The Pasty Litte Putz has seen fit to instruct us on “The Benefits of Bain Capitalism.” He gurgles that the private equity revolution of Mitt Romney and others helped keep America competitive, but the human costs must be acknowledged, too. The “private equity revolution” is what destroyed the middle class, Putz. MoDo gives us “Mitt’s Big Love.” She says in fashion next fall: enigmatic, elusive, analytical Harvard grads. The Moustache of Wisdom, in “Getting to Know You …” says as a new government takes shape, Egyptians are finding their voices again and rediscovering their neighbors. Mr. Kristof has a question: “Why is Europe a Dirty Word?” He says Republican accusations that President Obama is a quasi-European reflect a caricature of Europe that is flat wrong. Oh, and pass a croissant. Well, Republicans tend to be flat wrong about just about everything, so why should their view of Europe be any different? Mr. Bruni, in “Running From Millions,” says presidential candidates are just like you. You plus multiple homes and millions. Here, heaven help us, is the Putz:
The debate over Mitt Romney’s career at Bain Capital, in which several of his Republican rivals sound as if they’re auditioning for a production of “Les Misérables,” is at heart a debate about the last 30 years of American capitalism.
In the decades after World War II, the United States economy was highly regulated, highly taxed and highly successful. War, tyranny and ideological mania had devastated our competitors, and while Asia stagnated and Europe struggled to rebuild, America grew and grew and grew. It was a golden age for the liberal model of political economy, with a powerful regulatory state presiding over labor-management cooperation and a steadily expanding middle class.
But like all golden ages it passed. First in Europe and then in Asia, competitors emerged to challenge the United States’ economic dominance. In this new landscape, the pillars of the postwar economic order began to look like liabilities. Our heavily unionized industries seemed sclerotic, our regulatory system stifling, our tax rates punitive. And so American policy makers, C.E.O.’s and investors responded by changing their priorities — privileging growth over security, efficiency over equality, and embracing creative destruction on a scale that would have been unthinkable in the America of 1955.
In the private sector, this revolution was driven by men like Mitt Romney. As Ben Wallace-Wells put it in a New York magazine profile last October, Romney has spent his entire career seeking to “perfect” the American corporation, stripping “its inefficiencies until it might function as a perfectly frictionless economic unit.”
This process didn’t just involve pillaging companies and throwing their employees out onto the street, as Romney’s more overheated critics charge. While Bain’s record is hard to assess from the outside, one comprehensive study cited by Reihan Salam in The Daily suggests that private equity buyouts in general tend to have “only a modest net impact on employment” in the companies involved.
But neither was Romney the Henry Ford-esque job creator he’s tried to play on the campaign trail. He served his investors, not his employees, and his goal was always to make an uncompetitive company competitive, even if that required cutting paychecks and shuttering plants along the way. What’s more, Bain usually found a way to reap profits even when the overhaul failed and the company went belly-up.
In the broadest sense, though, the competitiveness revolution was good for the United States. In the 1970s, there were sound economic reasons to expect that other developed nations would gradually catch up to American living standards and per capita G.D.P. Instead, our rivals got rich, but we stayed richer. As Adam Davidson noted in last weekend’s Times Magazine, “even Europe’s best-performing large country, Germany, is about 20 percent poorer than the U.S. on a per-person basis.”
But keeping America’s edge came at a cost. Our economy became more efficient, but also more ruthless and Darwinian. Our G.D.P. kept rising, but the new wealth was less evenly distributed. The revolution delivered growth, but at the expense of stability and certainty. And for many Americans, even the “modest net impact” of private equity buyouts cost them a solid, good-paying job.
On the left, and now apparently in Newt Gingrich’s campaign shop, there’s a persistent suggestion that it could have been entirely otherwise — that the midcentury model could have somehow been sustained, that the private equity “vultures” could have been held at bay, and that what worked for the United States when Europe was in ruins and half the world was Marxist-Leninist could have worked in the age of globalization as well.
