by Cameron Reddy,
Clash Daily Guest Contributor
I was having a nice political discussion the other night when a friend’s date failed to realize he was speaking to a bunch of conservatives and let it rip about Romney and Bain Capital:
“Oh, Romney raped them, took their money, and left them for dead. People even died as a result. They did! That’s all Bain does… blah, blah, blah…”
He went on for a while, oblivious to the fact that he was about to be eaten by a shark (that would be me).
These are always tense moments for my friends. They know me, you see, and they know I’ve published a novel about these matters. I glanced across the table and could see eyes wide and pupils dilated in expectation of the conversation becoming very uncomfortable for our new friend … They were collectively holding their breaths.
Alas, it is hard for me to be restrained when I hear such drivel. But as I get older and wiser, I’m learning to tell myself in such situations: “The poor guy is just misinformed. He listens to ABC, CBS, NBC, MSNBC, and/or CNN. He doesn’t get all the facts, and what facts he does get are so colored with bias, they have little resemblance to reality. “So, Cam,” I told myself, “go easy on him.”
I did the best I could.
I turned and looked into his eyes. I could see he was expecting to be affirmed (after all, I live in Ann Arbor, a cesspool of liberalism).
“John,” I said, “have you worked in the venture capital industry?”
He just looked at me. And blinked.
“John, have you ever been invested into by a venture capital company?”
I think he shook his head — but I wasn’t sure.
“John, have you ever been an executive at a venture capital company and therefore charged with the duty to maximize the wealth of your fund by maximizing the value of your investees?”
His mouth opened, but nothing audible came out.
“Look,” I said, with a softened tone, “I’ve been in all three positions.” (This was only a slight lie, as I wasn’t invested into, but I represented two companies that were.) I continued, “No venture capital company on earth would ever succeed — would ever be sought out by hundreds of companies — by doing what you claim Romney did with Bain. It just doesn’t work that way.”
The lady friend who was the date for this guy was now clutching his hand pretty hard, protectively and apparently fearful for his emotional health. So I tried to go even softer. I might have even smiled at him.
In my voice that I usually reserve for candle-lit moments in a corner booth way in the back, I intoned, “Think of it. Bain Capital is one of the most successful venture capital companies in America. Businesses clamor to be invested into by Bain. The list of businesses that Bain has taken to success is pretty impressive. Have you heard of Guitar Center? Cumulus Media? Burlington Coat Factory? Michaels crafts? The Weather Channel? Maybe Toys R Us? Staples? In all, there are more than 250 companies Bain Capital driven to success.”
I let that simmer for a moment before continuing.
“Yes,” I said, “venture capital companies come in and often take over a company by buying more than 50% of the stock. They sometimes put their people on the boards of directors, which in turn retain or replace management based on performance. The millions of dollars they invest are used to buy buildings and equipment, hire sales people, hire accountants, managers, and shop employees. Employees fan out to buy pads of paper, pens, file cabinets, desks, copy machines, fax machines, and computers. Delivery trucks are purchased. Truck drivers are hired… Employees pile out of the office at lunch and buy hot dogs, burgers, salads, and lots of coffee and soda. They visit hair salons and chiropractors. You see how this works?”
Finally, he spoke. “Ah, but what about all the plants that were closed and people thrown out in the streets?”
“Good question, John. You tell me why a venture capital company might decide to close a plant.”
Now obviously, good reader, John was not expecting to get a question to his question. Accordingly, I let it sit for a moment. Then I answered.
“John, the answer is pretty simple, isn’t it? If the goal is to build the company, what would be the rationale for moving operations to another location or even country?”
Of course, John knew this in his heart, and his eyes seemed like they were starting to water. Being kind-hearted, I quickly went on.
“The people in charge of maximizing the wealth of the company and thus the venture fund must examine what is working and what isn’t. Some product lines may not be making money, or may not be making money based on labor costs or plant inefficiencies. Plants are moved, renovated, or yes, sold. If competitors are using inexpensive labor overseas, to remain competitive it may be necessary to move operations out of the country. Remember, it’s all about delivering a competitive product at the best price. It’s all about the business making money.”
John’s eyes brighten at what he thought was a point to attack. He triumphantly exclaimed, “Aha! That’s it! It’s all about the money and no one cares about the people! Romney doesn’t care about people!”
