Paul Krugman: Bain, Barack and Jobs

Romney's claims about job creation are nonsense:

Bain, Barack and Jobs, by Paul Krugman, Commentary, NY Times: ...Mr. Romney claims that Mr. Obama has been a job destroyer, while he was a job-creating businessman. For example, he told Fox News: ?This is a president who lost ... two million jobs...? He went on to declare, of his time at the private equity firm Bain Capital, ?I?m very happy in my former life; we helped create over 100,000 new jobs.?

But his claims about the Obama record border on dishonesty, and his claims about his own record are well across that border. Start with the Obama record. It?s true that 1.9 million fewer Americans have jobs now than when Mr. Obama took office. But the president inherited an economy in free fall... So how much of that Obama job loss took place in, say, the first half of 2009?

The answer is: more than all of it. The economy lost 3.1 million jobs between January 2009 and June 2009 and has since gained 1.2 million jobs. ... So Mr. Romney?s claims about the Obama job record ... are deeply misleading. Still, the real fun comes when we look at what Mr. Romney says about himself. Where does that claim of creating 100,000 jobs come from?

Well, Glenn Kessler of The Washington Post got an answer from the Romney campaign. It?s the sum of job gains at three companies that Mr. Romney ?helped to start or grow?: Staples, The Sports Authority and Domino?s.

Mr. Kessler immediately pointed out two problems with this tally. It?s ?based on current employment figures, not the period when Romney worked at Bain,? and it ?does not include job losses from other companies with which Bain Capital was involved.? ... Hey, if pluses count but minuses don?t, everyone who spends a day playing the slot machines comes out way ahead! ...

Mr. Romney?s claims about being a job creator would be nonsense even if he were being honest about the numbers, which he isn?t.

At this point, some readers may ask whether it isn?t equally wrong to say that Mr. Romney destroyed jobs. Yes... The real complaint about Mr. Romney and his colleagues isn?t that they destroyed jobs, but that they destroyed good jobs.

When the dust settled after the companies that Bain restructured were downsized ? or, as happened all too often, went bankrupt ? total U.S. employment was probably about the same... But the jobs that were lost paid more and had better benefits than the jobs that replaced them. Mr. Romney and those like him didn?t destroy jobs, but they did enrich themselves while helping to destroy the American middle class.

And that reality is, of course, what all the blather and misdirection about job-creating businessmen and job-destroying Democrats is meant to obscure.

Posted by Mark Thoma on Friday, January 6, 2012 at 12:33 AM in Economics, Politics, Unemployment

Source: http://feedproxy.google.com/~r/EconomistsView/~3/lVwN-LRJTEs/paul-krugman-bain-barack-and-jobs.html

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