Steelworkers union member David Foster says Mitt Romney's Bain Capital pioneered the system of private equity buyouts that wrecked the economy. Jayme Halbritter
Josh Kosman, an author and critic of private equity firms, says Romney is not a vulture, but a parasite.
A young Mitt Romney, second from right, with his Bain Capital colleagues.
Mitt Romney’s years at Bain Capital represent everything you hate about capitalism.
By Pete Kotz Thursday, Apr 19 2012
James Sanderson had encountered a rare moment of industrial harmony.
It was the early 1990s, and the 750 men and women at Georgetown Steel were pumping out wire rods at peak performance. They had an abiding trust in management's ability to run a smart company. That allegiance was rewarded with fat profit-sharing checks. In the basement-wage economy of Georgetown, South Carolina, Sanderson and his co-workers were blue-collar aristocracy.
"We were doing very good," says Sanderson, president of Steelworkers Local 7898. "The plant was making money, and we had good profit-sharing checks, and everything was going well."
What he didn't know was that it was about to end. Hundreds of miles to the north in Boston, a future presidential candidate was sizing up Georgetown's books.
At the time, Mitt Romney had been running Bain Capital since 1984, minting a reputation as a prince of private investment. A future prospectus by Deutsche Bank would reveal that by the time he left in 1999, Bain had averaged a shimmering 88 percent annual return on investment. Romney would use that success to launch his political career.
His specialty was flipping companies — or what he often calls "creative destruction." It's the age-old theory that the new must constantly attack the old to bring efficiency to the economy, even if some are destroyed along the way. In other words, people like Romney are the wolves, culling the herd of the weak and infirm.
His formula was simple: Bain would purchase a firm with little money down, then begin extracting huge management fees and paying Romney and his investors enormous dividends.
The result was that previously profitable companies were now burdened with debt. But much like the Enron boys, Romney's battery of MBAs fancied themselves the smartest guys in the room. It didn't matter if a company manufactured bicycles or contact lenses; they were certain they could run it better than anyone else.
Bain would slash costs, jettison workers, reposition product lines and merge its new companies with other firms. With luck, they'd be able to dump the firm in a few years for millions more than they'd paid for it.
But the beauty of Romney's thesis was that it really didn't matter if the company succeeded. Since he was yanking out cash early and often, he would profit even if his targets collapsed.
Which was precisely the fate awaiting Georgetown Steel.
When Bain purchased the mill, Sanderson says, change was immediate. Equipment upgrades stopped. Maintenance became an afterthought. Managers were replaced by people who knew nothing of steel. The union's profit-sharing plan was sliced twice in the first year — then whacked altogether.
"When Bain Capital took over, it seemed like everything was being neglected in our plant," Sanderson says. "Nothing was being invested in our plant. We didn't have the necessary time to maintain our equipment. They had people here that didn't know what they were doing. It was like they were taking money from us and putting it somewhere else."
History would prove him correct. While Georgetown was beginning its descent to bankruptcy, Romney was helping himself to the company's treasury.
*
The Working Man's Villain
He should have known better. The year before Romney purchased Georgetown, he mounted his career in politics, setting his sights on the biggest target in Massachusetts: the U.S. Senate seat held by Ted Kennedy.
There were early signs that he might topple the Kennedy dynasty. Much like today, Romney was pitching himself as a commander of the economy, a man with the mastery to create jobs. Yet he suffered an affliction common to those atop the financial food chain: He assumed that what was good for him was good for all. Call it trickle-down blindness.
In the midst of that 1994 campaign, one of Romney's companies, American Pad & Paper, bought a plant in Marion, Indiana. At the time, it was prosperous enough to be running three shifts.
Bain's first move was to fire all 258 workers, then invite them to reapply for their jobs at lower wages and a 50-percent cut in health care benefits.
"They came in and said, 'You're all fired,'" employee Randy Johnson told the Los Angeles Times. "'If you want to work for us, here's an application.' We had insurance until the end of the week. That was it. It was brutal."
But instead of reapplying, the workers went on strike. They also decided the good people of Massachusetts should know what kind of man wanted to be their senator. Suddenly, Indiana accents were showing up in Kennedy TV ads, offering tales of Romney's villainy. He was sketched as a corporate Lucifer, one who wouldn't blink at crushing little people if it meant prettying his portfolio.
Needless to say, this wasn't a proper leading man's role for a labor state like Massachusetts. Romney was pounded in the election, taking just 41 percent of the vote. Meanwhile, the Marion plant closed just six months after Bain's purchase. The jobs were shipped to Mexico.
Yet Romney didn't learn his lesson. He seemed incapable of noticing that his brand of "creative destruction" left a lot of human wreckage in its wake. Or that voters might see him as more scumbag than saint.
Just a few months after being hammered by Kennedy, he set fire to another company.
*
The Price of Incompetence
The move was classic Bain. Before buying Georgetown, Romney had purchased the Armco steel mill in Kansas City, which had been in business more than 100 years.
"We were setting a lot of records for production at that time," employee Steve Morrow says. "We were making a lot of money, because we were getting profit sharing."
Bain combined Armco with the mill in Georgetown and foundries in Tempe, Arizona, and Duluth, Minnesota, to form the newly christened GS Industries.
Romney purchased Armco with just $8 million down, borrowing the rest of the $75 million price tag. Then he issued bonds — basically IOUs — to borrow even more to pay himself and his investors $36 million.
Within a year, he'd already made four times his initial investment while barely lifting a finger. But he'd also run up a staggering $378 million in debt on GSI's tab.
Steel is an infamously cyclical business, a worldwide commodity prone to the same wild price fluctuations as oil. The Kansas City plant forged parts for equipment used in mining gold and copper, leaving it susceptible to the instability of those markets as well.
Yet the smartest guys in the room thought they could run the plant better than the people setting production records.
"They were getting rid of old managers and hiring new managers that didn't have any steel experience," Morrow says. "Some of the guys were nice guys and everything, but they didn't have a clue what was going on."
Many of the new supervisors were ex-military, people who believed that grown men and women are best motivated by punishment. Before Bain, Morrow says, "everybody got along."
Afterward? "They wanted to run the plant like a disciplinary environment. They wanted to discipline people for getting hurt on the job. They wanted to put us in an environment like a war, where we were always fighting with them."
Romney was charging GSI $900,000 a year in management fees to run the company. The Kansas City mill received $900,000 worth of ineptitude in return.
Although Bain borrowed $97 million to retool the plant so it could also produce wire rods, it left the rest of the facility to rot.
To save costs, Bain went miserly on everything from maintenance to spare parts and earplugs. Equipment deteriorated. Since the new managers didn't know how to repair it, "they'd want to rent a new piece of equipment out instead of maintaining what we had," Morrow says. The waste and inefficiency were breathtaking.
