The attacks on Bain
There is no question that many of the comments made by Rick Perry and to a lesser degree Newt Gingrich with regard to Bain Capital have been over the top. But some of those who have vilified both men and defended unbridled capitalism have also made statements that have been over the top.
The Bain Capitals of the world serve a valuable and necessary service in a capitalist based economy. Their pursuit of large returns for their investors can, and often does, result in the creation or the saving of many jobs as a by-product of this overall strategic plan. On the other hand there are times when a company simply cannot be salvaged and its assets are thus liquidated.
In all cases, the final judgment as to when to expand, sell or cannibalize a company is made by people who are subject to human frailty. Capitalism is a very successful economic theory; its execution is the issue that has dogged mankind for centuries. The birth of Marxism and socialism in the nineteenth century came about because of the exploitation of the workers who in many cases were forced to work 60 hours a week for low wages in unsafe conditions. Yet that was pure capitalism at work.
In a pure capitalist environment the only governor on the equitable behavior of the entrepreneur or business owner is one's sense of honor and ethics. That has proven to be an unreliable expectation. Thus over the years laws, such as insider trading, child-labor and financial reporting among many others have been enacted.
Those that are claiming that "capitalism is under assault" in the matter of Bain Capital are doing so by intimating that there should be no criteria or ethical guidelines when it come to making an investment in an existing company. Rather, the only thing that matters is maximizing the returns; how that process comes about is immaterial. In other words the people within the investment house are always assumed to be above reproach.
This knee-jerk reaction is understandable considering the unending assault on capitalism that has been ongoing since the 1930's and has reached its zenith with the current socialist regime in the White House. But there cannot be a blanket exoneration of all the activity in firms such as Bain Capital, Goldman Sachs or many major banks or industrial companies.
When Mitt Romney, a former owner of Bain Capital, chooses to run for president and makes as major campaign issue the jobs created while there, it is legitimate to review his record pro and con and ask why certain companies were allowed to fail and others succeed. This is not an indictment of Bain or the investment community.
Rick Perry and Newt Gingrich were wrong to shine the spotlight on Bain and not Romney's role while there as well as making outlandish statements concerning how much money the investors made by collapsing various companies and the so-called wreak age they left behind. But those who defend unbridled capitalism with the implication that there should be no ethical or moral guidelines are equally wrong.