It’s not the ‘Bain’ of our economy

By now, most Americans know that private investment and venture capital firms do little but destroy jobs, while job creation comes largely from government stimulus package or subsidies for particular industries.

Or not. We certainly don’t believe private capital and investment firms are the bane of our economic system. In fact, they play an important role in them.

However, a lot of Americans understand that’s what the Obama campaign and many Democrats want them to believe. It’s the essence of Team Obama’s now infamous ad attacking Mitt Romney and the company he created 28 years ago, Bain Capital, as being “vampire capitalists.” The ad features former steelworkers laid off from a company that Bain acquired and later took into bankruptcy.

Although President Barack Obama has defended the ad, numerous observers have denounced it for, among other things, failing to note that Romney had actually left Bain well before the steel company went into bankruptcy. It also omits any mention on Bain successes that kept companies alive and thereby preserved or increased jobs.

The larger issue is the role such companies play in society.

Obama has tried to hedge his bets in that regard, declaring in one speech that he supports private equity companies in principle, even if he disagrees with what Bain did. But, as the Washington Post noted, the president is trying to have it both ways, accepting money from leaders of private equity firms while his campaign ad disparages the industry.

It isn’t just Republicans and newspapers who have challenged the Bain ad, however. A number of leading Democrats — most famously, Newark, N.J., Mayor Cory Booker — have also said the ad is unfair or inappropriate. Booker later recanted, but other Democrats, including Obama’s former economic adviser Steven Rattner, have not.

Obama says the ad is part of his effort to challenge Romney’s claim to having the best skill set for dealing with our current economic problems. Certainly, Romney’s claims and his record are fair game.

However, sometimes private companies become bloated and unprofitable. They need to be scaled back and become more efficient if they are to survive and continue to provide jobs. Bain and other private equity firms purchase companies and accomplish that, or loan them money with conditions to do so. They aren’t always successful. Then they lose money and companies may close. Other times, they have great success and make substantial profits while rescuing companies and expanding their workforce, as Bain did with firms such as Staples.

This election will clearly be a choice between a man who puts his faith primarily in government solutions to economic problems and one who looks first to private enterprise. Voters will have to decide which view they think will serve them best.


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Once again the Sentinel fails to tell the whole story. The current President of Bain capital is a supporter of President Obama and a bundler of donations to his campaign.

President Obama has been shown time and again to be a professional hypocrite. This is just one more example.

June 1, 2012

Grand Junction Daily Sentinel
734 South 7th Street
Grand Junction, CO 81501

Dear Editors:

  The Sentinel’s editorial – “It’s not the ‘Bain’ of our economy” (May 31, 2012) – failed to mention several pertinent aspects of Republican presidential candidate Mitt Romney’s “business experience”.

  First, because Bain Capital is a “private” equity firm not required to disclose its “investments”, and because Romney has not released a full record of the firm’s ventures under his leadership, it is not yet clear whether Romney was a “job creator” or a “vulture capitalist” (as his Republican primary opponent Texas Governor Rick Perry – not the Obama campaign – first characterized Romney’s record).

  Second, private equity firms serve the economy by injecting equity into marginal businesses – just as President Obama attempted to inject “stimulus” into the flagging economy he inherited after eight years of Republican profligacy.  However, Romney’s decisions were unencumbered by ideological obstructionists, while President’s Obama’s stimulus efforts were substantially gutted by Republicans demanding more tax cuts.

  Third, while the decisions of private equity firms are driven by “the numbers” – quantifiable data reducible to spreadsheets – and are intended to benefit only a small constituency of investors, presidential priorities (as aptly summarized in the Preamble to our Constitution) are seldom so quantifiable, and ostensibly serve the “common good”.

  Fourth, when “private” investment was not forthcoming, even Romney turned to the federal government to “bail out” the Salt Lake City Olympics.  Now, even though the Bush tax cuts for the wealthy diverted much-needed revenue from the federal budget into self-perpetuating political campaigns, the federal government remains the only source of “equity investment” available to fuel public sector jobs needed to rekindle the economy.

  Finally, while Romney famously asserted that he “wasn’t worried about the poor, because they have a safety net”, both his economic prescriptions and the “Ryan Budget” would weaken that safety net – even as more formerly “middle class” Americans are falling into it. 

              Bill Hugenberg
              543 Rim Drive
              Grand Junction, CO 81507
Word Count = 300           257-1998

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