Last week, we explored whether President Obama, in his campaign stump speech, has taken a quote by former Massachusetts governor Mitt Romney out of context. The only record we could find of Romney’s remarks was from an Associated Press article last December, and we could not find a full transcript. We awarded the president Two Pinocchios but said we would revisit the issue if we could obtain a transcript.
We now have one, and it sheds some more light on the discussion that late December day in Iowa. So, now let’s look at what the president said, what the AP reported and then what was actually said.
Here are the president’s remarks, made in Seattle on May 10, 2012:
“When a woman in Iowa shared the story of her financial struggles, he gave an answer right out of an economics textbook. He said, ‘Our productivity equals our income,’ as if the only reason people can’t pay their bills is because they’re not productive enough. Well, that’s not what’s going on. Most of us who have spent some time talking to people understand that the problem isn’t that the American people aren’t working hard enough, aren’t productive enough — you’ve been working harder than ever. The challenge we face right now — the challenge we’ve faced for over a decade — is that harder work isn’t leading to higher incomes. Bigger profits haven’t led to better jobs”
Here’s the AP account of the event:
One woman recently told him that she had to endure a five-hour commute to work because her company moved out of state. How could he help keep good jobs in Iowa, she asked.
“Sometimes it’s counterintuitive,” replied Romney, a former businessman, explaining that businesses often invent new, more efficient ways to compete.
“The term is called productivity. Output per person,” he said. “Our productivity equals our income.”
Now, here is the actual transcript, with the section the president highlighted in boldface. We also highlighted the key part of the woman’s question:
Woman: “I lost my job to Utah four years ago, right — that my branch picked up and moved to Utah. You know, it’s, I’m not going to [inaudible] because of it. And, as a result…”
Romney: “Don’t blame me personally.” [laughter]
Woman: “…for 20 months I drove to Minnesota to get work — I got up at 2:00 in the morning, on Monday mornings, and got back at 9:00 pm on Friday nights. [inaudible for a sentence] But, my question is, how — I worry about reducing regulation, but how do you stop the competition between states — because that doesn’t really create jobs for the nation overall. It just sort of moves jobs around.”
Romney: “Well, I actually — it’s sometimes counterintuitive. But, I like the idea of states competing; I like the idea of businesses competing. So, for instance, when this company got started — and I don’t know much about the history of it, but I’ll guess. That in the past when they made large tanks and large products in plastic, they had a big mold and then they’d have people lay out plastic on it, and then they’d take the plastic off — it took a lot of people to make a tank. Now with the new technology, it doesn’t take a lot of people. It takes a lot less. And so the question is, did this company create jobs, or kill jobs? The answer is it created jobs. Because if they hadn’t created that innovation, somebody else around the world would have and put everybody out of work. We, over the years — the tractor. Someone said to me, ‘Do you want to put everyone back to work again? Get rid of tractors.’ That’s true. We can all go back on the farm, plow by hand. We’ll all be back to work, but we’ll be poor. And what happens with competition, is we find ways to do the same thing at lower cost, with better quality, and we can produce more and more things. The term is called ‘productivity.’ Output per person. America has the highest output per person in the world. We make more stuff and service per person than anywhere else in the world, and that’s a good thing. Because, by the way, our productivity equals our income. If you don’t make very much stuff, you don’t get much income. We have the highest income per person in the world. Europe, European — we’re 50% higher income per person in America than the average European. And so, I like competition. But I’ll tell ya, we have to be able to help people find new positions, new jobs, bring them into new industries. So much of what I grew up with was — I mean, we used to have, remember Kodak? I mean, someone came up with digital cameras. Think of all the people that made film. And film processing, gone. And yet, by virtue of that competition, we all become better off. And we have to help our workers find new jobs, give them training, and make sure that the innovation occurs in America as opposed to elsewhere in the world. Because if we become a second-tier innovator, we won’t have jobs for anybody. They are worth the effort to have them. Now, I — it breaks my heart any time I see someone who loses a job. It’s a — I mean, I know, it’s wrenching. And your experience, I can’t, driving back and forth to Minnesota — how long did you say you had to drive?”
Woman: “It’s a five hour drive.”
Romney: “It’s a five hour drive. Yeah, I mean this is… it’s — I’m glad you’re [inaudible] now. I want to make sure we make America the most innovative, creative, job-creating machine in the world. And that hasn’t happened the last few years. And I’m going to go to work to do my very best to help middle income Americans who have been most hurt by this economy and create good jobs in this nation.”
Romney’s answer is a bit rambling, but it seems the quote that Obama highlighted — “our productivity equals our income” — is more of a statement about what makes nations competitive.
The president, however, characterized it as Romney suggesting that “the only reason people can’t pay their bills is because they’re not productive enough.” The president also mischaracterized the women’s question as being about her “financial struggles,” when in fact she was asking how to stop competition between the states.
Jared Bernstein, a former administration official, first drew attention to Romney’s remarks in a blog post last January. We asked him if the full transcript had changed his interpretation of Romney’s remarks. He wrote back:
“Not so much. I still think that in the context of the question asked his logic goes like this:
A nation’s productivity equals its income,
thus if we have more productivity, we’ll have more income,
and thus you too, ma’am, will be better off.
And it’s the last part that is empirically wrong, as I showed in my post. I don’t think the Gov understands or appreciates the impact of the split between productivity and middle class incomes and wages. And that is one of many essential flaws in supply-side economics (ie, even if they’re right that it generates more growth, which I would not concede, they assume said growth will reach the middle.”
The Pinocchio Test
Bernstein, of course, looked at Romney’s statement from a particular ideological point of view, as did the president. But we still don’t think that gives the president the right to stick words in people’s mouths.
We are going to keep the rating at Two Pinocchios, in part because Romney’s comments are open to interpretation. But you could also have a more charitable view of the message Romney was trying to give — and in any case, the president’s retelling of the story misstated key details, such as the women’s question. We are curious to hear what readers think, now that they can read Romney’s remarks in context for themselves.
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