In response to T. Paine's
Obama's Smoke, Mirrors, and Outsourcing
All of that said, again if one assumes your charges against Romney were accurate, is it better to outsource jobs using one’s own money, or is it better to do so as a government official using taxpayer dollars?
My friend T. Paine makes as good a pro-Romney, anti-Obama case as can be made, better than that currently contrived by the Romney campaign. Romney allies publicly demand that he come clean with a decade's tax returns.
My friend defends Mitt Romney's business practices on principle. So what if Mitt Romney was shipping jobs to other countries? "The fact would still remain," says my friend, "that Romney did so with his OWN capital." He then attacks the policies of Barack Obama as the only true outsourcing of jobs.
Before we consider T. Paine's contemplation of what might result "if one assumes your charges against Romney were accurate", "one" being ...well... me, perhaps we should review at the outset the serious charges I make against Mitt Romney. It won't take long because there are none. As I have pointed out, the theory of free markets presumes that everyone acts for selfish reasons. If Mitt Romney destroyed American jobs, he did so incidentally. It was simply a collateral effect of doing business. Profits are the objective, not job destruction.
On the other hand, if American jobs were created, it was also incidental, another collateral effect of the quest for profits. Job creation is not the objective.
I did point out a contradiction between Mr. Romney's recent statements and previous assertions. He asserts, jaw jutting forward, the very model of assured integrity, that he left Bain Capital before overt outsourcing happened: destroying jobs, and health care, and retirement pensions. Those negative collateral effects of profit maximization.
I did contrast his impressive denials with the over 170 filings so far discovered in which Mitt Romney asserted the opposite. He swore to government agencies, including the Securities and Exchange Commission that he was constantly participating in Bain Capital. While Mitt Romney's 2002 testimony on meeting the residency requirement, authenticated by his active participation at Bain, was striking, his 2002 debate for Governor was visually impressive. Jaw jutting forward, the very model of assured integrity, Mitt Romney assured the good people of Massachusetts that business meetings and corporate responsibilities had ensured his continuing travel to and from Massachusetts. To suggest anything else was simply dirty politics.
It was with a bit of foresight, I suppose, that I mentioned a few days before an Obama aide, that false statements under oath to federal authorities is a criminal offense. In that earlier exchange with my friend T. Paine, I suggested we give Mr. Romney every benefit of interpretation. "Possessing a charitable nature, I would rather believe he is guilty of political mendacity to the press rather than criminal mendacity to legal authorities."
See what I mean? No accusation, just the benefit of which of two conflicting testimonies might be the truth.
I did suggest that, if Mr. Romney was prepared to insist that his sworn testimony from earlier days was actual perjury, my presumption being that it is not, he should indeed be absolved from any connection with anything at all that happened at or through Bain Capital after that. This would include the collateral effects of workers losing jobs, benefits, and pensions. It would also include those 100,000 jobs Mr. Romney claimed to have created.
The good and bad, the yin and yang of Mr. Romney's history, do go together like a horse and carriage, don't they? Can't have one without the other. And both are incidental, a mere side effect of a self-centered quest for profits. Adam Smith's invisible hand.
My friend T. Paine is correct in casting the controversy as a distraction. Mr. Romney's pose as a job creator does distract from policy and political record. My friend does provide examples of Obama policy gone very wrong. Three examples, in fact. Sadly, he has the unfortunate luck to have chosen examples that do not support his own accusations.
My friend mentioned stimulus money going to Cree Manufacturing, who opened a manufacturing plant in China. Outsourcing, says Mr. Paine. However, the plant in China was opened before any stimulus money was applied. The plant production supported the marketing of products to the Chinese people. No American jobs were outsourced.
My friend mentioned stimulus money going to a Japanese company that then purchased materials from Japan. Unfortunately, this turns out to have been an example of in-sourcing. The Obama administration managed to convince a Japanese company, Eurus, to build an electricity producing wind energy plant in Texas. It did use some components, including turbines, manufactured in Japan. The plant in Texas employs American workers and allows the Texas Electricity Wholesale Market to purchase energy without importing it in the form of oil and gas from other countries. In fact, Eurus now has similar plants in California, Oregon and Illinois. Oh, one other thing. Tax credits for Eurus, credits based on the benefits to the US economy of energy and employment, began during the Reagan administration.
