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WSJ: Romney’s Bain Capital Saved America

An editorial from Daniel Henninger at the Wall Street Journal:

Bain Capital Saved America

In the 1980s, the resilient U.S. economy saved itself from becoming Europe. Bain was part of the rescue.

By DANIEL HENNINGER
January 18, 2012

Not only did Bain Capital save America, but no matter what turn Mitt Romney’s political career takes, Bain Capital may stand as the best of Mr. Romney’s lifetime contributions to the nation’s economic well-being. If only he’d tell the story.

We are of course putting forth "Bain Capital" as not merely the Romney private-equity house but as the stand-in for the period of American economic history that ran from 1980 to 1989. Back then it was called the Greed Decade, with asset-stripping barbarians at the gate. Virtually everything about this popular stereotype is wrong. Properly understood, the 1980s, including Bain, were the remarkable years when an ever-resilient America found a way to save itself from becoming what Europe is now—a global has-been.

After centuries of First World status—and all the perquisites of prestige and power that came with it—Europe is watching its economic status slide inexorably toward new national powers in the East and elsewhere. Because of the modernizing change that Bain and others like it forced on U.S. corporations in the 1980s, we are not fading. Not yet

If not for Bain Capital and the other, bigger players who commenced a decade of leveraged buyouts and hostile takeovers in the 1980s, the odds are that the U.S.’s "fundamentals" would be similarly weak. Instead, the U.S. corporate sector remade itself during the Bain years

In the 1980s, the resilient U.S. economy saved itself from becoming Europe. Bain was part of the rescue.

Arguably, the primary force that set off the 1980s upheaval in U.S. corporate restructuring was the deregulation begun by Jimmy Carter and continued by Ronald Reagan. Airlines, ground transportation, cable and broadcasting, oil and gas, banking and financial services all experienced regulatory rollback. Meanwhile, a competitive, globalized marketplace was rising. Management at some of America’s biggest companies, confused by these rapid changes, found themselves sitting on huge piles of unused or poorly deployed cash and assets.

Thousands of Mitt Romneys allied with huge pension funds representing colleges, unions and the like, plus a rising cadre of institutional money managers, to force corporate America to reboot. In the 1980s almost half of major U.S. corporations got takeover offers.

Singling out this or that Bain case study amid the jostling and bumping is pointless. This was a historic and necessary cleansing of the Augean stables of the American economy. It caused a positive revolution in U.S. management, financial analysis, incentives, governance and market-based discipline.

It led directly to the 1990s boom years. And it gave the U.S. two decades of breathing room while Europe, with some exceptions, choked.

Every voter seems to sense that finding the answer to what comes next for America’s economic fortunes makes this election huge. The Washington Post-ABC poll just out produced an extraordinary 57% disapproval of the economic stewardship of Barack Obama, whose life goal seems to be to reverse the policies of 1980-2000.

Mr. Romney’s answer appears to be that voters want to keep hearing about him and his management résumé. Voters don’t want one man’s story. They want someone who understands how the next 10 years can produce an American economy that offers the opportunities for them that the 1980s produced for Mitt Romney.

The article actually does not even give Bain Capital enough credit. They were one of the true pioneers in the venture capital field, starting up back in 1984.

Oddly enough, even Newt Gingrich could and should take a little credit for America’s economic rebirth. Besides helping to push through lower taxes and deregulation, as we have noted before, after leaving Congress in 1999, Mr. Gingrich got on the advisory board of the private equity firm Forstmann Little.

In fact, Forstmann Little was one of the world’s first leveraged buyout firms, having begun in 1978.

This article was posted by Steve on Thursday, January 19th, 2012. Comments are currently closed.

7 Responses to “WSJ: Romney’s Bain Capital Saved America”

  1. tranquil.night says:

    Great thoughts and post Steve.

    I’m so much more comfortable defending, celebrating and regarding the Bain record as a positive in the general now if I have to. But I’m still uncomfortable that Mitt isn’t as comfortable as us about it.

  2. proreason says:

    The people running Romney’s campaign are the same people who ran McLame’s.

    They don’t believe obamy is dangerous or unique. They simply want to take their rightful place as paymasters for the next 4 years, but not at the risk of getting pushed off the gravy train.

    So Romney isn’t going to take it to Little Lenin. No way.

    If the economy gets even worse than now, Romney will win. But if it doesn’t, or if the marxists are able to redefine reality by twisting the statistics and using pravda to broadcast an overwhelming set of lies, then the McRomney team will lick their chops and collect their sinecures for the next four years, assuming that their turn on the merry go round will come up soon.

    • heykev says:

      “The people running Romney’s campaign are the same people who ran McLame’s.”

      Oh no, were doomed.

      I did notice that Mittoast’s hatchet job on Newt came out as expected just before the SC primary. It’s just too bad he won’t be as ruthless with Little Lenin.

  3. River0 says:

    America’s tragedy now is that there’s nobody on our side who can explain, inspire, and lead us in the rebuilding of America along conservative lines and with our cherished values. Reagan could do it and did it. Marco Rubio, Jeb Bush, Paul Ryan, and Chris Christie could do it, but chose not to venture out into difficult waters.

    The consequences of this failure may be fatal to our nation.

  4. artboyusa says:

    “If only he’d tell the story….” Yeah, if only. If this guy won’t stand up for himself and won’t fight, why should anyone else do it for him? Once Obama’s team get going on him, he’ll have as much of a future as baby harp seal on a Canadian ice floe – and so will we.

    As much as I dislike Gingrich he’s still a mean bastard who will mix it up and I’l take the mean bastard over the loser-in-waiting that is Romney any day.

    • sticks says:

      artboy, I hate to say this, but I think your right, Romney won’t win this by playing rope-a-dope with Obama swinging lefts and rights. I think I’d rather it be Gingrich, at least he’ll get off the ropes and fight.

    • proreason says:

      This is the lesson of the last three weeks.

      Do you want a pretty boy capo who pays his minions to go out and slander his enemies so he doesn’t have to get his fingernails dirty or upset wifee.

      Or do you want a yard dog who will snarl and bite anybody who goes after him.

      If you accept my premis that they are both going to be attacked like the Spartans at Thymapolae, then the answer is obvious.

      We can support a pretty boy in 2016 after the battle for civilization has been won.


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