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June 30, 2012

Fact Check.org Fact Checks the President and the Washington Post

...and finds the Obama campaign's claims (and their citing of the WaPo's recent outsourcing hit piece on Mitt Romney) to be "untrue or thinly supported":

Obama accuses Romney in a series of TV ads of being a “corporate raider” who “shipped jobs to China and Mexico,” asking if voters want to elect an “outsourcer in chief.” But some of the claims in the ads are untrue, and others are thinly supported.

Bain Capital, the venture capital firm founded by Romney in 1984, is the focus of the Obama campaign’s attacks. There is no question that Bain invested in some companies that helped other companies outsource work and that some of that work went overseas. That was the core business for Modus Media and SMTC Corp. — two outsource companies featured in a June 21 article in the Washington Post that has been the basis of recent Obama TV ads. Bain also invested in U.S.-based companies that sold goods manufactured here and abroad, and some of those companies closed U.S. facilities and eliminated U.S. jobs.

But after reviewing numerous corporate filings with the Securities and Exchange Commission, contemporary news accounts, company histories and press releases, and the evidence offered by both the Obama and Romney campaigns, we found no evidence to support the claim that Romney — while he was still running Bain Capital — shipped American jobs overseas.

Which leads me back to two questions I asked the other day:

If outsourcing is a bad thing, why is the President's re-election campaign doing it? And if it's not a bad thing, why is the President trying to mislead voters and gin up outrage against American businesses?


... we can hardly wait to learn why the Washington Post, which followed up a fact check that awarded the Obama Campaign 4 Pinocchios for accusing Bain Capital of shipping US jobs overseas with a front page story repeating many of the same claims, didn't think we should know that the Obama Administration is funding the creation of foreign jobs with taxpayer money designated for stimulating the US economy?

If outsourcing and offshoring are wrong, then it has to be more wrong for the federal government to use taxpayer money to do it than for private businesses to use their own money to do it. Judged by his own standards, Barack Obama is a worse villain than Mitt Romney or Bain Capital could ever be.

Not that we'll see the press looking into taxpayer funded outsourcing or offshoring with the same zeal they devote to front page hit pieces on Mitt Romney, mind you.

Posted by Cassandra at June 30, 2012 03:25 PM

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I'm not sure that this argument will persuade many people. The question of outsourcing isn't really about outsourcing, but about the moral foundations of corporations. The real theme is the one that both President and Mrs. Obama have put forward repeatedly: that good people shouldn't work in the private sector, but should 'give back' by pursuing careers in the public sector.

You can see the argument by working through the counterargument: A corporation's organizing purpose is to make money. Thus, regardless of what a corporation does -- outsourcing or otherwise -- it's all about raiding and moneymaking and selfish profiteering. The whole structure of the thing is built around that single organizing purpose.

If the government should outsource, however, it can explain that the jobs are a kind of diplomacy or foreign aid. It's about building relationships, keeping order, making peace and sharing prosperity. These are generous things, not selfish things.

It's the same action -- offshoring jobs -- but the real idea is that the context is what makes the action moral or not. You can't win with a tu quoque, or even a 'your guy is even worse!', because that's not the argument you're up against. The real argument being made is that Romney represents selfishness, and Obama represents kind generosity. The argument is that corporations are evil, and government is good.

The fact that Romney is tied to a rich and successful corporation thus becomes a weight around his neck, not a reason to vote for him. Obama's complete lack of private sector experience thus becomes evidence of a virtuous nature, too good to stoop to stripping widows and orphans of their homes for personal profit.

Posted by: Grim at June 30, 2012 06:17 PM

Well, I don't know that I was trying to "win" anything. I simply pointed out that several fact checkers have now looked at the President's ads on this subject and found them wanting.

And that if outsourcing and offshoring are bad because they give jobs to foreigners that should be given to Americans, then it's bad no matter who does it and probably worse when a public servant does it with American taxpayer money than when a business owner does it with his own money.

Conservatives don't have a chance in hell of convincing the kind of person who believes that it's selfish and wrong for private companies to outsource or offshore, but the very same activity suddenly becomes generous and good when the government does it.

I have no doubt that there are people this foolish, but they are not going to be persuaded by anything a conservative says because to their way of thinking, conservatives are selfish and evil and anything they say should be ignored if not vigorously opposed on that basis.

Posted by: Cass at June 30, 2012 07:42 PM

I don't know. This is one of those lessons that you have to teach in every generation, because it runs counter to human intuition. We intuitively believe that sharing for the good of the group is moral, while people who work for personal advantage are selfish.

Corporations (at least when considered as 'people') are structured around a principle of the pursuit of self-interest. Thus, intuitively they seem selfish and immoral.

It takes some teaching to show that (a) actually, corporations are really structured around the good of the group -- it's just a smaller, self-selecting group. Viewed that way, corporations are like families or other groups that work hard for the benefit of their members -- not for pure self-interest. Also (b) corporate activity produces demonstrable benefits to society, especially in terms of providing work for others.

Of course, this relationship between the corporation and its workers is a bit fraught intuitively as well. The corporation is structured to pursue the good of its stockholders, so it's easy to see that as 'kind of like a family' and 'for the good of the group.' But the workers are outside of that; the corporation is not structured to pursue the good of the people who work for it. Thus the 'good of the group,' or the corporate family, does not include the people who actually do the work (unless they invest in some of the company stock, of course).

So again, it's necessary to explain in each generation why this intuitively improper set of relationships is in fact acceptable and good. That's a complicated process, but I think it's one reason that younger voters often tend to be anti-corporate: the lesson is not an intuitive one, and in fact intuition seems to cut the other way.

