The problem with Romney capitalism

January 24, 2012

Jay Hancock's column "Missing the point about Romney" (Jan. 22) should be required reading in every economics class, and of course for every voter.

The issue is not that Mitt Romney is rich or even that he paid low tax rates on his riches. The real issue is that Mr. Romney and Bain Capital illustrate why U.S. employment has stagnated for four decades.

America cannot grow jobs because the only way a U.S. CEO knows how to create profits is not to make better products, increase sales, grow his company, and employ more people, but to let markets stagnate, reduce production, and lay-off, downsize, out-source and off-shore employees. This is what Bain and other of what Texas Gov. Rick Perry called "vulture capitalists" do, burdening the firms with crippling debt while the vulture capitalist Romneys of the U.S. milk the cash out of the firms.

During the stagflation of the 1970s, we were told the problem with lagging incomes was lack of productivity growth. As Jay Hancock points out, we have had a long period of increasing productivity, but wages have failed to grow. Equality has been hit with the triple whammy of lower taxes for the rich and higher payroll taxes for the working class, downsizing and exporting jobs, and reduced real wages and benefits forced on the remaining workers. Because record low tax rates and record corporate cash on hand have not sped recovery, clearly policies of more of the same are not the solution. To promote recovery, our policies should increase the income and buying power of the average worker and consumer.

James Kelly, Ellicott City

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