To support the Obama campaign scores of politicians and assorted gasbags, all across the media echo chamber are chanting the same ignorant slogan: “Mitt Romney’s priority at Bain Capital was not to create jobs, it was to maximize profits.”
The first post in this series explained what private equity really is and debunked charges from the Obama campaign that Mitt Romney, as leader of Bain Capital became a wealthy man by plundering and destroying healthy businesses.
At a recent press conference, a reporter asked President Obama for his “sense of what private equity’s role is in stemming job losses as they seek a return of investment [sic] for their investors.”
The President’s long, halting, semi-coherent response included:
Now, I think my view of private equity is that it is set up to maximize profit. There are times where [sic] they identify the capacity for the economy to bring new jobs or new industries. But understand that their priority is to maximize profits. And that’s not always good for communities or businesses or workers.
Keep in mind that in Obama’s circles, where those who call themselves “progressives” are the self-appointed moral authorities, accusing someone of seeking to “maximize profits” is a harsh indictment, tantamount to accusing a preacher of skimming the donations he collected for widows and orphans. The progressive mind dwells in a fictional realm where profit is a four letter word and wealth possession is evidence of having denied the masses their due wages. Progressives either don’t understand or ignore the real world where honest people provide products and services to voluntary customers and are compensated in the form of profits.
Jobs are created when profits are reinvested in the same or a new enterprise with the expectation of further profits. Without the pursuit of profits there would be no private sector jobs. Without profits and the wages earned by those who fill private sector jobs there would be no tax revenue to fund the “green jobs” and “public service jobs” and “stimulus jobs” the President and his party claim to create. Without profits there would be no donations to charities or social causes.
More from the President’s response:
This is the standard, Obama rhetorical formula. Knock down a straw man of his own creation and follow up with a meaningless slogan presented as serious policy The straw man is an idea that no candidate has ever articulated, that the job of a President is “simply to maximize profits.” The meaningless slogan is “fair shot.” It cannot be defined and thus becomes whatever each individual listener imagines it is.
Your job is to think about those workers who get laid off and how do we pay for their retraining? Your job is to think about how those communities can start creating new clusters so they can start attracting new businesses.
A President’s legitimate job is to manage the federal government. He should “think about” all the ways the government contributes to the loss of profits that leads to layoffs and hinders job creation. He should be thinking about how to remove regulations and taxes that are barriers to the normal investment of economic resources that creates jobs naturally, with no subsidies or loans or threats from government. He should be thinking not as Obama apparently does every day, of more and more government intervention with more and more regulations and taxes.
Obama’s “new clusters” stumped several commentators. Apparently he was referring to “business clusters” or “technology clusters,” regional concentrations of interdependent companies. But he doesn’t seem to acknowledge that profit-seeking is the motivational force that unites entrepreneurs with investment capital to create the new businesses that would populate his “clusters.” Obama wants the political benefits of new businesses, the job growth that would impress voters and the tax revenue to fund his Utopian vision. But he sneers at the seeds from which those new businesses grow: profits.
This is not a distraction. This is what this campaign is going to be about – what is a strategy for us to move this country forward in a way where everybody can succeed. And that means I’ve got to think about those workers in that [anti-Bain Capital] video just as much as I’m thinking about folks who’ve been much more successful.
For once, we enthusiastically agree with Barack Obama. By all means, let’s have a direct campaign debate about the two, opposite visions that have competed for the hearts and minds of Americans for a century:
A society and dynamic economy based on liberty, where those who earn profits are allowed to keep and invest them as they see fit, with reasonable taxation and minimum government intervention, creating new products, new businesses and new jobs naturally, to serve the needs and desires of voluntary customers;
An authoritarian society and economy where profit seeking is treated as unsavory and not “fair,” and subject to more and more rules and restrictions, where more and more resources are allocated by politicians through tax credits, insider loans and Solyndra style subsidies, to accomplish politically determined goals.
President Obama’s campaign is designed to target the ignorant who do not understand that where there is liberty there will be entrepreneurial endeavors, funded by profits, that necessarily, inevitably create employment opportunities. He hopes to lead voters to the irrational and false conclusion that seeking profits is a distraction from, rather than the only real path to jobs and prosperity.