The left blogosphere, straining to gain the grateful acknowledgment of the White House, remind one of school boys who have just learned a naughty word. They chatter among themselves, whispering it back and forth, each time convinced they are more clever than the previous utterance. In this case the naughty word is “profit.” Ooh, the Bain prospectus uses “profit.”Did you hear Mitt Romney laugh when he said the business was all about “profit”! But like many an errant school boy, they neither understand what they are saying nor are the first to discover the word.
Fortunately there are adults in the vicinty to explain it to them. At the American Enterprise Institute Jim Pethokoukis writes:
Among the criticisms of Mitt Romney’s business career is that it was never Bain Capital’s intent to create jobs, but merely to make money for its investors. Of course, the same goes for Bill Gates, Steve Jobs, Michael Dell, Warren Buffett, and just about every other successful entrepreneur and investor you could name. But that is the miracle of free-market capitalism. The pursuit of profits—by creating real value—benefits the rest of society through better products and services … and jobs and higher incomes.
He cites the Kaufman Foundation study that looked at the motives of business creaters. Shockingly, the vast majority started businesses to acquire wealth. As Jim observes, despite this motive of self-interest, “small business was responsible for 65 percent, or nearly 10 million, of the 15 million net new jobs created between 1993 and 2009—all without the actual intention of creating any jobs at all, other than for the owner.”
“But, but,” the anti-Bain critics squeal, “Romney said he created a bunch of jobs!” Yes, he’s said that repeatedly. It might even have been one of his personal motivations. But he got other people to invest their money so they could make a profit.
I suppose it’s expected that the left would deplore the notion of people making money and the inevitable loss of some jobs as capital moves to its most productive uses and innovation creates new industries and jobs. After all, their heroic intellectual president bemoaned the unemploymnet wrought by ATMs.
And it’s entirely unsurprising that Newt Gingrich, in his fury and rage, and Texas Gov. Rick Perry, whose idea of capitalism is doling out taxpayer money from “start-up” funds to rich donors, should latch onto thi language. But there are a few confused conservatives out there who think there’s a difference between the “good” and the “bad” economy, or who think that it isn’t particularly advantageous for the president to have clocked in some time in the private sector. I guess you can chalk this up to Romney Derangement Syndrome, but it’s not responsible or even accurate advocacy.
Jim Pethokoukis, once again, explains that the “vulture capitalism” and the ”Gordon Gekko” model might be good movie fare, but really have nothing to do with Romney’s work history. He writes:
Romney was a starter and fixer of companies, not a wrecker and pillager like Gekko. Nor did he do anything illegal like Gekko. Indeed, the private equity industry overall has been a powerful force for good in American economic life for the past 30 years. . . . And that’s the whole ballgame, really. Romney and Bain created value and increased productivity, which is the only true economic security for companies and their workers.
One politician who needs no refresher course on the benefits of markets is Rep. Paul Ryan (R-Wis.), who spoke more broadly about the topic this week on the Jay Weber radio show. It’s worth recapping what he had to say.
He began by addressing the president’s spiel, but frankly he could have been talking about Perry or Gingrich. He said he realized in watching President Obama’s speeched that “instead of hope and change, which was sort of an amorphous term that people could pour into whatever they wanted into his candidacy he was going to prey on the darker emotions of fear, envy, and resentment.” Ryan explained:
So, we have to make a decision in this country. Do we want to celebrate the right to rise? Which is we can make the most of our potential as individuals. Do we want to have government that sees its role as protecting equal opportunities so we can make the most of our lives? Or, is now the government’s role equalizing the outcome of our lives? So, there is a philosophical difference here and the practical implication of these two philosophical differences is a country that becomes a welfare state, a cradle to grave society, where we manage ourselves in debt and doubt and decline. Or, we get back on the American idea: prosperity, economic freedom, and limited government.
That doesn’t mean it is every man for himself, as Obama likes to charge. Ryan (and in his own way, Rick Santorum) understand that because there are poor, elderly, sick, and displaced Americans who may suffer in the vagueries of the market, we need “a safety net to help people who cannot help themselves, to help people who are down on their luck to get them back on their feet. But we don’t want to turn this safety net into a hammock that lulls people into lives of dependency and complacency. Number one, it’s not affordable. Number two, it drains your society of its vitality, its entrepreneurial spirit and its energy which makes us so prosperous in the first place.”
But if you want that dynamic economy in which, as Ryan puts it, people have “the right to rise” you need available capital and risk-takers:
Think of your friends the people in your community that started with nothing, worked hard, and made something of themselves and really produced in society. People flourished as a result of it. I can think of a dozen of entrepreneurs right here in Janesville who did this and in the world and our community is so much better for it. In America, that’s what we do. . . .
We have to stop picking winners and losers and favoring incumbent businesses. We have to be pro market not pro business. We have to be pro freedom and not putting the government in these amazing, powerful positions to reallocate and redistribute favors which is not going to work and is failing miserably now. It is basically the moral vision and framework which is not new, it is just basically reconnecting ourselves with our founding principles, in today’s times. Applying those principles to the problems of the day to get us back on track.
Maybe Romney is now uniquely positioned to explain that to voters. He’ll have to explain some basic economics and make the case once again for capitalism and limited government, but Americans intutitively understand that the prosperity, growth and jobs they desire will come from promoting free markets, not from demonizing them. They get it, even if the media elite doesn’t.