Barack Obama has a modest economic record and here’s why: Timothy Geithner, Lawrence Summers, and others gave him bad advice; his political people, David Axelrod, Patrick Gaspard, David Plouffe and others, had no feel for the broad suffering of America and lacked technical know-how or institutional experience in managing the world’s largest macro-economy; from Europe to Asia, global headwinds stalled job growth, the Council of Economic Advisors was a revolving door, and Barack’s own mastery and knowledge of economic fundamentals is weak. Twenty-nine million Americans looking for working is the result, a dismal record, especially four years past the Great Crisis.
Legislatively, Republicans blocked the recovery by threatening the integrity of American credit, by turning wrongheaded ideas into talking points, by ignoring truth (government does create jobs!), by passing bill after bill never destined to reach the President’s desk, bills never intended to help American families, never proposing a change in the rules that aided families burdened by mortgages and foreclosures, never stimulating demand—the key to job growth. They offered instead cuts in safety nets.
Yet the index for equity markets doubled from their 2009 bottom and more than ever companies saw record profits by 2012. Capital tells a very different story than jobs. Why the contradiction between record profits and job recovery, between community suffering and corporate swag?
Hidden in plain sight, it’s the part Mitt Romney conveniently leaves out of his message. Again, Mitt switches positions to pretend he is something he is not: he has no “know-how” about creating jobs—none. Mitt is a balance sheet guy. He creates capital—not work. He extracts capital gains—he does not increase paychecks. Wealth is profit; labor is an expense. His goal is to take out cash, not increase what workers take home. His entire corporate life, his constant activity has been extracting wealth, trading capital, increasing its return as capital gains. His ideas have a single source: profit, capital wealth.
And where did that capital wealth come from? He robbed labor. Without conscience, he fired workers, stole their pensions, stripped their benefits, sold their machines overseas to increase his personal wealth. He did not grow production; he extracted its value. He wrecked perfectly solid companies.
Now, with relish, he thinks his success and its carnage of unemployed workers will benefit the nation, the “small businesses” he cites. He never mentions the word “workers”—or their families, hoping we confuse capital wealth with increased demand. If Romney’s view were true, record profits would already be driving hiring. The top ten companies holding cash are behemoths of strength and stability, all in Fortune’s Top 100 US.
Here’s a partial list: Exxon Mobil (energy), $17.8 billion; WellPoint (health insurance); $20.3 billion; Amgen (biotech), $22.5 billion; Pfizer (drugs, equipment), $24.3 billion; Apple, (technology) $27. 6 billion; Oracle (software) 30.7 billion; Google (technology networks), $41.7 billion; Cisco Systems (technology) $48.7 billion; Microsoft (technology) $62 billion.
These are not small businesses. Mitt Romney knows nothing of small businesses, whether tailoring or coffee shops, lawn care or day care, mobile labs or fund raising, bed & breakfasts or convenience stores. He never walked their path. He does not know their craft—or the balance sheets of the Patels, the name identified with the large Indian community who now own 70% of American hotel rooms; they know more than Mitt about creating jobs and wealth. Washington, DC’s immigrant Ethiopian community turned service jobs into a several-block area of restaurants and stores (bounded by U and 9th Streets NW), creating a core of businesses and experiences that supports a network opening new neighborhoods and cities. Koreans and Iraqis have done the same with inner-city groceries.
The list of cash hoarders that Mitt wants to help in the name of workers are not small business—or job creators. He ignores the successful examples and models right under his nose! The culture of the giants he comes from and supports pushes profit and power, demanding concessions, lowered costs, global franchises. The frantic pleas of 29 million Americans are written off as national depreciation, a group that exceeded its usefulness and is somebody else’s problem. The 47 percent.
Mitt’s plan aims squarely to increase the behemoths’ market share. Think: how is China’s currency manipulation impacting small businesses? Can he explain the link? How will local-based businesses, which still can’t obtain capital, reap benefits from expanding trade in Latin America? These are markets beyond their reach.
A bet on challenging China to grow American jobs is the folly it appears. It’s fighting the last war and sacrificing the future. It’s also make-believe, an emotional appeal tied to anger and false hope. Romney aims his vision at the close-up details of the rower of the boat in the storm, never looking at the turbulence of the seas that impede progress and threaten safe harbor, the rocking danger faced at every oar’s turn.
Yet he would take the US into more dangerous waters. Betting on Latin America means facing the political challenges of dealing with corrupt systems, high regulation, restricted foreign investment, low-income consumers, and moving on a policy with no plan or compass—or impact on the middle class. That’s why Romney cites no examples or details tied to Peru or Brazil, to Honduras or Costa Rica, and ignores the Caribbean, where we have stronger ties, and Haiti, the world’s lowest-cost labor market on our doorstep.
Mitt’s pledge is a balance sheet strategy that sees opportunity in numbers for the giants. The giants benefit from a reset of China’s currency, from new Latin markets, from the opportunity to increase their capital—at a lower tax rate.
If you are voting on the economy, do this: before you accept the grand idea that challenging China will help your hometown, or if you are unemployed, that your job will return if we increase Latin American trade, ask how. If you believe that a tax cut by a balance sheet guy who refuses to show you the numbers but promises to preserve the middle class rate while we add $2 trillion to defense, who takes away coverage for preexisting conditions, lifetime limits, and the requirement that 80% of premium coverage be used for healthcare will create prosperity—say how! If that is your path to recovery, job growth, and success, tell us: how? Because Mitt’s recitation of the what always, invariably, inevitably omits the how. When others add it up, his plan’s only assurance is the increase in capital for the globe-striding stilt-walkers of wealth.
Barack‘s investments in education and infrastructure invests in human capital, the model followed by the world’s fastest-growing economies, despite Mitt’s denial. Brazil is expanding health care and education, and putting $60 billion into new rails for commerce; we now longer make rail cars or engines, the tasks of high tech precision, capital-intense industries at which America excels. More importantly, Barack protects the human capital that Romney dismisses so inelegantly. Barack is restoring government integrity by fighting fraud, returning $4 billion in health care fraud in 2012, a record. Barack has always outlined new openings in energy, only a recent addition for Romney.
So how to vote? Truth counts as an assessment of performance. Barack lags, Mitt misleads.
But in the end, Barack may fall short, but he, unlike Mitt, never switches up. I would rather be picked up and continue on than turned around.