- My friend mentions a start up pioneer in electric auto prototyping. Some scandal this turns out to be. Fisker Automotive, from Finland, has not gotten any stimulus money. That would be zero, none, not any. Conservatives, in their eagerness to hate all things Obama, have sometimes been less than scrupulous in their research. Fisher did accept $191 in federally guaranteed loans approved by the Obama Energy Department to see if they could make an experimental hybrid come into production. If it works out, it will be a very good deal for the United States, but the program can't really be credited to Obama. It was a Bush initiative, a program that began before President Obama took office.
So that would be one instance of outsourcing that isn't even close to outsourcing, one example of massive INsourcing, and one more example that we can hope will become INsourcing, although we will have to credit the Bush administration.
Maybe we can help out T. Paine a little. After all, that's what friends are for. There is an outsourcing scandal. It does not involve Mr. Romney's Bain deals, timelines, and SEC filings. It isn't about this investment or that. It is about long term policy. The sort of thing that government, citizens, you, and I should be considering.
Current tax policy actually provides substantial breaks to US companies that export jobs. It's inadvertent, but damaging anyway. US corporations that manufacture outside the United States pay taxes to the host country, and also to the United States. Foreign taxes are subtracted out, so it costs nothing for US corporations to export jobs.
Sound bad? It gets worse.
The taxes to the US don't have to be paid right away. Only when the resulting profits are imported into the United States is the balance charged. So the incentive is to postpone and postpone paying US taxes by keeping profits working outside the country. Creating jobs anywhere but here. It tends to put American workers at a competitive disadvantage.
The President has spoken about the problem. But little has been done.
The Romney position is that the tax benefit to corporations exporting jobs should be increased. He says lower global wages are needed to keep US corporations competitive.
Okay, so maybe I'm not helping my friend as much as I'd like to. Happily, he doesn't need it.
For all the time travel Mitt Romney explores, for all the filings, denials, and outsourcing deals, the essential point made by my friend T. Paine stands on its own. For all the good or harm Mr. Romney accomplished or inflicted, the "fact would still remain that Romney did so with his OWN capital."
The biggest problem for the Romney campaign is not how to convince T. Paine. It is not how to convince me and people like me. It is not how to convince the Obama campaign. It is not how to convince what seems to be an ever more skeptical voting public.
Helping or hurting, job creation or job destruction, Mr. Romney was motivated completely by profits. All that he did was completely in harmony with mainstream market based philosophy. His personal profits came from his own financial creativity. He worked with his own capital along with that which was entrusted to him by others. There is no wrongdoing. There is nothing worth hiding.
The problem for the Romney campaign is convincing Mitt Romney.
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By the way, Mr. Myste, I never agreed with Burr’s assertion. I simply said that for the sake of argument, I was going to assume it was true in order to make my point.
All of that said, the best thing that Romney can do, (especially if he was guilty of out-sourcing, sheltering his income in the Cayman Islands, etc) would be to come out and say, “Yep, I did all of those things to maximize profits. I worked within the context of the law and took advantage of all of the ridiculous loop holes available. For me to have done otherwise would have been irresponsible as a CEO. With that said, this is one of the very reasons why I am running for president so that we can revamp the tax code and eliminate most of these foolish loop holes. We need to pare back the bureaucracy and red tape of government for the unnecessary functions that government has no place inserting itself into so that businesses can grow. We need to make it attractive to repatriate that revenue and taxable income into the U.S. instead of making it far better to keep it offshore. I don’t apologize for being a smart business man and taking LEGAL advantage of such deductions and shelters when possible. We now need to fix the system so that businesses don’t have to and indeed will be unable to utilize such loopholes which are ultimately counter-productive to America’s economy. As a business man and as your president, I have the knowledge to lead congress to fix these problems. Obama has shown repeatedly that he does not.”
I won’t hold my breath while waiting for that speech to come to fruition.
And of course, the press and the Democrats will excoriate Romney, but they are already doing so now. Romney has nothing to lose and might attract some more independents that are starving for someone to tell it straight. I know I am sick of the mendacity from both parties.
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