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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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