Romney’s NEW OP-ED: What I Learned at Bain Capital

Mitt Romney at Bain

Romney Economics! Investing in Companies and Creating Jobs.

The original may be found on yesterday’s Wall Street Journal editorial page.

The back-to-school season is here, and as parents take their children to shop for school supplies, I suspect that many of them will be visiting a Staples store. I’m very familiar with those stores because Staples is one of many businesses we helped create and expand at Bain Capital, a firm that my colleagues and I built. The firm succeeded by growing and fixing companies.

The lessons I learned over my 15 years at Bain Capital were valuable in helping me turn around the 2002 Winter Olympics in Salt Lake City. They also helped me as governor of Massachusetts to turn a budget deficit into a surplus and reduce our unemployment rate to 4.7%. The lessons from that time would help me as president to fix our economy, create jobs and get things done in Washington.

A broad message emerges from my Bain Capital days: A good idea is not enough for a business to succeed. It requires a talented team, a good business plan and capital to execute it. That was true of companies we helped start, like Staples and the Bright Horizons child-care provider, and several of the struggling companies we helped turn around, like the Brookstone retailer and the contact-lens maker Wesley Jessen.

My presidency would make it easier for entrepreneurs and small businesses to get the investment dollars they need to grow, by reducing and simplifying taxes; replacing Obamacare with real health-care reform that contains costs and improves care; and by stemming the flood of new regulations that are tying small businesses in knots.

My business experience confirmed my belief in empowering people. For example, at Bain Capital we bought Accuride, a company that made truck rims and wheels, because we saw untapped potential there. We instituted performance bonuses for the management team, which had a dramatic impact. The managers made the plants more productive, and the company started growing, adding 300 jobs while Bain was involved. My faith in people, not government, is at the foundation of my plan to strengthen America’s middle class.

I also saw firsthand through these investments how energy costs impact the ability of a business to grow. Today, energy costs are weighing on job creators across America because President Obama has limited energy exploration and restricted development in ways that sap economic performance, curtail growth, and kill jobs. I will take a sensible approach to tapping our energy resources, which will both create jobs and make energy more affordable for every sector of our economy.

In the 1990s, when the “old-technology” steel industry in the U.S. was failing, Bain Capital helped build a new steel company, Steel Dynamics, which has grown into one of the largest steel producers in America today, holding its own against Chinese producers. The key to its success? State-of-the-art new technology.

Here are two lessons from the Steel Dynamics story: First, innovation is essential to the competitiveness of U.S. manufacturing. We are the most innovative, entrepreneurial nation in the world. To maintain that lead, we must give people the skills to succeed. My plan for a stronger middle class includes policies to give every family access to great schools and quality teachers, to improve access to higher education, and to attract and retain the best talent from around the world.

The second lesson is that we must have a level playing field in international trade. As president, I will challenge unfair trade practices that are harming American workers.

Running a business also brings lessons in tackling challenges. I was on the board of a medical diagnostic-laboratory company, Damon, when a competitor announced that it had settled with the government over a charge of fraudulent Medicare billing. I and fellow Damon outside board members joined together and immediately hired an independent law firm to examine Damon’s own practices.

The investigation revealed a need to make some changes, which we did. The company, along with several other clinical-laboratory companies, ended up being fined for billing practices. And a Damon manager who was responsible for the fraud went to jail. The experience taught me that when you see a problem, run toward it or it will only get worse.

That will be my approach to our federal budget problem. I am committed to capping federal spending below 20% of GDP and reducing nondefense discretionary spending by 5%. This will surely result in much wailing and gnashing of teeth in Washington. But a failure of leadership has created our debt crisis, and ducking responsibility will only cripple the economy and smother opportunity for our children and grandchildren.

