Thursday, January 12, 2012

BloggeRhythms 1/12/2012

There's another significant indication in the recent news that clearly demonstrates why pure politicians should have nothing to do with the economy, business in general, and the financial well-being of the United States. Because, apparently Newt Gingrich went after Mitt Romney, saying that while running Bain Capital, Romney was responsible for the layoffs of thousands of people. And that presents a perfect example of how little a windbag like Gingrich knows about how to create or manage wealth. 

First and foremost, Bain Capital was a venture capital organization, and as such it's primary goal was the creation of new business entity's, investing in others, and doing it's best to maximize the performance of it's holdings. So, if that meant decreasing the staff of an over-employed or poorly performing business in an attempt to make it more profitable or efficient, so-be-it, because Bain's goal was to do an effective job economically as opposed to fostering bloat and waste.

On the other hand, in the cases of businesses that ran well under Bain's guidance, thousands more were hired, increased taxes were paid and the overall results were for the considerably better, all the way around. 

Beyond that, venture capitalism isn't a textbook exercise designed to test baseless theories, it's a risk-filled endeavor where only the best managed operations have any chance to survive. And that's because the real income earned comes from performance of the entities invested in and their growth, because venture capitalists can't simply go to a captive tax-paying base for funds when they're wrong, wasteful, or incompetent as do politicians and governments. And that means a lot, because the tax-paying public isn't financing their mistakes, capitalists must do that themselves.

So, what this scenario goes to underline is that, as I wrote at the start, I think politicians ought to learn a little about the things they criticize before they shoot of their mouths. But, desperation causes hare-brained reactions quite often.  However, since Gingrich took the gloves off and tried to land a couple of really cheap and inaccurate shots, he's now put his own sordid past in play which is just about the same as willingly jumping into a shredder.

That's it for today folks.

Adios

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