Obama’s Public Equity Record Is Horrid
It would seem President Obama has never heard the old adage “that people who live in glass houses shouldn’t throw stones” or he is even more economically and fiscally challenged than anybody imagined.
It might even be both but what is certain is his incessant attacks on Bain Capital ring very hollow when you take a look at his “public equity” record as President.
While Gov. Romney may have epitomized a free-market capitalist during his tenure at Bain, he enjoyed an 80% success rate and he answered to his investors for the failures that cost Bain money.
However, while President Obama has been in office he’s promoted, even forced, many public equity investments and his success rate is far less than Bain’s, plus he has to answer to the taxpayers since it’s their money he lost.
Two excellent articles appeared in national publications today discussing this very issue. The first from Kim Strassel appeared in the Wall Street Journal and the second from Marc Thiessen was in the Washington Post. I highly recommend reading both and excerpt from each below.
From the Wall Street Journal:
All those Republicans grousing about the president’s attacks on private equity might instead be seizing on this beautiful point of contrast. Mr. Obama, after all, is no mere mortal president. Even as he’s been busy with the day job, he’s found time to moonlight as CEO-in-Chief of half the nation’s industry. Detroit, the energy sector, health care—he’s all over these guys like a cheap spreadsheet.
Like Mr. Romney, Mr. Obama has presided over bankruptcies, layoffs, lost pensions, run-ups in debt. Yet unlike Mr. Romney, Mr. Obama’s C-suite required billions in taxpayer dollars and subsidies, as well as mandates, regulations, union payoffs and moral hazard. Don’t like “vulture” capitalism? Check out the form the president’s had on offer these past three years: “crony” capitalism.
From the Washington Post:
Despite a growing backlash from his fellow Democrats, President Obama has doubled down on his attacks on Mitt Romney’s tenure at Bain Capital. But the strategy could backfire in ways Obama did not anticipate. After all, if Romney’s record in private equity is fair game, then so is Obama’s record in public equity — and that record is not pretty.
Since taking office, Obama has invested billions of taxpayer dollars in private businesses, including as part of his stimulus spending bill. Many of those investments have turned out to be unmitigated disasters — leaving in their wake bankruptcies, layoffs, criminal investigations and taxpayers on the hook for billions.
Ms. Strassel offers a thorough analysis of the flawed investment in Solyndra and its subsequent collapse, all of which cost taxpayers well over $500 million. She also takes a hard look at the favoritism shown the labor unions in the auto bailouts including the UAW’s screwing of 2,500 employees who held non-union jobs. Clearly the President is not a friend of those needing a job but he sure is a friend of big labor.
Mr. Thiessen takes a look at Solyndra as well but also dives deeply into another eight or so investments and loan guarantees made by the federal government as endorsed by President Obama. They include Raser Technologies, First Solar, Abound Solar and Sun Power; all of which are losing money, filed for bankruptcy and/or laid off virtually all their employees. Not an impressive record by any stretch.
From my perspective I’ll add the mother of all failed investments to the list, namely Obama’s stimulus packages which have cost taxpayers almost $1 trillion dollars while producing a net gain of only 101,000 full-time jobs between January 2009 and March 2012. President Obama justified the stimulus spending by touting unemployment would be at or below 6% by now yet it remains above 8%, even using the fudged numbers from the Bureau of Labor Statistics. A 33% shortfall in hitting the target would have to qualify as a colossal failure by any standards.
In the real world, performance is king and key to holding onto your job as an executive.
While at Bain Capital, you can be assured that Gov. Romney would not have lasted a full calendar quarter if he failed more than he succeeded as his investors would have thrown him to the curb without a thought.
Perhaps it’s time to look closely at the failures of President Obama’s performance in public equity, tell him to stuff his assault on Bain Capital’s record, and throw him to the curb come November.