Wednesday, May 23, 2012

Clash of Political Ideologies: Why Bain Capital Matters?

Keywords or Terms: General Elections; White House; Mitt Romney; Barack Obama; Republican Party; Democratic Party; Individualism; Community Effort; Gaffe; Mayor Cory Booker; Bain Capital Record for Mitt Romney; Clash of Ideologies; Job Creator;  and, 2012 General Elections.

What is the state of campaign for the 2012 general elections? During the Republican Primary, Mitt Romney, the presumptive nominee of the Grand Old Party portrayed himself as the inevitable nominee; and, intuitively believed that he could run an ‘Etch-A-Sketch’ campaign to get himself into the White House as Mr. President. During the Republican primary, each Republican aspirant offered his own perception of what the 2012 campaign is supposed to be or is all about; and genuinely believed that each offered the best alternative to the present occupant of the White House oval office. The end of the Republican Party primary revealed that at least, none of the alternative aspirant, is better positioned to compete against President Obama. At most as perceived by Republican voters who somewhat deferred to Mitt Romney as the GOP’s best hope for the November 6, 20102 general contest, the contest is going to be tight; and, Mitt Romney has most money and a national campaign infrastructure that could give the present occupant of the White House, run for his money. 

Democrats and some Republican voters consider themselves opposed to Mitt Romney’s philosophy of where America should be going; or, what the 2012 general election must be about. Members of Tea Party faction in the Republican Party waged an open warfare against Mitt Romney’s candidacy; citing that he is hardly conservative enough. Democrats, out of principle and philosophy negate Mitt Romney’s advancement of being a job creator; partly because he has been out of the business of creating jobs for over a decade; and, some unsubstantiated claims from the presumptive Republican Party Nominee as a job creator while at Bain Capital, the alternative asset management firm. The gaffe from an attention grabbing surrogate of President Obama, Mayor Cory Booker of Newark, New Jersey, on Meet the Press this weekend, highlighted a part of Mitt Romney’s business record at Bain Capital, the firm that advertises itself as always aligning its interests solely with its investors’ long-term objectives. Thus, going by the Philosophy of Bain Capital and records of Mitt Romney as the corporation’s CEO, it is not an aberration that President Obama’s campaign team wants American voters to consider the presumptive Republican nominee’s record while at the firm.

Every voter understands that this year’s general election has to be greater than whatever any of the two presumptive candidates, Mitt Romney and Barack Obama, might be conceiving as the best for the nation. But what does this mean? In traditional general elections, two major parties present their platform and ask voters to accept either platform as the best form of approach to move ahead for America. While each party’s flag bearer offers a choice of the way ahead by contemplative messages or advertisements; the candidates themselves attempt to highlight their individual accomplishments while in office either in the public or private sector, or both. While each candidate sometimes offers too rosy claims of their accomplishments, one or two of the presumptive candidates attempt to go beyond what is probably true about his candidacy and accomplishments. The challenge for voters is to pick that candidate; whose party’s platform and advertised accomplishments represent their individual interests and or position at the moment.  This is often a rather difficult task. Political campaigns in a general election are sometimes part illusion, and part reality; candidates offer so many convincing and sometimes contrary positions that make the voter confused and sometimes disillusioned; yet, he or she is left to make a choice. Often, the voter becomes flabbergasted by a candidate’s claim that they develop a hatred for the candidate and or his party’s position. To help the voter do a better job at picking the ideal candidate which closely represents their interest, the blog today will contemplate one issue of claim: the record of Mitt Romney while he was at Bain Capital, the equity investment firm. What is true about Mitt Romney’s claim as a job creator? What is the condition of the American Economy today? And, are we not better off today than we were four years ago?

Individualism or Community Effort Doctrine

Two main philosophies of choice or campaign messages are being offered to the voters for consideration in the upcoming general election. The first one- Mitt Romney’s rugged individualism thesis- partly vindicated by historical political American experience; and, probably partly by singular experience under another Republican President, Ronald Reagan. Romney’s argument is predicated under ideological conflict. The narrow sense that all Americans are gifted and each must make it on his or her own. That point is correct in a narrow sense: the ruggedness of individualism brought America successes; however, many of those successes will not have appreciated but for some government assistance – corporate or individual welfare! Mitt Romney fails to appreciate that many successes that you find in America takes root in government initial humongous expenditure, which many overlook; yet, are necessary for the kind of residual wealth which many claim are reasons of their individual effort and or success.  For example, the Internet began as a government program or project; today’s launching of a rocket into space by a private enterprise took its root in huge government investments into space odyssey; and some known wealth creation, only come out of the mercy of government continued patronage. As a matter of fact, there are some current wealth adduced to individuals in current dollar terms that are solely out of government subsidies or continued patronage.  The million dollar subsidy in the energy, agriculture and other industries are so integral to the wealth and successes of participants in those industries that it will be disingenuous to continue to claim that such successes come out of individualism or ruggedness of independent initiative of one American.

