Aaron Regunberg: Bain’s Democratic Defenders are Nauseating

Aaron Regunberg: Bain’s Democratic Defenders are Nauseating

For those following the presidential horserace, there have been two noteworthy developments this week. First, the Obama campaign began a major offensive against Romney's tenure at Bain Capital, releasing several videos featuring one-on-one footage and dialogue with workers whose jobs were suddenly and unexpectedly terminated following Bain's takeover and subsequent closing of their profitable factories. And second, a small number of prominent Democrats have come out against this line of criticism, complaining that Obama’s “attack on private equity” is the wrong way to go (Newark Mayor Cory Booker led the way, going so far as to call the Bain videos “nauseating”).

I am fine with Democrats criticizing Democrats—I do it all the time. But I think there are two important points to make regarding these pro-Bain Democrats’ attacks on the President. The first has to do with the motives of these particular intra-party condemnations. As Alexander Burns points out in a recent Politico article, each pro-Bain Dem has significant conflicts of interest on the issue of private equity. Cory Booker has raised major, major cash from private equity companies, and some of his biggest backers hail from the financial services industry. Former Pennsylvania Gov. Ed Rendell, who called Obama’s Bain messaging “disappointing,” currently works for a law firm, Ballard Spahr, that specializes in private equity mergers-and-acquisitions practice. Former Congressman Harold Ford has worked for Bank of America and Morgan Stanley since leaving office, and ex-auto czar Steven Rattner founded his own private equity firm (which, coincidentally, has had legal violations of its own). So it’s clear that these politicians all have their own reasons to criticize the President on this issue, none of which has anything to do with the validity or relevancy of the Obama camp’s strategy.

My second point is it’s important to remember that the Obama campaign is not attacking private equity in general, or the abstract “free enterprise system,” as Republicans like Romney and Democrats like Booker are claiming. What the Bain videos focus on is a specific kind of private equity scheme, the same approach that folks as radically left-wing as Rick Perry, Newt Gingrich, and Rick Santorum have labeled “vulture capitalism” and “un-America.” It’s a strategy that uses gimmicks and loopholes to simultaneously make a quick profit for the private equity firm while driving the business itself into bankruptcy. The most heart-wrenching thing about the stories documented in Obama’s Bain videos is that these factories did not need to be closed down. In each case, the factories in question were absolutely competitive. They were making substantial profits by creating quality American products, and they were providing solid middle-class jobs to Americans—jobs that not only helped individuals and families, but anchored the economic vitality of entire communities.

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Romney’s firm, Bain Capital, took over these businesses in order to dismantle them, sending them into bankruptcy and destroying an untold number of jobs. In the process, Bain made hundreds of millions of dollars, sacrificing the livelihoods and dignity of countless hardworking Americans at the altar of its own bottom line.

So don’t tell us, Cory Booker, that Obama’s critique is off base. Don’t tell us it’s not relevant that the candidate arguing he can turn our nation’s economy around has not only engaged in these practices, but actually profited from them—has actually used some of the dollars stained in these deals to purchase his third mansion or install a car elevator in one of his beach houses. Because that information tells us the priorities a President Romney would have. It gives us a window into what he means when he talks about economic growth. It shows us just how scary that vision is; or, in Mayor Booker’s words, how nauseating.