Economics

Does Mitt Romney Understand Economics?

The GOP frontrunner's comments about Bain Capital suggest a shallow understanding of basic economics.

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Presumptive Republican presidential candidate Mitt Romney is essentially playing one card in his quest for Barack Obama's job: his business experience taught him how economies work.

But Romney's own pitch raises doubts about this.

The Obama campaign charges Romney with destroying jobs when he ran Bain Capital, undercutting Romney's claim he was a job creator. Obama argues that Bain created only wealth for its investors and in fact presided over the bankruptcies leading to job losses.

I will make no judgment of Bain here. That would require looking closely at its particular ventures and sorting out allegations that it stiffed workers out of retirement and medical benefits. (To my knowledge, no one charges Bain with breaking the law or breaching a contract.)

Rather, I want to examine the claims that private-equity firms "create wealth, not jobs" and that when an acquired company is downsized or even closed, something unseemly has taken place.

A private-equity firm pools investors' money to, as Wikipedia puts it, "provid[e] working capital to a target company to nurture expansion, new product development, or restructuring of the company's operations, management, or ownership." Let's look at the restructuring aspect.

What makes such activities possible and necessary is human fallibility. Human action consists in the execution of plans in a state of uncertainty about the future. A business is not merely a loose collection of land, machines, materials, and workers. It is the embodiment of someone's plan for the future production of goods that (ultimately if not immediately) will satisfy a consumer demand. But a business plan assembled at time A may, because of new knowledge or change, look like a foolish idea at time B. If so, what should the business do? Persist no matter what?

That would be futile, because it would lead to bankruptcy and extinction of the firm. Adjustment to new conditions—possibly even liquidation—is in order.

Perhaps someone outside the firm has a sounder new plan for the company. Private equity is one device for enabling outsiders to bring their ideas to companies that are falling short of their potential.

The political controversy surrounding private equity spotlights the intentions of investors. But Adam Smith's insight is overlooked: In a free market without government privilege, people seeking profit are led as if by an invisible hand to create general benefits that may be unintended.

We live in a world of scarcity—our ends exceed the means available. Resources and labor devoted to one purpose cannot be devoted to another. The price system provides the best indication of what consumers prefer among all the possibilities. But fallibility is pervasive, and mistakes will be made. If a business assembles resources and labor for purposes that time proves out of sync with consumer demand (because of, say, changing tastes or innovation), the price system provides ways to detect and correct the error.

Of course, that may mean eliminating jobs, closing facilities, or shutting down the company. This surely creates hardship for employees. But that is a consequence of inescapable features of our world: scarcity, ignorance, and change. In such a world it is entirely possible that a business will hire too many people or build too many facilities. Sticking with the plan can't be in the longer-run interest of anyone, including those dependent on the company.

If the failing company's resources are redeployed to purposes more consistent with consumer demand, new opportunities for work and investment will arise. The closing or downsizing of a company releases scarce factors of production, including labor, for purposes hitherto out of reach.

Ironically, Romney seems not to understand this. He boasts of the jobs Bain created directly, but he has yet to say his activities likely created jobs indirectly by freeing up resources and labor for new projects. This indicates a significantly shallow understanding of how economies work.

We don't live in a free market, but rather in a corporatist economy where government favors may convert activities that would serve the general interest into activities inimical to it. That's why one cannot give a priori approval to Bain. A final judgment must await close examination of its activities in light of government corporatist intervention.

Sheldon Richman is senior fellow at The Future of Freedom Foundation, author of Tethered Citizens: Time to Repeal the Welfare State, and editor of The Freeman magazine. This article originally appeared at The Future of Freedom Foundation.

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  1. A ‘shallow understanding of basic economics’ is infinitely deeper than what passes under the current junta.

    1. Exactly.

      If all he understands is that capitalism isn’t necessarily evil? then he’s way ahead of Obama.

      1. I think both sides have it wrong. The Right think it possible to artificially limit liability, not have regulations and then expect wealth and growth to cover up the impact of violations of rights, environmental destruction, fraud, etc resulting from the moral hazards created.

        Instead of moving to remove state limits on liability (ending the corporation as we know it), the Left try to regulate it to prevent these “externalities”. This of course, leads to corruption, discriminate treatment, disproportional impact on small businesses and punishment of responsible businesses, rent seeking, subsidization, etc.

        Greed, growth and profit in and of itself is not a bad thing, provided it does not result in the violation of rights. The Right try to ignore the consequences of limited liability. The Left use regulation to try to (at best) stop the consequences of limited liability. Libertarians and true free marketers should try to kill the roots by making owners assume full liability for the actions of their property instead of passing costs off to victims and taxpayers.

