Private equity firms are evil, right? President Obama certainly seems to think so. His campaign excoriated Mitt Romney’s history of private equity investment in a web video earlier this week.
On the very same day this web video was released, however, Obama was hosting a $35,800-per-plate fundraiser at the home of Tony James, who is… the president of a gigantic private equity firm, the Blackstone Group. My goodness, that even sounds hoity-toity. “The Blackstone Group” is a name that could only be given to either a billion-dollar firm run by blue bloods, or a Friday-night Dungeons and Dragons game crewed by forty-year-old grad students.
If you think that’s a lot of baggage to impute to a firm based upon its name, well, President Obama was just on The View, and he claimed “when your name is Barack Obama, it’s always tight.” His crippled economy, soaring unemployment, and crony capitalist corruption wouldn’t matter if his name was Worthington T. Blackstone.
In case you’re keeping score, Blackstone is much bigger than Romney’s old firm, Bain Capital. Blackstone’s web site claims they “preserve and protect over $190 billion in assets for public and corporate pension funds, academic, cultural and charitable organizations, among others.” Bain Capital, on the other hand, touts “approximately $60 billion in assets under management.”
I should clarify that I have no beef with either Blackstone or Bain Capital. I’m not the one basing an absurd re-election campaign on the proposition that some carefully targeted private equity firms are evil. I would be happy to develop an investment plan for any stray millions that either of these fine companies would care to stuff in my mailbox.
The Obama narrative is complicated by the uncomfortable reality that Romney was long gone from Bain Capital when they layoffs they criticize him for occurred… but top Obama bundler Jonathan Lavine was still there.
Furthermore, the Obama campaign recently published an atrocious enemies list of Romney donors with “less than reputable records.” One of these villains is Paul “Chip” Schorr, castigated by Obama’s creepy “Truth Team” as follows:
Paul Schorr has given $112,500 to Romney’s presidential ambitions through Super PAC and direct campaign donations. As a partner at Blackstone, Schorr closed a deal in 2007 to outsource the services of seven U.S. companies to a firm in India, boosting that firm’s profits by $220 million and making millionaires of the Indian management team. In 2006, he arranged a buyout of a Colorado travel reservations company that led to 841 layoffs while Blackstone and its partners recouped the billions of dollars they invested in less than a year.
So only some of the gang at Blackstone are sinister robber barons who “outsource” U.S. jobs! How are we supposed to know the good guys from the “vampires,” as the Obama ad labeled Mitt Romney? Easy: just check their political donations. Do you suppose Schorr has to worry about a private investigator going after his divorce records, like at least one of the other targeted Romney donors?
Jim Geraghty of National Review cleverly compares this to the sale of papal indulgences, with private-equity titans invited to purchase absolution from their sins with a fat donation to Pope Barack I. The editors of the Wall Street Journal wondered if the guests at Obama’s big-bucks private equity fundraiser were required to dress up as vampires.
The Journal also relates the latest serving of weaksauce from the Obama campaign, as deputy campaign manager Stephanie Cutter defended Obama’s highly selective attacks by saying he isn’t “questioning private equity as a whole.”
That’s the problem. This is all politics, of the ugliest variety. None of the people or firms Obama is targeting have been accused of any crime. We’re supposed to unquestioningly accept Dear Leader’s judgment about which are evil, and his “judgment” is based entirely on political expedience and campaign contributions. Conspicuously absent from his resume is the tiniest shred of actual knowledge about private equity or investment. On the contrary, Obama’s disastrous “investments” lost sums of money that dwarf the amount JP Morgan is under fire for blowing in the “Whale Fail.”
Welcome to command economics, comrades! Remember, mention of the names “Jon Corzine” or “Tony Rezko” is strictly forbidden.
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