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Defending Romney where it’s due

Written on Thursday, January 26, 2012 by

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In my previous two columns, NEWTering Obama, Part 1 and Part 2, I’ve been clear that I think Newt Gingrich is the best of the remaining Republican candidates.  I’ve also argued that Romney doesn’t deserve Patriot support in the primaries because of the lack of consevative achievements as Massachusetts governor and his tax-the-rich demagoguery and ignorance (see Tax reform vs. Romney).   The South Carolina primary sent a clear message: conservatives are not happy with Romney.  And he has certainly not helped his image by taking on the advisers of the RINO turncoat ex-governor of Florida, Charlie Crist.

However, one thing from his past has been unfairly targeted by other Republicans, including Perry and Gingrich unfortunately, although Gingrich backed away from it quickly.   But this is actually one of the most encouraging things about Romney, and clearly differentiates him from Obama.  This should be an antidote to certain “vote my conscience” types who threaten to stay home on election day, or vote third party, which amounts to the same thing.   See my early column, Why conservatives should hold their nose and vote Republican: A search for a perfect candidate will help elect the worst.

Bain Capital

It is now becoming well known that Romney made a vast fortune with his venture capital company, Bain Capital, which he ran from 1984 to 1999.  Of course, the Left, including the Occupy Whatever swarms, love to stoke envy.  But conservatives see wealth as something to admire, if acquired ethically, because it shows great ability to please lots of one’s fellow people.  But supposedly venture capitalism is different, typified by Perry’s quip of “vulture capitalism”:

“They’re vultures that are sitting out there on the tree limb, waiting for a company to get sick. And then they swoop in, they eat the carcass, they leave with that and they leave the skeleton.”

However, while Romney certainly invested in “sick” (struggling) companies, a better analogy than Perry’s is a master chef trimming a fat and leaving the tasty steak.

It certainly wasn’t without its costs, including many jobs.  But under conservatism, there is no “right to a job”, which entails an obligation to hire.  Rather, a job should be considered the ability to please your fellow man in some way.  For example, you might be able to persuading a customer to buy something you’ve made, or an employer that your work is more valuable to him than the salary he pays you.

When it comes to struggling companies, clearly they are no longer pleasing enough of their fellow people to cover their costs.  Thus, they would be losing money for their shareholders who invested their money.  And if a company collapses, then everyone would lose, including the workers.

Bain would try to buy a company before that happened.   Then they would try to restructure the company to try to make it profitable—there is no point trying to destroy it.  It might mean firing the least competent workers and laying off others, or outsourcing (blame America’s high corporate tax rates and regulations!).

Sometimes the business can’t be saved, such as Romney’s company making look-a-like dolls.  But then the capital was transferred elsewhere so it could be more profitable, that is, would actually please customers.

Venture capitalism is certainly risky, because there is no guarantee that the investments in sick companies will pay off.  Indeed, according to the Wall Street Journal, of the 77 businesses that Bain invested in during Romney’s leadership:

“22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses. An additional 8% ran into so much trouble that all of the money Bain invested was lost.”

But most investors realize that if there is great risk, there needs to be a corresponding great potential reward, otherwise no one would take the risk!  As it happens, Bain made some very astute investments that were very profitable.  The WSJ summarizes:

“Bain produced about $2.5 billion in gains for its investors in the 77 deals, on about $1.1 billion invested. Overall, Bain recorded roughly 50% to 80% annual gains in this period, which experts said was among the best track records for buyout firms in that era.”

Some well known successes were Staples Inc., Domino’s Pizza Inc. and Sports Authority Inc.  Economic historian Burt Folsom adds:

“One of many triumphs at Bain was a $6.4 million investment in Wesley Jessen Vision-Care Inc., which skyrocketed more than $300 million under Bain’s new leadership.”

And the jobs naturally followed these successes: about 100,000 new ones.

What a contrast with the Jobkiller-in-Chief, aka the Foodstamp President.  Dr Folsom writes in another column, Is It Right to Fire People?

“Americans have understood this capitalist process for years, and it’s odd that in a time when we need to encourage risk and innovation that some would be critical of Romney for doing what needed to be done to run a profitable enterprise. Put another way, Romney at Bain Capital was so successful that he made three times as much money as President Obama lost with taxpayer dollars invested in Solyndra. Solyndra made solar panels and sold them at a loss. Romney would have shut such a company down, but President Obama kept it alive for years. Let’s put aside Solyndra’s giving contributions to Obama and the Democrats. The larger point is that the business was a bad risk. When Romney was investing with his own money, he fired people who ran companies like Solyndra. When President Obama was using other people’s money, he kept Solyndra alive and hoped for the best. Which of these two men is most likely to make the moves necessary to pull the U.S. out of its economic slump?”

Jobs in perspective

While conservatives regard jobs as pleasing their fellow people, the Left has long loved fake “make-work” jobs, which produce nothing.  We could easily “create jobs” by hiring some people to dig holes, and other people to fill them.  But this would hardly make our country better off.

