Saturday, January 7, 2012

Paul Krugmans Op Ed piece from today! Enjoy!!!

Bain, Barack and Jobs
Published: January 5, 2012

America’s recovery from recession has been so slow that it mostly doesn’t seem like a recovery at all, especially on the jobs front. So, in a better world, President Obama would face a challenger offering a serious critique of his job-creation policies, and proposing a serious alternative.
Fred R. Conrad/The New York Times

Paul Krugman
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Times Topic: Mitt Romney

Related in Opinion

Nicholas D. Kristof: Waiting for Mitt the Moderate (January 5, 2012)
Maureen Dowd: Oedipus Rex Complex (January 4, 2012)

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Instead, he’ll almost surely face Mitt Romney.

Mr. Romney claims that Mr. Obama has been a job destroyer, while he was a job-creating businessman. For example, he told Fox News: “This is a president who lost more jobs during his tenure than any president since Hoover. This is two million jobs that he lost as president.” He went on to declare, of his time at the private equity firm Bain Capital, “I’m very happy in my former life; we helped create over 100,000 new jobs.”

But his claims about the Obama record border on dishonesty, and his claims about his own record are well across that border.

Start with the Obama record. It’s true that 1.9 million fewer Americans have jobs now than when Mr. Obama took office. But the president inherited an economy in free fall, and can’t be held responsible for job losses during his first few months, before any of his own policies had time to take effect. So how much of that Obama job loss took place in, say, the first half of 2009?

The answer is: more than all of it. The economy lost 3.1 million jobs between January 2009 and June 2009 and has since gained 1.2 million jobs. That’s not enough, but it’s nothing like Mr. Romney’s portrait of job destruction.

Incidentally, the previous administration’s claims of job growth always started not from Inauguration Day but from August 2003, when Bush-era employment hit its low point. By that standard, Mr. Obama could say that he has created 2.5 million jobs since February 2010.

So Mr. Romney’s claims about the Obama job record aren’t literally false, but they are deeply misleading. Still, the real fun comes when we look at what Mr. Romney says about himself. Where does that claim of creating 100,000 jobs come from?

Well, Glenn Kessler of The Washington Post got an answer from the Romney campaign. It’s the sum of job gains at three companies that Mr. Romney “helped to start or grow”: Staples, The Sports Authority and Domino’s.

Mr. Kessler immediately pointed out two problems with this tally. It’s “based on current employment figures, not the period when Romney worked at Bain,” and it “does not include job losses from other companies with which Bain Capital was involved.” Either problem, by itself, makes nonsense of the whole claim.

On the point about using current employment, consider Staples, which has more than twice as many stores now as it did back in 1999, when Mr. Romney left Bain. Can he claim credit for everything good that has happened to the company in the past 12 years? In particular, can he claim credit for the company’s successful shift from focusing on price to focusing on customer service (“That was easy”), which took place long after he had left the business world?

Then there’s the bit about looking only at Bain-connected companies that added jobs, ignoring those that reduced their work forces or went out of business. Hey, if pluses count but minuses don’t, everyone who spends a day playing the slot machines comes out way ahead!

In any case, it makes no sense to look at changes in one company’s work force and say that this measures job creation for America as a whole.

Suppose, for example, that your chain of office-supply stores gains market share at the expense of rivals. You employ more people; your rivals employ fewer. What’s the overall effect on U.S. employment? One thing’s for sure: it’s a lot less than the number of workers your company added.

Better yet, suppose that you expand in part not by beating your competitors, but by buying them. Now their employees are your employees. Have you created jobs?

The point is that Mr. Romney’s claims about being a job creator would be nonsense even if he were being honest about the numbers, which he isn’t.

At this point, some readers may ask whether it isn’t equally wrong to say that Mr. Romney destroyed jobs. Yes, it is. The real complaint about Mr. Romney and his colleagues isn’t that they destroyed jobs, but that they destroyed good jobs.

When the dust settled after the companies that Bain restructured were downsized — or, as happened all too often, went bankrupt — total U.S. employment was probably about the same as it would have been in any case. But the jobs that were lost paid more and had better benefits than the jobs that replaced them. Mr. Romney and those like him didn’t destroy jobs, but they did enrich themselves while helping to destroy the American middle class.

And that reality is, of course, what all the blather and misdirection about job-creating businessmen and job-destroying Democrats is meant to obscure.
A version of this op-ed appeared in print on January 6, 2012, on page A25 of the New York edition with the headline: Bain, Barack And Jobs.

