Obama’s Assault on Private Equity
“I’m not about to sit here and indict private equity […] to me, we’re getting to a ridiculous point in America […] I know I live in a state where pension funds, unions and other people are investing in companies like Bain Capital. If you look at the totality of Bain Capital’s record, they have done a lot to support businesses, to grow businesses […] this kind of stuff is nauseating to me…” – Newark Mayor Cory Booker (D).
President Obama’s first term has been, for the most part, a complete failure. He signed a healthcare bill that Americans didn’t want, tried to pass a “Cap and Trade” law that voters despised, and managed to increase our deficit by an unprecedented $5 trillion. In addition, unemployment hasn’t dropped below 8% since early 2009, with more than 12.5 million people out of work, and gas prices currently exceed $4/gallon. Therefore, with no positives to campaign on, Obama has resolved to destroy his opponent with misguided attacks and a categorical assault on private equity.
The President’s recent attacks on Bain Capital reveal how little he actually knows about private equity. He was able to find a single instance where the company’s investments failed and jobs were lost. According to Obama, this one situation defines Bain Capital’s entire existence. However, if this were the case, Staples, Inc. would not exist, and companies like Burger King, Brookstone, Domino’s, and Toys “R” Us may not have survived. What the President doesn’t understand is that private equity is the backbone of American enterprise.
For Obama, this new focus is potentially fatal. By attacking Bain Capital, he’s essentially putting capitalism on trial. He wants to show the world that private equity doesn’t work and that Mitt Romney is merely another “job-killing” executive whose only goal is to earn as much money as possible. This characterization ought to offend the millions of Americans who invest in private equity firms, trusting them to produce powerful new companies and record profits. I’ll admit that private equity isn’t perfect; there are times when a company is impossible to save. However, firms like Bain Capital are essential to the American economy, as they create thousands of jobs every year and millions of dollars in revenues.
What’s astounding in this whole debate, though, is Obama’s outright hypocrisy. Ever heard of Solyndra? The green energy company received a $535 million loan from the White House in 2009. Obama’s administration predicted that the loan would create thousands of new jobs. However, in September 2011, Solyndra filed for bankruptcy and laid off 1100 employees. For reference, the steel plant highlighted in Obama’s new attack ad laid off roughly 750 employees. Consequently, the President spent more money than Bain Capital and managed to lose more jobs. His logic here is sickening. Evidently, it’s acceptable for the government to gamble taxpayer dollars and kill 1100 jobs but it’s “vampire-like” for Bain Capital to spend investor money and kill 750 jobs.
Obama’s convinced that attacking Bain Capital will win him a second term. He’s wrong. The American people know what his record is. The numbers are there: 8.1% unemployment, 12.5 million people unemployed, $5 trillion in new debt. No matter how much he tries to focus on private equity, at the end of the day, people care about their jobs, and Obama has destroyed far more of those than Bain Capital could ever dream of.