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For years, especially in the last decade, we have heard one side of American politics yelling “FREE MARKETS!” over and over again. It has become a kind of secular religion for a large segment of the voting public, even if many people don’t understand the full implications. The free market/free enterprise system has come to be equated, in the minds of many, with human freedom itself, even though the two are very different. Now, all of the sudden, it looks likr the free market system might be wrong after all, if you use it too aggressively, get rich and become a leading candidate for the Republican nomination. What’s going on?
Perry of Texas has led the way, followed by Newt Gingrich. Has Perry suddenly decided that free markets are not so good at this late date? Are Perry and Gingrich just playing politics, trying to make Romney sound like a latter day robber barron, taking from the poor and giving to t
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NY TIMES:
By JEFF ZELENY and JIM RUTENBERG
Republican rivals sought to slow Mitt Romney’s march to the nomination, branding him as a job-killing corporate villain.
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he rich (and himself)?
It would be funny, if it weren’t weird. The fact is, Perry and Gingrich need something they can use against Romney and they picked his time as one of the founders of Bain Capital to hit him with. Bain was a kind of prototypical crash, smash and burn take over company, not unlike that protrayed in the original Wall Street movie. They would move in on a company, slash the number of employees, cut budgets and then re-sell what remained at a huge profit.
This is the normal course in America these days whenever any company is seeing lower returns, slower growth and a downturn in its stock price. Wall Street applauds these kinds of deals with higher stock prices once the bodies have been cleared from the offices or factory floors. Usually, it doesn’t take some brilliant new strategy to turn around a company, just lower costs and a new concentration on the core business. Often, branches of the company in question are sold off at huge profits or, if profits are not available, and sold for parts.
This is a brutal form of capitalism, one that cares not one whit for long term employees and how much they have invested in a given enterprise. It is, in fact, one of the most brutal forms, save shutting the company down completely by bankruptcy or burning the factory and offices to the ground. Does capitalism have to be this vicious to survive? In the end, those who operate at this level, and make hundreds of millions of dollars doing so, don’t care whether it is morally justified or not; they have found a way to pump money out of the system and into their pockets and some of the companies rough handled in this way eventually become remade, successful enterprises again. Some don’t.
In the end, if a corporation survives being taken over and cleaned out like rotted fruit, then it can once again grow, add employees (usually at lower wages) and again report higher profits. This is what Bain Capital, Romney’s company, was good at doing and what many others have done in recent decades. At this very moment, people in various offices across America are stalking these kinds of wounded, takeover opportunities so they can grab something and reap the rewards.
Now, all of the sudden, the Republican candidates, who have in the past taken the position that capitalism can do no wrong and government can do no right, are saying that Romney was wrong. It is a bit like saying it is just fine to rundown grandmothers crossing the street, just don’t hit mine. Gingrich and Perry have embraced and celebrated this form of capitalism and, further, they have said there should be much less cushion for workers and others who experience the harsh realities of the marketplace by losing their jobs. (They have attacked almost every govt. program intended to help the unemployed and stimulus spending designed to help create jobs.) Now, during a campaign, Perry and Gingrich blame Romney for doing what they previously have endorsed, working the levers of the capitalist system to his advantage.
I suppose that expecting any sort of consistency in a presidential nominating process like this is foolish. They want to use whatever is available. Yet, it makes them look less like presidential contenders every day and will wind up hurting Romney tremendously if he gets the nomination. The Republicans are showing Obama how to win. The irony is that they are doing so by hanging one part of the darker side of capitalism around Romney’s neck. His ability to run as a presidential candidate is based, in part, on the wealth he accumulated during those years, so judging him on this issue is not, in itself, unfair. Ironic and perhaps hypocritical for Republicans, yes. Doug Terry, 1.10.12
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