The Obama campaign’s attack on Mitt Romney’s role starting up Bain Capital may go down as one of the worst political misjudgments of recent decades. It is based on an anachronism — a picture of an America that hasn’t existed in decades, if it ever did.
The attack is a spruced up version of Franklin Roosevelt’s Depression Era assault on “economic royalists,” the wealthy elite that he claimed had no concept of the lives of common people. You have heard that same “out of touch” charge leveled at Mr. Romney again and again in the campaign to date.
The Bain Capital charges have been built on it. They invite voters to adopt a view of economics taken directly from the script of the 1987 iconic film “Wall Street,” with Governor Romney cast in Michael Douglas’ role as Gordon Gekko – and like most Hollywood scripts these charges are heavy on fantasy.
We all know what is wrong with them, both in specifics and concept.
The specific shortcomings include slamming the governor for closing a company that Bain did not give up trying to save until several years after he left to take over the Salt Lake City Olympics.
The conceptual problems are that a big part of Bain’s business was turning around declining firms – not the kind of safe course that someone who made a pre-presidential career of voting “present” would understand. But without firms that will bet on saving losers, where would our economy be? Most American’s understand that risk is required to achieve economic growth.
For example, Bain under Romney bet on a number of steel companies. Who bets on steel in our time? What a loser industry. And yet, even as one of those companies failed, and has been the focus of an Obama ad, a number worked out, creating vibrant enterprises in a supposedly disappearing field together with the jobs that go with them.
Here is the paradox: The Obama campaign’s focus on Bain’s losers has ended up calling attention to Bain’s winners – and amplifying questions about the string of losing bets the president’s investment of public money has produced.
Yesterday, White House press secretary Jay Carney was pressed on this question of how the president’s losing bets with government funds were different than Mr. Romney’s at Bain. Carney’s answer boiled down to something like the president cared, really cared about those who lost their jobs when Solyndra and others like it failed. A listener might have thought, yeah, but Romney didn’t pour my tax dollars into failures that were run by his friends.
And yet, something more is going on here than economics.
In doubling down on its assault against Bain, the Obama Administration has bet that economic attitudes in the United States today are little changed from FDR’s 1930s or Harry Truman’s late 1940s. At that time, close to half the workforce was unionized. The great bulk of these (for the most part) men labored in heavy manufacturing and related industries. They worked for giant corporations, most of which had been founded well before they were born.
Consider the contrast with today. Today less than ten percent of the private workforce is unionized. Manufacturing output in 2007 was about six times higher than in 1950, but manufacturing employment has been declining as a proportion of the workforce, just as agricultural employment did in the 19th and 20th centuries. Meanwhile the Kauffman Foundation, which studies entrepreneurship, has reported that, since 1980, companies that were five years old or less created all of the net new jobs in the United States. Add it all up and it suggests that appeals to class and envy might not work in our time the way they did in FDR’s.
Here is another paradox: In this race, the, oh, so cool, totally modern incumbent is living in another time. It is the square, straight shooter with a 1950s haircut and manner who sees today’s world as it really is.