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Romney's Bain years a double-edged sword

Jan. 12, 2012 at 7:20 AM
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WASHINGTON, Jan. 12 (UPI) -- The work cited by Republican presidential nominee Mitt Romney when he led U.S. investment firm Bain Capital is a double-edged sword for him, observers say.

Romney's successes and failures as chief executive officer for Bain capital highlight his belief in "creative destruction," the concept that the new must replace the old so companies and the economy can become more efficient -- which is gospel to many businesspeople but a fertile field for attacks on Romney's record, The Washington Post reported Wednesday.

Although Romney cites three investments -- office supplier Staples, Sports Authority and Domino's Pizza -- as proof he knows how to create jobs, observers note that making profits and raising the companies' value were the primary goals, not job creation, the Post said.

The Romney campaign argues his experiences at the three companies give the former Massachusetts governor "the unique skills and capabilities to do what President Obama has failed to do: focus on job creation and turn around our nation's faltering economy."

But some private equity experts told the Post they think the link between Bain's deals and jobs creation isn't as strong as portrayed by the Romney camp.

"I've got a lot of admiration for Bain Capital, but jobs were the byproduct of the mission, not the product," said Howard Anderson, a senior lecturer at MIT's Sloan School of Management. "The product was to increase wealth, and in some cases it meant expanding the company. In some cases it meant contracting the company."

Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, said that despite job losses and other unsettling changes that occur when companies doggedly pursue profit, Americans, in the end, are "believers in creative destruction."

"Romney is mainstream in one sense, and that is that Americans are very committed to this process because we believe in the future and we believe in technology," Carnevale said.

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