Should Mitt Romney be held accountable for his activities at Bain Capital? Yes!
If the contention is that his business experience is critical to future performance in the White House than business experience is fair game. On this, Newt is not wrong. The manner of accountability is, however, in question. Is it about success or the manner of it? Is it simply about ‘finding’ an issue upon which to hang Romney? Is there a philosophical issue to be engaged? Newt, as well, needs to answer for his background beyond, “I made a mistake”. Newt’s list of potential points of accountability is long and the answers have been, more often than not, unsatisfying and dismissive. At least Mitt was not in bed with Freddy Mac. But, I digress.
In the interest of context, as a businessperson, I abhor abuses by business and applaud harsh punishment for corporate executives who knowingly put profit ahead of base line expectations of integrity. Recall the Ford Pinto of the exploding gas tank, Ford knew about the problem and did not solve it, people were maimed and killed. My solution; send a half a dozen Ford executives to jail for manslaughter. That would have been the appropriate warning message to the rest of the corporate crew. The financial meltdown should have also seen a variety of ‘perp walks’, from Wall Street to Fannie and Freddy instead of multi-million dollar bonuses. Want to send a message to corporate America, throw some executives in jail, real jail! The message we have actually delivered is that politically connected corporatists escape the jeopardy you or I would be in were we to perform similarly.
While ridiculous to suggest Mitt is jail bound, he should explain: who, what, where and when. For instance, a company being ‘broken up’ for the value of its parts is no small undertaking. It is a clear signal that the company is rich in physical assets and weak in terms of its operations and marketing. When a company’s value becomes limited to its physical assets, creative destruction will ensue. Also lost in the argument is that investor profits tend to be reinvested creating a cycle of growth that is undeniable.
I’m not exercised over the necessities of venture capitalism, having faced and been a ‘victim’ of ‘investors’ more than once. Decades spent in business leads to an insight; it’s not just what you do, it’s how you do it! How did Bain go about doing whatever it may have been they did? Mitt says he’s proud of his time at Bain; that being the case it should be defensible. No one, to best knowledge, accused Romney of immorality.
By answering fully, now Romney has the opportunity to kill the issue for the general election. Failure to do so raises more questions, creating perceptions that may or may not be valid. Better to validate facts than to gamble on perception.
Creative destruction is simply the circumstance where markets change and firms don’t or can’t change to meet the market. The classic example is buggy whip makers facing the onset of the automobile. Perhaps some of them began producing seats for the new car industry; many simply would not or could not accept the change to come. They found new jobs, or they found new enterprises to engage in. The demand, or lack thereof, in the market left them no choice.
A question of logic surrounds the challenge to Bain. Should there have been no failures, no breakups and no profit taking? Should everyone have gotten a first place trophy regardless of performance? That line of reasoning is distinctly liberal and inherently illogical. No one bats a thousand!