2012 Tuesday: Obama wants the election to be about a topic he doesn’t understand
In Chicago yesterday, President Obama described the essence of his campaign against Mitt Romney. Asked during a press conference about his campaign ads criticizing Romney’s record at Bain Capital in the 1980s and ’90s, Obama disagreed with fellow Democrats’ advice to focus on other issues:
[T]his is not a distraction. This is what this campaign is going to be about — is what is a strategy for us to move this country forward in a way where everybody can succeed?
Well, now. That’s just completely different from every other presidential campaign in history…
Some commentary has focused on what Obama said just before that: his description of the job of president vs. the job of a private equity CEO. And with good reason. There is plenty to address: from his assertion that the president should be involved in helping individual communities plan their economic development, to the obvious conclusion that the job, as he’s described it, is not one he’s done particularly well given the persistent sluggishness of the job market and the economy more broadly.
But what interested me was his summary of private equity:
Now, I think my view of private equity is that it is set up to maximize profits. And that’s a healthy part of the free market. That’s part of the role of a lot of business people. That’s not unique to private equity. And as I think my representatives have said repeatedly, and I will say today, I think there are folks who do good work in that area. And there are times where they identify the capacity for the economy to create new jobs or new industries, but understand that their priority is to maximize profits. And that’s not always going to be good for communities or businesses or workers.
Contra Cory Booker, Harold Ford Jr. and Steve Rattner — who are among the Obama supporters who cautioned him against demonizing private equity — the best reason for Obama to avoid the topic is that he sounds wholly uncomfortable on such foreign terrain.
His dissection of the place of profits in an economy supposedly based on free enterprise comes off like the remarks of an anthropologist recently returned from spending a year among some exotic, savage tribe. But profitability is a concept that comes naturally to most Americans because, unlike Obama, most of us have worked for for-profit enterprises.
Instead, Obama says “maximize profits” as if it’s one element among many when it comes to business (it’s just “part of the role of a lot of business people,” with the others ostensibly at liberty to ignore revenues and expenses), as if he grudgingly acknowledges some possibility that profits can co-exist with a healthy economy.
Wrong. Profits are indispensable to a healthy economy.
If a company is not trying to “maximize profits,” it is not a) trying to satisfy the most customers and thereby earn their business; b) recruiting and retaining the work force needed to deliver appealing products or services; or c) creating or freeing up the capital needed to expand its business.
Oh, and because we know Obama puts a premium on higher tax revenues: “Maximized profits” also mean more earnings for government to tax.
This is the story of America’s economic power. We are not the world’s most important economy, and the most prosperous people, because there are business people for whom “maximizing profits” is not “part of their role.” On the contrary. It’s because the profit motive — and, importantly, the greater freedom from government that our enterprises historically have had to pursue it — has ensured we have gotten the most out of our scarce resources.
Profits are not something to be merely tolerated as long as everything turns out OK for everyone else. They are the best motivation known to man to put as many people and resources as possible to productive work.
And creating new industries, with new jobs, is not incidental to free enterprise. Delivering novel products or services is not the only way to make money, but it is a time-tested way to do so.
This also happens to be the story of Bain Capital. Yes, it invested in businesses that couldn’t be turned around — that is, made profitable — and which had to be closed. But it also found great success in other ventures, some of which still employ tens of thousands of Americans.
Obama wants you to think the exceptions are the rule, at least where Romney and Bain are concerned. In doing so, he betrays his lack of familiarity with the very economy he claims to be trying to shepherd.
– By Kyle Wingfield
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440 comments Add your comment
JDW
May 23rd, 2012
9:59 am
@Rafe…”can you name one investor that saved KMart. How did KMart get out of bankruptcy and acquire Sears in less than one year? Seems strange to me.”
Nice softball… Thanks it goes directly to my point. Edward Lampert…it’s easy to look up and you can track the deal from start to finish. There is no such activity or interest recorded in the case of GM.
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
10:04 am
Nice deflection, JDW. (And covered a month ago on this very blog)
Typical when you can’t make a cogent argument.
JDW
May 23rd, 2012
10:06 am
@Tiberius…”Given past bailouts, why shouldn’t they first look to government to bail them out?”
