The Bain Question: Does Romney's Private Equity Cred Actually Prepare Him For The Presidency?

Mitt Romney took a series of punches last week as Republicans rallied around his role with Bain Capital, a private equity firm that Republican opponents characterized asn example of the kind of corporate greed and malfeasance that ruined the American economy. Newt Gingrich called it, “Rich people figuring out clever legal ways to loot a company,” and Perry said simply, “vultures”. Over the course of the weekend, however, many of these claims have been back-walked, a result of heavy criticism from the Republican establishment that Gingrich, Perry and the like were attacking the very foundations of free market capitalism.

Of course, saying that a man using his corporate power to fleece subsidiaries is “free market capitalism” explains a lot about why our economy is in the shape it is. That aside, Romney’s actual history at Bain is hazy at best, something that private equity firms are famous for by nature. Although Romney held up his time there as evidence that he’s a job creator, it’s unclear whether those 100,000 jobs that he touts himself with creating weren’t offset by, as his critics say, the fact that he closed down plants and shipped thousands of jobs overseas. Is he a credible candidate as a free market capitalist or is he really just a free market cannibal?

When POLITICO sought answers to whether Bain created more jobs than it sacked during Romney’s tenure, neither Bain Capital nor the Romney campaign would supply evidence one way or another. Romney himself, however, when questioned on the legitimacy of his claims, has spilled to both Fox News and George Stephanopolous at last Saturday’s debate. When questioned about whether his “100,000 jobs” figure did not include all of the jobs that Bain cut during his tenure, Romney said, “No, it’s not accurate. It includes the net of both. I’m a good enough numbers guy to make sure I got both sides of that.” According to POLITICO, Fortune magazine rated that comment “false”, and the Washington Post gave it “three pinnochios”.

Ultimately, the truth is probably somewhere in the middle. Bain Capital no doubt created jobs, holding up Sports Authority, Dominoes and Staples, which have all shown growth and created jobs. However, there are also a number of firms and companies that laid off employees, moved overseas, or even closed their doors entirely. Were these failures part of planned consolidation to create a windfall profit for investors, or legitimate failures that Bain was forced to liquidate? A question more germane to the presidency is, “how closely does running a private equity firm translate to running the United States of America?” Do we really want to find out?