The Bain of Capitalism’s Existence

Countless 0’s and 1’s have been spilled over Bain Capital and Mitt Romney’s work during his tenure there. There was a day when we might have heard a pre-election argument over how well Romney did while there. Was he a competent investor? Did he earn a return for his customers? Did he help expand solid firms and winnow out the weak ones in favor of better investments? An incumbent might have argued that the contender was not so good at all this investment stuff and therefore unfit for office.

Instead we have a President running for re-election who despises the whole concept of capitalism and is quick to attack his opponent, not on the basis of his competence, but his very participation in the investment process. Romney did what venture capitalist’s are supposed to do. He took money that people trusted him with and grew it for them. He made investments.

I have not closely examined Romney’s record because I don’t need to. I don’t think Romney’s business acumen is a good indicator of Presidential ability any more than I think that Ron Paul’s experience delivering babies qualifies him for office. What counts is the set of core values about governance that drive each man.* Do either one understand what makes an economy work?

Mitt Romney is no libertarian, but at least he does not hold the whole idea of capitalism in contempt. His participation in the process of investing in firms may prompt him to leave the private sector alone, but I have my doubts. The best I can say is that he knows, or should know, that venture capital and the free, unfettered deployment thereof is what feeds the hungry and clothes the naked, not government. Without private capital, we would all be figuring out how to distribute a whole lot of nothing. His biggest liability, or perhaps I should say the country’s biggest liability if they elect him, is that he will imagine himself capable in virtue of his investing experience of “managing” the economy. We all know how that story ends. Can you say “bailout?” I thought you could.

Let’s move to President Obama. I’ll be brief. He hates the private sector. He wouldn’t know a market if it bit him on the behind. He will do everything in his power to destroy capitalism in this country and may just be succeeding. If he is re-elected and we are left in four years with even a shell of a country, it will be a miracle ranking right up there with the parting of the Red Sea and the fact that my wife hasn’t strangled me yet.

Obama has chosen not just to attack Romney on his competence or lack of it as a businessman. He has poisoned the well completely. His attacks carry more and more of a tone of contempt for any and all market processes, his protests notwithstanding. Obama believes that government and only government is the key to our prosperity. The private sector is a nuisance and must be chained up in the cellar.

Sadly, Romney’s fellow Republicans did the same thing. My disgust with Barack Obama is not so much greater than my disgust with Republicans (Republicans!) who attacked Romney in the same way for the same reasons. Even Romney himself has offered up lame defenses of a perfectly defensible business past. No one alleges he was dishonest, only that he put capital to work where it would provide the greatest return. If you consider that a crime, you are already beyond redemption.

We Americans can either be, well, Americans and rediscover our respect for initiative, innovation, and courage or we can slide down to the level of beggars and ne’er-do-wells. We can cowboy up or hunker down. We can embrace the changes that are inevitable in economic life and learn to compete or we can whine our way to poverty. Obama won’t be there with you, by the way. He will have made his fortune as a leech on the underside of an increasingly politicized economy. When the host dies, don’t go to Obama’s house for a handout.


*Or at least this time it’s men.

About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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1 Response to The Bain of Capitalism’s Existence

  1. David says:

    Your commentary is spot on, Terry. The Wall Street Journal had some nice commentary on this last week as well. They said that we do not need to know the details of Romney’s success to know that he was a success and not running a predatory operation. After all, he was in the business for over 30 years and people continued to invest money with him. In addition, a significant fraction of the companies he worked on had greater success as a result of working with Bain and most of those continue thriving today.


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