Bain's plan all along was to streamline the company into greater profitability, then reap the rewards with a public stock offering. But the exact opposite was happening. Even Roger Regelbrugge, whom Bain installed as chief executive officer, knew the debt was crushing GSI from within, according to Reuters. If a public offering didn't materialize, the company would collapse.
Steel was about to enter a periodic downturn. Countries around the world were locked in a war of tariffs and government-subsidized production, creating a glut and driving down prices. Romney's strategy of the flip was never meant to endure difficult times.
Workers saw the end coming; they were particularly worried that Bain was badly underfunding their pension plan. So they went on strike in 1997, bringing a traditional Rust Belt flair to the festivities by littering the streets with nails and gunning bottle rockets at security guards.
When it was all over, the Steelworkers' union agreed to wage and vacation cuts in exchange for extra health and pension safeguards should the plant close.
Yet GSI was now hemorrhaging money, says David Foster, the union official who negotiated the deal. He claims that Bain cursed the company by placing its own interests above those of customers or long-term stability.
"Like a lot of private equity firms, Bain managed the company for financial results, not production results," Foster says. "It didn't invest in maintenance or immediate customer needs. All that came second to meeting monthly financial goals."
It would take a few more years of bleeding, but GSI eventually fell to bankruptcy.
The Kansas City mill closed for good; 750 people lost their jobs. Worse, Romney had shorted their pension fund by $44 million. The feds were forced to cover the difference, while workers saw their benefits slashed in bankruptcy court.
The battered Georgetown plant and the foundries in Arizona and Minnesota ultimately were bought out of bankruptcy by new companies. Their workforces were halved.
Still, Romney walked away unbruised. All that debt was technically GSI's, not Bain's. Because he'd repaid himself and his investors just months after the purchase, Romney pocketed millions for running the company into the ground.
"They were clever and ruthless enough to pay their own investors back at a really high return rate," Foster says.
This was the beauty of Romney's racket. Even if he killed a company — and he tended to kill them fairly often — he still made out, leaving others to take the hit.
*
The Parasitic Capitalist
On the campaign trail, Romney describes his work at Bain as resurrecting distressed companies. In this version, he's the white knight lifting troubled firms from the precipice of failure.
Not true.
Private equity companies like Bain rarely buy anything but profitable firms for one very compelling reason: The patient must be healthy enough to be force-fed all that debt. So it's something of a misnomer for Republican opponents to slur him as a "vulture capitalist."
"Romney is not a vulture capitalist, as Rick Perry says, since vultures eat dead carcasses," notes Josh Kosman, who's written about the private equity business for 15 years. He's "more of a parasitic capitalist, since he destroys profitable businesses."
Judging by the title of his book — The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy [ http://www.amazon.com/The-Buyout-America-Destroying-ebook/dp/B002SV37FO ] — it's safe to assume that Kosman's no fan of the industry. But he concedes that the business isn't inherently wicked.
The game works like this: Big-money investors write checks to people like Romney, who pool that money to buy or invest in other companies. Internal company documents show that a year before Romney left Bain in 1999, one of his funds had reached a massive $10 billion.
Though Bain requires a $1 million minimum for a seat at the table, its investors don't just come from the wealthiest 1 percent. They also include college endowments and teachers' pension funds.
Jon Burgstone, a professor at the University of California-Berkeley's Center for Entrepreneurship & Technology, sees private equity as essential to the economy. He may be a member of President Obama's National Finance Committee, but he's still an admirer of Bain.
"Generally, private equity companies invest in larger firms that need reorganization, or in smaller companies that need growth capital," he says. And their management can usually benefit from "very bright Bain consultants."
That feeling is shared by Steven Kaplan, among the foremost scholars in the field. The University of Chicago finance professor says that, statistically speaking, firms like Bain improve a company's cash flow while providing investors with a better return than the stock market.
There's no question that Romney had a gift for minting money. In 1986, he bought medical-equipment manufacturer Calumet Coach for just $1 million, later flipping it for $34 million. He made 16 times his initial investment in the Gartner Group, a technology research firm.
In what was perhaps his crowning achievement, he bought a money-losing Wesley Jessen Vision Care for $6 million in 1994. Seven years later, it was sold for a dazzling $300 million.
Kaplan argues that critics rarely mention these success stories, preferring to "cherry-pick" deals that paint Romney as unmerciful and gluttonous. "I think it's quite unfair," he says. "He was extremely successful at Bain generating returns for his investors. Bain Capital had a tremendous track record. When you invest in dozens of companies, some of those deals don't work out."
But if critics are quick to disregard Romney's triumphs, defenders are equally swift to rationalize his catastrophes. They'll note that for all Romney's bankruptcies, most were rescued by new companies and survive today. It's the final dollar tally that matters.
Yet they seem strangely incurious about the ruin he's delivered across the country. Take Kansas City, for example.
The Armco plant closing involved more than the torching of 750 jobs, Morrow says. Contractors and suppliers collapsed. Workers' children and widows lost health care and pension benefits. And while Bain received millions in tax breaks — paid for by the very people left holding the bag — Romney walked away millions richer.
So one might forgive everyday Americans for feeling they're on the wrong end of a rigged game, one where the wealthy always win — no matter how inept — and the little guy is left to hack through the debris.
Bain is a private company, meaning it has no obligation to reveal its practices. It's never made public a list of companies it's purchased. (Nor would Bain or the Romney campaign comment for this story.)
So in January, The Wall Street Journal did its best to piece together Romney's track record, reviewing 77 investments made under his direction. It turned out that nearly one in three of the companies experienced severe financial trouble. One in five wound up in bankruptcy.
The more telling figure: Of Romney's 10 biggest moneymakers, he ultimately destroyed four of them, leaving bankruptcy judges to clean up the mess.
As Foster sees it, Romney was an early pioneer of gaming the system. It would take another decade before large banks used many of the same principles to detonate the mortgage industry.
"The great irony is that his entire management experience at Bain Capital is buying companies and loading them up with debt and then looting the balance sheet," Foster says. "It's the very model that drove the American economy off the cliff, then left other people to manage the wreckage."
*
The Job Assassin
Renee Fry doesn't recognize the tin man she sees on TV, the candidate so congenitally wooden that he makes Al Gore seem like Flavor Flav. She was Romney's deputy chief of staff when he was governor of Massachusetts. The guy she served was warm and considerate, quick to distill data and seize the big picture.
"I'm lucky because I know him from the day-to-day Mitt," Fry says. "He liked going out and talking to people and learning from people. The Mitt I know had a real appreciation for people."
