It’s Wednesday, July 18th, 2012….and here’s The Gouge!
First up on the mid-week edition, the WSJ suggests the formula for a winning campaign is there; the Mittquis of Queensbury simply needs to follow the right instructions while mixing the formula:
Staples vs. Solyndra
Mitt Romney needs to make a better argument for Bain capitalism.
Can a President seeking re-election with a stagnant economy and high unemployment really be winning the jobs argument against a man who backed hundreds of thriving businesses? Can a President who sank taxpayer dollars into green-energy failures now succeed by attacking an opponent who funded winning start-ups with his own money?
Yes, President Obama’s attacks on Mitt Romney and the company he founded, Bain Capital, are deceptive and hypocritical. But Team Romney is compounding the damage from this character assault by conceding too much of the Obama critique.
When attacked for “outsourcing jobs,” the Romney camp responds by saying that Mr. Obama does it, too. Or the Romney campaign suggests that their candidate had already left the firm to save the Olympics when Bain was doing all the really bad stuff. Thus the trivial back-and-forth over when he really, finally, left Bain for good.
Tuesday’s Romney response was that Mr. Obama has collected more than $100,000 in contributions from Bain employees even as he has viciously attacked them.
This is a fair (if still insufficient) point, and the Romney campaign could add that the President may have benefited himself from Bain capitalism. Firms like Bain may have helped pay Mr. Obama’s salary when he taught law at the University of Chicago. While he was a professor there, the school ramped up its investments in private equity, enjoyed outsize returns and, according to a 2000 article in Pensions and Investments magazine, was a limited partner in more than 80 private-equity funds. The school won’t say whether Bain funds were among them. (This hidden truth will out about the time we see The Obamao’s college transcripts.)
But the next time Mr. Obama talks on the campaign trail about his rise from humble roots, he might also express some gratitude to the Mitt Romneys whose private-equity investments helped to build university endowments and thus helped underwrite Mr. Obama’s career in academia. Those same endowments have also helped pay for the education of thousands of middle-class students.
In any event, hitting Mr. Obama for his hypocrisy still won’t win the argument, if both men merely share the blame for acts of capitalism committed by Bain. Instead, Mr. Romney should enthusiastically defend Bain, and the job-creating contrast with Obamanomics that it represents.Did Bain have to cut some jobs as it built companies that ultimately created many more jobs? Yes, but its companies created more than they lost, and this dynamic spirit of improvement and enterprise represents a far better path to prosperity than the government-directed, political investing of Mr. Obama.
Mr. Romney can happily claim credit for Bain’s entire impressive history, rather than just the period through 1999. He has every right to do so as the company’s founder. And it will help illuminate the basic difference between his Bain career and the President’s 3.5 years running America’s economic policy to deliver 8.2% unemployment.
Mr. Romney’s Bain worked so well that it became the model for an entire industry. Mr. Romney helped create Staples, a start-up that worked and created tens of thousands of jobs.Mr. Obama financed Solyndra, which did not work. Neither did Abound Solar. The many Obama alternative-energy ventures play in different market segments, but they struggle for the same reason: They serve political agendas more than customers.
Mr. Romney has attacked Mr. Obama’s Solyndra investment in particular, but he hasn’t linked it consistently to the President’s failed model of government-led investing or contrasted it with the successful culture Mr. Romney built at Bain.
What Bain did is what all successful organizations do: Seek to deliver products and services that are better, faster, cheaper. In some instances that means fewer employees, even if Mr. Obama still can’t or won’t grasp the concept that we live in a competitive world. How many readers of this editorial have jobs today because the founders of their companies figured out how to spend more money on a slower manufacturing process to create goods of lower quality? (Other than, of course, those of you who work for the government!)
Overall, Bain capitalism means more successes than failures, and many more jobs. In March of this year, the managing directors of Bain Capital wrote to their investors and reported that, over the firm’s 28 years, companies backed by Bain have grown their revenues more than twice as fast “as both the S&P and the U.S. economy.”
The managers went on to note that after Bain invested, companies have grown their revenues by more than $105 billion globally, including $80 billion in the United States. Bain-backed companies, they added, have opened more than 5,000 stores and facilities during their ownership.
