The Center Holds: Obama and His Enemies

by Jonathan Alter

  There were two interrelated reasons why it should have been in Romney’s interest to push back against wackos: To prove to swing voters that he wasn’t the captive of the right wing and to show that he had the guts and toughness to be president. Faced with a similar situation on his left after he wrapped up the Democratic nomination in June 1992, Bill Clinton held a press conference to attack a female rap star, Sister Souljah, for making antiwhite comments. The message to moderates and independents was unmistakable: I will attack left-wing Democrats occasionally to prove I’m not their prisoner. It worked well, setting Clinton up for a successful nominating convention that unified and broadened his party. To Chicago’s relief, Romney never had his Sister Souljah moment. Perhaps it was impossible. “He couldn’t have done a Sister Souljah,” Grover Norquist said later. “People would have gone, ‘He’s not a real conservative.’ ” In fact Romney had to keep moving right. After Fox’s Bret Baier questioned him aggressively about his flip-flops, Romney told CPAC in February that he was a “severely conservative Republican governor,” which was both infelicitous and factually untrue.

  Candidate Romney was trapped in a right-wing universe that partner, Russ Schriefer, tivcivilian Romney, the one from the business world whom people admired, would have found ridiculous. Instead of denouncing Donald Trump for suggesting that the president wasn’t born in the United States, Romney welcomed Trump at a Las Vegas fundraiser just a day after the man conservative columnist George Will called a “bloviating ignoramus” went on CNBC and doubled down on his “birther” fiction.

  Unlike John McCain, Romney did nothing to restrain the trash-talkers whose paths he crossed. Rather that rebuking a woman supporter in Euclid, Ohio, who said at a May event that Obama “should be tried for treason,” Romney ignored the comment and launched into a long answer to the woman’s question. He looked the part of president but was having trouble showing the fortitude that Americans expected in the Oval Office.

  ROMNEY TRUSTED FEW people and viewed campaign consultants with skepticism. As a former management consultant, he believed that their advice was peripheral to the decisions at hand. But the political decisions he made on his own were often perplexing.

  In early 2011 aides gingerly suggested he get the issue of his income tax returns behind him at a time when few voters were paying attention. He rejected the advice. This gave rise to informed speculation that, like many wealthy taxpayers, his investment losses in 2008 and 2009 were so heavy that he paid little or nothing in taxes, which would have dogged him throughout the campaign if it became public. In preparing for another presidential run, he could have adjusted his returns to pay a respectable amount, as he finally did in September 2012 on his 2011 returns. But doing so would have cost him millions and violated a leadership principle he established for himself. “If I had paid more [taxes] than are legally due I don’t think I’d be qualified to become president,” he told ABC News in July.

  For months Romney promised to release his returns at tax time in April 2012, at which point the primaries would presumably be conveniently over. Even conservative commentators said that the governor’s position suggested he had something to hide. For months Stevens had advised him to get some returns out, and finally, on January 23, he agreed to release his 2010 taxes only. The big news was not his income—$21.7 million in 2010—but the rate at which he paid taxes, 14 percent, which was expected by those who understood carried interest but came as a surprise to much of the public. (This was almost certainly a higher effective rate than he paid in the years when he was not running for president.)

  Romney had told reporters only days earlier that he had made “not very much” money from outside speaking fees, but his two-year haul from the chicken-and-peas circuit totaled more than $600,000. While this wasn’t outrageous by the standards of big-time politicians, Romney looked as if he thought hundreds of thousands of dollars was scarcely worthy of notice. Worse, he and his wife had money in Swiss bank accounts (until 2010) and in the Cayman Islands, a notorious haven for tax avoiders. This didn’t make Romney a tax cheat; the Caymans are a place where many private equity funds park money collected from international investors (often investing in American companies) who frequently prefer to pay at the rates of their respective countries rather than U.S. rates. But complicated descriptions of the structure of funds hardly lessened the impact of the story, which was sure to resurface in attack ads.

