IT WAS only a matter of time before President Barack Obama’s re-election campaign followed earlier adversaries of Mitt Romney in portraying the Republican candidate as a callous millionaire who amassed his fortune by scooping up failing companies, stripping assets and firing employees in the heartless pursuit of profit.
The Obama campaign broadcast Steel, a two-minute advert decrying Bain Capital’s record at GS Technologies steel mill in Kansas City, Missouri, in five must-win battleground states last night.
The states were Colorado, Iowa, Ohio, Pennsylvania and Virginia, and the ad targeted blue-collar “Reagan Democrats” who have grown disillusioned with Obama.
Mr Romney founded Bain in 1984 and was its chief executive until he left in 1999 to organise the Salt Lake City winter Olympics. Though GST did not go bankrupt until 2001, Stephanie Cutter, Mr Obama’s deputy campaign manager, said Mr Romney oversaw the purchase of GST in 1993, established its structure and was still listed as company head when it went broke. “He was still making profits off this deal,” Ms Cutter said.
Of the $21.6 million (€16.92 million) in income Romney declared on his 2010 tax returns, $13 million (€10.18 million) came from Bain.
Like the audience the candidates are trying to win over, the men who deliver testimonials in Steel are white, working class and ageing. They speak from their living rooms, against backdrops of family photographs and American flags.
“They made as much money off it as they could,” says Joe Soptic, who had been a steelworker for 30 years. “They closed it down, they filed for bankruptcy, without any concern for the families or the communities.”
The 750 workers who lost their jobs at GST also lost their pensions and healthcare benefits while Bain reaped $12 million in profits.
“It was like a vampire, they came in and sucked the life out of us,” says Jack Cobb, another steelworker, speaking of Bain. “It was like watching an old friend bleed to death,” Soptic says of the company.
Their quotes are intercut with clips from Romney speeches. “As I look around at the millions of Americans without work, it breaks my heart,” Romney says.
“Those guys were all rich,” Soptic continues. “They all have more money than they’ll ever spend. Yet they didn’t have the money to take care of the very people that made the money for them.”
The advertisement has provoked renewed accusations of “class warfare” by Republicans.
Within hours of the ad being posted on the internet, the Romney campaign fired back with its own web video about Steel Dynamics, an Indiana company that Bain bought in 1994 which employs 6,000 workers today.
“One of the hardest things to do is move up a socioeconomic status in a generation,” says a pro-Bain worker. “Because of this company, I’m able to do that with my family. If that’s not the American Dream, I don’t know what is.”
Romney’s spokeswoman Andrea Saul accused “President Obama and his billion-dollar attack machine” of “desperately trying to distract from their own failed record of wasteful spending and crony capitalism by launching an attack on free enterprise”.
The duelling campaign ads convey irreconcilable visions of American capitalism. Steve Rattner, who advised Mr Obama on the Detroit automobile bailout, said the Obama ad was “unfair” because liquidations are “part of capitalism”. Mr Romney has always argued that “creative destruction” – ie “downsizing” or mass lay-offs – is necessary in business.
By taking on Mr Romney’s record at Bain, the Obama campaign is attempting to undermine his chief asset in the presidential contest: his argument that success in business qualifies him to be president. Though Mr Obama still has higher favourability ratings, he and Mr Romney are now in a statistical dead heat, and polls consistently show that voters have more confidence in Mr Romney’s ability to turn the economy around.
Mr Romney says he would grow the economy faster than Mr Obama by lowering taxes for the wealthy and slashing regulation, a policy derided as “magical capitalism” by EJ Dionne of the Washington Post.
Mr Romney spent 25 years in finance, four years as governor of Massachusetts and three years running the Olympics. “I spent my life in the private sector, not in government,” he boasted last September. “I only spent four years as a governor. I didn’t inhale. I’m a business guy.” But as Bloomberg News pointed out yesterday, running a corporation is not comparable to running a government.
Herbert Hoover, the wealthy mining executive and financier, catastrophically mishandled the Great Depression and is considered one of the worst presidents in US history. Mr Romney’s claim that he created 100,000 jobs at Bain is widely disputed. The New York Times says it’s impossible to accurately quantify the jobs created and destroyed by Bain.
Steve Rattner, the financier who criticised the Obama ad, also criticised Mr Romney.
“Mitt Romney made a mistake ever talking about the fact that he created 100,000 jobs,” he said. “Bain Capital’s responsibility was not to create . . . jobs . . . It was to create profits for its investors.”
The late senator Ted Kennedy pioneered attacks on Mr Romney’s record at Bain during the 1994 senatorial race, when he defeated Mr Romney by 17 percentage points.
Newt Gingrich adopted the theme in a half-hour video, King of Bain; When Mitt Romney Came to Town. This backfired when much of the video was found to be inaccurate.
The Obama ad could backfire too. The Romney campaign welcomed it as an opportunity to attack what it portrays as Mr Obama’s poor record on the economy.
Conservative commentators gleefully pointed out that on Monday night, when the Bain video was posted on the internet, Mr Obama attended a fundraiser at the Manhattan home of Hamilton “Tony” James, the president of the Blackstone Group, one of the US’s largest private equity firms.
Alluding to the steelworker’s description of Bain as a “vampire”, an editorial in the Wall Street Journal concluded sarcastically that perhaps Tony James asked guests “to show up with fangs and a funeral pallor” and that “Mr Obama no doubt wore garlic.”
Morgan Chase Losses Reforming Wall Street
MITT ROMNEY’S campaign yesterday described JPMorgan Chase Co’s huge trading losses as an unfortunate part of a free market economy.
Romney adviser Eric Fehrnstrom told NBC that while Mr Romney supported some financial regulation, he believed the losses at one of America’s largest banks involved investors, not taxpayers, and that rules for Wall Street should not hamper investments.
“The leadership of that company will be held accountable for this trading loss, but we don’t want to punish companies,” he said. “There was no taxpayer money at risk. All of the losses went to investors, which is how it works in a public market.”
The Romney campaign’s comments come the day after President Barack Obama said the huge loss showed the need for Wall Street reform. The FBI and the justice department announced yesterday that they had initiated a criminal investigation into the loss. – (Reuters)
