So I was really bored and wide awake at 3:30 am so I dropped by Big O Tree blog to see what mischief they were up to today. In addition to the usual hate-spew there was a link to this story by Paul Davidson at Alternet:
Right now, a man whose predatory career has claimed the jobs of countless Americans is trying to wrap himself in the flag and call himself a “job creator” and “wealth creator.”
Does he mean miserable jobs in Chinese factories? Wealth for the 1 percent? Apparently that’s exactly what he means.
Republicans claim that Mitt Romney’s entrepreneurial activities at Bain Capital have been good for Americans. The truth is that Romney has spent his career offshoring and outsourcing American production processes — and associated jobs — to countries like China where human labor is valued in the market at a very low wage rate.
Mitt Romney’s tenure as Bain’s CEO has long linked him to offshoring and outsourcing. Even today, although he is no longer in that position, Romney still makes a nice profit on undertakings done long after he left the day-to-day management of the firm.
Well that doesn’t sound very nice.
But wait! There’s more:
Bain’s engagement in outsourcing under Romney’s leadership can be traced back to at least 1993, when the firm bought into a company called Corporate Software Inc. CSI provided a range of services for hi-tech companies such as Microsoft. One service you’ll be familiar with if you have ever had a computer glitch is the outsourcing of customer support, often through call centers. At first, CSI employed U.S. workers to provide these services, but by the mid-1990s CSI was establishing call centers in other countries.
Then CSI merged with another enterprise to form Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. According to SEC reports filings, Bain was active in running Stream, providing “general executive and management services.”
I thought I’d look up this “Stream International Inc” but when I googled the name I found this in the Washington Post:
Bain’s foray into outsourcing began in 1993 when the private equity firm took a stake in Corporate Software Inc., or CSI, after helping to finance a $93 million buyout of the firm. CSI, which catered to technology companies like Microsoft, provided a range of services including outsourcing of customer support. Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside the country.
Two years after Bain invested in the firm, CSI merged with another enterprise to form a new company called Stream International Inc. Stream immediately became active in the growing field of overseas calls centers. Bain was initially a minority shareholder in Stream and was active in running the company, providing “general executive and management services,” according to SEC filings.
Those two paragraphs bear a remarkable similarity to the ones from Mr. Davidson’s article, but he seems to have forgotten to give proper attribution. However, if you look closer you will notice that neither passage states anything about a single American job being destroyed.
“Outsourcing” is a buzzword that merely means “we pay someone else to do it.” It is synonymous with subcontracting. I don’t brew my own beer, I outsource it to Adolph Coors. (Except I don’t drink anymore.) When you outsource it to another country that is called “offshoring.”
If you were to research Stream International Inc. you would discover that they are now called Stream Global Services (Stream) and that they have 50 service centers around the world, including 14 in North America (6 Canada, 8 US). They do this because they provide customer service around the world in numerous different languages.
IOW – They didn’t “offshore” American jobs, they expanded into other countries! The American jobs are still there and new jobs were created elsewhere. That way if you live in Austria you can talk to someone who speaks Austrian. Currently Stream has only three call centers in Asia, including one in India and one in China.
But wait! There’s more!
Bain has gone on with a host of additional offshoring activities since Romney left day-to-day operations. Romney’s enormous wealth is partly derived from a golden handshake package he received when he left the management, which included a share of profits.
In 2006, for example, Bain created the Sensata enterprise, which manufactures sensors and controls for major U.S. automobile companies. Recently, Sensata Technologies has announced plans to close a U.S. plant and outsource 170 jobs to China. Even more astonishing is that Sensata’s U.S. employees are training their Chinese replacements, who have been flown to the U.S. plant by the firm’s management.
As a major investor in Sensata, Romney could gain from any outsourcing move that is likely to cut costs and increase the company’s profits. It is reported that Romney owns at least $7.8 million in eight Bain funds that collectively hold 51 percent of Sensata’s shares.
Even using the date most favorable the the Obama campaign’s claims, Mitt Romney left Bain in 2002. He is no longer involved in the management of that firm. And while it may be true that Romney “owns at least $7.8 million in eight Bain funds that collectively hold 51 percent of Sensata’s shares” that doesn’t tell you how much his total net share in the company is. Mr. Davidson also neglects to mention that Sensata is based in the Netherlands.
Now here is where the article gets really stupid as well as dishonest. Mr. Davidson has presented all of his “evidence” against Romney in the preceding quotes. This is how he proceeds:
What if China built a shoe factory in California that was operated in the same way that factories are run at home? Here’s what it would look like:
(1) Children under 14 would work with their elders more than 60 hours a week.
(2) There would be no occupational safety standards for workers.
(3) The wage would be much less than the U.S. minimum wage.
(4) Workers would not have social security or pension benefits.
(5) The factory would have free-rein to pollute the surrounding environment.
If such a company were built, then the laws of the U.S. would shut it down, thereby preventing the factory from selling any shoes in American markets. Nevertheless, under the banner of “more capitalism please,” Brooks argues that the Americans (especially managers of large corporations?) gain from having open access to cheaper goods from offshoring and outsourcing production to such grotesque factory conditions. He seems to forget entirely why the U.S. outlawed sweatshops and child labor, and introduced social security laws. Hint: it wasn’t to enrich predatory capitalists at the expense of ordinary Americans.
The plea for more Romney-style capitalism would have us abandon our civilized social beliefs in treating all American workers with dignity. If we permitted American entrepreneurs to produce under the same uncivilized and unhealthy factory conditions as those practiced in China, their factories might very well sell cheaper products. But Brooks “more capitalism” is really a rallying cry for more sweatshop jobs, more child labor and more impoverishing of American workers so that offshoring and outsourcing entrepreneurs can make more millions and keep their incomes in offshore banks and out of the hands of the U.S. Internal Revenue Service.
Do you see any facts in there that are connected to anything Mitt Romney has actually done? Let’s go back to that title:
How Mitt Romney Got Rich Destroying American Jobs and Promoting Sweatshop Capitalism
Has the author supported his thesis with facts and logic? Or is he just spreading lies?