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
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
2:14 pm
Since you’re obviously the lazy one, JDW, I’ve done the work for you:
frugal
1. economical in use or expenditure; prudently saving or sparing; not wasteful
2. entailing little expense; requiring few resources; meager; scanty
Nowhere does the meaning of the word mean “not increasing spending”. Doesn’t matter if your spending doesn’t go up exponentially, son. What matters to meet the definition of frugal is that you don’t spend what you don’t have!.
getalife
May 23rd, 2012
2:28 pm
The bain attack is working .
It did not matter to cons but it matters to the majority of the American.
willard blood in the water.
Finish him of President Obama.
iggy
May 23rd, 2012
2:30 pm
Speaking of Willard, where is Finn? I hope he hasnt jumped from the nearest bridge due to his overly aggressive facebook stock purchase.
@@
May 23rd, 2012
2:30 pm
In European Debt Crisis, ‘The Street Has Taken Control’
It happens in three ways: the ballot box, social unrest and the financial system. All of them were pervasive during the Latin American crisis.
Now in Europe, we’ve already seen that happen in dramatic fashion. First, it came at the ballot boxes in France and Greece, where voters rejected austerity measures and backed candidates who promised to lessen the pain.
Second, there’s been social unrest—not just in Greece, where it’s been the worst, but in waves of protests across Europe, including Spain, Portugal, and France.
Events of the past week suggest “the street” is now beginning to take control of the financial system.
Mobocracy!
They’re making a run on the banks. This ain’t gonna end up well for any of us.
Rafe Hollister
May 23rd, 2012
2:31 pm
1 Trillion dollar porkulus bill = frugal. It is a new world!
Cash for clunkers= frugal.
Solyndra/green energy = frugal
GSA conference = frugal
Michelle’s frugal vacations.
JDW
May 23rd, 2012
2:34 pm
@Tiberius…And Mr. Obama has the most economical in use or expenditure as it relates to the federal budget since Ike…so say the numbers right there in black and white.
Just because you don’t agree doesn’t change a thing. You can have your opinion but facts are facts.
BTW the use of the word has no relation to spending what you have or have not…that is not in the definition that you so kindly pasted.
getalife
May 23rd, 2012
2:37 pm
Anerican people. Ooops.
The American people will not elect a vulture capitalist the loves to fire people.
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
2:39 pm
“BTW the use of the word has no relation to spending what you have or have not…that is not in the definition that you so kindly pasted.”
Yeah, JDW, ’cause “entailing little expense; requiring few resources;” means so many different things, especially when you don’t know how to READ!
getalife
May 23rd, 2012
2:39 pm
Austerity failed in Europe and the gop still wants it to fail here for this election.
Country first?
No, wealthy first.
iggy
May 23rd, 2012
2:45 pm
Austerity failed because the EuroTrash is still the EuroTrash. A group of self-serving, procrastinating idiots. Those folks cannot get along and will not. Its a prime example of the why productive peoples get pulled into the ditch by the non-producers. And also an assault on all this talk of fairness..
JDW
May 23rd, 2012
2:45 pm
@Tiberuis…”“entailing little expense; requiring few resources;”
And yet not a word in there about income. See income-spending=deficit. As usual you are only talking only about spending and apparently don’t even know it.
iggy
May 23rd, 2012
2:48 pm
PS…since when has Europe been a Country?
iggy
May 23rd, 2012
2:50 pm
“No, wealthy first.”
Agreed. The common man/worker-bee, who is waist deep in entitlements, early retirement with full benefits, ie wealth, etc. refuse to take measures that would allow their own Country to remain solvent. So yes, in this case, Wealthy First.
md
May 23rd, 2012
2:52 pm
“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? ”
Not sure about might have been, but the Italians were a definite………..
saywhat?
May 23rd, 2012
2:56 pm
Somebody forgot to tell lil tibby that facts tend to have a liberal bias. Well, I’m off to Bookman’s. Have fun here at the kids table!
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
3:01 pm
“Austerity failed in Europe and the gop still wants it to fail here for this election.”
getaclue, I suggest you re-read Kyle’s column of about 2 weeks ago which showed that austerity didn’t even occur in Europe.
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
3:03 pm
Income only comes into the frugal equation, JDW, when you need to figure out if you have any.
When you don’t, the frugal person doesn’t spend what he doesn’t have.
Nice try, but another failure on your part, son.
md
May 23rd, 2012
3:04 pm
“The American people will not elect a vulture capitalist the loves to fire people.”
So the venture capitalist that closed all those car dealerships should not be elected??
md
May 23rd, 2012
3:05 pm
“Austerity failed in Europe and the gop still wants it to fail here for this election.”
So now their plan is to borrow money and spend it?? Isn’t that what got them to this point?
