Economic Ignorance in the GOP Race


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Profits, by contrast, are a wonderful gauge.  Liberals who judge the Clinton economy by the surplus he left behind should remember that the same holds true at companies: profits matter.  If you can create $10 billion from three employees, more power to you – you’re pleasing a lot of paying consumers, who obviously benefit from what you do.  If you’re $10 billion in the hole but employ 3,000 people, you’re a failure.

The evil profit created by evil corporations really isn’t evil at all: it’s just a snapshot of the health of a company.  And by that standard, Bain Capital was a glowing success.  During Romney’s tenure, Bain Capital was generating an annualized return of over 50%.

But what about all those lost jobs?  Did Romney really have to cut them to create so much profit?

Yes.  It would behoove conservatives to remember that Oliver Stone’s iconic take on capitalism in Wall Street is essentially a communist critique of the capitalist system.  Carl Fox (Martin Sheen), the union boss – the same guy who’s bankrupting the Blue Star because employees are getting paid too much – is the hero.  Gordon Gekko (Michael Douglas) is the bad guy because he wants to dismantle Blue Star airlines.  What makes him the bad guy?  As Gekko says, “It’s not a question of enough, pal. It’s a zero sum game, somebody wins, somebody loses. Money itself isn’t lost or made, it’s simply transferred from one perception to another.”

This is precisely wrong.  Blue Star is near bankruptcy.  If Gekko doesn’t come in and create profit for Blue Star’s shareholders, they end up shafted the same way GM’s bondholders were – they get a minute percentage on their holdings.  If Gekko buys stock, the sellers profit.  The buyers of the Blue Star equipment also profit, and so do consumers, who now get better service from the companies that were able to buy up Blue Star’s assets.  Dismantling bad companies is not only good business, it’s good for people.  Economics isn’t a zero sum game.  Some people obviously lose, but more people win.  Carl Fox deserves to lose his job, since he’s so obviously helped collectively bargain Blue Star into the ground.

Newt Gingrich may be politically right in his Carl Fox act, but he’s philosophically wrong.  What Romney did at Bain was good for the economy, and it was good for people.  That may be difficult to explain in a time where jobs are supposed to be the only things that matter.  But that says more about the state of economic ignorance in America than it does about Romney.

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  • thebottom99pct

    It is civil war within the Republican party.

    What does it all say about conservatives and capitalism?

    In a searing critique Wednesday, MSNBC Host and former Republican Congressman Joe Scarborough lashed out at the hypocrisy of his own party over the past "horrifying decade."

    Scarborough's laundry list of grievances is shocking in its candor, outlining how Republican leadership has failed the conservative cause.

    But "Morning Joe" may have missed the larger point on a major issue that continues to outrage millions of Americans.

    Watch the clip here: http://thebottom99percent.com/morning-joes-joe-sc

  • Brian

    Newt should also go after Romney for doubling the number of state employees as Gov

  • Amused

    So far , other than attacking one another and of course the required "get rid of Obama memes " I haven't heard NOT ONE single plan or solution coming from the mouths of ANY of the GOP candidates ,addressing jobs , the economy ,or health care , really no different than what I've heard coming from the GOP in Congress .
    Obama's got to go , Obama sucks as President …….ok …..What;s YOUR plan ?Romney despite this absence of any of substance , other than " who served in the miltary or who didn't " , who's a conservative or who's not , will most likely win the nomination .Then what ? Oddly enough , I hear the same from all you alleged conservatives on this blog . Plenty of personal animus against Obama , but still no plan . This will not win the election .And will probably insure Obama a second term . So all these little diatribes espoused here , which are in effect all your candidates are doing , will not cut it with the rest of the country .Unemployment is down approaching '06 levels , we're out of Iraq , Bin laden's been liquidated , Israel is getting all the arms it needs .

    • truckwork

      You obviously missed Romney's primary victory speech in New Hampshire. http://www.globalpost.com/dispatch/news/regions/a
      If it came to Mitt or our present POTUS, I would vote for Mitt if for no other reason than this, Romney will follow the rule of law and support and defend the Constitution as it was written, not "Fundementally transform the Country".

    • johnnywoods

      We are deeply moved by your "concern" for us Amused, now go play in traffic.

  • Amused

    as far as "the bail out " ? It's working , loans are being paid back , Detroit is on a roll , Obama Care is kicking in , and so far no complaints , no dead grandmas , none of the dire and nefarious accusations that we've been hearing for the past 3 years have happened .No one tried to take any guns away , no one has been shipped out to the " Obama Concentration Camps " .
    SO WHAT DOES THE GOP HAVE ? Perhaps a resurrection of the Birther Issue ? Or " Obama's a muslim " ?
    Good luck with that in November.

    • truckwork

      The bail outs are working? Really? I don't think so and time will tell. Wait till inflation kicks in because the Feds are printing money like there's no tomorrow.

      Yes, Obama and Holder did attempt and continue to attempt to take guns away. The ATF has implemented registration of any long guns larger than .22 cal. despite that lack of any legislation allowing them to do so. The Justice Department, the FBI, the DEA, ICE and the many other Justice Department agencies continue to implement programs and projects that whitle away at our Rights.

      And the majority of the regulations that are now part of Obama care are being written by HHS and haven't kicked in yet. When they do, watch your employer provided health care disappear, and you will be left with only the government provided insurance/care that they say is allowed.

  • Gamaliel

    Ben Shapiro missed one point which is that you can create jobs in the economy overall even if in a specific company you fire people. Lets say a company of a hundred people develops a machine that allows them to fire 97 people and still be as productive with 3. The costs to make their product goes down and their profits go up. That means that those who consume the product have more money to buy other things and other people are employed to produce those things. In addition if they spend their profits that creates still more jobs. In fact there will be more jobs if those 97 people are fired than if they aren’t. The profit motive produces jobs. That is a point Obama misses also.

  • mrbean

    Newt Gingrich in his desperation is looking more like and sounding more like Michael "grungy glutton" Moore that a aspiring GOP candidate for President. Keep it up and you will have 4 more years of the clandestine Muslim hating whitey incompetent in the obal office.

  • umustbkidding

    It is so disheartening to see our only political party that is not communist playing the communists game of bashing Capitalism.

    I'm beginning to believe that there isn't any difference between the two parties, which means that we have our government poised to attack this citizenry.

    • johnnywoods

      Hey "kidding", it is disturbing that so many of our so-called conservatives are attacking capitalism as if it were a bad thing. They could not get by with that if so many Americans were not brain-dead from being "educated" in government schools.

  • alexander

    last week unemployment claims : REAL: 642,000
    "Adjusted" by FuBar Ack and brown-nosed MSM: 399,000.
    Yep, not 400k or 401k…no no no , has to be under 400k, so here it is!!!
    Whatta circus

  • MethanP

    One has to wonder, given the nature of the attacks on Romney, whether the other candidates are sponsored by Soros. Truther moment-I was an anyone but Mitt, however the behaviour of the others has turned me off.

  • mrbean

    Like I said, Newt Gingrich in his desperation is looking more like and sounding more like Michael "grungy glutton" Moore that a aspiring GOP candidate for President. He has allied himself once again with the enemy, and I fear what he would do as Commander in Chief and use politician double-speak to defend it.