The Last Word On Bain

Mitt Romney - Bain Capital

Between them, I think that Andrew Sullivan (writing at The Daily Beast) and Joe Klein (at Time) sum up perfectly the way that Romney’s tenure at Bain Capital can be reasonably and fairly framed in the forthcoming election debate.

First Sullivan:

The point is that a president cannot just maximize profts for shareholders. Being a CEO is not the same as being a president. Moreover, even if you think that Romney’s highly profitable adventures in private equity helped the economy more than hurt it, the rigged system in which he paid lower taxes, exploited other loopholes and made money regardless of the outcome in any specific case is not a pretty picture of real market capitalism.

And then Klein:

It seems to me that Obama’s immediate point is wrong: Romney wasn’t primarily about job destruction and corporate plundering. His larger point–that Romney was not so much about job-creation as he was about profit-creation–is correct, though. But the largest point of all is this: private equity capitalism was all about short-term profits–maximizing shareholder value–rather than long-term growth. It ushered in an era of massive executive compensation and bonuses. It prospered because of tax rules that made debt more profitable than equity, and a “carried interest” tax dodge that enabled Mitt Romney to pay a lower percentage in taxes than your average construction worker. It can be a useful tool in restructuring companies and steering them toward profitability, but it is not the sort of model you’d want to apply to the entire American economy.

A President has to be about long-term growth, not short-term profits–and to the extent that Barack Obama is using the Bain ads to make this larger argument, he is not “stumbling” or attacking “free enterprise,” but he is steering the conversation toward the most important topic this year: what sort of economy do we want to have and how do we get there?

There’s nothing in these arguments that sounds stridently anti-capitalist or envious of wealth creation. The point is simply one of short term vs. long term focus, and whether successful stewardship of a large nation requires additional skills over and above those required to succeed in business.

If – if – Obama can stick to this narrower line of attack, as he did at the recent NATO summit press conference, he will be much less vulnerable to the inevitable, tired charges of socialism and class warfare that are already being warmed up by some on the Right.

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