Old Frick already set the record straight on what it is Bain Capital does, but unfortunately, the Washington Post’s Eugene Robinson didn’t stop on over to check it out before writing his latest column.
In the 2012 Republican Primary, Mitt Romney’s opponents attacked Romney on Bain Capital for the same reason Obama is doing so: because other than smearing him on his dealings in a confusing industry, Romney is a frustratingly squeaky-clean candidate for an opponent to go after.
Yet in his assault on the role of private equity firms in the movement of capital in a free market economy, Robinson starts with:
Listen to what Newt Gingrich said in January: “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.”
Apparently Robinson didn’t get the memo, but Gingrich is now campaigning for Romney after Romney agreed to politically reprise his role at Bain Capital and help Gingrich with his bankrupt campaign. This current situation calls into question the credibility of his initial, politically motivated attack.
His next champion? A candidate he soundly ridiculed back in the GOP primary, Rick Perry:
Or what Rick Perry said that same month: “There is something inherently wrong when getting rich off failure and sticking it to someone else is how you do your business. I happen to think that that is indefensible.”
In fact, according to Robinson, none of Romney’s primary opponents made any sense, as he himself proclaimed here. If none of these candidates made any sense then, why is Robinson using them as champions of game-changing questions on the value of companies like Bain? Because it’s convenient, and Robinson is unconcerned about intellectual consistency.
What is the “important question” Robinson believes should be asked?
Shouldn’t free markets serve the American people, rather than the other way around?
The free market is millions of individuals on a daily basis making millions of individual decisions for themselves. The free market is not some third-party entity with its own will that either works for or against the American people depending on which side of the bed it wakes up on. The free market IS the American people. Some companies gain outsized and untenable power, supportable only by a crony capitalist system with the implicit wink-and-nod approach to bailouts. These same companies, because of this, are able to risk beyond what a normal approach would allow if their survival depended solely on their own recognizance. This is what the question should be: is the current trajectory under Dodd/Frank to bulk up existing large corporations, snuff out competitive upstarts, and create a new generation of de facto GSEs like Fannie Mae and Freddie Mac, a viable one? This question remains untouched by the reform Robinson wishes Obama had involved himself with:
President Obama is right to raise this issue now. I wish he had done so during the debate on financial regulatory reform — only now is he posing the kind of fundamental questions that needed to be asked — but better late than never. In his defense, a tough reelection campaign does tend to focus the mind.
Obama isn’t raising any “fundamental” issues, and his mind has only focused enough to use Bain as a cheap political tool to beat Romney over the head. The president is cynically counting on a basic distrust of all things Wall Street and the confusing nature of private equity firms to fuel his class warfare populism and carry him to re-election.
And for every situation such as this:
Suppose a company is failing and appears beyond rescue. Suppose a private-equity firm buys the company with borrowed money, burdens it with more debt, and then spends the next few years firing workers, selling assets, eliminating pension plans — all while collecting handsome “management fees.” Then the company fails anyway, as it was fated to do.
How many times have the Bain Capitals of the world prevented a company from failing and saved thousands of jobs in the process? It’s a question inconvenient to Robinson’s centrally planned approach to the economy and so he ignores it except vaguely alluding to an “important role” it plays, which Robinson leaves undefined. And if Robinson really can identify companies that are “fated” to fail, he could make millions shorting stocks.
The typical liberal fascist question follows:
What higher economic purpose has been served? Why is this not what Perry memorably called “vulture capitalism”?
Be wary when liberals start questioning higher economic purposes, as it’s always an excuse to ban or control that which they do not understand. But Robinson should be careful too, because the inquisition could easily be turned back on himself. After all, what higher economic purpose is served by Eugene Robinson’s inconsistent, ill-informed columns filled with disingenuous citations of Rick Perry? Old Frick is coming up empty.