“He should be proud of the great personal success he’s had as a CEO of a large financial firm. There are plenty of good and honest people in that industry, and there’s an important, creative role for it in the free market,” said the president. “But Governor Romney has made his experience as a financial CEO the entire rationale of his candidacy for president. Now, he doesn’t really talk about what he did in Massachusetts. But he does talk about being a business — business guy. Right? He says this gives him a special understanding of what it takes to create jobs and grow the economy. … So I think it’s a good idea to look at the way he sees the economy.”
President Obama explained that private equity firms do not exist to create jobs.
“Now, the main goal of a financial firm like Governor Romney’s is not to create jobs. And by the way, the people who work at these firms will tell you that’s not their goal,” he said. “Their main goal is to create wealth for themselves and their investors. That’s part of the American way. That’s fine.”
Though he called the work of these financial firms “part of the American way,” he also described situations where private equity has a negative impact:
“Sometimes, jobs are created in that process. But when maximizing short-term gains for your investors rather than building companies that last is your goal, then sometimes it goes the other way. Workers get laid off. Benefits disappear. Pensions are cut. Factories go dark. In some cases, companies are loaded up with debt — not to make the companies more productive, not to buy new equipment to keep them at the cutting-edge, but just to pay investors. Companies may go bankrupt as a result. Taxpayers may be on the hook to help out on those pensions. Investors walk off with big returns, and working folks get stuck holding the bag.”
President Obama went on to say the president has to look at the economy far differently than those in private equity.
“The job of a President is to lay the foundation for strong and sustainable broad-based growth — not one where a small group of speculators are cashing in on short-term gains. It’s to make sure that everybody in this country gets a fair shake,” President Obama said. “When you’re the President, your job is to look out for the investor and the worker; for the big companies and the small companies; for the health of farmers and small businesspeople and the nurse and the teacher. You’re supposed to be thinking about everybody — and the health of the middle class. … That’s how I see the economy.”
President Obama also reminded the crowd that the Iowa State Fairgrouns was the setting for one of Mr. Romney’s more controversial moments on the campaign trail. Last August at the fairgrounds, Mr. Romney infamously responded to a heckler asking him to raise taxes on corporations rather than people by saying, “Corporations are people, my friend.”
According to President Obama, Mr. Romney’s background in private equity explains that remark.
“Of course, the worldview that Governor Romney gained from his experience as a financial CEO explains something,” President Obama said. “It explains why the last time he visited these very same fairgrounds, he famously declared that corporations are people.”