A Last Dispatch From Battleground Ohio

The soldier, winded and hunched, ran the last few yards before leaping into the Foxhole that had been dug behind the carcass of Big Bird.  “Sergeant Jones, I’ve got bad news,” he said.  “I think we’ve lost Nesser.”

Dammit!  What happened, Private Ujay?”

“He was trying to weave through that field of empty chairs when he was knocked down by a fusillade of negative TV ads.  He wasn’t wearing his ear plugs or a gas mask, and he started retching after hearing about the President’s economic record.  The last I saw of him, he was being dragged away by a team of pollsters to participate in a focus group.”

What the hell!  I’ve told everyone that they need to keep the masks on, because the noise and poisonous messages are more than any man can bear.

“He said he wanted to breathe free and watch the Buckeyes game on TV, sir.”

Well, there’s no saving the poor bastard now,” Sergeant Jones said.  She peered over Big Bird’s soiled yellow feathers, scanning the terrain.  “Get down!” she barked, as a fusillade of binders full of women rained down.

“I’ve got more bad news, sir,” Ujay reported.  “Some of the members of the platoon are saying there’s nothing to worry about and no need to get ready for the next attack.”

Blast!  Didn’t they watch that first presidential debate and see what happens when you start to take things for granted?

Another soldier appeared and saluted.  “Message from Captain Duhamel, sir.  He says the Bain Capital Brigade is approaching from the east.  He thinks they’re hoping to outsource us all to China.”

Thanks for the warning, Private Jeff — but we all know that those briefcase-carrying Bain bastards are ruthless.  They’ll stop at nothing once they’ve decided to downsize.”  The sergeant paused for a moment.  “Well, we know that we don’t have enough horses and bayonets to make a stand here.  Time to move out.

“But Sarge — if we move we’ll lose the cover we’ve got here in this Foxhole.”

You didn’t build that, Mack!  Now move!

The bedraggled platoon scrambled out of the Foxhole, past the hulk of Big Bird.  Nearby, hordes of “ground game” campaign workers were dragging reluctant Ohioans to the polls for a final day of early voting.  A black motorcade barreled past, hurling campaign literature about a five-point plan at passersby trying to dodge the Obama volunteers talking about how a 7.9 percent unemployment rate means the economy is on the road to recovery.  A crowd of “campaign surrogates” traded punches on a street corner, and a phalanx of Jeeps carrying members of the 47 Percent Regiment were advancing from the west.  Overhead, the voices of pundits filled the air, raining invective and talking points on the few remaining civilians not under cover.  And Bill Clinton and David Axelrod were spinning like tops, knocking people down as Joe Biden’s Cheshire Cat grin blinded the soldiers and his maniacal laugh echoed off the downtown office buildings.

“My God!  It’s carnage,” Private Ujay shouted, as he ran after Sergeant Jones.  “We’ll never survive this, never!”

Yes we will,” Sergeant Jones bellowed.  “We’ve done it before, and we’ll do it again.  It’s what you get when you live in Battleground Ohio.”

Average Folks, Talking About Someone They Admire

Tonight (so far, at least) the Republican National Convention has been largely devoted to average folks talking about Mitt Romney — as a member of his church, as a friend and neighbor, and as an executive with Bain Capital.

It’s a bit jarring to hear people defending a venture capital firm — the kind of educated risk-taking business that is crucial in a capitalist economy, but which is so easily depicted as a blood-sucking, money-grubbing blight on society — and speaking so openly about the Mormon faith, because these aren’t the kind of things you normally see on TV.   I think it’s been refreshing, and effective, to hear from these average folks, talking about a man they know and like and appreciate.

We see enough of the airbrushed crowd, with their permatans and carefully coiffed hairdos, their carefully scripted remarks and rehearsed moves.  Seeing Joe and Jane America walking onto a political convention stage, speaking from the heart about someone who helped them, and whom they admire, is corny — but it’s a nice change of pace.

The Leading Republican Blandidate

Reeling now from three losses in the Minnesota, Missouri and the Colorado primaries it will be interesting to see how and if Mitt Romney can re-invent himself before he faces the president in November as the nominee.

Last night’s results showed that Romney is getting less of the vote in 2012 than he did in 2008 when he ran against John McCain and as high as 40% of those voting would like to see another candidate enter the race.

It’s not hard to understand why, bank accounts in Switzerland, the Caymen Islands and Bermuda, paying a tax rate of 14%, a $10,000 bet, a Massachusetts job creation ranking of forty seventh, a suspect job creation record at Bain Capital (does anyone really believe that Bain was trying to create jobs ?), expunged records while governor not to mention misconstrued verbal gaffes about firing people and the poor that make him seem heartless, insensitive and out of touch.

With the Republican primary only a month away the last poll Real Clear Politics showed for Ohio had Gringrich at 26%, Romney at 25%, Santorum at 22% and Paul at 11%. Santorum will most likely get more notice after his wins last night. An even more alarming statistic for his campaign is his favorable rating in Ohio stands at 28% and his unfavorable rating is 60%. I’m sure that his prior comments about the auto industry haven’t helped him much in that regard.

The next four weeks will be very interesting indeed, not to mention the next nine months. He’s still not told me what he’s for and he’s got some explaining to do if he’s going to get my vote !

