ANALYSIS: Bachmann’s Iowa blame game

Introduction

If NBC’s David Gregory had asked just a couple follow-up questions of Michele Bachmann on Meet the Press last Sunday, he would have found that her anecdote about how “Obamacare” will lead to economic ruin doesn’t stand up to scrutiny.

In fact, he would have found that the financial problems of the Iowa employer she cites to bolster her point are far more likely the result of the economic policies of former President George W. Bush.

In answering Gregory’s question about how she would “turn the economy around within several months” if elected president, as she recently promised to do, Bachmann pledged to repeal both the health care reform law and the Dodd-Frank Act, which Congress enacted last year to reform the way financial institutions are regulated.

“I’ll tell you the biggest job killer right now, because I’m all across Iowa asking people, business people tell me it’s Obamacare and it’s the Dodd-Frank law,” Bachmann said. “Dodd-Frank is drying up credit for businesses. And I have the repeal bill for Dodd-Frank.”

She went on to promise to repeal health care reform, too.

“People want that gone. It is absolutely without a doubt a job killer. I was just at a business in Indianola, Iowa. They’ve let half of their workforce go, over 100 employees.”

The implication, of course, was that the employer had to let all those workers go because of health care reform.

Gregory didn’t challenge her, so I started trying to find the Indianola employer that had axed so many jobs because of Obamacare.

I was especially curious because the portions of the law that will have the greatest impact on some businesses have not even taken effect yet. A provision that has gone into effect, which provides tax credits to small businesses that offer health care coverage for employees and help subsidize it, has actually been a boon to many firms.

While there are no final numbers yet on just how many of America’s four million small businesses eligible for the tax credit have actually taken advantage of it, reports by insurers indicate that many have done so since the tax credit became available on Jan. 1, 2010.

It is true that in 2014, large employers that don’t provide coverage to their employees will have to pay a “shared responsibility” fee, but the law exempts all firms that have up to 50 workers. The government estimates that no more than two-tenths of one percent of all firms are likely to have to pay the fee. That’s because 96 percent of all U.S. businesses have fewer than 50 employees, and most of those with more employees already offer health insurance.

Of course, Bachmann didn’t mention any of that during her Meet the Press interview.

Because Bachmann didn’t identify the Indianola company, I decided to make a few inquiries myself. My first call was to the Indianola city manager’s office. The layoff story didn’t ring a bell with anyone there, but they said someone at the local Chamber of Commerce might know something about it.

The folks at the Chamber were at a loss, too, but they did recall that a company called Cemen Tech Inc., which makes mobile concrete mixing trucks and dispensers, had laid off workers a few years back.

I called both Cemen Tech and the Bachmann campaign in hopes of digging out a few bits of information that didn’t make Meet the Press. When my calls were not returned, I did an online search for Cemen Tech. And now I know why Bachmann didn’t offer up any details.

A July 11 story in the Des Moines Register reported that Bachmann would be doing several televised interviews that afternoon “from a makeshift stage on (the) manufacturing floor of Cemen Tech, which employs 115.”

The story went on to report that Republican state Sen. Kent Sorenson, Bachmann’s Iowa campaign director, had asked Cemen Tech Inc. chairman Gary Ruble to host an event for the candidate. The story said that while Ruble remained undecided, “he likes what Bachmann has to say, especially about cutting government regulations.”

Ruble then is quoted as saying that Cemen Tech “was diminished by half because of lay-offs that began in late 2009 and is surviving on exports to Mexico, Russia and other countries.”

My online search then led me to a story on the Web site of Des Moines television station KCCI, dated Oct. 10, 2008, which reported that an Indianola manufacturing company had been forced to lay off nearly 60 of its 180 employees “because of the rocky economy.” That company was Cemen Tech.

Cemen Tech executive Tom Palme told KCCI the layoffs were necessary because the “economic crisis and tight credit market have taken a toll on new orders.”

So the big layoff at Cemen Tech apparently did not occur in late 2009, as Ruble reportedly said, but more than a year earlier—and a month before Obama was even elected president.

It turns out that Cemen Tech actually laid those workers off during the last year of the administration of George W. Bush and did so because of the recession and the credit crisis that resulted from one of the recession’s primary causes, the near collapse of big banks and mortgage companies. Federal Reserve Chairman Ben Bernanke and others have said the primary cause of the recession was the inadequate regulation of those financial institutions. The Dodd-Frank Act was an attempt to increase regulatory scrutiny of those firms to reduce the chances of a similar economic catastrophe in the future.

Even though newly announced GOP presidential candidate and Texas Governor Rick Perry this week essentially accused Bernanke of treason because of his monetary policies, it is important to remember that Bernanke has his job thanks to George W. Bush. Bush tapped Bernanke in June 2005 to chair his Council of Economic Advisers. Bush was so impressed with Bernanke that just a few months later he named him to succeed Alan Greenspan as head of the Fed.

So it appears that Obamacare and Dodd-Frank had little if anything to do with the problems at Cemen Tech. In reality, Cemen Tech’s problems stemmed from failed economic policies and insufficient oversight of financial institutions that occurred during the Bush years.

Let’s hope that the next time reporters get a chance to interview Michele Bachmann—or any other presidential candidate for that matter—that they ask a few pertinent follow-up questions. A little probing might force them to actually be honest with us.