President Obama has released a new campaign ad attacking Mitt Romney's record at Bain Capital. The ad focuses on GST Steel, which Bain took over in 1993. The company subsequently declared bankruptcy in 2001, two years after Romney had already left Bain to run the Salt Lake City olympics. Obviously, it's sad to see any factory have to close and workers lose their jobs. But it's also impossible to look at the failure of one firm and attempt to blame it on Romney without looking at the context of the U.S. steel industry.

In the Godfather Part II, during a scene set in 1959, gangster Hyman Roth famously boasts to expected partner Michael Corleone, "We're bigger than U.S. Steel." Back then, U.S. Steel was still a symbol of the pinnacle of success in American business. But now, the company is a shadow of its former self. It was removed from the Dow Jones Industrial Average in 1991 and when the firm celebrated its 100th anniversary in 2001, its market capitalization was actually lower in nominal dollars than the $1.4 billion when it was founded a century earlier (it was the first billion dollar company).

For decades before Bain ever got anywhere near GST, the American steel industry was already declining for a number of reasons, a big one being global competition. Below is a chart I made on the U.S. share of worldwide steel production based on data from the U.S. Geological Survey.