Let’s set the stage for a story about Governor Romney, the
candidate for president. The Gallup poll showed him in the lead to
win the Republican nomination. Another poll showed him beating the
incumbent Democratic president by eight percent. Then, before the
New Hampshire primary, Governor Romney made a slip of the tongue,
an off-the-cuff statement. Some of his conservative critics pounced
on him. The media repeated the “gaffe” endlessly. And Governor
Romney lost the Republican nomination.
That’s right Governor Romney lost the Republican
nomination, and the presidency — to Richard Nixon. That’s Governor
George Romney, the governor of Michigan, the father of Mitt, and
the front-runner for the Republican nomination in 1968. The Gallup
poll and Harris poll had him beating Richard Nixon and Lyndon
Johnson. Then, in 1967, George Romney explained his increasing
opposition to the Vietnam War: “When I came back from Vietnam, I’d
had the greatest brainwashing that anybody can get.” Brainwashing?
As Rep. Robert Stafford (R-Vt.) said, “If you’re running for the
presidency, you are supposed to have too much on the ball to be
brainwashed.” Romney looked weak and flustered. The press played up
Romney’s naïveté, and Nixon soared in the polls. Romney, far
behind, dropped out of the Republican race.
Mitt Romney has often followed in his father’s footsteps.
Just as George Romney was the president of a business (American
Motors) before launching his run for governor of Michigan, Mitt was
president of Bain Capital before running for governor of
Massachusetts. George Romney was held in contempt by Republican
conservatives because he refused to seriously back Barry Goldwater
for president in 1964. Mitt Romney, in a similar vein, supported
socialized healthcare in Massachusetts and has earned conservative
ire ever since.
But Mitt has explained away his healthcare plan with
finesse, and has even promised to dismantle Obamacare if he is
elected president. What’s now in focus is his off-the-cuff
statement that he likes to fire people. In context, Mitt was
describing how he likes to have many health care providers because
the competition gives him the choice of firing an inept provider.
Romney said, “I like to be able to fire people who provide services
to me.” Newt Gingrich and Rick Perry have alleged such a statement
is callous in a time of job insecurity. Perry, who is now out of
the race, has called Bain Capital a “vulture capital” company that
fired people and shipped jobs overseas to make money, not to
improve America. The media has also been on the attack in the
run-up to the South Carolina primary. Will such a “gaffe” sink the
son as it did the father?
No, Mitt Romney can overcome his remarks, and even gain
from them. Father George had no strong comeback from his
“brainwashing” comment. He appeared ill-informed, and the more he
talked about it, the worse it got. As for Mitt, the attacks on Bain
give him the chance to make the case for capitalism in a way that
makes it clear he is the one to rescue the U.S. from its current
economic stagnation. At one level, he can say that firing President
Obama, and his czars, and many bureaucrats as well, is the first
step to recovery.
More than this, he can describe his actions at Bain. As a
venture capitalist, he bought distressed companies, reorganized
them, sometimes fired people, sometimes went overseas, and, as a
last resort, shut some down. But he also transformed some
companies, like Staples and Sports Authority, into spectacular
successes. Overall, according to the Wall Street Journal,
he more than doubled his investment from $1.1 billion to $2.5
billion on 77 deals. That turnaround is what the U.S. needs
today.
What should Mitt do? Seize the initiative. Explain that
expanding overseas usually means expanding at home. According to a
2004 study by Dartmouth economist Matthew Slaughter, for every job
a multinational corporation expanded overseas, it added two at
home. The rising tide floats all boats — and we need a rising
tide, not redistribution. As for firing people, that is sometimes
essential in a successful capitalist economy. One hundred years
ago, carriage makers had to be fired, or laid off, and many worked
for Henry Ford making cars. Twenty years later, icemen had to be
fired, so they and others could be reemployed making refrigerators.
Button makers got the boot because others began making zippers.
Cars, refrigerators, zippers, and much else that we value came into
our lives because those making inferior products were fired to
create more opportunity for the new and better. As Ross
Kaminsky
points out in “Creative Destruction,
Properly Understood,” the old jobs were gone forever, but the new
jobs improved our nation and improved opportunities for living
here. Sure, not all Americans win in venture capital businesses,
but most do.
Will Mitt be like his father? If he is, President Obama
will better be able to brainwash Americans about “predatory
capitalism” and the need for higher taxes to redistribute wealth.
But if Mitt takes charge and defends the system that made his
family and his country great, he will in the process help make
America great again.