        1. I’m assuming you have no problem with two parties to a contract limiting their liability. So the issue is should a corporation be able to limit its liability to a third party that isn’t party to a contract with it?
          I guess an investor could refuse to purchase its stock unless a corporation had a ten trillion dollar insurance policy or said investor him/herself carried a policy that was a $1 more than the value of all his/her assets. Pragmatically, this isn’t going to happen anytime soon in a modern economy that requires huge sums of capital for certain enterprises. To start moving in that direction, “joint and severeable liability” laws need to be changed so contribution is proportional to share of damage, awards need to be limited to actual damages and not include mega-millions designed to punish the defendant, and “loser pays” rule put in place so litigious persons cannot
          bankrupt other persons whom they dislike.

          1. I’d agree with all of that, including that it is pragmatically unlikely to transition to a proprietorship/partnership/non-LL corporation system.

            My argument is that the “modern economy” is not a free market because of BOTH regulation and limited liability.

            In a true free market, enterprises would be more self-limited and self-controlled and investors/owners would be more active in making sure that their liability for the company’s actions is reduced to a bare minimum. By reducing insurance costs, investing in methods that minimize liability risk becomes a means to attain competitive advantage and investment instead of a burdensome cost that hurts profits and competitiveness and drives investors away.

            Unlimited growth would not be necessarily beneficial if liability was unlimited (businesses would stop growing beyond the capacity to self-control). However, the market demand will create more competition, likely meaning more smaller enterprises and more perfect competition. A free market would likely be dominated by many small businesses vs. a few large businesses operating as cartels.

          2. And yes, internally, I agree two parties should be able to contract liability risk as they see fit – as do partnerships. But the division of liability internally should not limit the amount that an external victim deserves to win. It’s also problematic, because once liability is at risk, investors cash out as quickly as possible and can keep any profits that may have resulted from the actions that led to the liability – and will hurt the amount available in the corporate kitty to pay the victim’s burden. If the company doesn’t hold liability insurance, I’d support allowing the court to assign the burden to the owners at the time of the action committed before putting that on the victim.

            1. Hi, Proprietist! I’d heard about you.

              You are certainly right, as far as I go. I don’t think it is feasible to end the corporate form, so, I just want to further regulate. My idea is that corporations would gladly give up their rights to get involved in politics in exchange for continued limited liability, just like Churches stay out of politics in exchange for their tax exempt status.

              I left a link on your website, to a nicely written paper on the subject of the history of corporate limited liability. It blames it all on the rentier investor, someone who doesn’t want to be bothered with knowing anything about a company, they just want a share of the profits.

              Since that time, the world seems to have become more and more suited for the greedy, lazy, rich, says I. Everyone else can get in line.

          3. No one’s yet come up with a way to efficiently

            a) Allocate massive amounts of capital
            b) Easily transfer ownership
            c) Have a company exist afte an owner’s death

            without shares of common in an LLC.

            1. (C) works with any standard partnership. Take http://www.cadwalader.com/Abou…..m and Taft, for one example.

              While (B) is a value for economic efficiency, surely you see it as a moral hazard, too?

              As for (A), well, there are plenty of modifications to the corporate form which might make it more reasonable to accept all of their other powers and prerogatives.

              1. The correct link is simply: http://www.cadwalader.com/Abou…..History/11

    2. They are peas in a pod. I hope Romney loses.

  2. So you are saying he has a shallow understanding meaning he has some understanding at all?

    You guys keep writing stuff like this and you just get me to vote for the guy.

    1. Yeah, I’m not sure what the argument is about Mitt. Sheldon writes a great piece explaining the details about what companies like Bain do and then his thesis for why Mitt doesn’t understand economics is because “he has yet to say his activities likely created jobs indirectly by freeing up resources and labor for new projects.”

      Since the media won’t admit this is true in the first place, how is this an indictment of Romney’s understanding of economics?

      Terrible argument.

      1. it’s a version of the faculty lounge where a different group of deep thinkers think deep thoughts to justify their dislike of a candidate who knows a hell of a lot more about economics and business than does the incumbent.

        The Obama contention that Bain created wealth but not jobs is an epic fail from a logical sense. By definition, companies like Bain go into companies that are already struggling and they figure out ways of making those companies healthy. It does not always work but, when it does, jobs often are created. Who cares if creation is direct or indirect? The alternative would be the company going under en toto and only Obama sees that as a worthy goal.