Delusion continues…GM came to the government after, long after, they had exhausted all other avenues. They didn’t want to, management lost their jobs, but they had no choice. Read the timeline…
http://www.telegraph.co.uk/finance/newsbysector/transport/general-motors/8141256/General-Motors-timeline-of-the-thrills-and-spills-1908-2011.html
Heck they were so desperate they even tried Chrysler before the government.
JDW
May 23rd, 2012
10:09 am
@Tiberius…”Typical when you can’t make a cogent argument.”
And yet, you still can’t name just one…
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
10:11 am
“GM came to the government after, long after, they had exhausted all other avenues.”
False. And your timeline doesn’t back up your contention.
Nice try, JDW.
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
10:13 am
Can’t name that which does not exist, JDW. I thought we covered that in the whole “Cause and Effect” theory.
You’re slower than usual on the uptake this morning, son.
JDW
May 23rd, 2012
10:21 am
@Tiberius…”Can’t name that which does not exist, JDW”
Wow you finally got it…psssssst thats why it had to be the government.
blackstarline
May 23rd, 2012
10:21 am
“If a company is not trying to “maximize profits,” it is not a) trying to satisfy the most customers and thereby earn their business; b) recruiting and retaining the work force needed to deliver appealing products or services; or c) creating or freeing up the capital needed to expand its business.”
Most companies I know are trying to “maximize profits” by a) forcing customers to buy their crappy products by eliminating the competition, and colluding with the remaining competitors to offer the same crap. b) constantly recruiting the cheapest labor available (especially illegals) and firing employees as soon as even cheaper labor is available. C) hoarding capital in order buy back their stock for short term profits, or buy off politician for even more tax concessions/subsidies from the state (corporate welfare checks)
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
10:24 am
Keep fantasizing, JDW. The government was the first suitor, which eliminated all others.
Cause.
And Effect.
iggy
May 23rd, 2012
10:27 am
” a) forcing customers to buy their crappy products by blah blah blah…”
Lay off the weed, you’re paranoid.
iggy
May 23rd, 2012
10:31 am
The Euro is tanking. Yet another grand liberal scheme that is failing.
JDW
May 23rd, 2012
10:38 am
@Tiberius… and now you are back to my 9:50…it’s like Mann and Ornstein were talking about you when they said “ideologically extreme; scornful of compromise; unmoved by conventional understanding of facts, evidence and science; and dismissive of the legitimacy of its political opposition.”
Especially the facts part.
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
10:39 am
“it’s like Mann and Ornstein were talking about you”
They were debunked as well.
You really need to keep up with reality, JDW.
saywhat?
May 23rd, 2012
10:51 am
Its not the facts which confuse lil tibby so much JDW. Its the fact that as a conservative, he is naturally just a low effort thinker.
http://psp.sagepub.com/content/early/2012/03/16/0146167212439213.abstract
md
May 23rd, 2012
11:00 am
“And md what do your deadbeat relatives have to say about you?”
Don’t really much care…..I tried, now it’s up to them.
Do you help an alcoholic by giving him alcohol?
Help starts with the individual…..they first must want to participate otherwise enabling does no good. Enabling is a short term solution that causes a bigger long term problem.
Look at society….we choose everything we do, and 1/3 of kids are currently dropping out of assistance program #1 (which by the way costs society 300B a year)….this in turn puts them on the hard road which more often than not leads to assistance programs 2, 3, 4 etc……it’s an endless cycle of enabling…..it may help giving them the short term assistance, but does nothing but compound the problem down the road.
Assistance needs to be conditional…………
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
11:20 am
“Its not the facts which confuse lil tibby so much JDW. Its the fact that as a conservative, he is naturally just a low effort thinker.”
And yet I’m not a conservative, saywhat.
Of course, you’d need a working brain to know that.
Rafe Hollister
May 23rd, 2012
11:23 am
JDW
Thanks for the tip on Edward Lampert. I learned a lot about business takeovers. He looks to be another venture capitalist that rode in on his white horse and temporarily saved KMart and Sears. Unlike Romney, he is failing. Appears that Sears is on the ropes again, however. Wonder if Barry Oblamer will ride in and save Sears, for his hometown?
Maybe Barry can become the CEO of Sears after Nov 6. I mean, he has such a good track record of buying companies with our tax dollars, downsizing them, laying employees off, giving them to the union, and bragging about his success. A true venture capitalist or since the government supplied the money for the purchase maybe a venture fascist.
md
May 23rd, 2012
11:26 am
The question that we should be asking about GM is why?