Rather, the object should be more goods and services for all, and capitalism is far and the away the best provider.   However, sometimes this means “creative destruction”, to use the phrase of Joseph Schumpeter (1883–1950).  That is, destroying some jobs and even some industries that were no longer pleasing their fellow people—this frees them for other jobs that will do so, and actually make everyone richer.

Astute libertarian John Stossel points out in Myths, Lies and Downright Stupidity that firing seems cruel.  But many of these workers are miserable in these old jobs, and hang on because change is scary, and searching for new jobs is discouraging.   Yet often, they have found better jobs, and even say, “Being fired was the best thing that happened to me!”

The outstanding economist Dr Walter Williams even wrote a column Job Destruction Makes Us Richer.  He points out that back in 1790, 90 percent of American workers were farmers, but by 2008, only 3 percent of Americans were working in agriculture.  Was this a horrific unemployment disaster?  No, improving technology meant that not only are our farms more productive now, but also, all these workers are now available to invent and produce so many of the other things we enjoy.

Similarly, industries like horse-and-buggy, iceboxes, and typewriters were huge employers that are now extinct.   But users of motorcars, refrigerators and word-processors should all be happy that there were no politicians trying to “create or save” jobs in those industries.

Why Romney is much better than Obama

During the great SC debate where Newt shone throughout, Romney also had his shining moment, where he castigated Obama’s attacks on the free market and firmly defended real capitalism as benefiting everyone:

“You’ve got to stop the spread of crony capitalism. (Obama) gives General Motors to the UAW. He takes $500 million and sticks it into Solyndra. He stacks the labor stooges on the NLRB so they can say no to Boeing and take care of their friends in the labor movement. …  He has to bow to the most extreme members of the environmental movement. He turns down the Keystone pipeline, which would bring energy and jobs to America.

“My view is capitalism works. Free enterprise works. … There’s nothing wrong with profit, by the way. That profit went to pension funds, to charities. It went to a wide array of institutions. … And by the way, as enterprises become more profitable, they can hire more people. I’m someone who believes in free enterprise. I think Adam Smith was right. And I’m gonna stand and defend capitalism across this country, throughout this campaign. I know we’re going to get hit hard from President Obama, but we’re gonna stuff it down his throat and point out that it is capitalism and freedom that makes America strong.”

Conclusion

Naturally during the Republican primaries, supporters of the different candidates will rightly be defending their candidates, and pointing out flaws in the opponents.  But these attacks should be accurate.  Dr Folsom, who like me is highly critical of Romney’s liberal record, advises:

“But let’s debate his vulnerable positions on those issues and admire the fine work he did creating wealth at Bain Capital—at a time when the U.S. needs a leader with economic sense.”

Patriots should not lose sight of the main goal: a conservative takeover that turns this great country back into the Land of the Free.  And a vital step is anyone but Obama—including Romney!

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  • brunch20

    The author has some good points. However, Romney is a centrist and an elitest republican. I do not believe that he is a strong consrvative and would not make the necessary change to reduce spending, big government, or fully repeal obama care. The fact that the Democrats and the republican elitest’s seem to lean toward Romney is not a good sign.

    • daves

      Partners in private-equity firms like Romney’s Bain Capital don’t risk their own money. They invest other people’s money and pocket 20 percent of any upside gains. They then pay taxes on only 15 percent on their incomes — a lower rate than paid by many middle-class Americans — because of a loophole that treats that income as capital gains.

    • Nathaniel Davidson

      No one was forced to invest, and the investors did very well, as the article documents.

      In my previous article Tax reform vs. Romney, I explain why capital gains should be taxed at a lower rate.

    • Shirley

      You are drinking the liberal media Koolade. They do risk their own money. Romney is now living on the investments he made with money he earned and paid the 35% tax on. When you are investing you are taking a chance at losing the money. The higher the risk, the higher the profits if you are correct, big losses if you are wrong. This is what makes capitalism work. You invest and risk and you make a good decision, you make a lot of money. If you invest poorly, you lose money. If you make a profit from an investment then you only pay 15% tax, a second tax on the same money.

  • Terry Black

    I would Rather vote for Dennis Kucinich, than either Gingrich or Romney!

    He is not a Globalist and while he is a Democrat, he is not as Liberal or Democrat to the degree Gingrich and Romney are!

    • patriotrenegade

      well your boy paul and dennis though both likeable have gone in such a circle, they merge. I pointed that out a month ago.

  • Terry Black

    Regardless, it would still take some extreme arm twisting to get me to vote Kucinich, however, if I had my arms twisted off, I would not vote for either Gingrich, Romney or Santorum they are deep pawns of Globalism!

    Hell = Hell

    They are just as corrupt as Obama

  • Terry Black

    An Interesting Article to look up:

    Soros: Not Much Difference Between Obama and Romney

  • http://aol Meg

    Terry, you must have sand in your brain, to even suggest such statements you have made.

