Over at Plum Line today, I did an update on various different endorsement counts in the WH GOP 2012 race. As you probably know, the answer is that Mitt Romney is getting very close to putting this thing away. More at the link.
Personally, I'm looking forward to the possibility that Newt Gingrich might win South Carolina, leading to a press frenzy around the "collapsing" Romney just as I call him the certain nominee. Oh well; it's just as likely he'll win South Carolina by ten points, and we'll get ready for a ten month long general election campaign. Doesn't that sound like fun?
Thursday, January 12, 2012
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This much is true, if you think there was political chaos during term one of of the Obama Admin, wait until term one of the Romney Admin. Over half of the guy's own party doesn't like him. Remember during the debt ceiling debacle when Boehner couldn't get the House to vote for Boehner's own stuff? That's probably a foreshadowing of what would happen with Romney. It would be a mess. He's going to need some kind of major GOP powerbroker on his ticket who will basically run the show the way Cheney did in the Bush II Admin.
ReplyDeleteActually, there's an easy answer to this. Romney caves to Republican extremists/stalwarts just like Obama did to extremes/stalwarts among the Dems.
DeleteSeems to me that much-discussed Gingrich movie attacking Bain's job-destroying efforts is a huge wildcard; most likely it will amount to nothing, but there's some chance it torpedos the Mittster. The variance is in whether the message gets simplified enough for common folk to understand why entities like Bain Capital routinely destroy jobs.
ReplyDeleteCause when the topic is private equity, inevitably the discussion strays to matters like arcane financing structures generating huge profits. People tune that stuff out as they rightly don't understand it.
Much more simply, suppose I owned a company, CSH Construction. If you wanted to wrest control from me, you would have to pay me fair value based on the current worth of the company. Pretty much the only way for that to be profitable for you is if the company were worth more in your hands than in mine.
There are basically three ways for the company to be worth more in your hands than in mine: 1) You engineer a dramatic increase in sales, 2) You make significant product cost innovations, or 3) You fire a shitload of people.
I think it virtually goes without saying that Mitt and the boys weren't looking for companies where there were huge sales increase opportunities, since the current company would have capitalized on any such opportunities; and they weren't looking for product cost improvements, as the Mittster would have no way of knowing from his cushy office in Beantown.
The fact that Bain Capital left thousands of lost jobs in its wake is actually fairly noncontroversial; that's all in a day's work (for them!). Will Romney's primary opponents, or later this summer, Obama, communicate this clearly to Joe Average American?
Excellent question, CSH. In general I don't trust Democrats to do that, or even to understand why it's important -- so I'm very pleased that Republican candidates are making an effort this time to show them how it's done.
DeleteThe director of that film was on Kudlow's show the other night, and Kudlow did his exasperation thing, asking "Isn't Gingrich attacking capitalism? Don't we Republicans like capitalism?"
DeleteWe do, Larry, we like it very much. However, if there are two neighboring firms, in the same industry, and one makes very high quality, expensive products with a large workforce, while the other makes low quality products with a skeleton staff, entities like Bain Capital profit from making the former company turn into the latter.
We Republicans don't really root for that. There's a moment early in the Gingrich film where one of the former washing machine employees points out that they used to make really high quality machines, but when Bain took over, quality went to hell.
Unfortunately, that comment is left to dangle in the documentary, with no perspective on why that observation is probably not sour grapes but more likely a business model. If Gingrich's guy won't point that sort of thing out, there's a good chance it won't get communicated at all.
Well, the film's director is probably trying to keep the focus on the harm that vulture capitalism does to people's lives, not to their laundry. As long as the newer washing machines don't explode, we can still hope that market forces will work as advertised -- some other company will come along to meet the demand for higher-quality machines. (I'm not sure that's true, but we can hope.) The bigger heresy is suggesting that there's a tradeoff between "wealth creation" and the well-being of workers and communities. I must say, although I'm pleased he's finally noticed it, it increases my contempt for Gingrich that in all these years of teaching us the "rules of civilization," as he brags, he never thought of this problem (or listened to others who were pointing it out) until a moment came when doing so served his narrow electoral self-interest.
DeleteYou raise an interesting point about the low-quality washing machines; among others, I shouldn't have initially dismissed product cost savings (as opposed to innovation) as a way for the raider to make money. Presumably, the Acme Commercial Washing Machine Company develops a reputation for high quality merchandise; Bain Capital's takeover is not communicated to the existing company's customers, who will continue to pay a premium for the company's (now crappy) washers for some time, presumably a longer time than Bain will be involved. A pretty profitable business model, no?
DeleteThe danger for Romney probably arises from the fact that rank-and-file Republicans don't side with Bain in the Bain v. Washing Machine Company Stakeholders case. If I had to guess, I'd say that the average Republican is anti-liberalism because they identify big government programs as an extensive opportunity for power-mongering overreach and abuse, not because they are disinterested in issues like social cohesion and the like. Power-mongering, like what Bain is up to when they blow up the Washing Machine company.
There's a frame for Bain Capital that goes something like this: "make a high quality, expensive product, employ large numbers of your neighbors, and we've got a target on your back, profiting from your demise"
That's probably comes in somewhere between Dennis Kucinich and Karl Marx in terms of marketability to the average Republican. Will Obama capitalize?
Yeah, we've got Gingrich mimicking Ralph Nader, Santorum doing a Michael Moore (complaining about how America's social mobility is falling behind Europe's), and Ron Paul sounding like Noam Chomsky. If any of this gained enough traction to stop Romney, or force him to the left, things could really get confusing -- you might have Obama running as the champion of conservative values against the Republican Party's neo-Bolshevism.
ReplyDeleteIs it possible that this could morph into a reasonable discussion of how to regulate financial firms? Or, more likely, a chance for Democrats to talk about this? (If they have any reasonable ideas stored up.)
DeleteThat's probably too much to hope for, but let's hope for it anyway. :-)
DeleteOh, and I forgot Bachmann and now Gingrich attacking "crony capitalism," and Gingrich now asking voters, "how many think we deserve to know why the big banks got bailed out with big money, but folks who own mortgages and folks in small towns ... somehow couldn't?" William Jennings Bryan should sue for plagiarism.
ReplyDelete