Out of The Quiet Rooms

Even the most disciplined candidate can't get through an entire presidential campaign without uttering at least one or two gaffes, those emblematic statements journalists will mention again and again to provide vivid illustration of his or her character defects. Few candidates are more disciplined than Mitt Romney, but the likely Republican nominee has already built up a small library of such verbal misfires, which could become the signposts of a most enlightening and overdue discussion on which we will now embark. If we're lucky (and Romney is unlucky), that discussion will move beyond the oversimplifications we've gotten used to, and demand that we re-examine some very basic ideas about our economy, like what "business" really represents, how capitalism creates its winners and losers, and what government might do about it.

In recent days, Romney has added some doozies to his growing list of cringe-worthy comments. In June, the man worth an estimated $200 million joked to a group of unemployed workers, "I'm also unemployed." In August he told a heckler, "Corporations are people, my friend." In a debate last month, he offered to bet Rick Perry $10,000 to resolve a disagreement. Two weeks ago, he told an audience, "I know what it's like to worry whether you're going to get fired. There were a couple of times I wondered whether I was going to get a pink slip." Then last Monday, while his opponents were attacking him for jobs lost at companies taken over by his private-equity firm, Bain Capital, he said, "I like being able to fire people who provide services to me." It may have been taken out of context (he was talking about getting a new insurance company if you don't like yours), but the picture of him expressing enjoyment at the thought of firing someone is hard to erase. If that wasn't bad enough, on Wednesday he complained that those who critiqued inequality in America were suffering from "envy" of successful people at the top (like him). When pressed on whether there are legitimate questions to be raised about the distribution of wealth, he said, "I think it's fine to talk about those things in quiet rooms"—just not in the light of a presidential campaign.

We can debate whether any one of these comments were really worthy of the attention they got, but put together they paint a portrait of a man who lives in a far different world than the rest of us, trying with almost comical insincerity to convince voters he's jus' folks.

Let's stipulate that Romney's primary opponents are attacking his tenure at Bain Capital for purely cynical reasons. The specter of defeat can cause erratic behavior in candidates, leading them to say and do things they might not otherwise. So as odd as it is to see conservative Republicans like Rick Perry and Newt Gingrich assailing the creative destruction wrought by Bain, it doesn't come as too much of a surprise. Nevertheless, it was striking to see the pro-Gingrich super PAC Winning Our Future release a 28-minute video assaulting Bain in terms that could have come from a labor union or MoveOn.org, juxtaposing blue-collar workers who lost their jobs with pictures of Mitt Romney's enormous houses. But whatever their motivations, Gingrich and Perry simply moved the discussion of Bain Capital up a few months on the calendar—this is just a preview of the scrutiny the Obama campaign will be giving it in the fall.

After all, Bain is the foundation on which Mitt Romney has built his campaign. Barely an hour goes by without Romney telling an audience, "I understand how the economy works," wisdom gleaned from his quarter-century in the private-equity game. But as we examine just what Romney did at Bain, we come to realize that "business" is many things, not all of which are so worthy of admiration.

Keeping people from thinking too much about that fact has been a long-term Republican project. As they methodically set about to crush labor unions, slash regulations that protect workers and consumers, and relieve the wealthy of the unpleasantness of taxation, they always say that the real beneficiaries of their policies are "small businesses," evoking the mom-and-pop corner store or the young company trying to get an innovative new product off the ground. Listen to Republicans talk economics, and you'd think that America was a land without big corporations or Wall Street bankers. All their discussions about the economy circle back to these small, noble enterprises, anchored in strong communities and creating jobs with creativity and integrity. Those companies certainly exist, plenty of them. But "business" isn't just Mom and Pop's Hardware, it's also Bain Capital. It's companies that aren't too concerned about community or integrity but have a single goal in mind: making money, lots of it, by whatever means necessary.

Conservative rhetoric about the wonders of capitalism and free markets carries with it the implication that any involvement in commerce, whatever form it takes, is inherently virtuous. America is full of suspect classes—government workers, community organizers, labor stooges—but businesspeople are the best among us. The truth, however, is that the guy running a startup software company and the guy running a private equity firm may both be engaged in "free enterprise," but they are doing very different things. Republican rhetoric about "job creators"—their favored euphemism for wealthy people—almost portrays the rich and corporations as being involved in a charitable enterprise, doing what they do for the benefit of those they'll hire. They might get wealthy along the way, but that's just a reward for their honorable job-creation.

That idealized view of free enterprise creates dissonance when you examine the reality of an enterprise like Bain Capital. It would be more convenient for Mitt Romney's campaign if it were otherwise, but the fact is that a private equity firm like Bain has one purpose: making money for its partners and investors. It doesn't exist to create jobs, even if its actions may sometimes result in new jobs. It doesn't exist to create a vibrant economy, even if its actions might make some contribution to overall economic improvement. If a private equity firm can make money by helping a company grow and hire people, it will, but if it can make money by stripping a company down and selling the carcass, it will do that, too. That now-famous photo of Romney and his Bain partners with dollar bills coming out of their pockets, a vulturine grin on every face, is an apt illustration of what they were up to. It sometimes wasn't pretty, but that's capitalism. If Ayn Rand were writing Atlas Shrugged today, she might well make John Galt, avatar of her philosophy of strict devotion to selfishness, the CEO of a private equity firm.

"I understand how the economy works," Mitt Romney says. But spurred on by the success of the Occupy Wall Street movement and the crushing reality of economic conditions in America today, more and more people are realizing that economy doesn't work the way they've been told. Romney knows that perfectly well. But he also knows that the more people understand about the unforgiving reality of the economy—Bain Capital included—the worse it is for him.

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