It’s not actually YOUR job

Hot Air:

Way harsh new pro-Obama PAC criticism: Romney doesn’t know how to make steel, he knows how to make money

Once again, Priorities: What, exactly, is your point supposed to be? In the same vein as the ‘Mitt Romney more or less killed a woman’ ad, they aren’t advancing any actual policies, just denigrating Mitt Romney on the basis of… well, as Allahpundit has pointed out, it seems like they’re just against layoffs on principle. Apparently, closing down unprofitable factories is the height of immorality rather than, you know, an engine for economic growth or whatever.

Believe it or not, though, there’s actually a pretty good reason that steelworkers make steel, and businessmen manage businesses. It’s because everybody wants to make money, and people set out to perform the specialized jobs at which they are skilled. All jobs and businesses have a shelf life, whether they be buggy-whip makers or automobile manufacturers, and part of the task of people who pursue careers like Mitt Romney’s is to be good at determining what that shelf life is. And yes, it can cause individuals real material pain in the short term, but everybody is better off in the long term.

There’s an old joke by Steven Wright – “I lost my job. Well, I really didn’t lose it. I still know where it is. But when I go there somebody else is doing it.

The English language is slippery. It uses possessive adjectives that are misleading. When you say “It’s my job” it’s not actually YOUR job. You don’t own it. What you actually have is a contract to exchange your effort, skill and industry for money. And unless you have a written employment contract the terms of that agreement are determined by common law and/or government laws and regulations.

But even a written employment contract does not give any possessory rights to the job, it merely requires your employer to pay you damages if they breach the agreement. Conversely, thanks to the 13th Amendment, you cannot be forced to work under an employment contract, you can only be held liable for damages if you refuse to honor the agreement.

This brings us to Obama’s “You didn’t build that” speech. The textbook definition of socialism is “Government ownership of the means of production.” Capitalism, on the other hand, is “based on private ownership of the means of production and the creation of goods or services for profit.”

Ownership and control are not synonymous but they often go together in practice. Capitalism is founded on the idea of each individual exercising ownership and control of their personal resources, including their property and labor.

What we practice is not unfettered “laissez-faire” capitalism. One of the things you learn in law school is that no rights are absolute. Your freedom of speech does not cover obscenity, your freedom of religion does not permit you to practice cannibalism and your right to keep and bear arms doesn’t allow you to own a nuclear missile. The real issue is how much the government should be allowed to infringe on your freedom to practice capitalism.

If you build a better mousetrap the world will beat a path to your door, but you’ll also put the old mousetrap makers out of business. Should the government intervene to stop you? Should they subsidize the old mousetrap makers to keep them afloat? Or should they do nothing?

The correct answer is none of the above. Some businesses will succeed. Some will fail. Others will muddle along. Government should let the market work and not try to pick winners and losers. But it should provide a safety net for dislocated workers, including unemployment, health benefits, and retraining assistance.

When I was in college I worked for a major big-box retailer. I hated my job but I didn’t want to lose it. So I was somewhat nervous when they announced they would be closing some stores. I was relieved when they announced that my store was not on the cut list.

The anti-Romney ad above pulls at our heartstrings. Nobody wants to see people laid off and factories closed. The steel industry flourished in this country for over a century after Henry Bessemer figured out a cheap way to mass-produce the stuff. But domestic manufacturing declined, and cheap imports from Asia began to flood the market.


In 1993, Bain acquired the Armco Worldwide Grinding System steel plant in Kansas City, Missouri and merged it with its steel plant in Georgetown, South Carolina to form GST Steel. The Kansas City plant had a strike in 1997 and Bain closed the plant in 2001 laying off 750 workers when it went into bankruptcy.

The company that would become GST Steel was founded in 1888. It reached its peak in 1945 with 4,500 employees. By the time Bain got involved it employed fewer than 1000 workers. The former owners decided in 1994 to try to sell the steel mill, otherwise they were going to close it down.

Bain stepped in and bought the steel mill and then invested millions of dollars in upgrades. They kept the steel mill open for eight more years. The steel workers got paychecks for eight more years. Then, in 2001, Bain decided to close the steel mill and declare bankruptcy. Do you really think they would have closed it if it was still profitable?