But if Romney played the friendly politician, kindness wasn't his specialty at Bain. He was generous to ranking executives, rewarding CEOs with huge bonuses. Yet he tended to treat those below his pay grade as little more than machinery.
Romney has repeatedly claimed to have created 100,000 jobs at Bain, and says that providing work for Americans was a primary company goal.
He makes his case by citing Domino's, Sports Authority and Staples, companies that added jobs after Bain bought in.
But Bain bought Domino's just months before Romney left to run the Salt Lake City Olympics, meaning someone else created those jobs. And he didn't manage Staples or Sports Authority; Bain was a minority investor in both.
By Romney's logic, any large investor — say, the Texas teachers' pension fund — also creates hundreds of thousands of jobs. The boast is so foolish that his campaign has since backed away from it.
Even Kaplan admits that private equity firms rarely create jobs. Workers are seen as costs, and costs are the enemy. According to Kosman, Romney was in truth among the most heinous job killers of them all.
While writing his book, Kosman conducted an interview with a Bain managing partner. The man told him that when Bain was about to buy a company, its partners would hold a meeting. "He said that about half the time [they] would talk about cutting workers," Kosman says. "They would never talk about adding workers. He said that job growth was never part of the plan."
That claim was buttressed by The Associated Press, which studied 45 companies bought by Bain during Romney's first decade. It found that 4,000 workers lost their jobs. The real figure is likely thousands higher, since the analysis didn't account for bankruptcies or factory or store closings.
An example of Romney's cold-blooded approach is his 1994 purchase of Dade International, an Illinois medical-equipment company. He soon merged it with two similar firms, a move that tripled sales.
Once again, he couldn't help but raid the vault, peeling away $100 million for himself and investors at the same time Dade was laying off 1,700 American workers.
After Bain closed a Dade plant in Puerto Rico, human resources manager Cindy Hewitt was asked to lure a dozen of those employees to work in the company's Miami factory.
But that plant soon closed as well. Though Romney was gobbling up millions, Bain still wanted those laid-off employees to repay their moving costs.
"They were treated horribly," Hewitt told The New York Times. "There was absolutely no concern for the employees. It was truly and completely profit-focused."
Yet Bain's molestation wasn't complete. It was trying to sell Dade, but didn't like the offers it received on the open market. So it created an artificial market of its own.
In 1999 it forced Dade to borrow $242 million, which was used to buy back company stock from Bain, Dade executives and their banker, Goldman Sachs.
Bain was again extracting profits with borrowed money. It had pushed Dade's debt to a bracing $2 billion. To help pay for the deal, the company laid off another 367 workers.
But that debt proved too much for Dade's shoulders to carry. Three years later, the company was bankrupt.
Kosman calls it standard Romney operating procedure. To pump short-term earnings, he would essentially "starve a company," whacking not just employees, but customer service and research-and-development funding — the very ingredients of long-term prosperity.
"I think they're one of the worst, at least during Romney's time," Kosman says. "They were very aggressive about dividends. They were very aggressive about borrowing the most money they could. He's very driven to be the best he could be, and that was to be as cutthroat as he could be. But in the process, he hurt a lot of companies and cost a lot of jobs, maybe tens of thousands of jobs."
Kosman says it's telling that Romney never cites companies he actually managed as evidence of his job-building skills.
"If Romney had some stories to tell, he'd use those stories," he says. "I think it's very interesting that he's not telling those stories, because I think they don't exist."
*
The Welfare Queen
Romney's economic views were on stark parade during this year's Michigan primary. He ripped President Obama for bailing out the auto industry, arguing that it should have been dealt with in his favorite resting place: bankruptcy court.
He was particularly incensed that the president rescued workers' pension funds before covering Wall Street's bad loans.
But his faith in the free market wobbles when his friends need rescuing. Romney just as vigorously defends the $10 billion government bailout of Goldman Sachs, his investment partner at Bain.
After all, Romney frequently assumed the role of welfare queen himself.
In 1988, he bought South Carolina photo-album maker Holson Burnes. In exchange for the firm's promise to build a new factory, the people of Gaffney, South Carolina, gave Bain $5 million in bonds and $200,000 in utility upgrades.
The plant closed just four years later. The 100 jobs there were later shipped to Mexico.
At GSI, he dumped $44 million in pension shortfalls on the federal government. And when he bought mattress-maker Sealy in 1997, he took $600,000 in welfare to move the firm from Ohio to North Carolina.
Even a company Romney cites as one of his greatest achievements — Steel Dynamics, where he was a minority investor — was practically launched by corporate welfare. Indiana taxpayers gave the firm $77 million to open a plant. Residents of DeKalb County actually had their income taxes raised solely to help Romney and his friends.
Tad DeHaven calls it "theft and redistribution."
He's no yammering Trotskyite; DeHaven is a former budget advisor to Republican U.S. Senators Jeff Sessions of Alabama and Tom Coburn of Oklahoma. Yet he notes that firms like Bain often get governments to subsidize their raiding parties.
The feds take $100 billion a year from everyday taxpayers and send it straight to companies like Romney's, says DeHaven, who now works for the Cato Institute, a conservative think tank.
But like most good Republicans, he's reluctant to single out the candidate for criticism. "It depends on what he knew and Bain's involvement in obtaining subsidies," DeHaven says. "I don't know if it makes him a hypocrite or not, but he should answer questions about it."
*
The President of Russia
Those answers won't be forthcoming. Romney refuses to discuss most of the companies he purchased at Bain, nor will he release his tax records from those years. As a result, voters are left to make their own call on his catalogue of creative destruction — and what he might be like as president.
Romney has professed his admiration for Ronald Reagan. But judging by his business history, the president he most resembles is Vladimir Putin. Romney has devoted his life to ensuring that every last penny rises to a few hands at the top. And like Putin, he's never shown much concern for the countrymen he tramples along the way.
"The word 'oligarchy' comes to mind," says Michael Keating, when asked to envision a Romney presidency.
Keating is a former business consultant and executive at Bertelsmann, a multi-national investment firm that operates in 63 countries. He asserts that men like Romney "hide their anti-social actions behind a rhetoric of free-market capitalist platitudes. But in the end, it's all about the bottom line — and only their own bottom line. ..."
"I don't think Romney is so much dangerous as he is unimaginative," Keating adds. "And in the world we live in, that amounts to the same thing."
The Purpose of Spectacular Wealth, According to a Spectacularly Wealthy Guy
Illustrations by Mat Maitland. Photographs from Getty Images.
Illustrations by Mat Maitland. Photographs from Getty Images.
