Capital Confusions over Bain Capital

Today POLITICO Arena asks:

Are Romney’s GOP rivals smart to continue their attacks on capitalism that have so far fallen flat? Would this theme be any more effective for the Obama campaign?

My response:

The Gingrich and Perry attacks on Mitt Romney’s work at Bain Capital are appalling. We expect that from Obama – as in yesterday’s “insourcing” press conference – because his understanding of how markets work is so slim and everything, for him, is politics. Those in the party that purports to stand for free markets should never stoop to such shameless pandering.

Steven Rattner’s piece in POLITICO this morning nicely summarizes the facts surrounding Romney’s work at Bain Capital. And yesterday my colleague Steve H. Hanke pointed to a more detailed study issued recently by the National Bureau of Economic Research, “Private Equity and Employment.” As Rattner puts it, Bain Capital’s record “was extraordinary, among the best in the business.” Yes, restructuring companies may cost jobs. Letting them fail does too – but also costs those who’ve invested in them, many of whom are or will be small retirees. At least Romney did it with private funds, not with taxpayer money or regulatory protections. That’s how capitalism works, for the benefit of all of us.