Jane Chastain is a Southern California-based broadcaster, author and political commentator. Despite her present emphasis on politics, Jane always will be remembered as the nation's first female TV sportscaster, spending 17 years on the sports beat. Jane blogs at JaneChastain.com. She is a pilot who lives on a private runway.More ↓Less ↑
“U.S. government files for Chapter 11 ”
That should be the headline the day after the new president takes over next January. Chapter 11 is not bankruptcy, per se; it is a chance to reorganize.
When a business is unable to service its debt or pay its creditors, the business or its creditors can file with a federal bankruptcy court for protection while this reorganization takes place. During this process, all existing contracts may be canceled, and assets are sold in an attempt to put the company on the road to recovery. This week, we learned that the U.S. debt is now equal to the size of the entire U.S. economy.
It’s time for the U.S. to, in effect, file for Chapter 11. The new president, acting as trustee for the people, should step in and do the necessary due diligence before the creditors like China get their turn.
The one man with the experience to do just that is Mitt Romney. Unfortunately, with Romney in the White House, that is unlikely to happen. His economic plan is timid. He wants to lower government spending to 20 percent of GDP down from 24 percent. That takes us in the right direction, but it’s not enough. Historically, tax revenue comes in at around 18 percent of GDP – so where does that leave us? Still in debt up to our eyeballs. This has to stop!
The country is in big economic trouble. This is not the time to tinker around the edges. It’s a time to go bold.
Most of the other GOP candidates have better plans for putting our economic house in order and boosting the economy. However – with the exception of Ron Paul – given their past records and recent remarks denigrating capitalism, one cannot take them seriously.
Newt Gingrich’s attacks on Romney’s record at Bain Capital, directly and through a super-PAC financed by a Las Vegas casino owner, is disappointing and outright disgusting. Clearly, he is throwing the biggest temper tantrum in political history or he has forgotten everything he ever knew about the free-market system.
Unfortunately, Jon Huntsman and Rick Perry have followed suit. Huntsman’s only business experience is working for daddy’s company. Perry, who has a good record as a Texas governor and an excellent economic plan, is shooting himself in the foot. All three political campaigns should implode.
Bain Capital, under Romney, made money for its investors by providing cash for promising young companies and by buying failing and underperforming businesses and trying to turn them around.
Bain’s goal was to build successful companies. What’s wrong with that? That’s what drives capitalism. When companies succeed, they make money. When they succeed, jobs are created. However, the jobs that are created are a natural byproduct, not the driving force behind the investment of sweat and capital.
Did some of those companies Bain invested in fail? Of course. However, many of those underperforming and failing companies were revitalized. According to a Wall Street Journal study on Bain, during Romney’s 15 year tenure, 22 percent of the companies Bain invested in either filed for bankruptcy, reorganization or closed their doors by the end of the eighth year. Another 8 percent lost all of the money that Bain had invested in them.
Say what you will, that’s an excellent record!. Furthermore, studies show that buyout firms during that period, on average, bailed out of their investments at the end of five and a half years, so Bain worked with its companies harder and longer than most.
If Bain hadn’t bought some of those distressed companies, most likely those companies would have failed on their own. But what about all those employees that were able to keep their jobs at the companies Bain revitalized? What about all the people that were hired as a result of Bain’s other investments?
Just last week, we learned that Eastman Kodak, an American icon, is restructuring, hoping to keep bankruptcy at bay. This week, it is being reported that Hostess Foods, the maker of Wonder Bread and Twinkies, is getting ready to file for Chapter 11. Who will step into to rescue the U.S. before it is too late?
Clearly, Romney has the business experience to do what is necessary to turn this country around. If only he had the will. If Romney had shown the will to do the kind of heavy lifting he did at Bain and run this country like a business, his poll numbers would not be stuck in the 25-30 percent range.
Nevertheless, Romney’s business record is one of accomplishment. The other candidates should not be faulting him for that. In doing so, they show their own stupidity. Who can trust them now?