Sunday, January 15, 2012

It's Capital, Not Capitalism

Mitt Romney has said on the campaign trail that an attack on him is an attack on capitalism. Aside from being a self-serving, disingenuous, mendacious statement (which is enough, don't you think?), it also shows how shallow and dangerous the Republican party has become.

Romney's career at Bain Capital is a touchstone for his presidential aspirations, and his success at convincing American voters that it makes him qualified to be president will decide whether he wins in November. As of this moment, I would say that this particular venture is off to a rocky start.

Polling for President Obama's PAC is showing that anti-Bain rhetoric is a winning issue for him. Rick Santorum is saying that Romney can't win based on his Bain experience. Rick Perry called out Bain as "vulture capitalism" (and this is officially the last time that anything Rick Perry says will be quoted in the Farmer blog). Newt wants Romney to stop the "pious baloney." The attacks have continued at such a pace that conservatives are rushing to defend Mitt and capitalism itself.

They must really be worried. After all, the GOP has fought for the last year to defund social services such as Planned Parenthood, enact cuts to education, redesign Medicare so seniors will actually have to pay more, and demonize people who are on unemployment benefits as lazy. Their candidates want to deny law-abiding children of illegal immigrants a shot at the American Dream, obliterate the Federal Reserve, go back into Iraq, make abortion illegal even in cases of rape or incest, oppose full civil rights for gays, keep taxes low on the wealthy so the rest of us have to make do with less, and allow banks and financial institutions to continue to do what got us into this recession in the first place.

But don't mess with capitalism, mofo.

As usual, they have it all wrong. The questions about Bain Capital and venture capitalism are not about the future of our financial system. The problem is the function of that type of business in the American system. Venture firms do play some positive roles in the economy by either rescuing companies that might otherwise go out of business or by scooping up bargains due to bankruptcies. The makers of Twinkies recently went back into bankruptcy for the second time and I, for one, would like some venture firm to resuscitate it.

The negatives, though, are compelling. These firms have a reputation for chopping up companies into parts and selling them off to make money, and as a result people get laid off and towns suffer. They are seen as paper-pushers whose only concern is for profits and bonuses, not for actually building something. And they're seen as being cold, calculating, number-crunching entities that don't care about the effects of their work, only the results. They are ruthless in their Darwinian cruelty, but criticism of their tactics is about capital, not capitalism. Has Bain engaged in this type of behavior? Yes, yes, and yes.

The Republican Party has bet its success on a combination of Cold War-era baiting and big lies, as if their candidates are the only ones who can fix the financial problems created by their ideology. In the end, that strategy will fail because it ignores the fact that more people are not siding with the wealthy (though they don't always blame them for the inequality). Romney's defense of capitalism is laudable, but by aligning himself with the 1%, he's left himself open to the withering attacks not only from his right flank, but from a full frontal assault that's coming from Obama and the Democrats.

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