President Barack Obama cast his race against Republican Mitt Romney as a contest against a private-equity executive whose goal was maximizing profits, while the president’s job is to “figure out how everybody in the country has a fair shot.”
Obama aimed at the heart of Romney’s campaign argument, saying there is a gulf between the skills and priorities needed in private enterprise and those in governing.
“If your main argument for how to grow the economy is, I knew how to make a lot of money for investors, then you’re missing what this job is about,” Obama told a news conference in Chicago yesterday.
Both campaigns are gearing up for a close election in which voters rank the economy and unemployment as top issues. Obama is seeking to undermine Romney’s central argument for his candidacy before the presumed Republican nominee can sell it to voters.
The president’s critique, at the end of a summit of NATO leaders, came in response to a question about criticism by some prominent allies of an ad his campaign is running that highlights the closing of a steel plant that was bought by Bain Capital LLC, the private-equity firm Romney co-founded.
Romney, 65, responded to Obama’s remarks by saying they showed the president will “continue his attacks on the free-enterprise system.”
“What this election is about is the 23 million Americans who are still struggling to find work and the millions who have lost their homes and have fallen into poverty,” Romney said in a statement.
Romney’s campaign has struggled to find a consistent line of defense against the Bain attacks. On a conference call today with reporters, former New Hampshire Governor John Sununu, a Romney surrogate, accused Democrats of distorting Romney’s record by “cherry picking” failed Bain investments and attacking the free-enterprise system. He dismissed the criticism as character assassination.
“If you want to go and talk about Bain as a whole that is fair,” Sununu said. “If you want to talk about Bain on cherry-picking basis that’s a distortion.’
Obama, 50, said he isn’t attacking the role of private equity firms, which he called ‘‘a healthy part of the free market.”
“There are folks who do good work in that area and there are times where they identify the capacity for the economy to create new jobs or new industries,” he said. “But understand that their priority is to maximize profits, and that’s not always going to be good for communities or businesses or workers.”
Romney’s background is fair game because the Republican candidate is emphasizing his business background rather than his record as governor of Massachusetts, Obama said.
“And when you’re president, as opposed to the head of a private equity firm, then your job is not simply to maximize profits,” he said. “Your job is to figure out how everybody in the country has a fair shot.”
Some Obama allies are undermining his argument as they try to avoid criticizing the investment community.
Mayor Cory Booker of Newark, New Jersey, yesterday called the private equity debate “nauseating to the American public” and likened it to proposed Republican attacks tying Obama to his former pastor, Reverend Jeremiah Wright Jr., who once urged blacks to sing “God damn American” instead of “God Bless America.”
“Enough is enough. Stop attacking private equity. Stop attacking Jeremiah Wright,” Booker said on NBC’s “Meet the Press.” After Romney’s campaign highlighted his comments, Booker backtracked in a Twitter message and a web video.
Steven Rattner, who headed the president’s auto task force, last week called “unfair” an Obama campaign ad about a Kansas City, Missouri, steel mill that Bain took over in 1993.
“I don’t think Bain Capital did anything they need to be embarrassed about,” Rattner said May 14 on MSNBC’s “Morning Joe” program. “It did it superbly well, acting within the rules, acting very responsibly, and was a leading firm.”
While Booker and Rattner weren’t speaking as official Obama campaign surrogates, their comments reflect a reluctance among some top business leaders and elected officials to echo the campaign criticism of Romney’s Bain performance, in part because they don’t want to vilify an industry that makes positive contributions to the economy.
Bain has made successful investments and many of its customers are pension funds, said Steven Kaplan, a professor at the University of Chicago Booth School Business.
“A number of the private equity investors, even some of the big names, are Democrats,” said Kaplan. “You can always find a deal that didn’t work.”
Jumping on remarks by Booker and Rattner, Romney’s campaign put up an ad replaying their comments along with a quote from former Representative Harold Ford, a Tennessee Democrat, saying “private equity’s not a bad thing.”
“Have you had enough of Obama’s attacks on free enterprise? His own key supporters have,” the ad says.
The Obama campaign didn’t disclose how much it spent to air the Bain ad, saying only that it would run in battleground states.
Obama for America began a round of attacks yesterday with a web video about another company acquired by Bain -- American Pad & paper, or Ampad, an office-supplies plant in Marion, Indiana - - that closed in 1995.
“You don’t come in and just take everything, everybody’s job and destroy a business. I mean, that’s what they did,” Jerry Rayburn, a former employee of SCM Office Supplies Inc., says in the 5 1/2 minute video.
Bain, in an e-mailed statement, said Ampad’s business grew during the years the firm controlled the company.
“The Marion plant was a challenging situation in a business that was performing well overall, growing revenues and adding jobs,” Bain said. “Our control of Ampad ended in 1996, fully four years before it encountered financial difficulties due to overwhelming pressure from ‘big box’ retailers, declines in a paper demand and intense foreign price pressures.”
Bain said revenues grew in 80 percent of the more than 350 companies in which the firm invested.
Boeing Co. CEO Jim McNerney, chairman of Obama’s Export Council, said on May 8 the wealth-creation-versus-job-creation distinction the Obama campaign is trying to make is “too easy.”
“Even within Boeing you’re growing some elements, you’re winding down others to fuel, to provide resources, to provide the growth,” McNerney said in an interview. “That’s what makes this country great, because we can redeploy capital and labor more quickly than other societies. And I think private equity plays a role in that.”
Still, Lawrence Fish, the former chief executive officer of Citizens Financial Group, Inc. and a top Obama campaign donor and surrogate, last week questioned Romney’s role at Bain while saying the industry plays a positive role in the economy.
“The question about private equity -- and this applies to Mitt Romney and his partners -- specifically is,” when jobs are eliminated, “whether they have behaved fairly and whether they’ve behaved responsibly. Was fair and complete severance provided to displaced workers? Were their pensions honored?” he said on Bloomberg Television’s “Political Capital.”
Vice President Joe Biden has emerged as the Obama campaign’s attack dog, saying in Youngstown last week that after GST Steel was taken over by Bain, Romney made sure his executives “got to play by a separate set of rules.”
“But not everyone got hurt. The top 30 executives walked away with $9 million,” Biden said on May 16. “And Romney and his partners walked away with at least $12 million.”
The former Massachusetts governor has a roster of surrogates to defend his business background, including Tom Stemberg, the founder of Staples Inc.; former Minnesota Governor Tim Pawlenty, Senator Rob Portman of Ohio and Wisconsin Representative Paul Ryan, House Budget Committee chairman.
Romney says that, during his tenure at Bain, the firm created 100,000 jobs. Neither the private equity firm nor his campaign have documented that figure in response to repeated requests by Bloomberg News. Bain Capital doesn’t track jobs lost or gained as a result of their investments.