As for why they closed:

In April 1997, the company faced its first labor strike in 40 years. The walkout stretched over 10 weeks, becoming bitter, divisive and sometimes violent. Then prices for electricity and natural gas skyrocketed. A power bill in September 1998 was more than double what it had been in 1997, a costly increase because the plant depended so heavily on electrical equipment.

Meanwhile, a flood of cheap steel imports drove down prices in the late ‘90s, the company reported. In 1998, it worked with other steel companies and United Steelworkers of America to petition the government for limits on wire rod imports.

Nearly half the steel mills in the United States closed around the same time as GST Steel. It’s easy in hindsight to second-guess some of the decisions made by Bain executives, but there is no evidence that they acted in bad faith. They made money at first but now they were losing money. Maybe things would have turned around if they had hung on a few years longer. Or maybe not. The Bain executives made a decision to cut their losses.

BTW – I have to wonder how many of the steel workers would have stayed loyal to GST Steel if a competitor had offered them a better deal?

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47 Responses to It’s not actually YOUR job

  1. myiq2xu says:

    I started this post yesterday before the Ryan announcement. It was originally going to be today’s am post.

    • It’s a good post, whenever it made it to the page. Practical and knowledgeable. Love it.

    • angienc says:

      Yes, it’s an excellent post. And I needed a break from the Ryanmania/Ryandemagoguery anyway.

      Seriously, Ryan comes out and says the exact same stuff Romney has been saying for months about this being a “choice” about what kind of country we want and people on the Left & Right are acting like Ryan said it first. FFS, not a one of them have been paying the least bit of attention other than to nit-pick Romney. At least Romney was smart enough to know he needed his VP pick to be someone who would wake them the fuck up and *force* them to pay attention to the message. Mission accomplished.

  2. angienc says:

    Best line in that ad, IMO, is:

    Mitt Romney doesn’t know how to make steel. He only knows how to make money.

    And Dear Leader doesn’t know how to make steel OR money, he only knows how to steal OUR money.

    Really, it’s like Priorities USA is working against Obama.

  3. DM says:

    I think those ads are to energize the obots.

  4. myiq2xu says:

    Ed Driscoll:

    “Has there ever been a campaign that went, literally overnight, from being about nothing to leaping neck-deep into the most treacherous, dangerous issue in American politics?” That’s the question posited by Allahpundit at Hot Air:

    I would have voted for Ryan for president if he had run so, as you might expect, I like the pick. To me, it’s a “clear conscience” selection: We’re going to own our agenda, let our very best salesman make the pitch on the biggest possible stage, and have the country decide. If they want to send The One back for a second term knowing that the consequences are a near-term fiscal meltdown, hey, that’s democracy. At least, for once, they’ll have made a fully informed choice on this issue; if the electorate prefers the $15 Trillion-Dollar Man’s “vision” on how to solve this existential problem to Paul Ryan’s, I prefer to have a clear statement at the polls to that effect.

    Wouldn’t it be nice if elections were all about policy instead of personalities?

    • DandyTiger says:

      Yeah they….. hey look, squirrel!!

    • angienc says:

      Perfect example of what I was talking about above re: people haven’t been paying attention at all to what Romney has been saying they only thing they’ve been paying attention to is the Obama smears & nit-picking Romney to death over bullshit because they all fall into 2 categories — Obots or ABRs — and have been predisposed to dislike Romney no matter what. How the hell else can someone write the campaign has been “about nothing?” See, it is Ryan, saying exactly what Romney has been saying for the last 3 months, that “transformed” things. #headdesk

      That’s the new meme, though, and they’ll stick to it no matter what the reality actually is — just like they are sticking with the meme that Obama ran a “nearly flawless campaign in 2008” despite all evidence to the contrary then and now.

      Nonetheless, as I wrote above, Romney was smart enough to see what was going on — on the Left & the Right — and knew to make his VP someone who would wake them all the fuck up. And you know what? Unlike the narcissist in chief, Romney’s the kind of guy who doesn’t mind letting Ryan get the “credit” for it, either.

      • I couldn’t agree more, but it doesn’t bother me as much. This is what Romney does. He’s a real mastermind, and unlike the Narcissist-in-Chief, he doesn’t feel need for any of the credit in the moment, really. He knows that’s coming if he successfully lays down the proper groundwork. He’s got real long-term vision that way.

