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ThePlumLIneGS whorunsgov plumline
Posted at 12:50 PM ET, 05/15/2012

Mitt Romney’s simplistic tale about the economy

Mitt Romney released a new Web video today attacking Obama on the economy that’s generating a lot of discussion. “Millions of Americans are struggling under the Obama economy,” the video’s narrator says. “Here are their stories.”

One primary example offered by the video of the damage inflicted on Americans by the “Obama economy” is what happened to workers after the Frigidaire plant in Webster City, Iowa, closed, leading to hundreds of layoffs — an example chosen because Romney is in Iowa today.

“At Webster City, Frigidaire was there for a hundred years or whatever, and they just up and said, `hey, we’re done here,’” one young man says. Another city resident laments her ongoing struggle to find work.

But a closer look at the closing of this plant complicates Romney’s narrative. Certain aspects of the history don’t support the broader story Romney is telling — and the details offer an interesting window into the larger debate over the economy that's driving the presidential race.

For one thing, the jobs lost at Frigidaire, which is owned by Electrolux, were outsourced to Mexico, not destroyed, even though the video doesn’t tell you that. And Electrolux first started eyeing Mexico as a location for production back in 2006.

According to Caryn Klebba, a spokesperson for Electrolux, Frigidaire used to have around 700 manufacturing jobs in Webster City, at two plants manufacturing washing machines. In 2006, the company announced that it was building a new plant in Mexico to manufacture a new line of front-loading machines. In fairness to Romney, this did not change the number of jobs in Webster City. But the company did begin manufacturing in Mexico during the Bush years, before increasing its manufacturing abroad later.

In October of 2009, nine months after Obama took office, and only a few months after the recession ended, Electrolux announced it was closing its Webster City operations and moving them to Mexico. The Romney video blames this on the Obama economy, in keeping with his amnesia strategy of trying to get people to forget just how dire the crisis already was in 2009, when Obama took office.

But according to Klebba, the primary reason for the move was a drop in demand due to global economic conditions. “Relocating the production was a difficult but necessary decision, because the sale of laundry products were dramatically impacted by the global economic crisis,” Klebba said.

A third way this example complicates Romney’s story: Electrolux is actually adding more jobs in the United States now than were lost in Webster City. The company is building a plant in Tennessee to manufacture cooking products, and it’s expected to add 1,200 jobs.

The rub, though, is that this new plant, which is shipping jobs here from Canada, is being built in part because of incentives created by city, county and state government, Klebba confirms — exactly the sort of government “picking winners and losers” that Romney likes to decry. Obama, by contrast, favors this sort of use of government resources to create American jobs.

In a broad sense, there’s no denying that Obama’s policies have not turned the economy around as fast as we’d hoped. But the example cited by the Romney campaign shows that the story is far more complex than the tale Romney is telling us, and in some ways it even undercuts Romney’s tale.

By  |  12:50 PM ET, 05/15/2012

 
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