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newberg OR

Well said. Mitt and his buddies made their money by taking the value from my job. He helped create declining job values. To me he often seems like he's a hero in his mind. Like a lot of rich kids it's all about them, not all about us.
Jan. 6, 2012 at 2:39 p.m.

Paul. Don't you get it? Romney's rich, therefore he is a job creator, therefore he deserves more tax breaks.
Jan. 6, 2012 at 2:39 p.m.
carlos lascoutx
mexico more juniors for the white house, we've barely recovered from the last oaf,
whose last words were: when i leave this office, no one will ever know what
happened here. present Junior is just warming up his lies, and looking for
the fools who will believe him.
Jan. 6, 2012 at 2:39 p.m.
Chuck Vekert
Highland MD

There is another logical fallacy in Romney's whole talking point. Does he intend as president to take over failing companies and downsize them from the Oval Office? Or does he intend to increase the incentives for Bains Capital and the like to take over companies and downsize them? Even assuming that he did create more jobs than he eliminated, how is this going to translate into Romney's actions as president.

To put it another way, I would not let the greatest neurosurgeon in my mouth to do a root-canal.
Jan. 6, 2012 at 2:39 p.m.
Roslyn Heights, NY

It seems all politicians lie at some point as demonstrated by Politifact and FactCheck. These organizations have also demonstrated that some do it more than others. Most of the lies are about things the politicians use to substantiate their policy positions.

There must be something in the nature of politics and human nature that causes this phenomenon.

It forces voters to choose leaders based on guessing games about what they think they will do when elected.

We can only hope Lincoln was right when he said, you can fool some of the people some of the time, and all of the people some of the time,but you can't fool all of the people all of the time.
Jan. 6, 2012 at 2:39 p.m.
John Scanlon
Collingswood, NJ
NYT Pick

There seems to be a disconnect between Mr.Krugman and the NYT reporter staff. It seems that the US factory worker with benefits is competing well against foreign competition. Krugman would benefit President Obama more if he acknowledged the President's ability to adapt to new realities. Get real, Mr.Krugman.
Jan. 6, 2012 at 2:38 p.m.
Pottwtown, Pa
NYT Pick

I voted for Obama but won't this time.
He seems depressed all the time and lacks confidence that a business leader needs.
Running our country is like running a business and Romney is more confident, therefore will help our economy more than Obama.

So this time Romney looks better.
Jan. 6, 2012 at 2:38 p.m.
Victor O
NYT Pick

Mr. Krugman's criticisms of Mitt Romney come across as those of a petty, petulant little schoolboy.

In what universe does a woolly-headed college teacher have standing to judge the actions of those in the practical world of real accomplishment, a world where actions have consequences and where accountability is the coin of the realm.
Jan. 6, 2012 at 2:37 p.m.
Javier Bocanegra
Rio Medina, Texas

The GOP and the presidential candidates don't have any ideas on how to govern, so they attack with their culture wars with the same topics: be afraid of, gays, brown people, black people, spending out of control, tax money being given away to poor people, too much regulation stifling business, etc. But we know all the talking points by now and we all know the truth, so only the very impressionable will follow them.
Jan. 6, 2012 at 2:36 p.m.
Phyllis Kritek
Half Moon Bay, CA

This editorial is strangely comforting. I have tried to follow the messaging of the GOP presidential candidates and am increasingly astounded at their content. I try to measure the messages against the facts as best I can discover them, and cannot discover linkages. It sometimes seems these messages are merely sly manipulations directed at the fears of those in the US who sense that the world is changing quickly and unequivocally, mostly aging white folks (of which I am one...).

The first unsettling question is : Do they really think that we are that dumb?

The second unsettling question is: What if we are?
Jan. 6, 2012 at 2:36 p.m.
Sandy Reiburn
Brooklyn, NY

Those "good jobs" ever dwindling...those ever "bad" jobs increasing. The immigrant laborers being chased out of the US in harsh and unconscionable ways, who did much of the farm work which Americans disdained, have now left and offered new job opportunities...
Jan. 6, 2012 at 2:36 p.m.

Well let me just add lying to the list and btw, in my book a half truth is the same as a lie. Time and again Romney has proven he is a lying spineless flip-flopping draft dodging chickenhawk who wants to go to war with Iran and send other peoples children to fight while he and his children sit with their millions, give themselves tax cuts, and send jobs to China.