        One of the reasons I respect him, and kind of how I run my blog/writing, which is why it’s all free all the time. I don’t mind working my a** off for ideas and product that make it into the mainstream. Ultimately, people will put it together what I’m worth.

        • angienc says:

          Just to be clear — it doesn’t bother me that Romney doesn’t get the credit — I agree, he just wants the job done & knows how to get it done; he doesn’t need to the “credit” (unlike Obama). What bothers me is the idiots in the chattering class just buying whatever meme is catches on despite the *reality.* Bunch of morons who talk & talk to show how “smart” they are when they don’t know their ass from a hole in the ground.

  5. myiq2xu says:

    It’s funny how fair pay is calculated.

    Should it be calculated based on how much you make compared to other workers with comparable skill sets? Or how much you make compared to your boss?

    If Dandy Tiger designs some software and sells it to Bill Gates for $1,000,000 and Gates makes $500,000,000 off of it, was Dandy Tiger ripped off?

  6. HELENK says:

    When I first went to work for the railroad, Bethlehem Steel was one of Conrail’s best companies. They are no longer in business. Japanese steel companies found a way to make steel cheaper the any company in America. The fact that there was an investment to modernize the company from Bain was unusual . Those guys were very lucky to get eight more years of work

    • angienc says:

      Yep. And Bethlehem Steel folded around the same time GST did — for the same reasons (cheap imports). Maybe Romney was to blame for Bethlehem Steel too — an evil plot to bankrupt the US steel industry, similar to Obama’s desire to bankrupt the US coal industry.

  7. New trend on Twitter.!/search/%23BidenDebateLines

    Conservatives are nothing today, if not imaginative. I like their new streak. It’s definitely not grandpa’s GOP anymore.

  8. WTF thumbed this down? FFS.

    • angienc says:

      Myiq hit a nerve — how dare he suggest someone isn’t owed a job for life?!?!?!?!
      Take it as a compliment.

      • myiq2xu says:

        I would welcome a cogent rebuttal.

        • angienc says:

          See, that’s your problem right there — they can’t give a cogent rebuttal.
          Screaming “racist” is as much of a rebuttal as you can expect from them.

        • myiq2xu says:

          I’m serious. I would like someone to lay out a legal/political argument explaining why a business owner owes his/her employees a job.

        • DandyTiger says:

          You’re wrong because shut up that’s why.

        • WMCB says:

          I’d like that cogent argument as well, myiq. And if they manage to make one, then I’d also like an explanation of how that is gonna work out long term, without making us an economically stagnant and declining nation, carefully protecting our increasingly irrelevant jobs, funded by……. moonbeams?

          If no buggy whip factory had EVER been allowed to go out of business and fire people, where would we be today? Would we have progressed technologically and economically?

          The problem that I see with so much of what passes for leftist thought these days is that most of it is wishful thinking. Just pass a law saying everyone must be happy and fed and never lose a job, and it will be so. I wish that were true. God, I’d love for it to be true. But it’s not. It’s just NOT. The real world doesn’t work that way.

          It is the function of individuals, and the businesses they create, to come up with the next big idea, the new way to make and do and create and sell that no one forsaw, but that changes the game completely. Govt SUCKS at that. You will notice that the industries that take off and grow are often the ones that govt has not caught up to regulating and hampering and milking for favors yet. I firmly believe that tech and internet took off like a rocket largely because govt did not yet have mechanisms in place to interfere with them, so they were largely left the fuck alone to dream and create.

          Want govt programs? Want a social safery net? Then you ought to LOVE largely and reasonably unfettered capitalism, because that is the ONLY engine powerful enough to produce the revenues you are going to need. And that involves allowing creative destruction, and moving on to the new and better, not propping up dinosaur industries.

          • myiq2xu says:

            Another problem is that if you give government the power to pick winners and losers they end up trying to prop up fading industries and suppress emerging ones.

            Also there is the example of ethanol subsidies. We’re going to end up paying more for corn and corn-fed products to guarantee fuel that is less efficient and more expensive.

        • DandyTiger says:

          And on ethanol, we also get to watch the rain forests in the amazon all burned down so others can grow food for us while we are busy growing corn for fuel. Real green thinking there.

