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Froma Harrop
NationofChange / Op-Ed
Published: Saturday 20 October 2012
In the second presidential debate, Romney accused China of “cheating,” mainly by holding down the value of its currency.

Etch A Sketch, Made in China

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Nine years ago, the Ohio Art Co. closed its Etch A Sketch operation in Bryan, Ohio, and moved the jobs to Shenzhen, China. The 100 laid-off American workers weren't surprised. They'd been training their Chinese replacements.

Months ago, a Mitt Romney aide famously declared an "Etch A Sketch" campaign — whereby the candidate would erase what he'd done before (like shaking an Etch A Sketch toy) and draw a more appealing portrait for a general electorate. That image is apt, in an unwelcome way, for a Romney now bashing China for taking American jobs. Romney's private equity company, Bain Capital, did its bit to help China win the work, and with enthusiasm.

In the second presidential debate, Romney accused China of "cheating," mainly by holding down the value of its currency. But that doesn't shake clean the Bain prospectus promoting China's "strong fundamentals" — among them, wages 85 percent lower than Americans.' "Accordingly," the prospectus reads, "Bain Capital expects to see an increasing array of high-growth companies available for investment."

Does that sound like anyone wanting to see the Chinese currency rise in value? The stronger the Chinese currency, the harder it is for Bain's (or anyone else's) Chinese factories to sell their wares on world markets.

Offering another viewpoint, workers from Freeport, Ill., demonstrated this week at the Massachusetts headquarters of Sensata Technologies, a Bain Capital creation that has moved thousands of Americans jobs offshore. Sensata made the Illinois workers train the Chinese who will take their jobs as a condition of receiving their meager severance pay. Sound familiar?

Part of Romney's rap against China is the stealing of U.S. technology. But Microsoft had accused Bain's Chinese retailer, Gome Electrical Appliances, of pirating its software.

And Global-Tech, a Bain Chinese appliance company, was found to have violated a U.S. patent held by a French company.

Around the time Etch A Sketch left for China, Asimco Technologies bought two auto parts factories in Michigan, closed them and laid off 500 Americans. Bain saw the "strong fundamentals" of Asimco's operations and acquired the company. Today, Asimco makes the same camshafts on land donated by the Chinese government. China has designated this area as an export metropolis, showering the companies that move there with a variety of government subsidies.

Romney counts himself among the American heroes who built a business, but what his business built above all was an army of crack Washington lobbyists. For example, the profits Romney collects from Bain are taxed at a low 15 percent, rather than the top rate of 35 percent. Even many Wall Streeters regard this as an outrageous loophole, but private equity lobbyists fight to preserve the deal, which Romney has no plan to change. Forget the malarkey about a blind trust managing his Bain investments. It is run by Ropes & Gray, the Boston law firm that advises Bain.

The head spins over Bain's offshore holdings in the Cayman Islands, Luxembourg and so forth, all tasked with exploiting the U.S. tax code — or put in less neutral terms, tax-dodging. Sadly, too many of our paid-for representatives in Washington cast a blind eye toward such tax games. (The direct subsidies come from China.)

Once stripped of their jobs, the laid-off Americans apply for unemployment and other government benefits to survive. Guess that turns them into the "takers" whom Romney holds in contempt.

Romney didn't create globalization, but having made a pile off it, you'd think he'd at least spare some change for its American victims. A 9.5 magnitude earthquake couldn't shake that unpleasant a picture off the Etch A Sketch.

Copyright Creators.com


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ABOUT Froma Harrop
Froma Harrop’s nationally syndicated column appears in over 150 newspapers, including The Dallas Morning News, Houston Chronicle, Seattle Times, Denver Post and Newsday. The twice-a-week column is distributed by Creators Syndicate, in Los Angeles. Harrop has written for numerous other publications, ranging from The New York Times and Institutional Investor, to Harper’s Bazaar and Metropolitan Home. Previously, she covered business for Reuters Ltd., in New York, and was a financial editor for The New York Times News Service. A Loeb Award finalist for economic commentary, Harrop was also honored by the National Society of Newspaper Columnists. Over the years, the New England Associated Press News Executives Association has named her for five awards.

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4 comments on "Etch A Sketch, Made in China"

dville

October 20, 2012 3:20pm

Mitt Romney is a sneaky slime bag SOB but the sad part is that he is close to being elected...so what does that say about half of the country? He has a company in Communist China and the people still want to vote for him.

BozoAdult

October 20, 2012 1:20pm

If you could put a face on what is wrong with the nation that face could be Mitt Romney and Bain Capital. Millions of us lost our jobs due to their activity. Never vote for a filthy Republican.

hepette

October 21, 2012 10:49am

Romney has slammed the bailout as a payoff to the auto workers union. But that certainly wasn’t true for the bailout of Delphi. Once the hedge funders, including Singer—a deep-pocketed right-wing donor and activist who serves as chair of the conservative, anti-union Manhattan Institute—took control of the firm, they rid Delphi of every single one of its 25,200 unionized workers.

Of the twenty-nine Delphi plants operating in the United States when the hedge funders began buying up control, only four remain, with not a single union production worker. Romney’s “job creators” did create jobs—in China, where Delphi now produces the parts used by GM and other major automakers here and abroad. Delphi is now incorporated overseas, leaving the company with 5,000 employees in the United States (versus almost 100,000 abroad).

Grandma in WA

October 20, 2012 3:31pm

Too many Republican leaders in our Congress are owned by powerful corporations and a handfull of extremely wealthy individuals. I believe that there is more than sufficient evidence that corporations and individuals with massive amounts of money have purchased control of the leaders in our US House of Representatives and US Senate. So it is impossible to pass legislation that favors the middle class. It is a situation of "he who has the gold makes the rule!" The only way to change this plutocratic form of government is to take the money (gold) out of politics. The only way this can be done is by an Amendment to our US Constitution. Please click on or paste into your browser - http://signon.org/sign/take-money-out-of-politics. Join over 457 concerned people from all over the United States that just recently signed.