As president, will Romney run the country as he did Bain?
[On maximizing profits, selling off divisions and putting people out of work. Does this mean the CEO Prez will jettison poorly performing states that suck off the government teat? — Vox Verax]
A Financier in Chief
By PETER JOSEPH, NYT
Mitt Romney stakes his claim to being a better "job creator" than President Obama largely on his success and experience in the private sector. After the first two presidential debates, voters say that they trust him more than the president on the economy and jobs, but it isn't because Romney has talked much about what Bain Capital actually does.
Romney has chosen not to try to put the private equity business in a particularly sympathetic light nor to explain it in a way that would enable voters to see the connection between his financial activity and his ability to create jobs. I understand his dilemma. As one who spent close to 25 years as a partner in two private equity firms, I can't imagine that I would ever want to try to explain the business during an American political campaign.
So far, the media has focused on Romney's wealth, which he earned from founding one of the leading firms in the business, a firm that maintains an impeccable reputation. This focus has led to interest in Romney's tax returns, which undoubtedly reflect the sound professional advice of experts in tax and estate planning. Other than identifying practices outside the experience of less fortunate Americans, the attention has not identified anything other than compliance with the intricacies of our tax code. One might feel that Romney should have released more of his tax returns or should not have been able to exploit an over-complicated tax code, but those issues are a red herring, in a way. Let's move past them for the moment and instead try to understand exactly how private equity works and how Romney's experience would inform his presidency.
The key point, which has been at once over-discussed and misunderstood, is that the best word for the job Romney did at Bain is financier. He identified attractive investment opportunities and then deployed capital (largely provided by others) to generate positive returns on those investments. For example, imagine that you wish to buy a piece of real estate and that you are able to get a mortgage for 99% of the purchase price (this may stretch your imagination - where can I get a mortgage like this? - but the world of private equity has different rules).
(More here.)
A Financier in Chief
By PETER JOSEPH, NYT
Mitt Romney stakes his claim to being a better "job creator" than President Obama largely on his success and experience in the private sector. After the first two presidential debates, voters say that they trust him more than the president on the economy and jobs, but it isn't because Romney has talked much about what Bain Capital actually does.
Romney has chosen not to try to put the private equity business in a particularly sympathetic light nor to explain it in a way that would enable voters to see the connection between his financial activity and his ability to create jobs. I understand his dilemma. As one who spent close to 25 years as a partner in two private equity firms, I can't imagine that I would ever want to try to explain the business during an American political campaign.
So far, the media has focused on Romney's wealth, which he earned from founding one of the leading firms in the business, a firm that maintains an impeccable reputation. This focus has led to interest in Romney's tax returns, which undoubtedly reflect the sound professional advice of experts in tax and estate planning. Other than identifying practices outside the experience of less fortunate Americans, the attention has not identified anything other than compliance with the intricacies of our tax code. One might feel that Romney should have released more of his tax returns or should not have been able to exploit an over-complicated tax code, but those issues are a red herring, in a way. Let's move past them for the moment and instead try to understand exactly how private equity works and how Romney's experience would inform his presidency.
The key point, which has been at once over-discussed and misunderstood, is that the best word for the job Romney did at Bain is financier. He identified attractive investment opportunities and then deployed capital (largely provided by others) to generate positive returns on those investments. For example, imagine that you wish to buy a piece of real estate and that you are able to get a mortgage for 99% of the purchase price (this may stretch your imagination - where can I get a mortgage like this? - but the world of private equity has different rules).
(More here.)
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1 Comments:
I'm hopeful that Romney will not run the country like a community organizer.
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