        1. What you say would be insightful and accurate, if only it were so ostentatiously untrue.

          One need not subscribe to the theory that Bain had an obligation to create or preserve jobs to have the intellectual integrity to recognize that Bain extracted wealth from companies to the general detriment of those companies/employees.

          If you want to make a ‘well, the money was put to better use claim’ that goes beyond ideological posturing, I’m all ears.

          Regardless of the above {as always, maybe *I’m* wrong, sure} my sense is it’s really the political juice that matters.

          Romney claiming to care about anyone or anything but figuring out how to use leverage to transfer wealth from failing companies to the already wealthy is prima facie nonsense.

          Also, the fact that he’s essentially reconstituted the Likudnik Neocon braintrust of dual citizens, chicken hawks, and Potemkin intellectuals indicates that he is either an incorrigible moron, or a puppet of a sinister cabal hyperfocused on another mideast war which will profit Cheney’s buddy’s and Richard Perle’s buddies but literally no one else.

          1. Sorry but your use of the term NEOCON outside of the context of a group of formerly leftist Jewish intellectuals, renders you a moron and your post nothing but a collection of buzzwords and concern trolling.

            1. Romney Advisors include, but are not limited to: Elliot Cohen, Robert Kagan, Robert Joseph, Dan Senor and Eric Edelman.

              Kagan, Senor and Edelman are now running what some call the new version of PNAC, the FPI.

              So, in addition to not knowing shit about evolution, and being a terribly myopic racist, you don’t know shit about Romney and the neo-cons, either.

              Here’s Colin Powell and Joe Scarborough talking about it:

              http://www.youtube.com/watch?v=1UE5yUWfxqQ

          2. “One need not subscribe to the theory that Bain had an obligation to create or preserve jobs to have the intellectual integrity to recognize that Bain extracted wealth from companies to the general detriment of those companies/employees.”

            That’s just stupid. Grade A stupid in fact.

            1. Read the post below. It is Mary Stack. You can’t fake insanity.

          3. wow, who knew so much jargon could add up to such incoherence. The argument is really pretty simple: Sheldon does not particularly like Mitt so he goes into a convoluted dissertation as to why that is. Problem is, Romney is not proclaiming himself an economist, but a businessman.

            I have no issue with Bain investing in companies with the goal of making money. It’s the reason why everyone invests and the reason why every company exists.

            I could give a shit about Romney’s level of “caring”; I care a great deal about his level of competence. On the latter, the gap between him and the campaigner-in-chief can be measured in light years.

            1. I agree with you on this but, Economists businessmen.

              Businessmen don’t study big-picture economics.

              1. ‘Scuse me, it should say:

                Economists are greater than businessmen, for this job at least.

                1. Which economist is running for POTUS?

            2. Apparently Rand Paul agrees with you
              http://www.realclearpolitics.c…..round.html

              1. Compared to Biden, yes Romney is “the guy”.

                If you compare Romney to Sheldon Richman he gets knocked the heck out. Romney blows.

        2. The Obama contention that Bain created wealth but not jobs is an epic fail from a logical sense.

          No it is not.

          In fact the “Obama administration” is correct on that point, they are just too stupid to realize the ramifications.

          The bottom line is that modern living standards were enabled by companies, like Bain, that destroyed jobs. That is also know as productivity. As in doing more with fewer inputs. It allows everyone to enjoy levels of wealth per capita that are orders of magnitude higher than they were two hundred years ago.

          Wealth creation is the factor that drives economic growth and rising living standards, not job creation.

          1. And here I thought illegal immigrants were what raised our living standards.

            1. They do, and nothing he said contradicted that.

      2. He shows no sign of getting it.

  3. “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”
    -Thomas Sowell

    1. Ah, great quote from a great teacher. Dr. S hits it on the head again.

      1. Dr. S hits
        Please consult your doctor before using this medication

  4. Romney doesn’t mention “freeing up labor for more productive uses” because that sounds terrible and mean to 99% of the electorate.
    It is the same as saying to someone who didn’t get into college, and probably didn’t belong there anyway, “Hey, it frees you up to become more productive right away!”

    True as it may be, it is unpopular to point it out.

    1. You beat me to it Triclops.

      Is it just me or do Richman’s articles always make a mundane and usually false point?

      1. Romney blows and is still a half-socialist.

        And it does matter if Romney doesn’t want to articulate all the aspects of Private equity.

