One mark of a skilled pundit is the ability to take the day's news and mold it to shape his or her own pre-existing interests, beliefs, prejudices, and hobbyhorses. In that spirit, let me offer my thoughts on an interesting article today in The Washington Post, revealing that while Mitt Romney was the head of Bain Capital, the firm invested in companies that specialized in outsourcing jobs overseas. What does this tell us about a potential Romney presidency? Let's look at the facts first, keeping in mind that Romney was at Bain until 1999:
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...
The corporate merger that created Stream also gave birth to another, related business known as Modus Media Inc., which specialized in helping companies outsource their manufacturing. Modus Media was a subsidiary of Stream that became an independent company in early 1998. Bain was the largest shareholder, SEC filings show.
So does this mean Mitt Romney is morally tainted in some way he wasn't before? No. You could only conclude that if you previously believed that Romney's tenure at Bain was an endless march of virtuous action, an almost charitable endeavor devoted only to "creating jobs" and making America the best country on earth. That's pretty much the way Mitt Romney would like us all to think of it, but of course it's not true. While he was at Bain, Romney was trying to make money, and that's all. Did he do so in grossly unethical ways? I'd say no, even if some of the decisions he made might have been, shall we say, unsentimental. But that's what we expect from business. The fact that participation in the burgeoning outsourcing industry was one of the ways he made money in the 1990s isn't too surprising.
To get back to the note on which I began this post, this is yet another reminder of something I've been shouting for years, that there is almost nothing about success in business that prepares one to be successful in politics and governing. Every election there are candidates who run for office at all levels saying "I'm not a politician, I'm a businessman," as though that were proof they'd be good at the thing they have no experience in. As Ben Adler reminds us, the list of business leaders who successfully applied their private sector experience to government consists of basically one name, Michael Bloomberg.
Learning more about Mitt Romney's business career probably shouldn't convince us he's a bad person. I don't think that this new information shows he'll try to ship American jobs overseas if he's president. The challenges he'll face, the incentives he'll have, and the goals he'll be seeking will all be very different. Which is exactly the point.
