On Sunday, Republicans tried to fend off Democratic attacks on Mitt Romney’s record at Bain Capital, by drawing the following analogy: Romney is to Bain Capital as President Obama is to Solyndra.
It began on Fox News Sunday, when host Chris Wallace turned to his guest, DNC Chairwoman and Rep. Debbie Wasserman Schultz (D-FL) with a question comparing Romney’s work at Bain to President Obama’s relationship to the failed solar energy company Solyndra, which went bankrupt after receiving a $535 million federal loan guarantee from the Department of Energy. “You go after Romney for laying off people, correct?” Wallace said. “Let me ask you about that. Is the President responsible for laying off the people of Solyndra?”
The comparison is misguided on many levels and only makes sense if you fundamentally misrepresent both what private equity at Bain meant in practice, and what happened at Solyndra. As a private equity firm, Bain Capital invested in companies and came up with a plan for making them profitable, or more profitable than they previously were. It wasn’t merely an investment — that’s venture capitalism — because it included a business strategy. Sometimes the plan was to lay off workers and cut wages and benefits. Sometimes the strategy failed and the company went under. But Romney, as CEO of Bain, was in charge of strategies that called for laying off workers while benefiting shareholders. None of that is true of Solyndra, where the company was loaned money to follow through on its own projects but ultimately failed anyway.
That’s the argument Wasserman Schultz gave Sunday morning, and Wallace and the chairwoman went back and forth. Here’s some of the exchange:
CHRIS WALLACE: “Is the President responsible for laying off the people at Solyndra?”REP. DEBBIE WASSERMAN SCHULTZ: “No, because the President wasn’t the CEO of Solyndra.”
WALLACE: “Romney wasn’t the CEO of these companies either. The President was a venture capitalist, he put taxpayer money into Solyndra and a thousand people lost their jobs so is the President responsible for the thousand people who lost their jobs at Solyndra?”
REP. WASSERMAN SCHULTZ: “Not even close. But Mitt Romney is responsible for being CEO of companies that he took over, that he dismantled.”
WALLACE: “No, he wasn’t a CEO, he put money into them.”
REP. WASSERMAN SCHULTZ: “No, he was CEO of Bain. Bain bought these companies, took them over.”
WALLACE: “But the President is the CEO of the country.”
REP. WASSERMAN SCHULTZ: “But he is not the CEO of Solyndra.”
WALLACE: “And Mitt Romney wasn’t the CEO of the AmPad or these other companies.”
REP. WASSERMAN SCHULTZ: “But Bain Capital owned those companies, he made the decisions.
Though the comparison is, as Wasserman Schultz put it, “it’s total apple, oranges comparison,” Republicans see potential for this line of attack. On the show, RNC chairman Reince Priebus found no fault with Wallace’s logic, affirming that as the President, even poor decisions made by private companies are Obama’s fault: “the reality is that the President is the CEO,” he said. After the show, the Republican National Committee fired off an email about the exchange. Romney spokesperson Eric Fehrnstrom tweeted about it was well: “A fumbling Debbie Wasserman-Schultz gives a primer on why the Bain attacks on Romney will backfire.”
The hidden nugget in all of this is that the comparison does not exonerate Romney, it simply shifts the focus to Obama.
Correction: An earlier version described venture capitalism as a loan rather than an investment.
Pema Levy
Pema Levy is a News Writer at TPM covering the 2012 election. Before coming to TPM, Pema was an assistant editor at The American Prospect where she wrote about politics and the economy.
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