Thursday, January 12, 2012
Bain Capital-it sounds like Bane. But are they really malefactors, the Vulture Capitalists as described by Rick Perry? Are they really deserving of the recent attack ad by supporters of Newt Gingrich, which has been described as being as vicious as anything ever cooked up by the left? And this is coming from Daily Kos!
Probably not. Private equity firms such as Bain play a vital role in any kind of capitalist system, the healthy ones as well as those which are grievously wounded, such as our own. They recognize there will always be winners and losers. Bain has probably saved more jobs on balance than they have devoured. They have created success stories from the ashes of creative destruction. Some companies, such as Staples, have survived thanks to Bain, and gone on to prosper, expand, and thrive.
And of course, there have been failures. There will always be some of those. That's also the risk of private equity. But on balance, in the case of Bain Capital, there have been more success stories than failures. There have been more jobs saved, and created, than lost. Much, much more.
Thus, when you attack Bain Capital, this great Bird Of Prey of the Romneylan Empire, they simply throw up their deflector shields and ward off your phaser attack. That's because you are engaging in a frontal assault against their strongest, most easily defensible positions.
But in the meantime, they employ their cloaking device when it comes to their truly malefic aspects. No one truly sees where they are coming from, and from where they derive their true strength. Few manage to pierce beyond the veil. But they should, because its power source isn't at all the power of the free-enterprise system, but the largesse of crony capitalism. And that system is itself enabled by the labyrinthine maze of red tape and regulations that make up the most offensive, counter-productive regulatory system in history.
It is a system which requires extensive time in the form of non-productive labor and draining of capital expenditure in order for any business to survive, and under which relatively few will thrive. This has been true since the days of the New Deal, but then, the damage was nowhere near as incalculable. It has since that time grown steadily over the decades, much like a cancer which has only now metastisized with the implementation of such onerous regulatory regimes as Sarbannes-Oxley, Dodd-Frank, and of course The Affordable Care Act, or Obamacare. These legislative and bureaucratic monstrosities have already adversely affected job creation and business profitability (and in many cases business survival)-and they have not yet even been implemented.
They need to be repealed, scrapped. But we should not stop with them. There are many more examples of laws and regulatory regimes that should be buried under the ash heap of history. Fannie And Freddie should be broken up and sold off to private interests. The FDA and the EPA should be scrapped, or at least massively scaled back, and made to be reactive agencies as opposed to the proactive monstrosities that actively look for the slightest excuse to levy fines and injunctions. All of these government boondoggles should be either scrapped or reined in sharply, and several cabinet departments should be phased out as well.
The dirty little secret here is, if this were done, and taxes were lowered significantly and the tax code itself simplified, the economy would grow by such leaps and bounds that entitlements could be saved with nothing more than relatively minor reforms.
Unfortunately, a moderate Republican like Romney is highly unlikely to do that, not because he is a moderate, a squish-a "RINO", if you will. No, it is simply because Romney's company, Bain Capital, that great bird of prey, like many other private equity firms, have thrived under the current regulatory system.
True, there will always be business failures, due to bad management or a flawed business model, even under the best of economies, and companies like Bain will always thrive to a point by buying these companies and when possible turning them around.
But does anybody seriously believe for one minute that Bain would be nearly as successful as it has been under a sound economy with a bare minimum of regulatory interference, no more than necessary. Let's get real here. Our regulatory system has created an atmosphere that is conducive to business failure as it contributes in large to the sluggishness of our economy. I won't venture to say what percentage of business failures are directly attributable to our oppressive regulatory regimes, but I do know that it has to be significant. Common sense tells you that.
So why should we trust Mitt Romney to significantly reform our economy? Why should we take him seriously when he says we need smaller government? Lower taxes? Less regulations?
Bain Capital at one point made investments in companies that specializes in green energy technology. Then voila, at some point, Mitt Romney declared himself a believe in Anthropogenic Global Climate Change. And of course, green energy. It does not take a rocket scientist-or a solar panel technician-to realize he was looking out for his own financial interests, and that of his company.
Why should we then trust him to reform a regulatory system that has enabled him and his company to grow, and to thrive, to a much greater extent than it ordinarily would have?
Posted by Patrick Kelley at 5:21 PM
The Romney Empire And It's Great Bird Of Prey