For months we’ve heard calls from Democrats for Mitt Romney to release his tax records. Last week Harry Reid even claimed he had it from “a number of people” had told him that Mitt Romney had not paid his taxes for a decade and demanded he release them.
I’d like to suggest Mitt Romney actually go ahead and release his tax records. Much like pulling a Band-Aid off a wound, where the fear of the pain is actually worse than the pain itself, I suspect the speculative hay that Democrats will be making over the next three months will be a far more attention grabbing than the actual returns themselves would be.
This is not to suggest that Romney should feel compelled to provide whatever information Democrats seek. On the contrary. I’m suggesting that Romney use his tax returns to do something he has yet to forcefully do: Make a crystal clear argument that capitalism is at the core of American success and it offers virtually every American the opportunity to achieve prosperity. Essentially his argument should be something like: “I’m proud to have earned hundreds of millions of dollars throughout my career. I’ve paid tens of millions of dollars in taxes, I’ve donated tens of millions more to charities and I’ve helped create tens of thousands of jobs and I’ve helped generate billions of dollars in honest income for tens of thousands of American families.”
Such language, when coupled with a telling of his time at Bain demonstrating the impact he and Bain had on companies from Staples, to Gartner Group to Domino's Pizza clearly tell the story of success that capitalism has written in our past and can write for our future.
Staples provides a perfect example. Bain Capital was one of the key early funders of the company in 1986. Not only did Staples itself create over 50,000 jobs within its stores, but it likely created hundreds of thousands more by giving small business people the opportunity to save money on office products, which they could then invest in other areas of their businesses such as marketing, capital and even employees. At the end of the day Bain Capital and Mitt Romney may have made tens of millions of dollars from their Staples investment, but the positive impact on the economy was worth billions.
But of course not all Bain endeavors worked out, and in some cases both money and jobs were lost. But that’s the whole point of capitalism. Mitt Romney’s job at Bain Capital was never to create jobs, nor to destroy them. It was to employ the capital in his care in such a way that it would legally earn the most money possible for his investors. Bain’s capital was simply one – albeit an important one – of the inputs necessary to build, grow or rescue a business. Others include everything from risk taking to janitorial services to manufacturing to R&D and hundreds more. Capitalism works because it harnesses the efforts of millions of producers, each seeking to achieve their own goals to meet the needs of millions or billions of consumers seeking an ever evolving supply of goods and services.
There may be no better demonstration of the power of the mechanism of capitalism than Leonard Read’s seminal 1958 essay “I, Pencil”. Read demonstrates with unparalleled clarity the myriad forces that come into play in order to manufacture one simple pencil. From the lumberjacks in California and Oregon to the graphite miners in Sri Lanka to the workers shipping the pumice from Italy, everyone plays a role in the manufacturing of the pencil, not by adhering to some grand top-down strategy for manufacturing a pencil, but rather by doing what they have chosen to do in response to the needs of the market.
The lessons Read wrote about in I, Pencil are as true today as they were in 1958. Compare the market driven success of the mobile device universe with the iPhone, Google’s Android, Amazon’s Kindle and their hundreds of thousands of apps with the abject failure of government driven endeavors such as solar power, ethanol, education and General Motors.
Mitt Romney should leverage his tax returns and the wealth they reflect to champion the cause of capitalism and clearly demonstrate the role it plays in American prosperity. Indeed he could not have asked for a better foil than Barack Obama in an effort to contrast that success with the abject failure of the progressive top-down statist approach. It’s not often that history gives a politician the opportunity to dovetail their personal story with current events to demonstrate with crystal clarity the superior nature of capitalism vs. statism. By releasing his tax returns and explaining the story behind them Romney will not only take a weapon out of the hands of his opponents, but more importantly, he can remind many Americans that it was capitalism that allowed us to prosper in the first place.