Skip to comments.Romney's False Choice: You Either Support Asset-Stripping Or You Are Anti-Free Market Capitalism
Posted on 01/09/2012 4:20:37 PM PST by Laissez-faire capitalist
Gordon Gekko Romney is being taken to task over his proclivities, and activities at Bain. To make it short, Romney engaged in what is commonly known as asset-stripping.
My point in this thread isn't to delve into the minutiae of what asset-stripping entails, but rather to point out that Romney is attempting to pigeonhole Gingrich as being anti-free market capitalism through the use of a false choice:
If Gingrich doesn't support what Romney did at Bain, then he is anti-free market capitalism.
Romney's false choice...
And all the while, Romney is trying to use a smokescreen to cover what he did at Bain.
In the end, just because you CAN take on more debt to procure investors an earlier dividend, for example, doesn't mean that you SHOULD.
Might doesn't always make right...
It is not the bankers and venture capitalists who rushed in to "save" them, sometimes only to take their own cut of the money and leave a percentage of them to go bankrupt anyway.
Now, if a true entrepreneur who invested his savings, started a Widget Manufacturing Company, and provided jobs to a few or hundreds of fellow citizens runs for President, then he deserves kudos for that courageous risk-taking action. To be fair, the Romney experience with Bain is not exactly a true freedom of individual enterprise example.
Let’s start with the fact that no such crime against humanity known as “asset stripping” exists. Assets used in one enterprise may have little or no value, but a high value if transfer - just as a functional alternator in a wrecked car has no value in the wrecked car but considerable value in a car that works but which needs an alternator.
Most of what Bain did was back new or growing companies like Staples and Dominos. In some cases they tried to turn companies around that were failing. Some investments worked and others didn’t. Overall Bain did well because it created value. Along the way it created a huge number of jobs.
One theoretical physics and engineering threads I manage to withhold my “brilliant” insights because I don’t know nearly as much about those things as others. But it seems that many on FR incontinently spread their opinions on things they not only know very little about, but what they repeat is a false message packaged for them by someone else.
Ok. Bain should never have invested in any turnaround situation so that all of the employees could have lost their jobs.
BTW, I can find articles all over the net in which people with agendas or who know nothing about the turnaround business voice all kinds of opinions - kind of like FR. Those who don’t know how this small complicated corner of the world works should go learn something before they post. If you know the area, you can independently evaluate the opinions. Simply collecting opinions and proclaiming that lots of people hold such and such an opinion is an absurd way to proceed. People who can’t find the character to do that often end up in thrall to people like Michael Moore or Alex Jones.
He’s selling himself as the man who can create jobs. With this record, Obama is going to be able to beat him like a drum - no matter HOW much money Romney has his SuperPac spend. Negative advertising isn’t enough. Running as the Not_Obama will not be enough. If we nominate this guy, we are doomed to another McCain fiasco.
At least with Santorum or Paul, we have an actual bona fide candidate, with solid opinions. Even Newt has more of a presence, as well as a positive Conservative history.
The purpose of exposing this video, from Gingrichs perspective is to show the difference between corporate-level consolidation as one aspect of healing over-bloated dying companies, and a comprehensive business model that enables ground-level, small business creation. That is a critical question that gets to the point of what we need in our president.
Romney is a corporate guy. There is nothing wrong with that - I have worked for a couple of the biggest corporations in the world and endured restructurings and staff reductions for 30 years. Newts angle is that Romney may know how to make money via corporate restructuring, but he does not have the real experience as a national leader, driving public policy to trigger wide-spread economic expansion by policy reform. It is child’s play for the Obama gang to credibly paint Romney as a corporate raider 1%’er. The story tells itself!
Listen to what Prof. Art Laffer says: You know, economics is my profession, and Ive specialized in it all my life, especially public policy economics. I feel sort of like a doctor in a hospital, choosing which surgeon is going to operate on my child. And, youve got a bunch of good candidates out there but Newt Gingrich has done it before. His plan is pure and simple supply-side Reaganomics all the way, he said.
The point is that Romney is a corporate rebuilding expert. He is in the business of doing the dirty work of painful corporate restructing that creates profits and survivability for corporate investors. That is an important service, but does nothing for the working guy who loses his job after many years of service and is out on the street.
