Why Romney can’t defend capitalism

July 31, 2012

When Fox News worries out loud that Mitt Romney’s failure to account for his time at Bain and his personal tax affairs may represent his Swiftboat moment, it is plain the Republican presidential bid has careened offtrack. The Bain attacks are “part of a strategy by Team Obama to turn Romney’s biggest perceived strength – his business experience – into his biggest weakness,” writes Fox’s Juan Williams. “Romney needs to come clean or his hopes of being president will end long before Election Day.”

How has Romney come so close to bungling his big chance, even before he has been nominated by his party? He appeared to be in an ideal position to turn his experience as a businessman into a winning political narrative. During these jobless economic doldrums, Romney might have become a champion of capitalism, explaining how private enterprise works and how it creates jobs.

His problem is that his time at Bain is not a classic story of heroic capitalism at work. Instead of an old-school entrepreneur with a good idea who raises funds to employ Americans to make a product that sells successfully around the world, Romney took distraught companies, charged them hefty fees, fired workers, and set the stumbling enterprise off in a new direction, laden with debt. Some companies prospered, some failed. Some gave Americans new jobs, some sent jobs overseas.

Romney’s tax embarrassment follows a similar arc. No one likes paying taxes, but conservatives have made tax dodging a religion, so Romney was in prime position to explain how taxing people too much can drag an economy down and how the rich, if lightly taxed, spend freely and create jobs. But the intricacies of Romney’s vast wealth are far from simple and his personal tax avoidance measures beyond ingenious.

There may be good reasons to hold a bank account in a tax haven like the Caymans, but most Americans don’t have reason to resort to such ruses. They suspect that those who help avoid the payment of taxes due in America are unpatriotic, even un-American. So how does Romney set minds at rest on his tax record? He doesn’t; he insists he will only issue two tax returns.

Many have a visceral dislike of Romney and his kind of well-heeled Republican. He is too rich, too smooth, too handsome. His family is too large and their vacations too extravagant. His privilege since birth has set him apart from ordinary Americans. His business at Bain was largely slaughterman’s work, taking unsentimental decisions about shedding jobs, incurring debt and closing plants. His private fortune is so substantial he employs armies of accountants to pick holes in the tax laws. He is prepared to say and do anything to get elected. Except for one thing: He won’t – or can’t – explain why capitalism is good.

Preaching the virtues of capitalism red in tooth and claw (to paraphrase Tennyson) is a hard sell at any time. Right now, in the midst of the most prolonged recession since the Great Depression, capitalism is in the self-immolating period Joseph Schumpeter cheerily dubbed “creative destruction.” If you believe what’s on the label, stronger, leaner companies will emerge from the wreckage, better fitted to the new competitive marketplace.

A leap of imagination is needed to grasp an argument that is so faith-based and counterintuitive. Not even Ronald Reagan, with all his persuasive eloquence, was able to convince Americans it was true: Closing companies and firing people leads to new jobs; outsourcing jobs overseas helps Americans get a job; free trade makes the whole world better off; and so on.

Romney hasn’t been helped in his task by those he beat to the nomination. Rick Perry describes what Bain does as “vulture capitalism,” picking the flesh off the bones of corporate corpses, while New Gingrich’s dark charge was that Bain was no more than “rich people figuring out clever legal ways to loot a company.” It is only a small step from such ferocious friendly fire to hostile questions about exactly when Romney left Bain’s employ, which disastrous Bain deals he was involved in, and which of the Bain companies he presided over fired people and sent jobs overseas.

For now, while Romney gaffes his way around the world, questions about exactly what he did in his Bain years and what taxes he paid before last year will remain unanswered. But damage has been done: The impression is that Romney’s vampire capitalism and his reluctance to pay his dues are hard to explain, even indefensible. Unless he returns to America in a more transparent mood and is prepared to open a decade of tax returns to scrutiny, he will be dogged by questions all the way to Nov. 6.

Nicholas Wapshott’s Keynes Hayek: The Clash That Defined Modern Economics will be published in paperback in September by W.W. Norton. Read extracts here.

