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January 13, 2012 07:14 PM UTC

Stop! You're "Trashing Capitalism!"

  • 48 Comments
  • by: Colorado Pols

Our friends at the Washington Post report:

Both former House speaker Newt Gingrich and Texas Gov. Rick Perry have argued that Romney destroyed jobs and lives at the venture firm Bain Capital by buying up and then shuttering struggling companies. A super PAC supporting Gingrich is airing ads in South Carolina attacking Romney’s record, using footage drawn from a 30-minute documentary called “King of Bain.”

The ad uses the same argument Romney has used on the campaign trail – that Bain helped Staples, the Sports Authority and Steel Dynamics create jobs.

“We expected the Obama administration to put free markets on trial, but as the Wall Street Journal said, ‘Mr. Romney’s GOP opponents are embarrassing themselves by taking the Obama line,'” the narrator concludes.

Allison Sherry at the Denver paper reports that GOP Rep. Cory Gardner joined yesterday in the pushback against attacks on Mitt Romney’s “corporate raider” record at Bain Capital, imploring Republicans running against Romney to refrain from such nasty Democrat-style “class warfare” (although Romney himself has done just as much to push that narrative). Newt Gingrich, for his part, has answered that he’s not disparaging capitalism so much, but heartless predatory outfits like Bain Capital that give capitalism a bad name.

No, says Gardner, that’s disparaging capitalism.

It’s an interesting pickle the Republican presidential challengers have gotten themselves into, having found a line of attack against the frontrunner that resonates, but with the side effect of upsetting key philosophical “free-market” assumptions among conservatives. They can’t take it back. Add that to the fact that these are probably futile attacks on the likely Republican nominee, and segue perfectly into President Barack Obama’s message, and you can easily see why player Republicans like Gardner suddenly realized that this had all gone much too far.

But so nobody accuses us of being unfair, Romney’s response ad follows too.

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48 thoughts on “Stop! You’re “Trashing Capitalism!””

    1. Obama didn’t do anything of those things Dave.

      The Obama Administration engaged in classic Kenysian economics where there was a partnership between the public and private sector and the bailout funding was in effect a loan to the auto companies to keep them afloat during the darkest days of the Bush recession.

      Romney on the other hand advocated letting them go broke.

      Big difference between gutting companies and giving them loans but only an idiot such as yourself would fail to notice the distinction.

      1. GM just passed Toyota to regain the top auto seller in the World.  A great story of Government support.  You know why they are number 1 again?  The Chinese love Buicks and I am not kidding.  

        Best

  2. Gardner is of course appalled at the comparison of Mitt with Gordon Gecko.  Cory’s entire existence is predicated on serving rich men like Mitt.

    I’m predicting this narrative is going to have stronger legs than Rev. Wright and the angry black man.

    1. if it’s about an ad ad attacking Romney then why does  the rticle say

      The ad uses the same argument Romney has used on the campaign trail – that Bain helped Staples, the Sports Authority and Steel Dynamics create jobs

      Wouldn’t that be supporting Romney?

      But it’s nice to know that Krauthammer thinks Obama did such a great job saving the auto industry. Obama and friends can use that, too.  

      Newt ‘s big vengeful thoughtless mouth seems to be doing a nice job of tying knots and sewing confusion. It’s almost as if he not only wants Romney to lose the general but would prefer that the entire GOTP gets crushed altogether for being so mean to him. What a guy!  

  3. without Occupy Wall Street. That really made it obvious that the American people as a whole aren’t so much into the so-called “free market” (read: economic anarchy) school of capitalism, of which the GOP is a wholly owned tool.

    People predicted that Gingrich would crash and burn in order to catch Romney on fire, but it appears that ‘pubs are panicking over the prospect of the damage being much greater.

    Pass the popcorn.

    2. Good God do I wish more people understood actual economic principles.  Pre-apologies, this is a reply to your post only because of the use of the term economic anarchy.

      This has been driving me mildly insane lately, and I keep yelling at my friends about it, but they won’t listen anymore, so I’ll post it to Pols.  

