Bain, Bain, go away……..(thoughts on the current stage of the Presidential campaign)

Why can’t the pundits focus on the real issues?

I am thinking about the issues surrounding Mitt Romney between 1999 and 2001. The “facts” are that Romney claims that he left Bain Capital in 1999 to run the Salt Lake Olympics, but that he signed several documents filed with the SEC and elsewhere stating that, through some time in 2001, he remained the sole shareholder, chairman of the Board of Directors, and Chief Executive Officer of Bain. This issue is apparently receiving so much focus for one major reason – an apparent conclusion that Bain Capital was involved in a number of transactions during this two year period of time which resulted in a large number of jobs being shipped overseas. (I assume this is what happened, although have no first hand knowledge.)

Romney maintains that he was not involved in the outsourcing transactions that took place during this time. The Obama administration is saying that this is not possible – look at the SEC filings.

There are a number of issues here.

First, let’s assume that Romney is correct on the history. That he left active management of the company in 1999 to move to the Olympics, and that he did not return. Let’s assume that Bain was involved in outsourcing transactions between 1999 and 2001, but that Romney had nothing to do with them. Does this let Romney off the hook?

I think the answer is ‘no’. Regarding the SEC filings, how can you be Chairman of the Board and CEO of a company and say that you were not involved in any of its activities? There are legal responsibilities to holding these positions and, if you don’t resign from them, you bear some responsibility for what the company did during this period, and you bear perhaps even more responsibility for ignoring the duties of your position.

But the real fact is that we don’t know the facts, in large part because the Romney campaign and Bain have not released any of the documents needed to ascertain the facts. For example, Romney says that he had taken a leave of absence from the company; can we see the documents that set the terms of the leave of absence? And if the leave of absence meant that Romney would not be involved in any company activities, where are the documents that would tell us who took over? Has anyone looked at the bylaws of the company, and do these bylaws talk about succession when the chairman or the CEO is no longer functioning in his positions? And do we know what sort of communication existed between Bain and Romney during this time? Did he participate in any discussions, or receive emails or other communications? Did he attend board of directors’ meetings? Etc., etc. These are not difficult questions to answer, but Romney (for whatever reason) does not seem to want to answer them.

But there are two other issues. First, as I understand it, we actually know relatively little about the various Bain transactions and activities. Can we learn more? And second (obviously somewhat related) is the question of whether jobs were created here, or moved overseas, or both or neither, through Bain activities. Is there a way even to calculate the answer to this question objectively?

But is any of this even relevant? This can be answered either yes or no, I would think. I am not sure what the goals of Bain Capital’s operations were (I understand that making money was a big one, but this is usually not the only goal of a business), but I would assume that building employment in the United States was not one of them. In fact, if it was I would be very surprised. And failure to have American employment increases as a business goal (or even failure to avoid outsourcing) is not a reason to criticize Romney’s candidacy for president.

Except for two things. One is that Romney has made his activities at Bain, and Bain’s success at increasing American jobs, a (perhaps ‘the’) linchpin of his campaign; he says that as a businessman, he knows how to increase employment and that he succeeded in doing so. The other is that it relates to Romney’s honesty, something that appears to be called into question again and again.

The Romney campaign says that the Obama campaign wants to talk about Bain to avoid talking about Obama’s record as president. While the Obama record is mixed, I can’t conceive of how this is true. Romney’s background is crucial to his qualification for the presidency, particularly since he himself has said that it is record at Bain is what qualifies him. And of course, this brings up one more anomaly of this campaign so far – Romney does not want to speak about his experience as governor of Massachusetts, presumably because he did not do a very good job increasing employment in the state during his term, and because he passed the original version of “Obamacare”, better known as “Romneycare”. In other words, in terms of what the Republicans would like to see, Romney as a public official is very similar to Obama as a public official. “We have met the enemy, and they are us.”

In the meantime, Romney attacks Obama’s presidential record on jobs and the economy. Obama has his answers, which may or may not be sufficient to satisfy the voters. But unfortunately, one cannot fairly judge Obama on the economy and on employment because the Republican House of Representatives is so intent on not giving the President any leeway to implement his program. Whether the Republicans are right or wrong on the economy is not my topic here – but the refusal of the Congress to let the president implement his legislative proposals is very relevant to the campaign, although the Democrats have not yet figured out how to emphasize the importance of this.

To me, it means that this campaign is more than a campaign for the presidency. If we wind up with a president from one party and a Congress controlled (or partially controlled) by the other, under current circumstances, we will have four years of paralysis – four years we cannot afford. So, from the perspective of either party, it seems to me that the campaign has to be broader than a presidential campaign – it has to be a campaign to elect a Congress that will be supportive of the next president. Perhaps this will come – it hasn’t yet.

We have a long way to go, of course. But as of now, it appears that neither campaign has figured out how to avoid the trivial (or how to avoid issues that will permit the discussion to be moved to the trivial), and discuss the big issues. The fear is that neither campaign wants to discuss the big issues, for after all a discussion of issues leads to considerations of compromise and understanding, something that is anathema to the current crop of federal office holders. If that is in fact the case, it goes without saying that, irrespective of what happens, we will all be the losers.


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