Quote:
Originally Posted by janmcn
....The Washington Post ran a scathing article about Bain Capital stating that companies that Bain owned were pioneers in outsourcing jobs to China and India. The Romney campaign went whining to the Post editorial board asking for a retraction, but the WaPo responded that they are sticking with their reporting.
Voters may not fully understand how equity investment works, but they very well understand outsourcing of US jobs. A lot of voters have had it happened to their job or a friend or a family member.
Romney’s Bain Capital invested in companies that moved jobs overseas - The Washington Post |
Y'know, you can't embrace the concept of the free market capitalist system and "have it both ways" when it comes to job creation. You're right, most voters are clueless when asked how "private equity" or "venture capital" works. That doesn't include me. I was in the business for the last ten of my working years.
Investment firms like Bain Capital are among the " purest" practitioners of free market capitalism. Their objective is simple--provide the maximum return on the money provided by their investors. What's important for people to understand is that private equity firms feel no long-term responsibility to the employees or other stakeholders in a company, and certainly none to the government or the economy as a whole. That might sound coarse and unfeeling, but that is what free market capitalism is all about--maximizing profits for the purpose of paying the highest return to their investors. They are short-term owners of companies--typically only 3-5 years--before they plan to sell the company either privately or by a public offering of stock.
So when people like the
Washington Post or other politically-driven critics comment on how Bain either didn't create jobs, or relocated jobs offshore, they fail to recognize that is not only Bain's right as an owner, but their
obligation to their investors that lead to those actions. It is not illegal or immoral for Bain to act as they do.
Pure and simple, if American workers were as skilled and would work as productively for the same wages as foreign workers, and if the regulatory and tax environment were the same as overseas, Bain would build the plants and hire workers here in the U.S. But if they can produce more profits elsewhere, then outsourcing jobs to other countries is the proper decision for them to make.
If politicians want to create jobs, other than expanding the number of people employed by the government itself, using policies, regulations and laws they can provide a pool of well-educated workers, and if the tax and regulatory environment is favorable investment and job growth will follow. Where our politicians get confused is creating laws and regulations that do one thing, but expecting other results.
Take a look at how Canada or India or China or South Korea governs themselves, plans for their economies, makes sure that job growth is enhanced. You'll see what I mean.