(/sites/default/files/uploads/2012/07/Non-Romney-pick-means-stock-pain-HATAPTT-x-large.gif)Last week, President Obama and his campaign minions decided to focus on Mitt Romney’s record at Bain Capital. Bain Capital has been attacked early and often for buying failing companies, then outsourcing jobs at those companies to other countries in order to cut costs. According to the Obama campaign, all of that was Mitt Romney’s fault.
It began with a planted Washington Post story strongly implying that Romney had outsourced while at Bain; as it turned out, the outsourcing at Bain truly happened after Romney was no longer in control – he effectively left a control position in 1999 to head up the Salt Lake City Olympics. Nonetheless, that story ended up becoming the source of Obama’s claims that Romney was responsible for the outsourcing – and even the Post had to chide the Obama administration for moving to “define what the article said, claiming that this transfer of jobs took place while Romney ran Bain. That’s not what the original article said.”
In fact, the real outsourcer was President Obama himself, who had used American taxpayer dollars to stimulate job creation in places ranging from China to Finland. But that didn’t stop the Obama campaign from lying about Romney.
Then, the Obama campaign went a step further. They dug up an old Washington Post report and had the Boston Globe rehash it as news. The report claimed, “Government documents filed by Mitt Romney and Bain Capital say Romney remained chief executive and chairman of the firm three years beyond the date he said he ceded control, even creating five new investment partnerships during that time.” In other words, Romney was fully in control of Bain during the time they outsourced jobs.
Stephanie Cutter, deputy campaign manager for the Obama team, promptly went on a conference call and said that this meant that Romney was either a liar or a felon (for lying on federal forms).
One problem: the forms don’t say that at all. They say that Romney was Chief Executive Officer and president with a controlling interest in Bain Capital VI, which was essentially a holding company for assets. Bain Capital VI was not a fully functioning, buying-and-selling entity controlled by Romney. And everybody, including both the Washington Post and CNN, knew it – which is why CNN said that Obama’s new Bain campaign “doesn’t appear to be true.”
So the attacks has fallen apart for the moment. But it won’t stop. The outsourcing meme is a giant, rotten red herring thrown in the middle of the floor to distract from the fact that the economy is currently bursting into flames. Stocks may be as much as 50 percent overvalued. Foreclosure rates in California are rising again. Cities are going bankrupt. And we’re talking about whether a private company Mitt Romney once ran fixed companies by hiring cheaper labor overseas.
While Romney’s campaign did a decent job fighting back against the outsourcing smear, Romney lost an opportunity to turn the entire issue back on Obama. Instead of fleeing from charges of outsourcing, Romney should have said that it is Obama’s policies that are creating incentives for businesses to outsource – they’re driving profit margins down and costs up. If Obama’s truly against outsourcing, he ought to resign now and save companies the trouble of shipping jobs to China.
Romney blew an opportunity for a teachable moment. He should have explained that Democrats don’t like outsourcing – but they do like regulation. That means that in order to prevent outsourcing, they have to regulate businesses so that they can’t go abroad. Which means that fewer people will start businesses in the United States.
Conversely, Democrats could try to impose tariffs on foreign imports, since those countries don’t have the same regulatory restrictions on their product creation and manufacture. This would jack up product prices in the United States. Which means people would have less money to buy products. Which means that businesses would go bankrupt.
Outsourcing is not a moral ill. It is a symptom of a business climate gone bad. Texas is not particularly worried about outsourcing. California is. Only a growing economy keeps jobs at home.
Romney could have said all of this. Instead, he chose to argue on Obama’s turf, and concede the notion that outsourcing is an actual ethical problem for private business. In doing so, he undercut the notion that he is an articulate advocate for the American businessman. If he keeps playing defense, he’ll lose.
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