Mr. Romney may have thought that debating Bain was a distraction from focusing on the failed Obama economy. But with Mr. Obama using Bain as his main argument against Mr. Romney’s record as a job creator, the Republican has no choice but to fight back or he’ll lose the election. Americans will choose Bain capitalism over Solyndra crony capitalism, if Mr. Romney makes the case.
We remain incredulous at Romney’s abject failure to prepare for the Bain attacks Newt Gingrich’s scorched-earth campaign surely signaled were coming. Were we advising Romney, we’d demand he hold either a news conference or deliver a speech at his next campaign stop, roll up his sleeves and deliver the something along the lines of this forward from Bill Meisen, composed we must note, prior to the Journal publishing the previous editorial:
1. The President’s irresponsible assertions about my tenure at Bain Capital have been proven demonstrably false by every independent fact checker who has reviewed them. The President is lying, and he knows he’s lying. I firmly believe going forward the President will continue to lie and do whatever he can to distract the American people from examining his Administration’s policies, policies which have resulted in nothing but abject failure.
2. The President has knowingly made false accusations I may have committed a felony with regard to an insignificant SEC filing. This from a man who admits in his own writings to underage drinking, smoking dope and snorting cocaine.
3. I’m proud of my record at Bain. During my tenure, through the investment of private capital, we turned around companies that to date have created X-million new jobs. My record stands in stark contrast to President Obama’s, whose business-as-usual crony-capitalism lost billions of public funds in failed ventures like Solyndra, Fisker Automotive and the Chevy Volt.
4. It’s a provable fact that I was not in day-to -day control of Bain at the time the President falsely claims that I was outsourcing jobs overseas. But had I been, I likely would have made the same decisions. The fact is many of our country’s policies and regulations, including most if not all of the ones enacted by this President, make it very difficult for companies to do business here. As President, I will change these policies and reverse these regulations. I will make it so attractive to do business in the United States it will no longer make financial sense to move jobs overseas.
Oh….and then we might add regarding the President….
In a related item, Marc Thiessen, writing for the WaPo, suggests Romney….
Forget the apologies and take the mitts off, Mitt
Ain’t that just like a RINO; brings a knife to a gun fight!
Here is the state of the presidential race in a nutshell: The Obama campaign charges that Mitt Romney might have committed a felony by misrepresenting his position at Bain Capital to the Securities and Exchange Commission. Outraged, Romney fires off this response: “He sure as heck ought to say he’s sorry.”
Ward Cleaver, call your office.
Not surprisingly, President Obama brushed off Romney’s request and continued to hammer him over the weekend. Obama is playing by the brass-knuckle rules of Chicago politics. Rather than calling for apologies, Romney needs to grab a bottle, break it on the bar and start fighting back.
This may not come naturally to Romney, but we know he can do it. Recall that during the GOP primaries Romney initially followed a strategy of staying above the fray. Instead of trying to win, he waited for his opponents to lose. Romney focused on his business experience, while Tim Pawlenty, Michele Bachmann, Rick Perry and Herman Cain imploded in sequential fashion.
But then in South Carolina, Newt Gingrich refused to follow suit. Like Obama today, he ran ads showing laid-off workers blasting Romney for cutting deals that cost them their jobs. Like Obama today, he demanded Romney release his tax returns and demanded to know what he was hiding. Romney absorbed blow after blow and failed to fight back — and as a result suffered a devastating defeat in the Palmetto state.
It was only when Romney realized his White House chances were fading that he finally took the mitts off and went on the offensive against Gingrich. He branded Gingrich an “influence peddler” who spent “15 years in Washington on K Street” advising clients like the discredited mortgage giant Freddie Mac. He declared Gingrich “erratic” and questioned his competence for the Oval Office. He defined Gingrich as a “failed leader” who resigned his speakership “in disgrace.” It worked. Romney won decisively in Florida, and went on the secure the GOP nomination — in large part because Republican voters finally saw a candidate who was willing to fight and who they believed could go toe-to-toe with Obama in the fall.