Edward Conard. Marvin Orellana for The New York Times
By ADAM DAVIDSON Published: May 1, 2012
Ever since the financial crisis started, we’ve heard plenty from the 1 percent. We’ve heard them giving defensive testimony in Congressional hearings or issuing anodyne statements flanked by lawyers and image consultants. They typically repeat platitudes about investment, risk-taking and job creation with the veiled contempt that the nation doesn’t understand their contribution. You get the sense that they’re afraid to say what they really believe. What do the superrich say when the cameras aren’t there?
With that in mind, I recently met Edward Conard on 57th Street and Madison Avenue, just outside his office at Bain Capital, the private-equity firm he helped build into a multibillion-dollar business by buying, fixing up and selling off companies at a profit. Conard, who retired a few years ago at 51, is not merely a member of the 1 percent. He’s a member of the 0.1 percent. His wealth is most likely in the hundreds of millions; he lives in an Upper East Side town house just off Fifth Avenue; and he is one of the largest donors to his old boss and friend, Mitt Romney.
Unlike his former colleagues, Conard wants to have an open conversation about wealth. He has spent the last four years writing a book that he hopes will forever change the way we view the superrich’s role in our society. “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong,” to be published in hardcover next month by Portfolio, aggressively argues that the enormous and growing income inequality in the United States is not a sign that the system is rigged. On the contrary, Conard writes, it is a sign that our economy is working. And if we had a little more of it, then everyone, particularly the 99 percent, would be better off. This could be the most hated book of the year.
Conard understands that many believe that the U.S. economy currently serves the rich at the expense of everyone else. He contends that this is largely because most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone. “Most citizens are consumers, not investors,” he told me during one of our long, occasionally contentious conversations. “They don’t recognize the benefits to consumers that come from investment.”
This is the usual defense of the 1 percent. Conard, however, has laid out a tightly argued case for just how much consumers actually benefit from the wealthy. Take computers, for example. A small number of innovators and investors may have earned disproportionate billions as the I.T. industry grew, but they got that money by competing to constantly improve their products and simultaneously lower prices. Their work has helped everyone get a lot more value. Cheap, improved computing helps us do our jobs more effectively and, often, earn more money. Countless other industries (travel, telecom, entertainment) use that computing power to lower their prices and enhance their products. This generally makes life more efficient and helps the economy grow.
The idea that society benefits when investors compete successfully is pretty widely accepted. Dean Baker, a prominent progressive economist with the Center for Economic and Policy Research, says that most economists believe society often benefits from investments by the wealthy. Baker estimates the ratio is 5 to 1, meaning that for every dollar an investor earns, the public receives the equivalent of $5 of value. The Google founder Sergey Brin might be very rich, but the world is far richer than he is because of Google. Conard said Baker was undercounting the social benefits of investment. He looks, in particular, at agriculture, where, since the 1940s, the cost of food has steadily fallen because of a constant stream of innovations. While the businesses that profit from that innovation — like seed companies and fast-food restaurants — have made their owners rich, the average U.S. consumer has benefited far more. Conard concludes that for every dollar an investor gets, the public reaps up to $20 in value. This is crucial to his argument: he thinks it proves that we should all appreciate the vast wealth of others more, because we’re benefiting, proportionally, from it.
Google’s contribution is obvious. What about investment banks, with their complicated financial derivatives and overleveraged balance sheets? Conard argues that they make the economy more efficient, too. The financial crisis, he writes, was not the result of corrupt bankers selling dodgy financial products. It was a simple, old-fashioned run on the banks, which, he says, were just doing their job. There are a huge number of people in our economy who want ready access to their savings — pension-fund managers, insurance companies and you and me with our bank accounts. And because economic growth comes from long-term investments in things like housing, factories and research, the central role of banks, Conard says, is to turn the short-term assets of nervous savers into risky long-term loans that help the economy grow.
Every once in a while, this system breaks down. For one reason or another, the savers panic and demand all their money back. This causes a massive problem because the money isn’t sitting at the bank; it’s out in the world in the form of long-term loans. “A lot of people don’t realize that what happened in 2008 was nearly identical to what happened in 1929,” he says. “Depositors ran to the bank to withdraw their money only to discover, like the citizens of Bedford Falls” — referring to the movie “It’s a Wonderful Life” — “that there was no money in the vault. All that money had been lent.”
In 2008 it was large pension funds, insurance companies and other huge institutional investors that withdrew in panic. Conard argues in retrospect that it was these withdrawals that led to the crisis — not, as so many others have argued, an orgy of irresponsible lending. He points to the fact that, according to the Financial Crisis Inquiry Commission, banks lost $320 billion through mortgage-backed securities, but withdrawals disproportionately amounted to five times that. This stance, which largely absolves the banks, is not shared by many analysts. Regardless, Conard told me: “The banks did what we wanted them to do. They put short-term money back into the economy. What they didn’t expect is that depositors would withdraw their money, because they hadn’t withdrawn their money en masse since 1929.”
Conard concedes that the banks made some mistakes, but the important thing now, he says, is to provide them even stronger government support. He advocates creating a new government program that guarantees to bail out the banks if they ever face another run. As for exotic derivatives, Conard doesn’t see a problem. He argues that collateralized-debt obligations, credit-default swaps, mortgage-backed securities and other (now deemed toxic) financial products were fundamentally sound. They were new tools that served a market need for the world’s most sophisticated investors, who bought them in droves. And they didn’t cause the panic anyway, he says; the withdrawals did.
Even though these big conclusions are at odds with most other accounts, several economists said that they see Conard’s description of the crisis as more than just an apologia for the banking class (though it certainly is that, too). Andrei Shleifer, an influential Harvard economist, told me that he thought Conard was “genuinely fantastic on finance.”
“Unintended Consequences” only mentions Romney by name once (and in the acknowledgments, at that), but Conard hopes that the arguments detailed in his book will help readers understand why it’s so crucial that his former boss — who believes the government should help the investor class — win this November. As I read “Unintended Consequences,” though, I wondered if the book would have the opposite effect. Even staunch Republicans and many members of the Tea Party might bristle at a worldview that celebrates the coastal elite and says many talented people in the middle class aren’t pulling their weight. Was Conard saddling his old boss with another example of how out of touch those with car elevators and multiple Cadillacs can be? In this time of overheated arguments between opponents who rarely listen to one another, here was a rare member of the 1 percent openly trying to make his case. How convincing is it?
Conard and I eventually sat down at a cafe off Madison. His book is filled with a lot of abstraction, so I asked him to show me how his ideas play out in the real world.
Conard picked up a soda can and pointed to the way the can’s side bent inward at the top. “I worked with the company that makes the machine that tapers that can,” he told me. That little taper allows manufacturers to make the same size can with a tiny bit less aluminum. “It saves a fraction of a penny on every can,” he said. “There are a lot of soda cans in the world. That means the economy can produce more cans with the same amount of resources. It makes every American who buys a soda can a little bit richer because their paycheck buys more.”
