Never in my memory have we had a political issue that so distorts reality in favor of emotion in an effort to gain office on an issue that has nothing to do with economic policy in this country.
I want President Obama to win reelection because I fear what the Republican Party has come to stand for: cutting the social safety net to pay for the War on Terror; repealing the Affordable Health Care Act; eliminating regulation that protects the population from pollution, bad banking practices, shoddy production of food & drugs and who knows what else; treating non-hetersexual people as 2nd class citizens; eliminating a woman's right to choice; and last but not least; committed to policies that treat hard working undocumented immigrants as if they were terrorists. I admit that my grandfather walked across the border from Canada and that makes me very sympathetic to these people who are brave enough to risk death to get here and work.
However, I am glad that the populist wing of the Republican Party is using up Governor Romney's Private Equity experience as an issue because I don't think that was President Obama's best issue to hammer Governor Romney on. Fairness and a belief that Government does good is the best issue to hammer any Republican on.
Private Equity is a non-issue because capitalism is about generating returns for capital. If you work outside of government, that is your mission. I have made a career investing in High Yield companies and countries. One reason High Yield companies exist is that leverage and running companies more efficiently generated higher returns on capital. The development of this market created jobs in the financial sector to manage this asset class. The higher returns on capital flowed to pension plans and insurance companies, which supported workers' pensions and kept insurance costs down. Yes, companies were seemingly looted with extraordinary fees flowing to the management companies, but those decisions were not made in the name of destroying jobs, they were made because the bond covenants allowed the cash to flow and because people believed that the company could support the debt. There was no desire to specifically create or destroy jobs, only to generate a return on capital.
To decide whether such activity is good or bad policy is beyond the roll of government and the voters. It is capitalism. If private equity had not bought any specific company, it might have gone bankrupt anyway because it was underperforming. Because Private Equity bought an underperforming company, they might have preserved jobs that would otherwise have disappeared. Underperforming companies need to reduce their workforce to find a level of activity that is profitable. Then they can seek to grow and add productive employment.
I don't think that Governor Romney was close enough to the nuts and bolts of running any of the companies that Bain invested in to have that experience help him make the government run more efficiently; unless he applied that to the State of Massachusetts and then he should make that his centerpiece of his qualifications.
As for RomneyCare vs the Affordable Heath Care Act, Governor Romney says that RomneyCare was appropriate for Massachusetts because the uninsured were being treated in the emergency room and the taxpayers/insurance companies were paying for that treatment. Excuse me, that is the same problem that the Affordable Health Care Act is aimed at solving and is almost identical to RomneyCare.
And when Governor Romney wants each individual to be able to fire their insurance company, how can they do that with employer sponsored health insurance and without an insurance exchange that allows individuals to compare and be guaranteed access to health insurance. Repealing the Affordable Health Care Act makes no sense if you want to empower the individual to hold insurance companies accountable for delivering cost efficient health care which is what the Republicans want to do.
I wish the Republicans had coherent fiscal and health care platforms so we could find middle ground and push this country forward to a more stable platform.
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