So where is that candidate today? Since securing the nomination, Romney has reverted to his old approach. Instead of trying to win, he seems to be waiting for Obama to lose. When the Supreme Court declared the individual mandate a tax, instead of barnstorming the country to hammer Obama for enacting a massive tax increase on the middle class, Romney went jet-skiing on Lake Winnipesaukee. While Romney has been largely running positive ads, Obama has spent nearly $100 million in battleground states on mostly negative ads about Romney’s tenure at Bain — declaring him a “pioneer of outsourcing” who is running for “outsourcer-in-chief.” Obama’s ad buy has dwarfed Romney’s by a margin of at least 4-1. Result: Only 18 percent of swing state voters see Romney’s business experience positively while 33 percent viewed it negatively. Obama is taking Romney’s greatest asset — his business experience — and turning it into a liability.
Not to worry, says Team Romney. They point out that despite the attacks, their candidate is running even with Obama in the polls and is out-fund-raising a sitting president by a significant margin.
The problem is: It shouldn’t be a tie.Obama is coming off of the worst three months of an incumbent president during an election year in recent memory. Consider the litany of blunders and bad news he has suffered — from his declaration that “the private sector is doing fine,” to his ugly fight with Catholic leaders over his Health and Human Services mandate, to the controversy over his intelligence leaks, to his decision to invoke executive privilege in the “Fast and Furious” scandal, to the string of bad jobs reports that show we are in the weakest recovery since the Great Depression. Yet despite the endless stream of bad news, the president is running even with Romney. In fact, he’s gaining. Three months ago, Gallup had Romney with a five-point lead over the president; today, they are at 46-46.
Framed this way, the picture for Romney does not look so pretty.
Romney’s new ad declaring Obama a liar is a sign of life — but he’s still responding to attacks instead of launching them. The Post reports that Romney will fire a new salvo this week accusing the president of “crony capitalism” and contrasting “Obama’s political payoffs with middle class layoffs.” Said one adviser, “We’re turning the page.” Let’s hope so. We know Romney can brawl with the best of them; if he couldn’t, he would not be the GOP nominee today. The question is: Which Mitt Romney will we see over the next four months? The passive candidate who got trounced in South Carolina? Or the fighter who brawled his way to victory in Florida?
Here’s the juice: if this humble scribe can tell someone to go to Hell such that they look forward to the trip….which we’ve had to do on numerous occasions….surely one of Romney’s highly-paid handlers, speechwriters or advertising gurus can concoct a campaign which can focus the public’s attention on The Dear Misleader’s almost limitless liabilities.
It’s not a question of if they can do it, but why haven’t they?!?
After all, as Andy Kessler details in the WSJ, it’s not like the means and material aren’t staring them in the face:
The Incredible Bain Jobs Machine
In a competitive economy, $5,000 computers become $500 tablets. Consumers get to spend the difference elsewhere in the economy.
Did Mitt Romney and Bain Capital help office-supply retailer Staples create 88,000 jobs? 43,000? 252? Actually, Staples probably destroyed 100,000 jobs while creating millions of new ones.
Since 1986, Staples has opened 2,000 stores, eliminating the jobs of distributors and brokers who charged nasty markups for paper and office supplies. But it enabled hundreds of thousands of small (and not so small) businesses to stock themselves cheaply and conveniently and expand their operations.
It’s the same story elsewhere. Apple employs just 47,000 people, and Google under 25,000. Like Staples, they have destroyed many old jobs, like making paper maps and pink “While You Were Out” notepads. But by lowering the cost of doing business they’ve enabled innumerable entrepreneurs to start new businesses and employ hundreds of thousands, even millions, of workers world-wide—all while capital gets redeployed more effectively.
This process happens during every business cycle and always, always creates jobs. Yet is ignored by policy mavens.
It is now four years after the wheels fell off our financial system. The government has tried every gimmick to revive the economy: fiscal stimulus, monetary easing, loan write-downs, foreclosure modifications—all duds. It seems like no one remembers how an economy creates jobs anymore. The right answer, in fact the only answer, for jobs and better living standards, is productivity.
Economists define productivity as output per worker hour. But ramping up the output of trolleys or 8-track tapes won’t increase living standards.It is not just technical efficiency that matters, it is also effectiveness—that is, producing what the economy really needs and consumers will pay for.
