Romney’s experience matters
The Obama campaign has, against all Democratic pundit advice, hammered the Romney campaign on the experience Mr. Romney gained at Bain as CEO and how that experience qualifies him, or disqualifies him, as a candidate for president of the United States.
Why? Well, political benefits aside, because Bain was a pioneer in American capitalism, in a way that contributed to the change in capitalism here since the 1980s. The change has resulted in a shift from traditional capitalism to a distanced capitalism free of ethical concerns altogether.
Before the 1980s American capitalism, the model of success for the planet, had been the most successful creator of innovation, wealth and social development ever devised. The result was the richest society in history with the largest middle class ever created.
Part of the foundation of that form of capitalism was the socially adopted premise established, in part, by Henry Ford, that of welfare capitalism.
In Ford’s context “welfare” was not about poverty programs, but about caring about the overall welfare of his workers.
Ford, make no mistake, wanted more dependable employees and reduced worker turnover as an outcome for his efforts. But those efforts included increasing worker pay suddenly from $2.34 per day to $5 per day ($120 per day in today’s environment) and reducing the workweek from 48 hours to 40 hours.
Ford argued the wage increase was a form of profit sharing, and he wanted his employees to earn enough to buy his cars.
Ford was one of the capitalists who engineered the creation of the American middle class, along with the strong union movements that were taking place during the same period of time.
Those union formations worked to end child labor, make safer dangerous industry jobs like mining and steel-making, and create living wages for teachers, firefighters, and police.
This form of capitalism created the consumer society that made America the model of success for the world, and gave access to so much for so many in our society.
Foundationally, the concept held to the premise that if your company profited, so too did the employees share in those profits, the rising tide raising all boats metaphorically.
But in the 1980s, with the advent of affordable air and sea travel, and the development of communications technology, the global economy began to intrude upon the American model of capitalism.
Some, like Romney at Bain, saw the opportunity to maximize profit corporately by distancing the management of corporations from the workers in those corporations.
Consequently, the response was to re-locate factories and jobs to whatever locations were the least expensive for production costs, mostly experienced through labor costs.
The results were that new plants located where workers had no benefits, low wages, and, in many ways, none of the advantages of Henry Ford’s workers of a century ago.
In fact, the very concept was to reverse the Ford ideas of economic participation by employees.
Bain, Romney, and those who championed this “vulture capitalism” were highly successful in creating personal wealth, expanding CEO wealth from ratios of 40 to 1 over workers incomes to 500 to 1 by today.
As a by-product of these changes U.S. financial institutions participated in funding the economic shifts and created additional wealth for those in our financial industries.
Everyone won at this venture, if “everyone” meant investors and corporations, everyone but the workers. And Bain, under Romney’s leadership, led the way to these new successes.
Perhaps American capitalism is forever changed because of “vulture capitalism,” but if that is so, then the American dream will be only a memory.
Yes, Mr. Romney has had great success, but it is success in diminishing the prospects of every working American. That success should not be rewarded by the very people who have lost opportunity, faced wage and benefit cuts and fallen behind in future potential.
Jim Crawford is a retired educator and political enthusiast living here in the Tri-State.