  • jerry1944

    what he does with companys dont worry me but i want vote for romney because of his health plan and gun laws. Thats as far as i needed to look. Just wish Bachmann had stayed in

  • http://yahoo joyce bracy

    Im not a big fan of Newt,but if you vote for Romney you might as well of voted for Obama same man different skin color.

  • Ann Wilson Kingsley

    We might believe Romney is a Capitalist if his voting record did not betray him. However, the same is true of Gingrich. Both of these candidates are New World Order lackeys who have no intention of doing what is necessary to roll back the Socialist agenda to again create a Capitalist prosperous America. I’m voting for the only Capitalist candidate – Ron Paul!

    • patriotrenegade

      still lyin? Mitt is clean on globalist treason. your boy has ZERO chance.

    • SamFox

      patriotrenegade, may Mitt is not so clean after all.

      http://gulagbound.com/25499/mitt-romneys-mentor-his-father-a-fan-of-saul-alinsky/

      I post. You decide if he worth taking a chance on.

      All that’s hanging in the balance you would be gambling on in support of Mitt is the future of the USA…that’s all.

      Myself, I don’t think it wise to trust the man 0 & co modeled 0buma Care on.

      SamFox

  • http://yahoo joyce bracy

    I have no Beef with Romney about Bain or how he got rich He worked for it.Bottom line is he paid his taxes,he worked for a living,if you could make the money he makes and do the job he does you would do it.I also have no problem with Newt and Freddie,Fanny or who ever he worked for the deal is he worked and paid taxes,what happened in either of these companys has nothing to do with Romney or Newt if they had not been hired to do the job someone else would of done it.At least they pay taxes better than I can say for half of Obamas people of half of the American people that think someone owes the a living

    • daves

      Scruples don’t matter?

  • americanbeliever

    I agree that both Gingrich and Romney are not who or what I wanted for a republican canidate but either truly is better then the obamanation we have now.They both have a history of being inconsistent and self serving but they are not interested in destroying this country.To do so would be “killing the goose that laid the golden eggs”.They like their lifestyle to much to do that.On the other hand,obama has been on an obvious,systematic crusade from the beginnig to bankrupt this nation,demoralize its people and encourage insurrection and fighting among ourselves.The best way to destroy a country is from within and get us to do it ourselves by causing financial hardship,supporting opposing radical ideas and undermining every relationship we have with allies while supporting chaos in the rest of the world.Not supporting a republican canidate at this point is cutting off your nose to spite your face although considering obamas friends the better analogy would be cutting off you head to spite your body since that would be more in keeping with the thought processes of his cronies.I totally agree our options aren’t great this time around but not to participate by voting is surrender.

    • Retired USAF MSgt

      Bravo!!!!!!!

    • gtx13

      Why Romney doesn’t go to Dems, as long time was preinvented “obamacare” ! He is not fit to play a role between Conservatives ! May be, he is fit for RINO liberals as Ann Coulter, Chris Christie, Nikki Halley and Brit Hume !

  • Debbie F

    Perhaps, since Romney is already filthy rich, he would be less apt to become corrupted by money? It seems that corruption is the root of all of our problems. It would be tough to buy him off!

  • americanbeliever

    Hey,can anyone explain to me why my post states “Your comment is awaiting moderation ” and has for 30 minutes at least.There is a post after me.Thanks.

  • David in MA

    How come America is not hearing about this:

    Romney’s father was a naturalized from Mexico

    Which makes him inelegable to be president according to the Constitution…

    Romney’s father, George, was born in the state of Chihuahua, in a colony of polygamous Mormons.

    http://www.npr.org/2012/01/22/145574014/mexican-cousins-keep-romneys-family-tree-rooted

  • gtx13

    We have to chose a Christian President, not other faith cults to avoid the decadence of this great country ! Dog do not eat dogs !

    • patriotrenegade

      ?

    • SamFox

      patriotrenegade, I only care that the candidate is a true verifiable conservative Constitutionalist. That would only be Ron Paul ATM.

      But there is a bonus for people of The Way.

      http://www.ronpaul2012.com/the-issues/statement-of-faith/

      Ron is a Christian. You may not have known that because he doesn’t wave Jesus around to attract votes.

      Of the other 3, Mitt is a Mormon, Rick is a Catholic & Newt is a Catholic after leaving a S. Baptist Church. That is not meant as a cut, it’s just facts.

      I don’t care about their personal faith. If they have the ‘wrong’ faith, that is, not totally Jesus the only Savior & mediator & Bible based, that’s between them & God. I would vote for a devout pagan IF that one had a platform that came close to Ron Paul’s.

      Ron has to take a lot of jive & false accusations. One thing that is true; he is not the best speaker & doesn’t look all that ‘shiny’ outwardly.

      But God uses what the world thinks is weak to take down their strength. He uses what men call foolish to confound their ‘wisdom’.

      Judge not by outward appearance, use righteous judgment it says in the Book.

      If you look more closely with an honest heart & mind, you may find like I did, that Ron Paul is a Patriot’s answer to prayer for saving the USA.

      SamFox