“Nice try, kid, but I
think you just brought a knife . . . to a gunfight.”
—Harrison Ford as Indiana Jones in Indiana
Jones and the Kingdom of the Crystal Skull
Continuing what is clearly going to be his “us vs. the evil
rich people” campaign theme, Obama last week ran ads criticizing Governor
Romney’s past work as the CEO of Bain Capital as that of a vampire. Just another installment of Romney as the out-of-touch
1%-er, a rich bastard who has made millions by looting it from the little
people. But don’t worry, Obama isn’t
engaging in class warfare. He’s the
Great Uniter, don’t you know?
I don’t want to debunk the ad here. The Wall
Street Journal ran an excellent piece detailing its errors, notably that
the steel company at the center of it didn't go bankrupt until two years after Romney left
Bain, that it was already heading down the drain when Bain bought it, and that it would have gone out of business eight years earlier but for
Bain’s investment in it. I want instead to make
the larger point that if this is the arena in which Obama chooses to engage,
there’s ground to be gained. In short, if
he wants to play the Bain game, I think Romney should take him up on it.
Let’s start by acknowledging some truths about Romney and
Bain.
Mitt Romney is wealthy. I get it. No real secret there. So are/were Bill Clinton (law, real estate—Whitewater, anyone?), both Bushes (business, inheritance), Ronald Reagan
(acting, endorsements), Jimmy Carter (inheritance, commercial farming, real
estate), Gerald Ford (real estate, books, corporate board service), Richard
Nixon (law, real estate), LBJ (real estate, media), John Kennedy (family trust
funded by bootlegging), etc.; it takes a lot of money and rich friends these days to run for
President. Romney has made millions
running successful businesses like Bain Capital, and this should be a good
narrative for him to showcase his management skills and understanding of markets.
Bain Capital was and is a venture capital enterprise, not a pirate ship. It provides operating funds for startups and
other businesses in exchange for a stake in the profits. Put a different way, it collects money to
invest in other enterprises that employ people to create products and provide
services. Yes, in some instances Bain’s
investments failed; that’s the nature of business investing, as Obama has
reminded us about Solyndra. At least
Bain was risking private money voluntarily contributed for that specific purpose,
and managed by businesspeople who actually knew what they were doing (but
that’s another post). Yes, in some
instances Bain bought businesses and shut them down to sell the assets. Any economist this side of Paul Krugman will
tell you that when a business’ assets are worth more than the value of the
going concern—i.e., the capital is
being employed towards a purpose society does not value—the more efficient use
of that capital is to pull it out of the failing venture so it can be reallocated
to something society values more. Over
time, everyone benefits.
But the point here is that Bain Capital and Mitt Romney
didn’t make money by stealing it from others.
They employed people. They provided
capital so that other businesses could operate and employ still more people to provide
goods and services still more people wanted to buy. That’s how the economy works. Bain Capital made profits by participating as
a productive cog in the economy, to the benefit of its shareholders, the
businesses in which it invested and their employees, and the consumers of those
businesses’ goods and services. That’s
how Mitt Romney made his money; it’s a success story in how the American free
market system operates, and it’s one Romney should welcome the opportunity to
tell.
But there’s a flip side to that story if Obama wants to
cross swords on this ground, and it’s one that also works to Romney’s advantage
if he’ll take it. In fact, if he does it
right it should be no contest.
Barack Obama is also wealthy. Maybe he’s not in the same Forbes rank with
Romney (or John Kerry, or Nancy Pelosi . . .), but he’s pretty flush. Current estimates put his net worth upwards
of $10 million. I don’t have $10
million. Do you? Chances are overwhelming that you don’t. That makes Obama also a member of this evil
1% economic super-elite he likes to demonize when he’s not hanging out in their
parlors, skiing at their resorts, or tapping their wallets for campaign
donations. So how did he make his
millions?
He wrote a book (OK, in fairness, he actually wrote two
books).
About himself.
That’s it. He didn’t
employ anybody. He didn’t provide a good
or a service. He didn’t supply capital
fuel to the engines of commerce so that someone else could employ people to provide
a good or service. He didn’t otherwise
do anything productive. Obama’s sole
economic contribution through which he has generated his considerable wealth
was to tell the world he existed. He did
nothing more than engage in an audacious act of narcissism, and some people—for
reasons that will forever pass understanding—bought it. It is no wonder that his Presidency has been
all about “look at me”; it is in fact all he knows how to do, because it’s all
he’s ever done.
I don’t care that Obama’s gotten wealthy. If he can get people to buy an autobiography
of a 30 year old with no significant accomplishments to his credit, more power
to him. But if he wants to hold up Bain
Capital as a campaign issue, it seems to me it’s the perfect platform to highlight
just how shallow and empty Obama is.
Consider the contrast on this issue alone. With Romney and Bain Capital, we see a
candidate who has had to manage people, marshal resources, generate results,
and be accountable. In other words, he’s
actually had to do something in real life.
Obama, on the other hand, has done nothing but grab attention, claim
credit for the work of others, and deflect blame and responsibility. Present.
Oh, yeah, and operate Microsoft Word.
You want to talk about Bain Capital and real world
experience, Mr. President?
Bring it.
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