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Thursday, January 12, 2012

2 Romney foes hit Bain cuts - Tracy Jan and Michael Levenson

http://www.boston.com/news/politics/articles/2012/01/12/romney_foes_lean_hard_on_bain_cuts/

The attacks have unnerved conservatives. Rush Limbaugh, the influential talk radio host, has said that Gingrich “sounds like Elizabeth Warren.’’ Sean Hannity, the Fox News host, said Perry’s rhetoric “sounds like Occupy Wall Street.’’ And Chris Chocola, president of the Club for Growth, has called the attacks “disgusting.’’
But Perry and Gingrich appear determined to continue pressing the argument in South Carolina, where they are once again contending that Romney preyed on businesses and drained them of profits.
“I am for entrepreneurship,’’ Gingrich said in Rock Hill, according to The New York Times. “But I am also for the American people’s right to understand how the games are being played: Are they fair to the American people, or are the deals being cut on behalf of Wall Street institutions and very rich people?’’

Three observations:
1. There is a difference in purchasing a competitive company with the intent on plundering the pension and selling all of the assets when the company was strong in the long term and shuttering an uncompetitive firm that is simply bobbing along until they go bankrupt.
2. Creative destruction is part of capitalism. Without failure, there is no market. What Romney did at Bain was not "vulture capitalism" but instead was weeding weak competitors out of the market. We benefit by improved choice and price.
3. Romney is wrong to call himself a job creator. He was a wealth creator. There is a distinct but very clear difference. It was told to me in business school that government's function is to create jobs. Private industry's job is to create wealth.

Bonus observation: it is truly fun to watch Gingrich be torn apart by lions during his kamikaze run.

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