AEI's Pethokoukis Slices, Dices, and Destroys WaPo's Romney-Outsourcing Story

June 22nd, 2012 11:25 PM

If this were a prize fight, it would have ended at the end of the sixth round in a knockout. In a post at the American Enterprise Institute's blog this afternoon, James Pethokoukis, who previously toiled at U.S. News and Reuters, made mincemeat out of Washington Post reporter Tom Hamburger's Thursday Mitt Romney-Bain Capital hit piece ("Romney’s Bain Capital invested in companies that moved jobs overseas").

Just sit back and enjoy the pummeling. Since Hamburger didn't land any blows, I'll only deal with the punches Pethokoukis landed in explaining "Romney Reality" while refuting six "WaPo World" whines (italics are in original):

Sorry, Washington Post, Romney didn’t get rich moving U.S. jobs overseas

... the WaPo seems more than a little fuzzy about the basics of how international business works — and the difference between outsourcing and offshoring.

(Example 1) ... What CSI (Computer Software Inc.) actually did was provide U.S. software developers with technical support and sales. Example: It provided domestic outsourcing — which is different than overseas offshoring — for call centers and help desks. As far as its international business goes, CSI was reseller of U.S. software in European markets. In other words, they helped distribute U.S. software around the world.

(Example 2) ... overseas call centers in the WaPo story (relating to Stream International Inc.) were based in Europe and Japan, and serviced international customers of U.S. companies in their local languages.

(Example 3) ... what Modus Media did was help companies like Microsoft and IBM sell their products internationally. Products destined for American consumers were manufactured here at home.

(Example 4) ... GT Bicycles had overseas suppliers before Bain invested in the company.

(Example 5) ... (printed circuit board manufacturer) SMTC wasn’t even acquired until months after Romney left Bain Capital. Is Romney running for president or is Bain?

(Example 6) ... (computer chipmaker and tester) Chippac was purchased in March 1999, a month after Romney left Bain Capital. Prior owner was Hyundai, a South Korean company that already had factories in Asia at the time of sale. So buying a company with foreign factories is the same, apparently, as “shipping jobs overseas,” according to the Washington Post.

The Post threw six Hamburger haymakers at Romney, all of which wildly missed the mark. Only one arguably represents an example of outsourcing, and the former Massachusetts governor wasn't even in the ring at Bain when the relevant management decisions were made.

The ignorance on display (or the blind determination to disseminate falsehood regardless of the consequences, which sadly can't be ruled out) should be embarrassing to the Washington Post's managers and shareholders. One questions whether either is smart enough to acknowledge how Pethokoukis shredded their Mr. Hamburger.

Cross-posted at