Mitt Romney’s rivals this week intensified their attacks over business failures that happened on his watch at the investment firm Bain Capital. But even the successes touted by Romney’s campaign involved some painful decisions and layoffs.
Both the successes and the failures reveal the candidate’s faith in “creative destruction,” the notion that the new must relentlessly replace the old so that companies and the economy can become more efficient.
The concept is gospel to many businesspeople. But its intersection with politics has created what may be a recurring line of attack against Romney’s record.
Romney’s approach is visible in the three big Bain investments he trumpets in his official biography as evidence that he knows how to create jobs. The companies — Staples, Sports Authority and Domino’s Pizza — are well-known consumer brands, and the campaign has gone so far as to say that Romneyhelped create 100,000 jobs through his work related to those businesses.
But like Romney’s work on all the businesses Bain invested in, the primary goal with these companies wasn’t job creation but making them more profitable and valuable. This meant embracing aspects of capitalism that have unsettled some Americans: laying off workers when necessary, expanding overseas to chase profits and paying top executives significantly more than employees on lower rungs.
Supporters of Romney rival Newt Gingrichreleased a video on Wednesday accusing the former private-equity financier of laying off workers and profiting from the results. Yet Romney has never shied away from proclaiming his belief that job cuts are sometimes necessary.