And so, in a broader sense, productivity is really about doing the right things the right way. Using modern construction equipment, we could build a pyramid on the National Mall in Washington with amazing efficiency, but it would not be effective.
So how does productivity result in more employment?
Three ways. First, some new technology comes along that allows something never before possible. Cash from an ATM, stock trading from an airplane’s aisle seat, ads next to Google search results.
The inventor or entrepreneur who uses the invention benefits from sales and wealth and hires people to produce the good or service. We don’t hear about this. Instead we hear about the layoffs of bank tellers, stockbrokers and media salesmen. So productivity becomes the boogeyman for job losses.And many economic cranks would prefer that we just hire back the tellers and toll collectors.
This is a big mistake because new, cheaper technology becomes a platform for others to create or expand businesses that never before made economic sense. Adobe software killed typesetters, but allowed millions cheaply to get into the publishing business. Millions of individuals and micro-size businesses now reach a national, not just local, retail market thanks to eBay. Amazon allows thousands upon thousands of new vendors to thrive and hire.
Consider Uber, a 20-month-old start-up, whose smartphone app knows where you are and with a simple click arranges a private car pickup to take you where you want. It doesn’t exist without iPhones or Androids. Taxi and limousine dispatchers lose. Customers win. We’ll all be surprised by new tablet applications being dreamed up in garages and basements everywhere.
The third way productivity results in more employment is by attracting capital to satisfy new consumer demands. In a competitive economy, productivity—doing more with less—always lowers the cost of products or services: $5,000 computers become $500 tablets. Consumers get to spend the difference elsewhere in the economy, and entrepreneurs will be happy to sell them what they want or create new things they never heard of, but will want. And those with capital will be eager to fund these entrepreneurs. Win, win.
The mechanism to decide the most effective use for this capital is profits. The stock market bundles profits and is the divining rod of productivity, allocating capital in cycle after cycle toward the economy’s most productive companies and best-compensated jobs. And it does so better than any elite economist or politician picking pork-barrel projects and relabeling them as “investments.”
The productive use of capital is not an automatic process, of course. It is all about constant experimentation. And it is never permanent: Railroads were once tremendously productive, so were steamships and even Kodachrome. It takes work, year in and year out—update, test, tweak, kill off. Staples is under fire from Amazon and other productive online retailers. Its stock has halved since its 2010 peak and is almost at a 10-year low. So be it.
With all the iPads and Facebook and cloud-computing growth, why is unemployment still 8.2% and job creation stalled? My theory is that productivity is always happening but swims upstream against those that fight it. Unions, regulations and a bizarre tax code that locks in the status quo.
In good times, no one notices. But in slow-growth economies, especially in the last 10 years, regulations and hiring rules and employer mandates and environmental anchors have had a cumulative dampening effect on productivity.
How can government do the right thing to help productivity and the employment it fosters? Get out of the way.Every government-mandated low-flow toilet, phosphorous-free dishwasher detergent, CFL light bulb, and carbon-emission regulation is another obstacle on the way to a productive, job-creating economy that produces things consumers really want.
Though we refuse to place our faith in any man, it certainly seems Ronald Reagan’s been the only Republican presidential candidate in the last 60 years who clearly enunciated Conservativism’s truths:
Perhaps because the Dutchman’s been the only one who actually believed what he said.
Since we’re on the subject of things consumers obviously don’t want, here’s a case in point, courtesy of Bill Meisen and Seton Motley, writing at Newsbusters.org:
Media Fail: Chevy Volt Makes NO Money, Costs Taxpayers Hundreds of Thousands of Dollars Per Car
The Jurassic Press is missing much in their reporting on the $50 billion bailout of General Motors (GM). The Press is open channeling for President Barack Obama – allowing him to frame the bailout exactly as he wishes in the 2012 Presidential election.
The President is running in large part on the bailout’s $30+ billion loss, uber-failed “success.” And the Press is acting as his stenographers. An epitome of this bailout nightmare mess is the electric absurdity that is the Chevrolet Volt. The Press is at every turn covering up – rather than covering – the serial failures of President Obama’s signature vehicle.
