Posts Tagged ‘Bain’

How productivity creates jobs … and how gov’t stifles productivity.

July 17, 2012

Nice piece in today’s WSJ … here are snippets:

Punch line: Productivity — the ultimate engine of growth and better living standards — always  swims upstream against those that fight it. Unions, regulations and a bizarre tax code  lock in the status quo.

But, doesn’t productivity — getting more output with less inputs — destroy jobs?

Sure, but it creates way more than it destroys by creating technological avenues and lowering the cost of business

So how does productivity result in more employment?

Some new technology comes along that allows something never before possible. Cash from an ATM, stock trading from an airplane’s aisle seat, ads next to Google search results.

Cheaper technology becomes a platform for others to create or expand businesses that never before made economic sense. Think, eBay and Amazon.

Productivity  attracts capital to satisfy new consumer demands. In a competitive economy, productivity—doing more with less—always lowers the cost of products or services:

And, private investment does a better job of allocating capital than any elite economist or politician picking pork-barrel projects and relabeling them as “investments.”

Entire WSJ article is worth reading

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“You PE guys are a bunch of vampires … have any loose change?”

May 16, 2012

Monday was a great  day in the rough & tumble day in the world of presidential politics and candidates’ hypocrisy.

* * * * *
Monday morning

President Obama’s campaign launches an ad, “Steel,” attacking Mitt Romney’s record on job creation.

The two-minute ad focuses on GS Technologies, a steel mill in Kansas City that was bought by Romney’s private equity firm Bain Capital and went bankrupt soon after.

According to the Washington Post, the ad paints Romney as out of touch with the needs of the local workers and concerned only with Bain’s own profits.

“We view Mitt Romney as a job destroyer … a vampire. They came in and sucked the life out of us.”

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* * * * *
Monday afternoon

In rapid response mode, the Romney campaign also released its own web ad, “American Dream,” focused on a successful steel company invested in by Bain:

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* * * * *
Monday evening

According to the Weekly Standard, President Obama attended a fundraiser Monday evening in New York City  hosted by Hamilton E. James, the chief operating officer and president of Blackstone —  “one of the world’s largest private equity fund businesses”

This fundraiser-of-the day had a particular irony to it since earlier in the day Obama criticized private equity investors as vampires.

* * * * *

You just can’t make this stuff up …

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Newt’s brilliant plays … Mitt’s fumbles

January 22, 2012

First, the disclaimers ….

I had a Mitt ‘08 bumper sticker … he was my pick back then … he was my pick coming into 2012.

I think he’d make a good president … maybe even a very good president … not likely a great one.  Think Bush 41.

I think he’d get CEOs to start breaking ties in favor of hiring, I think he’d get domestic oil rolling, and I think that he’d bridge some of the divide between the left-right extremes (after all, he is a “Massachusetts moderate”).

Side note: When did “moderate” become a bad thing?

But, I gotta admit, I’m starting to have doubts.

First is the charisma deficit.

Even McCain could show some umph every now and then. Sure, be mature, be disciplined … act like the adult in the room … but, stop acting & looking  like a funeral director.  That blank stare during the debates is giving me the creeps.

Second are the bona fides.

I think Mitt’s smart, knows business and knows how to run organizations – public and private.

But, the storyline isn’t compelling to a vast majority who think that all business people are Gordon Gekkos … related to either “Chainsaw Al” Dunlop or Bernie Madoff … or both.

  • The Olympics turnaround was a clear success. 
  • But, the Mass governorship was equivocal – sold out some basic principles to get elected – signed some dreadful legislation – wasn’t likely to get re-elected – and shied away from the battle.
  • Solid exposure to business as a blue-chip consultant and investment firm honcho … but, didn’t run any businesses (except the capital firm) … and the job creation stats aren’t a “wow” … added 120,000 retail clerks at Staples and Sports Authority … big deal.

When was the last time you were in a Sports Authority? I thought they were out of business …

Third, are the elephants is the room.

  • RomneyCare … still hasn’t given a credible rationale for why he signed the bill and why he thinks the system is working … and, if it is, why he’d squash ObamaCare
  • Bain Capital … it should be easy to defend his Bain years and turn the experience into a positive … do it!
  • He’s in the evil 1% …  explain to people why that’s a good thing, not a bad thing … the debate point that he didn’t inherit his wealth was strong … but he didn’t go in for the kill
  • The tax returns … related to the 1% problem …  and compounded by Buffett’s “coddled” mantra and unseemly parking of dough in the Cayman Island … deal with it, man.  My advice: release your 2010 tax returns today … before the Tampa debates … and fight back like Newt would when pundits start picking lint off the returns.
  • The Mormon thing … it’s not a problem for me … I’ve worked with many Mormons and respect their basic value system – strong families, work ethic, community support, etc. … but, it’s an issue for many folks  … so deal with it head on … convince people that you only have one head and one wife … that chuch service is a good thing … that you don’t have to smoke & drink to be cool.

Fourth, is the overall strategy,

  • Raising money from the establishment, investing in a campaign structure, and then playing prevent defense just isn’t going to cut it. Gotta play some offense, man.
  • Going after Newt on historical nits is petty and won’t work … we know he was a philanderer; we know he was heavy-handed as speaker; we know that he took money from Freddie Mac.  Nobody cares, Mitt.
  • Show us that you really want to win this thing !

We’ll see in the next couple of days whether Mitt can regroup, turn it up an couple of notches and  play to win.

I’m still rooting for the guy, but my knees are getting wobbly.

* * * * *

Now, on to Newt.

I think he’d make the campaign against Obama very interesting … I think he’d lose (remember, half the country doesn’t pay income taxes and thinks gov’t dependency is a good thing, not a bad thing), and would make an awful president if elected … better than the incumbent, but too erratic for my tastes.

But, gotta tip the cap to the guy.

On balance, I think the Bain attacks were a mistake since they were largely unfounded and did present an anti-capitalist theme that Mitt should’ve pounced on stronger.

The debate ploy to attack the media on the open marriage question was a stroke of brilliance … took that issue off the table … elevated the media to bad guy status … and set a tone for the rest of the debate.

Well played.

Last night’s acceptance speech was also well done …  conciliatory to opponents … in Obama’s face … right tone and substance.

I was really struck by the new campaign themes that he rolled out: “Unleashing the power of the American people” and “Rebuilding the America we believe in”.

My opinion: Those are powerful battle cries.

And, by launching them last night, he pre-empted Obama’s state-of-the union which reportedly is going to be themed “Return to American values of fairness for all”

This could get interesting …

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