The Bain of Romney’s Campaign

Efforts by some of our friends from the other side to characterize Sen. Mark Warner’s comments this morning on MSNBC as akin to those of Newark Mayor Cory Booker, in the sense that they allegedly suggest that discussion of Romney’s experience at Bain Capital ought to be off limits, are way off-base.

Sure, if you cherry-pick Warner’s words, you can distort what he had to say as “taking issue with the Obama campaign’s ad assault on Bain Capital.” But if you look at Warner’s entire comment, it is clear that Warner was making the same exact argument President Obama made yesterday in Chicago:

Bain Capital was a very successful business. I think they got a good return for their investors. That is what they were supposed to do. I think when you’re in public life, though, what you’ve got is a different time horizon. The notion that everything in government is exactly the same way that it is in business, they’re different time horizons when you’ve got to invest for the long haul, when you actually do the kind of early stage investing, whether in preschool, whether it’s in K-12, whether infrastructure, that doesn’t pay back quarter to quarter.

(See here for the entire interview.)

I think it is worth stressing the point being made in these comments and those by the President, is entirely correct.

Importantly, the issue in this matter is not Bain or private equity.

(more on the flip)

Bain was, and is, a very successful PE firm. As far as I know, Bain enjoys a good reputation on Wall Street. Nor is there anything immoral or unethical about the business in which Bain is engaged (provided they act in a lawful manner, of course, and as far as I know, they do so). They are in the business of making money for investors, and there is absolutely nothing wrong with that, IMHO.

Sometimes Bain (and other PE firms) can maximize returns for investors by growing a business, which will typically lead to job creation, and sometimes they maximize returns by breaking up businesses, selling valuable assets and closing down what doesn’t make money. That often leads to job losses.

But those instances of job creation, or job loss, were incidental to Bain’s goals. It has nothing to do with the actions Romney took or the decisions he reached at Bain, where his goal – profits for his investors — was something else entirely.

Indeed, it is not useful to discuss whether Mitt Romney presided over the net creation or destruction of jobs while at Bain, beyond the fact that Romney has claimed to have created more than 100,000 jobs, and it is certainly fair to put that claim (or any claim by any seeker of political office) to the test. But the point that the President, and now Warner, is seeking to make is more significant, and that point is examining Romney’s Bain record to determine whether, as Romney claims, it qualifies him to be President of the United States.

Obama and Warner argue (and it makes sense to me) that the responsibilities of a President are quite different than those of the head of a PE firm. A private equity CEO need not be concerned with how their pursuit of profit affects either individual workers or a community at large – they should only be worrying about the return for their investors — but a president does have to understand, empathize with and act on such concerns.

Romney was a fool to bring Bain into this campaign, and now I suspect he is sorry to have done so. At best, the experience Romney had at Bain was irrelevant to the skill set and knowledge required for the Presidency; at worst, that experience, which is directed solely at maximizing profits and nothing else, is antithetical to the position of President.

In typical fashion, Romney is seeking to weasel out of the box he built for himself by maintaining that any discussion of Bain is off limits, either as an attack on free enterprise or a personal attack on Romney himself. (Indeed, in the Romney campaign’s hilarious effort to distort Warner’s quote, they reduce it to 16 seconds of Warner saying “Bain was a very successful business,” as if whether Romney was “successful” at Bain was the issue. This guy just does not get it.)

Of course, discussion of Romney’s role at Bain is perfectly appropriate, if not essential.

I agree with Romney supporter John Sununu on this issue. “I think the Bain record, as a whole, is fair game,” Sununu said earlier today. “What you have to do is an honest evaluation.”

Romney brought his Bain experience into the campaign. We should now examine that whole record, fairly and honestly.