By Carole on Jan 11, 2012
President Barack Obama's desperate class warfare strategy has demonized, demoralized and over regulated job creators in an attempt to win over the unemployed and underemployed. Some on the ideological right have gone to the opposite extreme - defending even the most predatory business practices as noble and all-American capitalism. The result so far? More division between groups of Americans and the very real possibility that November's election will only make things worse. But a much more honest assessment could unite not just Republican primary voters but Independents and all but the most left leaning Democrats too.
After years of campaigning on his private sector business success, former Massachusetts Governor Mitt Romney is finally being publicly challenged over his rime at investment firm Bain Capital. While Mr. Romney touts Bain's investments in small start-ups that eventually became successful employers, he doesn't mention that the bulk of Bain's (and his own) vast financial gains came not from that kind of venture capitalization but from the private equity side of the business which involves corporate buyouts to secure majority control of mature companies, reorganizing them and then selling them off a few years later.
Ten private equity deals produced $1.75 billion which was 70% of Bain's gains during Mr. Romney's tenure at the firm. Four of the ten went bankrupt shortly after being sold off by Bain resulting in a significant loss of jobs.
Campaigning in first-in-the-South primary state South Carolina, Texas Governor Rick Perry was able to draw a clear distinction between those who attack any form of private sector success versus those who defend any legal form of profiteering in the name of free enterprise. "I know the difference between venture capital[ism] and vulture capitalism," he said. "Venture capitalism is a good thing, comes in, gives that gap funding to help these companies get off and get started creating jobs, and work. But Mitt Romney and Bain Capital were involved with what I call vulture capitalism."
What Governor Perry refers to as vulture capitalism is certainly not illegal and doesn't warrant the kind of alleged reforms that President Obama and his big government cronies keep trying to implement. But it is important for voters in South Carolina and beyond to understand that Mr. Romney achieved more of the success he's so proud of via business practices that killed not created jobs.
Contrary to accusations from some in the media and the party establishment, Mr. Romney's Republican opponents are not attacking capitalism by shining a light on his predatory business practices. They are merely telling the truth about a rival's record and that's a big part of what primary campaigns are for.
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