Mitt's Business Background

For years, Mitt Romney ran Bain Capital, one of the largest private equity companies in the world. The Glove says this makes him a successful "businessman", and we need a businessman in the White House to improve the economy, reduce unemployment, and make everything hunky-dory.

Maybe he's right. As President, we've had generals, farmers, engineers, academics, actors, and a lot of lawyers. I'm not sure, but I don't know that we've ever had a businessman. We probably have, I just don't know who.

Certainly, there's nothing at all wrong with a background in business, but neither is it a guarantee of a great president. As always, it's best to examine the person and the track record, case by case.

So, what exactly is a "private equity firm"? A private equity firm provides working capital to a target company, in exchange for management fees and portions of future income/profits. The bottom-line purpose is to reposition the target company in such a way as to turn a profit for the equity company and its investors, not the target company. The target company is merely a vehicle, a means to an end. The equity firm has identified the target as an "opportunity". Maybe that means the equity firm helps the target expand or develop new products. Maybe it means restructuring, outsourcing, layoffs and closures. Either way, the equity firm comes out OK, and the success or failure of the target company is completely beside the point. Win some, lose some. Nothing personal, just business. Next!

Private equity firms sometimes go by other names, like venture capitalist, vulture capitalist, and corporate raider.

We all have to earn a living one way or another, and a lot of us are in business. But Mitt and the Bain Capital "businessmen" operated in some rarefied air, making money with other people's businesses and, sometimes, from other people's misfortunes. This approach has a lot more in common with Wall Street's mortgage-backed CDO shenanigans than it does with the average American business person simply trying to offer a product or service to meet a need.

Do we really need a Romney-style businessman as President? None of us would want to see, say, Lloyd Blankfein in the White House. Is The Glove that much different?