Special Report

Anti-Romney — Or Anti-Capitalism?

Newt Gingrich's lowest, cheapest, most immoral blow yet.  

By 1.10.12

Send to Kindle

I've never seen a baseball player get three strikes on one pitch, but former Speaker of the House Newt Gingrich just accomplished the political equivalent. During a Sunday morning Republican debate in New Hampshire, Gingrich suggested that a Super PAC supporting him will be attacking former Massachusetts governor and venture capitalist Mitt Romney's business history.

Strike one: As Quin Hillyer notes, Gingrich may have inadvertently tipped his hand exposing illegal coordination between his campaign and a PAC.

Strike two: Regardless of the impact of criticisms by Newt-backers on Romney, Newt has shown himself to be too bitter, petulant, and vengeful -- in short, too immature -- to be a serious candidate for the presidency.

And -- the most important and least discussed -- strike three: The PAC's impending assault combined with Gingrich's words during Saturday morning's debate that "I think it's a legitimate part of the debate to say OK on balance are people better off by this particular style of investment?" show less an attack on Romney than attack on capitalism itself, something that should be anathema to a self-described "Reagan conservative."

Newt Gingrich's apparent point -- the same one we already know Democrats will attempt to use against Romney should he become the nominee -- is that in Romney's career as an investor at Bain Capital, he occasionally had to fire some of a purchased company's employees in an attempt to turn around a troubled situation.

If Gingrich's claim is that making money should be done with zero negative impact on others, it is, if you'll pardon the pun, particularly rich that the Super PAC about to attack Romney is being funded by a $5 million donation from Sheldon Adelson, Chairman and CEO of the Las Vegas Sands Corporation. Las Vegas Sands, which owns and operates casinos in the U.S., Macau, and Singapore, reported 2010 revenue of $6.85 billion and net income of $599 million -- all generously received from gamblers big and small. If there were ever a business likely to do financial harm to its customers, it's the casino business -- and I say that as someone who has been to Las Vegas many times, enjoys a wager as much as the next guy, and does not begrudge the company a penny of its profits.

But think about Gingrich's words: "on balance are people better off" due to Romney's "style of investment"? There is so much wrong with the question that it's hard to know where to start.

First, who is Newt Gingrich, whose entire life has been in politics, academia, and self-promotion, to offer judgment on how businesses are or should be run? Gingrich's qualifications in this area are little better than Barack Obama's, but at least Gingrich's self-promotion was done a few times through for-profit companies which appear, in total, to have hired a few dozen people -- and fired some of them when Gingrich Communications was shut down last year when Newt announced his campaign. I don't buy into the idea that a business decision is better if it helps others more than it helps you, but at least Romney's job firings were done to protect the jobs of others as well as the investments of those who trusted Romney. Newt fired people just so he could run for office. What's good for the goose, Newt?

And by the way, Newt, what "style of investment" do you want to recommend as comporting with your holier-than-thou approach to business ethics -- one that perhaps does not require trading on political influence and connections the rest of us don't have, and which were not the foundation of Mitt Romney's financial success (quite different from, for example, collecting $1.6 million from Freddie Mac for "advice as a historian")?

Second, is it an appropriate question to ask, especially for a conservative? Shouldn't the right question be, "Did Romney do what he promised his investors he would do, while staying within the law?" Is Mr. Gingrich suggesting that Romney should have treated investors -- to whom he had a fiduciary duty -- worse in order to live up to Gingrich's cynical implications regarding the morality of business? To put it another way, if I told you that someone said that a business should operate in a way that makes the nation "better off on balance," would you assume it more likely to have come from Ronald Reagan or from Benito Mussolini?

How different is Gingrich's formulation from Mussolini's description of a corporatist state in his 1935 book Fascism: Doctrine and Institutions? To wit, "In view of the fact that private organization of production is a function of national concern, the organizer of the enterprise is responsible to the State for the direction given to production." Mr. Gingrich may never honestly call himself a "Reagan conservative" -- or any other kind of supporter of liberty and free markets -- again.

------ Intermission ------

On Monday, Mitt Romney said when discussing purchasing health insurance that he "likes being able to fire people who provide services to me." While the context was being able to change insurers if they're not providing good service -- and the incentive that that possibility instills in providers of services -- Romney's opponents wasted no time taking his remarks out of context, making it sound as if Romney was making a blanket statement about relishing firing people.

Jon Huntsman knew he was wildly misconstruing Romney's words when the former said that "Gov. Romney enjoys firing people" which, even out of context, Romney didn't say. But putting aside that such an interpretation was clearly not what Romney meant, even if he had said "I like being able to fire people" as a more general statement, one has to wonder what his critics would propose as alternative. Should a businessman not be able to fire people? Once again, Mussolini's heart warms at the words of Romney's critics.

That said, Romney's words will be referenced or replayed out of context by each opponent he will face over the coming 10 months; it was perhaps his first important gaffe of the campaign even though an honest observer would find his statement unremarkable. When it comes to dishonest observers, it's hard not to think "With Republicans like these, who needs Democrats?"

------ End Intermission ------

Third, Gingrich's question has no objective answer -- exactly the kind of question we therefore expect from the left whose haters of capitalism see its "creative destruction" but can't see or think past the second word because when in the realm of entrepreneurship or even basic economics, they have no grasp of the first. Who is to judge whether we are better off "on balance" due to any particular business decision? Surely the Obama Administration would like the answer to be government; by his anti-capitalist attack on Romney's former business Newt is playing right into Democrats' hands, not just giving them electoral ammunition but erroneously implying that Obama's own intense anti-capitalism has even a shred of moral or logical foundation.

Fourth, what is Gingrich's implication for public policy? Nobody disputes that Bain Capital's intention when firing people was to preserve an operating company so that profits could be generated -- without which 100 percent of that company's employees instead of some much smaller fraction would have lost their jobs. If Gingrich says that approach is wrong, then is he suggesting that the work force of the federal government should also not be shrunk regardless of the possible efficiency gains and benefit to taxpayers (the analogues to investors when it comes to government except that we always operate at a loss)?

After all, when a government worker loses his job, he is (at least in the short run) worse off, even though the thousands or millions of people paying his salary are, at least financially, better off. But the worker is losing thousands of dollars while each of the rest of us may be losing a penny. Would Newt then claim that we are not better off "on balance" and thus argue for never firing anybody? If he would claim it, he would be wrong -- not just economically but morally, since forcing a person to spend his money on something he doesn't want to buy (whether an employee's services or health insurance) is one baby step away from slavery and zero steps away from economic fascism. But even if he were right, what "solution" could Mr. Gingrich plausibly suggest other than one that would make Il Duce smile?

Gingrich and the casino-funded Super PAC supporting him are less attacking Romney than attacking free enterprise. It is a shameful, petty gambit by the former Speaker, a man who constantly claims to be running on "big ideas" and "big solutions." Newt Gingrich's involvement in the assault on Romney's business career may prove to be illegal and politically unwise. But worst of all, it's immoral.

Like this Article

Print this Article

Print Article
About the Author
Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He is the host of The Ross Kaminsky Show on Denver's NewsRadio 850 KOA on Saturday mornings from 6 AM to 9 AM. You can reach Ross by e-mail at rossputin(at)rossputin(dot)com.