I’m not sure Bain Capital could have grown or turned around some of the companies we invested in had we faced today’s anti-business environment. Andy Puzder, the chief executive of CKE Restaurants Inc., which employs about 21,000 people at Carl’s Jr. and Hardee’s restaurants, has said that the “current unfriendly economic environment perhaps best explains why American companies are sitting on over $2 trillion which they could invest.”

President Obama has piled on excessive regulations, proposed massive tax increases, added more than $5 trillion in federal debt, and failed to address the coming fiscal cliff—all of which is miring our nation in sluggish growth and high unemployment.

I know what it takes to turn around difficult situations. And I will put that experience to work, to get our economy back on track, create jobs, strengthen the middle class and lay the groundwork for America’s increased competitiveness in the world.

A few comments from Paul Johnson, if you’ll indulge, about why what Mitt says is so important:

1. Mitt’s succeeded before. We have some serious problems, but Mitt has displayed an unusual ability to solve difficult issues. From his tenure at Bain, to establishing and turning around other companies, to turning around the Olympics, Mitt Romney knows success and how to replicate it. We don’t have four more years to fix our economic and budget issues. As a foil to the last four years’ failures, we have a candidate in Mitt Romney that Jack Welch, legendary head of GE, called the most qualified candidate for president in his lifetime. We have no excuse not to fire our current president and hire someone who can tackle our problems. Remember this interview?

2. A good idea isn’t good enough. Just like having the government provide infrastructure isn’t good enough. It takes an entrepreneur to “build it.” Mitt will never forget that.

3. Through his experience Mitt knows what it takes for businesses to succeed. Mitt will be the true friend of the middle class, not by promising handouts, but by creating jobs and a chance to achieve something. Part of creating jobs is easing the regulatory burden on business by repealing, among other things, Obamacare, its trillions in unfunded obligations, hidden taxes and freedom-limiting mandates, while replacing it with a real solution that cuts costs. Creating a business-friendly environment would free up the trillions Mitt describes in his article. Simply allowing US companies to re-patriate foreign earnings without taxing them could also result in the infusion of a trillion dollars into our economy without costing the US taxpayers a dime. Both are priorities for Mitt.

4. Mitt makes clear his faith is in the ingenuity of the American people to pull us out of this economic mess, not the government.

5. He focuses on the importance of energy independence to create jobs and liberate the US from its addiction to foreign oil. See Jayde’s article immediately preceding this.

6. He points out how critical innovation is to our economy. We are now competing in a worldwide marketplace for jobs, and labor is just plain cheaper overseas. But Mitt knows we don’t want to be the world’s low cost labor supplier. The key to American success is to offer something no one else can: innovation, invention and improvement. And when we invent something spectacular, we have to protect it by making sure other nations can’t steal it. Failure to do so hurts American jobs. Taxing those that are successful hurts American jobs.

7. When Mitt sees a problem, he runs toward it, not away from it. Our government has been running from the big problems of the budget deficit and the looming “fiscal cliff” for so long they now seriously threaten our economy. Through his pick of Paul Ryan as his running mate, Mitt has shown commitment to honest debate and real change. Mitt’s taking the problems with the budget deficit, the economy and Medicare head-on.

8. Finally, Mitt points out Obama’s failure. He’s had nearly four years, but his promises of below 8% unemployment, halving the deficit and creating a “post partisan” political world remain unfulfilled. Instead, his campaign has been full of partisan rancor in an effort to avoid a discussion of Mitt’s accomplishments and Obama’s failures. I’m sure Obama is frustrated he didn’t accomplish what he wanted in his first term. But it’s the mark of a leader to get things done, not to complain about the size of the problem. Obama has failed. It’s critical we now go with the man who’s the most qualified candidate in our lifetime. Mitt Romney.

Paul Johnson

Paul Johnson is an attorney for venture capitalists and their portfolio companies by day, husband and father of three teenage boys by night. He’s an avid supporter of Mitt Romney for president and, as a graduate of Brigham Young University, a BYU football and basketball fan. Paul also enjoys competing in triathlons. Because he’s in the “Clydesdale” (over 200 lb.) class, he has even had podium finishes from time to time. Paul also has the distinction of being a big enough U2 fan to be willing to travel to Dublin to see them in their native environment.

