» Subscribe Today!
The Power of Information
The Ledger - EST. 1978 - Nashville Edition
Skip Navigation LinksHome > Article
VOL. 36 | NO. 1 | Friday, January 6, 2012

Against business? GOP split on Romney's practices

Print | Front Page | Email this story

WASHINGTON (AP) — What gives? Some of Mitt Romney's rivals are waging a fierce attack that you'd never think would come from the mouths of Republicans who claim Ronald Reagan as their hero. They're blasting the GOP front-runner for aggressive, wealth-creating business tactics.

The criticism, mostly from former House Speaker Newt Gingrich and Texas Gov. Rick Perry, didn't seem to matter much in New Hampshire, where Romney claimed a comfortable primary victory. Gingrich was fourth and Perry was sixth.

But the sniping may have more resonance in next-in-line South Carolina, which is far more economically depressed, and in Florida. Both states are struggling with high joblessness and weak housing markets. South Carolina's primary is Jan. 21, Florida's is Jan. 31.

Trying to tap into populist sentiment, Gingrich and Perry are accusing Romney of being a fat-cat venture capitalist during his days running the private equity firm Bain Capital, laying off workers as he restructured companies and filled his own pockets.

A group backing Gingrich is airing TV ads in South Carolina showing distraught people who say they lost their jobs to Bain's restructuring practices while Romney was at the helm.

Jon Huntsman, a former Utah governor and ambassador to China, at first joined Gingrich and Perry in the attacks on Romney. But on Wednesday after his third-place finish in New Hampshire, Huntsman backed away in part from such criticism while continuing to assail Romney's four years as Massachusetts governor.

The Bain Capital attacks are nearly identical to criticism once leveled at Romney by one of the nation's best-known Democrats, Ted Kennedy, when Romney tried to claim Kennedy's Massachusetts Senate seat in 1994. Whether that tactic helped or not, Kennedy, who died in 2009, did hold on to his seat.

To hear such accusations now from Republicans — historically the party of business and free enterprise — is particularly notable.

"It's like watching dogs walk on their hind feet. It's not impossible, but it certainly looks odd when you see it," said economist Bruce Bartlett, who worked in the Republican administrations of Reagan and George H.W. Bush. "I don't think they seriously believe there is anything wrong with what Romney did. I just think that they're trying to use any card that they can find in the deck that might give them an edge. It's simple expediency."

Romney has shrugged off the fusillade.

"We understood for a long time that the Obama people would come after free enterprise." he told reporters as he flew from New Hampshire to South Carolina on Wednesday. "We're a little surprised to see Newt Gingrich as the first witness for the prosecution."

Romney has repeatedly touted his business career as giving him the right credentials for dealing with a tough economy and the know-how to produce jobs. However, in the process of restructuring companies to make them more profitable, many workers indeed were laid off. The criticism from fellow Republicans now threatens to undercut Romney's central argument that his private-sector experience best positions him to defeat Democratic President Barack Obama in the fall.

Gingrich, mounting the fiercest attacks, denies he's arguing against capitalism.

"I am totally for capitalism. ... I do draw a distinction between (it) and looting a company," says the former House speaker. He also asks, "Is capitalism really about the ability of a handful of rich people to manipulate the lives of thousands of other people and walk off with the money?"

Gingrich was a little more subdued on Wednesday. Without naming the former Massachusetts governor, Gingrich said at a campaign event in Rock Hill S.C., that he wants "free enterprise that is honest. I want a free enterprise system that is accountable."

Perry, meanwhile, who earlier called Romney a "vulture capitalist," struck a defensive tone on Wednesday. At a stop outside Columbia, S.C., the Texas governor said, "I understand restructuring. I understand these types of things." But, he added, "The idea that we can't criticize someone for these get-rich-quick schemes is inappropriate from my perspective."

Huntsman in the past has asserted that "Governor Romney enjoys firing people. I enjoy creating jobs." But on Wednesday, he presented himself to South Carolina Republicans as a pragmatic problem solver who disdains partisan posturing.

"If you have creative destruction in capitalism, which has always been part of capitalism, it becomes a little disingenuous to take on Bain Capital," Huntsman told reporters in Columbia. Instead, he said Romney should be judged on his record as governor when "he didn't deliver any big bold economic proposals."

The next two weeks are what Romney's foes are interested in, with the key primaries in South Carolina and Florida. The Bain Capital attacks have opened a rift among Republicans, with many conservative groups and personalities urging Gingrich and the others to tone it down.

Conservative radio host Rush Limbaugh said Gingrich's language was "out of bounds for those who value the free market." Club for Growth President Chris Chocola called the attacks "disgusting." Steve Judge, CEO of the Private Equity Growth Capital Council, cited "a lot of misinformation" from both parties ignoring benefits to the economy from firms such as Bain.

The harsh attacks on Romney reflect the tea party influence on GOP politics, residual anger against financial practices that led to the 2008 economic crisis and government bailouts and a widespread desire among conservative Republicans to find an alternative to Romney. They also come as the Republican Party becomes increasingly blue collar.

But one rising tea party star who has endorsed Romney, South Carolina Gov. Nikki Haley, said she doesn't like the criticism of his business practices. "It's a sad day in South Carolina and across this country if Republicans are talking against the free market. Let me tell you that," she said.

Romney was defended on Wednesday by Democrat Steven Rattner, a financier who helped lead the Obama administration's bailout and restructuring of Chrysler and General Motors. He told MSNBC that, while he intends to vote for Obama, "I think these attacks are unfair. I think Mitt Romney not only had a very successful (business) career, but Bain Capital is a terrific first-class firm managing money, mostly for endowments, for pension funds. ... And he did it in a perfectly honorable way."

Texas Rep. Ron Paul, who finished second in New Hampshire, and former Pennsylvania Sen. Rick Santorum, who finished fifth, have avoided slamming Romney for his Bain record. Santorum even defended Romney at a town hall meeting Wednesday night in Columbia, S.C.

"It's this hostile rhetoric, which unfortunately — and I don't want to stand here and be a defender of Mitt Romney — but unfortunately even some in our own party now, even some running for president will engage in with respect to capitalism," Santorum said. "It's bad enough for Barack Obama to blame folks in business for causing problems in this country. It's one other thing for Republicans to join in on this."

Paul told The Washington Times that "it astounds me" that Gingrich and the others would rip Romney's work as a venture capitalist. "Either they are totally ignorant of economics," he said, "or if they know economics it's just demagoguing for narrow political points."

"It's strange for Republicans to go after a colleague who's successful in business. The arguments by Newt Gingrich could be made by the far left of the Democratic Party," said James Thurber, a political scientist at American University.

Romney has said that, on balance, he took steps that led to the creation of 100,000 jobs.

However, that claim comes from activities concerning only three companies, all of them successes: Staples, Domino's and Sports Authority. And it counts many jobs that were created after Romney left Bain in 1999. And it ignores job losses at many other firms that Bain invested in or took over.

Follow us on Facebook, Twitter & RSS:
Sign-Up For Our FREE email edition
Get the news first with our free weekly email
TNLedger.com Knoxville Editon