I was asked to write a piece for a national political blog

You can preview it here.  If you are a republican, this may not be to your liking but then again who knows.

The FACE of the GOP

We are strong believers in the "picture=1,000 words" school of thought. Here we are treated to belligerent and smug.  Governor Christie is out defending his friend, Mr. Romney, who looks on with that smug little smile that drives liberals nearly crazy.

We are reminded of the popular kid in grade school - the first to wear Pat Boone white buck shoes because he could afford them and afford to get them dirty and when challenged, he had some bully who wanted to suck up to him out in front just in case he needed a little muscle.

The discussions surrounding Mr. Romney have centered somewhat on Bain Capital, the VC/leveraged buyout creation of Bain & Company.  Mr. Romney puts great store in turning around companies that Bain invested in and therefore learning how capitalism works. The "Bain Way" was to micromanage until companies turned around.  This is a Venture Capital method, popular in the middle 1980s, and under Mr. Romney's turn at Bain, marginally successful.

When Bain Capital formed, Mr. Romney was the face of it - raising the initial seed money and transforming the fund from a mildly successful VC firm into a more robust leverage buyout firm.  This is where his link to capitalism eludes us.

The pundits and talking heads are equating "equity" participation with capitalism and not really dealing with the venture/leverage area at all.  Simply, if you go out and by 100 shares of Apple Computer in the stock market you are an equity holder in Apple.  In some very minor percentage, you own a wee bit of  the company. You have made an equity investment of sorts. Your money went to someone else who had owned the shares; now they have your money and you have the shares.  Apple saw NONE of that money.

Venture Capitalists would have gone to Apple and said, "You (the company) need money. I want shares. I will invest in you directly so that the company gets the money to work with. You will issue me new shares so I own a sizable chunk of your equity directly bought from your company and not another shareholder".  Clear so far?

The leverage buyout guys are different and here is how.  They take a hard look at your company but instead of buying shares or investing directly like a venture capitalist would, they just figure it might be cheaper to go to the shareholders and offer to buy up all their shares and once they have control, they clean house, fire a lot of people and then decide what to do with what they own. They may choose to put more money in and revitalize it, or they may choose to sell it off piecemeal and recapture their investment, or somewhere in between. They might also borrow all the money against the breakup value of the company and finance the takeover, pay back the investors with the proceeds and hopefully pocket a fair bundle of money in the end.

This later scene is Bain Capital at the time Mr. Romney was running it. Reports have it that he did very little "running it" if any. He was on to the next deal - the rainmaker so to speak. He was successful in picking apart potential companies about half the time. He NEVER created a job. He only lost jobs when he closed companies or they didn't "get better".  But as a CEO of the target company (which he never was) he created nothing. He spent money and hoped.

I'm as sure that this gives him the insight to run the business of the United States just as sure as the little boy who surveys the pile of crap in the living room and concludes that there must be a pony in there somewhere.