In 2012, for the first time in decades, issues of economic fairness were pivotal to a national election.
The Republican nominee for president, Willard “Mitt” Romney, had been CEO of a “venture capital” firm and faced harsh criticism for what the apologists for such firms describe as the “outsourcing” of American jobs. It was bruited about that Romney had engaged in “vulture capitalism.” Romney was described as one of those “rich people figuring out clever legal ways to loot a company.”
It is true that what Romney’s firm did was being done by many other “venture capital” firms for the past 30 years. What has changed is that Americans from almost every walk of life (except the richest 2 percent) have reached the limit of their tolerance for business practices (many of which would be unlawful in most western democracies) whereby firms borrow hundreds of millions of dollars to buy a company, saddle the company with the debt of the purchase price, then loot the cash reserves of the company (including the employees’ pension fund) to line their own pockets. Sometimes the swindle also includes selling off some of the physical assets of the company (manufacturing plants and machinery, real estate, etc.) and the “outsourcing” of jobs (exporting jobs to China), but not always.
Nearly always, however, those employees who are not laid-off are required to take pay cuts and, if they have any benefits, benefit cuts as well. These cuts almost never apply to the “top management” which usually gets salary increases and is awarded “golden parachutes” (a severance pay package in case the now-crippled company goes under) amounting to tens of millions of dollars and sometimes more.
Meanwhile, those employees of the affected company who are left may have difficulty making their mortgage payments and paying their bills, because frequently they are now paid less than a living wage.
As I pointed out, this has been going on for 30 years or more, but in 2012 the political atmosphere has changed drastically. Those remarks that I quoted at the beginning of this column about Romney’s “vulture capitalism” and ‘looting” were made by Republicans (Rick Perry and Newt Gingrich, respectively). Can anyone imagine a Republican making such remarks about the business practices of Wall Street in the 30 years previous to 2012?
It is just possible, maybe, that for the first time in decades the majority of the working class recognizes themselves as part of a class, and furthermore as a class whose interests and well-being are in constant danger from firms like Bain Capital. If that is the case, then this realization provides one of the essential preconditions for the reordering of priorities necessary for a national recovery
Paul Schwietering is a former Democratic state central committeeman for the 14th state senate distict.