This is a fantasy, unfortunately — one that belongs to the world of Hollywood endings, where Gordon Gekko is defeated, Blue Star Airlines stays in business and Bud Fox’s dad gets to retire with a solid pension. Indeed, it’s such a fantasy that even Oliver Stone didn’t quite believe in it: In “Wall Street,” Blue Star was saved from Gekko’s clutches — and presumably, from the real-life fate of an Eastern Airlines or a Pan Am — not by a government subsidy or a benevolent Daddy Warbucks, but by a rival buyout specialist.
Still, just because the private equity revolution was necessary doesn’t mean that it was an unmitigated good. And for Mitt Romney to frame criticisms of Bain as just “the bitter politics of envy,” as he did last week, displays a tone-deafness that could cost him the presidency. No one — and certainly no politician — who has profited so immensely from an age of insecurity should ever appear to be lecturing the people who’ve lost out.
Instead, Romney needs to prove to anxious voters that he and his party have more to offer them than just Bain capitalism alone. To win the White House, he’ll need to promise not only competition that leads to growth, but growth that leads to broadly shared prosperity. To defend his revolution, he’ll need to show that he’s reckoned with its costs.
The thing is, you little schmuck, Mittens has nothing else to offer, neither does he care about the costs. Moron. Here’s MoDo, who’s just up the coast a ways, in Charleston, SC:
What a choice we’ll have in the fall: one man on a pedestal, another behind a wall.
Democrats and independents may have fallen out of love with President Obama, but Republicans and independents can’t fall in love with Mitt Romney. The two Harvard Law School grads are heading into a match with oddly matching flaws: both became famous while staying enigmatic and inaccessible.
If Obama is Spock, Romney is the Tin Man. If Obama failed to rein in Wall Street vultures, Romney reigned among Wall Street vultures.
The Republican front-runner is fighting back in South Carolina against charges from rivals that he was a heartless plunderer at Bain. The jobless statistics, he said at a rally in Aiken, represent “real people and real suffering.”
Ignoring his own tax plan, which would help the wealthy and hurt the poor, Romney adopted a heartfelt tone: “I’m concerned about the poor in this country. We have to make sure the safety net is strong and able to help those who can’t help themselves. I’m not terribly worried about the very wealthiest in our society. They’re doing just fine.”
Neither the president nor his likely challenger are bon vivant, backslapping types. Both like to see themselves as pragmatists and saviors; both have backgrounds that make them seem alien and exotic to some voters.
As Michael Kranish and Scott Helman recount in “The Real Romney,” when Alex Castellanos was a media adviser for Romney’s presidential run in 2007, he prepared a PowerPoint presentation war-gaming lines of Democratic attack. He predicted that Willard Mitt Romney could be depicted as “phony,” “slick — not human (hair?)” and “You do not know where WMR comes from.”
Romney’s religion pulls a curtain over parts of his life story because some important moments for Mormons are restricted to Mormons. After Mitt and Ann were married in Michigan in 1969, they flew to the Mormon temple in Salt Lake City for a ceremony where Mitt wore white robes and they were “sealed” for eternity. But Ann’s parents were not Mormon, so they were not allowed inside to see it.
Romney recoiled from ’60s counterculture and was “proudly square” as he went from seeing “The Sound of Music” with Ann to avoiding the Grateful Dead at college, Kranish and Helman report. While Stanford classmates like David Harris organized protests against the Vietnam War, Mitt got a deferment to go to Paris as a Mormon missionary.
His position on the war mirrored his dad’s. When George Romney was for it, Mitt was for it; when George turned against it, so did Mitt, agreeing that Americans had been “brainwashed.”
At Harvard, Romney was in a nondrinking, nonsmoking, suburban, uxorious bubble with Ann, revolving around Mormon rituals, Mormon couples and the Mormon credo of strong, heterosexual, traditional families.
“The parental roles were clear,” the authors of “The Real Romney” write. “Mitt would have the career, and Ann would run the house.”
Mitt was tolerant with friends and did not proselytize, but his world, then as now, centers on his faith, his family and, most of all, Ann. Once while he was at Stanford, he missed Ann so much he auctioned off his camel’s hair coat to pay for a trip home to see her. (His father had cut back his allowance to make him study.) At campaign stops 47 years later, he still calls her “my sweetheart” and “my girlfriend.”
Some former Romney advisers say that bringing Mormonism into the mainstream is part of why he wants to be president. But he tries to soothe skittish evangelicals here by promising not to be “pastor in chief.”