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
3:10 pm
It’s pretty bad when you have to school liberals on the meaning of words when they start making up their own definitions.
The Fresh Prince of Bill Ayers
May 23rd, 2012
3:16 pm
getalife
May 23rd, 2012
2:37 pm
Anerican people. Ooops.
The American people will not elect a vulture capitalist the loves to fire people.
The American people will elect a vulture capitalist that is going to fire your clueless “Teleprompter Puppet” and the “First Vacationer”. Her private chef’s and bartenders can go too!
That Black guy
May 23rd, 2012
3:26 pm
It’s also interesting that he allows the coded racial overtones on his blog
_________________________________
What are the “coded racial overtones”?
I didn’t see any.
Hillbilly D
May 23rd, 2012
3:28 pm
The total demand for autos would remain close to the same.
Interesting thing that I learned in my many years in car dealerships, is that before a given model year, industry analysts can tell you with a great deal of accuracy, how many vehicles will be sold in the U.S., in the coming year. Predictions on which company will sell how many, usually aren’t too accurate but they seldom are very far off on the total number sold. So each year, the different companies are basically fighting for a share of what is a pretty finite pie.
@@
May 23rd, 2012
3:35 pm
Investors fear end of world as we know it
First came news on the “taxmageddon” front: the Congressional Budget Office announced that the U.S. economy is likely to lapse into another recession early next year if automatic spending cuts go into effect as planned and if no action is taken to extend a package of tax cuts first implemented nine years ago.
Not ominous enough? Well, there is the ticking time bomb now being referred to as “drachmageddon,” or the prospect that Greece will abandon — or be forced out of — the eurozone in the near future.
The prospect of another recession, combined with the fallout from a Greek exit from the eurozone, could cause chaos that would rapidly spill over to US financial markets.
Everyone’s nerves are frayed. We’re now entering the raw emotion phase.
IT IS WHAT IT IS!!!!
Got milk?
Hillbilly D
May 23rd, 2012
3:36 pm
the Congressional Budget Office announced that the U.S. economy is likely to lapse into another recession early next year
Where I live, we ain’t out of the first one yet.
Rafe Hollister
May 23rd, 2012
3:37 pm
Frugal Ike built the interstate highway system, Frugal Barry built………
bada bing…….
A mountain of debt!
Rafe Hollister
May 23rd, 2012
3:38 pm
Hillbilly @ 3:36
Up here, we missed the recovery as well, recovery when?
Illegal Alien
May 23rd, 2012
3:43 pm
If 3 or 4 if you posters would stop, the comments would probably fit on 1 page.
@@
May 23rd, 2012
3:44 pm
Hillbilly:
I’ve witnessed four friends get laid off within the last month. They were four among many within various companies. Two of them in logistics.
Didn’t make the news.
Hillbilly D
May 23rd, 2012
3:51 pm
@@
I know a guy who just recently got laid off, in a large scale cutback, after 26 years with a national company.
saywhat?
May 23rd, 2012
4:01 pm
Illegal Alien
May 23rd, 2012
3:43 pm
“If 3 or 4 if you posters would stop, the comments would probably fit on 1 page.”
______________________________________________________________________
But then there would be nobody to laugh at.
Doug B
May 23rd, 2012
4:02 pm
No, Kyle, you don’t understand. Obama went out of his way in that quote to say that maximizing profits is mostly a good thing. But was it a good thing when PG&E contaminated an area and made lots of people very sick? It made the company more money. Would you say that was “good for communities or businesses or workers”? There are many examples where a pure profit motive caused problems beyond what is acceptable.
@@
May 23rd, 2012
4:05 pm
Gupta trial jury told of “top secret” Buffett deal
NEW YORK (Reuters) – The deal that gave Goldman Sachs Group Inc a $5-billion boost from renowned investor Warren Buffet at the height of the 2008 financial crisis was “as top secret as you could get,” a leading banker testified on Wednesday at the insider-trading trial of onetime Goldman board member Rajat Gupta.
Makes Buffett look bad, don’t it?
You crack me UP
May 23rd, 2012
4:06 pm
@@
Whats up?
Haven’t seen you on JBs blog. Where have you been?
@@
May 23rd, 2012
4:09 pm
You crack me UP:
Unfamiliar with your name. Would it be Fred?
@@
May 23rd, 2012
4:10 pm
(Reuters) – A judge on Wednesday gave prosecutors more time to assemble their case against two men arrested on terrorism-related and possession of explosives charges ahead of the NATO summit.
Sebastian Senakiewicz, 24, is charged with making a false terrorist threat, and Mark Neiweem, 28, is charged with attempted possession of explosives or incendiary devices in the days leading up the North Atlantic Treaty Organization meeting on Sunday and Monday, which drew thousands of protesters to Chicago.