The guy is as bad as all the rest of the Republican/Tparty Clowns and maybe even worse if that's possible. While they do nothing but talk, Obama cleaned up the Bush/Republican economic mess, got Bin Laden, got out of the Bush/Republican 10 year trillion dollar fiasco in Iraq. stabilized Afghanistan, and cleaned out Libya for next to no cost, and no lives in just 6 months.

Meanwhile, what did the Republican/Tparty do: gave tax cuts to the richest people while the nation went to war and others are doing all the fighting. And now they want more of the same tax cuts. Shame, Shame, Shame on them!
Jan. 6, 2012 at 2:36 p.m.
Cleveland, Ohio

The jobs "created" by the great job creators of our time are not so bad. Just ask any Advanced Degree holding youngster who's fast tracking it in a big box store's General Manager Trainee Program if they think life could get any grander. Or the Bachelors Degree seeking part timer who dreams of meaningful, secure, maybe even- if they are fortunate enough to be a Liberal Arts type- self actualizing work but who instead will probably face a Sallie Mae mortgage and maybe a couple more part time situations to help them get a better foothold in the "real world". To quote (sic... paraphrase) the great job creating social philosopher Sonnie Dubya Bush: "Isn't this a marvelous country, where you regular folks can have 3 jobs like that... only in America... isn't that marvelous?"

Until all or plenty of us who see the absurdity of this ongoing economic model's vision and consequences organize effectively to truly create an alternative path into our collective futures- I fear all our columns and essays and comments (not to mention our variouis "occupy" events/be ins) are merely whistling in the dark. We should start by supporting a grass roots Congressional District by Congressional District organizing effort to confront with Constitutional Amendment level reform- or re-Constituting, if you will- our Campaign Finance, Electioneering, Lobbying, money in politics, and corporate charter laws.

Till such time enjoy this silly sporting event election and its banal mainstream coverage.
Jan. 6, 2012 at 2:36 p.m.

No one denies President Obama created jobs. But he threw $800 billion at the problem with very little to show for it on a $/job basis. This makes the President look incompetent. Plus the revolving door of" experts" like Romer, Summers, Goolsby, haven't given rise to confidence either. And what of "shovel ready jobs" and the laughter Obama displayed when he dismissed the later critiques with the trite "a lot of those jobs weren't so shovel ready afterall" ? These things do not add to the command that a President is supposed to display. In fact, they greatly subtract from it. Hence, a majority of the voters are now tired of the sameness of this act and the incompetence of the display.
Jan. 6, 2012 at 2:36 p.m.

The Obama campaign staff would be fools not to start lining-up people who were laid-off from Bain acquired companies for appearances in TV commercials.

If Romney claims second-hand success-by-proxy, then he should be prepared to get full credit for the failures as well.
Jan. 6, 2012 at 2:36 p.m.

In March 11, 2003, you wrote a piece entitled "A Fiscal Train Wreck":
"With war looming, it's time to be prepared. So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits. . . ."
Skyrocketing budget deficits worried you then?!?! Oh my, you must be on a cycle of changing your position every 8 or 9 years depending on who is in office.
Jan. 6, 2012 at 2:36 p.m.
R. Karch
Silver Spring, Maryland

The trend in this country has been toward fewer and fewer good jobs, that is, jobs that pay good wages or salaries, and good benefits. The shift has been toward the best jobs, and then the most money becoming concentrated among a smaller and smaller class of people. And along with this trend, it is no wonder that there is now a lopsided concentration of wealth among the richest 1 %, and the richest 0.1 % . The lopsidedness gets worse the richer people are, and the more the rest of the whole lopsidedness in wealth distribution is, the worse this disparity gets at the high end.

But you wrote: ' The real complaint about Mr. Romney and his colleagues isn’t that they destroyed jobs, but that they destroyed good jobs.' In view of what 'good jobs' have been doing for this country, why is that not the right result, of the other failures?

How can this country keep having nothing but 'good jobs'? People have become accustomed to the ideas proclaimed by politicians that everyone should be able to share in an 'American dream', meaning continued same levels of wages and benefits.

Meanwhile the cost of oil, cost of corn, wheat, and other commodities have all been rising. It means all the systems a modern economy depends upon: transportation, heating, manufacturing, and construction, cost more. Something had to give. But people demand continuation of same standard of living.
The costs have been absorbed in unemployment, employment nowhere near population growth!
Jan. 6, 2012 at 2:36 p.m.

