Like 67.2 million other Americans, I watched the first presidential debate between Obama and Romney on October 3rd. I’ve seen a lot of spin since, but clearly Romney was the more appealing character on my TV screen. Obama seemed to be having an off day.
Actually, Obama’s performance stunk.
But does a well practiced performance by Romney mean we should vote for him.
My first concern about Romney is that he said everything the middle class needed to hear. This normally wouldn’t be bad, but he’s said exactly the opposite in each speech he’s given right up to this debate.
So instead of taking him at his word, which at best is a moving target, I need a little better understanding of what he might actually do as president. Which brings me to a notion that has long served me well: The best indicator of future behavior is past behavior.
There are several parts of Romney’s life that I believe would be instructive. He was raised Mormon, his daddy was rich, a businessman, and Governor, who had aspirations for the White House himself. When I watch Romney’s demeanor and speech on TV, he reminds me of many of the Mormon bishops and stake presidents I’ve personally known in my life. His wife also speaks in fluent Mormon. They are both used to being at the very top of their own world in terms of wealth and importance.
But lest the reader misinterpret me, being Mormon is neither good nor bad. Talking about it, though, does help me to understand Romney. He is extremely active in the church. He donates millions of dollars a year in tithing. He’s been a bishop and a stake president. This lets me know that there are tendencies in his belief system in general, as well as somewhat predictable patterns to the actual things he does every day of his life.
While Mormons have made many missteps along the way, they eventually almost always figure things out and take the high road. Part of their belief system is that we are all here on Earth to be tested. Only the worthy will make it to the Celestial Kingdom, which is the highest of the three Kingdoms in the afterlife they believe in. This translates into an extreme desire to do what is right.
Of course, there may be a definitional problem in knowing exactly what is right. But my experience is, even if it takes years, and on occasion a century or more, eventually Mormons do get it right. For example, though they were dragged there kicking and screaming, they eventually allowed black men to enter the priesthood. I don’t think the day is far off when they will back away from their current stance against homosexuals, and instead fully embrace them as equals.
With regards to Romney getting it right (after first sounding like a complete ass), I was particularly impressed that a day after the debate he issued a statement saying he was flat out mistaken for calling 47% of Americans victims who live only to feed at the public trough. It wasn’t an easy road for him. He had stuck with his original statement for a week or more. But he did it. He admitted his error. Changed his position. Finally did the right thing. Like I said, it’s not unexpected that he would struggle with what he’s done, but eventually get it right.
So part of me thinks that Romney’s performance at the first debate may be indications that he is finally reaching the right decisions, jettisoning a lot of the extreme rhetoric which was only useful in the nomination fight, something he had to say to the extreme right that provides so much of his base, but now is a huge detriment to him actually being elected. It’s kind of like a snake sheds skin, he’s now come out a completely changed man.
Or maybe not so changed. He was governor of Massachusetts, one of the most liberal states in the nation. And he was Republican. His opponents in the presidential primary race have saturated the airwaves with old news clips of Romney looking more liberal than the vast majority of Democrats today. And he holds up his own health care legislation in Massachusetts as a monumental success and model to be followed.
Past behavior being the best predictor of future behavior, perhaps we should have easily predicted his positions in the first presidential debate. Regulations are necessary he told us. I won’t touch Social Security or Medicare. In fact, Obama is a bum for removing $916 billion from Medicare. I’ll restore it. On and on he went, seeming to say in so many words he was the old liberal who led the state of Massachusetts to have, among his other wild successes, the best health care in the nation and the best education system in the nation.
No one could have watched Romney’s performance and missed his sharp grasp of business concepts and macro economics. But he comes with some pretty definite pre-conceived notions of how to lower unemployment, how to bring our economy back, and reduce the national debt. I wasn’t all that convinced that he was concerned about the middle class being the driving force behind a resurgent economy. He’s more of a trickle down Reaganomics kind of guy. Once again, his past behavior may be dictating his thought process. He comes from money, an extremely wealthy and powerful family. And his one significant business experience would indicate that he truly believes personal wealth is the most important goal, and what you do to gather that wealth to you is not all that significant from a moral outlook.
If Mitt Romney is remembered in the business world for one thing above all others, it will be his style of hostile leveraged buyouts that produced for both him and Bain Capital many hundreds upon hundreds of millions of dollars.
Romney is smart. He will succeed wildly at anything he does. Which is why he was so successful at raiding American companies, dismantling them, selling off their parts, and leaving with hundreds of millions of dollars, free and clear. I’ve been reading up on these raids. Here’s how they appear to have worked:
First, he sees a company that has money to be taken out, usually because its assets are worth more than its value. Or to say this another way, the sum of the target’s parts, the various companies, factories, and divisions, is worth more than the current market value for the whole, so long as things are reorganized a bit.