The Press has failed to mention at least five Volt fires, myopically focusing on the one the Obama Administration hand-selected for attention. The Press has failed to mention that the Volt fire problem remains unsolved. Is it the battery? Is it the charging station? Is it the charging cable? All of the above? GM and the Administration don’t know. And the Press ain’t breaking their necks trying to find out.
In more recent news, the Press has almost as one hailed the June Volt sales increase:
GM’s Volt Sales Up in June
Surprising June Sales for Volt
Chevy Volt Leads US Plug-In Car Sales
Chevy Volt Sales Increases
Volt Records Second-Best Sales Month
The Press has for the most part failed to mention how pathetic this “second-best sales month” actually is. And even when one Dinosaur does, the unwarranted enthusiasm is palpable:
GM sells 1760 Volts in June, double from 2011
Wow. Huge number.
The Press also fails to put this pathetic tally in perspective. The Chevy Cruze is basically a Volt without the dead-weight, flammable 400-lb. electric battery.Which makes it $17,000, rather than the Volt’s $41,000. Chevy in June sold 18,983 Cruzes – more than ten times the number of Volts. And that’s down 1/3 from last June’s 24,648.
But that feeble Volt tally has the Press all revved up. And speaking of the Volt’s ridiculous $41,000 sticker price:
According to multiple GM executives there is little or no profit being made on each Volt built at a present cost of around $40,000. Furthermore, the $700 million of development that went into the car has to be recouped.
Get that? GM makes “little or no profit” on the Volt. So it makes perfect sense that GM would spend millions of dollars advertising it, does it not? No ideological or campaign intent there, eh President Obama?
Look, I get it, it’s fun. I just spent $1 million – of your money – advertising free air. On which my profit margin is just as good as GM’s is on the Volt. Only my ads didn’t have a song, or a dance. We just aren’t as cool as the Volt.
But wait – there’s so much more. (A)dd $240 million in Energy Department grants doled out to G.M. last summer, $150 million in federal money to the Volt’s Korean battery supplier, up to $1.5 billion in tax breaks for purchasers and other consumer incentives, and some significant portion of the $14 billion loan G.M. got in 2008 for “retooling” its plants, and you’ve got some idea of how much taxpayer cash is built into every Volt.
Speaking of those “tax breaks for purchasers and other consumer incentives” – as of November of last year that tally all by itself was $250,000 per Volt sold. And that excruciating pain is ongoing. Again, a Volt sold makes GM no money – but costs We the Taxpayers a $7,500 bribe – I mean “incentive.” Oh – and President Obama wants to jack that bribe to $10,000 per.
I guess it’s good news after all that Volt sales remain so anemic.And with GM’s new 60-day return policy, it looks like you can buy a Volt and cash the $7,500 bribe check. Then return the Volt – and keep the $7,500 bribe cash. How’s that for Taxpayer coin stewardship?
Keep all of this outrageousness in mind when next the Jurassic Press joins with the Obama Administration in celebrating the Chevy Volt.But it (allegedly) helps President Obama get reelected. And nothing would make the Press happier – and for that there’s (almost?) nothing they won’t do.
Hey, for now at least, it’s a free country; buy ’em if you want ’em. But for heaven’s sake, DON’T….
….leave it in your garage overnight!
Turning now to the Follow-Up segment, the Journal‘s thoughts on The Obamao’s version of Field of Dreams:
‘You Didn’t Build That’
On the President’s burst of ideological candor.
The Presidential election has a long way to go, but the line of the year so far is President Obama’s on Friday: “You didn’t build that.” Rarely do politicians so clearly reveal their core beliefs.
Speaking in Roanoke, Virginia, Mr. Obama delivered another paean to the virtues of higher taxes on the people he believes deserve to pay even more to the government. “There are a lot of wealthy, successful Americans,” he observed, and many of them attribute their wealth and success to their own intelligence and hard work. But the self-made man is an illusion: “There are a lot of smart people out there,” he explained. “Let me tell you something—there are a whole bunch of hard-working people out there.