It might be hard to get excited about milligrams of aluminum, but Conard says that we live longer, healthier and richer lives because of countless microimprovements like that one. The people looking for them, Conard likes to point out, are not only computer programmers, engineers and scientists. They are also wealthy investors like him, who are willing to risk their own money to finance improvements that may or may not work. There is a huge mechanism constantly trying to seek out and support these new ideas — entrepreneurs, multinationals and, crucially for Conard, investment firms and hedge funds and everyone down to individual bond traders. As Conard told me, one of the crucial lessons he learned at Bain is that it makes no sense to look for easy solutions. In a competitive market, all that’s left are the truly hard puzzles. And they require extraordinary resources. While we often hear about the greatest successes — penicillin, the iPhone — we rarely hear about the countless failures and the people and companies who financed them.
A central problem with the U.S. economy, he told me, is finding a way to get more people to look for solutions despite these terrible odds of success. Conard’s solution is simple. Society benefits if the successful risk takers get a lot of money. For proof, he looks to the market. At a nearby table we saw three young people with plaid shirts and floppy hair. For all we know, they may have been plotting the next generation’s Twitter, but Conard felt sure they were merely lounging on the sidelines. “What are they doing, sitting here, having a coffee at 2:30?” he asked. “I’m sure those guys are college-educated.” Conard, who occasionally flashed a mean streak during our talks, started calling the group “art-history majors,” his derisive term for pretty much anyone who was lucky enough to be born with the talent and opportunity to join the risk-taking, innovation-hunting mechanism but who chose instead a less competitive life. In Conard’s mind, this includes, surprisingly, people like lawyers, who opt for stable professions that don’t maximize their wealth-creating potential. He said the only way to persuade these “art-history majors” to join the fiercely competitive economic mechanism is to tempt them with extraordinary payoffs.
“It’s not like the current payoff is motivating everybody to take risks,” he said. “We need twice as many people. When I look around, I see a world of unrealized opportunities for improvements, an abundance of talented people able to take the risks necessary to make improvements but a shortage of people and investors willing to take those risks. That doesn’t indicate to me that risk takers, as a whole, are overpaid. Quite the opposite.” The wealth concentrated at the top should be twice as large, he said. That way, the art-history majors would feel compelled to try to join them.
I first met Conard last fall, around the same period in which I was spending a lot of time in Zuccotti Park, interviewing anti-Wall Street protesters who argued that people like him were destroying our democracy. Most Wall Street leaders ignored the Occupy movement or evaded it, and I was sure Conard would be among the most silent. He had recently been stung by a 1 percent scandal of his own: setting up a company whose sole purpose was to donate $1 million to a political-action committee that supported Romney. He was being cast as the embodiment of the secretive and growing influence that the hyperrich have in our political system. If anybody was going to be shy with a reporter, I figured, it was him.
Over lunch with editors from The Times Magazine, Conard proved the exact opposite. He looks like a benign middle-aged guy until he starts making an argument. At which point, Conard stares into your eyes and talks with intense force, punctuated by the occasional profanity, in full paragraphs. He delighted in arguing over corporate-bond rates and Chinese central-bank policy, among other arcane minutiae. It also became clear that he had exhaustively thought through the role of the superrich in our economy, and he wasn’t afraid to share those opinions.
Conard’s life serves as the perfect model for his economic philosophy. Born in 1956, he grew up in a middle-class suburb of Detroit, the son of a kindergarten teacher and a Ford engineer. His childhood ambition was to be able to afford his own house in a Detroit suburb, but, he likes to say, he took a series of risks (like forgoing the more secure path of law school) that eventually led him to Harvard Business School. When Conard graduated, in 1982, he entered the burgeoning field of management consulting. He joined the prestigious Boston-based firm Bain & Company, which nine years earlier was founded with a radically different approach from the more traditional New York-based consulting firms. Those firms positioned themselves as grand thinkers, far above the fray of daily business struggles. Bain’s approach was to join its clients in the trenches, providing analysis and working with senior management to beat the competition.
In 1990, Conard decided to pursue even greater wealth by quitting Bain to become a manager at the investment bank Wasserstein Perella, in New York. He disliked the job, though, and when his old colleague Mitt Romney took him to lunch in 1992, Conard offered his services to Bain Capital, a division that Romney helped start in order to acquire companies with the goal of improving them itself. When Romney said he couldn’t afford to match his Wall Street pay, Conard offered to work for less until Romney decided he had added enough value to deserve a bonus and stock options. His first year did not go terribly well, though Conard eventually identified an ideal takeover target, a company that made pharmaceutical-test instruments. Bain paid less than a half billion for the company. Its value has since risen to more than $7 billion. In 2000, he became the head of the New York office.
Which leads us to what Conard said was his next big risk — leaving the business world to make his case for a new, decidedly pro-investor way to think about the economy. He seems genuinely certain that his arguments in “Unintended Consequences” will persuade a fair number of economists, politicians and thought leaders. I suggested during many of our conversations that being a public intellectual might be tricky when you freely say the sorts of things that Conard often does. During one conversation, he expressed anger over the praise that Warren Buffett has received for pledging billions of his fortune to charity. It was no sacrifice, Conard argued; Buffett still has plenty left over to lead his normal quality of life. By taking billions out of productive investment, he was depriving the middle class of the potential of its 20-to-1 benefits. If anyone was sacrificing, it was those people. “Quit taking a victory lap,” he said, referring to Buffett. “That money was for the middle class.”
There’s also the fact that Conard applies a relentless, mathematical logic to nearly everything, even finding a good spouse. He advocates, in utter seriousness, using demographic data to calculate the number of potential mates in your geographic area. Then, he says, you should set aside a bit of time for “calibration” — dating as many people as you can so that you have a sense of what the marriage marketplace is like. Then you enter the selection phase, this time with the goal of picking a permanent mate. The first woman you date who is a better match than the best woman you met during the calibration phase is, therefore, the person you should marry. By statistical probability, she is as good a match as you’re going to get. (Conard used this system himself.)
This constant calculation — even of the incalculable — can be both fascinating and absurd. The world Conard describes too often feels grim and soulless, one in which art and romance and the nonremunerative satisfactions of a simpler life are invisible. And that, I realized, really is Conard’s world. “God didn’t create the universe so that talented people would be happy,” he said. “It’s not beautiful. It’s hard work. It’s responsibility and deadlines, working till 11 o’clock at night when you want to watch your baby and be with your wife. It’s not serenity and beauty.”
