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Richard Day: Metamorphosis and Terrorism
In an improbable sequence of events we are reaching a time when everything is illuminated about Wall Street greed. The improbable messenger is Newt Gingrich. The foil is Mitt Romney. The audience in this sudden drama is a combination of Americans of every political stripe who understand that financial industry excesses nearly brought this country to its knees. The stage crew is Occupy Wall St. The on-lookers are the power brokers in Washington. In standing room only are the hedge funds and financial executives who like first year med students are watching an autopsy. Standing in the wings is Barack Obama.
On the first day of campaigning in South Carolina, and facing an onslaught of advertising and 30 minute film on the predatory practices of Bain Capital, Romney ran straight into Obama's arms for cover. Preposterously, Romney compared the closing of plants by Bain as part of the same "creative destruction" process that was necessary, for example, when Obama took the reigns of the Automotive Industry. Using Obama's rescue of the Auto Industry as cover shows, in my opinion, absolute fear by Romney that the attacks on Bain are viable.
After the Iowa primary I speculated upon Gingrich's opportunity to adopt a populist position as an anti-Romney strategy, suggesting that he could tap into the latent anger toward Wall St. greed. But I had no idea the extent of what was possible in the Bain revelations nor the phenomenon in which a host of cross currents might aggregate into a wave of anti-Wall St. sentiment.
I suspect many in the financial industry will run for cover and throw Romney under the bus in the process. There was a scathing article in Forbes which took to task not only Bain Capital but some of the other Private Equity Capital companies. The stock of Blackstone, which went public several years ago, giving the partners a market for their private stock, went all the way down to $5 after the public offering. At the present time the stock is around $15, about half the initial offering price. Shades of Bain. The Forbes article concludes that Romney's entire campaign is an attempt to protect the 15% carried interest tax which privileges private equity firms, hedge funds and others in the 1%.
Unexpectedly, Romney is becoming the poster boy of financial industry excess. Because of Occupy Wall St., Matt Lauer was able to confront Romney about the issue of "fairness" in wealth inequality in a way that resonated with a broad audience. Because Romney savaged Gingrich in Iowa, Newt retaliated on Bain Capital. Because the Bain attack is a focal point at the most critical juncture of the 2012 Republican primary, the issues surrounding Bain Capital, and Private Equity in general, are being examined in detail by mainstream media. The elements of the Wall St. Greed story are reinforcing each other like a mob forming.
Like the lucky bystander who puts a dollar into a slot machine and hits the jackpot after some other guy has been plugging the machine all night long to no avail, Obama just had gold dropped into his lap. Not only will all of the Obama team's operations research be amplified by the Bain Capital attacks, but a wealth of potential focus group research has been created. More importantly, Romney himself just endorsed Obama's rescue of the Auto Industry---but in a manner that draws the exact contrast between saving an industry vs. ransacking a company for private gain.
One could of course question the use of a word like ransack---which gets to the intangible and perhaps most powerful element of the Bain Wave. In the populace, right and left, is seething anger toward Wall St that has been frustrated by the fact that much of what Wall St. did was not necessarily illegal, but crossed the line of moral behavior. Many blame Obama for not downsizing the banks, penalizing the financial institutions and perp walking CEO's and I share the sentiment behind those criticisms. In any case, there has been no overall accounting for Wall St. greed---no societal sacrifice or scapegoat---until, perhaps, now.
One small but juicy slice of the greed pie is the example in South Carolina where a Bain company went bust and the Federal Government had to spend tax payer money to salvage the pension fund. That was after Bain had taken millions out of the company. The death of Bain Capital by a thousand incisions has only just begun.
Romney's campaign has been characterized by planning and caution, but sometimes you simply cannot ask all the right questions beforehand---like, "Who expects a tsunami?"