The Bain Of Our Existence? Hardly!
January 23, 2012
By J.J. Jackson
I cannot help it. I have to defend Mitt Romney from idiocy. Yes, I know the man is a RINO. However even a RINO deserves to be defended when the attacks against him are unwarranted and so utterly crackpot in nature that they fly in the face of reality.
Unless you have been living under a rock for the past month, you are now fully aware that Mr. Romney once ran a company called Bain Capital. The company is a private investment firm which spends its cash on a variety of endeavors from venture capital to leveraged asset acquisitions. Over the years, Bain Capital purchased or helped finance a myriad of companies. Some of those companies failed. Most of those companies succeeded. Some succeeded beyond anyone’s wildest imagination.
Despite creating more jobs than most people can even count however, the company and Mr. Romney have come under attack from the far and not so far left. Why? Well, because the company engaged in capitalism. Well, at least when it was not taking federal money apparently. But I am not here to defend the latter because it is indefensible. However, I am here to defend the former because the former is what is being attacked nonsensically.
The sort of scurrilous attacks on Mitt Romney and Bain Capital for being capitalists which are being thrown around, frankly, I expect from President Obama and the far left. It is sadly all they know how to do. But to hear these sorts of attacks also come from Newt Gingrich, Newt’s PAC buddies and even Governor Rick Perry? Ok, honestly I cannot say that I am totally shocked. Although I am shocked a little. For them to get involved in this displays a lack of leadership and character. And while I never really pegged Newt as a real leader or someone with strong character, I had thought much better of Governor Perry before this episode.
The fact is that sometimes companies acquired by Bain Capital had to be reorganized and downsized or even disassembled completely. Thus, the complaint goes, Romney is a callous so-and-so who had no qualms about putting people out of a job. As if having a particular job with a particular company is now somehow a right? Like I said, I expect this sort of stuff from the dim bulbs that inhabit the White House and the halls of liberalism. I expect better however of people who want to legitimately call the GOP home.
Bain Capital did, several times, indeed invest in or wholly take over struggling companies. And as part of their involvement they did at times, either themselves or as part of the rescue deal, force the company to lay off workers who were not necessary to the operations in order that the company would again have a chance to become profitable. It is also true that Bain Capital took over some companies, quickly assessed that the assets of the company were more valuable than the company itself and turned around, hacked up the company and divested its assets in order to actually make money on the deal. Oh, how droll! Do they not know that funneling good money into failing companies to keep them from failing is so much more fashionable? At least to leftists, anyway.
The only people who complain about this sort of activity are those who lost their jobs because of these actions and who had been taught to be victims, liberal demagogues and “conservatives” who forgot to boot their brains before speaking on the matter. Look, this is the way a functioning economy works. If you do not like it, move to China, Cuba, Venezuela, France, Greece or Italy. Because those are countries where the creative destruction of nonfunctioning parts of the economy is not allowed to happen. Instead useless, mismanaged companies filled with employees not producing anything which pleases their fellow man are allowed to sputter on. Usually this is done with the continual infusion of tax dollars into these companies and paid by other people until the entire economy eventually collapses.
Say you have a steel mill that is making, of course, steel. The problem is that while it is making steel due to a combination of high labor costs and antiquated equipment it cannot make a profit and is running in the red. The company is going belly up. A company like Bain Capital comes along. They look at the books. They look at the market. They look at the plant. Then they make a decision to buy the plant. Then they make a decision to either liquidate the assets or reorganize to make the company profitable. The latter results in some people losing their jobs as the bloat of exorbitant and unwarranted salaries and the number of people working for a company is trimmed. The former results in everyone at the plant losing their jobs.
Liberals, and again non-thinking “conservatives,” decry this as Bain Capital destroying jobs. But the company was going belly up anyway. Everyone was already going to lose their jobs if such a thing were to happen. So at worse it is a wash and Bain Capital actually destroyed no net jobs on its own if it opts to close the plant and sell every last bit of scrap it can for whatever money it can get. At best it actually saves jobs by turning the company around.
Of course this is no consolation to the trained victims of American society who lost their jobs under the knife of a company like Bain Capital. They will whine to anyone that will listen. They will be recruited by political charlatans who seek to exploit their poor condition for their own political gain. But in reality they are still just whiners who instead of whining should be bettering their lives and taking their skills, which hopefully they actually have, out to the open market. Failing companies and bad business models cannot be allowed to just continue on indefinitely because someone feels they are entitled to a job at XYZ Corp. This is not a fairy tale. It is real life.
In real life the Soviet style model of unproductive jobs being kept just for the sake of the employee feeling entitled to the job always fails. And believe me, you will not be happy under such a system. Just ask anyone who has lived through it.
No one who attacks Bain Capital for engaging in capitalism is fit to lead this nation because they show that they do not understand basic economics.
And what happens when you have such people in charge of anything? Well, you get crazy ideas like the “Jobs Bank,” which GM used to have, where hundreds of unneeded employees sit around all day playing games, reading books and watching television because they just cannot be fired and all maintaining full benefits and pay. Remember what happened there? Do you? Had GM been allowed to do what Bain Capital knows how to do the government would not have had to step in and “save” them with billions in unconstitutional spending.