Mitt Romney’s wealth which has not been ascertained this current year, since he has refused to make public his tax filing, if properly scrutinized will have some of its roots in government subsidized programs or projects. The Internal Revenue Service exists to collect taxes; however, it is an entity that has returned money to many wealth creators; including Bain Capital. Wealth creation by all American Corporations are dependent on the security within the borders of this nation; including stability, maintained military arsenal and status; maintained international political relations, financing of many international bodies, including NATO;  where American government’s contributions cannot be underestimated. If many nation member of international bodies are giving accolades and deferments to USA for its huge contribution to the sustenance of many of their programs, how come individual Americans, living fat on taxpayers money in terms of subsidies, tax deferment and more, are claiming individual ruggedness as reason for their wealth and or success?

Mitt Romney’s claim as a job creator may be justified by some of his years as a CEO at Bain Capital; however, there are many testimonies that show that Romney’s claims are biased, since many, if not all of the said jobs created, were at the expense of other jobs lost by Americans. In effect, it is probably a zero sum game, since Bain Capital puts as his first goal and obligation, the long-term interests of it investors. Furthermore, since Bain Capital is a company that undertakes the dissolution of corporations or entities that it considers as inefficiently ran, no one knows the criteria used, except those within or affiliated with Bain Capital, in an effort to make profit. It is probably acceptable that the corporation would marginalize the interest of citizen A to benefit citizen B, in its way of doing business. Where then is the job created?  Effectively, Mitt Romney has to destroy some people’s jobs in order to create jobs for other people. No one can say, with all certainty and better estimates, that jobs destroyed by Bain Capital were replaced by other similar jobs and remuneration, in better efficient corporations. As a matter of fact, no one has proven beyond doubt that many of the private equity firms on Wall Street are making corporations more efficient or effective while maximizing wealth for their investors. Hence, Romney cannot clearly accentuate to himself or any corporation he has led, a net job creator logo or banner. That rugged individualism that he is espousing as the better route for America to take at this stage of our economic malaise or development, is at least suspect, if not completely dismissible, in light of the bouncing back of the American Economy after the recent recession.

Other less sensational claims have been adduced to Mitt Romney that will not be discussed here, as they are somewhat outrageous, outlandish and probably unrealistic. We acknowledge the following: the merits of Supply Side Economics; the demonizing of Patients Protection and Affordable Care Act, the credit for saving General Motors in restructuring - these are all but campaign propaganda. No objective American must be impressed by these claims. They are all but propaganda to help Mitt Romney’s candidacy in probably a tight-faced and closely contested general election. Unfortunately, vulnerable Americans with average ninth grade education may be impressed; however, if many of these people truly evaluate many of Romney's campaign messages of achievements, they will actually see Mitt Romney’s candidacy for what it is: a facade! Such is the world of political campaigns for the White House oval office sometimes!

The second model or philosophy advanced by President Obama: A community focused initiative, that we are all in the boat together and what affects one crew member, affects all on the boat. To paraphrase the President's words: "[Americans] value shared sacrifice! We have that shared optimism and belief in an America where hard work pays off and responsibility are rewarded, and anyone can make it if he or she tries – no matter who you were, no matter where you came from, no matter how you started out." This thesis is also shared in America’s historical political experience; from social progressives, including the social justice and environmentalism doctrines. This philosophy is variously ingrained in Theodore Roosevelt’s New Nationalism; Woodrow Wilson’s New Freedom; Franklin D. Roosevelt’s New Deal, John F. Kennedy’s New Frontier to Lyndon Johnson’s Great Society. They are concepts that are hardly appreciated by conservatives; however, they are always ready to reap their rewards, either in terms of corporate welfare or tax refunds that they initially antagonized at their introduction by progressives on the floor of congress.

The manner of President Obama’s progressive doctrine offered in his campaign for a second term may succinctly be found in John F. Kennedy's definition of a liberal: "someone who looks ahead and not behind, someone who welcomes new ideas without rigid reactions, someone who cares about the welfare of the people – their health, their housing, their schools, their jobs, their civil rights and their civil liberties – someone who believes we can break through the stalemate and suspicions that grips us.” The orthodoxy of this definition is probably grounded in how President Obama has administered this country in the past three and a half years; and, probably serves as the foundation of his future leadership if he wins a second term. From equal pay for equal work between men and women, to the revocation of Don't Ask Don't Tell policy in the military and most recently, the insinuation that LGBT community should have the same opportunity of marrying whomever they choose, just as heterosexual people are doing, President Obama has shown that he is dedicated to fairness and firmness is addressing many issues facing our nation. As unwholesome this philosophy or doctrine is to conservatives, it has served this nation well in the way Obama has led and must, to his credit, form the foundation of his first term accomplishments. From saving General Motors and jobs to killing America’s Number one enemy, Osama bin Laden, one can assertively say, liberalism of the Obama's administration has served the nation well on many fronts, including civil right's recognition for members of our nation who have felt left out of the promise of America. From flexibility in enforcement of some laws considered unconstitutional to consideration of immigration issue, where a minority group feels disenfranchised with respect to landed status with green cars or path to citizenship.

