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.
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