Central to this investor’s work ethic is another pillar of his worldview. Unlike Romney, Conard rejects the notion that America has “some monopoly on hard work or entrepreneurship.” “I think it’s simple economics,” he said. “If the payoff for risk-taking is better, people will take more risks.” Conard sees the success of the U.S. economy as, in part, the result of a series of historic accidents. Most recently, the coincidence of Roe v. Wade and the late 1970s economic malaise allowed Ronald Reagan to unify social conservatives and free-market advocates and set the country on a pro-investment path for decades. Europeans, he says, made all the wrong decisions. Concern about promoting equality and protecting favored industries have led to onerous work rules, higher taxes and all sorts of social programs that keep them poorer than Americans.
Now we’re at a particularly crucial moment, he writes. Technology and global competition have made it more important than ever that the United States remain the world’s most productive, risk-taking, success-rewarding society. Obama, Conard says, is “going to dampen the incentives.” Even worse, Conard says, “he’s slowing the accumulation of equity” by fighting income inequality. Only with a pro-investment president, he says, can the American economy reach its full potential.
At its core, Conard’s book addresses what is perhaps the most important question in economics, the one Adam Smith set out to answer in “The Wealth of Nations”: Why do some countries grow so rich and others stay poor? Where you come down on the answer has as much to do with your politics as your economic worldview (two things that can often be the same). Glenn Hubbard, a prominent economist and one of Romney’s chief economic advisers, takes his ideas seriously. “He doesn’t have the blinders of a model-based view of the world, which is an advantage and a disadvantage,” Hubbard told me. Others, like the progressive economist Dean Baker, were less kind. “I can’t say there was much I found compelling,” he told me. The celebrated New York University economist Nouriel Roubini went out of his way to say that he had “great intellectual respect for his sharp mind,” even if he didn’t agree on numerous points, especially the benefits of inequality.
Nearly every economist I spoke with said that Conard has too much faith in the market’s ability to reward only those who create real value. Conard, for instance, insists that even the dodgiest financial products must have been beneficial or else nobody would have bought them in the first place. If a Wall Street trader or a corporate chief executive is filthy rich, Conard says that the merciless process of economic selection has assured that they have somehow benefited society. Even pro-market Romney supporters take issue with this. “Ed ought to be more concerned about crony capitalism,” Hubbard told me.
“Unintended Consequences” ignores some of the most important economic work of the past few decades, about how power and politics influence economic growth. In technical language, this field is the study of “rent seeking,” in which people or companies get rich because of their power, not because of their ideas. This is one of the few fields in economics in which left and right share many influences and ideas — namely that wealthy individuals and corporations are able to influence politicians and regulators to make seemingly insignificant changes to regulations that benefit themselves. In other words, to rig the game. One classic example is banking. Banks have enormous resources to constantly put explicit or subtle pressure on lawmakers and regulators so that regulation can eventually serve their interests.
Conard’s version of the financial crisis ignores much reporting and analysis — including work I’ve done with NPR’s “Planet Money” team — that shows that some of the nation’s largest banks actively manipulated customers and regulators and, sometimes, their own stockholders to profit from dangerous risk. And for many economists, rising inequality can create exactly the wrong outcomes for society over all. Rather than simply serving as an invitation for everybody to engage in potentially beneficial risk-taking, inequality can allow those with wealth to crush new ideas.
I kept raising these questions with Conard, but he repeatedly waved them off. “I don’t want to talk about rent-seeking,” he told me. “When you go off to a third-world country, there’s a dictator who says, ‘I’m giving the telephone franchise to my brother-in-law.’ It’s pretty hard to do that here.” I countered that many economists see rent-seeking in the United States as a much more subtle but still destructive process. If some rich people are able to get and stay rich by messing around with the rules, then those art-history majors will feel as if they have no chance to break into a well-connected, well-protected elite.
Perhaps concentrated wealth will inspire a nation of innovative problem-solvers. But if the view of many economists is right — that it sometimes discourages innovation — then we should worry. While Conard offers deep and well-argued analyses on almost every issue, on this one he resorted to anecdotes and gut feelings. During his work at Bain, he said, he saw that successful companies had to battle against one another. Nobody was just given a free ride because of their power. “Was a person, like me, excluded from opportunity?” he asked rhetorically. “If so, I wasn’t aware!”
I suggested that both could be true. The rich could earn a great deal of wealth through their own hard work, skill and luck. They could also use their subsequent influence to make themselves even richer. One of the great political and economic challenges of our time is figuring out the balance between wealth that benefits society and wealth that distorts. Of course we want to encourage people to take risks and find areas of productive innovation. It’s just not in the interest of the United States to allow wealth to skew the political process so that good new ideas are barred.
Are Conard’s views the uncensored, impolitic version of the man he hopes will be president? The Romney campaign said they wouldn’t comment in any way on “Unintended Consequences,” and Conard wouldn’t share with me anything about his private conversations with his old friend. Glenn Hubbard said only that at a broad level, Romney and Conard share “beliefs about innovation and growth and responsible risk-taking.”
Conard and Romney certainly share views on numerous policy matters. Like many Republicans, they promote lower taxes and less regulation for those who achieve financial success. Romney has also said that rising inequality is not a problem and that the attention paid to the issue is “about envy. I think it’s about class warfare.” The differences between these two men are also striking. Romney’s economic platform and his record as the governor of Massachusetts suggest that he is more of a centrist than Conard. Romney wants to eliminate capital-gains taxes for people earning less than $200,000 a year but keep them in place for the 1 percent, which Conard says is a good start but doesn’t go far enough.
The biggest difference is that Romney is running for president and needs more people to like him. Conard doesn’t have to worry about that. “People get very angry before they change their mind,” he said. “Economics is counterintuitive. It just is.” I told him that surely is true, but his ideas are counterintuitive even to people well versed in economics. After we spoke for one of the last times, he sent me an e-mail summing up his argument: At base, having a small elite with vast wealth is good for the poor and middle class. “From my perspective,” he wrote, “it’s not a close call.”
Mitt Romney is weird. When the Obama reelection campaign early in the cycle made the mistake of indicating that its strategy would be to imply that Mitt Romney is weird by repeatedly telling Politico [ http://www.politico.com/news/stories/0811/60921.html ] that it planned on calling Mitt Romney weird, Romney’s camp countered by causing a brief and not particularly sincere media brouhaha over whether “weird” is code for “Mormon.” Plenty of Americans think Mormons are weird, yes, but in this case, the simple fact is Mitt Romney is weird, entirely apart from his religion.
