Burnt Toast
You just can't go there.
Forget the third rail. Newt just licked his finger and stuck it right in an electrical outlet.
He's toast in my book...burnt toast.
The nature of his criticisms of Romney's actions while at Bain Capital are disqualifying. No self-respecting fiscal conservative can possibly take him seriously now.
When Republicans start recklessly and maliciously tearing down Private Equity (PE) it's game over.
It's bad enough that such a small fraction of Americans understand the importance of PE, let alone how it operates, and its considerable benefits to our economic well-being.
In a world where President Obama's class warfare rhetoric is one of the most dangerous and destructive elements to emanate from a presidency full of nonsensical bombast, it is outrageous for Gingrich to feed that beast.
On the bright side, Romney does have an opportunity to use the attacks as a means to clearly demonstrate the absurdity of the entire Private Equity/class warfare argument from Newt and the Left. He should put it in terms that every American can comprehend, and expose the mendacity of his critics and those stoking the class warfare embers.
First, cut the knees out from under media proponents of, and adherents to, the ostensible notion that it's wrong to restructure businesses and fire people in the process.
Should the New York Times, Boston Globe, and other major newspapers not have let go of thousands of employees when the market dynamic for print media changed dramatically over the past decade or two? Would it have been better to march their full staffs right over a cliff than to save the businesses and the many thousands of remaining jobs represented therein? Ones that would have otherwise gone away.
What about the electronic media? The major networks have had dramatic downsizings—closing domestic and foreign bureaus and consolidating operations. Should they have allowed their businesses to run into a brick wall, or was it better to steer away from the crash and salvage all the jobs possible?
Aren't all of these 'saved jobs' anyway (using the Obama lexicon)?
How about the Post Office and its over half million employees? Everybody knows it's headed for disaster. Would it be better to restructure it and save tens of thousands of jobs, or let it collapse under its own weight?
Without Private Equity and business restructuring in general, the big will get even bigger. They'll be able to absorb the assets of bankrupted companies and easily take over the weak. Intelligent reorganizations at least give growing and/or troubled companies a fighting chance to remain independent or at least become vibrant parts of healthier organizations.
Romney should explain that if you don't make large sums of money on the winners it makes no sense to take risks—because you'll never make up for the inevitable and costly losers.
The businesses typically targeted by Private Equity have a high probability of failure (or being absorbed) if something isn't done to reinvigorate and recapitalize them. The companies that Romney was involved with at Bain Capital only went bankrupt at a 22% clip. That's a remarkably low failure rate and likely represents a very significant number of saved jobs.
Romney should seize this opportunity to point out Gingrich's argument for what it is—a desperate Hail Mary from a guy who knows better, or certainly should. More importantly, he can use this as a teachable moment (Barry's not the only one who can have one) on why businesses and governments must adapt if they don't want to become extinct. It's simple economic Darwinism.
That should appeal to the Left...after all, they do prefer evolution over miracles.
Forget the third rail. Newt just licked his finger and stuck it right in an electrical outlet.
He's toast in my book...burnt toast.
The nature of his criticisms of Romney's actions while at Bain Capital are disqualifying. No self-respecting fiscal conservative can possibly take him seriously now.
When Republicans start recklessly and maliciously tearing down Private Equity (PE) it's game over.
It's bad enough that such a small fraction of Americans understand the importance of PE, let alone how it operates, and its considerable benefits to our economic well-being.
In a world where President Obama's class warfare rhetoric is one of the most dangerous and destructive elements to emanate from a presidency full of nonsensical bombast, it is outrageous for Gingrich to feed that beast.
On the bright side, Romney does have an opportunity to use the attacks as a means to clearly demonstrate the absurdity of the entire Private Equity/class warfare argument from Newt and the Left. He should put it in terms that every American can comprehend, and expose the mendacity of his critics and those stoking the class warfare embers.
First, cut the knees out from under media proponents of, and adherents to, the ostensible notion that it's wrong to restructure businesses and fire people in the process.
Should the New York Times, Boston Globe, and other major newspapers not have let go of thousands of employees when the market dynamic for print media changed dramatically over the past decade or two? Would it have been better to march their full staffs right over a cliff than to save the businesses and the many thousands of remaining jobs represented therein? Ones that would have otherwise gone away.
What about the electronic media? The major networks have had dramatic downsizings—closing domestic and foreign bureaus and consolidating operations. Should they have allowed their businesses to run into a brick wall, or was it better to steer away from the crash and salvage all the jobs possible?
Aren't all of these 'saved jobs' anyway (using the Obama lexicon)?
How about the Post Office and its over half million employees? Everybody knows it's headed for disaster. Would it be better to restructure it and save tens of thousands of jobs, or let it collapse under its own weight?
Without Private Equity and business restructuring in general, the big will get even bigger. They'll be able to absorb the assets of bankrupted companies and easily take over the weak. Intelligent reorganizations at least give growing and/or troubled companies a fighting chance to remain independent or at least become vibrant parts of healthier organizations.
Romney should explain that if you don't make large sums of money on the winners it makes no sense to take risks—because you'll never make up for the inevitable and costly losers.
The businesses typically targeted by Private Equity have a high probability of failure (or being absorbed) if something isn't done to reinvigorate and recapitalize them. The companies that Romney was involved with at Bain Capital only went bankrupt at a 22% clip. That's a remarkably low failure rate and likely represents a very significant number of saved jobs.
Romney should seize this opportunity to point out Gingrich's argument for what it is—a desperate Hail Mary from a guy who knows better, or certainly should. More importantly, he can use this as a teachable moment (Barry's not the only one who can have one) on why businesses and governments must adapt if they don't want to become extinct. It's simple economic Darwinism.
That should appeal to the Left...after all, they do prefer evolution over miracles.
Masterful essay!!! I was pro Newt when he first announced, but he always finds a way to screw up. Mostly, I think, because he is a career politician, and while well versed in history, not too much in economics. Plus like nearly all politicians, when they start to lose, they abandon any "principals" and attack with any/every means possible. I hope you forward a copy of this blog to the Romney campaign!
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Glad to see you commenting again.
I can't imagine a more mis-guided line of attack from one Republican to another. Fittingly, Gingrich is the one who has been most negatively impacted. Unfortunately, it has opened a can of worms that will cause collateral damage for years to come.
I did forward to blog entry to the Romney campaign.
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