America’s problems are structural, not cyclical. We have stretched our balance sheet upon emergence from the worst financial crisis since the Great Depression. The consumer struggles with stagnant wages and continues to retire debt assumed during more ebullient times. The business sector presumably will not invest because of the uncertainty created by the fiscal cliff, the outlook for taxes, and regulations that strangle new business formation. China and India, together 40 percent of the global population, have practiced the modern version of mercantilism and are likely to represent competitive threats well into the future.
President Obama looks at this environment and is comfortable that government has a role in bringing the economy back to health. That comfort is evident on the stump. He is totally within his skin wailing about income inequality and his desire that the wealthy pay their fair share. He speaks about middle class pain but his policies have done little to attack the root causes of that pain. He criticizes bankers but actively solicits funds from Wall Street. He may not be solving the problem but he is totally comfortable beating the drum for hope while delivering little change.
Mitt Romney lacks the comfort with his positions that President Obama has developed because he has not come to grips with who he is and why he really wants the job. Let’s play psychoanalyst. We learned recently that Romney’s parents were temporarily on public assistance when they came here from Mexico. His background, were he to consciously acknowledge it, has a role for an extended safety net: unemployment insurance, worker retraining, public investment to assist in repositioning for the labor skills needed for the future. But his public speeches have not emphasized that which he must believe to be part of the solution.
Mitt Romney is the first businessman to run for president since Ross Perot in 1992. Perot was the founder and CEO of Electronic Data Services. When employees that he had placed in harm’s way in Iran were jailed, he led a group of patriots to recover them. In short, Perot held that there would be no collateral damage from his business decisions.
Enter Mitt Romney, 20 years later. Romney’s company Bain Capital does leveraged buyouts. This is a business strategy that creates lots of collateral damage. Statistics show that companies undergoing buyouts shed 7 percent of their work force by year two and 10 percent by year five. In the 1980s and 1990s, pension plans with excess funding were captured and health care benefits compromised.
What should Mitt Romney do? The Sun Belt is fiscally and socially conservative. Being religious is natural. Our advice is to repent. His repentance would sound something like this: Leveraged buyouts made a lot of sense when there were lots of under-performing companies and were beneficial in reversing the conglomeration phase of the late 1960s. What should have been an opportunistic and limited strategy became a long-term business complete with government tax privileges. Anyone who has ever managed money professionally knows that investment trends go on for much longer than they should. I thought this trend would have run its course but since it has not, one of my first acts as president is to eliminate the tax advantages for leveraged buyouts. The company that I created will have a more limited and beneficial role in the future. This is my confessional. However, the collateral damage from buyouts is not solely on the shoulders of Bain Capital. President Clinton’s Secretary of Treasury, Robert Rubin, should have revoked these tax privileges and his Secretary of Labor, Robert Reich, should have protected labor. This is a bipartisan responsibility. Now, ask President Obama why he has not acted to limit private equity tax privileges?
Why does Mitt Romney need to do this? Because unlike George Bush, the next president will not be “the decider.” If we are to bridge ourselves to what America is for the future; at this point in time, with ideology dominating reason and structural rather than cyclical problems; the next president must be “the compromiser.” Compromise will create collateral damage on many different issues. The major trait of our next president must be fairness. For if we are to see our “ox gored” once, that goring will be more readily accepted if we believe that everyone’s ox is spilling a little blood. Ideology aside, this is the best we can hope for as we reposition ourselves for the future.
When Mitt Romney was asked about the Massachusetts health care plans similarities to Obamacare he has stated, “The parties in Massachusetts wanted many things but this was the compromise I was able to fashion.” When he says it, it sounds almost as an excuse rather than an accomplishment.
If Mitt Romney is to win this election it will be because the Massachusetts moderate recaptures the stage. These are the only terms upon which the independent voters so critical in swing states will give it to him. To fashion compromise will require that we trust our president to limit collateral damage and believe that he is consistent and fair when our ox is gored. These are the traits of the Massachusetts moderate. It is time for him to step forward.
Contact Glensky, a former Wall Street financial manager who now lives in North Myrtle Beach, at firstname.lastname@example.org.