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Mitt Romney: Job Creator?

August 1st, 2011 at 5:30 pm | 29 Comments |

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Democratic talkers are already testing a line of attack on Republican front-runner Mitt Romney.

Romney, malady they say, was not much of a job creator as governor of Massachusetts. In fact, during the Romney years 2003-2007, Massachusetts ranked 47th of the 50 states new jobs created. While the Massachusetts unemployment rate did decline during Romney’s tenure, that decline was more due (according to Northeastern University) to a consistent out-migration of working-age residents. Massachusetts’ manufacturing employment declined by more than fourteen-percent, the third worst in the nation. The Boston Globe scathingly summarized the Romney record: “On all key labor market measures, the state not only lagged behind the country as a whole, but often ranked at or near the bottom of the state distribution.”

A tough verdict. But not a fair verdict. As governor, Romney had some clear economic successes: he closed a $2 billion budget shortfall in his first year, he cut government spending, housing prices led the nation and he cut large amounts of red tape from Massachusetts’ laws.

As for the poor job record, Romney has an arguably justifiable explanation. Romney inherited a very tough economy critically damaged by the collapse of its the once-vibrant technology sector.

Massachusetts depends crucially on technology industries, which are the second largest sector in the state. The cycles in the industry drive the cycles in the state economy. When the PC replaced the minicomputer in the late 1980s, the Massachusetts economy dipped into recession.  The downturn Romney inherited stemmed from the dotcom bust. The current (relative) upswing in Massachusetts is widely attributed to a pickup in biotechnological industries.

Romney is correct to point out one central point about his record: “The governor before me lost jobs; the governor after me has lost jobs; we actually created jobs.” When Romney took office, Massachusetts had the highest job-loss rate in the nation. During his four years, he was able to at least steer the ship in the right direction. But he did so incredibly slowly.

To better understand Romney’s pace of job creation, I talked to Michael J. Widmer, President of the Massachusetts Taxpayer Foundation. Widmer emphasized first that before evaluating the record of any governor, one ought to understand that, particularly in the short-term, he possesses little actual ability to influence the economy.

But, since Romney is campaigning on a platform of job creation, it’s important to examine his claims. Widmer saw Romney’s record as generally “poor”. The Taxpayer Foundation corroborated other reports stating Massachusetts was 47th in jobcreation – a pace Widmer calls “anemic.”

Moreover, Widmer was “most critical” on the point that Romney had “no blueprint” to deal with the business climate of Massachusetts. Widmer agrees that the state, through high costs, a large regulatory environment, and a negative political culture, has a somewhat hostile environment for business. Although Romney campaigned on fixing this, Widmer argues that Romney didn’t really address it. Granted, this was a very hard promise to keep – it would “take superman” to do it in one term – but Widmer holds this cannot be an accomplishment Romney touts.

There is some silver lining – for example, Romney’s Secretary of Economic Development Ranch Kimball, spearheaded efforts to help expand and keep internal commerce in Massachusetts (rather than hoping to bring business in – a big stumbling block in the state) that had “incremental successes.”

All in all, Widmer portrayed the Romney record as unsatisfactory. Simply put, when asked if Romney at least set the groundwork for policies to later bear fruit, he responded: “Not really.”

These are the concerns Governor Romney will need to address. Although Massachusetts did restart growing and employing people while he was governor, Romney needs to answer two vital questions: 1) Did it happen at an acceptable pace, and 2) Could he have done anything else?

Recent Posts by Harry Graver



29 Comments so far ↓

  • TerryF98

    Romney was a job creator like the parasite in your intestine is your close buddy.

    At Bain he was a typical asset stripper, shipping jobs and even complete factories overseas. Making huge profits and discarding the companies like trash in a dumpster.

    As Governor his record is terrible. The excuses in this piece are like fluffing up an old Tom cat as a show specimen. Please get real.

    Romney is a charade, a fraud, a flip flopping coward who hid himself away during the debt crisis discussion in case he was put on the spot.

    Not Presidential material in any way shape or form.

    • Steve D

      I wanna see Romney up against Perry or some other religious wacko. I think it would be a hoot seeing them try to explain why the Mormons are a cult but creationists aren’t.

  • Oldskool

    I expected this to be about his job-creating record as a businessman which is also very bad. Poor Mittens.

  • Saladdin

    Granted, this was a very hard promise to keep – it would “take superman” to do it in one term

    Which begs the question of why he didn’t run for a 2nd term? Maybe because the man can read a poll. He knew he’d have lost to Deval Patrick, so he opted out.

    • Steve D

      Using “beg the question” that way is like a waitress asking if you want your steak “with au jus” – simply illiterate. “Beg the question” means avoid or sidestep a question, not inspire one.