  The candidate’s tax embarrassments were just always said the same thing: 2U small one sign of his cluelessness about public perceptions. In preparing for the 2012 campaign, neither Romney nor his aides focused on his image as a Richie Rich character. Romney decided to stand by MassCare (his health care plan in Massachusetts) and to project comfort with who he was, a wealthy businessman. But his personal fortune was a largely unmentionable subject in Boston. Despite the car elevator at his new La Jolla home, Romney thought of himself as a cheapskate who made sure his sons were not raised as entitled rich kids. Even Bob White, the former Bain partner who was thought of at campaign headquarters as Romney’s alter ego, apparently did not warn him that his wealth was a political problem, though he later briefed campaign officials about the complex details of Romney’s holdings.

  This was a classic example of a candidate heedlessly avoiding an important personal issue, in this case, his image as a plutocrat. Romney credited his parents for raising him right but seemed clueless about the advantages in life afforded by what Warren Buffett called “the lucky sperm club.” He said later he believed that class in America should be discussed only in “quiet rooms.” That was a pipe dream in 2012, when voters retained their anger at rich people who seemed to play by their own rules. “If Romney’s going to be Michael Douglas, that guy’s not going to win,” Stevens said in April 2012, referring to Douglas’s infamous character Gordon Gekko in the movie Wall Street. “He doesn’t have to be Michael Douglas.”

  But he was Gordon Gekko. Somehow the candidate had not thought about the political ramifications of offshore accounts, overstuffed IRAs (with tens of millions, clearly out of step with the intention of the retirement accounts, which was to encourage middle-class savings), and a new $12 million California vacation home whose construction could have easily been delayed a year or two. In their 2010 returns, the Romneys wrote off $77,000 for Ann’s dressage horse, Rafalca, whose prancing preparations for the Olympics became a running joke on late-night TV. Romney, who by 2012 had been actively running for president for five years (and had thought about it for ten), should have anticipated how this would look. As one senior campaign aide put it, “He should have said to his accountants and money managers, ‘I’m running for president, get me out of all of this.’ ”

  THE 2012 ELECTION was expected to be defined by billionaire-backed super PACs and a wealthy GOP challenger. Imagine the surprise in Boston when, starting in April, Romney, the candidate with financial expertise, faced what Stuart Stevens called “a perpetual financial crisis.” The comedian Andy Borowitz joked that “Romney spent $76 million to beat a serial adulterer and a mental patient in a sweater vest,” but it wasn’t so funny for Republicans.

  Like almost all conservatives, Romney opposed campaign finance laws in principle; now he was handcuffed by them. Under the law, an individual can give up to $2,500 to a candidate for the primaries and another $2,500 for the general election. The latter amount cannot be used for television until after the convention, which in 2012 was at the end of August. Having spent so much during the primaries, Romney was strapped. He had to get through four months (May through August) before he could begin to use his general election money. Obama, with no primary challenge, didn’t have this problem. Meanw partner, Russ Schriefer, Lah2hile the highly touted pro-Romney super PAC reinforcements could not, by law, coordinate with the campaign, and their ineffective ads quickly made them almost a nonfactor. To stay competitive with Obama, Boston figured that Romney had to raise about $100 million a month, all of it from donors who had not already “maxed out” (given
$5,000). Starting in May, Romney achieved this, but not without consuming huge amounts of time and energy.

  There was a way out, of course. Romney could have reached into his own pocket, as he had in 2008, when he gave his primary campaign $45 million, about a fifth of his fortune. But he vowed not to do so again. A Romney family friend said that the candidate’s reasoning involved personal considerations and a concern that he would once again look like a rich guy trying to buy the presidency. Some Republicans wondered why they were being asked to dig deeper while the candidate himself didn’t do so. The campaign quietly borrowed $20 million in July, but by that time thousands of airings of anti-Bain ads had gone largely unrebutted. By not wanting to reinforce his image as a wealthy man, Romney gave Obama an opening to do just that.

  ROMNEY’S TACTICAL APPROACH could be summarized by the old playground taunt: “I’m rubber. You’re glue. Whatever you say bounces off me and sticks to you.” It was a tried-and-true approach in past elections but didn’t work so well in 2012.

