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It was 25 years ago that filmmaker Oliver Stone unveiled his cinematic defamation of American-style capitalism and the free enterprise system.
The success of 1987’s “Wall Street” helped brand the Reagan Era — at least in the minds of Hollywood liberals and the mainstream media — as the Decade of Greed.
Stone portrayed it as a time when only the super-rich got richer, particularly the corporate raiders personified by Gordon Gekko, his movie’s villain whose slicked-back hair and brace suspenders became classic bits of 1980s iconography.
And a quarter century later, “Gordon Gekko” is still punditocracy shorthand for a sort of zero-sum, predatory capitalism where companies are bought, stripped of assets and dumped for the quick buck. Workers be damned.
So when Republican presidential candidate Mitt Romney is compared with Gordon Gekko, a frequent happening of late, it’s probably not a commentary on his thick, lustrous hair.
“Romney was hardly some bankster vampire draining cash from once-healthy victims.”–James Pethokoukis
Nope, it’s a quick-and-dirty way of smearing Romney’s private-equity career at Bain Capital as nothing more than “vulture” capitalism, to use Rick Perry’s term of choice.
Indeed, the new anti-Romney video “When Mitt Romney Came to Town” — purchased and promoted by supporters of Newt Gingrich — makes a wonderful, 25th anniversary companion piece to “Wall Street,” as it tries to rebrand Romney into a real-life Gekko.
The 28-minute piece of agitprop purports to tell the true story of four companies that Bain bought and gutted, portraying Romney and his colleagues as looters and liquidators who turned “the misfortunes of others into their own enormous financial gains.”
The King of Bain as the King of Pain whose “cash rampage would ultimately slash jobs in nearly every state in the country.”
Interspersed among teary testimony from fired blue-collar workers–including tales of ruined Christmases, foreclosed homes and, apparently, near starvation–are footage and stills of Romney looking and sounding every bit the ruthless, cold-hearted capitalist.
There’s a gag shot of Romney and his Bain colleagues waving around dollar bills. A photo of Romney getting his shoes shined on a runway in front of a private jet. Pictures of Romney’s ginormous homes. It’s all there.
There’s even video of Romney inadvertently paying homage to Gekko’s infamous “greed is good” speech. “Profits,” Romney says in one clip, “that’s the name of the game.”
And the video ends by hinting that as tremendously wealthy as Romney is, there just might be more dough stashed in secret, overseas bank accounts. Just maybe.
All in all, a blend of suggestion and innuendo with a sprinkling of just-enough facts to make an effective attack infomercial. Contribute to the Anti-Romney, Newt Gingrich, now. Operators are standing by. First 100 callers get a signed copy of “A Contract with the Earth.”
But a lot of truth was left on the cutting room floor. For instance, although electronic components maker DDi filed for bankruptcy in 2003 after Bain cashed out, according to Bloomberg Businessweek, blame the deflated dot-com bubble, not Bain. And the video failed to mention that the company has since emerged from bankruptcy and is thriving.
Then there’s KB Toys, whose shuttering in 2009 the video blames on the massive debt Bain piled on it. But actually another private equity firm was running it by then, Bloomberg Businessweek points out, with the firm blaming weak sales from the sinking economy for KB’s demise, not debt.
But the most egregious factual omission by “When Mitt Romney Came to Town” is that quite often when Romney came to town some pretty good things happened.
There were investments in startups like Staples that created tens of thousands of jobs. Or improved operations at Domino’s Pizza and other going concerns, with that enhanced value reflected in huge returns for Bain investors.
Romney the Raider? Please. Recall that Gekko’s big play in “Wall Street” was buying an airline with surreptitious intention of selling of its jets and gates — and then pocketing an overfunded worker pension plan.
The Bain Way, by contrast, was to take high-risk stakes in floundering firms with the intention of righting the ship — not wrecking it — and then selling for big profit. Bain went for the slow buck. Romney was hardly some bankster vampire draining cash from once-healthy victims.
Then again, pumping and dumping like Gekko generally isn’t the way of the private-equity business. In the 1980s, the industry helped a flabby, uncompetitive Corporate America get back in shape.
A study that reviewed the performance of private equity over the past 30 years concluded the “empirical evidence is strong that private equity activity creates economic value on average.” That’s right, “on average.” Not always.
And sometimes, even when the Bain Way was successful, workers lost their jobs in the process. But profitability is the only true path to economic security for the private sector, which, of course, can’t tap taxpayers or run the printing presses like Washington can when cash runs low.
In other words, no profits means no jobs. Might make a good takeaway for a Powerpoint presentation Romney can give to some of his rivals.
James Pethokoukis is a columnist at AEI and a CNBC contributor
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