      The “free market” is NOT, I repeat, is not, nor was never intended to be, economic anarchy.  The market that we currently have is far closer to economic anarchy than a free market.

      A free market is one that in which, in theory, supply meets demand for the greatest economic efficiency and distribution of scarce resources.  This happens actuality in several ways.  To enumerate a few of them: a) competition exists and allows the best ideas to rise to the top b) funding/credit is available to businesses to allow said competition, since if you can’t fund a project its dead in the water c) information is available about the economic/purchasing choices you have, allowing an informed decision (basis of that rational decision making part of economics) d) prices of goods reflect true costs (even libertarians recognize the idea of negative externalities and realize they should be taken into account in pricing).  

      As our economy developed, we recognized that a lot of these things don’t happen on their own.  The most well known and understood example is monopoly power – we have laws/regulations against monopolies because they stifle the type of innovation and competition on which a “free market” rests.  Thus, we introduce regulations precisely because the result is that our economy is actually more free due to the regulation.

      So… right now we have economic anarchy that people are mistakenly referring to as the free market.  We do not have a free market.  When you have the disconnect we currently do as evidenced in the large amount of corporate profits sitting largely dormant (in economic expansion type terms) and an over 8% unemployment rate, that is the definition of an inefficient use of resources.  

      I bring this all up in a thread about Romney because what Romney did was an example of what you can do in an unregulated economic system that has devolved into anarchy.  It is not what would or could happen in a genuinely (philosophically) free market system since in a free market system capital goes to where it is most efficiently utilized, not for a short term gain for a few which leads to long term bankruptcy.  In short, attacking what Romney did is not actually attacking free market capitalism, it is attacking the bastardization of a free market.  The attacks could be very powerful indeed if they recognize that distinction.  

      2. the proponents of this kind of free market actually want this. They seem to prefer one with absolutely no regulations and restraints, allowing them absolute freedom to manipulate and exploit. That’s what I had in mind when I said “economic anarchy,” because I believe deregulation leads exactly to that.

        In short, I fully agree with you as far as what is an ideal free market, and as far as what we have today.

        I’m not sure the average right wing, “free market” Republican gets that distinction based on the policies they expressly support, but I think most Americans, whether they understand economics or not, prefer a system with regulation and safety nets.

        1. Its like how with actual anarchy (state of nature type deal) the biggest, strongest folks are able to take the food and other resources of those who are smaller.  That’s exactly what’s been happening in our economy for some time now.  I agree that some people do want total freedom to manipulate and exploit, and unsurprisingly the loudest voices for such a system are those who are in the best position to manipulate and exploit.  

          This is one of those situations where the words themselves become problematic, since many people hear the words “free market” and think hrm… free… like liberty… so… the more freedom the better… ok done thinking.  Kind of like the Patriot Act initially.  So I think there’s a lot of value in pointing out the difference between a free market and anarchy so that they aren’t perceived as being the same.  

          Even on the left I hear many of my friends talking about the terrors of free market capitalism, and then they describe a hatred of something that bears little resemblance to what a free market actually is or does.  

          So overall, I think that most people (as you say) prefer a system with some regulations and safety nets, but need a bit more economic education to understand that those regulations and such aren’t always in conflict with a functioning free market, and rather, are often required for a free market to exist at all.

        1. The trick is to find the good in the bad. Kittens do a good job of keeping our foxes and coyotes fed through the winter; Tebow means that I probably won’t have to fight a crowd at the gym later today . . . Capitalism?  Maybe it does a good job of keeping my neighborhood safer, since we now have several more folks watching from their home during the day?

  4. Gardner signed his silly letter with Ben Quayle, the idiot vice president’s son who as a congressional candidate denied writing a trolling sex blog for DirtyScottsdale.com before he admitted it.

    Quayle’s getting that website going and blogging under the “Boogie Nights” porn name “Brock Landers” is as much experience of capitalism as Quayle and Gardner have put together. They’re both lawyers and Gardner has never had a business job in his life. What he knows about predatory capitalism and entrepreneurship he no doubt learned from a Heritage Foundation newsletter.  

    http://www.politico.com/news/s…

    Just the latest chapter in the GOP clown show.