        1. Obama, meanwhile, is a whole socialist if not worse. Please explain how that is better than whatever Romney may be.

          1. Correction, more like mostly-socialist.

        2. Romney blows and is still a half-socialist.

          Really? How so?

          And it does matter if Romney doesn’t want to articulate all the aspects of Private equity.

          Why? Is this an election or a economics exam?

          1. You have no credibility John, you’re a socialist to me.

            Have you paid attention to any of Romnney’s history?

            This dipshit will be a horrible President.

            1. Fuck off Mary. You are not even trying anymore are you?

              1. Hah, Socialist answer the question.

          2. Also if you don’t understand Economics you should never be President.

    2. Re: triclops,

      Romney doesn’t mention “freeing up labor for more productive uses” because that sounds terrible and mean to 99% of the electorate.

      Most of the electorate do not even know where the oil the US consumes comes from (hint: many think it comes from Arabia or words to that effect), let alone about creative destruction.

      The Amerikan Pulbic Skool Seistem has performed its true and real job perfectly.

      1. Olive trees?

  5. Flip Flopney….shallow understanding of economics…..

    There you go, that makes him a vast improvement over captain zero.

  6. Romney seems not to understand this. He boasts of the jobs Bain created directly, but he has yet to say his activities likely created jobs indirectly by freeing up resources and labor for new projects. This indicates a significantly shallow understanding of how economies work.

    Maybe. More likely it indicates a deep understanding of how political arguments work and what is likely to be effective. Maybe he doesn’t make the second part of the argument because he figures it will, in our sound bite era, go right over people’s heads?

    I seriously doubt Romney doesn’t understand second order effects.

    1. Yes.

      It took Richman a mid-length article to get to the point he wants Romney to make to the attention-deficit voters. Way over their heads.

    2. Wrong, he doesn’t understand basic economics. His protectionist rhetoric and government bailout approving ways tell me Rich is right.

      1. So you think someone who ran a large private equity firm doesn’t understand the concept of opportunity cost and the value of freeing up labor and capital to be used more productively elsewhere?

        Sorry, not buying.

        1. Yep at the macro level he has shown no skills whatsoever.

          Most economists disagree with protectionism, and only socialists agree with the Bailouts. And he’s a $$$$$$$$$$$$$ Spender.

          His record is atrocious, we might as well vote for you or Obama as President then.

          :]

      2. Gotta go with hk here.

  7. Romney would be a fool to argue that he was doing a favor for all those people he fired. And that seems to be what Richman is asking him to do.

    1. Libertarians would be foolish to try and run as Libertarians.

      So? You have to be right, not popular. And we need to eventually educate people.

  8. We live in a world of scarcity?our ends exceed the means available. Resources and labor devoted to one purpose cannot be devoted to another.

    But….but….MULTIPLIER EFFECT!!!11!

  9. “Ironically, Romney seems not to understand this. He boasts of the jobs Bain created directly, but he has yet to say his activities likely created jobs indirectly by freeing up resources and labor for new projects. This indicates a significantly shallow understanding of how economies work.”

    Basing an opinion on a person’s understanding of something they didn’t say indicates a significantly shallow understanding of how logic works.

    1. Romney has a history of not understanding economics.

      1. Yes, his $190,000,000+ net worth indicates he doesn’t know squat about economics

        1. And yet he wants to spend us into bankruptcy at the Marco level.

          President = Macroeconomics, not micro.

          His macro is nonsensical.

          1. Perhaps you would do us all a favor and summarize his nonsensical macroeconomics so we can all examine it’s nonsensical attributes.

            1. Tariffs. Good enough?

            2. He’s not a Libertarian, he’s an old-fashioned neoconservative who believes in the police state, and thinks Bill Clinton cut too much spending.

              Yeah I’m pretty much completely right. He’s a horrible candidate for President.

        2. George Soros is a billionaire and an advocate for the most atrocious economic policies imaginable, so accumulated wealth isn’t necessarily a good indicator of sound economic thinking.

          1. Well, it’s probably better when the wealth is accumulated by the person themselves, rather than a guy like Romney, who used political and business connections to advance his career, regardless of merit.

            I mean, unless you think having a father being head of the largest automotive company in the world during the installation of the Interstate Highway System and later Governor of Michigan was “no big deal.”

    2. Who said I making a point of logic?

  10. This is a pretty empty indictment of Romney. The complexities of the issue aren’t going to sell to the general public. It’s obvious that Romney understands basic economics, he just doesn’t waste time trying to teach it.

