If you’re a Daily Kos reader, you are no doubt familiar with the Daily Pundit Roundup, in which snippets of columns are featured. Today, Eugene Robinson is excerpted, the excerpt containing the following:
There’s nothing inherently wrong with private equity, which plays an important role in the economy.
This in a column in which he is rightly praising Obama for going after Romney on his Bain record. The statement is all too typical of liberals, who, in order to make themselves seem reasonable when measured against rabid Republicans, are always willing to give credit where it is not due, and to buy into the prevailing, right wing manufactured meme. In fact, there is something inherently wrong with private equity, as practiced by Romney, who was merely typical of the breed. And while it is true that private equity plays an important role in our economy, that role is almost entirely negative. Don’t take it from me, take it from the rarely wrong Paul Krugman, at the link contained in the same Kos Pundit Round up:
Once upon a time, this fairy tale tells us, America was a land of lazy managers and slacker workers. Productivity languished, and American industry was fading away in the face of foreign competition.
Then square-jawed, tough-minded buyout kings like Mitt Romney and the fictional Gordon Gekko came to the rescue, imposing financial and work discipline. Sure, some people didn’t like it, and, sure, they made a lot of money for themselves along the way. But the result was a great economic revival, whose benefits trickled down to everyone.
You can see why Wall Street likes this story. But none of it — except the bit about the Gekkos and the Romneys making lots of money — is true.
For the alleged productivity surge never actually happened. In fact, overall business productivity in America grew faster in the postwar generation, an era in which banks were tightly regulated and private equity barely existed, than it has since our political system decided that greed was good.
For the most part, people like Romney are leeches, except leeches can have some beneficial uses. Romney type leeches merely suck the blood out of corporations, and leave the body behind when they finish feeding. It is purely incidental to them whether the body lives or dies once they’ve finished feeding. In this they are typical of the rot that has set into a system where money is most easily made either by draining money from the government or from truly productive enterprises, or getting the government to sanction what by any measure should be criminal activity. Thus we have insurance companies that do not insure, for-profit educational institutions that do not educate, and bankers who gamble with our money, secure in the knowledge that the more they screw up, the more likely they’ll get more of our money to bail them out.
Yet somehow, these folks have all managed to convince us liberals, or at least those in the Beltway, that we are supposed to genuflect, before pointing out that maybe, sometimes, they cause a few problems. The fact of the matter is that they only rarely, and never intentionally, contribute anything of value to society. To the extent they do contribute anything of value, we almost always get more of the good stuff if we tightly regulate them to make sure they stay on task.