PHOTO: Republican presidential candidate Mitt Romney delivers foreign policy remarks at the University of Warsaw Library, July 31, 2012.  REUTERS/Kacper Pempel


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To me, this not releasing his tax returns suggests that American citizens aren’t supposed to think intelligently about their vote before they pull the lever. That’s not how democracy works. The voters are supposed to be informed.

Posted by Siara | Report as abusive

Excellent article. Stay classy, Willard.

Posted by Adam_S | Report as abusive

Whapshot, isn’t it unpatriotic to call capitalism into question? The tricky thing is that so many people confuse the distinctions between capitalism, free-markets, and democracy, that they thing they are one and the same. So if Romney was a good capitalist, he must also be good at everything else. And what is really weird is that his work at Bain seems to be more important than his work as Governor of Massachusetts.

Instead of distancing himself from the Governorship, which is purely to please his conservative constituency, he should be highlighting his success in balancing the budget and passing universal health care. If elected, I suspect he’d be able to do everything Obama wanted to do but couldn’t because of political fighting.

Despite the rhetoric, they’re both moderates. The only real difference between the two men is that Obama is a fantastic orator with a fraction of the wealth.

Posted by LEEDAP | Report as abusive

The problem is that capitalism has warts, and all. That “heroic” capitalism isn’t really capitalism, but the consequences of certain business pursuits which also, unintentionally, have positive social consequences.

The reason Romney can’t defend capitalism — in the full-throated way the National Review has urged (the same conservative publication that advised him to release more tax returns) is that capitalism is ugly. It is not the glorified, flag-wrapped drivel some would have us believe.

I say this not because I dislike capitalism, any more than I dislike nature, which is also ugly.

Romney is a perfect capitalist: indifferent to social ramifications (let the housing market find its bottom, to heck with people on the streets; let GM fail, because the invisible hand knows best).

That is defensible, but political suicide.

My take on why those tax returns can’t be released: http://bit.ly/MI503w

Posted by johncabell | Report as abusive

The problems outlined above go deeper than Romney. They are fundamental problems with republican ideology. Giving the wealthiest 1% of people a special tax break (Romney pays 14%, working people pay 34%)…. doesn’t work as advertised. These tax cuts have been in place for over 10 years now and they clearly did nothing to create jobs here or opportunities. The richest 1% takes the money and runs to the Cayman Islands with it. Wouldn’t you? I don’t blame the rich for doing this. It’s smart. I blame the idiots who would elect them President while sticking themselves with a 34% tax rate to make up the difference. That’s the power of AM radio I guess. Worship the rich, spread fear about how the liberals will ban Christmas if elected, question nothing.

Posted by AlkalineState | Report as abusive

I thought that “Nature, red in tooth and claw” was Darwin, or perhaps Huxley. Maybe quoted by Tennyson?

The evolutionary metaphor is apt because capitalism’s good or bad aspects are often linked to perceptions of “social Darwinism” (which was NOT among Darwin’s ideas). The disagrements between right and left of center are much a matter of the scale of competition. Is the competition for success at the level of individual, family, or larger ‘tribes’ of town, state, country?

On the right the smallest scales are seen to respect self-reliance and individual initiative, but also argue for concentration and inheritance of wealth in the hands of Gov. Romney and others among the 0.1%, which may be detrimental to the larger country.

On the left there is more tendency to make the competition larger – better education, care for young and old, infrastructure, collective defense, all to allow competition at a larger scale.

The largest competition of the 20th century was tested at the level of nations and alliances of nations. The effort put into 1940s Navy training made a lifelong impression on my dad as did the opportunity affored by the GI Bill he used for college. Great prosperity followed a collective effort to train, educate and build that lasted through the 1950’s (despite shortfalls in civil rights etc – not a golden age, but definitely an age of widespread opportunity to enter and rise in the middle class).