He seems incapable of natural conversation and frequently uncomfortable in his own skin. He’s simultaneously dorkily earnest and ingratiatingly insincere. He suggests a brilliantly designed politician android with an operating system still clearly in beta. He once tied a dog to the roof of his car and drove for hundreds of miles without stopping and some years later thought that was an endearing story. All video of him attempting to interact with normal humans is cringe-inducing, as a cursory YouTube search quickly demonstrates. (Martin Luther King Day, Jacksonville, Fla., 2008: Mitt poses for a picture [ http://www.youtube.com/watch?v=FDwwAaVmnf4 ]
with some cheerful young parade attendees. As he squeezes in to the otherwise all-black group, he says, apropros of nothing, “Who let the dogs out? Woof, woof!”) He seems to have been told that “small talk” is mostly made up of cheerfully delivered non sequiturs.
Every good Romney profile has a “Romney says something bizarre” moment. In Sridhar Pappu’s 2005 profile for the Atlantic [ http://www.theatlantic.com/magazine/archive/2005/09/the-i-holy-cow-i-candidate/4196/ ], Romney produced a commemorative plate featuring the likenesses of Dwight and Mamie Eisenhower, and announced: “Not only was Eisenhower one of my favorite presidents; when we became grandparents, you get to choose what the kids will call you. Some call you Papa. I chose Ike. I’m Ike, and Ann is Mamie.”
Leaving aside that Eisenhower worship is not particularly widespread in the modern GOP (he failed to kill the New Deal programs and didn’t particularly love Israel), it is not “a thing” that you can make your grandchildren call you by the name of a random dead president. There are a wide variety of names for grandparents based on family traditions and cultures and adorable toddler malapropisms, but I have never heard of a grandparent asking to be called some other non-related person’s name. (“Make the children call me ‘Horatio’ because I so admire ‘CSI: Miami’s’ David Caruso.”)
Even Romney’s family seems to have found this weird: Of his eight grandchildren, only the oldest ever called him “Ike,” according to Tagg, and she stopped when everyone else evinced a preference for “Papa.”
This odd Eisenhower admiration seems like some sort of carefully calculated (but poorly thought out) way to highlight “moderateness” while also appealing to pious sentiment. Romney explains that he admires Ike as much for his personal morals as for his actual acts, and says he feels disappointed in Jefferson, for his affair with Sally Hemings. “What for me makes people like Teddy Roosevelt and Franklin Roosevelt and John Adams and George Washington and Dwight Eisenhower and Ronald Reagan such extraordinary leaders is that they had integrity through and through,” he says. (I guess it’s OK to have an affair, like FDR, and own slaves, like Washington, but Romney draws the line at combining the two.)
After a voter at the New Hampshire diner told Romney, “My daughter goes to Michigan State,” he replied, “Oh, does she, really? My brother’s on the board of Michigan State.” When another patron said that she was from Illinois, Romney told her, “I won the straw poll at the Illinois Republican convention!”
His off-kilter interpretation of casual conversation also involves guessing at the ethnic background of strangers, poorly (“are you French-Canadian?”), and awkward joking (pretending a waitress pinched his ass). And he enjoys congratulating people, seemingly for the feat of existing and being in the vicinity of Mitt Romney.
If Nixon was epically, operatically weird — the sort of president the nation that produced Charles Manson should expect, let’s say — Romney is uninterestingly weird. First reel of “Blue Velvet” weird, without a hint of that subterranean layer of rot and perversion underlying the whole thing. Upon returning to his childhood home in Michigan for a 2012 campaign event, Romney noted that the trees were “the right height.”
Mitt had grown up hearing people comment on his father’s sweep of slicked-back black hair, white at the temples. But since his early teens, Mitt had patterned his own hairstyle after a man named Edwin Jones, who served as his father’s top aide in running the Detroit operations of the Mormon Church.
“He sat up front, to the side at a desk, keeping records,” Mitt would recall years later. “I remember that he had very dark hair, that it was quite shiny, and that you could see it in from front to back. Have you looked at my hair? Yep, it’s just like his was some 40 years ago.”
“Have you looked at my hair?” There is perhaps some psychological insight there: Romney is worshipful of his father, and has apparently modeled himself on a man his father trusted.
Romney’s commitment to clean living is less an individual quirk than one prescribed by his religion, but it is always amusing when a grown adult acts like a character in an Archie comic. A 2003 Boston Magazine piece has the new governor pouring Diet Vanilla Coke and regular Vanilla Coke for a family taste test. (I can only assume the sodas are caffeine-free, though there is some debate in LDS circles about the letter versus the spirit of the prohibition against “hot beverages,” which does not explicitly mention caffeine.) It also notes Romney’s regular breakfast: “cereal, egg whites, and toast without butter.” At Bain Capital, he refused to put his own money in a company that produced R-rated movies. (He did consent to allow Bain to invest.)
Even the stories of Romney’s supposed temper are ridiculous. He was arrested, in June of 1981, for disorderly conduct while attempting to launch his family boat in Cochituate State Park. He got in a heated argument with a cop who noted that the boat was not displaying its registration. Romney was hauled in in his swim trunks. Charges were dropped when he threatened to sue for false arrest. At the 2002 Salt Lake Winter Olympics Romney got in a public confrontation with a volunteer police officer directing traffic outside an Olympic venue. Police allege Romney said “fuck” multiple times while berating the cop. Romney declined to apologize to the cop, Shaun Knopp, and while the public berating did happen — he mentions it in his book — Romney made a big point of specifically denying that he used a bad word. (In fact, Romney insisted at the time that he specifically said “H-E double hockey sticks.” Like a child. A remarkably well-behaved child speaking in earshot of his second grade teacher.) He told the Boston Globe that he had two witnesses to corroborate his denial. “I have not used that word since college — all right? — or since high school,” he said.
Romney recently told People magazine [ http://www.politico.com/news/stories/1111/68845.html ], “I tasted a beer and tried a cigarette once, as a wayward teenager, and never did it again.” I’m not sure we should believe him. There’s no way in hell I can imagine Mitt Romney loosening up enough to have a beer.
A docent with visitors at the Church History Museum in Salt Lake City, which presents the history of the Mormon church. Kristin Murphy for The New York Times
The Church History Museum in Salt Lake City presents the Mormon story in an American context. Above, the gift shop is well stocked with figurines on Mormon themes. Kristin Murphy for The New York Times
Part of the plow used on the first half-acre in the Salt Lake Valley in 1847. Kristin Murphy for The New York Times
A stained-glass window by an unknown maker, from 1913, shows the first vision of the 14-year-old Joseph Smith. Kristin Murphy for The New York Times
By EDWARD ROTHSTEIN Published: April 22, 2012
SALT LAKE CITY — The president, according to Mormon doctrine, is literally a seer, a prophet — the president, that is, of the church. Usually American presidents have a somewhat lower reputation.
Now that Mitt Romney, an active Mormon, is aspiring to the more mundane office, new attention has come upon the faith that guides him. And much of that attention has been accompanied by controversy, confusion and concern about how Mormonism fits into American society.
