With the inevitable momentum former Massachusetts Gov. Mitt Romney gains as he inches closer to the 2012 Republican Party presidential nomination, it was only a matter of time before his Republican competitors, as well as his Democratic opposition, scrutinized his record at Bain Capital.
But many of the attacks that have been hurled at him have been unfair or completely out of line. And as the window of opportunity closes fast to derail Romney’s string of victories in the primaries, his fellow GOP competitors are only giving the Obama campaign more ammunition to use for the general election.
First of all, as someone who made his fortune and career in the private sector vs. being a career politician, Romney will have a very untraditional record to run on. Most politicians who run for office are attorneys, military vets, or statesman who got their start holding a statewide office. Occasionally you may get a business owner running for office, but this will be the first time in this nation’s history where the general public will have to look at someone who comes from the business of venture capitalism, private equity, and leveraged buyouts.
I’m waiting for a poll that asks the general public if they even know what those terms mean.
I’ll bet you a clear majority are unfamiliar with those definitions or probably have the wrong idea. With that much uncertainty among the masses, it creates a treasure trove of opportunities just waiting to be exploited by all interests. So it’s only expected that the Democrats would turn Romney’s record into an image of a “rich, white guy who likes to fire people.”
It’s time to set the record straight on this.
Bain Capital is a financial services company that engages in investment management. Venture capital typically involves buying a small stake in a promising start-up company and trying to help it grow and thrive. Private equity deals focus on leveraged buyouts of companies that are under heavy debt or near bankruptcy, and restructuring the troubled company’s costs, operations, and assets, which can involve anything from streamlining a company’s decision-making process to cutting some jobs, while saving others.
The Wall Street Journal did an excellent piece researching Bain’s record under Romney’s tenure. The report found that Bain recorded roughly 50% to 80% annual gains on 77 deals while Romney was CEO from 1984-1999, which experts said was among the best track records for buyout firms during that era. Romney himself earned the bulk of his $200 million-$250 million fortune during these years. So not only did he do his job and do it well, but he was pretty successful at it too.
Now this image perpetrated by the Democrats of a Gordon Gekko-type corporate raider that liquidated companies for all they were worth and screwed “the little people” over is purely absurd. Romney and Bain were anything but. They were a thoroughly respectable investment management firm that successfully discharged its responsibility of earning high returns for its investors by deploying capital in companies privately rather than by buying shares in the public market.
And shame on Republicans like Texas Governor Rick Perry and Newt Gingrich who buy into the false accusations and call Romney names like “vulture capitalist.” I thought we (as in us Republicans) were all free market capitalists here. I understand their time’s running out on their campaigns but that doesn’t mean you go attacking the very principles and values our party is supposed to espouse for your own self interest. It looks desperate, classless, and downright disgusting.
But the bottom line is the Romney campaign has its work cut out trying to explain this to the general public. For the most part, most ideological voters are going to believe whatever they want to believe about what Bain is and did under Romney’s tenure. It’s the independents that Romney has to convince about what his record truly is and why he, as a veteran of the private sector and someone who understands how a free market economy works, is best equipped to lead this country out of a stagnant economy and stubbornly high unemployment by incentivizing private sector expansion, investment, and job creation.
Like he did at Bain.
Photo Credit: Mitt Romneys