The Obama recovery is stalling out even as the president attacks Mitt Romney’s record at Bain Capital. But who has the better jobs record?
Both presidential candidates claim they can get the economy moving again, but each advocates a very different approach to job creation.
President Obama has pursued a government-led, debt-financed “stimulus” and investments in “green” companies while Romney at Bain pursued a private capital rescue of failing companies.
Which approach produced more jobs?
Obama points to Romney’s failure at GS Technologies and Ampad.
GST was a unionized steel company in Kansas City, which went out of business in 2001, two years after Romney left Bain Capital to run the winter Olympics. The managing partner at Bain in 2001 was Jonathan Lavine, a current Obama fundraiser.
Bain bought control of GST to save a failing steel company that had already fired more than 80 percent of its peak workforce. Bain invested $100 million to modernize the plant.
Foreign competition and union contracts made the steel business unprofitable and Lavine closed it and eliminated more than 700 jobs.
Bain bought control of Ampad, an office supply company in Marion, Ind., in 1992. The business prospered, and Bain sold majority control for a profit in 1996.
Big-box retailer pressure decreased Ampad’s profitability after that, and it went out of business in 1999.
Bain invested in some 350 companies over the time Romney ran the company.
More than 80 percent of them, including well-known names like Sports Authority, Domino’s Pizza and Staples, benefited from Bain management and were successful.
While hundreds of jobs were lost to restructuring and instances of business failure, many thousands of new jobs were created in Bain’s successful companies.
Obama picked two of the failures, but his attack was one sided and went too far. It was one sided because Obama failed to tell the whole story of these two “failures,” and it went too far because the president appeared to be attacking the whole notion of private capital.
In a campaign stop in Chicago, Obama said, “If your main argument for how to grow the economy is, ‘I knew how to make a lot of money for investors,’ then you’re missing what this job (the presidency) is all about.”
Bain made more money as companies it invested in grew – and the more the companies grew, the more people they hired.
Last week, even President Clinton praised the “good work” of private capital and Romney’s “sterling business career.”
Prominent Democrats like Pennsylvania Gov. Ed Rendell, Newark, N.J., Mayor Cory Booker and former “car czar” (and private equity success story) Steve Ratner also defended the job creating role of private capital.
Compare Obama’s job-creation actions over the last three years.
Obama’s near-trillion-dollar stimulus plan to “save or create” millions of jobs found few “shovel ready” projects (as the president finally admitted) but did shore up state and local government jobs.
The reorganization through bankruptcy of Chrysler and GM infused $130 billion of public money but imposed foreign ownership (Chrysler/Fiat) and union (United Auto Workers) control.
Bond holders (retirement plans for example) got nothing and hundreds of auto dealerships were closed, nearly all of them owned by Republicans.
While most of the public money has been repaid (some with new government loans), taxpayers are still out more than $30 billion in the GM deal alone.
Today seven of 10 GM cars are made outside of the U.S. as GM plans to build more plants – in China.
Obama politics demanded GM produce a “green” car. The Volt is a dud, and its assembly plant has been closed – with the workers furloughed.
Solyndra was the symbol of Obama’s investment in, and commitment to, “green” technology and a move away from oil, natural gas and coal.
The company got nearly half-a-billion tax dollars. Today it’s bankrupt, the plant shuttered, and 1,100 workers out of a job. But Solyndra executives were granted bonuses by the bankruptcy judge.
Solyndra is joined by 18 other “green” companies that got federal grants and/or loans and are now bankrupt.
Fisker Automotive took our money and plans to build its electric car outside the U.S.
Can Obama name even one “green” energy company success? Where are the jobs?
Worse yet, a closer look at those Department of Energy loans for “green” companies reveals that 80 percent of the money went to companies owned, controlled or invested in by Obama campaign donors.
Two different approaches. Two different results. One big choice for voters in November.