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22 June 2012

WaPo: Mega Pinocchios For POTUS

M2RB: The Eurythmics

Would I lie to you?
Would I lie to you honey?
Now would I say something that wasn't true?
I'm asking you sugar
Would I lie to you?

4 Pinocchios For White House adviser David Plouffe And His Claims On Romney’s Jobs Record And The GOP Strategy



“There was an amazing article the other day, I believe it was in The Wall Street Journal, where Republicans in Congress are openly saying, ‘we’re not going to do anything until the election with the economy, because we want to help Mitt Romney.’ With an economy that needs help right now, with the middle class struggling, it’s an amazing thing.”
“For all of this talk about government, for every private-sector job created in Massachusetts by Governor Romney, six public sector jobs.”

- White House Senior Adviser, David Plouffe on Fox News Sunday, 17 June 2012

White House senior adviser David Plouffe made the rounds on the Sunday talk shows this week, making appearances on all the major networks except one. He used the opportunity to defend and clarify President Obama’s campaign message, but he also took swipes at presumptive GOP nominee Mitt Romney.

We wondered what article Plouffe was referring to when he said Republicans have talked openly about trying to improve Romney’s election chances by blocking economic progress. And what about the Republican challenger’s job-creation numbers? We wrote a column in the past about this issue, but Plouffe’s assertion about six government jobs for every private-sector job represented a new and inconceivable-sounding twist.

Let’s examine the veracity of these claims.

The Facts

In terms of the “amazing article” Plouffe referred to, we found no reports quoting Republicans talking openly about sitting idle on the economy to improve Romney’s election chances.

The Obama campaign backed up Plouffe’s claim by pointing to a Wall Street Journal article titled “Republicans See Advantages in Go-Slow Approach on Bills.” The subhead reads:“GOP Lawmakers Banking on Election Gains; Democrats also resist compromise.”

Right away, this suggests the article is not what the White House adviser implied. Sure enough, the piece says Republicans are “bullish about Mr. Romney winning and the GOP making gains in the Senate,” and that “they are wary of cutting deals that would curb the options of more conservative leadership that could be in place next year.”

In other words, GOP lawmakers don’t see much sense in making deals with Democrats when they might have a lot more power after the election. One senior member of the House Budget Committee, Rep. Scott Garrett (R - N.J.), reportedly asked: “Where is the upside?”

The article says nothing about Republicans trying to sabotage the Obama administration with inaction on the economy in order to help Romney’s prospects. In fact, it said, “Republican leaders deny that.”

Furthermore, the report noted that Democrats themselves are avoiding compromise on major budget issues because “they don’t want to undercut their ability to make a campaign issue of Republicans’ support for curbing the growth of Medicare and other popular entitlement programs.” This is the only mention of either party using inaction as a strategy to affect the upcoming election, and it’s an indictment of the left, not the right.

We should point out that calculated moves are nothing new for lawmakers during an election year. In 1996, for example, congressional Republicans saw little hope that then-GOP presidential nominee Bob Dole would unseat President Bill Clinton, so they passed welfare-reform legislation before the GOP convention had even taken place. This increased their own odds of victory in the election, but it undercut Dole, taking away an issue he had hoped to use against Clinton.

We should also mention that the current Republican strategy mirrors an approach Democrats used when they were confident their party would win the presidency in 2008. Congressional leaders then held back many key appropriations bills until Obama took office in 2009, thus allowing them to shape the 2008 budget more to their liking.

As for Plouffe’s claim about the Bay State’s employment gains, data from the Bureau of Labor Statistics shows Massachusetts added 22,400 private-sector jobs during Romney’s tenure. That means the state would need to have created 134,400 public-sector jobs in the same period for the White House adviser’s claim to be true.

That’s not even close to what happened. Massachusetts gained just 5,300 state-government jobs while Romney was in office. As such, the state added more than four private-sector jobs for every state-government job. This is pretty much the reverse of what Plouffe claimed.

