Why Bain Matters

That's a quote from President Obama's press conference this afternoon when he was asked about the campaign ads on Romney's experience at Bain.

This morning Ezra Klein made a pretty similar point.

Romney says he was in the “job creation” business. He wasn’t. He was in the wealth creation business, and when that meant firing people, that’s what he did — , and he profited handsomely from it.

On the other hand, many of the companies that Romney closed needed to be closed. It was better for them to die quickly, and for the money to go to productive uses in the economy, than for them to decline slowly. The Obama administration has presided over layoffs in the federal government, not to mention the auto industry, and it would surely argue some of them were necessary.

At its best, private equity acts as an accelerant of needed creative destruction. At its worst, it’s a particularly heartless form of vulture capitalism that kills companies that don’t need to be killed in order to enrich investors who are already very rich...

But the real problem with Romney isn’t what he did at Bain. It’s what he didn’t seem to learn from it...

What he could have learned from that experience is that, just as creative destruction is important for moving an economy forward, a safety net is important for catching those who are left behind. As head of Bain, Romney fired a lot of workers who were perfectly good at their jobs, who were committed to their companies, who had families they needed to support. That was his job as head of a private-equity giant. But his job as president of the United States would also be to look out for those workers...

That’s why the ads in which laid-off steelworkers say Romney just doesn’t care about people like them are so effective. As head of Bain, it was Romney’s job not to care about them. But as a presidential candidate, it’s his job to show that he does care about them. So far, he hasn’t.

There's nothing inherently evil about private equity firms. What the Obama campaign will do in the future is tie Romney's past at Bain to his proposals on the economy - pointing out that he learned all the wrong things from that experience when it comes to being President of the United States.