By: Nathan Tucker
The message of the Obama campaign is clear—Mitt Romney is a vulture capitalist who only made his millions by destroying jobs. As Mark Steyn humorously put it: “Mitt Kills. Warning From The Surgeon General: Voting For Romney Will Result In Death. Mitt = Death. Silence = Acceptance.” Missing from Obama’s campaign rhetoric, however, is the simple fact that a vulture doesn’t kill, it merely eats what is already dead.
“Here’s what I do know,” Obama Deputy Campaign Manager Stephanie Cutter recently said, “I guarantee you what—that when GS Steel went bankrupt, that Mitt Romney personally walked away with a significant profit while Joe Soptic lost his job.”
Soptic, who infamously was not widowed at the hands of Romney, made an appearance in two Obama campaign videos in May in which he baselessly accused Romney and Bain of making “as much money off it as they could, and they closed it down. It was like watching an old friend bleed to death.”
These campaign tactics appear to be having an effect, with a recent poll showing that voters believe Romney was more interested in making profits than on creating jobs during his time at Bain Capital. While this is what all business owners do, it led the majority of those taking the poll to believe that Romney does not care about the needs and problems of people like them.
What far too many people fail to recognize is that they, too, act on greed. Consumers always operate out of a desire for profit, seeking to get the most product they can for the money they’re willing to spend. Additionally, every action they take in the marketplace—the decision to buy foreign rather than domestic, to shop at the big-box store rather than the local Mom & Pop, to buy used rather than new, to rent rather than own—has an affect on somebody else’s job.
Businesses, after all, only provide what consumers want, and the only way they remain profitable is by meeting this demand more cost-effectively and innovatively than the next guy. Rather than denouncing profit-seeking consumers, however, socialists are only interested in denouncing the businesses who make a profit by giving consumers a profit.
But, the Obamanites protest, don’t evil vulture capitalists like Mitt Romney seek to make money off of other people’s misery? Don’t they make billions of dollars simply by buying businesses in order to close plants and sell off assets? Assuming, despite evidence to the contrary, that Romney is such a vulture, so what?
These complaints overlook the simple fact that a capitalist only closes a business and lays off its employees if it is no longer profitable. The capitalist will do whatever makes him the most money, and he would gladly keep the company open if it would bring him more money in the end.
Socialists apparently have no problem with this type of greed because it results in visible, albeit secondary, altruistic results; they only denounce it when it results in lost jobs. But what they fail to understand is that the jobs were already lost—regardless of whether the business failed on its own after a long slow death or the vulture capitalist entered the picture. It was only a question of when and under what ownership.
But how do we know that the business couldn’t have been saved if a benevolent capitalist had swooped in and bought the company rather than the vulture capitalist? Simple—if, with a reasonable risk, the business could’ve become profitable, it would have been more valuable and, consequently, would have sold for more than it was worth closed and emasculated. A vulture capitalist, therefore, wouldn’t have even bid on it, and it would have been sold to a capitalist who sought to keep it operating at a profit.
But what about the billions of dollars Romney and Bain made off of closing the business? They do what all capitalists do—they reinvested it in companies making profits by providing consumers with profits. This creates more capital, which leads to higher wages, increased jobs, new innovations, and a higher standard of living.
Despite Obama’s hatred for a capitalist system that rewards greed, it is only the desire for profits that turns a world in need into a better place. As Adam Smith put it, this mutual desire for profits by both producer and consumer unintentionally promotes the interests “of the society more effectually than when [they] really intend to promote it.”