What's struck me about this presidential campaign is just how inane politicians' election platforms are. They're inane in the way that they promote their own candidates, and they're inane in the way that they attack other candidates. Even if they pick the right issues, I feel like the campaigns draw all the wrong conclusions in the way that they sell themselves on those issues. Two cases in point: the Obama campaign's attack on Romney's taxes, and the Romney campaign's promotion of his time as the chief of Bain Capital and what it means.
The gist of the Obama campaign's attacks on Romney's taxes seems to be that 1) Romney is rich, 2) Romney doesn't pay much in taxes, and 3) Romney holds assets in foreign accounts for tax purposes. Which are (or have recently been) all true. But, in a very substantial sense, they're entirely beyond the point. The link the attacks want viewers to draw is that Romney is dodging taxes, and this makes him "ruthless", and "out of touch", or something along those lines. And if you extrapolate from that that he's doing something illegal, that's a plus for them. Now, to be clear, I don't think there's anyone outside of the fringe who thinks Romney is engaging in tax fraud. At the least, there's no evidence of it. What he's doing is what every rich person (or really every person who bothers to do their own taxes) does-- structuring his investments in such a way that he ends up keeping as much after-tax money as possible to use as he sees fit, whether to buy himself another yacht, or to give more money to a charity or church that he likes. And more power to him for that-- rich liberals do the exact same thing.
For me, all that line of attack does is demonstrate that Mitt Romney made a whole lot of money and engages in tax planning. Shoot him. The more effective line of attack, I think, is to tie the amount of taxes Romney pays to the amount of taxes he supports. There are plenty of rich people in the US. There are plenty of rich people who pay very little in taxes. Warren Buffett has a bigger tax bill than Romney, percentage-wise, but not by all that much. But the difference between Romney and Buffett is that Buffett sees this state of affairs as problematic, while Romney sees it as good and natural. Buyout barons aren't dishing out $50,000 a plate to go to the Hamptons and feed the Romney campaign because they think Obama's policies are destroying the economy-- half of them know a lot about buying companies and very little about anything else. They're out there because they're afraid that, under President Obama, they might have to hand over an extra $5 million of next year's $50 million. And if there's one thing buyout barons think, it's that they earn every penny of those millions. But I'd guess that Barbara the Office Manager making $45,000 a year isn't all that amused that she's paying as much of her income in taxes to the government as Steve Schwarzman at Blackstone. A persuasive implication of the Romney tax bill for me isn't, "Look how out of touch Mitt Romney is, he doesn't pay much in taxes." It's "Look how little Mitt Romney pays in taxes; he thinks this is the natural way things should be; President Obama thinks people who have built their wealth in America, have used America's resources to do it, have workers educated in America's public schools, whose parents' health care is paid for by America's government should give a bit more back to keep America great than people who have been less fortunate." The attack shouldn't be that we need to soak the rich; it should be that we're all in it together, and that means the rich as well as the middle class should pay their fair share.
Then there's the Romney campaign's promotion of his record at Bain Capital. And there's no doubt that his time there was extraordinarily successful. His first fund averaged annual returns of over 80%, which is extraordinary even in the rarefied air of private equity. He earned a whole lot of money, and is now worth somewhere between a quarter and half a billion dollars, which makes him mega-rich. The Romney campaign claims that his time at Bain makes him uniquely well-equipped to create jobs, and that attacks on his time there amount to an attack on success. The second claim is hogwash-- being rich or successful doesn't qualify someone to be president. George Soros is arguably the most successful hedge fund manager of all time-- if wealth equates to success, he's got Romney trumped. Romney counts as mega-wealthy with a net worth of up to half a billion. Soros is worth about 40 times that, $20 billion. And he's given away another $8-10 billion or so. Despite this sterling career, I don't know of anyone who thinks that being a great hedge fund manager somehow qualifies Soros to run a country. Heck, I wouldn't hire him to run the Treasury or the Fed either. While he's a unique investor with a legendary understanding of markets, he's not a policymaker, and pretending that knowing how to make money in one way makes him good at everything is completely backward thinking.
The other claim Romney makes is that his time at Bain taught him how to create jobs. This is also nonsense. To begin with, private equity is NOT in the job creation business-- it's in the return on investment business. If this means adding jobs, great. If it means slashing jobs, no problem. If it means cutting company employees and outsourcing their work, well, that's the price of business. This isn't the "wrong" thing to do-- they're a business, not a charity. But that analogy runs another way-- business isn't a charity, but government isn't a business. This is a line of attack that the Obama campaign hasn't mentioned, but it's one that is profoundly true, and should be hammered home. Even in business areas that are more closely in the innovation rather than financial engineering business, like technology and manufacturing, running a big company has very little in common with running a country. While laying out the differences between a business and a country would take a whole post, it suffices to say that a business 1) doesn't sell 80% of its product to its own employees, 2) seeks to maximize a single metric, such as return on equity or stock price, rather than balance competing social goals that are often in tension, and 3) is, unlike a country, in direct competition with others in its industry. Lost profit opportunities for Bain will be picked up by KKR. A bad fund performance for KKR means client money will run to Blackstone. By contrast, if China goes into recession, the US doesn't "win"; it loses a huge potential market for things it produces. Running a private equity firm doesn't make Romney a job creator. It doesn't qualify him to run a country. And it doesn't mean he has a secret formula from his time at Bain that he can apply to restore America's success.
But here's what Romney CAN claim his time at Bain means-- that he knows how to manage an organization. While a government runs nothing like a company, the West Wing of the White House DOES operate somewhat like a company unit. The President is, in a very real sense, the CEO of the west wing. He needs to synthesize advice coming at him from a number of different advisers. He needs to deploy those advisers to their most productive uses, taking advantage of their skills. And he needs to combine their input to make good political and policy decisions. This is, I think, President Obama's biggest weakness. I don't think he's been a particularly effective manager as president, and the result has been a first term that's lacked focus and has too often seemed afflicted with terrible ADD. He's had exceptionally talented people advising him on all different kinds of policy matters, but he can't seem to come to any kind of conclusion about who's right. The result has been a first term that's lacked vision. This is where Romney can draw a contrast. As head of a buyout firm, while he was managing an organization that looked nothing like a government, the skills he can claim to have cultivated may well be very transferable. If he can argue that he can parlay his time as an executive into the ability to quickly and effectively synthesize information, develop a strategy, and execute that strategy, he can draw a contrast between his own focus and the disjointedness that's seemed to plague the Obama administration.
What might really be a compelling line from Romney would sound something like this: I'm not going to claim to be a job creator, but I will claim that I can manage this government more effectively than the President has. Of course, for campaigns, sound bites and polling trump true arguments and sound logic, but it might be refreshing to see the campaigns change tack just a little bit.
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