YES: Romney At Bain Capital Is Very Fair Game
Texas Gov. Rick Perry said: â€œTheyâ€™re vultures that (are) sitting out there on the tree limb waiting for the company to get sick and then they swoop in, they eat the carcassâ€¦"
[The View From Washington]
Republican presidential candidate Mitt Romney is using his business experience at the private equity firm Bain Capital as a plank in the platform supporting his claim of economic expertise. He continues to claim that he helped create 100,000 jobs while at Bain and challenges President Obama’s ability to manage the economy.
At a recent campaign speech at Roof with a View Romney said, referring to the president, “he’s in over his head, and he’s swimming in the wrong direction…Since he was sworn in, more Americans have lost jobs…He didn’t turn that around, put people back to work — actually more have lost jobs, more homes have been lost, gas prices have doubled…”
The Obama campaign has taken aim at Romney’s claim of job creation and economic expertise. In an ad, the campaign had former steelworkers at the mill taken over by Bain, stating that Bain was a like a “…vampire, a blood-sucker, and he's a job-destroyer.”
The campaign has also set up a website Romney Economics.com highlighting some of the Bain Capital business ventures; how much was invested, profit made, and jobs lost.
As a result of the ads and web site, the Romney campaign and others are questioning the Obama campaign’s tactics. In a recent interview in Jacksonville, Florida, Romney accused President Obama of “character assassination.”
“We can talk about a lot of things, but the centerpiece of his campaign is quite clearly character assassination,” Romney claimed.
Obama surrogate Corey Booker, mayor of Newark, NJ has also questioned the Obama campaign’s tactics. Booker had stated that he was, "uncomfortable" with the line of attacks. "This kind of stuff is nauseating to me on both sides…It's nauseating to the American public. Enough is enough. Stop attacking private equity."
The Obama campaign is following the strategy initiated by some of Romney’s own Republican brethren. Some of Romney’s former Republican challengers also questioned the Bain Capital business model and Romney’s claims of job creation. Newt Gingrich said, “The Bain model…is to go in at a very low price, borrow an immense amount of money, pay Bain an immense amount of money and leave. I’ll let you decide if that’s really good capitalism. I think that’s exploitation.”
According to the National Journal, Texas Gov. Rick Perry stated, “They’re vultures that (are) sitting out there on the tree limb waiting for the company to get sick and then they swoop in, they eat the carcass…They leave with that and they leave the skeleton.”
Contrary to Mitt Romney’s assessment, this is not an attempt by the Obama campaign to assassinate his character. Romney has hailed himself as a "job creator." Contrary to Mayor Booker’s assessment, this is not an attack on private equity. This issue raises a valid question. Does private equity business experience prepare you to manage the American economy? Not all successful businessmen create jobs.
Not all business experience translates to successful management of the economy. It is important to distinguish between industrial capitalism and finance capitalism.
Industrial capitalism creates jobs by utilizing machinery and human capital to manufacture products. This has a positive impact on economic growth by creating jobs and products that are sold on the open market. Mitt Romney’s father, George was an industrial capitalist. As president of American Motors Corporation, George Romney oversaw a company that manufactured automobiles in Michigan.
Finance capitalism or venture capitalism does not make products, it makes money. Finance capitalism produces profit from the purchase and sale of, currencies, financial products, or companies. Mitt Romney made his fortune in finance capitalism. For the most part he created wealth for himself, his investors and partners; not jobs for the individuals working at the companies Bain Capital acquired.
Not all business experience translates to successful management of the economy.
Romney’s record at Bain Capital is relevant. The problem is, he’s trying to construct a myth about himself as a job creator and the facts and economics don’t support his claim. As a finance capitalist he made his fortune at the expense of others.
Perhaps one reason that Mayor Booker shies away from the Obama campaign strategy is that he knows that the President has surrounded himself with finance capitalists. Former Economic Advisor to the Obama administration, Jon Corzine can’t find $1.6B of investor money with MF Global.
Goldman Sachs Hank Paulson, who was involved in the bailout, and Treasury Secretary Tim Geithner have all made their fortunes investing in currencies and creating financial products like credit default swaps that contributed to the current financial crisis. While Romney’s record is relevant, the president should be careful, because his is as well.
Wilmer Leon is the Producer/ Host of the nationally broadcast call-in talk radio program “Inside the Issues with Wilmer Leon,” and a Teaching Associate in the Department of Political Science at Howard University in Washington, D.C. Go to www.wilmerleon.com or email: firstname.lastname@example.org. www.twitter.com/drwleon
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