Thursday :: Jan 12, 2012

Force Romney To Sell Creative Destruction

by Steve

"We're trying to lure more venture capitalists into my home state every day, but the idea that you get private equity companies to come in and, you know, take companies apart so they can make quick profits and then people lose their jobs, I don't think that's what America's looking for. I hope that's not what the Republican Party's about."
--Rick Perry, today

The Romney campaign has managed to unite most of the GOP behind Mitt’s defense of Bain, through a basic defense of capitalism. As Joe Scarborough said tonight on “The Last Word with Lawrence O’Donnell”, the GOP must circle the wagons and stop Newt Gingrich, Rick Perry, and yes Sarah Palin from attacking Romney over Bain, because to allow them to tear down Romney over Bain is allowing the GOP to tear itself apart over capitalism. And to Scarborough, letting a seed of doubt creep into the populace over the purported benefits of unencumbered capitalism risks the GOP losing its reason for being.

What’s at issue here is a defense of creative destruction, or destructive capitalism, the mostly-accepted tenet that jobs must be destroyed for innovation and reinvigorating a firm or industry. To Scarborough, Karl Rove, and many other establishment GOP hacks, it’s an essential element of our economy that people have to lose their jobs, namely unionized workers, so that corporate profits and shareholders do better. And to them, Romney and his defenders are doing God’s work in pushing back against Gingrich and others in defending the righteousness of capitalism.

The problem with this argument is that while Schumpeter’s theory may have been successfully sold in the economic community, no one has ever been forced to sell it in the court of public opinion in a presidential campaign in the immediate aftermath of Wall Street’s destruction of Main Street. Ronald Reagan and George W. Bush were never forced to sell the American people on the argument that it was necessary for thousands of American families to be economically ruined to improve corporate and shareholder profits, again purportedly for the betterment of us all. And even Schumpeter believed that displaced workers would be retrained into the new industries, yet he didn't know that globalization and the modern GOP would render that a pipe dream.

Barack Obama will have no problem picking apart Mitt Romney this fall and force him to defend why it is necessary for vulture capitalism to run free as a basic element of our economy. The GOP has already started, through the misguided likes of Steve Rattner and others to tell us that attacking Bain is attacking venture capitalism itself.

But vulture capitalism is not venture capitalism, no matter how many times Romney and his defenders try to dress that pig. Mitt Romney and Bain weren’t doing what they did to create new industries and products; they did it for a return on investment at the expense of others. And the easiest way for Obama to contrast this is to point out to voters that Mitt Romney is no Steve Jobs. What Jobs did and venture capitalism does benefits us all. What Bain and Romney did was for the betterment of them.

Steve :: 7:42 PM :: Comments (3) :: TrackBack (0) :: Digg It!