I don’t care much for Mitt Romney. I think he’ll say just about anything if he thinks it will help him get elected. He’s unprincipled, and his political career is not indicative of the Conservative banner he’s currently trying to claim. Finally, his continued support of Romneycare is troubling, and if Obama’s record weren’t so unequivocally disastrous, he would have no chance of defeating him; (we already ran John McCain once). [Note 10.9.2012: The preceding strike-through was added to reflect a change in my opinions before re-sharing this article].
Still, those who attack his work at Bain Capital are either naive or misguided. To say bain destroyed businesses for profit is, at best, a grand oversimplification, or at worst, a blatant and deliberate mischaracterization. To understand Bain, you must look beyond mere emotion to the service they provide, and ask what would happen if there were no “vulture capitalists.”
The businesses bought by Bain were terminally ill. Without someone to intervene, all jobs at the firm would be lost and any benefits provided to its former employees would likely evaporate. Bain capital absorbed these toxic assets and contained the destructive influence of these failing businesses.
Some of these businesses failed anyway. In those cases; despite what Romney’s detractors claim, no jobs were lost that weren’t already doomed. That doesn’t mean the losses aren’t unfortunate and painful to some, but we don’t berate the surgeon when an experimental procedure fails to save an otherwise terminal patient.
Further, those who want to hate Bain conveniently ignore the results when Bain’s long-shot surgery succeeds. In those cases, it’s true Bain may make a lot of money. It’s also true that many, sometimes all, of the workers get to keep their jobs instead of joining the rolls of the unemployed as the would have without Bain’s actions. And once the company begins to recover, it has the capital to hire even more employees.
Finally, although Romney gained immensely from these transactions, he and his corporate partners weren’t the only people to profit. On the contrary, a Bain success not only saves the workers from an imminent layoff, but success also means revenue for retirement funds, pension funds, and individuals investors who provide Bain with the capital to make these investments.
Business death is a natural phenomenon. We shouldn’t demonize those responsible for containing the damage and cleaning up the mess.