If Mitt was such a skilled and successful job creator why is his fortune of roughly $260M so small? He would have done better as an insurance company executive. Sounds more like he was a mediocre parasite living off other people's money.
Jan. 6, 2012 at 2:36 p.m.
Peoria Illinois

There is no border to the dishonesty Romney presents as truth. It is all one fabric these days. And very little of it is what he intended six months ago.
Jan. 6, 2012 at 2:36 p.m.
miami beach

Can we get one, just ONE, op-ed who will objectively on these issues. Yes, Mr Krugman, we like Democrats & Mr Obama, it's plain as the nose on your face and the pom poms in your hands. How about impressing everybody (and restoring your credibility for the moderates) and writing an unbiased piece that distills the essence of both candidate's sides of the argument and issue? And then let us make up own minds on the subject?

Now, that would be a rare op-ed worth reading.
Jan. 6, 2012 at 2:36 p.m.
Santa Barbara, CA

It is truly gratifying to hear someone of Krugman's stature no mince words. Now, as the Yiddish saying goes, "your mouth to God's ear." And the ears of the former middle-class and middle-class aspirants who are under attack from the capitalist hydra now just at its peak power and just don't know it -- courtesy of Faux news of course but also the spineless among the journalist profession.
Jan. 6, 2012 at 2:36 p.m.

Fair comparison?


How many jobs did Obama create before he was president?
Jan. 6, 2012 at 2:36 p.m.

Right on the button again, Dr. Krugman. I am almost becoming your "groupie!" It is astonishing to me that except for a few like you, most in the corporate-controlled media never ever challenge these false claims and run such people out of town for outright lying, as they used to do in old days. There is no stigma attached to making such blatantly false claims and a certain party has gotten so good at it that it has managed to redistribute the national wealth to "job creators" instead of the common public. The media must be blamed mostly for this, since they present these claims as facts, without ever challenging them directly and shaming the claimants. Anyone with common sense ought to realize that you don't become 250 million dollars rich by doing what is best for the common folk. That money came from somewhere and I am sure in Romney's case, it did not come from "capitalist wealth creation." It came from buying companies, selling off valuable assets and trashing the companies and their employees, all the while pocketing the proceeds! Just take a look at the photograph in which Mr. Romney is handing out money to his colleagues with a wide grin on his face. That is not "jobs" he is handing out for sure. How can we let these things happen in the name of democracy and unfettered capitalism, and commit national suicide in the process? Wake up America! Please!!!
Jan. 6, 2012 at 2:36 p.m.

In France we are also in presidential campaign. Every day we hear new affirmations, in a sentence, one wronger than the others.

Many people believe them. One needs articles like this one, bright and clear, to explain in what they are wrong. Problem is that it is easier to hear, and to believe, a sentence than to read a long article.

Election campaigns are the "zero degree" of intelligence, unfortunately for us. The only objective of politician often is to saturate the media space rather than make people clever.

It's true for republicans in States this last year but it's also true for the right in France. We share at least this !!!

Unfortunately for us.
Jan. 6, 2012 at 2:36 p.m.
San Clemente, CA

It's clear that Governor Romney, at best, had a neutral impact on job numbers during his tenure at Bain, and it is equally clear that most of the jobs Bain created during that period were lower-paying than the ones that were destroyed. It would be useful, however, to have more precise figures on this as the Presidential campaign moves ahead.

With regard to a comparison between George W. Bush and Barack Obama, we do have precise figures, which give the lie to Republican claims that the President is a job-destroyer. Generally, one starts holding a President to account beginning with the first fiscal year in which his first budget is passed, not the beginning of his term, when the previous President's policies are still in effect. By this standard, employment during the eight George W. Bush years declined by 1,792,000. During the first three Barack Obama years, employment has increased by 1,608,000. In September 1981, total U.S. employment stood at 131,518,000. In September of 2011, total U.S, employment stood at 131,334,00. So, over the past 10 years, U.S. employment has been stagnant, with employment declining under the Bush Administration and rising an equal amount under the Obama Administration. Those are the true figures.
Jan. 6, 2012 at 2:36 p.m.

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1 comment:

Diane said...

Wow...thank for your insight. If our government really wants America to be united they should do whats best for the country by keeping us substitutable. At the rate we are going in another 20-years we will be on the news compared to a third-world country. They are killing our way of life with the petty differences. Corporations are taking the business and jobs to other countries for two reason, cost-effective and talent. Yes it's cheaper to hire and develop product in other countries. However, our educational system is like an old-boys club. Lets educate this group of people and not this one. I can go on and on but I want.