Why Romney Stumbled in Blighty

I would only add that, along with relationships, even the Robber Barons of the 19th Century left major institutions in their wake: Steel mills, railroads, massive factories and refineries. While Romney, and the rest of the leveraged buyout gang, will largely leave nothing but empty buildings, ruined lives, and of course, lots of money in Swiss bank accounts.

By Paul Krugman:

Fred Kaplan has what I think is the best take so far on Romneyshambles:

The thing that Krauthammer doesn’t get is that Romney is not the sort of businessman—that his brand of capitalism is not the sort of enterprise—that requires even the most elementary understanding of diplomacy, courtesy, or sensitivity to other people’s values, lives, or perceptions.

The American capitalists-turned-statesmen of an earlier generation—Douglas Dillon, Averell Harriman, Robert Lovett, John McCloy, Dean Acheson, Paul Nitze—took risks, built institutions, helped rebuild postwar Europe, befriended their foreign counterparts: in short, they cultivated an internationalist sensibility at their core. Whatever you think of their politics or Cold War policies generally (and there is much to criticize), financiers formed an American political elite in that era because finance (through the Marshall Plan, the World Bank, the IMF, and so forth) was so often the vehicle of American expansionism.

By contrast, private-equity firms, such as Bain Capital, where Romney made his fortune, tend to view their client companies as cash cows, susceptible to cookie-cutter formulas from which the firms’ partners reap lavish fees, almost regardless of the outcome. Their ends and means breed an insularity, a sense of entitlement, a disposition to view all the world’s entities through a single prism and to appraise them along a single scale.

I would only add that the bankers of yore operated by building relationships; Bain made its investors money in large part by breaking relationships, e.g. by walking away from implicit promises to workers. It’s not a style that makes for good diplomacy.

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