January 11, 2012
Venture Capitalism v. Vulture Capitalism
Posted by Gordon Smith

Rick Perry is trying to label Mitt Romney and his old firm, Bain Capital, as "vulture capitalists," and Sean Hannity is not buying the rhetoric ... 

Ron Paul also came to Romney's defense against Perry, Newt Gingrich, Rick Santorum, and Jon Huntsman, all of whom are criticizing Romney's record at Bain. Ron Paul is right on this one. So is the WSJ:

Private equity helps to promote dynamic capitalism that creates wealth, rather than dinosaur capitalism of the kind that prevails in Europe and futilely tries to prevent failure. Sometimes this means closing parts of the company and laying off employees, but the overriding goal is to create value, not destroy it.

This debate will be with us through the general election, it appears, either because Romney figures out how to make it a plus with the middle class or because Newt Gingrich or President Obama figures out how to make it a liability for Mitt. While the particulars of many Bain investments leave some room for interpretation, the venture capital industry in the US has been the envy of the world, and the argument in favor of European-style capitalism seems especially weak right now. This should be a winner for Mitt, if he can make the connection to average voters.

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