Next, he takes a few tens of millions of Bain Capital’s money, say thirty-million, uses that to secure a loan from a large bank to buy controlling interest in the company. That way, he can call the shots. Unfortunately, management sometimes objects to a hostile takeover. The mistake of other corporate raiders is they go to war with management. Not Romney. He would provide the existing management team many millions of dollars in compensation, and in essence, buy their loyalty.
Once he was in charge, he would begin the hard work of dismantling the company. Bain charged an enormous consultation fee, tens of millions of dollars, maybe more, for this. Why? Because it’s hard work. People have to be fired. Factories closed, or moved to more profitable locations. Assets sold. Subdivisions sold. Till what’s left is only the most profitable parts.
Then Bain would secure a loan as the largest shareholder (through, the now willing and eager management, I presume), for the remaining company to buy Bain’s shares. Often hundreds of millions of dollars would be the final purchase and loan amounts.
The result: Bain walks away with the hundreds of millions of dollars, completely debt free.
But what about all of the debt they just borrowed?
The company they raided is saddled with the debt. For some of those companies, the debt was too great, they ended in bankruptcy. For others, they took years and years of hard work, but they struggled through the hardship, managed to stay alive.
To me, Romney’s days at Bain are instructive in many different ways. Romney is clearly smart. He knows how business operates and can make huge sums of money without either the need to actually produce consumer goods or provide any kind of services. What he did fits its descriptive name, he raided viable companies, took huge profits, and left them to fend for themselves however they could. Whenever I think of this, I see a pirate ship roaring up to a merchant vessel, cannons blazing. The pirates swing on long ropes, sabers in mouth, land, slaughter all able seamen, leave with the cargo and women, not really caring if the ship burns and sinks, or somehow makes port with the few surviving but badly wounded aboard.
But more than just smart, Romney has no compunction about what he did. He’s proud of it. In his mind the world is a place where the fittest survive. And by creating the ultimate free enterprise system, competition can thrive. Weak companies don’t deserve to exist. If they can’t outsmart him, they should provide him with a nice pot of gold for his troubles.
How deeply he ignores moral issues in his business behavior is clear in his denial that he was CEO and sole owner of Bain Capital at a time when Bain was shipping US jobs to China. Now that he’s running for president he denies this. But in SEC reports filed for those years he clearly stated he was CEO and sole owner. If I were advising him, I would tell him to stick with what he reported on the SEC papers. Because if what he reported to the SEC is not true, he’s probably committed a felony.
The important thing to note, however, is he has no problem changing the story whenever it suits his needs. Thinking about this sets off all sorts of alarms, buzzers, and bells in my head. We don’t need what could be the result of a president engaging in such behavior, another Nixon type Watergate coverup, or a Bush-Cheney administration outing our CIA operative because her husband exposed the truth about the legitimacy of attacking Iraq.
But that’s Romney the businessman.
Romney the public servant is quite another story. He saved the Winter Olympics in Utah. He really did. Our noble leaders here in Salt Lake City had bribed their way into the games, but when that all came out on the five O’clock news, someone had to step in, fix the mess. Romney was the right man in the right place. The Olympics were a huge success. He also donates millions of dollars a year to worthy causes. He’s a kind caring husband and father. He personally helps the poor and down trodden, both through his church activities, and otherwise.
So my question is: Will the real Willard Mitt Romney stand up?
The world will not end if either Obama or Romney is elected. They are two of the most intelligent men to ever campaign against one another. Obama came into office unseasoned. He relied heavily on advisers who, from time to time, have lead him down the wrong path. Such as whoever told him to not get into it with Romney during the debate. Obama had so much ammunition, especially with Romney reinventing himself at every turn, that this could have been much closer debate. But that aside, Obama is a problem solver. He doesn’t have an extreme ideological agenda. And he’s done an excellent job against some pretty great odds.
Romney would make an excellent president. But there’s danger that he’ll play to his extreme right wing base because he thinks he needs to do this in order to have a second term. And his sympathies may naturally sit much more with the extreme wealthy than they do with the middle class and poor. The Mitt Romney who was Governor of Massachusetts I could vote for in a heartbeat. The Mitt Romney doing leveraged corporate takeovers I’d never be comfortable with. The Mitt Romney playing to the extreme right to secure the Republican nomination, I believe would cause more harm to this country than George W. Bush ever did. Romney is a far bigger concern because he’s many times smarter and much more capable of actually accomplishing whatever he sets out to do, whether that be beneficial for America, or extremely detrimental.
Having said that, I see that my brother has given Romney a thumbs up. I’m presuming he means the Romney who happened by for the first presidential debate. I too find part of that Romney intriguing.
I also believe that Obama has earned a second term.
Which is all to say, I can’t wait for the next debate.
Written by Waine Riches