We need to consider collective examples, from past homestead communities to modern Amish, to universal health care and education, to the largest military or construction endeavours, all of which argue for larger scales of teamwork and training, before we start applying the “survival of the fittest” rationalization for individual greed. This thinking brought us the original progressives like T.R., a fine Republican until the shifting standards of recent years. Thinking in larger scales brings regulations and laws, but also rights, courts and police; helping everyone succeed – in opposition to Ayn Rand and the idea of competition is best held at smaller scales with ‘every man for himself’.

Gov. Romney may be mute on defending capitalism because he’s caught between his past success with larger-scale thinking in Massachusetts and the ‘every man for himself, starve the beast’ mantra of his tea-party-shifted GOP base, and the short-term-profit work of Bain.

Posted by Decatur | Report as abusive

Decatur, that was astutely put. Thanks for the post.

Posted by AlkalineState | Report as abusive

I think all of this misses the point. The policies of the current President are awful, and he does not learn from his mistakes. When the country compares the two candidates, it will be a choice of failed policies and the hope that a change in the White House will provide policies that work.

A Presidential re-election campaign is supposed to feature the good job that the incumbent has done, which won’t work for this President. So far all the Obama campaign has done is try and direct attention away from the terrible job he has done in the past 3.5 years. The problem is they started too soon, and I think that by November the public will be less willing to overlook the current situation. Bain capital will be an old story. But the administrations performance will still be there, right in front of the voting public.

Posted by stevedebi | Report as abusive

Stevedebi, do you have examples of these ‘awful’ Obama policies? And Romney’s medicine for them?

Posted by AlkalineState | Report as abusive

Romney is pure greed and pure evil. The problems we are experiencing in the economy is that the wealthy class has once again gained control of the global economy and has caused it to crash solely by unrestrained speculation — just as they caused the stock market crash of 1929.

In the ensuing years of the Great Depression, due mainly to sensible banking and trade restrictions placed on the wealthy class, the damage to the US economy was contained — but not mitigated, which would have required significant changes in wealth distribution. This was never done, or the country would never have had to face the Great Depression.

In reality, it took the beginnings of WWII to provide the “natural bailout” which Bernanke, for example, has tried to do artificially since 2008.

It isn’t working, nor will it ever work.


Because the wealthy still retain ALL their ill-gotten gains, just as they did during the Great Depression, which is the real main reason the global economy languished for 10 years and did not recover until the “events” leading up to WWII forced a recovery.

The ugly truth is that until REAL DEMAND returns, by whatever means, there will NEVER be a recovery.

The eurozone bailouts will NEVER work because they are simply a continuation of the process of draining of the working class in each country to the wealthy class — this time, instead of “investment”, by increasing the debtload beyond the ability of any country to survive.

The problem is the wealthy class are doing just fine — just as they did during the Great Depression — the real truth about unemployment is that it is NEVER in their best economic interests to stimulate job growth among the working class.

Increasing real growth, which means decreasing unemployment, simply means more concessions that the wealthy class must make to the working class (e.g. the period of growth shortly after WWII saw an immense erosion of the wealth they had stored up from the excessive profits they had accumulated as a result of the artificial demand of WWII).

The object lessons of history are clear, if you care to read the lessons contained there. Increasing the power of the working class is NEVER good for the wealthy class, since it erodes their profits, mainly due to the demands of the working class for higher wages and benefits that are the basis of better living conditions for the working and poor classes.

The wealthy resent having to share their wealth with anyone, particularly the poor, since they don’t really deserve it — after all, if God had wanted you to live like a real human being (i.e. the wealthy lifestyle), He would have made you rich, either through birth or by rewarding your hard work (i.e. “entrepreneurship”).

The problem is that the wealthy don’t like to share their wealth, so this “up by your bootstraps” is mainly bullshit to keep the masses under control by giving them something to hope for, when in reality there is absolutely nothing to hope for for the vast majority of working class or poor behind the facade they project (e.g. the American Dream). Its ALL “smoke and mirrors” totally designed to keep you in your place and them in theirs, as God intended things to be.

