When the Republican presidential primary first began to take shape in early 2011, the candidates set out by training their sights squarely on President Obama. Over the course of the first 12 months of the campaign, they called him a “socialist,” accused him of waging “class warfare,” denounced him for being a “job killer,” for demonizing “job creators” and seeking to impose a “European-style welfare state” that would “redistribute” Americans’ hard-earned money.
Now that they’ve reached the pivotal New Hampshire primary, however, the candidates are singing a very different tune, and have found a new villain to focus on: Mitt Romney.
The Republicans vying to be the anti-Mitt have taken some ferocious swings at Romney’s past as the head of Bain Capital, a private equity firm that often advises or buys out distressed companies and, in many cases, lays off workers in order to make those companies more profitable (earnings that are passed on, of course, to the managers at Bain). Romney hasn’t exactly made it hard for his opponents, either, with his many fumbled attempts to relate to the common man (remember, the man who is planning to quadruple the size of his $12 million beachfront home in La Jolla, Calif., once joked to a group of unemployed people, “I’m also unemployed”).
No Republican candidate has been more aggressive in his attacks on Romney’s record at Bain than former House Speaker Newt Gingrich. Gingrich, who briefly surged to front-runner status before he was hit with a barrage of negative ads by Romney allies, said Tuesday that Bain Capital’s work with distressed companies “undermined capitalism,” and that any economic system in which wealthy investors can make a profit by draining a company of its value and leaving its workers unemployed is an “indefensible model.”
“Show me somebody who has consistently made money while losing money for workers and I’ll show you someone who has undermined capitalism,” Gingrich said. He added:
There’s a big difference between people who go out and create a company — even if they fail — if they try to go in the right direction, if they share in the hardships, if they’re out there with the workers doing it together. That’s one thing. But if someone who is very wealthy comes in and takes over your company and takes out all the cash and leaves behind the unemployment? I think that’s not a model we want to advocate, and I don’t think any conservative wants to get caught defending that kind of model.
Seems like a reasonable thing for a presidential candidate to say, regardless of whether you agree or not. Except, there’s one pesky complication: Gingrich has himself been accused of defending just that kind of a model, an economic system in which feeble government regulations and defanged oversight agencies are incapable of stopping big banks and their patrons in Washington from manipulating American workers and homeowners for financial gain.
For one thing, Gingrich himself worked as a paid adviser to Freddie Mac, which many Republicans have fingered as a leading culprit in the financial meltdown. The private, government-backed company — along with its sister firm, Fannie Mae — was designed to expand the mortgage lending market by pooling mortgages, turning them into securities and selling them to investors. That system, of course, backfired. But in 2006, when Republicans floated the idea of dismantling the two companies, Freddie Mac hired Gingrich to convince them otherwise, according to Bloomberg. The Citizens for Responsibility and Ethics in Washington, a watchdog group, has filed a federal complaint accusing Gingrich of unlawfully acting as an unregistered lobbyist.
Gingrich has also said he would repeal the Dodd-Frank Wall Street reform act signed into law by President Obama in 2010. The law, among other things, empowers existing financial regulatory agencies with the stated goal of protecting American consumers from companies looking to turn a profit through abusive practices. The law also created the new Consumer Financial Protection Bureau, the first agency in U.S. history charged specifically with protecting consumers from manipulative practices in mortgage lending and other financial services. Republicans have attempted to neuter the agency by blocking President Obama from appointing a leader. When Obama circumvented Congress last week by announcing a recess appointment, Gingrich accused the president of “a total willingness to violate the law and impose an imperial presidency.”
And, finally, Gingrich has opposed closing the kinds of tax loopholes that allow investors like Romney and his partners at Bain to keep much more of their money than middle-class Americans. As the Boston Globe has reported, it’s possible Romney has benefited from a tax loophole that allows members of financial partnerships, such as private equity firms, to pay just 15 percent of their income in taxes, rather than the standard 35 percent income tax rate for high earners (we can’t know for sure because Romney won’t release his tax data). Gingrich has said he opposes any measure that would amount to a tax increase. When asked about such these tax breaks, in fact, he wouldn’t even call them loopholes. “If we give you an incentive to do something right that creates more jobs, that is not a loophole. That’s an incentive,” Gingrich said of corporate tax breaks in an interview with ThinkProgress earlier this year. “If you then intelligently follow that incentive and create more jobs, we should celebrate that as a good thing.”
To be fair, Gingrich has also called for stronger regulations on Wall Street, just not the kinds of reforms President Obama has advocated. He has, for example, said the repeal of the Glass-Steagall Act, which separated investment banks and retail banks, was “probably a mistake.” But his past a lobbyist for the companies that securitized faulty mortgages and his opposition to Wall Street regulations may make it difficult for him to attack Romney as a vulture who preyed on American workers to turn a profit.