By Gary P Jackson
I become more disgusted by Newt Gingrich with each passing day. Now this despicable, corrupt, Big Government “progressive” bastard actually has me about to passionately defend Mitt Romney.
Mitt friggin’ Romney!
It’s quite obvious that Newt Gingrich, whose only jobs for the last 33 years have either been in government as an elected official, or out of government as a shake-down artist, has absolutely no idea how business works.
It seems Newt is attacking Mitt because his venture capital firm, Bain Capital, was known to buy companies and shock of shocks, lay people off in order to save them! This has been standard practice, and considered good business sense, since the formation of capitalism.
From the Weekly Standard:
Newt Gingrich has adopted an anti-free market argument—a favorite of the political left—to criticize Mitt Romney. Gingrich accused his rival of making money by “bankrupting companies and laying off employees” in his years at Bain Capital.
Under Romney’s leadership, Bain Capital emerged as a prominent private equity firm, investing initially in startups—Staples was one—then specializing in turnarounds. The company was highly profitable, but was criticized for reducing payrolls and shutting down firms it couldn’t revive. Romney left Bain Capital in 1999.
Whether its investments were successful or not, Bain Capital was engaged in the rough and tumble of free market capitalism. Thus Gingrich’s criticism, coming from a conservative, was surprising.
His attack echoes the criticism of Romney by the late senator Ted Kennedy in 1994. Romney ran against Kennedy when the senator sought reelection in 1994. Kennedy won, aided by brutal, unfair TV ads criticizing Romney for killing jobs.
Gingrich was responding to a statement by Romney earlier Monday on Fox News. Romney was asked if Gingrich should return the $1.6 million he earned for advising Freddie Mac. “Boy, I sure do,” Romney said. “He [Gingrich] was on a debate saying that politicians who took money from Freddie and Fannie should go to jail, which is outrageous in itself.”
In response, Gingrich said: “I would say if Governor Romney would like to give back all the money he’s earned from bankrupting companies and laying off employee’s over the years at Bain, I would be glad to listen to him.”
With Romney at the helm, Bain Capital bought companies, restructured them on firmer financial footing, and later sold them at a profit. But not every buyout succeeded. The Kennedy campaign broadcast ads that focused on cases in which workers lost their jobs. Romney has insisted Bain Capital created far more jobs than it killed.
President Obama’s reelection campaign is reportedly prepared to use the left-wing line of attack against Romney, should he win the Republican presidential nomination next year. Now Gingrich has jumped in first with his sharp criticism of Romney’s career at Bain Capital.
In a debate in October, Gingrich said: “If you want to put people in jail…you might start with Barney Frank and Chris Dodd.” They were the chief Democratic defenders of Fannie Mae and Freddie Mac, the “government sponsored enterprises” that have lost around $150 billion at the taxpayers’ expense.
As usual, Newt’s own words come back to bite him in the ass. Newt is fine sending democrats to jail [as am I] for the exact thing he [Gingrich] is just as guilty of. Newt took a serious amount of money from Freddie Mac to do the same thing Barney Frank and Chris Dodd are guilty of.
If Dodd and Frank should go to jail for taking money from Freddie Mac, why shouldn’t Newt? I’m just using Newt’s own logic here, and frankly, I’d LOVE to see all of em in prison from now, ‘till the end of time.
Though not anywhere near the scope and scale of Bain Capital, I have a bit of experience at what it takes to turn a business around. Years ago I worked with a team of fellow managers whose job was to do just that.
After working in the service end of the business for over a decade as a manager, it came time to move on, and up. I found myself hired by a large mega-dealer, with dealerships all over the state.
I started in sales. More importantly, I walked into a dealership that was undergoing serious restructuring in order to save it. Unfortunately, that particular dealership had been run so far into the ground that nothing was going to make that happen, and was eventually closed.
The good thing, in my case, that came out of this, was I did well, professionally …. and financially …. even though the business was a lost cause. My boss, and his small team, were the dealer group’s “turn around specialists” whose job it was to go into one of the group’s dealerships, if it was in trouble, and try to save it. With a group this size, at least one dealership was always under-performing The one I was working at was the only unsuccessful attempt to save.
Long story short, I was asked to join this group, and would eventually go all over our state on a little adventure.
Our deal was simple. A dealership was in trouble, and we’d do whatever it took to fix things. Though that wasn’t the objective, often the entire staff would quit en masse the second we showed up. Most times, all stayed, except for obvious reasons, the management.
We spent time figuring out what went wrong, and correcting the mistakes. Sometimes this meant firing the entire sales staff and starting over, or firing some and training those who remained the right way to create sales, and retain customers, thus creating future sales. Other times, really good people were there, and a simple bit of professional guidance is all that was needed.
Without our group, these dealerships, and eventually the entire company, would have failed.
It comes down to having 15-50 people looking for new jobs, or 5000.
Had we not been there and helped restructure these companies, that would have been the end result. Not only would the dealer group eventually collapsed, the hundreds of vendors that we did business with would have been effected as well. Many of them would have went under too, as we were their biggest, and sometimes only customer.
Sometimes running a business calls for tough decisions, but I was taught it was better to help someone realize they had chosen the wrong profession, and send them on their way towards their right one, rather than have them [and you] be miserable and unproductive.
What we did, and what Bain Capital did, was save companies. Companies that create jobs. They had to go in and make tough choices. Had to weed out those who were responsible for the failures. Sometimes people lost their jobs simply because the company couldn’t afford to keep them on. That’s not evil, it’s just business.
In a way, it’s no different than what Texas Governor Rick Perry has been doing, and receiving great, and much deserved praise for. You see, California is failing, and many companies are about to either close, or relocate. Governor Perry has been poaching these companies from California, and elsewhere, for years. Now sometimes many of the employees move to Texas. Other times, the companies bring key people, but hire Texans to fill most positions.
They do this to save their companies.
What’s better in the grand scheme of things, having a business collapse, and everyone loses their job, or have the company made whole again, and only a relative few lose their job?
Obviously, if you are the one losing your job, you aren’t happy, but restructuring businesses that have been mismanaged, making them viable again, is a good thing.
Having a business go under doesn’t just effect that business, or it’s employees.
You see, every time a company goes out of business, it also effects it’s suppliers.
Depending on the size of the company, it could effect the suppliers in such a way they too have to lay people off, due to lost business. The worst case scenario, being some suppliers go out of business as well. So now you have not one, but two companies that are out of business, and even more people out of work.
It rolls down hill, and the suppliers’ suppliers can be effected as too.
This is business 101, and not a difficult concept to understand. Unless you are Newt.
There are many, many reasons to go after Mitt Romney, just as there are more reasons than one can count to hammer Newt Gingrich over. But going after Romney for what is a standard [and proven highly successful] business practice is stupid. It proves Newt doesn’t understand how businesses work.
It also speaks to Newt’s REAL ideology, not the pablum he feeds his fans.
The sort of argument Newt is using, is right out of the Socialist handbook.
Is it any wonder that Newt says socialist dictator wannabe FDR, not Ronald Reagan, is the “greatest president of the 20th Century”?