There simply is not much more to say about former House speaker Newt Gingrich’s volley of attacks on his main rival for this year’s Republican presidential nomination, former Massachusetts Governor Mitt Romney. There is, however, a great deal to be said about the institution they were denigrate: venture capitalism. Phrased by Gingrich and his fellow travelers as “vulture” capitalism, it typically is presented in a terrible light by activists, politicians, and media figures alike. Nonetheless, it has proven itself actually to be a highly effective force for positive growth and innovation in the market.
Simply put, venture capitalism is a group of investors purchasing a failing company, neutralizing its weaknesses and magnifying its strengths, then finally injecting huge sums of money into it with the hope of turning an eventual profit. This is an extraordinarily risky business to take part in; one that has created overnight billionaires just as easily as it has sent many a man jumping out of his office window. Obviously, even the best of venture capitalists are going to have more than a few pitfalls, and Romney, in his long and strikingly successful career as a corporate asset manager, was absolutely no exception to this rule.
In a nearly thirty minute propaganda film which was a piece of sheer emotionalist rubbish that I was barely able to sit through, Gingrich’s allies interviewed those who worked in many of the factories purchased by Romney’s company, Bain Capital. All of these people wound up losing their jobs due to one of the following reasons; either their respective workplaces were simply not productive enough to maintain operations, or that factory could not provide Bain with a sufficient return on its massive series of investments. While nobody in their right mind likes to see a good worker fired, when the times change too quickly for an entire industry to keep up, this is precisely what happens.
Blaming Romney for following the demands of an increasingly internationalist economy, and whose leadership allowed far more companies to experience an economic resurgence than failure, is irrationality defined. If anything, America needs more men like Mitt, and more corporations like Bain to streamline our not merely weakened, but clinically diseased state of fiscal affairs. Bringing efficiency to the private sector is, in the short term, not at all a pretty sight, but in the long term it never fails to yield fantastic dividends. We should not be chastising Romney, Bain and the capitalist system for the remarkable progress they have brought to our society, we should be thanking them.