The big story of the day is a deeply reported piece by Tom Hamburger, showing that Mitt Romney’s Bain Capital in many ways invented the cottage industry of shipping US jobs overseas.
During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components, according to filings with the Securities and Exchange Commission.
While economists debate whether the massive outsourcing of American jobs over the last generation was inevitable, Romney in recent months has lamented the toll it’s taken on the U.S. economy. He has repeatedly pledged he would protect American employment by getting tough on China […]
But a Washington Post examination of securities filings shows the extent of Bain’s investment in firms that specialized in helping other companies move or expand operations overseas. While Bain was not the largest player in the outsourcing field, the private equity firm was involved early on, at a time when the departure of jobs from the United States was beginning to accelerate and new companies were emerging as handmaidens to this outflow of employment.
Bain played several roles in helping these outsourcing companies, such as investing venture capital so they could grow and providing management and strategic business advice as they navigated this rapidly developing field.
So Bain was basically an outsourcing innovator. Oh, I’m sorry, “offshoring.” See, that was the main point of contention brought up by the Romney camp today. They obviously got some data from Frank Luntz that “offshoring” plays much better.
“This is a fundamentally flawed story that does not differentiate between domestic outsourcing versus offshoring nor versus work done overseas to support U.S. exports. Mitt Romney spent 25 years in the real world economy so he understands why jobs come and they go,” Romney spokeswoman Andrea Saul said. “As president, he will implement policies that make it easier and more attractive for companies to create jobs here at home. President Obama’s attacks on profit and job creators make it less attractive to create jobs in the U.S.”
Outsourcing, the Romney campaign says, involves hiring another company to get work done that could have been done by the domestic company in-house. Offshoring is just sending the whole set of jobs overseas to capitalize on lower labor costs.
I hope to be enlightened on the difference for US jobs between outsourcing and offshoring. It seems that both involve those jobs moving overseas so that non-US residents perform them. Whether the official definition of what Bain encouraged and counseled was outsourcing or offshoring doesn’t mean much to the American who used to do the job and then found himself out of work.
Obviously the Obama campaign is pouncing. But I wonder how long it will be before they get a surrogate who trips up by pronouncing his love for private equity firms. Or, whether the Romney campaign will use those previous statements from the likes of Cory Booker and Bill Clinton to insulate themselves from further attacks. Because Democrats can’t quit private equity, the edge of this investment in shipping away American jobs comes off a bit.