Debunking the Romney Ad: The Private Sector Is Doing Fine
Mitt Romney’s television ad is driving me crazy. It’s the one that repeats President Obama’s quote, “The private sector is doing fine,” and shows depressing unemployment statistics. Obama said this during a news conference last month. The ad’s intent is to portray Obama as out of touch with reality.
The problem is that the private sector—namely corporations, wealthy people and CEOs—is doing fine.
The Economic Policy Institute recently reported that “private sector job growth in the current recovery is close to that of the recovery following the early 1990s recession and is substantially stronger than the recovery following the early 2000s recession.” Bloomberg News reported in June that its BGOV Barometer showed that the health of the U.S. private sector was improving, in light of corporate profits, stock market performance, and hiring by private employers. Bloomberg News cited Labor Department data that private employers have added 3.1 million jobs since June 2009 and that profits by members of the Russell 3000 Index of U.S. companies topped $1 trillion for the first time. After-tax corporate profits rose 8.5 percent in 2011 to $1.58 trillion, according to the International Business Times. As noted earlier this month by Rex Nutting of the Wall Street Journal‘s MarketWatch, “corporations mostly gave $1.5 trillion they earned in profits in 2011 back to their shareholders through dividends and stock buybacks, or else hoarded it in a corporate rainy-day fund.”
According to the WSJ, the highest-paid CFO in the country was Comcast’s Michael Angelakis, who reportedly made $21.9 million, including a $7.2 million bonus. The second highest-paid corporate finance executive was Donald Humphreys of Exxon Mobil, who earned $18.5 million. The median compensation for CFOs in the S&P 500 last year rose 2.1 percent to $3.3 million.
Actually, thanks mostly to the Republican Congress that resisted President Obama’s $450 billion jobs bill, which would have given more federal aid to states and cities, it’s the public sector that’s not doing fine. According to the Economic Policy Institute, the public sector has shed 627,000 jobs since June 2009. Based on past trends of the government adding jobs to keep up with population growth, it should have added around 505,000 jobs in the last three years. Thus, approximately 1.1 million public-sector jobs have been lost in the last three years.
While local governments hire teachers, police officers and firefighters, they use a combination of federal, state and local money to pay them. So what happens when local governments can’t pay their employees? Look no further than Scranton, which is down to its last $5,000 in the bank; its public employees, including police officers, firefighters and the mayor, are now being required to work for the minimum wage at $7.25 an hour.
Politicians from both sides of the aisle use the approach of this pro-Romney ad—using a candidate’s statement or quote that could be interpreted in a negative light against the candidate and then repeating it or not putting it in context. It worked for President Bush in 2004, when he showed John Kerry’s quote, “I voted for the war before I voted against it.” Joe Sestak used Arlen Specter’s quote “my change in party will enable me to be re-elected” against him in the 2010 Democratic Senate primary. President Obama’s campaign and its supporters will likely repeat Romney’s infamous quotes “Corporations are people, my friend,” and “I’m not concerned about the very poor” without putting the statements in context.
Here, I believe that the pro-Romney “private sector” ads used an Obama quote that was subject to differing interpretations and was used out of context. Although individual employees who work in the private sector are hurting, most of the employers and corporations in the private sector are doing well. Regarding context, Bloomberg News noted that Obama’s “doing fine” statement was made while he was contrasting private employment growth with job losses suffered due to state and local government budget cuts.
The Obama reelection campaign has been fighting back. A couple weeks ago, it released an ad in which the narrator states, “Mitt Romney and his billionaire allies can spend millions to distort the president’s words. But they’re not interested in rebuilding the middle class. He is.”
When ads like these run, the average television viewer doesn’t know the context in which the statement was made or the underlying facts. They just see and hear the candidate’s quote, over and over and over again. For some swing voters, those repeated words could sink in.
Larry Atkins, a lawyer and a journalist, teaches journalism at Temple University and Arcadia University. He has written for the Baltimore Sun, Chicago Tribune, Dallas Morning News, Huffington Post, NPR, Philadelphia Inquirer, and others.