The Corner

The Battle of Bain Capital

Kudos to Yuval for this trenchant observation about the great Bain battle, which I think gets at the heart of what makes some conservatives uneasy about Romney’s record there:

But it has revealed two problems that conservatives who have risen to Romney’s defense and the Romney team itself will need to address. The former have too easily treated finance as the entirety of capitalism, and so have needlessly made both the defense of finance and the defense of capitalism more difficult. And the latter have too easily treated Romney’s Bain experience as the entirety of the case for his election, and so have needlessly made both the case for Romney’s Wall Street work and the case for his candidacy harder.

Consider Levin’s first point first, that Romney’s defenders have “treated finance as the entirety of capitalism,” which is key to understanding the hostility. 

A bestselling author creates wealth for himself and others by sitting alone at his desk and then producing something the public wants to read and buy. George Eastman basically invented the photography industry (now fallen on hard times), Henry Ford, the modern automobile industry. A screenwriter or two, even if they’re sitting poolside in Beverly Hills, create out of whole cloth a movie script that sells to a studio and then provides employment for hundreds or even thousands of people — employment that did not exist until they started typing with one simple question in their minds: “What if . . . ?” All of these folks deserve the rewards they get, and ought to be able to keep most of them.

But the public — after decades of enduring pixel-pushing Masters of the Universe, corporate crooks engaged in liar’s poker as they loot the suckers, convicted felons who try to manipulate the American political system, and other assorted enemies of the people — is rightfully suspicious of men who make millions off the lives and fortunes of others and then act as if they’ve accomplished something unique and original. 

And that’s why Mitt’s vulnerable — and why a knee-jerk defense of “capitalism” as if it’s synonymous either with finance or “creative destruction” is so dangerously tone deaf heading into this crucial election. For it doesn’t matter that the Obama administration is practically a revolving door of Wall Street hacks. It doesn’t matter that President Goldman Sachs himself is a magnificent hypocrite on the subject, denouncing the “one percent” while he takes $4 million vacations and parties with Johnny Depp

What matters is that the Democrat-Media Complex continues to push the meme that Republicans are the friends of and apologists for corporate hijinks. And that Romney, fairly or unfairly, is going to get tarred for the sins of others. Which he why he needs to hear this now, from our side, before he blithely wanders into the Axelrod meat grinder.

As to Yuval’s second point, it’s not entirely either Romney’s or his allies’ fault that he’s been backed into this corner. The terrible Bain optics have been something the Dems have been salivating over for months now — they’re what the centrally planned “Occupy” movements were all about — and for Romney to be a viable candidate, he’s going to have to learn to deal with them. So far, he’s failed.

The problem for Romney is, he has nowhere else to go. He can’t run on RomneyCare or his overall record in Massachusetts (other than to say he learned how to work with Democrats — the last thing a motivated and angry conservative base wants to hear). He can’t even run on “electability,” since he lost the 1994 Senate race, chose not to run for re-election as governor in the face of certain defeat, and lost the 2008 nomination to John McCain, despite pouring $35 million of his own money into his campaign. He’s practically Harold Stassen already. 

So he has to run on his record as a “job creator.” But, as Jonathan Last notes in the Weekly Standard, that’s false, too. 

When Romney says that his goal at Bain was to “create jobs,” that’s not entirely true. As a private equity firm, Bain’s goal was to maximize return on investment (ROI) for a small group of high net worth investors. Sometimes that meant giving seed money to a promising start-up. Sometimes it meant rescuing a company and turning it around. Sometimes it meant finding revenue streams a company hadn’t realized—including government bailouts. Sometimes it meant off-shoring a company’s jobs. And sometimes it meant finding a company whose component parts were worth more than the whole—and dismantling it.

Any jobs Romney or Bain “created” were thus incidental to their real function, which was (as Last points out) to maximize shareholder value and goldmine the remaining value of the company so that it might more profitably be used elsewhere. Nothing wrong with that, but don’t try to sell it as “job creation.”

A “job creator” is the bestselling author (Stephen King, Dan Brown, et al.) whose works help keep his publisher afloat and who indirectly provides employment for editors, copy reader, designers, public relations staff and management. A “job creator” is Eastman or Ford or Steve Jobs or Bill Gates or anyone else who creates industries. A “job creator” is the screenwriter (Robert Rodat) who typed out the words: “EXT. OMAHA BEACH – MORNING,” won Steven Spielberg an Oscar and gave employment to all these people through the force of his own creative imagination.

But to call corporate restructuring “jobs creation” won’t fly. Romney is going to have to come up with a far more persuasive, positive rationale for his candidacy if he hopes to beat Barack Obama in November.

Michael Walsh — Mr. Walsh is the author of the novels Hostile Intent and Early Warning and, writing as frequent NRO contributor David Kahane, Rules for Radical Conservatives.


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