The Boston Globe reported in 2006 that Romney’s political team privately talked with church leaders about building a nationwide network of Mormon supporters called “Mutual Values and Priorities,” using alumni chapters of Brigham Young University’s business school. Jeffrey Holland, one of the 12 apostles of the church, was involved in the plan.
“The Real Romney” offers details about his days as a bishop of his church in Boston, including the time he sought out a single mother named Peggie Hayes and advised her to give up her soon-to-be-born son for adoption. She claims he threatened her with excommunication; he denies that.
The book also features a colorful history of the candidate’s polygamous Mormon ancestors living in Illinois, Utah and Mexico — running from the law at times — that evokes the HBO series “Big Love.”
Mitt’s great-grandfather Miles was happily married to a young woman of Scottish descent named Hannah, with two daughters, when Brigham Young ordered him to take another wife.
At 80, in a memoir written for her family, Hannah was still able to recall the jealousy and tantrums of the second wife and the depth of her own distress: “I felt that was more than I could endure, to have him divide his time and affections. I used to walk the floor and shed tears of sorrow. … If anything will make a woman’s heart ache, it is for her husband to take another wife.”
Now here’s The Moustache of Wisdom, who is in Cairo:
I’m sitting in the campaign office of Abdel Moneim Aboul Fotouh, the doctor who has split from the Muslim Brotherhood to run for president of Egypt on a reformist agenda. As I listen to his team — three young Egyptian professionals volunteering their time — describe their strategy, this thought occurs to me: I’ve met more new, interesting Egyptians, of all political persuasions, in the last week than I have in the last 30 years. That is no accident. Egypt under Hosni Mubarak was a country where there was only one person to talk to, one person who was empowered to decide. Everyone else was just waiting for Godot. And the conversations were all one way — from top to bottom.
That is not the case anymore. Egyptians are finding their own voices again and rediscovering who their neighbors are. In some ways, they have been shocked. A Muslim Brotherhood leader told me that he was totally surprised when the elections showed how many Salafi Muslims lived in Egypt. When the fundamentalists tell you that they had no idea there were so many superfundamentalists, you can imagine how surprised the liberals were. The Egyptian generals have been stunned at how many unarmed secular youths have been willing to confront troops in the streets to get the army to cede power. There is a certain “Oh-you-live-here-too?” quality to Egyptian life today.
The longer you stay here, though, the more it becomes clear that Egypt has not had a revolution yet. It’s had an uprising. The basic military regime that has ruled Egypt since 1952 is still in charge — only a military council has replaced the Mubaraks. But this uprising has lifted the heavy lid off this society and let in oxygen. That, plus the recent parliamentary elections, has enabled all these newly emergent people, parties and voices — from all walks of Egyptian life — to surface. Whoever becomes Egypt’s next president had better be ready for a two-way conversation with all these emerging forces.
But for Egypt to have a democratic revolution — a real change in the power structure and institutions — all these newly empowered parties will have to find a way to work together to produce a new constitution and a new president. That will not be easy. The economic and social problems that Egypt has to overcome today are staggering. They will require the whole society to pull together, but the divisions and lack of trust today between the new and old power centers — the army, the security police, the Tahrir youth, the Islamists, the Christians, the traditionalist silent majority, the secular liberals — are substantial. This country needs a weekend retreat to get to know itself anew.
It’s no wonder. All the Arab autocrats, like Mubarak, ran their countries the same way — “like protection rackets,” says Daniel Brumberg, the co-director of Democracy and Governance Studies at Georgetown University. Different groups — ethnic or religious minorities, the business sector, Islamists and secular activists — were played off against, and “protected” from, each other by the leader who sat atop the pyramid. Everyone was afraid of everyone.
The hopeful news is that real politics has broken out here, and some Egyptians are working on building lines of trust across the new power centers. Take Amr Hamzawy, a secular liberal who was just elected to Parliament, which opens on Jan. 23. He and others have begun a quiet discussion with the Islamist parties about how to cooperate on legislation to get Egypt growing again and to show that the new power holders can produce a better Egypt.
