Romney Camp Admits That Its Bain Job Creation Number Is Bogus
http://thinkprogress.org/economy/2012/01/04/397565/romney-admits-bain-jobs-bogus/?mobile=nc
[Romney spokesman Eric] Fehrnstrom says the 100,000 figure stems from the growth in jobs from three companies that Romney helped to start or grow while at Bain Capital: Staples (a gain of 89,000 jobs), The Sports Authority (15,000 jobs), and Domino’s (7,900 jobs).
This tally obviously does not include job losses from other companies with which Bain Capital was involved — and are based on current employment figures, not the period when Romney worked at Bain.
Bain Capital has been responsible for thousands of layoffs at companies it bankrupted, such as American Pad & Paper, Dade International, and LIVE Entertainment, which Romney’s stat completely leaves out. He’s also taking credit for jobs created long after he left the firm to launch his political career. To sum it up, the stat Romney uses is incredibly dishonest...
Romney Camp Admits That Its Bain Job Creation Number Is Bogus
http://thinkprogress.org/economy/2012/01/04/397565/romney-admits-bain-jobs-bogus/?mobile=nc
[Romney spokesman Eric] Fehrnstrom says the 100,000 figure stems from the growth in jobs from three companies that Romney helped to start or grow while at Bain Capital: Staples (a gain of 89,000 jobs), The Sports Authority (15,000 jobs), and Domino’s (7,900 jobs).
This tally obviously does not include job losses from other companies with which Bain Capital was involved — and are based on current employment figures, not the period when Romney worked at Bain.
Bain Capital has been responsible for thousands of layoffs at companies it bankrupted, such as American Pad & Paper, Dade International, and LIVE Entertainment, which Romney’s stat completely leaves out. He’s also taking credit for jobs created long after he left the firm to launch his political career. To sum it up, the stat Romney uses is incredibly dishonest...
BINGO!
And then Willard goes on to govern Massachusettes by massively increasing taxes to businesses (he called it closing loopholes) leading to..
Job growth was devastated by Romney’s policies. The Massachusetts Taxpayer Foundation says that under Romney, “job growth has been anemic.” (28)
According to job creation experts Andrew Sum and Joseph McLaughlin of Northeastern University, manufacturing employment during the Romney years “declined by 14%, the third worse record in the country.” (31)
The same scholars wrote that “from 2001 to 2006, Massachusetts ranked 49th in the nation in job creation…” (32)
The Boston Globe business columnist Steve Baily wrote that “there are 40,000 fewer people in the workforce than when Romney took over.” (33)
This view was echoed by the Boston Herald’s business columnist, Bret Arends, who wrote, “During the four years Mitt Romney was governor of Massachusetts, it had the second worst jobs record of any state in America…it wasn’t a regional issue. The rest of New England created nearly 200,000 jobs.” (34)
Another way to judge a state’s economy is to look at its Gross State Product and these statistics are kept by the U.S. Bureau of Economic Analysis. Between 2001-2005, the percent GSP increase for Massachusetts was an anemic 8.44%, one of the lowest five-years increases in the country – 44th out of 50 states. (35)
We’ll let labor market economist Andrew Sum summarize: “as a strict labor market economist looking at the record, Massachusetts did very poorly during the Romney years…on every measure you’ve got, the state was a substantial under-performer.” (36)
31) Mass Jobs, Center for Labor Studies, November, 2007, Northeastern University.
32) Ibid
33) Boston Globe, 2/15/06
34) Boston Herald, 2/21/07, http://news.bostonherald.com/editorial/view.bg?articleid=184105
35) www.ssti.org/Digest/Tables/061206t.htm
36) Reuters, 1/21/08, www.reuters.com/artilce/politicsNews/idUSN2033704120080120
While Romney’s job accounting has been the stuff of imagination and nice, round numbers, here’s something else I believe people are missing. This has been bugging me all day, and I finally decided that he’s a fraud - no matter how many jobs he claims he ‘created.’ Unless they were in the Bain office where he worked, and he made the decision to open a position and set the compensation, he didn’t create the job.
Romney and Bain Capital didn’t run the companies they bought on a day-to-day basis. They provided a) capital and b) “consulting expertise.”
Now, let’s say that we want to use the heroic Venture Capitalist facade that Romney and Friends would like to put up - ie, where Romney and Bain invested capital in some company and enabled them to grow and flourish, la-dee-dah, cue the swelling violin music.
I’ve met a bunch of real VC’s in Silly Valley in my days, and none of them ever tried to claim that they “created X jobs” in their target investments. None. They did brag about their ROI’s, the change in company growth or sales as a result of their advice or injection of capital, but jobs? Those were the responsibility and authority of the management of the target investment company. The VC’s didn’t make calls on that other than “Well, your burn rate is showing us that if you keep hiring at this rate, you’ll need another round in Y sooner months... and you’re not going to be ready for that milestone then... you’d better slow down your [cash] burn...”
Let’s take Staples as the example: Bain & Romney weren’t running that company, they weren’t making the hiring/firing decisions at that company. They put in a wad of early money and they got a ROI on their investment. OK, that’s nice... Anyone can write a check. Takes only minutes. His involvement is not like that of a startup founder who gets big - eg, Steve Jobs and The Woz started a company that became huge and employed a whole bunch of people. They were directly responsible for the decisions that increased or decreased employment. Likewise with guys like Bill Gates, or TJ Rogers, etc. Cisco today employs over 30K people around the world. You don’t hear Sequoia claiming credit for creating those jobs, do you? No. They’re on to their next investment.
An investor claiming that he “created jobs” by mere injection of money into a company is about as dishonest to me as a banker claiming that he produced “X bushels of wheat” because he made a farmer an operating loan to enable the farmer to buy fuel, seed and fertilizer for the season. The damn banker wasn’t out there in the tractor, pulling an air seeder across the plains in the mud of April, and they weren’t sitting in a combine for 40 hours straight as they got the crop off the field ahead of a storm. All the bankers did is sign some papers, punch some buttons on a keyboard and then demand the payments to be made on time.
The “job” that outfits like Bain do is maximize ROI on client funds. That’s it. They can do it buy buying and strip-mining companies, they can do it by spotting up-n-coming startups, they could do it by speculating or investing in markets. Hedge funds make large, levered-up investments in various companies... and I don’t hear hedgies claiming they created “100K jobs” at any point.
Romney is being dishonest here when he’s talking about jobs other people created. Contrapositively, I won’t hang the jobs that were eliminated by Schumpeterian destruction around Romney’s neck either. I will state again that I think his MO (and the MO of many PE/LBO firms) are unethical. They’re using clever accounting and “financial engineering” tricks to maximize their gain and leave others holding the bag. It’s legal, but then so was making mortgage loans to people who had no ability to repay, wrapping the crap paper into a CDO and getting a AAA hung on it.
His latest ad simply says "thousands". Ok fine. I'm sure if someone took an honest look, they'd find any jobs created were comparable in expense to jobs created by Obama.