Until this week, pundits not enamored of Mitt Romney said he hadn’t yet been “tested” in the presidential primary. That they would not consider more than a dozen debates, a series of challengers claiming the mantle of not-Romney and the Iowa caucuses as tests is a topic for another time. But this week no one would contend that he didn’t get grilled.
By week’s end about the only conservative figure not condemning Newt Gingrich’s anti-Romney assault was Sarah Palin, whom leftist bloggers venerated with head-spinning hypocrisy. (If you needed further proof of how irrelevant to the conservative movement she’s become, this was certainly it.) Gingrich’s very few defenders weakly argued something about Bain being the “wrong” kind of capitalism, but they managed only to inspire Gingrich’s critics to refine and elaborate upon their defense of private equity and, more generally, capitalism.
As Yale professor Jonathan Macey put it today, the “looting” and “vulture capitalism” talk was “anti-capitalist.” It seems that Gingrich and his cheerleaders (mostly on the left) didn’t have a clue what they were talking about:
Private-equity firms make significant investments in companies, mainly U.S. companies. Most of their investments are in companies that underperform industry peers. Frequently these firms are on the brink of failure.
Because private-equity firms are, by definition, equity investors, they make money only if they improve the performance of their companies. Private equity is last in line to be paid in case of insolvency. Private-equity firms don’t make a profit unless their companies can meet their obligations to workers and other creditors.
The companies in which private-equity investors are able to turn a profit generally grow, rather than shrink. This is because the preferred “exit strategy” by which private-equity firms profit is to take the private companies in which they invest and enable them to go public and sell shares that will help the company grow even stronger. As for turnaround success stories, Continental Airlines, Orbitz and Snapple have all benefitted at some time from private-equity investment.
It took about five days for mainstream news reporters to agree with our initial assessment: Gingrich’s anti-capitalist jag was a uniquely stupid ploy that backfired on him and, for the first time, rallied conservatives to Romney’s side. When the Romney camp finally responded with an ad of it own, it seemed the battle had already been won:
And if all that were not enough, The Post’s Glenn Kessler looked at the film and three specific deals, all of which had been badly misrepresented in the anti-Bain film. He concluded:
Romney may have opened the door to this kind of attack with his suspect job-creation claims, but that is no excuse for this highly misleading portrayal of Romney’s years at Bain Capital. Only one of the four case studies directly involves Romney and his decision-making, while at least two are completely off point. The manipulative way the interviews appeared to have been gathered for the UniMac segment alone discredits the entire film.
If Romney makes it to the general election, he’ll be citing that when President Obama uses the same arguments.
Two criticisms remain of Romney’s response, one valid and one less so in my mind.
First, Romney runs into problems in awkwardly trying to relate to the average Joe. Instead of straining to bring up some incident in which he claims he can relate to down-on-their-luck voters, he should be candid about his success. He’s got to be comfortable saying something like: “I have been remarkably blessed and was able to achieve a lot of success. I want everyone in America to prosper and to rise to their highest potential. President Obama may think that there’s only so much success and wealth to go around. Not me.” The name of his last book is “No Apology.” He should take it to heart and not try to compete in the class-envy wars.
The second criticism of Romney is, I think, premature. The argument is that he didn’t have his own facts and figures and compelling anecdotes to knock down the over-the-top anti-Bain film and rhetoric suggesting he’s a combination of Simon Legree and Louis XIV. I suppose the ad released today could have come out a day or so ago. But give the Romney team its due: Right now it is in a primary in which every assault on capitalism was a win for it. Why get bogged down and divert attention from the “Newt’s so nuts he’s attacking capitalism” meme?
Romney’s going to need plenty of charts and positive stories in the general election, but why waste the success story ads now? (You can imagine the pro-Romney testimonials: “I was on welfare before I got a job at Staples.”) There’s plenty of time, especially if he wraps up the nomination earlier rather than later, to bring out the bar graphs and employment stats. Better to use those in the general election, hammering home just how ignorant of the private sector the president is and how disingenuous is the attack on private-equity markets.
There’s room to debate whether Romney could have previewed some of that pro-Bain information now. But the guy DID win the week, decimate Gingrich, unify the base and show impressive poll numbers. It’s hard to say he “blew it.”
The same anti-Romney crowd on the right that argued he had a 25 percent ceiling ( he was at 34 percent in Gallup’s national tracking poll yesterday) feigned “concern” about Romney’s response. They will no doubt describe whatever results in South Carolina as “disappointing.” Meanwhile, Romney is winning this thing and isn’t about to take advice from the pundit class that has gotten just about everything in this race wrong.