Speaking of the new Parliament members, Hamzawy said, “We are just being introduced to each other — with different stereotypes, and different packages of demands and interests and reservations. But we have a society waiting. We have to deliver. The big challenge is to transcend the polarization of the elections. We will not be able to deliver if we polarize in Parliament. We have to transcend ideological differences. From a strictly liberal perspective, we have around 20 percent. The political Islam camp has about two-thirds. So our job is to work to pull moderates from the political Islam camp to the center. Our challenge is to define that new strategic center for Egypt.”
Hamzawy added: “I am humbled and impressed by the commitment of Egyptians to their country. … I was running against a Muslim Brotherhood candidate. I had over 800 volunteers, and I did not pay anyone a penny. It is not a passive society anymore. It is a society eager to be in action.”
Egyptian politics for the last 50 years has been largely a struggle between the army and the Brotherhood, and both today are suspected of having secret agendas to grab power alone. I’d keep a wary eye on both of them.
But here’s what’s new: They are not the only ones anymore with plans for Egypt’s future and the energy to push them. Somehow all of these new and old forces have to now find a way to share power to rebuild this country. Egypt has wasted so much of the past 30 years. It doesn’t have another minute to waste. Or, as the Egyptian journalist Lamees El-Hadidi, who lived through it all, remarked to me, her generation doesn’t want to lose “the past and the future.”
Now here’s Mr. Kristof, who is in Paris:
Quelle horreur! One of the uglier revelations about President Obama emerging from the Republican primaries is that he is trying to turn the United States into Europe.
“He wants us to turn into a European-style welfare state,” warned Mitt Romney. Countless versions of that horrific vision creep into Romney’s speeches, suggesting that it would “poison the very spirit of America.”
Rick Santorum agrees, fretting that Obama is “trying to impose some sort of European socialism on the United States.”
Who knew? Our president is plotting to turn us into Europeans. Imagine:
It’s a languid morning in Peoria, as a husband and wife are having breakfast. “You’re sure you don’t want eggs and bacon?” the wife asks. “Oh, no, I prefer these croissants,” the husband replies. “They have a lovely je ne sais quoi.”
He dips the croissant into his café au-lait and chews it with zest. “What do you want to do this evening?” he asks. “Now that we’re only working 35 hours a week, we have so much more time. You want to go to the new Bond film?”
“I’d rather go to a subtitled art film,” she suggests. “Or watch a pretentious intellectual television show.”
“I hear Kim Kardashian is launching a reality TV show where she discusses philosophy and global politics with Bernard-Henri Lévy,” he muses. “Oh, chérie, that reminds me, let’s take advantage of the new pétanque channel and host a super-boules party.”
“Parfait! And we must work out our vacation, now that we can take all of August off. Instead of a weekend watching ultimate fighting in Vegas, let’s go on a monthlong wine country tour.”
“How romantic!” he exclaims. “I used to worry about getting sick on the road. But now that we have universal health care, no problem!”
Look out: another term of Obama, and we’ll all greet each other with double pecks on the cheek.
Yet there is something serious going on. The Republican candidates unleash these attacks on Obama because so many Americans have in mind a caricature of Europe as an effete, failed socialist system. As Romney puts it: “Europe isn’t working in Europe. It’s not going to work here.”
(Monsieur Romney is getting his comeuppance. Newt Gingrich has released an attack ad, called “The French Connection,” showing clips of Romney speaking the language of Paris. The scandalized narrator warns: “Just like John Kerry, he speaks French!”)
But the basic notion of Europe as a failure is a dangerous misconception. The reality is far more complicated.
What is true is that Europe is in an economic mess. Quite aside from the current economic crisis, labor laws are often too rigid, and the effect has been to make companies reluctant to hire in the first place. Unemployment rates therefore are stubbornly high, especially for the young. And Europe’s welfare state has been too generous, creating long-term budget problems as baby boomers retire.
“The dirty little secret of European governments was that we lived in a way we couldn’t afford,” Sylvie Kauffmann, the editorial director of the newspaper Le Monde, told me. “We lived beyond our means. We can’t live this lie anymore.”
Yet Kauffmann also notes that Europeans aren’t questioning the basic European model of safety nets, and are aghast that Americans tolerate the way bad luck sometimes leaves families homeless.