In truth, the US middle class is an anomaly never seen before in US history, and the wealthy are very jealous of “their wealth” being squandered on the middle class. As a result, they are busily destroying the anomalous US middle class and converting them into the ever-growing US poor class, which obviously is where they rightly belong.

Many of the US tax proposals are aimed directly at destroying the middle class, just so the wealthy do not have to share their wealth with them any longer.

While it is true that the US middle class once served a “purpose” during the phenomenal growth years after WWII — the “purpose” being mainly to enrich the wealthy class by deliberately creating a consumer society like the world has never seen before — hence, the beginnings of the growth in “easy credit” to the great unwashed, which the wealthy are now deriding as a fundamentally bad idea since these people cannot be trusted with debt.

This, of course, ignores the many decades of responsible handing of debt by the US middle class, until, that is, the US banking regulations grew lax (by the deliberate undermining of the banking laws by the wealthy) and the Great Housing Bubble that ate the world began. In truth, it is the wealthy class that cannot be trusted with debt, since every time they obtain easy credit, they cause a bubble through reckless speculation and the inevitable crash, which the poor end up paying for one way or another. Does this sound familiar? It should, since it describes quite accurately the US and eurozone “financial crisis” as it exists today.

Historically, the “Great Enabler” for the resurgence of the wealthy class was the reemergence of a global economy that is reasonably safe for investment — due mainly to the collapse of the “Evil Empire” and the global communist movement, which was their main threat for much of the 20th century — there appeared far more profitable areas of the world to invest in (i.e. the Holy Grail of China and the 3rd world Asian countries).

THIS is why they no longer want to invest in the US economy, and US corporations would rather sit on their cash than invest it in the US economy. They KNOW the US economy is a zombie economy — one which they created due to their greed — and they are biding their time until conditions for them improve.

What is truly ironic is that it was the US middle class that gave them the phenomenal growth in profits after WWII, but then it became more profitable to invest elsewhere in the world — this coincided with the rise of “free trade is good for” you that the wealthy continued to chant ad nauseam, while as a direct result of free trade the US economy continued to lose irreplaceable manufacturing jobs that were the real support of US consumer spending — thus the wealthy class began the process of draining the US middle class of what they increasingly saw as lazy and indolent, and certainly not worthy of the benefits they were demanding in terms of (especially) health care and retirement. For example, the wealthy began to worry about what would happen to all their investment capital pool from the huge buildup of IRA accounts the baby boomers were amassing to help them survive in their later years (since, unlike European nations, the US has NO socialized system to take care of anyone who falls through the cracks). In fact, this became such an obsession, the wealthy began openly “worry” that the US economy could not survive this massive drain of capital (by its rightful owners, who more likely than not would be in desperate need of that money), so it must be stopped somehow.

(This is NOT the same issue as Social Security, but they are related concepts in terms of how the wealthy view all that money just sitting there doing nothing, especially since they could make better use of it for themselves.)

So the wealthy began to hate the middle class for taking away their profits and giving nothing in return.

Most importantly to the wealthy class, the rise of the middle class is a “zero sum game” that erodes their power — ultimately, power is really the “name of the game” — so with the rise of the middle class they become hampered in their pursuit of free trade with no rules (i.e. they believe in the survival of the fittest, and that doesn’t mean the working class).


Basically, what is good for the working class is bad for the wealthy class, and vice versa. That is the REAL “inconvenient truth” they don’t want you to understand.

All I ask (if you bothered to read this at all) is to think for yourself for a change. The evidence is all there — even in the wealthy-slanted history given to school children so they can be ready to accept their place in society as good little “worker bees”, and cause the wealthy no problems. Its the wealthy interpretation drummed into you since you were a small child that is the lie that must be overcome to understand what is wrong. But you are not children anymore, or are you?

Why has the world fallen apart so dramatically from the promised new start after the disaster of WWII? (this is very complicated, but I have given you some clues above, which is all I can do given this venue.)

