the plan but for some reason he wouldn't enact that at a national level. His reasoning doesn't make sense unless of course you understand that he's running for the GOP president. I know there aren't many candidates who are consistent in their views and actually have legitimate integrity, but I guess that's too much to expect for our possible next president.
As a guy who works in a company "captured by Wall Street" I will tell you it is NOT a good thing. Wall street thinks in quarters. At best in years. But many businesses, including ours, have a basic investment/return time of 5-7 years.
Manage that kind of a business quarter-by-quarter, and you destroy a ton of shareholder value. That's why most of the innovation in this country is done by private firms (typically startups) rather than public ones.
Many Republicans view Romney's election in Massachusetts rather dubiously. For one thing the Democratic Party was clearly divided between liberals and moderates while the Republican Party was still united. When a liberal won the Democratic nomination it didn't go down too well. Romney skillfully siphoned off the moderate voter and won the election for governor. Those conditions don't exist in the present situation. The Republican Party is divided. You're running against a seated President and a united opposition. Romney is insurance against the possibility of a Tea Party President in the event that Obama loses. Obama isn't tied down in Libya, troops are leaving Iraq, QE3 is collecting dust, the economy is slowly improving, Wall Street money is going to Obama, Merkel isn't going to allow the Euro to go down the drain and next year the primaries will become a political carnival..
i wish we had a president running for this title in public and in debates would say i am taking care of this country first! which means the citizens that are born and born and raised and the ones trying to become citizens and our military first and foremost everything else is and will be second untill this country is back on the right tract!!!!!!!!!!!! Denham Springs,Louisiana
Romney would be a shoe in if he stood by his record.
If you could merge Chris Christie with Romney, you'd have a guy who'd say, "yeah, that's what I did, and it was right."
I know "the base", wouldn't like it.
The next great GOP President will redefine the base
This is a danger that Romney would continue pandering as president but past presidents have pandered as candidates then made dramatic turns once in office. Candidate Obama went to church, said he'd renegotiate NAFTA, opposed a health insurance mandate, and gave the impression that he'd be a foreign policy dove.
@ TV
May I sound conspiracy-theorist, but to justify such a defense budget means having a war every ten years, blatantly creating a war if necessary (i.e Irak intervention)
@RR
Do you really expect a dream candidate, knowing the cost of an election campaign? If money is opinion, then corporate is opinion, and no need for candidates! could you be more pragmatic Mitt?
Having sought the GOP nomination in 2008 and failed, I fully expect that Romney has modified his style. He is nothing if not pragmatic. However, I expect he is the same 2008 candidate just trimming his sails to win the nomination. You don't blow through $100 of millions the same way that was proven to fail last time.
He even smiles now, which I opine is the only factor that the electorate considers. Who had the bigger smile: McCain or Obama? And Reagan's and Carter's smiles were unsurpassed. I expect that Romney will out-smile Obama in 2012.
"Yet it is a commonplace even on the non-socialist left that markets should be efficient, that corporations should maximise profits, and that democratic government should set "socially responsible" rules of the game and insure people against market volatility."
WW, Romney is entirely against setting socially responsible rules of the game. So your indignation here that the NYT reporter inflated Romney's role in what many consider a realignment of capitalism rings pretty hallow here if you are promoting the idea that Romney's efficiency gains are a positive thing from a pragmatic perspective, if when you judge Romney's polices pragmatically he seeks to gut essential financial, healthcare, and environmental regulations that even you as a libertarian agree with.
This entire post sounds like libertarian huffing and puffing based on a presumed attack on your ideology. WW you have shown yourself to be flexible and more of a realistic libertarian when it comes to policies. Mr. Wallace-Wells probably agrees with you on almost every policy you support! I mean comon, even if you want to take the most insidious interpretation of this article's intentions it is to say that people like Mitt Romney have contributed to the incredibly growing income inequality in the marketplace. And you have personally lamented this many times before saying that Wall Street has run wild and their activities need to be curtailed!
So please WW more substantive policy posts. You are quite good at them. This post just seems petty.
Romney seems to be the man up to the job of replacing Obama. http://thoughtspotssafire.blogspot.com/
Having read his article, I largely agree with Mr Wallace-Wells: Mitt Romney worries me because has extensively used business methods which do not align well with the purpose of government, as stated in the constitution's preamble, to "promote the general welfare".
Do we want a society that is hyper-competitive, valuing efficiency above all else and rewarding those who are most able to work with and/or to take advantage of the system? Or do we work to build people and promote the efficiency that would come with it? This is a short-term/long-term trade-off.
The example of the Indiana paper factory employees in Wallace-Wells' article illustrates this well. Those employees lives were significantly disrupted by the efficiencies that Romney and Co. introduced. The argument in favor of the changes was that the factory ultimately would have been closed due to its inefficiencies. But could these brilliant consultants have found ways to invest in the people who were there rather than simply treating them as liabilities?
In the long term, does the approach Romney and Co. have used build the economy we want? Or do you develop a system that gives everyone a chance to rise? Naturally there are times when a business must let people go, but a government cannot do that. And our society has been ignoring or avoiding an ever-increasing number of people for far too long. The president and the legislators develop the legal structure and policies that will impact the long term. In my view it cannot be aligned only with short-term success.
One of my favorite parts of Wallace-Wells' article was the conclusion, where he briefly discusses the apparent detachment between Romney's Mormonism and his business dealings. I am a practicing Mormon, so Romney is currently my church's most visible member. I often do not like what I see in him. Two central Mormon doctrines are applicable here: 1) All people have intrinsic worth as children of God. 2) This life is the time for all people to progress and improve. Wallace-Wells' article leaves me wondering whether Romney believes these things.
"What Lafayette said" would have been more concise. Sorry I missed that comment my first time through.
RR, I agree too but the question is whether someone who has spent the last five years pandering will give us the benefit of his economic insight or whether he'll spend the next four years pandering some more. Not even Barack Obama, virtuoso of the retreat, seems less likely to put forward a controversial sound program.
Without even referring to Romney in particular, it doesn't seem like politicians pander to get elected anymore. It seems to be that they blow smoke to breathe.