It’s absurd to dismiss Europe. After all, Norway is richer per capita than the United States. Moreover, according to figures from the United States Bureau of Labor Statistics, per-capita G.N.P. in France was 64 percent of the American figure in 1960. That rose to 73 percent by 2010. Zut alors! The socialists gained on us!
Meanwhile, they did it without breaking a sweat. The Bureau of Labor Statistics says that employed Americans averaged 1,741 hours at work in 2010. In France, the figure was 1,439 hours.
If Europe was as anticapitalist as Americans assume, its companies would be collapsing. But there are 172 European corporations among the Fortune Global 500, compared with just 133 from the United States.
Europe gets some important things right. It has addressed energy issues and climate change far more seriously than America has. It now has more economic mobility than the United States, partly because of strong public education systems. America used to have the highest proportion of college graduates in the world; now France and Britain are both ahead of us.
Back in 1960, French life expectancy was just a few months longer than in the United States, according to the Organization for Economic Cooperation and Development. By 2009, the French were living almost three years longer than we were.
So it is worth acknowledging Europe’s labor rigidities and its lethargy in resolving the current economic crisis. Its problems are real. But embracing a caricature of Europe as a failure reveals our own ignorance — and chauvinism.
Santorum and his buddies on the clown car are jingoistic morons. Now here’s Mr. Bruni, who’s be relegated to Columbia, SC:
Fresh from his triumph in New Hampshire, Mitt Romney bounded onto a stage here last week in a sport jacket, which was unusual for him, and an open collar and jeans, which are the norm. Casual dress is part of his financial camouflage. It doesn’t scream $200 million man.
Voters aren’t fooled. I checked with those assembled to hear his remarks, and even undecided ones who weren’t fully familiar with him knew that he was rolling in it. They were also unsurprised by that.
“Isn’t pretty much everybody who runs for president wealthy?” said Wendy White, 49, a schoolteacher, making affluence in politics seem as foreordained as height in professional basketball — which it almost is. “In an ideal, utopian society, we’d like someone who knows what it’s like to struggle as a teacher or a working mom. But Republican or Democrat, they always have money if they end up in the White House.”
And Republican or Democrat, they often go to laughable lengths to play that down. A recurring theme from just about every election cycle is the economic altitude of candidates who insist on playacting that they’re less loftily removed from the so-called common man than they really are. Time and again we’re treated to a comedy of manners with predictable pratfalls and a clear take-away: although there has long been a significant economic disparity between the rulers and the ruled, neither group can get entirely comfortable with it.
John McCain styled himself as a pomp-allergic enemy of big money in politics but hit a rough patch in 2008 when a reporter asked him how many homes he and his wife, Cindy, an heiress, owned. He had apparently lost count, because he couldn’t come up with the answer: at least seven. According to some estimates, he was worth more than $36 million, not counting most of her fortune.
When John Kerry ran for president four years before that, he and Teresa Heinz Kerry, also an heiress, were worth about $750 million, according to numbers crunched by Forbes. He emphasized that it was her money, not his, and that he had lived modestly in the past. He wasn’t living modestly any longer. He and his wife reportedly divided their time between five homes worth more than $30 million in aggregate, including retreats in Idaho for skiing and on Nantucket for sailing.
Romney, whose net worth is generally estimated to be $200 million, earned his money rather than marrying into it. But the precise way he earned it — through Bain Capital, a corporate-takeover firm — has come under fierce attack in advance of the Jan. 21 primary in South Carolina, where some of Bain’s deals are said to have cost jobs, and unemployment is 9.9 percent.
To make matters more fraught, he’s campaigning during a time of exaggerated income inequality and increasingly loud complaints about it. A survey released by the Pew Research Center last week showed that 66 percent of Americans consider the conflict between the haves and have-nots to be “very strong” or “strong.” In 2009, only 47 percent of respondents said that.
Romney’s adjustment to that is a work in awkward progress. Last June, he told Florida voters that as a candidate, he, too, was essentially unemployed. He was kidding, but still.
He wasn’t kidding last week when he told New Hampshire voters that he had begun his career “at the entry level,” as if the Harvard-educated son of a former governor and corporate chieftain grabs hold of the same first rung that others do. And he assured them that he had known the fear of “a pink slip.” They probably thought he was talking about lingerie.