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About Paul Johnson

Paul Johnson is an attorney for venture capitalists and their portfolio companies by day, husband and father of three teenage boys by night. He's an avid supporter of Mitt Romney for president and, as a graduate of Brigham Young University, a BYU football and basketball fan. Paul also enjoys competing in triathlons. Because he's in the "Clydesdale" (over 200 lb.) class, he has even had podium finishes from time to time. Paul also has the distinction of being a big enough U2 fan to be willing to travel to Dublin to see them in their native environment.
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9 Responses to Romney’s NEW OP-ED: What I Learned at Bain Capital

  1. AfricansforRomney says:

    I TRUST Gov Romney a proven successful business leader 100xs over Prez Obama. Obama has no vision for the future America. No plan whatsoever except blaming, talking craps, accusation. We can’t afford another 4 years of Obama Juvenile presidency. Obama never prepared to be a Prez handling the biggest economy in the world.

    It is depressing out there, the CBO project report, recession… the choice is simple. We need an adult Prez Romney to look into the issues that we’re facing.

    Gov Romney=Trustworthy!=a proven Leader!

  2. Michael Singley says:

    Dear Mr. Romney, Yesterday on Fox I heard a story by a guest speaking with Bill Hemmer. About Illegals getting unearned income. They get a tax ID without a SSC and then apply for unearned income to the IRS. They are then paid hard earned american tax dollars. One instance, an illegal claimed 20 children living with him and 3 other adults. They collected $30,000 of our tax dollars! Harry Reid stopped a bill in the house that would have ended this , he stated that the bill was no longer needed because this was no longer happening…he lied to the house and the people, it is going on. I believe that is how they are buying illegal votes! Please, dig into this…!!! Mr. Ryan should know the Rep. on the finance com. who tried to stop this. The people are not aware of this!

  3. Raye says:

    Thomas Kim, when will you and your ilk tire of spouting the same old rhetoric? I’m sorry, but anyone who uses the Huffington Post and Washington Post as credible sources automatically loses the argument as far as I am concerned.

    Thank you for sharing this article, Paul. I think Mitt has proven time and time again that he is quite capable of being an effective leader. If people can give a community organizer a chance, then why not Mitt, whose experiences, by far, surpasses Obama?

  4. Jon E. S. says:

    Mr Kim, you are starting to sound a little desperate! Afraid your “savior” is going to lose the white house in a few months from now? Yeah, so is Obama and his bunch of corrupt cronies. You’re wasting your time here buddy. Go look elsewhere for someone dumb enough to believe in Obamaloney’s hope and change. It’s time for real change!!

  5. Hispana says:

    Making comments using liberal outlets and sources proven to be false does not give you much in credibility. You have not passed the smell taste at all. So, time for you to go back to your liberal sources where the uninformed, unintelligent prevail. You have been CAUGHT IN THE ACT here very quickly because we know how to consider Trash. Go back to your buddies and those that continue to ignore what is right in front of their faces: Obama has nothing credible about him.

  6. Susan says:

    As a small business owner myself, my views about government and business have changed a lot over the past several years. I assumed that local/state and federal agencies would help me with my business growth, but I was wrong. Just to get a business going to day is daunting due to regulations, assessments, taxing, permits, etc. It is extremely costly and is the primary reason so many businesses fail. Romney is right that it takes a lot more than just a good idea. It takes deep pockets and the ability to be very flexible with the business model. Our initial plan turned out to be flawed and we had to pivot quickly which we did. We have had to pivot many times to react to market conditions.

