GOP presidential contenders Rick Perry and Newt Gingrich, GOP strategist Karl Rove, and a few other GOP stalwarts loudly claim that the Bain issue is a potential presidential game loser for presumptive GOP presidential nominee Mitt Romney.
The story has been well-worked over. Romney supposedly cut, slashed and burned a rash of private companies during his years as an investor and operative for the private equity firm, Bain Capital. There's absolutely no way the conventional wisdom goes that Romney can claim that he can do what President Obama allegedly has failed to do, and that's be a job creator. In a head to head general election duel with Romney, Obama will repeatedly loop the Bain ad attacks from Perry and Gingrich on Romney about Bain and this will sink his campaign faster than the Hindenburg.
Yet what appears to be a loser of an issue for Romney could just as likely be a potential winner. He's got a big trump card when it comes to venture capitalism that even President Obama is well aware of. And that's the engrained attitudes of many American's toward free enterprise. A lot of Americans, including many of those that rail at the greed of Wall Street and corporations, dream of striking it rich, and that means owning their own business.
Polls continually show that a majority of Americans fervently believe that the poor aren't poor because the capitalist system is greedy, corrupt and exploitive. They blame their poverty on their personal failings. When poverty started to inch up in 2001, National Public Radio (NPR), the Kaiser Family Foundation, and Harvard University's Kennedy School found that respondents no matter their background routinely said that the poor were 'unmotivated,' 'lacked aspirations to get ahead,' and 'didn't work hard enough.' That included a significant percentage of the poor.
The overwhelming consensus was that with hard work and determination anyone could succeed. A second consistent finding is that Americans just as fervently believe that free enterprise system and free markets is far and away the best, if not only, system in the world to generate, growth, prosperity, and jobs. The collapse of Communism, the fiscal woes and convulsions of European social democratic governments, and the massive GOP sell job that ballooning government spending and mounting deficits have retarded economic growth, are proof positive for a majority of Americans that free enterprise -- unchecked and unbridled -- is the engine for job growth and individual wealth building. A Gallup poll in 2010 found that nearly 90 percent of Americans gave a positive rating to free enterprise. Though there were sharp divisions about the merits of small versus big business, with near universal approval for small business, few said that big business was the enemy of economic growth.
Romney's push back is that Bain was not an evil ogre and that he was not a greedy corporate rip-off artist at the expense of workers, and that small to medium-sized businesses would not have a prayer of getting off the ground if venture firms didn't supply the cash. This sounds even more compelling considering the virtual freeze by the big banks on lending to small, start-up, or debt ridden firms. Even Obama has at times sounded like a fervent free marketer in touting private business as the key to growth in countless speeches and appearances.
Romney's contention that he created 100,000 jobs through his Bain actions is unverifiable at best and hogwash at worst. But his point that a range of enterprises such as pension funds, charities, and university endowments, have put money into venture funds and made money to fund programs and endowments is true. His other point that many of the businesses that Bain and other private equity firms dump cash into were failing any way is also true.
Romney has tried to turn the table on Obama and paint him as a venture capitalist citing the Solyndra flap. This is the shaky Fremont, California company that got over a half billion in government dollars to manufacture cylindrical solar panels. There's more. By the end of 2011, the White House also plans to channel more than $50 billion through tax credits, low-interest guaranteed loans and grants to green energy ventures. These ventures may well be just as risky, unproven, and with no guarantee of success in creating jobs or doing much to achieve energy independence. The big difference though is that the Obama administration is not dumping government money into these ventures to make a fat profit for individual investors and speculators but to implement the government's energy independence policy.
This crucial distinction between Obama's green ventures and Romney's Bain money-making pocket lining will be deliberately blurred, distorted, and lied about to try to defuse the Bain bomb. Romney will try to make the case that free enterprise and entrepreneurship are the cornerstones of American prosperity, and venture outfits like Bain make that prosperity possible. He's got a lot of public belief in that going for him to make that case, true or not.
Correction: A previous version of this post incorrectly referred to Bain & Company, the global consulting firm. The private equity firm founded in part by Mitt Romney is Bain Capital.
Earl Ofari Hutchinson is an author and political analyst. He is a weekly co-host of the Al Sharpton Show on American Urban Radio Network. He is the author of How Obama Governed: The Year of Crisis and Challenge. He is an associate editor of New America Media. He is host of the weekly Hutchinson Report Newsmaker Hour heard weekly on the nationally network broadcast Hutchinson Newsmaker Network.
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