He’s almost uniquely clumsy with quips that draw inadvertent attention to his affluence. Bet you $10,000 you can’t name someone clumsier.
That’s a wager most of his current Republican rivals can afford. According to a breakdown by ABC News, Jon Huntsman Jr.’s net worth has been estimated to be about $50 million, while his father’s is $900 million. Newt Gingrich’s is close to $7 million, Rick Perry’s about $3 million, Ron Paul’s between $1.9 and $5.2 million and Rick Santorum’s as much as $2 million, though in all cases it’s hard to be sure or specific. Candidates file dollar ranges rather than exact figures to the Federal Election Commission, and only some elect to make their tax returns public.
The Republican field is no historic anomaly. Some of our richest presidents were our earliest ones. When The Atlantic two years ago researched presidents’ wealth and adjusted their estimated net worth to 2010 dollars, it found that eight of the first 10 presidents were worth at least $20 million, and five of those men were worth more than $50 million, at least by the time they left office. George Washington led the pack, with $525 million, much of it courtesy of Martha, a widowed heiress.
In the second half of the 19th century, there was a stretch of presidents of humbler means, including Abraham Lincoln. But almost all 20th-century presidents were much richer than the average American.
Barack Obama didn’t grow up well-off and remained relatively poor by presidential standards, but he and his wife reported a gross income of nearly $1 million in 2006 and had assets of between $2 million and $7.35 million by the end of 2007, when his presidential bid was under way. By then the Clintons were rich enough that Hillary, challenging Obama for the Democratic nomination, was able to lend her campaign $11 million of her own money.
The tens of millions it can take for a credible presidential primary campaign favors candidates with money, if only because they have the ability to abandon salaried jobs and stump. When Mike Huckabee begged off the 2012 presidential race, a lack of accrued wealth was one reason.
“If I run, I walk away from a pretty good income,” he said, referring to his daily radio and weekly TV shows.
More important, candidates of means tend to have access to the sorts of rich people who can pump major money into super PACs. The principal one supporting Romney had already raised $12 million by last July.
Even many Congressional campaigns have grown drawn out and exorbitant. Is it any wonder, then, that Congress has become a wealthier club? As Eric Lichtblau reported in The Times recently, the median net worth of a member of Congress appeared to be $913,000 in 2010 and had grown 15 percent over six years. The median net worth for all Americans was about $100,000 and had declined 8 percent.
There’s no simple relationship between privilege and policy. The Roosevelts and Kennedys, both spectacularly rich families, produced leaders known for their populism and protection of the less fortunate. Nancy Pelosi, a staunch defender of government aid, is thought to be worth as much as $196 million. John Boehner? Just $1.8 million, according to figures from 2010.
Wealth in politics makes a certain sense. The same drive, vanity, accomplishment and ingenuity that fuel a successful political career often fuel high earnings beforehand. And those earnings in some instances win voters’ confidence.
Paul Friedman, 32, an undecided voter who showed up at Romney’s event in Columbia, said, “If we’re talking about jobs, and his businesses are successful, then maybe he’d run the country in a way that brings jobs back.” That’s Romney’s pitch.
But he walks a tightrope, wanting to broadcast his success without seeming out of touch. A wealthy candidate’s aides guard against tone-deaf admissions of privilege while opponents itch to pounce, as the first President Bush’s did in 1992, when he seemed unfamiliar with a grocery store’s electronic price scanner.
I doubt many politicians at that stage of the game are spending much time in the checkout line or know the price of milk without seeing it on a briefing paper. But the charade persists. The second President Bush learned from his father’s mistakes and seemed to develop an entire folksy persona in response. He spent vacations clearing brush, and though done on a vast Texas ranch purchased with his considerable wealth, it yielded optics preferable to those of John Kerry windsurfing.
Romney recalls the Naugahyde chair in an office past and tweets about breakfast at Subway and a flight on Southwest Airlines. But inevitably he muffs the script. During last Sunday’s debate he said a man shouldn’t run for office if he needed to win to pay the mortgage.
It wasn’t a $10,000 flub. But it was rich.
