Real Economist Pronounces Bullshit On The Washington Post
In what is meant to be a bombshell political story, the Washington Post is attempting to paint Republican presidential nominee Mitt Romney as a private equity boss who got rich by shipping American jobs overseas.
But the WaPo seems more than a little fuzzy about the basics of how international business works — and the difference between outsourcing and offshoring.
Or maybe this was a story just too politically juicy to properly check.
But whatever the reason, WaPo World’s version of Romney’s business career at Bain Capital may not correspond with reality, via a source familiar with Bain’s activities as well as a detailed analysis of the piece.
Bain’s foray into outsourcing began in 1993 when the private equity firm took a stake in Corporate Software Inc., or CSI, after helping to finance a $93 million buyout of the firm. CSI, which catered to technology companies like Microsoft, provided a range of services including outsourcing of customer support. Initially, CSI employed U.S. workers to provide these services but by the mid-1990s was setting up call centers outside theRomney Reality: What CSI 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.