      • Saladdin

        Steve,

        Actually, begging the question is a type of logical fallacy in which the proposition to be proven is assumed implicitly or explicitly in the premise. Thus, the assumption of the statement “to do it in one term” begs the question of why Romney didn’t run for a 2nd term… It’s because he would’ve lost to Deval Patrick, no question. Mitt didn’t run for re-election because he couldn’t win, not because he wanted to run for the Presidency.

  • balconesfault

    As for the poor job record, Romney has an arguably justifiable explanation. Romney inherited a very tough economy critically damaged by the collapse of its the once-vibrant technology sector.

    Huh. I look forward to seeing Frum’s critique of Romney’s attacks on Obama’s job record.

  • Rubicon

    How many people work at Bain Capital, Bain Consulting, Staples, etc. Romney helped to create, establish, and fund several companies that have produced tens of thousands of jobs. Did he fire people. Of course. A better question would be to determine the value of the companies he founded, restructured, turned around, or funded, etc.

  • Rob_654

    Romney looks like the guy who laid off your father.

  • Banty

    The “job creator, rain maker” myth is one of those Libertarian myths I discarded from my belief set three decades ago.

    A business owner’s task is to provide his product or service with as FEW jobs as possible. Yes, new and expanding enterprises add jobs as necessary, but they’re wary of adding too many. And, they will compensate the LEAST they can get away with. That’s a function of the job market.

    The job market is even in good times at a disadvantage vis a vis employers. Employers set the terms, and hold potential livelihoods in their hands. One might think one can walk over to the next employer if one doesn’t like the first, but one does so only to find out the other employer has benchmarked himself with one’s previous employer, and the terms will be comparable with the first, with differences only on the margins.

    Now, some individuals will be able to make themselves stand out and be able to set their own terms more (or less). Many of these get quite proud of themselves about it ,but in reality, luck is the partner of almost of all their successes. Only, few really realize that. But most people on the job market will always have common skills, common abilities, to sell. Tea Partiers and tough-guy talkers like to pretend it’s all about bootstrapping and self-improvement, but they are talking the Lake Woebegon myths of the job market. In the real world, it’s a sour experience to be in a society where many are idle and struggling, even if one’s own job is secure.

    There are whole businesses, like Bain (which Romney will be hearing a LOT about) which are really about anything BUT products, services, OR jobs. Much of the financial sector, for example.

    The other silly part of this is how Rich People are the “job makers”, because of whom they hire privately. Who builds a pool by their 6,000 ft. home, they say, other than someone hired by themselves? Well, actually, the preponderance of independent contractors, landscapers, etc., are hired by middle class folks like myself, oftentimes hiring out tasks so we can recoup some of our own private time and energy, to try and be that stand-out employee in that ephemeral job market.

  • WTBoy

    Mitt Romney shares an unfortunate history with Carly Fiorina. Both were business leaders at one time, and both their records were most marked by job reductions, and job outsourcing. Fiorina was badly damaged in her run for Senate by her record at AT&T and Hewlett Packard where she was responsible for the loss of tens of thousands of American jobs. (http://www.nbcbayarea.com/blogs/prop-zero/Carly-Fiorina-and-the-outsourcing-jobs-question–105151029.html)

    Romney has a comparable problem. While he was at Bain Capital, Romney led the effort to outsource American jobs. Bain’s modus operandi was to buy medium-sized companies and outsource most of the jobs overseas, just as Hewlett Packard did during Fiorina’s tenure. Bain’s (and Romney’s) actions devastated the states of Pennsylvania and Ohio. (http://www.politicususa.com/en/republican-ceo-president)

  • Today’s Jenny From The Block Moment | Library Grape

    [...] to Harry Graver of FrumForum: Romney, [Democrats] say, was not much of a job creator as governor of Massachusetts. In fact, [...]

  • sinz54

    It’s increasingly clear that Obama is toast.

    He’s an ultra-liberal who has abandoned Keynesian economics under duress, while unemployment remains stuck over 9%. And yet he has proposed no alternative theory. Stick a fork in him, he’s done.

    So the next question is which Republican is going to succeed him in 2012.

    And of the Republicans who have announced their candidacies, Romney is probably the best of the bunch. He’s not far to the right like Bachmann or Cain; he knows something about governing a state that isn’t a GOP stronghold; and he’s pretty bright.

    I’m not a big fan of Romney. But the country can manage with him as POTUS for at least 4 years.

    • Oldskool

      The problem with your party is that even Saint Ronald Reagan couldn’t win the nomination today. But don’t let that stop your lively fantasies.

    • talkradiosucks.com

      “He’s an ultra-liberal….” blah blah blah.