    1. Sorry this isn’t true at all. About 90% of economists clearly believe in free trade.

      He is a pseudo-Capitalist, opportunist.

  11. Oh come on… Romney would take office, pull a few more trillion out in loans, line his pockets and let the US goes into bankruptcy and walk away with more free money. 😉 ( It’s what he did with Bain and creating wealth is all about duplicating the actions that worked before)… just saying…

    In reality… I think this election will come down to Cultist or Christian… And while I would prefer someone with more sanity and intelligence (atheist), I have to go with Christian. You have to be a idiot to believe in the Bible and that we are all inbred from Adam and Eve… When it comes to a choice between inbreeding and big bang, DNA testing proves big bang every time… But you have to be a really serious idiot to believe anything in the book of Mormon which takes the bible and then makes up a really stupid and implausible spin off story. Dumb dumb dumb dumb dumb dummmmmmmmmm. (south park reference)

    1. Obama is just as bad if not worse.

      But I dislike Democrats so I want Obama to get reelected. I’m tired of them whining about Bush.

      1. If Romneybot is elected, they’d quit whining about ‘Booosch’ even quicker.

        And start whining about Mittens.

    2. “I’m not familiar with the type of thing I’m seeing.”

    3. just saying…

      bullshit..you’re not “saying” anything. Romney would be taking a pay cut by being elected and your Bain scenario could not be more wrong if Oliver Stone scripted it.

      However, you are honest in one regard – your antipathy is based on pure religious bigotry. Christianity is no more firmly based on fact and logic than is any other faith, and its followers prove that daily. The only group more tiresome than bible thumpers are liberals but, again, thanks for being honest about your bigotry.

    4. But you have to be a really serious idiot to believe anything in the book of Mormon which takes the bible and then makes up a really stupid and implausible spin off story.

      The irony, it burns.

      Tanakh – Hebrew Bible – Old Testament – New Testament… any of these things ring a bell?

      No?

      How about virgin birth, walking on water, making wine from water, curing the blind, cursing a fig tree, resurrection?

      Dumb dumb dumb dumb dumb dummmmmmmmmm.

      Indeed.

      1. As retarded as all that stuff is, the Book of Mormon takes it to a whole new level, with an alien planet where god lives, and a guy who dictates a book by looking at rocks in a hat, then the book is lost, with magic golden plates which, mysteriously, no one ever seems to see.

        Plus, the guy had already been caught fucking half the daughters of farmers in his county before he made up a religion justifying his predilections.

    5. If a person’s religious beliefs or lack thereof is your main determinant for who to vote for, you’re possibly the biggest moron on the planet. I’d vote for a full on devil worshipper if I thought they were the best choice for president. And if I didn’t have any options that I liked, I’d do what I’ve done in every presidential election since I turned 18: stay home.

    6. Big Bang =/= abiogenesis (the former preceded the latter by about 12 billion years). And in any case, the beliefs of the “cultists” and the Christians in that regard is identical.

  12. He boasts of the jobs Bain created directly, but he has yet to say his activities likely created jobs indirectly by freeing up resources and labor for new projects. This indicates a significantly shallow understanding of how economies work.

    No, it indicates a significantly strong understanding of how elections work.

    1. I wouldn’t be too sure of this. Romney has made his fair share of gaffes already. That doesn’t imply a great understanding of elections.

  13. Do economists understand background dependence and the bare notion of paradigms?

    In other words, the ‘reification’ of the idea of ‘the economy’ has left out the people who do the activities, the buying and selling of goods and services, out of the equation, excepting some lip service to ‘unemployment.’

    If the sector of your economy that derives its fortunes by trading around future promises to pay, based on actual labor to be done in the future, and if that sector grows much faster than anything else, all while the Ivy League chattering class talks about how swell ‘the economy’ is…

    maybe {just… just maybe, folks} it’s sort of losing trees for forest?

    I may be wrong however. I am after all chasing the dragon at the moment….

    1. Fuck off Mary.

      1. Fuck Republicans.

        1. Well at least your honest about your economic theory = ECONOMICS IS TEH BAD BECAUSE TEAM BLUE!!TEAM BLUE!!TEAM BLUE!!!

          1. Oh no you’re wrong.

            Fuck Democrats.

            I’m at reason for a reason buddy. ;]

      2. Why don’t you try to make me after I come in your mother’s ass?

    2. I am after all chasing the dragon at the moment

      I though as I was reading the rest of the comment that it sounded like the rambling of strung out junkie. Thanks for verifying that.

