OK, this will not be a full-throated defense. Instead, it’s more of a complication of the narrative being pushed by both Democrats and Romney’s Republican rivals. I hate to say that I’m agreeing with Michael Steele here, but I do agree that our moral qualms with Bain Capital and its business may end up implicating a lot of capitalism as a whole. (Unlike Steele, I don’t think this is entirely a bad thing, but let’s start here.)
Bain Capital, Romney’s company, has the M.O. of a lot of private equity firms: they invest in a variety of companies, lay off workers, slim down unprofitable assets, and groom them to be resold.
As with a lot of companies, if they can make more money elsewhere, they will. Capitalism is about making profits for individual companies, and we should expect companies to lay off workers if that makes the more profitable. Industries shift and costs fall elsewhere; that’s just the cost of capitalism. Each entity, acting in its own self-interest, makes decisions that impact the broader web of goods and services. Bain wasn’t playing the system, manipulating currency markets, or performing rent-seeking behaviors per se. Instead, it was just doing what one expects firms to do.
If we don’t like it, we can try to ameliorate these decisions: better education systems, better unemployment benefits, better job retraining, more government jobs to which to shuttle some of these excess workers, etc. We may also build a system that makes companies contribute more to the costs of terminating workers. But the core problem itself — that private equity firms buy up (often failing) businesses, lay off a bunch of workers, and make a profit off of it — is a core problem of capitalism, not just of Mitt Romney.