The Reagan model is supply-side driven, driving tax-rate reductions, deregulation, small business incentives and consumer-based, ground-up growth that benefits everybody. This is where Newt has credibility and experience. The American people voted Reagan in the 80’s and Reagan needed a real, results driven visionary in the House to sponsor his change. Newt was a key driver - Laffer knows this because he was there! In ‘94 the American people voted for revolution in the congress after 40 years of democrat strangulation. Newt was the leader! Look how investment grew after Newt’s reforms. Deficits were reversed, taxes reduced, investment incentives enacted, stock market blasted off, unemployment shrank to near full-employment level. We know what happened in Clinton’s 1st 2 years when he had both houses of Congress. He was killing us. What changed things - Newt!
There is a big difference between creating corporate profits and saving those investors and core employees vs. growing a widely incentivized, ground-up economy. This is where Newt has an advantage because as Prof. Laffer states, Newt has credible experience doing this. Newt can lay claim to helping create 11 million jobs in the 80’s. Romney did create corporate profits but in no way does his model comprehensively trigger consumer confidence and wide-spread growth. This is why Newt Gingrich is immeasurably most qualified to stand as the GOP nominee for President and I pray the SC voters will get this message. I live in Florida and can’t wait to vote for Newt.
I can appreciate the distinction but don’t subscribe to it. I’ve been told that my profession (IT/internet) is not real because it’s 0’s and 1’s. Finance is a data oriented product at this point (debt instruments, derivatives) and I guess I don’t find it any less real than a widget. To each their own.
But if that is your standard and a 0 is no business experience (say community organizer) and a 10 would be someone like Henry Ford - then a) where does Mitt fall on the scale? and b) where are the rest of the candidates? IMO, I think only Huntsman has had a real job now that Cain is out.
Do you find it funny that we’re explaining the basics of finance and capitalism to someone with the name “Laissez-faire capitalist”? Guess it’s our does of Vitamin I for the day.
I wasn’t saying financial products aren’t real. I was only drawing the distinction, that running an investment firm generally requires quite a different mode of thinking than, say, running an innovative entrepreneurial business from the ground upsuch as creating a Ford Motors, or an Apple, or what have you. I’d believe the latter to possess superior working understanding about how the “real economy” works and what really it takes to create jobs, etc.
I’d place Romney somewhere around a 7.5 on your scale.
Oh, and as far as the rest of the candidates, I don’t knowI presume they’re all much lower than Romney FWIW. But good businessmen don’t necessarily make good politicians; both domains require rather different skill sets and natural talents to be successful.
Yes, and I was trying not to comment on it. There are a lot of people on FR who mean well and who are desperate that Romeny not get the nomination, but we can’t just latch onto any line of criticism. You see the same irrationality at play on the SS threads.
Yes, and I was trying not to comment on it. There are a lot of people on FR who mean well and who are desperate that Romney not get the nomination, but we can’t just latch onto any line of criticism. You see the same irrationality at play on the SS threads.
Then mine are just as bad, I read war the first time.....
Apologies, wasn’t trying to put words in your mouth. I think that score’s about fair. Curious where you’d rate the others or who at least you think is the next best. I suspect it’s extraordinary as compared to the pack of lawyers and government careerists that we typically get.
I hope that whoever the candidate is that they get more real business into government positions (hopefully those looking for impact vs. a revolving door). If a candidate doesn’t eliminate the Department of Ed, I hope that they put someone from industry in charge of it a la Intel’s Andy Grove. Basically someone who knows the types of minds we need to compete and ruthless enough to push for the change.
Providing jobs is not the purpose of capital investment. Making money is the goal, regardless of whether or not job creation results from any particular investment.
Check out this great new ad by Newt. Just on YouTube today.
I love that ad = POP GOES THE WEASEL!
The Wall Street Journal(not a Marxist rag) had plenty of critical reporting on the abuses that were happening. Romney has made his career at Bain the centerpiece and main reason he is the best qualified.
So, lay it out. Lets see it all. Which companies, what happened, the good, the bad, the ugly. It's coming sooner or later better to do it sooner and see if Romney can sell it. Obama and the dems will surely exploit it. Best to vett it now.
The big thing is how "compassionless capitalism" is to be reined in. Doing it through legislation will inevitably morph into socialism. It should only be done through the censure of public opinion.