Why are the “solutions” proposed by the wealthy class not working, but in fact only making things much worse for everyone else. (This is relatively simple. The wealthy class were caught off guard by the collapse of the global economy — mainly because their greed blinds them to reality — and now they are desperately trying to make sure their ill-advised investments are safe. At your expense, of course.)

Why are the wealthy prospering when everyone else is dying — the irrefutable proof is the stock markets which have made a truly miraculous recover — yet NO single economy (except China, where most of the wealth has gone) is showing ANY signs of recovery. (Because the wealthy totally control the global banking system, which by definition is beyond any control by any one country, thus it has become the complete unfettered free trade of the 1920s all over again. The solutions then, as now, are to regulate banking and trade so that it reverts to what it should be — a factor in growth for the economy — and not what it is now.)

The short answer to these questions, and a whole lot more of the world’s economic problems, if you stop to think about it, is simply: “IT’S THE WEALTHY, STUPID!”.

Romney and his crony capitalists are vultures picking apart what remains of the global carcass they managed to kill through their unremitting greed.

Posted by joelrain | Report as abusive

Mitt Romney can’t defend capitalism because he isn’t a capitalist, he’s a Neo-Liberal.

Posted by zhmileskendig | Report as abusive

This is one of the most important articles I’ve read.

How this “scum bag” got to be the Republican nominee is beyond belief.

They might as well have nominated the cross breed of Daddy Warbucks and Gordon Gekko with just a bit of Gilded Age, William A. Clark thrown in for good measure.

As a result, I no longer consider myself American.

Posted by Lord_Foxdrake | Report as abusive

If you are not prepared to have your private life made public, then you are not prepared for public office. Like it or not, that’s the way it is.

Posted by manfromutopia | Report as abusive

No matter how bad Romney is, he is infinitely better than the person currently residing in the White House. In the usual election choice of picking the lesser of two (2) evils, the current President is definitely the greater evil.

Posted by kevin2oh | Report as abusive

The question is more: what kind of capitalism can Gov. Romney defend? Norman Rockwell capitalism works when the “honest big government” of laws, regulations, courts, food & drug testing etc., workd to restrain avarice or cheating. Too-big-to-fail crony lobbysit capitalism thrives when the govermnent oversight is cut away.

Put another way with a tenuous nod to Tennyson and Robin of Locksley: the capitalism of the honest 99% of “saxon” merchants and artisans protected by good King Richard or the corrupt, venal “norman” 1% in league with King John?

Rebuttals to this about the market ensuring voluntary honesty don’t have much real-world basis, since the ‘big honest government’ provides the framework for fair competition. This is the environment in which the American pendulum has swung since we chose federalism – always a capitalist country, even now and in the future, but sometimes prey to unrestrained behavior, sometimes more secure with excess reined in. Never the most unrestrained, corrupt crony “capitalism” that’s seen in former commnunist or colonial countries.

Other people have refernced gilded age excess; there seem to be fewer examples of the other extreme, and those were corrected faster, but they do exist (FDR and air mail contracts for example).

Posted by Decatur | Report as abusive

No one can defend capitalism.

Posted by DeSwiss | Report as abusive

Capitalism is intentionally modeled for our primal anamalistic inherent tendencies, both individual and tribal.

Gatherers, Hunters, and Poachers.

What level of civilization do we want, low or go higher.

Posted by Flash1022 | Report as abusive

Capitalism or Greece. Capitalism or Spain. Capitalism or Italy. Not a hard choice. Time to throw out Obama and his socialist ideas.

Posted by Willie12345 | Report as abusive

If we had the luxury of selling off underperformers like Alabama and Kentucky to a Chinese hedge fund…. Then Romney’s skills might be great. Unfortunately, we’re stuck with the incest states and the othere charity cases of red-state America (Kansas drought relief checks, Oklahoma drought relief checks, Nebraska ethanol checks, you get the idea). That’s part of the deal and I don’t think Romney can handle much more than enriching himself. A good skill, but not a Presidential priority.

