One of the best defenses of Romney’s record at Bain has come from an unlikely source: President Obama’s former “car czar,” liberal Steven Rattner. According to Rattner, “Bain Capital’s record was extraordinary, among the best in the business.” Rattner mocked the Gingrich/Perry/liberal caricature of Romney’s former company, insisting that “Bain Capital is not now, nor has it ever been, some kind of Gordon Gekko-like, fire-breathing corporate raider that slashed and burned companies.”
In addition to being inaccurate, Gingrich’s attacks on Bain bear a disturbing resemblance to diatribes typically spouted by people who have no clue about how capitalism works. Gingrich draws false distinctions between “good” capitalism and “bad” capitalism, between “real” capitalism and “exploitive” capitalism. He is channeling liberals who pay lip service to the virtues of capitalism even as they decry the very mechanisms that allow it to work.
According to Gingrich, Romney should be quizzed about whether Bain took out too much money in dividends from one or two companies that failed years later. It’s easy to question such decisions with 20-20 hindsight. But would President Gingrich decide the amount of dividends that should be paid to a private equity firm under his conception of “good capitalism”? How would that be any different from President Obama deciding the “certain point” at which “you’ve made enough money”?
The oft-described “creative destruction” of capitalism can unfortunately cause short-term pain that is easy to demagogue. But that creative destruction is necessary to free up capital for vibrant businesses that can use it most productively. This results in more jobs, more opportunity for workers (ultimately including those who have lost their jobs), more prosperity, more tax revenues, a stronger economy and better lives for us all. Creative destruction is an essential element of free market capitalism, a system that has lifted far more people out of poverty than any other, that allows even poor people to live in relative comfort, that allows poor people their best opportunity to become rich, that maximizes opportunity for all. Interfering with creative destruction might postpone some short-term pain, but creates much greater long-term pain by choking off growth (see: Europe).
Gingrich declared in his South Carolina victory speech that November’s election “is the most important election of our lifetime.” That was not merely one of those “grandiose” statements that Gingrich prides himself on making. The election is indeed that important because our free market system is being undermined by President Obama’s statist policies — and by the misguided and mislabeled notion of “fairness” that Occupy Wall Street and their enablers on the left have thrust into the national debate.
In the face of this threat to American-style capitalism, Republicans need to nominate someone who can make the case for economic liberty. We need someone who can argue convincingly that free market capitalism is not just a conservative value, but is a fundamental American value. It is the source of our prosperity and the foundation of the American exceptionalism that Gingrich celebrated in his South Carolina speech. Through his attacks on Romney, Gingrich has stripped himself of the moral authority to make that argument. Those attacks have also placed a burden squarely on Romney: Supporters of economic liberty must now count on him to make a robust, compelling and inspiring case for the brand of capitalism that he now, thanks to his opponents’ attacks, embodies.