      1. It seemed like a pretty typical labor exploitation argument to me. 😉

        1. more or less. The economy can be doing well while the average person is doing less well.

          Goldman Sachs can post record profits, and yes, viginia, futures trades do ultimately depend on and indeed *presuppose* future labor… but the average oil worker can be doing worse.

          I’m not sure how limited the reading of some of the posters here must be that they see criticism of non-productive debt-trading as an increasing share of GDP as some sort of commie nazism.

          When more and more of the economy is people trading around what in essence are future promises to pay based on future labor {it is AXIOMATIC that futures markets presuppose inchoate labor – Old Mexican might be the dumbest, least funny guy here}… then your ‘real economy’ transforms into a turd.

          This isn’t to say Romney and Bain never did any good, but liquidating a company is “creating wealth” in the way selling treasuries to pay guys to carry rocks from one side of the yard to the other is “creating jobs.”

          A little physics beats a lot of economics.

          Economics majors were the guys who lacked the brains to do real science, but had the arrogance and cluelessness to claim that you can create wealth by trading debt.

          Idiots.

    3. Re: Dr. Thaddeus Tingleberry,

      Do economists understand background dependence and the bare notion of paradigms?

      They probably understand the notion of bare backsides.

      In other words,

      You mean there’s another way of saying the meaningless nonsense posted above?

      […] the ‘reification’ of the idea of ‘the economy’ has left out the people who do the activities, the buying and selling of goods and services, out of the equation,

      Which is nonsense, since leaving trade out of the equation, ipso facto turns the discussion to about something else entirely and not economics.

      If the sector of your economy that derives its fortunes by trading around future promises to pay, based on actual labor to be done in the future,

      A statement that automatically and without question tells anybody with a brain that you have NO idea, NO clue, NOT EVEN A HINT, of how the future markets work, or what they entail, or what they are.

      But here’s a hint, just because I feel particularly magnanimous today: It is NOT based on future labor.

      1. Futures markets aren’t dependent on future labor?

        Care to explain because, and I’m feeling magnanimous myself…I don’t think you have any idea what you’re talking about. I think you’re regurgitating talking points, and haven’t a clue what I posted about.

        You clearly have no understanding of what I meant as to the reificication of the economy, prattling on about trade like a coked up twat. Care to try again, Susan?

  14. Romney’s comments about Bain Capital suggest a shallow understanding of basic economics

    I think he’s probably speaking to his audience, for whom even a shallow understanding is well over their heads.

    The economic debate between obama and romney amounts to = “Capitalism, sometimes BAD” vs. “Capitalism,sometimes GOOD!”

    in the end they aren’t much different from each other. Different colored tie.

  15. Not that credentials mean much, but Romery graduated in the top third of the law school and top 5% of the business school at Harvard. Where did Sheldon Richman study economics? Business experience?

    1. Joe Stiglitz won a nobel prize in Economics and ran the world bank.

      He’s still a shithead.

      Since when has Appeal to Authority ever been a reliable indicator someone’s *right* about anything?

      1. About as many times as appealing to something someone doesn’t say as an indication of their knowledge about a subject

        1. So you find the argument lame, and yet it’s the argument you made.

          1. No, it’s the argument made in the article the discussion is about

            1. ???

              You make the claim that Richmans argument is lame (which I would probably agree with BTW).

              Then you make the claim that because Romney’s ‘credentials’ are better than Richmans, he must understand economics better (you seem think business knowledge is the same as economic knowledge, which they’re are not).

              Then when your argument is called out as a lame appeal to authority you say it’s no better than Richmans lame argument thereby admitting, “yes, my argument is lame”.

          2. Since when is it an outrage to ask the credentials of someone judging another’s knowledge of a subject based on something they don’t say? It’s not an argument. I can read the curriculum for an MBA at Havard and see the requirements.

            1. “Since when is it an outrage to ask the credentials of someone judging another’s knowledge of a subject based on something they don’t say?”

              Who said it was an outrage? I think gilmore was saying it was a stupid argument to make.

              Saying, “who are you to question Romney’s economics” because Romney went to Harvard and is really really rich, is like saying, “who are you to question Obama and the constitutionality of Obamacare” because Obama went to Harvard law and was a constitutional law professor.

              1. What’s “rich” about it? I can easily see that economics is a requirement for an MBA at Harvard Business school. Based on the information I HAVE, and not something Romney DID NOT SAY, how can I come to the same conclusion as the author?

              2. Specifically this statement:
                “The GOP frontrunner’s comments about Bain Capital suggest a shallow understanding of basic economics.”
                The evidence AT HAND suggests something different than the ABSENCE of a statement a person expects.