      This particular line of abject idiocy is especially laughable after what we saw over the weekend. I hope you’re convincing yourself, at least, because I doubt anyone else is buying this swill.

      As for Mitt Romney, he’s a very good job creator, as long as you remember that the only person whose job he cares about is his own.

    • WTBoy

      Republicans: the party that tried to force your Grandma to eat dogfood.

    • NRA Liberal

      “…He’s an ultra-liberal who has abandoned Keynesian economics under duress…”

      I’ve always predicted that this would come to be the TOP storyline.

      They need to reconcile a set of contradictory premises.

      1. Obama’s own manifest and proven center-right ideology.
      2. Their own image of him as a Marxist.
      3. Their need to show him as weak and humiliated.
      4. Their need for him to be a wily tyrant.

  • Timothy

    This oft repeated notion that one can run Government like they run Business reveals a very weak understanding of the Public Sector and the differences between business (authoritarian by nature) and government.

    Mitt Romney’s general appeal is supposed to be of the Benevolent King; the cut/slash business man with a heart.

    What’s more? He’s decidedly devoted to a racist theology. If Obama had to answer for his Jeremiah Wright connections (and I believe it was right to ask him to do so), then what of Mitt and his devotions?

    To wit: How To Interview Mitt Romney About Racism: http://www.moreperfect.org/site/?p=7

  • armstp

    Harry,

    You can spin it all you want, but it was a pretty pathetic jobs record. Similar to George W. Bush. Your explanation may explain why Massachusetts was not the top state in job creation during the period, but there is no way it can explain why it was near the bottom.

    It is funny you start off defending Romney, but then you quote Widmer, who works for a conservative lobby group, who basically destroys Romney on jobs.

    This quote says it all:

    “Widmer was “most critical” on the point that Romney had “no blueprint” to deal with the business climate of Massachusetts.”

    No blueprint! And this from a guy would worked for one of the biggest management consulting firms on the planet where all they do is create blue prints. Even though he worked on the private equity side of the business, you would think some of the strategic thought would have rubbed off on him.

    If anything Massachusetts should have been a much stronger creator of jobs in technology during Romney’s time, given its massive advantage of having both Harvard and MIT in the state. If Romney did not know how to use those resources, then that is his fault.

  • sweatyb

    “Romney had some clear economic successes: he closed a $2 billion budget shortfall in his first year, he cut government spending, housing prices led the nation and he cut large amounts of red tape from Massachusetts’ laws.”

    None of those things are economic successes.

  • Stewardship

    Quotes from the Boston Globe have no place in any conservative dialogue!

    Having been involved in economic development for nearly 25 years, one of my frustrations is how voters take “it” out on presidents and governors over the economy. They have so little to do with the peaks and valleys…but shoulder all the blame when things are bad, and claim all the credit when things are good.

  • JedMerrill

    47th in “job growth” sounds bad, but of course it isn’t, when the state is technically at “full” employment.

    Fact is, Massachusetts under Mitt averaged 5.2% unemployment, far below the 9.2% we are seeing under Obama, not even counting all of the people who have quit looking in all fifty states!!

    When Mitt left Massachusetts, unemployment was down to 4.8%. I can’t remember a time in the last 30 years when unemployment has ever been that low nationally.

    Here’s the breakdown:

    http://americaneedsmitt.com/blog/2011/07/29/ma-romney-rank-47th-job-growth/

    As I understand it, unemployment in Rick Perry’s Texas is actually much higher than in Mitt Romney’s Massachusetts!

    Thanks for pointing out Mitt’s success getting rid of the deficit as well!

    #mitt2012

  • jamesj

    Too hilarious. Romney’s defense is going to be “…Romney has an arguably justifiable explanation. Romney inherited a very tough economy critically damaged by the collapse of its the once-vibrant technology sector”?

    Couldn’t the same (or much worse) be said of the situation Romney’s potential opponent inherited?

  • Graychin

    Romney blames his predecessor?

    Why didn’t Democrats think to blame the current mess on Bush?

    But that’s different. Isn’t it?

  • kathyjboyd

    Unemployment numbers are comprised of those that are in the job market for the past 30 days. It does not include those that have not been in the job market in the last 30 days: people who have given up looking; those that have gone off unemployment because it has run out. One solution to unemployment is “High Speed University” check it out

  • adamcarralejo

    “Romney had some clear economic successes: he closed a $2 billion budget shortfall in his first year, he cut government spending …”

    I’m getting tired of people conflating “economic issues” with “budget issues.” There’s a relation, but, you can have a healthy budget with a crappy economy (see US economy circa 1929-1934), and you can have large deficits with a functioning economy (World War II, mid-1950′s, mid-1980′s, early 2000′s).

    This smacks of the “cut spending to create jobs” lie.