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Bain Capital Saved America

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  • Description

    The Wall Street Journal’s Dan Henninger on the importance of Bain Capital during the 1980’s.

  • Duration 5:28
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You guys did bank capitals saved America.

The Wall Street -- -- -- -- writes that back in the 1980s companies like -- invested in America when know what else what and then -- the company now.

That's the premise everyone had given up its step toward the private equity -- Well private equity guys saw an opportunity.

That emerged -- an interest think under way back then Charles.

If you go back and look at the history.

Which -- -- economist concluding is that.

A basically a lot of corporate America got caught off base.

Jimmy Carter started deregulate the economy in the late 1970s Ronald Reagan continued if these -- major American industry.

Airlines gas and energy transportation.

Even finance and what happened is that and plus think it.

World economy with globalizing there was lot of competition.

Corporate America which -- kind of emerged from the conglomerate boom of the 1960s.

Was kinda sitting on a lot of cash they had deploy their assets in efficiently and people like being in Romney in a whole host of other -- -- crap Henry Kravis.

Analyze those companies and saw that there was a lot of unused cash -- which was not being.

Realized by shareholders.

And so this process began of leaning on the corporations and that in turn.

Created this huge restructuring process that allowed corporate America to become a much more efficient.

Then Europe and I think what is happening now as I tried to say in the column is you see European decline.

You see funds were -- to buy Europe's debt because they just can't.

Trusted and the world economic power is shifting to countries like Indonesia and Brazil the emerging nations.

I think being capital in all those firms allow the United States to -- that huge bullet that is now it is.

Though there's no argument that we were in decline is an argument that American companies in general fell asleep at the well maybe -- -- -- in neutral and even to this they argue like you know we should never have the losses -- automobiles.

There's always Budweiser should be owned by foreign companies now so maybe they did step in just the right time -- my question is not only.

Why isn't Romney defending what he did.

Why hasn't articulated a plan and vision and a strategy going forward to compete with president Obama's what gives.

Well I think Mitt Romney is reflexively but defense of personality.

He reacts to criticism and he feels that he -- to.

Work that criticism rather than going on offense.

We now have to date them the remarkable phenomenon reported by newspaper in Augusta Georgia.

Whose whole overnight suggests that Gingrich is now three points ahead of Romney Romney had an eleven point lead going into that debate the other night.

And I think the problem is basically Gingrich -- a guy who goes on offense and Mitt Romney if the fellow who just instinctively is always on defense -- personality.

Won't allow him to defend happening the way it should be -- Don't give him the talking points I mean if you're gonna make this case for private equity as a student at what would you say given three talking points of why it's not evil it is good for the economy and for the average American.

Well I would say essentially -- first thing that I was just saying that.

-- help the United States and Leveraged Buyouts and hostile takeovers revive the American economy secondly as -- the layoffs.

Every lay off hurts and we have 9% nearly 9% unemployment now because there are a lot of layoffs in the American economy.

And that's just kind of the process that occurs when you're going through -- restructuring like that but that.

The point is to.

While the United States to grow at a rate strong enough to minimize those kinds of what else and that's what Bain and the others were trying to work isn't done all the.

Quantify the job creation I mean if you look at the companies -- turn around the deals that they did if you look at Dunkin' -- you look at -- you look at Staples.

Like Blackstone and what they did with helped and I mean can you sit there and and do the numbers and come up with well they created this many jobs.

Well you had the good luck I think of in the 1980s of that process.

Occurring simultaneously.

With the Reagan economic policies and the tax cuts you had 7% growth.

Strong growth for seven years in the 1980s and in the 1990s as well in the 1990s.

Corporations voluntarily.

Restructure themselves and became more efficient what.

And that -- Yeah jobs yeah -- -- then I think it's simpler than that.

Somebody has a great idea for superstore with sells office supplies they can't find the money they need 650000.

They go to paying -- -- -- running again it.

And that they got 11100 stores around and how many employees if 9000 employees straight into whatever that means the point it's it's pretty simplistic anybody out there right now who want to start a business nothing if you wanna raise more 500 -- right now -- -- a bank is too small Wall Street and the it's amazing story about the American prosperity.

Well in what you're saying it -- that did Mitt Romney has to explain how the American economy can get back to creating.

Staples sports authority in companies like that what is thwarting that that's what is there is even want to hear your point is how do you want lock.

I think that -- that touting this as an amazing success the foundation of our amazing why he would run away from it presumably he understands that -- about articulating it.

Maybe maybe you will get back and he loses I know he's gonna happen.

I went back and done well we're gonna get that -- -- yeah I know I don't lose South Carolina right back flood damage.

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