King of Bain ... Gingrich defends the ad

Matt Foley said:

And Gingrich killed 1,000 times more jobs by spearheading the NEOCON effort behind NAFTA. Big whoop.

Click to expand...

Gingrich didn't pocket millions out of it. Regardless that is a non-response.

donsutherland1 said:

There's a difference between constructively criticizing practices and presenting a distorted picture. Fact checks by Bloomberg.com and others have found that the Bain ads are misleading. Indeed, Gingrich is now trying to dissociate from the ads.

Click to expand...

Absolutely true. The Gingrich ad did some was a stretches. OTH, some of the official de-bunking are mis-leading also. For example, the KBToys debacle was after Romney's tenure at Bain, but it is germane to the argument as it speaks to Bain's business practices and what institutions like Bain do in our economy.

donsutherland1 said:

There's a difference between fraud and Bain's tactics.

Click to expand...

Absolutely. I did use too much hyperbole in my illustration. There is nothing overtly fraudulent about Bain. They are an upstanding and premium private equity firm. That said, private equity as an industry is a sham. First, the industry was re-named from LBO (leveraged buy-outs) because of that industry's bad connotations (ie: Gordon Gecko). Unlike venture capital where business acquisitions are in the form of equity purchases, which strengthens the balance sheet of the target company. OTH, private equity firms use very little equity but finance their acquisitions by borrowing against the assets of the target company, often drastically weakening their balance sheets. They then fee up the deals to ensure they get what little equity they have at risk back quickly, creating a return for their shareholders. They are, in essence, house flippers... deploying little equity, owning the upside and offloading the downside on others.

donsutherland1 said:

The issue of jobs creation will be a central on during the campaign. Both the President and his opponent will attempt to stake the claim that his policies would be more effective in terms of creating jobs. That's a fair campaign issue.

Click to expand...

donsutherland1 said:

That could well be the case. That's entirely a different matter from Bain Capital.

Click to expand...

Not really, as in this case Bain Capital is the key evidence. Bain Capital really represents how shallow the American economy has become. Our economy is all about making money on money (1%) rather than wealth creation through ingenuity and hard work. The fact of the matter is that 41% of profits earned in our economy are earned in the financial services sector. This is not a sign of a healthy economy as real wealth (for a society) is not created by moving money around. Think of a real simple economy.... Gilligan's Island. The only contribution Thurston Howe had to that society was the fact he had US dollars, which were only of value if they were ultimately rescued... otherwise, he was somewhat of a deadbeat in the culture. The people with most coconuts would be the productive members of that society: the professor, gilligan, the skipper and mary ann. (Ginger might have lots a coconuts also given supply and demand of valued commodities... but I won't go there.)... Long-term, moving money around does not create real wealth.

Bain is not a job creator, its a wealth creator and often plays the zero sum game. As such, Bain Capital is a perfect strawman for a really debate of what has happened in our economy. I, for one, look forward to that debate.