To be fair, I should point out to my readers who aren't bothering to watch the video that it was not specifically endorsed by Gingrich, and I am unable to find a reference online to him endorsing it, beyond the usual Mitt slams in the two recent debates.
For me, it isn't about Romney, and it isn't about Gingrich. It's not even about the spooky style (ffs, it comes across as a trailer for a new Saw movie). It's about the intellectual disconnect in the message.
We can reasonably assume that the Gingrich campaign has seen the video. We can further assume that, if its contents offended Newt's sensibilities sufficiently, he would have distanced himself from its message. We can further assume that, since he hasn't--he seems to be getting a fair amount of mileage out of the Evil Bain meme--this video is something about which Newt is anywhere from "meh" to "schwing!". Most importantly, the campaign must feel that at worst this video does no harm to Newt, and at best is a powerful case against Mitt Romney.
If the Right means what it says about the wisdom of the free market, or the power of Capitalism to bring America back to its prior economic glory, then we must ask them how restrained (ie, regulated) or unrestrained (ie, Ayn Rand's "absolutely unfettered") they would like to be. This video certainly doesn't attempt to make a nuanced case for reasonable regulation, inasmuch as it is only a 3 minute teaser for a longer documentary... but is it too much to ask that they don't contradict themselves so blatantly? It really just comes across as being silly, especially with the generic piranha-approaching-the-
These are people who take pride in making so many issues sound purely black and white, and Capitalism is no exception. How often do we hear GOP candidates extolling free markets while lamenting regulations? Capitalism often is portrayed as the ideal to strive for; the free marketplace is supposed to be much more efficient and generally better for people. Those idgets over in Europe just can't get anything right. Government is incapable of effectively or efficiently regulating the economy, so we should just leave the economy alone. Hey, it worked for our first 100 years or so, didn't it?
I make a hollow laughing sound in their general direction.
After the worst financial meltdown we've seen in our lifetimes, and after so many investigations revealing the extent to which both large banks and their regulators were at fault, these are the people who are saying that regulations are strangling the banks' ability to provide credit. Do they ever listen to themselves? I don't think ALL regulations are perfect, but if an environment of lax regulators combined with loophole-ridden rules was able to help produce the Great Recession, just exactly what the F do you expect will happen if we go back to a "more pure", less regulated system?
Hey, Capitalists!!! If you're serious about the whole "free market" thing, Romney's your guy, because he has the most experience with one of the purest forms of Capitalism: predation. Here's one way it works, Romney-style:
NB: There are thousands of firms around the world that do this; to say Romney's Bain Capital was exceptionally cruel or unusual for a capital management corporation would be extremely unfair.
You hire a team of analysts and start looking for opportunities. An opportunity might be a new investment vehicle, or a new business idea, or (even better) it could be a troubled company with basically solid fundamentals and cash-flow. The reason it's better to buy a troubled company is that there is far less risk. You're paying pennies on the dollar for a huge portfolio of assets, and if the deal isn't quite sweet enough, you have the leverage to dump employees as a way to keep the balance sheet happy in the short term. In contrast, new ideas tend to have a high initial capital:failure rate, and new businesses that DO succeed sometimes take years to become truly profitable. Until then, your investors are financing the deal while tapping their feet waiting for a return on their investment.
Remember that not all capital management corporations walk into a deal with the specific strategy of breaking their companies into pieces, firing everyone, and selling all the assets off for cash. Capital management is about scoring home runs, yes, but it really thrives on getting steadily high rates of return relative to the overall market. It is always preferable (at least for the PR) to buy a company, make it better, and then patiently look for a serious buyer while you reap returns on that improved investment.
Now here comes the cruel part. Employees are assets, and expensive ones at that. Take into account everything that goes into hiring, training, and maintaining an employee, and it's some serious money. Therefore, when a company is underperforming, employees are one of the first things on the chopping block. Firstly, layoffs can save tons of money for the effort. Secondly--if handled properly--layoffs can have a very positive effect on the remaining employees' productivity. Thirdly, they allow for rather dramatic reorganizational efforts, which can ultimately help the company as a whole get back on it's feet and begin rehiring. And when they DO rehire, they'll be able to plan and follow their productivity goals far more efficiently.
Companies like Bain Capital are very very good at finding weaknesses and exploiting them. They are also very very good at defining an opportunity and maximizing its potential for their investors. If they have to lay off a third, or a half, or all the employees at a given concern, they'll do that. If they have to close a division, throwing most of a town into unemployment, they might do that, too. If they have to add employees, they'll do that as well. It is critical to remember that Bain Capital, like most businesses, has competitors out there, and their investors know this. If Bain doesn't perform well enough for them, someone else will.
Probably the most important thing that you won't hear is this: Every company that gets bought, was sold. We presume that these deals were all legal. Thus, Bain walks in, voluntarily makes an offer, and the company voluntarily accepts said offer. Transaction over. Bain is now in charge, because it owns the majority position. If Bain then needs to close a division, or lay off some employees, then they have every right to do that, and if they are publicly traded, they are most likely REQUIRED to do that. The difference between firing an incompetent worker and closing an unprofitable division is numbers, not philosophy.
This is just one demonstration of Capitalism at work, and it is one of the purest forms thereof. Learn from it.
In conclusion, apart from the whole Don't-Nominate-Mitt-Because-He's-Not-Newt thing, why are Newt's folks bitching about Romney's background? Are they seriously saying that *gasp* Capitalism needs restraining regulations???? Or are they merely making the argument for moral or compassionate Capitalism? Are they really saying that we could unregulate much of the economy without dire results for those not in financial or political power?
For a black & white issue, this one sure seems to look MUCH better in grey.
No comments:
Post a Comment