I allowed him to swell in his mistaken pride for a moment — but just a moment.
“Well, John, I admit it must seem like that to the people put out of work.”
I looked into his eyes so he’d know that I wasn’t pulling his leg.
I reiterated and expanded. “It really does seem like that. It’s terrible, really, and a complete tragedy to the community. All the opposite of what I was just describing happens. Filing cabinets are emptied. Pads of paper are shipped to Mexico. Lunch hang-outs go out of business. Hair dressers start cleaning homes for spare cash. It’s horrible.”
John’s face brightened at that — I’m pretty sure he figured he suddenly had me. With a tinge of smugness he asked, “So, if they cared about people — if they really cared — they’d keep the plant open. Wouldn’t they?”
John put on a smile so big I felt almost like a bully for what I knew would remove it. “The answer, John, is the fact that America has made it harder and harder for a business to make money. We demonize success. Federal and state regulations are stupidly onerous. Frivolous lawsuits from plaintiffs’ attorneys are filed non-stop. Labor unions — and you know this is true — use work rules as weapons. John, we have literally chased industry out of the country. Now, regrettably, businesses that would like to stay here and employ Americans are forced to outsource labor just to remain competitive.”
To my surprise John’s smile didn’t vanish, and he quickly threw me a curve ball. “But what about Solyndra and that car battery company, A123 Systems, that just filed for bankruptcy? Those companies were trying to do it here and went out of business. Why doesn’t Bain help them?”
Ah, a Democrat ploy. Twist the issue and reverse the burden of proof … I’ve written about this at American Thinker in my creation of Saul Alinsky’s Rule 13, which states, in part:
“Confound the enemy with allegations he cannot possibly disprove.” Whenever possible, turn the enemy in on himself.
Understanding their ploy is only half the battle. We must know how to fight it — and we do so by understanding the issues. Thus, I replied, “That’s a different problem, John. That’s a problem of Obama trying to centrally manage an economy.”
John’s eyes waxed over a bit. I suspect he hadn’t heard that term used on the Huffington Post.
“John, in our free-enterprise system, entrepreneurs seek to make that which society wants and desires most. They must figure out a way to produce an item at a price that, one, people will pay, and two, will make a profit. They show a business plan to an investor, such as a venture capitalist, who takes a share of the company (in stock) for his money. You follow me?”
John very slightly nod his head, so I continued.
“But, since no one wants or desires electric cars, Obama has tried artificially to create demand for them by driving up the cost of energy. He has done this by cutting our oil exploration and shutting down coal-fired plants. He has fomented unrest in oil producing regions of the world. He also has supported oil drilling by countries that are not our friends in the hope that they will gain economic power and thus greater leverage to charge us more. Obama figures higher gas prices will make people want his electric car.”
“Now, John, to a point, he is right, of course. If he could get gas to $10 a gallon, his solar panel companies and his electric car plants might be prospering. But our economy would be totally destroyed. This is the fallacy of a centrally-planned economy. There are unintended consequences that the planners can’t envision, don’t understand, and therefore cause with catastrophic results.”
John’s eyes were not totally glazed over, so I decided to press the attack. “Just look at China. They literally have entire cities — malls — apartment complexes — roads — traffic lights — everything. But no people!! The cities are totally empty.”
John’s face screwed up a bit. “Really?”
“Why haven’t I seen any of this on the news?”
“That, John, is the best question you have asked. The simple fact is, if you knew the truth about socialism and capitalism — and about your guy Obama — you would have never sat down here and tried to make Bain Capital and Mitt Romney into monsters.”
Postmortem: John is a good sport and took his beating in stride. We are friends but will not likely again discuss Bain Capital. As time goes on, I will gently illustrate how leftist policies are destroying this country. Unfortunately, until we break the virtual monopoly the left has on the media and education, John and his brethren will go on happily voting for people and policies that harm this republic and the employers who sign their paychecks.
Mr. Reddy blogs at www.cameronreddy.com. His controversial thriller, “By Force Of Patriots,” crystallizes the social, political, and legal issues at the heart of America’s current angst. It’s available at Amazon.com. You can also read more and “like” his novel on Facebook.
Image: In search of the Maltese Falcon #13 – White Backed Vulture, Malta Falconry Centre;
uploaded by Babbage; author John Haslam; Creative Commons Attribution 2.0 Generic license.