Friday, May 25, 2012

‘Just the Way Business Works’

    In the midst of all the talk of private equity, vampire capitalism, anti-Robin Hoods, and even apple-and-coconut comparisons, perhaps the voice of reason needs to cut through all the hyperbole and put the entire matter into perspective:
Now, we knew from the start that [it] was going to entail some risk, by definition. If it was a risk-free proposition, then we wouldn’t have to worry about it. But the overall portfolio has been successful. It has allowed us to help companies... It’s helped create jobs. There were going to be some companies that did not work out; [this] was one of them. But the process by which the decision was made was on the merits. It was straightforward. And of course there were going to be debates internally when you’re dealing with something as complicated as this.  

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        There are no guarantees in the business world about success and failure.  That is just the way business works, and everyone recognizes that...  you cannot measure the success based on one company or the other.

So, is this Mitt Romney explaining what happened in the case of Bain Capital and GST Steel?  Or a Romney spokesman patiently explaining private equity to some journalists?  No, actually the first quote is from President Barack Obama, and the second from Press Secretary Jay Carney.  Both are addressing the failure of solar-panel maker Solyndra, which, despite a $535 million loan guarantee from the government, filed for bankruptcy in 2011, laying off 1,100 workers in the process.
    In a quote reminiscent of the Bain Capital commercials the Obama administration has been running against Romney lately, "'I was told by a security guard to get my [stuff] and leave,' one [Solyndra] employee said."  However, as Jay Carney said, "you cannot measure the success based on one company or the other."
    But that was last year.  And besides, the Obama administration was only trying to save the planet.  Romney just wanted to make money.  As I said at the beginning, it's all about perspective.  And there's nothing like an election to bring things into focus.

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