A Businessman Should Not Be President
Published in El Mundo
(Spain) on 23 October 2012
by Pablo Pardo (link to original)
(Spain) on 23 October 2012
by Pablo Pardo (link to original)
Translated from
by Sara Hunter.
Edited by Kathleen Weinberger.
One of the things that Mitt Romney repeats endlessly is, because he comes from the private sector, he knows how to create jobs and how to balance budgets.
Both statements defy common sense.
Let's start with the second claim. Romney is a businessman from the private equity sector. Private equity means taking debt to buy a company, then using the company to guarantee the debt as collateral – simply speaking, a mortgage. Private equity funds are doing something that has not been done since the 1980s: taking still more debt, using this for the basis of companies, and distributing this money between the shareholders of the funds, like dividends.
Experience in private equity is about how to create and manage debt in a way that earns shareholders money. In the process, this means reducing payroll, selling units, and, if necessary, breaking up the company. This does not create many jobs.
Additionally, there is a second argument against the idea that businessmen make successful politicians. Politics and business are two different things. When you manage a company, you are looking for ways to benefit your shareholders. Companies are dictatorships. Decision-making is done by the boss or by the shareholder. Employees do not vote for the CEO – that is done by the shareholders. Where do things like pensions, unemployment, and museums fit into a company? How do you manage a country like a business?
Not to mention the idea of a country managed using the types of methods used by Bain Capital!
Let's say that Romney takes out enormous debt on the United States and continues to split it among voters, and later sells the eleven U.S. nuclear aircraft carriers that the U.S. has to pay off this debt. Incidentally, what Romney has said about the Navy, about the country falling to levels below those of 1917 is untrue: in the world there are 12 nuclear aircraft carriers: 11 belong to the U.S., and one belongs to … France. Moreover, the U.S. now has more warships than it did under George W. Bush.
Also among the assets liquidated are Yellowstone National Park and the Statue of Liberty.
One last thing: let’s look at the performances of the three businessmen who became president in the last century:
1) Herbert Hoover, the architect of the Great Depression.
2) Jimmy Carter, the architect of hyperinflation of the seventies.
3) George H. W. Bush, who had a minor recession.
There was also a president who had a Masters in Business Administration (MBA) but had a very bad record as an entrepreneur: George W. Bush, that is, the architect of the Great Recession, the greatest crisis in the U.S. since … the Great Depression.
Both statements defy common sense.
Let's start with the second claim. Romney is a businessman from the private equity sector. Private equity means taking debt to buy a company, then using the company to guarantee the debt as collateral – simply speaking, a mortgage. Private equity funds are doing something that has not been done since the 1980s: taking still more debt, using this for the basis of companies, and distributing this money between the shareholders of the funds, like dividends.
Experience in private equity is about how to create and manage debt in a way that earns shareholders money. In the process, this means reducing payroll, selling units, and, if necessary, breaking up the company. This does not create many jobs.
Additionally, there is a second argument against the idea that businessmen make successful politicians. Politics and business are two different things. When you manage a company, you are looking for ways to benefit your shareholders. Companies are dictatorships. Decision-making is done by the boss or by the shareholder. Employees do not vote for the CEO – that is done by the shareholders. Where do things like pensions, unemployment, and museums fit into a company? How do you manage a country like a business?
Not to mention the idea of a country managed using the types of methods used by Bain Capital!
Let's say that Romney takes out enormous debt on the United States and continues to split it among voters, and later sells the eleven U.S. nuclear aircraft carriers that the U.S. has to pay off this debt. Incidentally, what Romney has said about the Navy, about the country falling to levels below those of 1917 is untrue: in the world there are 12 nuclear aircraft carriers: 11 belong to the U.S., and one belongs to … France. Moreover, the U.S. now has more warships than it did under George W. Bush.
Also among the assets liquidated are Yellowstone National Park and the Statue of Liberty.
One last thing: let’s look at the performances of the three businessmen who became president in the last century:
1) Herbert Hoover, the architect of the Great Depression.
2) Jimmy Carter, the architect of hyperinflation of the seventies.
3) George H. W. Bush, who had a minor recession.
There was also a president who had a Masters in Business Administration (MBA) but had a very bad record as an entrepreneur: George W. Bush, that is, the architect of the Great Recession, the greatest crisis in the U.S. since … the Great Depression.