    Goes without saying you’ll get no worthwhile background of any sort on this or any other story from the state’s lone “beltway reporter” Allison Sherry. Why? Because she sees her job as stenography. Why? Ask NYT public editor Arthur Brisbane.

    http://www.guardian.co.uk/comm…

  5. but this does not help Gingrich or Perry in their race against Romney. The only way Romney loses the nomination is if he’s attacked from the right, not the left.

    I almost wonder if this is part of a larger coordinated GOP strategy to get Romney’s dirty laundry out early in the election in hopes it is less an issue in October. I truly believe the GOP is trying to replicate the Democratic Presidential primary of 2008. Obama’s dirty laundry came out early in the race and ran its course in the public’s eye well before November.  

    1. I really don’t know how much chance the GOP believes they have at winning the White House; the weak field, led by a candidate who is obviously favored by the establishment, really suggests that they don’t think they can do it this time. It’s hard to replicate the result of the Dem’s 2008 primaries without two strong candidates with real support among the rank and file members.

    2. shows Gingrich improving and Romney dropping.

      The problem with this conspiracy conjecture is that Occupy Romney isn’t going to go away.  It also shows the impotence of the Tea Party movement that could suppress their support.  I really really doubt that it is a conspiracy.

        1. Paul is rising, Santorum skidding downwards:

          http://thehill.com/blogs/ballo…

          Romney came in at 29 percent, followed by Gingrich at 25 percent, Paul at 20 percent, Perry at 9 percent, Rick Santorum at 7 percent and Jon Huntsman at 1 percent.

          Paul has climbed 11 percent in the last week and Perry has gained 7 percent. Santorum, who was tied for second in last week’s poll at 24 percent, plummeted into fifth place in the current poll.

          2. since he’s the only “true” fundamental rightie available and his summer prayer revival helped win the so-baptist & pentecostal pulpits.

            Paul has a better grassroots ground game than anyone else and you just gotta wonder about a 3rd party run as he continues to place 2nd/3rd.  Word is he’ll retire after this run and work toward Rand’s momentum in ’16 (which sends a shiver down my spine).  Ron dissing the GOP would hurt Rand’s continued support & GOP status and their devious mind are caught up in some kinda Paul dynasty dream.

            The aftermath of the Palmetto showdown will be bye-bye to Newt, Huntsman, and Parry.  Santorum will stick it thru FL and try to hang on ’til SuperTue but it will mostly be just Mittens mopping up.      

      2. But Romney has never had very high expectations for South Carolina, or any southern state for that matter. My guess is his shortcomings in SC are more the result of him being labeled a “Massachusetts Moderate” than being a greedy “vulture capitalist”.

        I will say that if these attacks from Gingrich do stick among conservative voters, it will show just how confused tea partiers are about what they believe in.  

    3. They are all fake candidates designed to elect Romney.

      The Romney general is going to sound like this…pro choice, invented the individual mandate, practical CEO business master of the universe type who can put America back to work….jobs, not checks….income not welfare… and kick butt over seas ….fight them over there so we don’t have to fight them here…

      There is no one in this primary except Ron Paul who thinks* there is any other possible outcome.

      .

      *Bachman doesn’t think – as a submissive wife, she leaves that to the boss

  7. Four Pinocchios for ‘King of Bain’

    http://www.washingtonpost.com/…

    Romney may have opened the door to this kind of attack with his suspect job-creation claims, but that is no excuse for this highly misleading portrayal of Romney’s years at Bain Capital. Only one of the four case studies directly involves Romney and his decision-making, while at least two are completely off point. The manipulative way the interviews appeared to have been gathered for the UniMac segment alone discredits the entire film.