“If you were successful, somebody along the line gave you some help,” he continued. “There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that. Somebody else made that happen.”
This burst of ideological candor is already resonating like nothing else Mr. Obama’s said in years. The Internet is awash with images of the President telling the Wright Brothers, Thomas Edison, Henry Ford, Steve Jobs and other innovators they didn’t build that. Kevin Costner’s famous line in “Field of Dreams,” as adapted for Mr. Obama: “If you build it, we’ll still say you didn’t really build it.”
Beneath the satire is the serious point that Mr. Obama’s homily is the soul of his campaign message.The President who says he wants to be transformational may be succeeding—and subordinating to government the individual enterprise and risk-taking that underlies prosperity.The question is whether this is the America that most Americans want to build.
The answer’s an emphatic “NO”….unless of course you’re an incurable Liberal….or believe in the Tooth Fairy, the theory of Atlantis and there’s such a thing as a free lunch.
One thing’s for certain; come November 7th, there will be no excuse for not knowing who Obama is, let alone for what he stands.
On the Lighter Side….
Then there’s this beauty from Dan Feeney:
And in News of the Bizarre, this item from The Telegraph, forwarded by Bill Meisen, identifies a problem most of us likely never knew existed:
Traffic signs in New Zealand destroyed by prostitutes performing stunts
Dozens of traffic signs have been destroyed by prostitutes performing pole-dances in the street to attract clients, officials in New Zealand’s biggest city have revealed.
More than 40 poles have been bent, buckled or broken in the past 18 months in one area of south Auckland, New Zealand, it is claimed. The signs, bearing legally required notices such as parking restrictions, are thought to have cost ratepayers thousands of dollars to replace.
“Prostitutes use these street sign poles as dancing poles,” said Donna Lee, an elected member of the city council’s Otara-Papatoetoe Local Board. “The poles are part of their soliciting equipment and they often snap them. “Some of the prostitutes are big, strong people.”
“Big”, yes; but “strong” must be Maori for “females of unlimited girth”.
Finally, we’ll call it a day with another titillating tale ripped from the pages of the Crime Blotter, courtesy of Bill Meisen and one feisty Floridian:
Charges unlikely against man who shot robbers
The Internet cafe patron who shot and injured two men as they tried to rob the business will likely not face any criminal charges. “Based on what I have seen and what I know at this time, I don’t anticipate filing any charges,” said Bill Gladson of the State Attorney’s Office for 5th Judicial Circuit. Gladson said he has reviewed the security surveillance video from the cafe. While he still awaits final reports from the Marion County Sheriff’s Office, he said the shooting appeared justified.
Samuel Williams, 71, who fired the shots, has a concealed weapons permit, according to the Sheriff’s Office.Under Florida law, a person is allowed to use deadly force if he or she fears death or serious injury to themselves or others. As long as the person isn’t committing a crime and is in a place where he or she has a right to be, they are considered to be acting within the law.
Williams, who lives in Ocala, could not be reached for comment on Monday. But at least one of his 30 fellow patrons at the cafe wants to thank him.
….Surveillance video of the incident was released on Monday by the Sheriff’s Office. It shows two masked men entering the Palms Internet Cafe, 8444 SW State Road 200 in Ocala, just before 10 p.m. Friday. One of the men had a gun. Williams was seated toward the back of the cafe dressed in a white shirt, shorts and baseball cap.
Now, as Paul Harvey used to say, the REST of the story:
….Both men [Duwayne Henderson and Davis Dawkins, both 19] were shot by Williams. Their wounds were not life-threatening. Each was arrested hours later and charged with attempted armed robbery with a firearm and felony criminal mischief. Henderson remained in the Marion County Jail late Monday in lieu of a $31,000 bond. Dawkins was released Sunday after posting an $11,000 bond.
Internet cafes are regulated by the state. They offer sweepstakes entries, which are used to buy time on computer terminals that simulate casino-style games. The operations, which have sprung up around the county and the state, are known to deal in cash.
You go, Gramps, you go! The perps are lucky Mr. Williams wasn’t packing a Colt 1911; they wouldn’t have had time to collect their thoughts, let alone wet themselves in their mad scramble for the door.
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