Posted by AlkalineState | Report as abusive

Beautifully written, crisp and pithy – although it does serve to indict Romney, even skewer him.

Posted by Global55 | Report as abusive

The typical scenario for Bain Capital and the like is to take over a troubled company whose management has put-off the hard decisions—operations need to be shut down, workers need to be laid off, etc. The takeover companies are then the bad guys when they do what is required to save the patient. Do takeover companies always do the right thing? Of course not.

Although not popular now, I fundamentally believe Capitalism and Joe Schumpeter are the right path. I have seen it work. (go to http://unrepentantcapitalist.blogspot.co m/ and look for the Aug 21, 2010 posting. Article is called ‘the US is losing too many jobs’)

I wish Romney could use his time in the spotlight to articulate why Capitalism is the right way forward, but I fear he can’t or won’t.

320 million people and these are the two best we can come up with?

Posted by jambrytay | Report as abusive

jambrytay, the additional problem is a takeover company pocketing what ever money that’s left in the company coffers, putting it in an offshore bank account (so that it no longer exists on paper) and then defaulting on the employee pensions, vendor bills and creditors that were the obligations of the company they just took over. The new outfit files bankruptcy because…. “Look, we have no money.”

The reason this looks bad is because it is bad. It’s legal. And I don’t even fault Romney for doing it. If he can live with it, more power to him. But to then ask us to vote for him because of his ‘business experience?’ It’s like voting for the guy who sends you Nigerian wire fraud scams. Just because he makes himself some money and finds a loop-hole to do it does not mean he should be running the United States.

Posted by AlkalineState | Report as abusive


I don’t think the pillage and plunder scenario you describe is typical. Does it happen? Yes. Is it typical? No. I’ve seen a few of these private equity firm buy-outs up close, and I saw changes that needed to be made and everyone knew it. Painful? Yes. Necessary? Yes. Was the company left in better shape? Yes. Did the private equity guys make money? Yes.

Posted by jambrytay | Report as abusive

America had already tried Ayn Rand’s version of heartless capitalism even before she wrote about it in her books. It caused the Great Depression. Franklin Roosevelt had a better version of capitalism. Americans at the time must have liked it because he was elected to four terms as President. FDR said,
“The royalists of the economic order have conceded that political freedom was the business of the government, but they have maintained that economic slavery was nobody’s business. They granted that the government could protect the citizen in his right to vote, but they denied that the government could do anything to protect the citizen in his right to work and his right to live.

Today we stand committed to the proposition that freedom is no half-and-half affair. If the average citizen is guaranteed equal opportunity in the polling place, he must have equal opportunity in the market place.

These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the flag and the Constitution. In their blindness they forget what the flag and the Constitution stand for. Now, as always, they stand for democracy, not tyranny; for freedom, not subjection; and against a dictatorship by mob rule and the over-privileged alike.

The brave and clear platform adopted by this convention, to which I heartily subscribe, sets forth that government in a modern civilization has certain inescapable obligations to its citizens, among which are protection of the family and the home, the establishment of a democracy of opportunity, and aid to those overtaken by disaster.

But the resolute enemy within our gates is ever ready to beat down our words unless in greater courage we will fight for them.

For more than three years we have fought for them. This convention, in every word and deed, has pledged that the fight will go on.

The defeats and victories of these years have given to us as a people a new understanding of our government and of ourselves. Never since the early days of the New England town meeting have the affairs of government been so widely discussed and so clearly appreciated. It has been brought home to us that the only effective guide for the safety of this most worldly of worlds, the greatest guide of all, is moral principle.

We do not see faith, hope, and charity as unattainable ideals, but we use them as stout supports of a nation fighting the fight for freedom in a modern civilization.

Faith – in the soundness of democracy in the midst of dictatorships.

Hope – renewed because we know so well the progress we have made.

Charity – in the true spirit of that grand old word. For charity literally translated from the original means love, the love that understands, that does not merely share the wealth of the giver, but in true sympathy and wisdom helps men to help themselves.