Deferring to President Obama' campaign team, the triumph of Bain Capital for its investors, is a bad omen for job creation. The flip side: What is good for workers is not necessarily good for equity firm investors. The unnavigable success and claims of Mitt Romney as a job creator, is at the expense of middle income earner's survival in modern day America. The raging debate on how to restore growth and prosperity in America cannot be absent of fairness, if we are to avoid similar protest of the Tea Party movement in the Republican Party. In the universe of investor capitalists, the welfare of other Americans is hardly much of a concern. The growing inequality and poverty in America, which President Obama sees partly as a result of inequity in opportunities, which he is also attempting to correct, is very much contrary to the positions of Mitt Romney and the Republicans, who subscribe to the concept of : everyman for himself, God for us all. The Republicans, through their nomination of Mitt Romney as their flag bearer fail to understand the pains of the middle income earners. Since the 2008 recession, this group has seen their income shrink far more than any other income group since the second world war, lost huge ratio of their retirement savings or nest egg, suffered humiliation from long-term unemployment, loss of mortgages and homes, high rate of divorces and marriage disillusions, all over what is happening in America's economy; and, where the nation is heading.

One can contrast Mitt Romney's position and or philosophy to that of President Obama's; and, one will come out  with several contentious positions; none of which will deny America's free market system is still alive; and calling for fairness and a human face in the market place. While individual autonomy is distinctive and encouraged in a free market economy, there is still room for everyone to come to the table of success and feel welcomed. Men and women who lost jobs under equity firms reorganization efforts, complain that there is hardly a shared sacrifice and success in in many equity firms' purported effort to make American Corporation efficient. Many equity firms leave their employees holding the bag after eradicating about ten percent of existing jobs prior to equity firms' buyouts. Romney says he is not running on his record as Governor of Massachusetts; but his performance at Bain Capital. Romney says he created 120,336 net jobs in 24 companies he bought and reorganized at Bain Capital. All these he accomplished after buying and dismantling 100 companies as Bain's CEO, Mitt Romney. Romney's performance could be termed either way: Romney failed in net jobs creation in seventy six companies; and or, if he can create 120,336 net jobs in 24 companies, he could probably create four times that, if his performance ratio is as good in the other seventy-six firms bought over. An indisputable fact is that equity firms are working for their investors and customers, not necessarily creating jobs; and successes or failures of these private equity firms, do not necessarily lead to jobs' creation. The equity firms may help improve productivity of the businesses they buy over, however, like vulture, once they dismantle companies, they are ready to harvest their investments and profit as fast as they can, even at the expense of loss of jobs and or human sufferings.

Present Status of American Economy

There are now promising and probably, higher level of performance of economic indicators for Americas Economy. Building strength in America's Economic indicators are showing that we are moving right along, or in the right direction, as promised by the Obama's Administration when he asked for stimulus money from Congress and taxpayers. The fundamental transparency of leadership found with President Obama is a core part of possible future economic growth; and this may serve as a case for President Obama's second term and support from American voters. The risks taken by Obama's Administration when the economy was in a free fall in the tail end of 2008 and early 2009, exemplifies promise that is now being harvested by many companies that are turning or being turned around; and, which have contributed to employment increases or job growth in the past twelve months. Further, the development on Wall Street, while still tepid, shows that there is potential for increased economic expansion if we can stay the course. Congressional Republicans who withheld help for stimulus spending, health care and financial reforms are finding out that their strategy to frustrate the Obama's Administration has not worked as they had intended.

Sink or swim, isn't a smart policy; and it is not the most effective doctrine for helping out those who have been suffering from current recession. Promising unattainable heights, in the context of job creation is very elusive, if a new President jettisons some of the policies that have brought us out of the worse recession since the 1929 depression. Promising unattainable goal in elections campaign adds is like fooling the electorate hoping that they will take a bite and jettison the current successes of the present administration. Climbing out of tedious recession is difficult, but requires painstaking forbearance. Similar cyclical recession to that of 2008 has been here, putting our capitalistic system into question; however, every time this has happened, the nation has always climbed out of the hole better than when we went in. The usual problem is: how to ensure that the American public is patient enough to reap the reward of past suffering at the unset of the recession. The promise of President Obama's second term is not full-proof; however, a bird in hand is better than two in the bushes.

Better Off or Worse Off

There is a raging debate among voters regarding if they are better off or worse off from four years ago. Most enlightened voters see much improvement and believe that better days are ahead for America. The fears and rumor mongering going on in the Republican party cannot dissuade support for the continued Presidency of Barack Hussein Obama, II.  Equally important to the administration is the need to advance continued successes in the realm of the American Economy, despite antagonism from Congressional Republicans. Sometimes, signs of effort made by an Administration aren't apparent to the voter or persons at the receiving end of a slow economy. Holding off support by congressional lawmakers may make the effort of an administration look dismal. An administration likewise, might fail to trumpet its own successes as much as needed to encourage support from voters. For the incumbent, it is important to continue to encourage average Americans to persevere and dissuade misinformation from the republicans that undermine the efforts that are yielding fruits from decisive decisions of this administration. It is important for the Obama's Administration to continue to emphasize that the sink-or-sink doctrine advanced by the individualist, are not good for our current economy; and probably, may be unacceptable considering the American value of shared sacrifice, which has been in place since the advent of this democracy.

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