Sunday, May 27, 2012

Creating A Storyline

Asked by CNN's Christine Romans "why is it not hypocrisy for the president to take campaign donations from private equity when he's attacking private equity and making that a central part of his campaign?" Democratic National Committee chairperson Debbie Wasserman Schultz responded in part

Accepting a contribution from a particular person involved in venture capital and criticizing Mitt Romney who has made his record as a venture capitalist at Bain the central focus of his credibility and his qualification for being president are completely different things.    Who contributes to Barack Obama has little to do with that because those contributors are not running for president.

"Who contributes to Barack Obama" would pertain to the President's "attack" on venture capital and taking "campaign donations from private equity when he's attacking private equity" would be hypocritical.... if Obama had attacked venture capital.   Initially, he stated

...And when you're president, as opposed to the head of a private equity firm, your job is not simply to maximize profits. Your job is to figure out how everybody in the country has a fair shot. Your job is to think about those workers who get laid off, and how are we paying for their retraining. Your job is to think about how those communities can start creating new clusters so they can attract new businesses. Your job as president is to think about how do we set up an equitable tax system so that everybody's paying their fair share, that allows us then to invest in science, and technology, and infrastructure, all of which are going to help us grow.

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. It doesn't mean you weren't good at private equity. But that's not what my job is as president...

Later clarifying his remarks, the President commented

My view of private equity is 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.  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.

Now it's not only Republicans, but also members of the mainstream media who are wrestling with the English language.       The primary objective of private equity, to maintain profits, "is a healthy part of the free market" which is "not unique to private equity."    In so doing, "there are times where they identify the capacity for the economy to create new jobs or new industries."
The President could have said "private equity is set up to maximize profits while incurring massive debt, generally cutting workers' benefits and jobs."    But he didn't.   He took pains not to criticize private equity, not to criticize Bain, and not even to criticize Mitt Romney.    Rather, he simply explained that the skills those managers display are not transferable to the role of a president, which "is to make sure the country is growing not just now, but 10 years from now, 20 years from now."

Or Obama could have proposed that Bain Capital make public (which, as a private company it is not required to do) a list of the companies it has purchased.    The President might have noted, as one union official has, that Romney's "entire management experience at Bain Capital is buying companies and loading them up with debt and then looting the balance sheet.    It's the very model that drove the American economy off the cliff then left other people to manage the wreckage."  

But President Obama decided, in part so there would be no contradiction between his analysis and acceptance of money and advice from the industry, to take the high road.    So, too, did Wasserman-Schultz, accusing Romans merely of "not just comparing apples and oranges (but rather) comparing apples and coconuts."    It was an accurate and polite response from someone who might have begun by observing that the premise of Christine Romans' question should not have been a simple restatement of a Republican talking point designed to excuse the looting of American jobs and pensions by multimillionaires.

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