  The idea was a refinement of Karl Rove’s old rule that candidates do best when they go after their opponents’ strengths, not their weaknesses. Thus Republicans went after Al Gore on the environment in 2000 and after John Kerry on his heroic Vietnam War record in 2004. Under this theory, if you strip the other candidate of his assets, he has nothing left to run on. Taken further, if you strip your adversary of his weapons, he has nothing left to fight with. Romney had first adopted the rubber/glue tactic back in 2002, when he ran against Democrat Shannon O’Brien for governor of Massachusetts. O’Brien, picking up where Ted Kennedy’s successful 1994 Senate reelection campaign left off, pounded Romney over Bain. Instead of changing the subject, as he had against Kennedy, Romney counterattacked. He charged that O’Brien’s running mate, Chris Gabrieli, who ran a venture capital firm, was the one who invested heavily in Bain-run companies like Ampad and GST Steel, the same companies that Kennedy (and later Obama) charged with causing painful layoffs. Romney claimed in 2002 that he had been off running the Salt Lake City Olympics and had no involvement in those deals. The jujitsu against O’Brien and Gabrieli worked. Bain was neutralized as an issue in the gubernatorial campaign and Romney won.

  Fast-forward to 2012, when Obama and pro-Obama super PACs went after Romney’s connections to Bain and charged that he was still CEO and full owner, even if off in Salt Lake City running the Olympics. Once again Boston responded with a ferocious barrage. Every time the president or first lady visited a company, college, or nonprofit that had benefited from a Bain connection—and hundreds of institutions had portfolios with such investments—the Romney campaign screamed hypocrisy. But this time the tactic didn’t work. The press understandably thought that owning a mutual fund that contained companies that, unbeknown to most investors, contained Bain financing hardly disqualified someone from criticizing Romney over Bain.

  Even so, Romney aides spent most of 2011 with a false sense of security about the Bain connection, in part_2U small because a former Bain executive who ran for Ted Kennedy’s Senate seat in 2010, Steve Pagliuca, had endured only one nasty Boston Globe editorial on his connection to the firm. (They didn’t seem to notice that Pagliuca lost in the Democratic primary.) And Romney’s rivals in the 2008 presidential campaign had largely left the subject alone. By the 2012 cycle, it seemed like awfully old news. But Perry and Gingrich went hard at Bain, and Chicago made it a theme of Obama’s campaign. Axelrod figured that if Bain was Romney’s “calling card,” Obama would take a leaf from the Rove play-book and go after his opponent’s strength.

  Obama paid no price for it. The fact-check features in the Washington Post, the Annenberg Center, and elsewhere found that Chicago was wrong in claiming that Romney still had responsibility for Bain Capital’s investments after he left to take over the Olympics. But the Democratic base loved that the president was finally throwing punches, even if they were misdirected.

  Throughout the year both parties left misleading impressions about the company that Romney had founded. Republicans pointed to Bain as evidence that Romney had a record as a job creator. But the point of Bain’s investments was profit for itself and its shareholders, not job creation. At many Bain-owned companies, payroll was reduced and workers left in the lurch after the takeover. Democrats meanwhile often made it seem as if private equity was a disreputable business. In truth, Bain helped underwrite several fledgling companies and resuscitated others. All told, private equity proved to be more productive than most brands of modern-day capitalism; at least it focused on real companies in the real economy, not the casino of derivatives, credit default swaps, and other exotic products that, as former Fed Chairman Paul Volcker put it, contribute nothing to wealth creation.

  In May Newark’s Democratic mayor Cory Booker defended Bain Capital as having “done a lot to support businesses, to grow businesses.” He called an Obama attack ad linking Romney to layoffs at a Bain company “nauseating.” Chicago panicked and made Booker, a longtime Obama supporter, recant. His statement, which he taped himself, looked almost like a hostage video. Stephanie Cutter, Obama’s deputy campaign manager, later said Booker’s defense of Bain was one of the most frightening moments of the entire campaign because it undermined Chicago’s depiction of Romney as an overdog. She needn’t have worried. Romney’s Bain connection was just one brick in a wall that was going up between him and the middle class.