We seek not merely to make government a mechanical implement, but to give it the vibrant personal character that is the very embodiment of human charity.

We are poor indeed if this nation cannot afford to lift from every recess of American life the dread fear of the unemployed that they are not needed in the world. We cannot afford to accumulate a deficit in the books of human fortitude.

In the place of the palace of privilege we seek to build a temple out of faith and hope and charity.”
http://www.austincc.edu/lpatrick/his2341  /fdr36acceptancespeech.htm

Posted by wrylyfox | Report as abusive

Capitalism or Socialism?

Can someone please tell me which Socialist country we are striving to emulate? and why?

I am voting for the capitalistic (success) Romney
Not the socialistic ( everyones the same – government knows best) Obama…

but, just so I can understand, which current socialist country is held up as our exemplary goal to strive for?

Posted by 100MPS | Report as abusive

What a load of tripe. Mitt Romney is NOT the problem. While Obama cannot be entirely blamed for the break-down (although he was a Senator, thus part of the problem), he and his ridiculous policies are to blame for the lack of a recovery. His attempts to replicate the failed European model of “social democracy” are meeting with predictable results, along with his pathetic foray into class warfare. I’m sorry, but there truly is no free lunch and Obama must stop pretending so. Stop trying to turn the safety net into a hammock and we shall all be better off.

Posted by Energyguy | Report as abusive

Well met, Wrylyfox. FDR 2012.

Posted by AlkalineState | Report as abusive

jambrytay, again. When Romney announces that he’s prepared to shut down Alabama and Kentucky for their chronic underperformance, get rid of the people there, and sell off the real estate and assets to an overseas hedge fund…. we’ll accept that his particular brand of ‘business’ experience is relevant to being President of the United States. I’m not holding my breath. Romney has been a little light on the specifics.

Posted by AlkalineState | Report as abusive

Loose labeling or false either-or choices don’t help. We’re not deciding between socialism and capitalism in this election, or likely ever in the U.S. We’re debating what kind of capitalism we have in our capitalist (not socialist) USA.

For 200+ years it’s been a regulated capitalism here, subject to taxation under federalist government.

While businesses chase growth overseas, they also bump into the major problems of countries that lack the institutions we have to regulate capitalism, to provide a level playing field, to discourage cheating, to protect property, etc. Some multi-billion dollar big businesses efforts failed, pulling out of Russia, China, and elsewhere after chasing ‘cowboy capitalism’ or ‘communist-state-capitalism’ growth appeal, before little or no ‘rule of law’ in the new markets washed away the best-laid plans.

The politicians claiming capitalism is under attack are the same ones who want to gut the rule of law that keeps the ‘invisible hand’ honest and above-board. We did fine for our decades of greatest 20th century success with higher upper tax bracket rates, stronger regulations and simpler financial accounting.

Now the thirty years of pressure to deregulate, to lower top taxes, and cut government have left the middle class (including most small business) and poor with income and wealth levels flat, while the 0.1% top cats who are preaching this trend of “less government = more capitalism” have seen wealth and executive pay balloon over the same 3 decades. Demand is down and recovery is delayed because of reduced opportunity and income for 99.9% including our middle class.

The number of financial scandals in recent headlines about new cheating or scams, coming to light just 4 years after the 2008 financial meltdown, also support the idea that we’re better off as a nation with a fair, regulated capitalism rather than trying to play the game without rules or referees.

Posted by Decatur | Report as abusive

Decatur – well said. However some additional caveats about American capitalism; the US economic model has never been one of ‘Free Markets’, or business competing and the ‘best’ surviving or a self-correcting marketplace, where consumers decide winner-loser businesses or any other like claptrap; trickle down or supply side economics. Graft and political cronyism walked side by side with the Industrial Revolution and rewarded politicians and Robber Barons alike; that alliance evolved into the interdependence of today, where government subsidizes multinational corporations by legislative intent and tax code giveaways. The same corporations bitterly complain of over taxation and excessive regulation while shifting environmental impact expense to the public sector and buying political favors to increase revenue.

