Mother Jones released another video of Mitt Romney, this one from his Bain Capital days, circa 1985.
Here's an interesting excerpt (emphasis mine):
Bain Capital is an investment partnership which was formed to invest in startup companies and ongoing companies, then to take an active hand in managing them and hopefully, five to eight years later, to harvest them at a significant profit.There are two aspects of the new video that I think are noteworthy:
- Romney asserts that it takes "five to eight years" to manage a company (either a startup, ongoing venture, or a turnaround) to the point where Bain could "harvest" it at a significant profit. Five to eight years. As David Corn points out: "Romney mentioned that it would routinely take up to eight years to turn around a firm—though he now slams the president for failing to revive the entire US economy in half that time." Enough said.
- The Romney excerpt above is essentially a mission statement for private equity firms. This is what they do. In fact, I don't fault Romney for making that comment. It is the job of private equity firms to make (often outsized) returns for their investors. Romney clearly had a very good grasp of that fact. What neither Romney nor any other private equity player will likely ever name as an objective is "job creation." It is, simply, not on their radar. And to the extent it happens (see: Staples), it's always secondary and incidental to the primary objective of doing what it takes to achieve the highest possible return on investment (ROI, otherwise known as "harvest"). Hence, for Romney to tout his private sector experience at Bain as somehow translating into an ability to create jobs is just so much gibberish. It probably more often the case that private equity improves its ROI by cutting jobs, not creating/adding them.