Capitalism 301 (And The Food Network)

If, like Kish and me, you like to watch The Food Network from time to time, you’ve been exposed to capitalism at its very essence.  Whether it is Diners, Drive-Ins and Dives, where great food made from scratch earns raves and steadfast loyalty from customers, or the latest competitive cooking or baking show, or Restaurant Impossible, where the host tries to rescue a failing business every show, viewers of The Food Network regularly see how capitalism works.

Restaurant Impossible is a good example.  Each episode, chef Robert Irvine takes his bulging biceps to a new restaurant that’s on the skids.  In short order, he finds out why the place has one foot on the banana peel.  The food is slop.  The service stinks.  The decor is dreadful.  The owner doesn’t know how to keep the books or otherwise run a successful business.  The kitchen is a grease-laden horror story.  The cooking staff doesn’t even know how to properly chop vegetables.

The viewer quickly understands why the marketplace has spoken and the business is doomed.  Irvine, however, injects $10,000 and effort into the venture and tries to turn it around in two days.  The place gets redecorated.  The menu gets changed.  The staff gets trained and a kick in the butt, besides.  The owner gets schooled on basic business and finance principles.  And, quality and the importance of serving hot, tasty, attractively presented food in a pleasant setting are emphasized and re-emphasized.  After two days the place reopens to rave reviews and we learn how the business fares over the next few months.

In short, Irvine and his team are like the Bain Capital of the restaurant sector of our economy.  They don’t get an equity interest in exchange for their investment of time and money, but the principles of what they are doing is the same:  figure out why a business is failing, decide how to fix the problems, and then spend the money and time necessary to try to turn the business around.  In the real world, unlike on Restaurant Impossible, sometimes the turnaround can’t be achieved.

Restaurant Impossible is a weekly, one-hour lesson in business basics and the “invisible hand” at work.  Adam Smith — and probably Mitt Romney, too — would be proud.

Capitalism 101

Capitalism 201

Capitalism 201

If Mitt Romney ends up as the Republican nominee, we’ll be hearing a lot more about his stint at Bain Capital.  I think that would be a good thing for a lot of reasons — one being that we would all be better served if our citizenry and our politicians had a clearer understanding of how capitalism actually works.

Capitalism is a messy system.   Businesses, large and small, routinely fail.  Some never succeed.  Some businesses — think buggy whip manufacturers or, more recently, Kodak — succeed at first, then fail.  The owner may just be a bad businessman.  Customers may change their preferences.  New competitors may enter the market at lower prices or with better products.  The business may be slow to react to important societal changes or technological developments.  The list of potential reasons for business failure is about as long as the human imagination is capable of making it.

Venture capital funds like Bain Capital may get involved in a business at the outset, when an inventor or entrepreneur has an idea but doesn’t have the money to see that idea realized and brought to market.  The venture capital firm will study the invention or business idea, decide whether it has potential, and then may provide money in exchange for an equity interest in the business.  Often those businesses don’t succeed even after the capital infusion; it may turn out that the invention can’t be converted into a reasonably priced, mass-produced product or that the potential customers doesn’t like or want it.

Venture capital firms also may get involved after a business has begun to fail — and this seems to be where Bain Capital receives criticism. In those cases, the venture capital firm will consider whether the business can be saved, in whole or in part, and will look at many different factors.  The finances or capital structure may need to be drastically changed.  Unprofitable divisions may need to be terminated so more profitable divisions become the sole focus.  Payroll and overhead may need to be cut — or maybe the only thing worth saving about the company is a patent on a process that can be used to make something else.  Even if the venture capital firm makes the investment, the business often will still fail because the forces that brought it to the brink were just too strong to overcome.

If you accept that businesses routinely fail in a capitalistic system, how do you assess the contribution of a firm like Bain Capital?  Do you criticize them for swooping in and trying to make a good deal for their investors — much like shoppers search for good sales or good bargains — because that may mean that some employees of the struggling business might lose their jobs as a result?  Do you focus on the instances where they are unsuccessful in turning around the failing company?  Or, do you look at the successful turnarounds, commend them for their ability to pick a winner and for the profits they have generated for investors, and recognize that the remaining employees of the now-thriving company might all be out of work if Bain Capital or similar firms hadn’t made their investment in the first place?

One other point deserves mention:  venture capital funds also often fail.  If the fund’s managers aren’t successful in picking new businesses or turnaround targets, they won’t earn profits and investors will go elsewhere.  Managers of venture capital funds have a direct interest in doing whatever they can to see that the companies in which they invest succeed — at least until the venture capital firm cashes out its investment.

I think a discussion about these aspects of capitalism — even one that occurs, in part, through the distorting lens of campaign ads — would be healthy for the country and for both parties.  Democrats should welcome it because it exposes what they consider “vulture capitalism” and could lead people to have a different perspective on the role of government regulation.  Republicans should welcome it because it demonstrates how private money that isn’t taken by the government in the form of taxes can be used to create new jobs or preserve old jobs, bring new products to market, and establish new technology that leads to welcome social changes.

Either way, I’d rather hear an honest and meaningful debate about capitalism and the role of private investment in our economy than another election that turns on tired buzz phrases, gotcha moments, and ancillary matters like Mitt Romney’s religious beliefs or Michelle Obama’s spending habits.

Capitalism 101