Alex Tabarrok writes
Excellent piece by Reihan Salam on private equity. And how Bain Capital fit into the larger picture of a dynamic economy.
The difficult truth that virtually no politician is prepared to acknowledge is that the road to job creation runs through job destruction.
What Mitt Romney discovered was that American corporations sometimes had to be dragged, wailing and whining, into a state of efficiency. As a management consultant at Bain & Company, Romney had studied successful firms and then told other firms how to replicate their strategies. But those firms had come of age in the fat years of American corporate dominance, when many believed that the Japanese could do little more than manufacture cheap toys and textiles, and many were reluctant to accept his newfangled advice. It eventually became clear that if Romney and his cohort were going to remake American business, they’d have to raise money to make their own investments. Spurred by the senior partners at Bain & Company, Romney and his merry band of consultants established Bain Capital.
I wish Romney were as eloquent in his defense as is Salam.
Sounds good, though I can’t vouch for the accuracy of the Salam analysis. I don’t have a dog in this hunt.