What has become increasingly obvious is that Capitalism, if unregulated and unrestricted by laws and vigorous oversight can and will undermine and subvert the governing structure and processes that allowed their formation. The very essence of the American Dream is social and cultural equality; a society where wealth and power is held by 1 percent of the population and the remainder are bound by economic chains, politically manipulated and legally disadvantaged is doomed to fail; it’s just a matter of time.

Posted by JBltn | Report as abusive

I would respectfully suggest that the contributors to this article have not addressed the core issues and are not properly comparing apples with applies in their discussion.
[1] As a general statement a company is a separate legal personality and is an entity in its own right separate from its shareholders.

[2] The obligations of directors and a CEO of a properly structured company have a legal and primary responsibility to the company first and shareholders and employees second.

[3] That responsibility requires the financial protection of the company over and above obligations to any other stake holder.

The legal requirements of the empowered CEO and MD have therefore a conflict of interest in providing protection and job creation for employees where the life or existence of the company is exposed.

As I understand Romney did not fail in his obligations to his company. While it may be totally unsatisfactory and financially devastating to the US employee that jobs were lost and jobs exported the complaint has to be with the company structures and the law around the operation of those structures.

Until the world creates or develops a new company structure that gives legal force to the employment and creations of jobs of similar or equal value to the company responsibilities as an individual entity then any criticism of a CEO {Romney} is probably less than fair.

In New Zealand we have the same problems and to date have not sought to create a legal entity that seeks to protect and enhance employment and social responsibility. US companies operating in NZ place the health of their NZ registered company over and above the responsibilities to the employees.

I would urge you to address the issue of company structure and not the results of company operations.

Posted by Zykon | Report as abusive

As you may not trust less regulated businesses; I do not trust a less regulated government.

State Capitalism is the new term for Communist China and others;

Regardless of the terms and labels used what is Obama’s end game.
When all the change is done and we are looking at the final product…what will it look like? where exactly are we going, toward a specific already proven model or toward a purely theoretical construct that may or mnay not work as planned in real life.

Posted by 100MPS | Report as abusive

Posted by Global55
“Beautifully written, crisp and pithy – although it does serve to indict Romney, even skewer him.”

if the large Media switched to a more conservative presentation of the news / opiniions / and so forth. (or non partisan) And skewered Obama instead…maybe pieces such as this would not be considered so beautifully written after all.

In the world of capitalism’s evils; there is silence from the ‘Main-Stream” media about Obama’s mis-steps or their own.

The most un-regulated of all capitalistic ventures is the media, as they (like Obama) remain unchallengable even though they are also in the top 1% as well.

I don’t automatically beleive any capitalist media (or other corporations) just because they tell me what I want to hear, or persuade me that their opinions are facts.

Posted by 100MPS | Report as abusive

Very well written and objective article. If you are going to talk the talk… you better have walked the walk!

Posted by abkisa | Report as abusive

It is interested that you find it necessary for Romney to have to defend capitalism. Defend capitalism.

Only in the half twisted sideways world of the liberal press does anyone have to defend capitalism.

How about we accept capitalism as the tried and true form of opportunity for humans?

How about somebody on the left require some defense of socialism? Based on the obvious failure of the socialist agenda, the millions starved to death, the millions who disappeared, the tens of millions killed in and by socialist governments as the population soured on the experiment, and the unquestioned damage to a human’s dignity and self worth living in a collective form of economy.

Posted by styrophome | Report as abusive

Romney cannot defend it because he really knows America does not use capitalism anymore…we operate with a highly managed and manipulated form of reverse fascist, psuedo-capitalism. He and those that are paid to make money for him, use the system to manage and manipulate exotic financial instruments for personal gain at the expense of “the people”.

Posted by mojobeefbone | Report as abusive

[…] capitalist. One’s a liberal, the other a conservative. Don’t expect those who pose as respectable columnists at Reuters to be any […]

Posted by In Defense of Vampire Capitalism | Existence Exists | Report as abusive