Will they be holding them indefinitely?
schnirt
JDW
May 23rd, 2012
4:11 pm
@Tiberuis…”It’s pretty bad when you have to school liberals on the meaning of words when they start making up their own definitions.”
I think you need a bit of comprehension work before you take it upon yourself to “school” anyone. Unless it’s a class in how to be a pompous a$$ and then my friend you are uniquely qualified.
You crack me UP
May 23rd, 2012
4:12 pm
@@
Don’t post much at all, but read comments on Jay’s blog a few times a week. Unless someone is using more than one name I pretty much figured out who the regulars are and didn’t notice you posting
MarkV
May 23rd, 2012
4:13 pm
Austerity has failed in Europe. Kyle’s ridiculous article and bogus numbers cannot change that.
Romney’s business experience is irrelevant to governing the country.
You crack me UP
May 23rd, 2012
4:14 pm
Hopefully he didn’t give you the boot
East Lake Ira
May 23rd, 2012
4:14 pm
What a cesspool of racial animus, proud ignorance, and disproven economic claptrap.
Well done Kyle. Your fans are a true representation of what the GOP has become.
I feel bad for all of you.
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
4:25 pm
“Austerity has failed in Europe.”
MarkV, I suggest you re-read Kyle’s article of about 2 weeks ago showing austerity in Europe wasn’t actually tried.
@@
May 23rd, 2012
4:26 pm
You crack me UP:
Hopefully he didn’t give you the boot
I’m pleased to say, HE DID!!!
At Kyle’s request, I’ll engage in no further discussion on the topic. Something about jay being indefensible.
schnirt
Tiberius - Banned from Bookman's and proud of it!
May 23rd, 2012
4:26 pm
“What a cesspool of racial animus,”
And yet, the ONLY posters mentioning race are the liberals on this blog. Go figure. You can read, can’t you, Ira?
“proud ignorance, and disproven economic claptrap.”
Again, what else would you liberals post? It’s all you’ve got.
Dusty
May 23rd, 2012
4:37 pm
Sometimes I wonder what these leaders talk about at “economic summits”. I mean like the one just held at Camp David.
From what I read, Prresident Obama said that giving out government money (stimulus) was the way to cure a sick economy.. Mz Merkle, the successful German leader, said (more or less)” Are you out of your mind?”
Then the new French president charmed everyone and gave the straight socialist line in sweet Frencais, i.e. spend, spend, spend.! Nobody really had a solution. The closing motto could have been “Money grows on trees!”
Only the German could brag. So nobody agreed with her! I don’t know whether the Greek leader had enough money to get to the conference.
So it goes. Maybe we should send a warm hospitable message like “go home and quit spending!”. We can’t though. Our president won’t stop spending either..He doesn’t have time for such things. . It would interfere with his re-election campaign.
MarkV
May 23rd, 2012
4:43 pm
Tiberius @4:25 pm: “MarkV, I suggest you re-read Kyle’s article of about 2 weeks ago showing austerity in Europe wasn’t actually tried.”
If you have learned to read, you would have noticed that I had referred to that article in my post @4:13 pm.
yuzeyurbrane
May 23rd, 2012
4:49 pm
Solidifying the base is not a bad short term goal since that only leaves you a few points short of winning the election. It also fires up the troops which is just what you need to push over the goal line. Romney has been doing the same thing already with his base.
@@
May 23rd, 2012
4:57 pm
Obama team trumpets new polling on gay marriage
Support for abortion is down. I wonder how many gays opt for abortion? My guess? Not many.
Lil' Barry Bailout (Unexpectedly Revised Downward)
May 23rd, 2012
5:00 pm
Obozo: And so, if your main argument for how to grow the economy is I knew how to make a lot of money for investors, then you’re missing what this job is about.
——————–
I guess I missed the part where Romney said that.
Obozo: Liar.
At least Romney has that skill. We’re still trying to figure out what Super Capitalist Ultra Manly Obozo’s skill is. It certainly isn’t growing an economy, lowering unemployment, reducing deficits, or moving folks off the welfare rolls.
Dusty
May 23rd, 2012
5:04 pm
yuzeyurbrane. 4:49
Sure, firing up your base is standard election procedure. But the president has already been elected once and should have a fine record to show us. He was elected to run the country. Remember?
The Oval office should be the headquarters for the president to work with Congress and actually be a leader. I don’t think they even “dust” the Oval office anymore. Why bother?
Is it asking too much of the president to expect him to spend most of his time on the office of the presidency he already holds?
Romney’s record and methodology has to be established in the public eye. He has a good record but has to tell Americans more about it. Therefore I expect to see him often in many ways.
Leadership is a lost art in Washington. It is not there to see.