Why were they special?
And before answering, do the research on the number of companies/industries/people that were not deemed “special”……..
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
11:32 am
“The question that we should be asking about GM is why?
Why were they special?”
Three letters: UAW
redneckbluedog
May 23rd, 2012
11:43 am
Mitt Romney has no fight and no spine……he is a bully, but not a fighter…he just pays other people to do his bidding for him…..Let GM go, let housing go, let bin Laden go, flip-flop on Romneycare, let Bain go unanswered…..
But I did hear he was looking to PURCHASE one…..or have one granted to him by the “Great Wizard of Kolob”……
md
May 23rd, 2012
11:45 am
“Three letters: UAW”
The question was targeted to those that don’t know that
redneckbluedog
May 23rd, 2012
11:47 am
I was actually on the fence until Monday….(of not voting)….but I’m coming down on the side of the Kenyan…..he’s a fighter…..
The first qualification to be President is to have a backbone…and say what you want about Obozo, Obarry, Owebama, the half-white non-citizen President….HE HAS A BACKBONE…….as opposed to Mitt, the Mormon flip-flop yellow-belly…..
NOT GOING TO VOTE FOR A COWARD FOR PRESIDENT….!!!!
md
May 23rd, 2012
11:48 am
I see some here only use their computers for posting……google is your friend.
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
11:52 am
Looks like redneckbluedog got into some bad ’shine this morning . . .
Rafe Hollister
May 23rd, 2012
12:00 pm
redneckbluedog was about as likely to vote for Romney as Michelle.
Oblama really showed his backbone when he endorsed/didn’t endorse same sex marriage. He said that was a states right issue, the only issue that is states right, not healthcare, not drug laws, but same sex marriage?
iggy
May 23rd, 2012
12:04 pm
redneckbluedog
May 23rd, 2012
11:47 am
Funny!
iggy
May 23rd, 2012
12:06 pm
Senate Hearings/3 ring circus to commence on fb. Yes, our haughty leaders are gonna, yet again, attempt to crucify Wall Street instead of doing their jobs ie reparing the economy.
Dusty
May 23rd, 2012
12:12 pm
Well, it is a nice day and I have already had a good laugh this morning. While checking out the AJC home page section on Opinion I noticed that Bookman is writing that Obama is “the most frugal president since Ike”. Whoooeee!!
I think they must have changed the definition of “frugal”. If Obama gets any more “frugal” we will be lower than Greece. That’s mighty low, folks!
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
12:15 pm
With Bookman, up is down and black is white. Reality has no meaning whatsoever in is world.
iggy
May 23rd, 2012
12:19 pm
At one time I valued bookmans opinions. Didnt much agree with them but thought he, at times, had some valid points, arguments.
“Ill get on my knees and pray, I
WONT GET FOOLED AGAIN”:
iggy
May 23rd, 2012
12:20 pm
I kinda miss Cynthia “CrazyVille Tucker.” She was always good for a laugh.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
May 23rd, 2012
12:21 pm
The president didn’t even have an opponent in Kentucky, but with 99 percent of the vote counted, Obama took just 57.9 percent of the vote, with the remaining more than 42 percent of ballots cast for “uncommitted.”
And to think, our deluded little dummycrat friends think they are going to win against Romney, hahahahahahahaha, what a bunch of klowns.
Dusty
May 23rd, 2012
12:28 pm
It gave me a chckle, Tiberius. He throws out the “bait” every day as a feast for his followers. Doesn’t matter how contrived it is. Truth is not a factor.
Dusty
May 23rd, 2012
12:41 pm
Iggy, 12:19
I know what you mean. There were a few liberals at Bookman’s that I enjoyed. But the rest were so extreme, I began to feel that all liberals were mean as snakes. I left because I knew that feeling was wrong. I don’t agree with most liberal politics but that does not mean I want to hate liberals. Not in America or anywhere else. I just want us to work out our problems with a better level of understanding between us.
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
12:52 pm
Just read Bookman’s fiction, Dusty.
It’s the same old lies, damned lies and statistics stuff he’s used before.
Desperation makes for some pretty funny stuff over there.
saywhat?