The best reasoning we could find to support Plouffe’s claim is that the rate of public-sector job growth for the state (4.7 percent) was about six times that of private-sector gains (.79 percent) during Romney’s tenure. But this is very different from having six times the numberof new government jobs, which is what the White House adviser clearly implied when he said, “for every private-sector job created in Massachusetts by Governor Romney, six public sector jobs.”

The bottom line here is that Plouffe equated growth rates with raw numbers, thereby vastly exaggerating the amount of public-sector work the Bay State created under Romney.

We should note that we didn’t include local or federal employment in our analysis because governors generally have little control over those numbers. Regardless, it wouldn’t have made a difference. Government jobs as a whole in Massachusetts increased at a slower rate (.46 percent) than private sector jobs (.79 percent) during Romney’s tenure.

In this regard, the state added more than 11 private-sector jobs for every government job. Again, this contradicts what Plouffe said.

The Obama campaign did not respond to questions about Plouffe’s statistics, but issued this statement about his remarks Sunday: “Instead of taking action on the economy and passing the President’s American Jobs Act now, congressional Republicans continue to drag their feet and play politics, though their own candidate Romney has no plan on jobs. Just like David Plouffe said, we have an economy that needs help right now, with a middle class that’s struggling. Republicans should set the politics aside and do what’s in the best interest of the country.”

The Pinocchio Test

Government jobs in Massachusetts grew at six times the rate of private-sector jobs during Romney’s term as governor, but that’s not at all the same as adding six public-sector jobs for every one in the private-sector. The state actually gained at least four private-sector jobs for every government job.

Plouffe referred to an “amazing article” that supposedly proved that Republicans have talked openly about improving Romney’s chances in the election by doing nothing on the economy. But the article actually explained that GOP lawmakers prefer to postpone any deal making until after the election because they’re feeling bullish about their chances. That is no different than what Democrats have done in the past. 

Neither of Plouffe’s claims were factually correct, so Team Obama earns four Pinocchios.

                                 Four Pinocchios                                        


4 Pinocchios For Obama's Newest Anti-Romney Ad



“Running for governor, Mitt Romney campaigned as a job creator. But as a corporate raider, he shipped jobs to China and Mexico. As governor, he did the same thing: Outsourcing state jobs to India.”
— Voiceover of new Barack Obama campaign ad

Glenn Kessler at the Washington Post

The Obama campaign apparently loves to ding former Massachusetts governor Mitt Romney with the charge of “outsourcing.” On several occasions, we have faulted the campaign for its claims, apparently to little avail. 

 Now, all of the claims have been combined in one 30-second ad, with the added incendiary charge that Romney was a “corporate raider.” Let’s look anew at this material.

The Facts

The phrase “corporate raider” has a particular meaning in the world of finance. Here’s the definition on Investopedia:

“An investor who buys a large number of shares in a corporation whose assets appear to be undervalued. The large share purchase would give the corporate raider significant voting rights, which could then be used to push changes in the company’s leadership  and management. This would increase share value and thus generate a massive return for the raider.”
In other words, this is generally an adversarial stance, in which an investor sees an undervalued asset and forces management to spin off assets, take the company private or break it up. 

In a previous life, The Fact Checker covered renowned corporate raiders such as Carl Icahn and his ilk. We also have closely studied Bain Capital and can find no examples that come close to this situation; its deals were done in close association with management. Indeed, Bain generally held onto its investments for four or five years, in contrast to the quick bust-em-ups of real corporate raiders. So calling Romney a “corporate raider” is a real stretch.

So how does the Obama campaign justify this phrase? It cites a single Reuters story from last August, about a campaign stop in New Hampshire, written by a stringer, Jason McLure, who was previously based in Africa. Buried in the article is a reference to Romney as a “former corporate raider.”

 “Reuters typically refers to Romney as a ‘former private equity executive’ or something along those lines,” said Ros Krasny, the Boston bureau chief.  “Of the hundreds of times we have referenced Romney over the past year or more, honestly, that example from Jason must have just slipped through the net — 10 months ago.”

A better source for Romney’s behavior as an investor might be someone who actually worked on Wall Street, such as former Obama auto czar Steven Rattner. “Bain Capital is not now, nor has it ever been, some kind of Gordon Gekko-like, fire-breathing corporate raider that slashed and burned companies, immolating jobs wherever they appear in its path,” Rattner wrote in Politico this year.