      2. You didn’t say shitheads were not economic geniuses; therefore, you must think Joe Stiglitz is a spot on economist. See how that works?

  16. Understanding how to run a business is not the same thing as understanding economics.

    It’s the same difference that applies to being ‘pro-business’ and ‘pro-free market’.

    Romney is the former, not the latter.

    1. Still, I am confident of the marginally superior economics of a Crony Capitalist with the feat “Hide in Plain Sight” compared to a dual classed Crony Capitalist/Class Warrior with feats in “uncanny dodge” and “doublespeak”.

      1. Meh. The differences I see between Romney and Obama are limited, at best.

        During the primaries he jumped on Rick Perry for calling SS a ponzi scheme.

        He attempted to scare senior citizens by claiming Obama wanted to take away their Medicare.

        Accuses Obama of wanting to GUT the military.

        Holds Donald Trumps economic views on China.

        Appearantly has yet to find a war (potential or otherwise) he doesn’t support.

        Supported TARP.

        He supports the WOD.

        The list goes on and on so excuse me if I don’t find the argument that, “hey, Obama’s worse” compelling.

        1. I don’t see any real difference, politically or as a matter of personal character, between Romney and Obama.

  17. But a business plan assembled at time A may, because of new knowledge or change, look like a foolish idea at time B.

    FAIL. time t, and time t+1.

  18. We don’t live in a free market, but rather in a corporatist economy where government favors may convert activities that would serve the general interest into activities inimical to it. That’s why one cannot give a priori approval to Bain. A final judgment must await close examination of its activities in light of government corporatist intervention.

    I’cm calling bullshit on this.

    The only way that this criticism is valid, is if Romney at Bain lobbied for specific laws or regulatory exemptions that benefited him.

    Successfully playing by the rules established by the national government does not make someone a socialist. Enacting those rules in the first place does.

  19. From all I’ve been able to learn about Romney’s “business experience”, it appears to consist entirely of using is Political Class status (by birth) to work as a lobbyist; with a little part time action in bilking private investors. I think he probably left the professional work in asset stripping, cheating employees out of pay and benefits, laying people off, accounting, and tax cheating to professionals.

    1. Staples is a good place to buy office supplies.

  20. I would love to be as shallow as him and make $ 300 million (In a privete company without stealing or political favours) The claim that we have to see if Bain is ok is a leftist argument: all companies are guilty unless proven otherwise. Until now the best the left (and some libertarian hippies who oppose the GOP even when they have it right) is that one of the companies got bankrupt and the workers lost their pensions (Thats what happens in a free economy, we all now that a centralized economy is much worse) I?ve lived many years in Latin America, and I tell you that having someone who spent his lifetime in the private sector as president would be a dream come true. Politcians in Latin America are usually charlatans and big regulators and taxers. Only someone who has lived his entire life in USA is unable to see this. On the other hand Obama is the classical charlatan who enacts contradictory, subjective and illogical legislation. And anyone who says that Romney and Obama are the same can not claim to support free markets. An economy can be more regulated or less regulated, more taxed or less taxed, is not like a pregnancy. Romney speech is VERY MUCH closer to free markets, anyone can see this.

    1. Except that others here have pointed out that there isn’t a single major policy point about which Romney and Obama have different views.

      1. Not true. Romney wants to lower taxes and loopholes, Obama wants to raise taxes on high earners because of “fairness” (no definition)
        Romney wants to eliminate or at least put constrains on the EPA to help energy industries. Obama thinks oil sucks and America shoul become oil free.
        Romney very explicitly said that he will repeal socialization of health care aka Obamacare.
        Romney wants to promote federalism and diminish the centralization of govt. Obama wants more and more money to DC.
        Romney has repeatedly criticized the auto bail out, Obama thinks the bail out was a great success.
        Romney wants to keep capital gains tax at lower rates. Obama thinks this is unfair because he either doesn?t realize or pretends that he doesn?t realize that taxing dividends accounts for double taxation.
        Romney has embraced the Ryan plan, the first serious proposal to save entitlement programs. Obama apparently thinks everything is cool the way it is now.
        Romney has repeatedly criticized public unions prerrogatives. Obama loves public unions.
        I could go on and on

        1. Basically, on some issues, the candidates are the same (they both support Israel, corporatism) and in some regards, like the ones you listed, they are different.

          If the issues where they are the same matter most to you, they look the same.

          If the issues which matter most to you are where they are diametrically opposed (abortion rights), then they seem radically different.