May 23rd, 2012
1:06 pm
Dusty, iggy and lil tibby discussing facts and reality is like Michael Jordan, Paul Schaeffer, and Samuel L Jackson discussing hair gel.
iggy
May 23rd, 2012
1:09 pm
I saw Jackson in Pulp Fiction with a head full of hair and hair full of gerry-curl so you point is mute, I mean moot
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
1:23 pm
You’d think a person who makes their living as a writer would know the meaning of the word “frugal”.
But then, like many things in the so-called liberal mind, reality is ignored (if ever even known to begin with).
iggy
May 23rd, 2012
1:27 pm
Get ready…The Grecians and EuroTrash are about to blowup the world.
JDW
May 23rd, 2012
1:36 pm
@Tiberius…”It’s the same old lies, damned lies and statistics stuff he’s used before.”
You did notice that the source was that bastion of liberal thinking The Wall Street Journal…or did that small item escape you in your zeal to declare your contempt?
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
1:44 pm
JDW, perhaps you should take my advice and look up the meaning of the word “frugal”.
Unless you’d like to be a stupid and lazy as Bookman.
Wallis the dog
May 23rd, 2012
1:52 pm
Kyle, Your post today is excellent. Based on many of the comments, economic ignorance is an epidemic.
DAVETV
May 23rd, 2012
1:54 pm
I posted this earlier but received no feed back. Posting again to see if someone can tell me where I’m wrong in my thinking.
My take on it is that because we propped up GM, that stole the opportunity for other car companies to take over that market share. Do you think people wouldn’t buy any more cars unless they could get a GM product? Other car companies would get to step up and fill that demand. They would get to make more cars. They would have to hire more workers. Expand or build factories. Perhaps companies who know how to run a business successfully should be the ones who benefit. Instead, we penalize success and reward failure. On what economic model is that policy based?
JDW
May 23rd, 2012
1:54 pm
@Tiberius…”perhaps you should take my advice and look up the meaning of the word “frugal”.”
Tell it to the Wall Street Journal….
“There has been no huge increase in spending under the current president, despite what you hear.
Why do people think Obama has spent like a drunken sailor? It’s in part because of a fundamental misunderstanding of the federal budget. ”
WOW sounds like they know you too!
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
1:59 pm
JDW, just because one person at the WSJ doesn’t know his a$$ from his elbow around a dictionary, doesn’t mean that someone who is supposed to be versed in the same should repeat the mistake.
That is what lazy, stupid people do.
Welcome to that club, son.
JDW
May 23rd, 2012
2:00 pm
@DAVETV…”My take on it is that because we propped up GM, that stole the opportunity for other car companies to take over that market share.”
No doubt it eliminated an opportunity for other car companies, primarily those from other countries to increase market share, raise prices and make more money. Question is to who’s benefit would that have been? Certainly not the 75,000+ GM workers or the 100,000’s employed in the GM supply chain, the state and local governments in those locations, the federal government or the taxpayers.
That’s why it takes a different skill set to be President, you need to think more strategically rather than tactically.
iggy
May 23rd, 2012
2:03 pm
Dave, probably mox nix. The total demand for autos would remain close to the same. Some would benefit, as the GM customer would now prefer to purchase “brand X.” The workforce would most likely not recover, as the employees at the remaining companys would be expected to double up production. Some layed off employees would be absorbed but not all.
New factories could be built but why not change the GM symbol, on the front of the building to “Brand X.” Would be much cheaper to simply retool existing factories.
Agreed. Obama and his cronies prefer to reward failure. As example just look at one of Obamas first appointees, one Joe Biden.
JDW
May 23rd, 2012
2:04 pm
@Tiberius…”JDW, just because one person at the WSJ doesn’t know his a$$ from his elbow around a dictionary, doesn’t mean that someone who is supposed to be versed in the same should repeat the mistake. That is what lazy, stupid people do. Welcome to that club, son.”
Thing is I believe you are the individual that has great difficulty distinguishing between holes in the ground and ones in your nether regions. As for the “club”…it’s all yours…why there’s your picture right in the top slot.
@@
May 23rd, 2012
2:05 pm
Gov. Jerry Brown’s plea to California voters: ‘Please increase taxes temporarily’
A TEMPORARY tax!!??!!
I’ve never known of such a thing.
iggy
May 23rd, 2012
2:07 pm
Before Jerry was elected he went on camera and professed what we all know. He stated, in so many words. “We as policitians have no plan, we will tell you we have a plan but we dont.”.