Conventional wisdom has it that the election will be a referendum on the President’s handling of the economy. If that wisdom were correct then the first quarter of 2012 was good for Obama, the second quarter good for Romney.
But the conventional wisdom is wrong.
A tough economy will make it harder for the President to win re-election, but the focus on the economy will not help Romney. Why? After all, he has the great track record as a businessman; certainly he has been personally successful. But, it is what Romney did to be a successful businessman that will be tied, like an albatross, around his neck.
Mitt Romney is not in the tradition of such entrepreneurs as Henry Ford or Bill Gates. They built companies from scratch and grew them into industry leaders. Romney didn’t build companies, he maximized their value to generate returns to Bain Capital. Sometimes that led to companies that grew and prospered, but it also led to companies being broken up and sold for parts.
Unlike Ford and Gates, whose personal investment in their vision demanded that their respective companies grow and prosper, Romney was not committed to corporate growth as an end in itself, rather he was committed to extracting value from the company. If growth suited that end, then so much to the good; if breaking it apart and selling the assets created maximum value, then so be it; if loading it with debt, and driving it into bankruptcy, was the most profitable to Bain, oh well.
Venture capitalists provide seed money to promising new companies. They are invested in their success, as that is how they make money. But corporate raiders, or “vulture capitalists’ as Rick Perry put it so well, don’t necessarily care if the company succeeds, especially if there is more value in company dead, than alive.
The President will challenge Romney to explain that to the voter. A voter who – although he is disappointed in the results of the President’s economic policies – still blames Bush for causing the recession in the first place.
Which points to Romney’s second challenge in running on the President’s handling of the economy. The President may have fallen short on the economic recovery, but what Romney is proposing is the same wealth shift to the rich that has twice before led to recessions; the first after 8 years of Reagan and the second after 8 years of Bush Jr.
How Romney made his money is reminiscent of the financial legerdemain of the ‘masters of the universe’ of the 1980s and, more recently, of the financial crisis of 2008.
Recent loses of as much as $9 billion at JP Morgan, and the admission by Barclay’s Bank that it fixed a key interest rate. keep the spotlight on the immorality and risk of capital companies - to Romney’s detriment.
Add to this his lack of empathy for the common man – Ann’ s “couple of Cadillacs”, “I’m unemployed as well”, “I like firing people”, “I don’t care about the very poor” – and Romney has a steep mountain to climb.
The people who plotted Obama’s election in 2008 have succeeded once and don’t think that they haven’t studied Karl Rove’s strategy of attacking a candidate at his supposed strength - remember the “swift-boating” of decorated war vet, John Kerry.
Romney will make it easy for him to be painted as an out of touch plutocrat because of his mystery IRAs in Cayman Island tax shelters and Swiss bank accounts – the details of which Romney won’t release because of “confidentiality agreements” with Bain Capital.
Here, even the Citizen’s United decision allowing SuperPacs and “not-for-profits”, so beloved by the rich and corporations, will back-fire on Romney. It would seem like cheap politics for Obama to attack Romney’s personal wealth, rather than his positions. But these supposed independent groups will give the President plenty of cover.
Romney will fail if all he has is his economic argument, as he will be painted as a faithful lap dog of the super-rich. A man who, if he keeps talking about his own business history, will be pigeon-holed as someone who will enrich his handlers at the expense of the old, the young and the sick.