     

  8. As Gingrich campaigned in Iowa, he continued to say he’ll remain positive. He’s emphatic about it.

    Gingrich calls the negative ads “disgraceful” and says his rivals have violated Ronald Reagan’s “11th Commandment” not to attack another Republican. He got a lot of applause for that line at every campaign stop.

    “They can’t hit me with enough negative ads to make me go negative because I think it’s bad for America,” Gingrich said at the Smokey Row Coffee house in Oskaloosa on Tuesday night. “This is why people are sick of Washington.”

    http://www.npr.org/blogs/itsal…

    2. WASHINGTON — Newt Gingrich has called on a pro-Gingrich super PAC to edit a 28-minute film attacking Mitt Romney to “remove inaccuracies” and asked Romney to make the same public appeal to a super PAC supporting his presidential bid.

      “This week, fact check organizations like The Washington Post and Politifact have ranked advertisements produced by Super-PACs supporting Governor Romney and myself as containing enormous inaccuracies,” said Gingrich in a statement sent out by his campaign on Friday.

      “I am calling for the Winning Our Future Super-PAC supporting me to either edit its ‘King of Bain’ advertisement and movie to remove its inaccuracies, or to pull it off the air and off the internet entirely,” Gingrich said.

      Ooo….sorry Newt.  Since there can’t be any coordination between candidates and PACs you can’t tell them what to run, edit out or take down. They have no obligation to follow your suggestions and doing so might actially look bad, as if there is direct coordination, you know? There hasn’t been any, right Newtie?

      http://www.huffingtonpost.com/…

    3. to release the agreement of his consulting agreement with Freddie Mac in which he reportedly collected a cool $ 1.6 million (there are conflicting reports on the amount paid and for what).

      Newt previously said he couldn’t release it because of a confidentially clause, but Freddie released that last week.

      We’re still waiting Newt……

        1. Mandarin, French.  Showing off that fancy learning and re-enforcing their weird foreignness. You know–like other countries matter.  China–hah!  Who cares what they think?  Look, if I can’t pronounce a leader’s name, how insulting is it to my Americanness that you would expect me to?  

          That’s nothing but a ‘gotcha’ question.  

          Now Perry, he’s too smart to know how to speak anything other than Texglish. Or as they say in those parts…

          Oops

  10. I’m still waiting for factual information about whether Bain actually engaged in the “vulture capitalist” form of venture capitalism.

    Vulture capitalism, to me, is using a leveraged buyout (LBO) mechanism to strip a company’s cash and leave it with too much debt leading to its bankruptcy.  As I’ve posted before, the typical LBO during the 1990’s went as follows:

    1) Find a company that has an over-funded pension plan. A pension could be over-funded when its stock investments have increased (like in the ’90’s) beyond its actuarially determined funding requirements.

    Note that this would not be found on the company’s balance sheet, but only buried somewhere in its footnotes.

    2) Strip the pension fund of its excess and use it to borrow more money from a bank or other investor.

    3) Use the pension cash and loan proceeds to buy the company.

    4) As the new owner of the company, strip it of all available cash and pay yourself handsomely to the extreme.

    5) Cut jobs and costs relentlessly to pay for the new debt load.

    6) If all goes perfectly, sell the company for another profit to yourself.

    7) If something, even a little something, goes wrong, declare bankruptcy, keep your cash and leave town.

    8) Go back to step 1, rinse, repeat.

    I want someone to say this is what Bain did and to what companies.  Newt hinted that this was true in the case where he says they put in $30 million and took out $180 million.  Let’s see some facts.

    2. I do not know if they specifically engaged in this tactic.


      Bain, after its initial focus on small firms needing capital, later shifted toward the potentially more lucrative business of leveraged buyouts-acquiring control of businesses by using investors’ money amplified by debt.

      http://online.wsj.com/article/…

      Source from the liberal WSJ.

      1. You are both right, and I’m waiting for a middling reporter or a political campaign to learn the details of Bain’s tactics.

        Danny’s quote is getting closer to the LBO method I was discussing.  But, they didn’t say whether Bain stripped the over-funded pension plans which was widely used.

        Well, at least it’s still a long time till November.

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