The onslaught of attacks on Republican presidential candidate and former Governor Mitt Romney’s (R-MA) record at Bain Capital, a private equity firm, began even prior to Romney’s New Hampshire primary victory.
The so-called “anti-Romney” candidates realized what political observers determined after the Iowa Caucus: with a small win in Iowa and a solid win in New Hampshire, Romney would be unstoppable. The other primary candidates, led by former House Speaker Newt Gingrich (R-GA), started to criticize the business credentials that are at the core of Romney’s candidacy. Desperation had set in.
Romney’s campaign has been focused on growing the economy and creating new jobs from the day he announced his candidacy in June. With unemployment above eight percent (closer to eleven percent if you look at the unemployed who the government excludes from the workforce due to the lengthy time of their unemployment) and almost stagnant economic growth, the economy will be the number one issue in the 2012 presidential election.
America has come out of recessions in the past with robust economic growth, a characteristic we have not observed following the so-called “Great Recession.” Romney argues that it is the Obama administration’s policies that have caused this slow recovery. Dodd-Frank, Obamacare and other regulatory legislation have not provided the environment for strong economic growth to occur in.
Using his private-sector experience, Romney has convinced many Republicans, including myself, that we need someone in the White House with business expertise. This is a trait that distinguishes Romney from the Washington politicians he is running against in the primary who have spent their lives in government. There are not any issues in the other candidates’ records where Romney can point to times when their actions caused individuals to lose their jobs because the other candidates worked in government. Romney worked for a business that had to hire and fire people.
Taking advantage of this fact, Gingrich and Rick Perry (R-TX) have criticized Romney repeatedly for the jobs lost during his tenure at Bain. Gingrich told reporters in December that Romney would not “give back all the money he’s earned from bankrupting companies and laying off employees over the years at Bain.” Charles Krauthammer, a neoconservative columnist, and other conservatives slammed Gingrich at the time for criticizing capitalism. The attacks on Romney’s business record subsided until after the Iowa Caucus.
The Gingrich-supporting Super PAC “Winning Our Future, Inc.” purchased a film about Romney’s supposed job-killing record at Bain and began to air ads in South Carolina using “facts” from the film. Gingrich himself has also continued to attack Romney’s Bain record, as has Perry. Governor Perry went as far as calling Romney a “vulture capitalist” instead of a “venture capitalist.” The singular reason for this attack is political gain — nothing more.
Romney’s record at Bain includes the firm’s successful funding of Staples when Bain was a venture capital firm. Romney was instrumental in the decision to go forward with this investment as head of Bain. Now, Staples has locations across the country and around the world, and employs nearly 100,000 people.
Bain switched from being a venture capital firm to being a leveraged buyout firm more than twenty years ago, and this is where much of the criticism has come from. Leveraged buyout firms purchase a share of a company that exceeds 50 percent, with the intention of making a profit off of the money borrowed to buy the firm. Often, the companies that are purchased are on the verge of bankruptcy or face significant obstacles to continue producing and making a profit.
Bain bought many different companies like Staples with the intention of making the companies profitable so that Bain could secure a larger profit. Under Romney’s leadership, Bain acted as a turnaround specialist. The goal was making the companies more efficient to make them profitable and provide a return for the Bain investors. In order to turn companies around, production often has to be decreased for a period of time, resulting in the loss of jobs. This is an unfortunate reality of the business world, a place Washington politicians do not have experience in.
Romney recognizes time and time again when pressed about his business experience that sometimes Bain’s investments created jobs, and sometimes they did not. He says “sometimes we were successful, and sometimes we were not.” In the cases where Bain was not successful in turning around companies, Bain had to do everything it could to turn a profit for its investors. The companies were already headed for bankruptcy, and Bain did all it could to make them profitable. A profitable company with more jobs added to keep up with increased production was a win-win situation for Bain.
Romney’s rivals have focused on the times when Bain was not able to turn the companies around. In reality, Bain was one of the most successful private equity firms in the world, and while the success rate hovered around fifty percent, the major successes Bain had under Romney’s leadership far outweighed the failures.
We need a turnout specialist to put the reins on the federal government and allow America’s entrepreneurial spirit to grow the economy. Gingrich and Perry need to stop damaging the person who will be the Republican nominee with dishonest attacks. They have opened the door for Obama to quote other Republicans attacking Romney in the general election. This gives the attacks more credibility, which could harm Romney.
Gingrich and Perry should drop out of the Republican race for the good of the party. While Gingrich can claim he is second in South Carolina polls, there is no path forward for Gingrich without a win in the state. Perry has no path forward right now, and should stop bringing unnecessary anti-capitalist rhetoric onto the Republican stage. They, along with Obama, have spent the majority of their careers in government, while Romney was running a business. Going after Romney’s tenure at Bain is all about politics, not about moving America forward and improving our economy.
Tyler is a sophomore. You can reach him at tbecker1@swarthmore.edu.
