Monday, August 20, 2012

Romney - Job Creator?

Companies create jobs; Not the government
[HINT: Romney has built hundreds of companies]

[Disclaimer:  For this post, we draw on published facts.  We also draw on our lectures for a 6-credit hour course we taught at the University of Maryland University College in International Management.]

So, is Bain Capital a villain -- or hero?

Who created more jobs:  Obama, or Romney?
Sorry, Romney gets the Gold Medal; Obama gets a kick in the pants!

Bain Capital created companies which generated tens of millions of jobs directly and indirectly.
Obama spent nearly a TRILLION dollars to create Three Million -- at a cost of $275,000 each.
He also spent the same amount in loans and subsidies to Green companies which hired, then laid off thousands of workers -- who had produced no salable products.  Each of these workers thus cost the American taxpayers millions of dollars.

Millions of jobs created at home and abroad by Bain Capital 
Mr Obama accuses Mr Romney and Bain Capital of shutting down US companies, or worse, shipping US jobs overseas.

The reality is the opposite.  Bain Capital funded the formation and growth of hundreds of companies, creating jobs both in the US AND internationally.

To clarify the contribution to US employment Bain Capital has made, we've taken the liberty of listing a few of the many companies created or enhanced through Bain's investment; notably, these companies created millions of jobs directly and indirectly in the US and internationally.

Friends of Obama

Not one of the Bain-funded companies was created using federal subsidies or loans; all were created or enhanced through venture capital investment -- at risk -- by Bain capital.  Not all the companies Bain Capital invested in were successful, and some went belly-up, and workers lost their jobs; then again, without Bain's investment, they likely would have failed sooner, and the workers would have been unemployed earlier.

The companies listed below are only a few, but are representative of the companies created with Bain Capital investments; the employees are direct hires, and so don't count the millions of employees hired in the supply chain -- all those companies which provide products and services to these companies:

Nearly 400,000 New Jobs

Burger King:           34,000 employees,   12,400 shops
Domino's Pizza:   145,000 employees,     9,700 shops
Dunkin' Donuts:  200,000 employees,  10,000 shops

500 Theaters + the Movie Industry

AMC:                                        21,000 employees,  5,000 theaters
Guitar Center:                        10,000 employees,     228 stores
Sealy:                                         4,800 employees
Burlington Coat Factory:       28,000 employees,     360 stores

Plus seasonal hires

Sports Authority:  51,000 employees,    450 stores
Staples:                   90,000 employees, 2,000 stores
Toys "R" Us:          70,000 employees,    600 stores

Doctors, Nurses, support staff,
medicines, medical equipment, etc.

Hospital Corporation of America (HCA):

180,000 employees,
273 hospitals/centers

Let's take a look at the Supply Chain employment resulting from these companies:

For example:
Burger King, Domino's Pizza, Dunkin Donuts
all need the components for their food products; here's a sampling of the suppliers involved --all with their own tax-paying employees:

1) Farmers and ranchers grow/provide beef, chicken, dairy products, and vegetables
2) Bakeries provide the dough for buns, pizza, and pies; to serve the cooked/baked products
3) Specialty companies supply plastic trays/cups/glasses/ice cream holders, spoons/forks/knives;
4) Paper companies supply plates, bags, napkins, place settings.
5) Specialty suppliers provide spices, flavorings, cooking oils, salt and pepper and sugar.

Warehousing & Transport

And, think of how many secondary suppliers support each of these primary suppliers.

Finally, think of the supply process in which these products are warehoused, after which thousands of trucks, trains, and planes transport these goods to these company outlets. And, think about how many of these truckloads of these products are used by each of these companies, at each location, seven days a week.

We're almost finished -- other spin-offs.
Think in terms of how these millions of employees spend their wages:

Consumption -- Not Conspicuous
Gasoline/bus/subway fares
Rents/Mortgages -- apartments/condos/houses
Groceries/snacks/coffee/bottled water
School tuition/housing/

Last but not least, every one of these companies and employees pays taxes -- to the city, the county, the state, and to the federal government.

Now, let's take a look at the type of employment Obama created:

No Jobs, No Tax Revenue
It cost taxpayers $500 Million -- 1,100 workers their jobs
Government funded/guaranteed Green companies like Solyndra:

A few executives who pocketed tens of billions of dollars and parked the cash in off-shore accounts

The employees hired went on unemployment benefits when these companies collapsed; they stopped all but the most critical consumption -- and paid no taxes.
Cost taxpayers $275,000 per worker

The American Recovery and Reinvestment Act spent $825 BILLION to employ approximately three (3) million workers in shovel-ready jobs, supposedly to maintain the infrastructure.  When those funds run out, these workers will be unemployed again.

That works out to expenditures of $275.000 per employee; had Obama simply written a check for $200,000 to these employees, they'd have gone on consumption spending sprees and boosted the sales of retail stores throughout the country, causing them to hire more employees and boost their suppliers.

And, the government could have used the unspent $225 BILLION to pay down the government debt!

Reduced Market Share = Fewer Jobs

Or, the hundreds of billions of dollars that went to keep GM and Chrysler afloat, to keep the unions from losing their membership; in essence, had these companies folded, other companies would have moved in and purchased their assets, and hired the non-union workers actually interested in working.

Currently, the United Auto Workers Union has replaced corporate management as part of Obama's program -- sort of like selecting the inmates to run the asylum.  Or more like the old Communist run car companies of Eastern Europe like the Yugo [a low point in the history of Fiat] and the Zil and the Gaz.

In essence, Mr Obama's economic recovery program in reality, created few -- if any new jobs, but instead, maintained unproductive unionized employment at taxpayer expense.