COMMENTARY | After Newt Gingrich's poor showing in Iowa -- largely a result of attack ads broadcast by the PAC backing Mitt Romney -- it's only natural that Gingrich should attack Romney. However, the film the PAC backing Gingrich has produced misleads voters by muddying the realities of American business and Romney's role within it.
Winning Our Future, the PAC supporting Gingrich, has produced an online documentary with a trailer on YouTube. The film portrays Romney as a heartless job killer while CEO of Bain Capital. An off-screen voice says of Bain that "they fire people, they cut benefits, they sell assets." Clearly the film is meant to leave the impression Romney took defenseless American companies and bled them dry like an industrial-strength corporate vampire.
The film may be having an effect on the New Hampshire primary, where Jon Huntsman has made a recent surge. However, this portrayal of Romney as blood-sucking corporate raider is misleading in terms of what Romney and Bain Capital actually did.
An article in Monday's issue of The Wall Street Journal investigates Bain's investments during Romney's tenure as CEO, noting that "Bain's investing style ? particularly during the firm's early years, was focused on smaller and sometimes troubled companies that Bain hoped to fix or build."
This was a risky strategy. All of these companies were underperforming, otherwise they wouldn't have been targets for Bain in the first place. The process of making a firm stronger by definition means making it more profitable. That may involve merging it into another firm, changing its operations, reducing expenses-any one of which may involve reducing its workforce, perhaps drastically.
So what's worse? Simply letting the company fail, pushing all its workers into unemployment? Or letting go some workers to make the firm more profitable, maybe even bringing it to the level of the "screaming success" that several firms saw under Bain, according to a University of Chicago finance professor quoted by the Journal?
It's important to remember Bain didn't make money when it laid off workers. It made money when the firms it invested in became profitable.
I have long been on record as not voting for Romney's party , and I won't be doing it now. But fair is fair. Gingrich's PAC's film misrepresents what Romney and Bain Capital were doing, by giving only a portion of the picture.
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