For a glimpse of how Mormons see themselves, though, it’s worth visiting the Church History Museum [ http://www.lds.org/churchhistory/museum ] of the Church of Jesus Christ of Latter-day Saints here. Created by believers, for believers, the museum shows how close to the center of American life Mormons consider themselves to be.
The gap is enormous between that perspective and the one embedded in the wider culture. The hit Broadway musical “The Book of Mormon” riotously mocks the church’s doctrine. The high-toned HBO soap “Big Love,” which ended last year, relished the complications of polygamy (once endorsed by the church and long since renounced). Reports of posthumous Mormon baptisms of Holocaust victims have fueled outrage [ http://www.nytimes.com/2012/03/03/us/jews-take-issue-with-posthumous-mormon-baptisms-beliefs.html ]. Accusations of extremism and murder appear in thrillers reaching back to Sherlock Holmes’s first case in “A Study in Scarlet.”
While Mormons have been prominent in politics — including the Senate Majority Leader, Harry Reid, Democrat of Nevada; and Mr. Romney’s father, George W. Romney, former governor of Michigan — and while there are growing lists of famous Mormons [ http://www.famousmormons.net/ ] in American culture, the church’s temple rites are as closed to non-Mormons as Mecca is to non-Muslims. Little is popularly understood about a religion that traces its origins to the revelations granted a 14-year-old son of a farmer in 1820 in Palmyra, N.Y. Is Mormonism central to American life or at its margins?
The museum doesn’t provide a definitive answer, but it does supply considerable insight into Mormon culture and some of the tensions in this young religion.
The museum opened in 1984, and its core exhibition dates from that period. Its current director, D. Kurt Graham [ http://www.niupress.niu.edu/niupress/scripts/Book/bookresults.asp?ID=544 ], is quick to point out its antiquated character. It has videos but no interactive screens. It has a diorama of nondescript farmland with a fragmented 20-minute audio program, aided only by lights shining on the plastic landscape. The overall story is incomplete. All of this, he says, will change with a planned overhaul during the next three years. But even if not up-to-date in museological style, the narrative covers the faith’s fundamentals.
The exhibitions open with allusions to the founding revelations — in this case, divine figures seen by the kneeling farm boy, Joseph Smith, as shown in a 1913 stained-glass window. Then, as we look at the upstate New York landscape, we listen to audio commentary outlining the milestones that led to the church’s founding: further divine visitations; a buried book written on gold plates in cryptic hieroglyphs; the inspired translation of those plates by Smith yielding the Book of Mormon; and rampant persecution of the community of believers, who claimed to be restoring true Christianity.
The strange thing is that aside from these displays the rest of the museum could almost be an account of the settling of the American West. We see a reproduction of a 19th-century covered wagon with a clever wooden odometer attached to its wheel, the street plan of a new city on a promontory along the Mississippi River in Illinois, paintings of wagon trains and battles, fragile objects carried on long migrations, a 19th-century printing press and artifacts of early commerce.
The narrative climaxes in evocations of small-town American life, including marching-band uniforms and commemorative ribbons. A diorama maps Salt Lake City’s early expanse. We learn of the first Mormon Temple’s construction and the growth of Mormon social institutions, and glimpse religious practices along with evidence of the faith’s expansion, shown in artworks from Africa, Asia and South America. On the second floor is an exhibit about the religion’s presidents, whose achievements are outlined.
There is a sense of triumph in this chronicle, emphasized by a statue of the Mormon angel Moroni blowing a trumpet at the view of the Mormon Temple offered through a window. The church’s handiwork in Salt Lake City is as much a part of the landscape as the snow-covered mountains in the distance.
But this museum is not a tale of religious evolution, nor is it a presentation of theological ideas. It is also not a version of “Lives of the Saints,” with accounts of miracles.
It is actually a kind of identity museum belonging to that ever-expanding genre as a celebration of a particular hyphenated American group, an exploration of its trials and a demonstration of its achievements. The museum shows how earthly a religion Mormonism is, how practical its actions have been and how intimately connected its history is to the American past. The printing press, the farm, depictions of the ordinary citizens who were the first church members — we see a vision of early American democracy. The covered wagon, the daring mapping of unknown territory: Mormon history is a version of the American pioneering myth.
The difference from the standard pioneering narrative is that here it is also presented as the history of a people. The people are established by blood relations and through conversion to the faith. An explicit identification is also established with the fate of the ancient Israelites. And persecution plays a central role: Smith, we are told, is hounded out of New York. His followers move West, seeking safe ground to build their new society. In 1844, in Carthage, Ill., Smith is murdered (we see his death mask, along with a painting of the attack). His successor, Brigham Young, leads tens of thousands across treacherous terrain to reach Utah, which is hailed as Zion restored.
Such biblical themes were often a part of early American imaginings. And the Book of Mormon even suggests that the Israelites and American Indians were related.
So the typically individualistic American tale of Western settlement is overlaid here with another story emphasizing communal bonds and biblical destiny. And the utopian dreams of Zion are accompanied by the pragmatic institution building reflected in the museum’s exhibitions. Mormonism may have otherworldly concerns, but it also embraces many worldly ones, which, we see, involve charity and commerce. The convictions that fill a 21,000-seat church conference center near the museum with Mormons from all over the world have also led to the construction of the new church-owned [ http://www.mormonnewsroom.org/article/city-creek-center-an-economic-revitalization ] City Creek Center mall [ http://shopcitycreekcenter.com/ ] nearby, with its luxury shops and condos.
It would take someone outside the church to present a broader, more detached vision of Mormonism, to shift emphases, reveal the shadows, discuss schisms and highlight ways the church has changed: its racist ideas exorcised only in the last 30 years or so, its baptizing of the dead coming under some restraint, its authoritarian culture being challenged by dissenters. In many ways the history of Mormonism discloses many of the strains in most religions’ histories: the tension between revelation and doctrine, the conflict between individual experience and communal belief, the challenge of religious convictions finding a place in secular surroundings.
But for all its worldwide appeal, Mormonism also seems distinctively American. Mormons see themselves at the American center because, in many ways, that is how their history was shaped; they are seen as alien by many because of their pronounced separateness, a notion created by the very sense of peoplehood that has given them coherence.
This identity museum suggests, though, that whether or not a Mormon wins the White House, that sense of difference may end up becoming an asset. It may begin to make Mormons more like other American groups: bound by history, birth, culture or belief, and more prepared to affirm that identity publically while celebrating their many achievements.
The Church History Museum is at 45 North West Temple Street in Salt Lake City; (801) 240-3310 or lds.org/churchhistory/museum.
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