Regarding the outsourcing claims, we have frowned on these before. The Obama campaign rests its case on three examples of Bain-controlled companies sending jobs overseas. But only one of the examples — involving Holson Burns Group — took place when Romney was actively managing Bain Capital. 

Regarding the other claims, concerning Canadian electronics maker SMTC Manufacturing and customer service firm Modus Media, the Obama campaign tries to take advantage of a gray area in which Romney had stepped down from Bain — to manage the Salt Lake City Olympics — but had not sold his shares in the firm. We had previously given the Obama campaign Three Pinocchios for such tactics.

The Modus Media case is also not an example of shipping jobs overseas. The company closed one plant in California and transferred the jobs to North Carolina, Washington and Utah. At the same time, it opened an unrelated plant in Mexico. The Obama campaign once trumpeted the fact that we had dinged a conservative Super PAC for making the same leap in logic.

The claim that Romney outsourced jobs as governor is equally overblown. 

This concerns Romney’s veto of a bill that would have prohibited Massachusetts from contracting with companies that outsourced the state’s work to other countries. Lawmakers were especially concerned about a $160,000-a-month contract with Citigroup to operate a system of electronic food-stamp cards that included a customer phone service center in India.

Both the liberal editorial page of the Boston Globe and conservative editorial page of the Boston Herald urged Romney to veto the amendment, saying it would cost the state money. Romney agreed, saying the measure did not protect state jobs — the call center might have moved from India to another state — but “had the potential of costing our citizens a lot more money.” The Democratic-dominated Massachusetts legislature did not override his veto, even though it overturned 117 others, suggesting that there was little real support for the measure.

When the food-stamp contract expired, the Massachusetts Department of Transitional Assistance insisted that those jobs be returned to the United States. But they ended up in a call center based in Utah — just as Romney had predicted.

As we mentioned, we recounted this ancient Massachusetts history before, giving the campaign Two Pinocchios. So we were very surprised that the Obama campaign cited that critical Fact Checker column as a source for the ad in its back-up materials.  

The ad also cites as a source a Boston Globe article from last month that merely reports on an earlier ad making similar charges. That’s highly circular reasoning — and is not fair play.

Upon hearing this ad was under consideration for a tough rating, the Obama campaign supplied reams of additional SEC documents regarding Romney’s ownership in Bain after he left for the Olympics, most of which we had examined previously when we first looked at this question. The campaign also supplied SEC documents showing that two of these companies, Modus and SMTC, as well as one called Stream International (a predecessor of Modus), earned money in part by helping other companies subcontract work overseas. Some of this business predated Romney’s departure from Bain, but thus far it seems a slim case for this particular ad. 

“Romney can’t run from his record. At Bain and in Massachusetts, he had the chance to keep jobs in America and sent them overseas instead,” said Kara Carscaden, deputy press secretary for the Obama campaign. “Even while he was at the Olympics, Romney owned and profited from Bain, continues to profit from it today and cannot ignore what Bain did during that time. Whether it’s outsourcing public jobs to India or shipping private ones to Mexico and China, Romney’s record is clear.”

The Pinocchio Test

 The Obama campaign fails to make its case. On just about every level, this ad is misleading, unfair and untrue, from the use of “corporate raider” to its examples of alleged outsourcing.  Simply repeating the same debunked claims won’t make them any more correct.

                                 Four Pinocchios                                        

Would I Lie To You? - The Eurythmics

Would I lie to you?
Would I lie to you honey?
Now would I say something that wasn't true?
I'm asking you sugar
Would I lie to you?

My friends - know what's in store.
I won't be here anymore.
I've packed my bags
I've cleaned the floor.
Watch me walkin'.
Walkin' out the door.

(Believe me - I'll make it make it)

Tell you straight - no intervention.
To your face - no deception.
You're the biggest fake.
That much is true.
Had all I can take.
Now I'm leaving you

(Believe me - I'll make it make it)

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