  RATHER THAN REACHING out, Romney just kept attacking Obama’s strengths. First, Boston tried it on women’s issues. After Democrats began alleging a “war on women,” Romney and his surrogates could have ignored the attacks and tried to move to friendlier terrain. Instead they accused the president of being hostile to stay-at-home moms. This didn’t work either. The gender gap didn’t budge. Nor did the gap among minorities. Romney almost never ventured into the inner city or even to minority areas of the suburbs, although any sensible look at the country’s demographics would have told him that simply turning out the Bush base from 2004 wasn’t going to cut it. He needed to find new voters and streak toward the center “as fast as you can,” as Nixon always advised GOP candidates to do after their primaries were over.

  The issue National Youth Administration bvon which he most urgently needed to reposition himself was Wall Street. His private equity background was worsened by the perception that he sided with the big banks, which were the subject of scorn in every focus group conducted since 2008. After he went on the ticket, Paul Ryan urged Romney to attack Dodd-Frank from the populist left. He argued that the new law, signed by Obama in 2010, had enshrined too-big-to-fail, favored large Wall Street banks over smaller regional financial institutions, and made the government too cozy with the banks. Advisers prepared a PowerPoint that showed Romney how going after Obama on Dodd-Frank could work on several levels at once. Romney wouldn’t bite. It would have meant challenging his peer group. His Wall Street friends had spent millions lobbying against Dodd-Frank as too restrictive, and he couldn’t very well go all the way to the other side of the issue. But he absorbed everything he heard, and later, at the first debate, the populist line would pop out.

  More often Romney got the timing of his pandering backward. If he was going to visit Liberty University, founded by the Revered $8 billion,

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  Boston Mad Men

  In his late fifties, Stuart Stevens was still into adventure sports. He cycled 450 miles, mostly uphill, in the Pyrenees, and skied a hundred kilometers to the North Pole. He celebrated the latter achievement by getting naked with Eskimos and Russians of both sexes in an overheated igloo. Every hour, one of the revelers, fortified by vodka, was required to exit and run naked once around the igloNational Youth Administration” do in temperatures of around 40 degrees below zero—good preparation for the insanity of a presidential campaign.

  Stevens, a Mississippi native, had a couple of pairs of cross-country skis propped up in the corner of his campaign office, but the Romney campaign’s chief strategist rarely had time to use them. For two
years he was either on the road with Romney or working at the Commercial Street headquarters almost around the clock, leaving only to exercise or sleep for a few hours. Whatever the campaign’s chief strategist lacked in long-standing ties to the governor, he made up for in influence over almost every part of the operation. By force of intelligence and personality, he dominated the inner circle of advisers and enjoyed Romney’s confidence even when plenty of people inside and outside the campaign were gunning for him. Like James Carville in Bill Clinton’s 1992 campaign, Stevens, a Hollywood scriptwriter and author of charming travel books when he wasn’t running campaigns, offered bits of humor and history with his relentless spin.

  Until 2012 Stevens’s favorite experience in politics had been working for George W. Bush in 2000. Brought in by his friends Mark McKinnon and Karl Rove, he had bonded with Bush, who always made sure Stevens was there for debate prep. In 2008 he and his media consulting partner, Russ Schriefer, at first worked for John McCain, whom Stevens had despised in 2000. They made a spot about Romney’s serial flip-flops (“Americans want a leader, not a follower”) that never ran but was leaked when they jumped ship to the Romney campaign.

  Stevens believed that the 2012 GOP nominating process was different from almost every nomination since Eisenhower’s. With the exception of 1964, when Barry Goldwater was nominated instead of Nelson Rockefeller, the GOP’s tradition of primogeniture demanded that the inheritance go to the first son, the one whose “turn” it was. Nixon, Ford, Reagan, Dole, both Bushes, and McCain all won in part because it was their turn. Stevens argued that though Romney was runner-up in 2008, it wasn’t necessarily his turn or his party. He was a northeastern governor in a southern party, a Mormon in an evangelical party, a supporter of health care reform in a party hostile to it. “Romney has to steal this nomination,” Stevens said in the spring of 2011. “Left to its own devices, the party won’t move to him.” He was right about that, though he didn’t mention that his candidate would have to knife his rivals with tens of millions in attack ads before he could steal the prize.