    Most people do not have any understanding of what excessive regulations are doing to job creation. There was a time that a stay at home mom could bake cookies from her house and make a nice profit that added to the family income. No longer. She would need to build a commercial kitchen, or find a commercial kitchen which ups the start-up costs which often is just a hurdle to big. Over the past couple years there have been big changes to code requirements within a commercial kitchen requiring more hood venting that is extremely expensive. It is why eggs and toast no longer can be had for under 3.00. I could write pages about all the additional costs for any restaurant today.

    Romney is right that energy costs are hurting businesses. As prices rise suppliers bill us a surcharge for this extra expense for them to do business. Those in the plastic industry see resin prices skyrocket as oil increase since oil is use making plastic.

    Romney is right that the US is often not competitive because companies here in the US are having to absorb rising healthcare costs which has been on-going for over a decade. The decision to hire means that company believes that the salary and benefit can be paid for through increased sales. So that new hire must pay for themselves or not get added. While it is vogue today to bash profits, it is what makes the world go around. Government can add jobs ONLY if the private sector is healthy since it is the private sector paying for those government jobs. There needs to be a balance there otherwise we risk becoming Greece.

    I would like to see enthusiasm from our youth to want to create their own jobs by becoming job creators. I regret terribly not having embraced that spirit a long time ago. I just never knew it was an option. Take your dream and make it happen and don’t look to others to support you. Most especially don’t look at the government to do the heavy lifting, because as debt mounts as we are seeing across the globe, promises made to those dependent on the government are being slashed just to keep a government operating.

  7. Cathy says:

    Thomas Kim, I don’t know if I’d waste my time and energy on this site. I think you’ve been brain washed in the laundromat of liberal thought. If you wish to air your dirty laundry here, be prepared to be “bleached”…

    Romney and Ryan will do some housecleaning soon and hang Obama out to dry!

    R + R in 2012

  8. Annette S says:

    Susan…great post. You know from experience. I am involved with 2 small businesses and I know what Romney’s vision of a business friendly environment could do for our country.

    But amazingly Obama along with his allies and supporters see businesses as greedy and hoarding their money. They don’t understand that uncertainty keeps businesses from hiring and investing. They believe in a president who believes in anti-colonialism and social darwinism. They believe that free enterprise is like a parasite feeding on on the wonderful things the government has done for the common good.

    Currently polls show that Americans trust Romney over Obama concerning the deficit and the economy. But they trust Obama over Romney concerning Medicare, taxes and Healthcare which is hard to understand since these issues are part of the economy.

    How is it that they trust a president that has taken $716 billion from Medicare to finance Obamacare. $716 billion that finances the portion of Obamacare that has nothing to do with seniors. Seniors have paid into FICA all their lives and now Obama has defunded Medicare dollars for hospitals, doctors and insurance providers. Seniors will find it difficult to find doctors who will see them because doctors and hospitals simply won’t have the funds. On top of this, seniors are left with a panel that will make further cuts….rationing is what it boils down to.

    Meanwhile Obama is misleading his supporters who trust him. Obama is telling them the following:

    “FACT: President Obama’s health care law strengthens Medicare benefits while cutting waste and insurance company subsidies.”

    Obama’s supporters who hate insurance companies anyway and believe they have too much money think Obama has done a good thing. They see the cutting of waste and insurance subsidies as cost control. Obama, they believe, is cutting money that the greedy insurance companies don’t need and that it does not affect the beneficiary. But Obama knows exactly what is going on. He is hiding what he is doing and misleading his supporters.

    Romney I believe will hit Obama hard with ads that reveal the real Obama. He has more cash then Obama and knows where to take a punch and how hard. The coming debates will also be important. Romney will hammer Obama on this issue and other important issues revealing the true Obama.

    Carter was 9 points ahead of Reagan before the debates. But after the debates the country turned to Reagan. I believe the same will happen for Romney, because he is a pragmatist with integrity and the truth is on his side.


  9. Annette S says:

    Thomas Kim….

    If Obama is such a great president…..why are the Republicans registering more voters than the Democrats??