Wednesday, October 24, 2012

Romney's Business Experience...More Liability Than Asset

As the campaign heads down the final stretch we see Mitt Romney’s supporters reverting back to the cornerstone of his qualifications for the presidency…his business experience. 
Their claim is simple.  Romney’s extraordinary success in the business community makes him uniquely qualified to tackle the nation’s economic problems.
Their claim seems valid.  After all, when you are talking about budgets, debt and deficits; who better to take the wheel than a successful businessman with decades of experience in handling such matters.
The problem for Romney is that the United States of America is not a business.  And each time Romney has tried apply his business acumen to the nation’s problems his experience has proven to be more of a liability than an asset.
Take his economic plan.  Romney sees the top 1% of the country as the job creators…the engine that runs the country…our biggest asset.  He wants to maximize the power of this asset by reducing their taxes and stripping away regulations that impede their growth.  But in order offset that decrease in revenue he has to cut his expenses and reduce his liabilities.  He does this by cutting loopholes, programs and legacy costs that the other 99% of the country depends upon.  In the business world you can outsource, offshore, layoff or replace that 99% with advances in technology and automation.  You can downsize and consolidate your operations to eliminate many of them and reduce their impact on your bottom line.  But that doesn’t work in running a nation.  That 99% isn’t going anywhere.  You have to account for them as they matter just as much as the top 1%.  Romney has continually stumbled in accounting for the 99% in his economic policies.
Let’s look at his infamous “47%” comments.  Romney singles out the 47% of Americans who don’t pay taxes.  He says that they are not taxpayers and therefore not interested in his tax reducing proposals. He says:  “So my job is not to worry about them because I will never convince them that they need to take responsibility for their own lives.”  Let’s set aside that included in that 47% are elderly folks on social security, veterans and the working poor who don’t earn enough income to pay taxes.  In the business world Romney could get away with not worrying about them.  Again, he could outsource, offshore or simply lay them off.  But as president he has to include them in his policies and his economic plans.  Romney’s “off the cuff” comments show that he has trouble making that transition.
Finally, let’s look at the auto bailout.  Mitt Romney looked at the failing auto industry as he would any other prospective Bain investment.  He concluded that the industry needed to go through a managed bankruptcy, reorganize their management, restructure their operations and reduce their liabilities and expenses. If they came through the bankruptcy then Romney would be willing to provide government guarantees for financing so car buyers would not have to worry about the security of their warranties.  If they were unable to successfully re-organize and right themselves then their fate would be in the hands of the free market by whose hands they would live or die. Steve Rattner, the “car czar” who handled the bailout for both the Bush and Obama administrations, said that the industry could not have gotten through the bankruptcy procedure without an infusion of cash.  Unable to pay their bills; they would have to shut down and liquidate.  Rattner tried to find financing through the banking industry.  But the banking industry was in turmoil.  Lehman had just collapsed and other major banks were teetering on the brink.  None of them would touch the car industry with a ten foot pole…not even Romney’s Bain Capital.  Rattner says that Romney was well aware of this financing difficulty and still wanted to let the market take the industry down.  Rattner says that the president understood the importance of the auto industry to the American psyche.  He understood the devastating effect the industry’s collapse would have on the country.  And he fully understood the enormous effect the loss of 1.5 million auto jobs would have on the economy.  So the president stepped in when Mitt Romney would not.
Running a country is a great deal different than running a business.  It’s not just about debits and credits…profit and loss.  It’s about people and their lives. 
Serving as President of the United States requires a very different set of skills than serving as CEO of Bain Capital.
Governor Romney and his supporters have yet to grasp that concept.          
           


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