People are criticizing Mitt Romney for his work at Bain Capital. It seems that people lost their jobs after Mitt came.
What did Mitt come to do? Bain was in the business of buying troubled companies, turning them around (if possible) and reselling them at a profit. A profit to whom? A profit to investors in Bain Capital. Also, since we are talking about a troubled company that has been turned around, it is also at a profit to every person who retained their job, every person who had a stake in the company that was turned around, and everyone who that company served in some way.
We are not talking about coming in and ruining perfectly healthy companies and making off with a profit. You see, that’s not possible. If a company is ruined after you come in, you don’t walk out with more money, you walk out with less. Apparently Democrats and leftists don’t understand this simple concept: A company (unlike a government bureaucracy) only continues to exist if customers for their goods and/or services are willing to buy those goods and services for more money than it costs to produce those goods and services. A profit must be made or the company fails.
Sometimes a company is in trouble because its workforce is not productive enough. In other words, the people producing the goods and services are adding more cost to the goods and services than customers are willing to pay for the goods and services. In this case, the company must become leaner, lowering its costs in order to survive. People often lose their jobs when this is the case. If a company has 100 employees and it can not pay them and make a profit at the same time (better stated, it loses money as a result of paying them all), it has two choices: 1) Go out of business, costing 100 people their jobs; or 2) Figure out a way to increase productivity utilizing fewer people, in which case 20 or maybe even 50 people lose their jobs, but, 80 or 50 keep their jobs.
Sometimes companies can’t be salvaged. For one reason or another, there is just no way to make necessary adjustments to the business in order to make it profitable. This could be because other technology has caused the product to become obsolete. This could be because legacy costs (pensions, etc.–ask Hostess!) are a burden that simply adds too much cost to the product. There are a lot of reasons that some companies aren’t salvageable. In that case, the best one can do is to shut it down, and sell off whatever assets you can so that investors don’t walk away empty handed. There are times when the assets are worth more than the operations.
What Mitt Romney did at Bain was to rescue failing companies. Sometimes he failed. But every success, even if it was costly to some (those laid off) was a win for many others. It was not like he was going in to ruin successful companies. He was going in to save failing companies. And he did so most of the time. His work at Bain was a net success (hugely so) not only for investors in Bain, but also for those impacted by every company he was able to turn around and make successful.
Oh… And he did it with private money, smarts, and hard work. He didn’t do it by utilizing government money (taxpayer money) or garnering favors (like unions and cronies do) to have government subsidize a business that should fail.
Mitt’s work at Bain should be celebrated. It should be emulated. Democrats and the left, who live in a world where the job is somehow unrelated to the success of the company–a result of thinking like a government employee–don’t understand this. Republicans had better understand it. They’d also be better off if they were able to explain it.
Here’s a good article on the same subject by John Hayward at Human Events.
UPDATE: Here’s a great article at Power Line about one of the companies that Bain bought and sold. The complaint is that jobs were lost (150 lost their jobs in Gaffney, SC). In the meantime, the company was saved, merged, became profitable, was sold, and now employs many hundreds of people… just not in Gaffney. The business was FAILING when Bain bought it. ALL jobs would have been lost. The corpse of the company would not have merged, became profitable, gotten sold, and now employ hundreds of people. It is disgraceful that people are using this example of Mitt “profiteering”.