Mitt Romney held a high stakes, closed door fundraiser last night at the 95-room, 65,000 square foot estate of HP CEO Meg Whitman. Liberals will attempt to tie Romney to the image of excess that naturally follows from words like “95-room” and “65000 square foot” (or frankly to any use of the word “estate” that is not synonymous with a will and probate court). Or perhaps liberals will seek a connection to the image of Romney buddying up to a Chief Executive who announced earlier in the month that she intends to fire 27,000 workers while continuing to draw an enormous payment package from the failing company.1
1 Like many shady executive packages, Whitman publicly claims a “$1 salary” to minimize income taxes while loading her compensation with bonuses (between 2.4-6 million) and millions of shares of stock options that are charged at the lower capital gains rate and worth millions if the company increases profits. These require Whitman to meet profitability targets which it can meet even without achieving long-term success through, among other options, firing workers.
But the connection between Mitt Romney and Meg Whitman that liberals will mostly miss is that both exemplify the difference between personal and business success in the modern American system.
Much has been written about Mitt Romney and his time at Bain Capital. About his massive wealth, acquired largely through saddling real businesses with debt and then taking his payday out of borrowed money. Breaking companies like playthings not because he wanted a steel company or a paper company, but because he saw a financial scam to be played at the expense of workers and the taxpayers who more often than not had to pick up the tab. Romney does not actually provide “business experience” despite his campaign’s insistence, but a knack for grifting for personal gain.
Enter Meg Whitman, the California-based executive who rose to prominence as a fellow-traveler of Romney’s at the successor of Bain Capital. She transitioned into an executive for hire, with short-term stints as a VP of Strategic Planning at Walt Disney (“Strategic Planning” reminds me of the West Wing episode where Hollywood insiders keep offering the White House staff “VP of Development” jobs), Stride Rite, FTD and Hasbro.
Then she made her mark by joining eBay, the online platform where people go to auction off useless stuff while eBay takes a massive rake. I would credit Whitman for building a real business if I didn’t constantly wonder how the changes she made weren’t completely obvious to any non-Hippie brought into the Bay Area tech company — hire a design team to make it look good and then categorize products so people can find them…not really Earth-shattering innovations. She bought Skype and took a massive loss on it — all while being praised as a genius despite her failed investment. Her primary contribution to the site is shepherding the site through its IPO, undoubtedly a monumental task, but a sharp sense of financial regulations and contracts with investment banks are not exactly the stuff of all-time business successes like Andrew Carnegie or Henry Ford.
And now she heads the rotting shell of HP, a company run into the ground by fellow Republican star Carly Fiorina, whose support of failed project after failed project earned her the moniker “the anti-Steve Jobs” but not before qualifying her as a multi-millionaire and credible GOP Senate nominee.
Romney and Whitman (and Fiorina…and even the serially bankrupt Donald Trump for that matter) highlight one of the unheralded dangers of income inequality — a culture so stratified becomes more obsessed with the “reality of wealth” than the “creation of wealth.” One of capitalism’s redeeming features is the (perhaps over-simplified at times) belief that wealth is good because it is the product of exercising exceptional skill or judgment in building a business of social value. But Mitt Romney and Meg Whitman are praised for their personal wealth even if the source of that wealth is unimpressive, wrought with failures, or downright destructive. In a sense, the modern world of wealth conflates many with true business skill with others making personal income off failing ideas and skills unrelated to building an innovative business. It gives us “celebutards” just as vapid as those gracing the E! Network’s programming schedule, just with an affinity for using phrases like “market synergy.”
At the fundraiser Whitman hosted, Romney undoubtedly delighted the crowd by decrying policies like “3% tax increases” or “taxing carried interest as income.” While Romney surely labeled these decidedly non-Marxist policies as evidence of a broad-based “class warfare” meant to “divide America,” the fact of the matter is that “class warfare” is only destructive if it pits America against rewarding those with the talent and innovative spark to build something to enrich the lives of all Americans. When “class warfare” targets corporate raiders and overhyped executives, the attack is not necessarily an attack on capitalism as much as a call to return the capitalist system to its original values.