Mitt Romney on Corporations
Former Republican Governor (MA)
ROMNEY: The fact that we're both doing as well as we are is we both have a private-sector background. But I just want to set the record straight. I've been chief executive officer four times, once for a start-up and three times for turnarounds. One was a financial services company. That was the start-up. A consulting company, that's a mainstream business. The Olympics, that's certainly mainstream. And, of course, the state of Massachusetts. In all those settings, I've learned how to create jobs.
A: I'm not interested in bailing out individual institutions that have wealthy people that want to make sure that their shares are worth something. I am interested in making sure that we preserve our financial system.
Q: So would you not be open to another Wall Street bailout?
A: Well, no one likes the idea of a Wall Street bailout. I certainly don't.
Q: But you said in 2008 that it prevented financial collapse.
A: There's no question but that Bush's action was designed to keep the entire currency worth something and to make sure we didn't all lose our jobs. My experience tells me that we were on the precipice. Was it perfect? No. Was it well-implemented? No, not particularly. Should they have used the funds to bail out GM and Chrysler? No. But this approach of saying, look, we're going to have to preserve our currency and maintain America and our financial system is essential.
ROMNEY: Well, my background is quite different than you describe. In the business I was in, we didn't take things apart and cut them off and sell them off. We instead helped start businesses. We started Staples, we started the Sports Authority, we started Bright Horizons children centers. We began businesses. Sometimes we acquired businesses and tried to turn them around--typically effectively--and net-net created tens of thousands of new jobs. And I'm proud of the fact that we were able to do that. That's a big part of the American system. People are not going to be looking for someone who's not successful. They want someone who has been successful and who knows how fundamentally the economy works.
ROMNEY: What's happened in this country, [is] the absolute wrong time to have the absolute wrong people put together a financial regulatory bill was right now and Barney Frank and Chris Dodd. They were the wrong guys at the wrong time. Because what they did with this new bill is usher in what will be thousands of pages of new regulations. The big banks, the big money center banks in Wall Street, they can deal with that. They have hundreds of lawyers working on that legislation. For community banks that provide loans to business like yours, they can't possibly deal with a regulatory burden like that. Small community banks across this country are starving and struggling because of inspectors that are making their job impossible. It's a killer for the small banks. And those small banks loaning to small businesses and entrepreneurs are what have typically gotten our economy out of recession.
Romney, speaking to a crowd at the Iow State Fair, was being pressed about raising taxes to help cover entitlement spending. When one mentioned raising corporate tax rates, Romney responded by saying corporations were no different than people. The line earned him a sustained round of applause from the crowd.
But the Democratic National Committee fired off emails almost immediately after the remarks, as part of a continuing effort to frame the GOP frontrunner as an out-of-touch elitist, writing: "This is what Mitt Romney is going to run on?
A small band of hecklers, positioned near the stage, continually quarreled with Romney about whether wealthy Americans should pay higher taxes. "There was a time in this country when we didn't attack people based on their success," Romney said.
All of these measures are meant to confront the current economic peril. Properly guided, Washington could in fact speed the recovery. So far, some of the actions it has taken will help, and some will hurt. But we can be certain that the American economy will recover. The invisible hand of the market is more powerful than the lumbering machinery of government. The private sector--entrepreneurs and businesses large and small--will create the millions of jobs our country needs.
A: Well, there’s a great deal that is effective in his plan. First, he’s getting money back to consumers. That makes sense to me I just think we need to go further. We go to corporate support and helping corporations have the incentive to buy more capital equipment. That he also does. I do it more aggressively by writing off a larger amount of capital expenditures--getting companies to buy more stuff so that other companies will hire people. If you want to turn an economy around, the key thing is to grow jobs. It’s not just to get checks in the hands of consumers; it’s consumers & companies buying things that create jobs.
A: It is a good idea. It’s something I’ve been proposing for many months. We have a roughly 35% corporate income tax rate. It’s almost tied with Japan, which is the highest in the world. Nations like Ireland have learned the game. They’ve put the rate down at half of ours or less and have attracted a lot of jobs. The challenge with a corporate tax cut is that it takes a while to have an impact. It has a significant positive impact over time. It’s probably not likely to have an immediate boost because it takes a while for companies to make investment decisions. But it is a good idea.
A: Well, you know, as it’s been said for a long time, you don’t help the wage-earner by attacking the wage-payer. And this kind of divisive, populist approach is like he’s channeling John Edwards. It is not working for John Edwards. It’s not going to work for Mike Huckabee. The Republican Party is one where people recognize opportunity, and they welcome individuals who have gone out and taken risks and tried to create jobs. Small companies in this country create the vast majority of jobs in America. I began a very small business that’s grown. My business has not laid people off. It’s grown and grown and grown.
Moreover, Romney ignores the $174 million that his own administration figures he raised through “closing loopholes” in the corporate tax structure, which amounted to a tax increase for those who were using them.
Nor is it true that all of Romney’s fee increases were aimed at providing services. The Massachusetts Taxpayers Foundation says, “It’s been disingenuous to say there’s no new taxes, in the sense that there’s very little connection to the fee increases and the cost of services that the fees are supposed to represent.”
A: Is London going to replace New York? Of course not. Should we fix Sarbanes-Oxley and take out Section 404 as it applies to smaller companies? Of course we should. Is this country the hope of the world? Absolutely.
Romney recruited the best of Bain Consulting. Bain Capital invested heavily in struggling businesses or bought them outright. Their modus operandi as simple: find failing companies and apply the proven approach of quality thinking, rigorous analysis, and sound business principles to raise profitability. When the companies sold, Bain partners made fortunes.
Bainiacs, as they are called, are driven to succeed, and are a dogged group of Type AAAs. Bain’s slogan is: “Helping make companies more valuable.” The promise is profit. The promise is usually kept.
Bain became one of the most sought-after landing zones for Harvard Business School’s best and brightest, because Bain mattered; Bain changed things. “The idea that consultancies should not measure themselves by the thickness of their reports, or even the elegance of their writing, but rather by whether or not the report was effectively implemented [as Bain did], was the inflection point in the history of consulting,” Romney told Consulting magazine. Bain’s website cited a press quotation, “Bain delivers results, not theory.”
One of the more revealing observations was that our firm’s culture was inconsistent with our stated mission, with stress and dissonance as the result.
At Bain Capital, we aspired to have a firm that put our investors’ interests first, even before our own. But competitive self-interest increasingly figured quite prominently in decision-making.
We went to work to change our culture, to make it more consistent with our personal values and with the objectives we had for our firm. The struggle for integrity between mission and culture was never abandoned. And that made Bain Capital a better place to work.
Use of Olympic symbols, or even the words “Olympic” or “Olympiad” without permission were easy ways for companies to get Olympic association free. The government passed a law making it illegal.
We took public relations hits for our brand protection efforts. It never goes over well when the guys in the suits come down on the little Mom and Pop operations that do not know enough not to use the Olympic rings in their homegrown marketing.
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