The following is an excerpt from Suzanne McGee | January 11, 2012 | The Fiscal Times |
One of the silliest spectacles in the battle for the 2012 Republican presidential nomination may be unfolding in television advertisements right now as a group of avowed believers in free markets and capitalism get huffy about the fact that one of the GOP candidates has – gasp! horrors! – made a rather nice living from being a private-equity fund manager.
To be sure, buyout fund managers aren’t candidates for canonization. They can be ruthless, and they’ll use their clout to cut the best possible deal for themselves and their investors every single time, often at the expense of other participants in the financial markets – just ask any investment banker whose boss has told him to bid on a financing package for a multi-billion dollar buyout.
But the issue here isn’t that Mitt Romney might not have played nicely with investment bankers or his fellow financiers when cutting deals for Bain Capital. Nor is the problem that Romney made many millions from his role taking a company private (or acquiring a still-private business, or purchasing a division of another business), overhauling it and stripping away any inefficiencies, and then selling it on to someone else. He isn’t even being raked over the coals for structuring crummy deals, using excessive leverage and putting the financial system in jeopardy, or getting involved in one of those seemingly endless roundabout transactions in which a company (hmm, let’s say a mattress company?) is sold from one private equity group to another, and on to a third, and a fourth, and on and on. (I’m not saying that either Bain or Romney was involved in such shenanigans, merely that they might represent a valid basis for criticism.)
Nope, the issue appears to be that Romney actually believes in the free markets. When asked to take an underperforming or unprofitable business and overhaul it, to strip away any inefficiencies, he actually did it. In other words, he cut jobs. That’s just downright un-American, Romney rivals like Texas Gov. Rick Perry and former U.S. House Speaker New Gingrich seem to be saying. Perry on Monday compared Bain Capital to vultures. And a pro-Gingrich super PAC is about to unleash a television ad campaign in South Carolina comparing Romney’s lavish lifestyle (the American dream) with the plight of former workers who lost their jobs after a Bain-sponsored buyout of their company (the American nightmare).
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