Two of the remaining republican candidates have lashed out at Mitt Romney for his role in managing a hedge fund, Bain Capital. I find it somewhat interesting that these republicans have any prominence whatsoever given their glaring ignorance. If they are not ignorant but are trying to use their attacks to political advantage is even more disgraceful. Either they know nothing about hedge funds and venture capitalists or they think that republican voters know nothing about them either. I presume that Gingrich is attacking Bain because of his loathing for Mitt Romney and that Rick Perry joined in because he is trying to paint himself as a populist. I have a problem with Romney for another reason. He keeps painting himself as a businessman. However, his brand of businessman is different from Herman Cain's. Romney was not a businessman from the standpoint of manufacturing a product for consumers, being constrained by the forces of supply, demand and competition. He did not have to primarily concern himself with labor contracts, meeting payrolls and the fickleness of consumer demand. Rather he ran a hedge fund among whose purposes is to find inefficient businesses that may be worth more broken up than as presently constituted. Make no mistake, this watchdog role is an important one. However, there is a point that has to date been overlooked. It has often been said that the problem with Mitt Romney is that he is not a rock the boat type of guy when what this country really needs is to blow stuff up. Agencies need to be eliminated. There needs to be a systematic cutback in federal employment and federal benefits and compensation. Why? It is because since it has no profit motive, the federal government is inherently inefficient and wasteful. Of the candidates still in the race, only Perry has ventured forth a bold plan to rein in the federal government. Nevertheless, the most qualified person to effect change is Mitt Romney due to his experience at Bain Capital. If Romney at Bain Capital saw a multibillion bloated, inefficient, wasteful fortune 500 firm worth more if pared down in size, it would a prime candidate for a takeover. So lets hope that if Romney wins the nomination and then the election, he applies his hedge fund background to the federal government.
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com