You have summarized much of the philosophy of that great moral philosopher, Adam Smith. And the engine which provides the jobs in that individual effort of a free individual is summarized in the word "profit." Of course, we know that the redistributionists believe that word, "profit" is a dirty word--one to be used to disparage entrepreneurs. But, when they impose their government-over-people philosophy, picking winners and losers, and destroying the engines of growth, then oppression results.
Today's jobs situation is the result of departure from our constitutional foundations. It has been brought about by the so-called "progressives'" takeover of the reins of government.
As for "job creation,"--just think about it. The most successful "experiment" in job and wealth creation is the one which began in 1776 in America, was protected and "secured" by a written Constitution that severely limited government, and it thrived for over two centuries. It provided an example of more liberty and opportunity, more productivity, and more goods and services than the world ever has seen.
It happened under what James Madison called "the benign influence of a responsible government."
While Europe struggled with oppressive government intervention, the genius Founders of America recognized enduring truths about human nature, the human tendency to abuse power, and the possibilities of liberty for individuals. Richard Frothingham's 1872 "History of the Rise of the Republic of the United States," Page 14, contained the following footnote item on the condition of citizens of France:
"Footnote 1. M. de Champagny (Dublin Review, April, 1868) says of France, 'We were and are unable to go from Paris to Neuilly; or dine more than twenty together; or have in our portmanteau three copies of the same tract; or lend a book to a friend: or put a patch of mortar on our own house, if it stands in the street; or kill a partridge; or plant a tree near the road-side; or take coal out of our own land: or teach three or four children to read, . .. without permission from the civil government.'
Clearly the government of France laid an oppressive regulatory and tax burden on citizens, robbing them of their Creator-endowed liberty and enjoyment thereof. Frothingham observed that such coercive power constituted "a noble form robbed of its lifegiving spirit."
Thomas Jefferson warned Americans:
"To preserve [the] independence [of the people,] we must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers." --Thomas Jefferson to Samuel Kercheval, 1816. ME 15:39
Note Jefferson's very last thought here. He declares that when government taxing and debt have reached certain levels, in order for individuals to survive, then their chosen "employment" becomes "hiring ourselves to rivet their (the government's) chains on the necks of our fellow-sufferers."
Consider: in 2012, where are America's levels of employment highest? Is it in the once-thriving private sector, or in the ever-increasing government sector?
Have we reached that final phase of what Jefferson described as a logical end to what begins as letting "our rulers load us with perpetual debt"--a state where we actually become participants by "hiring ourselves" to make slaves of our fellow citizens?
Of course, you are correct! All those who enable, or in any manner that doesn't coercively impose their will on the entrepreneurial enterprises, are real contributors to the wealth creation process. Traditionally, that process has been labeled "the free enterprise system," or, by the Founders, as "freedom of individual enterprise."
Whatever it is called, it represents the efforts of free people, under the rule of law, exercising their Creator-endowed freedom. As posted earlier (above), this was the system advocated by America's Founders, and it led to the greatest explosion of liberty, opportunity, prosperity and plenty in the history of civilization.
This is why, IMHO, the candidate who possesses the deepest understanding of the Founders' ideas of liberty may be the best qualified to combat on behalf of liberty in this election. It must be understood that this is a battle of ideas--fundamental ideas about the nature of liberty and the role of government.
It is not about running a business. It is about preserving the Founders' intentions for a limited government and free individuals. The antidote to the appeals and lies of the "redistributionist in chief" is a quickly-delivered dose of Jeffersonian wisdom on matters of liberty versus tyranny, spending, deficit, debt, taxation, regulation and control, and the ensuing consequences of that combination of government involvement in the lives of a nation.
The goal of the opposition candidate must be to first educate the citizenry in the founding philosophy, helping them to rediscover the ideas "embalmed" (Lincoln) in their Declaration of Independence and structured into their Constitution's limits on the power of Presidents, Congresses, and Judges.
If the candidate can achieve that goal, the November election will be a correction of course, in favor of liberty for individuals and a curb on Presidential power to "fundamentally transform" America.
Largely agree. Never argued that government was business or that business skill is all that is needed. I just appreciate candidate that actually knows how business works. I also prefer that to the typical government careerist and lawyer types we’re usually stuck with.
The original point of my thread (seeming now gaining steam) is that it’s unwise for conservatives to bash business experience and use leftie arguments to do so. There’s plenty to bash Romney on but the leftie arguments are not it.