Posted by: Grim at June 30, 2012 07:57 PM

I think this is a good line of attack:
Isn't Obama, by giving $1B to Brazil to have them develop their off-shore oil prodcution, outsourcing?

Posted by: john b at June 30, 2012 11:10 PM

What about all of the jobs that were outsourced by the $1 trillion stimulus bill. I believe that more jobs were created outside the US than inside the US.

Posted by: Joel Wolk at June 30, 2012 11:55 PM

A question parallel to Grim's original comment is the concept of moving labor about generally. Whether the job is moved to another company in the US or moved offshore, the local man has lost his job.

The Progressives argue with greater or lesser clarity that this is inherently immoral--the man is being treated as a cog in a machine, no more or less of value than any other cog in the machine.

Conservatives need to make a better argument against this view, which is inherently shortsighted and (often cynically) distorts the purpose of the transfer. Conservatives also need to make a positive argument that demonstrates the rightness of out-/offshoring, and that discriminates between those occasions (the majority, I assert) that are, in some sense, right and those that are plainly greedy in the narrow, shortsighted sense on which the Progressives seize.

Eric Hines

Posted by: E Hines at July 1, 2012 09:03 AM

Right, that's a good point also.

I was thinking about this again this morning when reading this article on Pennsylvania working-class voters trending Republican. They're clearly persuadable, but the corporate system isn't structured for their advantage in the same way that it is structured "for" the advantage of corporate shareholders. It happens often to be to their advantage, but it isn't for their advantage.

Explaining just how much more "to" their advantage it is must be done in every generation, and probably in every serious election of this kind. Romney's spent a lot of time in government, too, so he can lay claim to 'the good work that government does'; but if he's going to avoid having Bain turned into a millstone for his neck, he'll have to make the argument that corporations are good for the poor and the working man -- while also making the argument that this good is not their purpose, and that it's good that it's not their purpose because the creative destruction it enables allows for better things later.

Posted by: Grim at July 1, 2012 10:02 AM

The "to" vs. "for" argument is interesting. You have only to look at the poverty, tyranny, and misery that results from kindly experiments in collectivism to know that there's a big difference between meaning well and doing good for people.

Mean old capitalist systems encourage people to maximize their own profit, and in so doing increase prosperity for everyone, though often at the "cost" of exaggerating differences between rich and poor. Saintly collectivist systems insist that everyone should renounce ugly selfish motives and fight to eliminate class distinctions, and in so doing they ensure that most people huddle together in an undifferentiated band of stagnant want.

Harnessing individual effort to the profit motive is the best way we've found to keep a tight link between choices and results, which in turn is the best way we've found to maximize results overall. But there's a persistent fantasy that we can make the system work better if everyone makes choices about what to work on and what to consume by considering nothing more than what he imagines to be best for everyone else. That's a model that works well for adults with dependents in their case, but is disastrous for a country full of autonomous citizens trying to cooperate with each other. It's both presumptuous and ignorant.

Posted by: Texan99 at July 1, 2012 12:09 PM

Regardless of what company or corporation you are working for, in a free market economy, you are still working for yourself. You can quit, find another job, move on at will.

It may not be as easy and self-evident to most people, because they let their emotional attachment to routine blind themselves to acting in their own true self interest. That is as true of myself as anyone else. I should've left the place I work 7 years ago, and moved on, but I couldn't bring myself to pull the trigger. Through a lot of years of corporate misery, I am now in a better place (temporarily), but it was in my emotional attachment to a "place" instead of my own self interest that hurt me.

In socialist/collectivist societies, the state and the employer deliberately play on those sentiments to fix you in place and prevent employment mobility. I have found this to be especially true of some of my co-workers in France. There is a tremendous stigma to "frequently" changing jobs there. In the decade of 81 to 91, I changed jobs five times. In the last 21 years I have changed jobs once.

Captialism / free enterprise markets are neither good or evil. They are filled with men and women who can be fair, intelligent, motivated, or foolish, stupid or short-sighted (describing my boss from 2007-2009). But they do not have the sanction of the State to be successful no matter what. Which is what ultimately saves free market capitalism from the woes of socialist command economies and five year plans.

The former super-large corporation I was once a small flea-speck in was going/is going through some rending changes due to the complacency of the former leadership that THOUGHT that they were infallible - had a mandate from Heaven.

Around 40 years ago, the corporation that my father was a worker bee for was going through a difficult re-structuring. The man leading it was smart and efficient, and the re-structuring saved the company and it was prosperous into the late 70's and 80's. But at the time it was wrenching, and the average worker there was worried and miserable about how the outcome would work for them. They hated it, but it saved the company and thousands of jobs.

Bain Capital was a company that worked with companies to save them from bad management and stupid decisions from previous management. It is not an easy story to tell, compounded by the present lies told in Obama campaign commercials. There are other big and small companies like Bain that do work like this to help rebuild and re-capitalize failing companies. Re-structuring any company is hard on the employees and is full of anxiety until it is finally over.

Posted by: Don Brouhaha at July 1, 2012 01:43 PM

Interesting. So, who better to grow? Corporations, which get 'welfare' in the form of tax breaks from government, but are still bound by some form of the rule of law, or government, which exempts itself from the rule of law?

Posted by: Carolyn at July 2, 2012 10:13 AM

You might take the stance that there is an important question of scale for both -- in other words, that "growth" may not be desirable in either. A government that is restrained in size and power can be of less service to powerful corporate patrons as a tax-farmer; and corporations that are less monopolistic make it easier for an individual or family to take advantage of the kind of independence Don is talking about (re: willingness to move to a competitor for a better deal).

Insofar as we are interested in human liberty, there is good reason to oppose the concentration of power in either place.

Posted by: Grim at July 2, 2012 12:54 PM