Steve Jobs epitomized the kind of capitalism that made America great: creative genius, passionate attention to design and innovation, cutting- edge products that please tens of millions of consumers around the world. Mitt Romney epitomizes the no-sweat, no- risk rigged game of the private equity player: “strip and flip” profiteering on companies that others have built, with deal-terms that are fixed to return handsome profits to private equity investors even when companies they invest in fail. The game at Bain resembles nothing so much as well-heeled hunters at a private reserve, where “beaters” guide the prey into convenient spots to be shot by the “hunters”, yielding trophies with none of the messy trudging through the muck and cold.
Private equity executives and their conservative apologists assert that this activity is a necessary element in the process of “creative destruction”, delivering efficiency to the markets. It is nothing of the sort. Creative destruction is Craigslist overturning the newspaper classified advertising business; it is Dell Computer changing the landscape in the personal computer business; it is Amazon, Google , Facebook and the hundreds of tiny upstarts in Silicon Valley or Seattle or Boston that will one day break the oligopoly of big oil or big pharma with discoveries springing from the sweat and toil of true entrepreneurs.
Adding further insult to we commoners, Romney and other private equity and hedge fund managers enjoy extraordinarily preferential tax rates (only 15%) on their income from this business, in what must surely be the greatest corporate welfare tax scam in history.
But all this privilege is not enough for Mr. Romney, who dismisses critics of Bain as whining socialists promoting the politics of envy. No, Mr. Romney, not envy. What you are hearing is the sound – growing louder every day – of derision. And contempt.