          So, if like some libertarians, the most important thing is to gut the Department of Education, the candidates seem identical.

  21. I am not aware of any accurate method of converting things Mitt Romney says into facts about what he believes.

    1. @BMFPitt.

      It’s a simple equation.

      If Romney says X, it means he believes “Saying X will help me get elected.”

  22. Good points, but it’s awful tough for a presidential candidate to rationalize that “As a man involved in business I laid off / outsourced / eliminated jobs for the sake of long term gains”. Especially in an economy with 8-10% unemployment. To my knowledge, not even Ron Paul has publicly defended the fluid nature / creative destruction of the free market.

    Even if Romney was a visionary who invented the ATMs or cyborg laborers, the demagogues will still zero in on the jobs his inventions “destroyed”. It’s the nature of elections, it has to be played in certain way to win.

    If you’re an billionaire entrepreneur or a law professor teaching free markets, why would you risk running for higher office? The business people who seek that position will continue to be CEO types, for obvious reasons.

    You won’t have true free marketeers running for president, and even if they did, they would be meticulous in packaging or tailoring their message to the populace. Romney did some nice things in the economy. Clinton was OK. Barack Obama spent most of his life in academia and government. Pass.

    1. I wish you libertarians would get your acts, collectively, together (ah, the irony) and run some moderate candidates who can say “I think this particular law/social program/regulation is just simply absolutely terrible, and here’s why.”

      Trying to dismantle the entire social welfare state in one sitting is a recipe for disaster, not to mention electoral defeat.

      What are your priorities? What is the worst, absolute worst, single thing the government does? If you happen to have picked a program like OAS/DI, which simply can’t be turned off overnight, what’s the glide path to your eventual platform goal?

      You can probably pick more than one, but going past 3 you are definitely going to lose a lot of people.

      As your claim that Romney did some nice things in the economy, I can almost write the crypto-Obama ads now: “Vote For Another MBA President: It Worked With Bush!”

  23. The problem is Romney is running for President. Let’s imagine for the sake of argument that Romney really is an astute free market economist, capable of explaining the dynamics of entrepreneurship, the price system, and and the profit-and-loss dynamic to a room full of undergraduates.

    The problem is in a presidential campaign, you need something that can fit into a sound bite, is comprehensible by someone with a high school diploma, and isn’t easily exploited by the opposition. “I know how jobs are created, because I’ve created them” is a message that works well enough. Look at how much flack he took for saying he likes being able to fire people, a completely reasonable statement that he explained pretty well (and for me, the turning point from “lesser of two evils” to “actually, he might not be so bad”). It sucks, but that’s politics.

  24. materials, and workers. It is the embodiment of someone’s plan for the future production of goods that (ultimately if not immediately) will satisfy a http://www.vendreshox.com/nike-shox-r2-c-7.html consumer demand. But a business plan assembled at time A may, because of new knowledge or change, look like a foolish idea at time B. If so, what should the business do? Persist no matter what?

  25. Sorry, but this is a lame premise. Blaming Romney for not saying something that is true, but difficult for most people to understand? I call bullshit.

    Blame politicians if they say something not true or not connected to reality regarding economics (like Obama) not for silence on a particular aspect of economics.

    Silence is better than stupidity and ignorance.

  26. He is politician not a economist but his advisers will train him.

  27. What a wonderful story of your family coming to California and making the place better because you were there.When I hear some people complain about immigrants coming here, I wonder what they are thinking and I wonder who THEY think made America the great Country that it is today.

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  28. I want to examine the claims that private-equity firms “create wealth, not jobs” and that when an acquired company is downsized or even closed, http://www.nikewinkel.com/trai…..-c-58.html something unseemly has taken place.

  29. Dude, it’s not that Romney doesn’t understand crony capitalism. He fully understands it. In fact, it’s one of the reasons he’s running for President. He wants to end it.

    1. He’s a crony capitalist, one of the top ones.

      Do you think he could have made it on his own? His dad was a Governor, and, more importantly, head of one of the largest companies in the world, the largest employer in the world after the Soviet state enterprises?

  30. Blame present government corporatism, not Romney. Don’t denigrate capitalists for not understanding the system. Romney fully understood the system he operated in (he has an MBA from Harvard) and did the best he could to operate in it.

    Romney the men from Bain were efficiency experts. And you can’t say they didn’t free up resources and labor for new projects, even if capitalism has gotten corrupted in American.

  31. Rockefeller Republicans were never much for free markets.

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