        • WMCB says:

          This is what makes me crazy about the prevalent anti-capitalist bent of today’s D party. There’s NO FUCKING WAY you are going to fund all the things you want to do unless there are a LOT of people making gobs of money hand over fist. And yeah, there are going to be a few who get filthy (and maybe even undeservedly) rich along the way. I could give a shit, if that’s the trade for a booming economy, jobs, and tons of taxpayers. 5 million people paying $1000 is MORE REVENUE than 500 people paying a million. Ten times as much, in fact. But the left seems more intent on squeezing more out of an ever shrinking “rich” tax base than in making a bigger tax base. Sure, cut out the loopholes that let a small handful of billionaires pay zero. I’m all for fairness and a progressive structure. But damn, you talk to some of these people and they really would rather, as Thatcher said, be content if everyone were poorer, so long as the “evil rich” were poorer still. They would rather everyone make $10,000, and the rich $50,000, than have evryone make $50,000 and the rich make 2 million. It has zippo to do with sound fiscal policy and tax revenues, and everything to do with a sense of visceral and emotional gratification. It’s fucking insane.

        • myiq2xu says:

          Let’s not forget that those loopholes were put in there to encourage certain activities/investments.

          IOW – social engineering via the tax codes.

        • myiq2xu says:

          BTW – The other day someone asked what the difference was between a loophole and a deduction. My answer:

          “If you take it then it’s a deduction. If someone else uses it then it’s a loophole.”

        • WMCB says:

          We desperately need a simplified tax code. And yes, that may mean giving up some “loopholes” that I and my family personally use. But it needs to be done. It is too easy to corrupt a system where the tax code lends itself to favor-dispensing.

  9. angienc says:

    OT (yes, back to Ryanmania) — I like this guy’s take (although I disagree that the end that the Ryan pick makes a Romney win “harder” — forcing the focus to be on the economy is good for Romney. Plus, he wouldn’t have done it if he thought it *truly* hurt his chances). I am especially hoping this part is true (and I think it fits Romney — he’s a hell of a lot smarter than people on both sides are giving him credit for — you don’t get to live on the $20 million a year from your investments that you MADE, not inheritance, in private equity being an idiot):

    2) Ryan will help Romney govern. If the Republican ticket triumphs in November, having Ryan on-side will help Romney, a non-Washingtonian, navigate the complexities of Capitol Hill. But here it’s important to keep in mind that Ryan is an ideologue and a Beltway wheeler-dealer, attuned to both the possibilities for bipartisanship (recall that his latest Medicare proposal is co-sponsored with a Senate Democrat) and the need to sometimes swallow hard and take one for the team (hence those Bush-era votes for TARP and Medicare Part D). Thus if Romney wants to push an aggressive agenda in his first hundred days or year in office, Ryan will be a natural point person — but if the Romney White House then needs to compromise well short of conservative objectives, Ryan will be capable of negotiating the deal and ready and willing to sell it to a reluctant base. What’s more, having Ryan as a loyal administration foot soldier (whose own presidential ambitions are bound up in Romney’s success) will prevent the Wisconsin congressman from setting up a rival center of power within the party, or becoming a locus of conservative dissent. Some conservatives may think that the Ryan choice brought Romney permanently on-side for their ambitions. But it’s also possible that the choice will ultimately be remembered as the moment when Romney co-opted conservatives instead.

    Full article here:

    • I’ve no problem with Romney “co-opting conservatives.” The way I’m looking at this is, if Romney wins, the Nixon GOP is dead. Finally. And thank gawd.

  10. tommy says:

    All the progs have got onto the mediscaring bandwagon.

  11. OT:

    FYI, myiq, I’m featuring this article as the “Morning taste” on Romney Democrats tomorrow. Billing it as best GST Steel ad rebuttal around.

  12. DM says:

    I found this:
    Three Big Reasons Why Paul Ryan Could Help Mitt Romney Steal Wisconsin

    A Public Policy Polling survey conducted in July showed that, of all the Republican vice presidential contenders, Ryan had the most effect on the presidential race in his home state. Although Obama led Wisconsin by 6 points in a head-to-head matchup with Romney, the poll showed that the vote swung by five points in favor of Republicans when Ryan was added to the ticket. 

    more at link

    Romney/Ryan ticket does better with the Catholics and younger voters in WI.

  13. yttik says:

    “..your freedom of religion does not permit you to practice cannibalism…”

    Well crap, that’s going to throw a wrench in things.

  14. lorac says:

    myiq, this is a most excellent essay!

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