Mitt Romney: Did He Create A Hundred Thousand Jobs Or Kill Seven Thousand?
Since Mitt Romney had a mediocre record of job creation as the governor of Massachussetts, he has touted his record of creating jobs at Bain Capital. He’s noted time and time again that he created 100,000 jobs at Bain and has presented this to voters as a core reason why they should vote for him. Additionally, part of the response to the incredibly effective ads featuring people who lost their jobs because of Bain has been, “Well sure, some people lost their jobs, but Mitt created a lot more jobs than he killed.”
The problem with this is that there is no meaningful evidence other that Mitt Romney’s word that it’s so.
The first indication the 100,000 jobs created number’s dodgy is that when Mitt ran against Ted Kennedy in 1994, 2/3 of the way through his tenure at Bain, he was only claiming in ads that he created 10k jobs. Now, he’s claiming a 10 fold increase up to 100,000 jobs. That’s enough to make you raise an eyebrow, but not ironclad that he’s fudging. However, there was a more serious indication of trouble: Romney, who could fairly be called the best prepared candidate of the election season, had no firm numbers to back up his 100,000 jobs-created claim. Of course, this is extremely suspicious. Here we have one of the biggest reasons voters are supposed to back Mitt Romney, but his campaign was presenting no real evidence to back it up.
Last night, Sarah Palin asked an obvious question, where’s the proof Mitt Romney created 100,000 jobs?
I don’t agree with the attacks on free market capitalism at all. I don’t believe that that’s really what is at the heart of Governor Perry’s criticism of Romney and his time at Bain. This isn’t about a politician making huge profits in the private sector, think what Governor Perry is getting at is that Governor Romney claimed to have created 100,000 jobs at Bain and you know, people are wanting to know: Is there proof of that claim? And was it U.S. jobs created for United States Citizens? You know, the 100,000 jobs, and I believe that that’s what Governor Perry is getting at is, you know, own up to the claims that are being made I had and that’s fair. That’s not negative campaigning, that’s fair to get a candidate to be held accountable to what’s being claimed, especially when it comes to job creation because so many of us are so concerned about what’s going on Main Street, as well as Wall Street.
That seems like a fair question since the 100,000 jobs created claim from Mitt falls apart the moment you begin to investigate it.
In November, Josh Hicks, writing “The Fact Checker” column in The Washington Post, tried to verify a common Romney claim: “In those hundreds of businesses we invested in, tens of thousands of jobs net-net were created,” but had to leave its report with “verdict pending.”
“Neither Bain nor the Romney campaign gave us the information when we asked for it,” Hicks wrote. “Bain also declined to answer with a yes or no whether its companies created more jobs than it eliminated during Romney’s tenure.”
As the Iowa ad wars heated up in December, Factcheck.org asked the pro-Romney super PAC Restore our Future to back up the claim in the ad it was running in Iowa that Romney created “thousands of jobs” at Bain. A spokeswoman replied, “We aren’t supplying that information.”
At the start of January, Romney got more specific in his claims, telling “Fox and Friends” that “we helped created over 100,000 new jobs” while at Bain. This time, when queried by the Post’s Glenn Kessler, the Romney campaign backed up the figure by saying it represented the current employment of three companies that Bain had either started or helped grow – Staples, The Sports Authority and Domino’s.
But, as the Post pointed out, this didn’t take into account the jobs lost due to layoffs at firms Bain invested in, particularly during its later-stage leveraged buyout period, and so the statement got a single Pinocchio.
When challenged at Saturday’s debate by moderator George Stephanopoulos that the 100,000-job claim didn’t include the jobs taken away by layoffs, Romney replied, “No, it’s not accurate. It includes the net of both. I’m a good enough numbers guy to make sure I got both sides of that” – a comment that Fortune rated as “false” and the Post gave three Pinocchios.
But even the fact-checkers’ definitive-sounding conclusions are couched in doubt. As Fortune put it: “No one knows for sure, including Romney.”
How can such a tangible, measurable thing be so unknowable?
Part of the problem, from the perspective of the private equity industry, is that at the end of the day there is only one legitimate way to gauge success, and that is by how much money goes into investors’ pockets.
“The measure of private equity being jobs is silly,” said Steven Kaplan, a professor at the University of Chicago’s Booth School of Business who researches private equity. “The right measure is what you are doing for your investors, and that’s where he looks extremely good.”
Bain declined to comment for this article, but Kaplan was certain that they “have no idea” what the employment figures related to their various investments is.
Bain may have provided management expertise or money when others would not, but a company such as Staples – one of the biggest contributors to Romney’s job figures – was largely the brainchild of entrepreneur Tom Stemberg. Stemberg presumably should get most of the credit for inventing a killer new business category. (Left unsaid, of course, is all the jobs that might have been lost at small stationery stores unable to compete with the low prices of Staples, Office Depot and so forth.)
Moreover, should Romney even get any credit for jobs at Domino’s, as his campaign claims? The deal in which Bain Capital bought Domino’s closed on Dec. 21, 1998, according to a Domino’s news release that referred to “Milt Romney.” Less than two months later Romney had left Bain to run the Salt Lake Olympics, meaning he had barely any role in running the company once it became part of the Bain investment portfolio.
When Romney made a run for the governorship, the Boston Globe reported in 2002 that he had not been involved in the details of many deals toward the end of his Bain experience: “These days, Romney can say he hasn’t inked a deal in many years. Even during the end of his tenure at Bain, from 1994 to 1999, he played the role of CEO and rainmaker rather than delving into the details of buyouts.”
Interestingly, when Romney ran for the Senate in 1994, his campaign only claimed he had created 10,000 jobs. In one ad, a narrator said: “Mitt Romney has spent his life building more than 20 businesses and helping to create more than 10,000 jobs. So when it comes to creating jobs, he’s not just talk. He’s done it.”
Now, apparently, those 10,000 jobs have increased tenfold, apparently in part because of Bain investments in which Romney had at best a tangential role.
In other words, Mitt’s 100,000 jobs is a figure much like Obama’s “saved and created;” it’s a meaningless number plucked out of thin air.
It’s not a small matter for Mitt Romney to be offering up an imaginary number as a central reason to vote for him, particularly since the number of people who were put out of work by Bain Capital will end up being much more concrete. If Mitt Romney’s actual number of “jobs created” is closer to the 10,000 he mentioned in the 1994 campaign, then it’s entirely possible Mitt Romney killed more jobs than he created at Bain Capital since the private research I’ve seen, which is more likely to be low than high, suggests roughly 17,000 people were fired, laid off, or were in firms that went out of business while Mitt Romney was in charge.
In other words, is it entirely possible Mitt Romney was a net job killer, not a net job creator during his time at Bain? Absolutely.