When Mitt Romney Came to Town: Is Newt's New Attack Video Good for Anybody?

In case you haven't heard, Newt Gingrich (well, his Super PAC known as Winning the Future) released a scathing 28-minute video titled "When Mitt Romney Came to Town." See it below:

See it here: http://www.webcasts.com/kingofbain/

I watched it, and the first thing I felt was disgust. I wasn't disgusted at Mitt Romney. I wasn't disgusted at Bain Capital and their business model or practices. I was disgusted at Newt and his Super PAC for creating this misleading video. 

Let this be known: this blog, its writers, owners, managers, etc. do not yet endorse any one GOP candidate. We feel either of the GOP candidates would be a better solution for America's future than Barack Obama. With that, I am extremely disappointed in Newt Gingrich. 

After Herman Cain dropped out, Newt got a surge in popularity. I will admit, I liked him. He did what I and the writers of this blog love: he backed what he said with fact (you will see why this is in bold). In the GOP debates, he would make a claim and give a cited, historical reference as proof. His wealth of knowledge in history and how he applies this knowledge is something I have rarely seen. It has been very admirable. He seems to understand politics, economics, and most importantly, how history can teach everyone and everything in these fields a lesson. 

In comes this video. First, this is not a post about private equity or venture capital. Being student of finance, I understand these fields very well. I understood these fields before I studied finance and financial economics academically and before I entered these fields as a career. This post is about how destructive this video could be to the GOP as a whole. 

The first opinion I had of When Mitt Romney Came to Town was that it made me think it was made by Occupy Wall Street. It reminded me of the 9/11 conspiracy video "Loose Change." It used video clips and mood-changing music to back its points. What's worse? It can be used later by the Obama campaign to hurt Mitt Romney if Mitt wins the nomination. How? Well, out of the 312 million citizens in this country, how many truly know or understand what private equity is all about? Obama can use clips from this video (just as Newt is doing) to sway the minds of the non-understanding electorate into believing things about Mitt that simply aren't true. How does this help the GOP? Everything right now points to Mitt winning the GOP nomination, and to me, this video is basically nothing but Newt Gingrich saying "if I can't sail the ship home, I'm going to burn down the whole damn ship."

Factually, the video is Swiss cheese at best. Again, without getting into the tenets of private equity, this video plays more on emotion than hard facts. I uses testimonials from various manufacturing workers of companies purchased by Bain Capital. While their stories are sad, these workers are by no means experts in these fields. It sounds harsh to say, but it's the truth. Using these testimonials for backing that Romney and Bain Capital were acting unethically is like asking the fan of the team that loses the Super Bowl what he thought of the referees. Regardless of truth, the information given is going to be very biased, and it won't give a factual representation of the real business practices utilized by Bain. When it comes to fact checking, this article on CNNMoney (http://finance.fortune.cnn.com/2012/01/12/the-bain-bomb-fizzles/?iid=HP_LN) breaks down the cases seen in When Mitt Romney Came to Town and shows how many of the "facts" given in it are simply false. For example, author Dan Primack states uses Bain's purchase of KB toys to highlight this point:

"Romney and Bain bought the 80 year-old company in 2000." Again, Romney left Bain in 1999 and had no operational role thereafter. It is true that he remained an investor, but so did dozens of university endowments, private foundations and pension systems. None of them played a part in Bain's investment decisions or portfolio company management." 

Primack then writes, "The video also plays a video of Romney speaking at Emory University in 2010, and suggests that he refers to the ultimate failure of KB Toys as "creative destruction." This is taken completely out of context. Romney's Emory comment was pulled from a 45-minute interview that never once mentioned KB Toys. Instead, he was discussing broader economic productivity issues."

Using clips taken out of context... Come on, Newt. You know better than that. It was sleazy when the press took Mitt Romney's comment about firing people out of context; this is no different. 

He continues with another example from the clip highlighting the plight of circuit manufacturer DDI Corp. Bain Capital acquired DDI in 1996: 

"It suggests that "Romney and Bain" began firing DDI employees just before taking it public, including 275 Colorado workers. Again, there is a timing problem. Those Colorado employees were let go in early 2000, after Romney left Bain. The IPO also occurred after Romney had left."

Say what you will about Bain Capital and the practices of private equity firms, but to hold Mitt Romney accountable for things that occurred after his tenure is irresponsible. 

I'm sure the Democrats are just loving this, and as I would have expected, this video has been scorned by the GOP. It's political treason. Newt is employing tactics the far left would admire. Out of context clips, misleading statements, "facts" that are simply false, mood-changing sound and video shots are all intentional and are all used in left-leaning propaganda videos. Nothing is more dangerous than feeding misunderstood material to people in order to change their opinion. As the late comedian George Carlin once said, "I saw some old clips of this from the 1930s, but they were difficult to understand because the subtitles were in German." 

As stated, many in the GOP have expressed their disdain for Gingrich's video. Even the Chamber of Commerce president Tom Donahue has defended Mitt Romney and his role at Bain: 

CNNMoney: http://money.cnn.com/2012/01/12/news/economy/bain_romney_chamber/index.htm

The Daily Caller: http://dailycaller.com/2012/01/12/chamber-of-commerce-president-disappointed-in-attacks-on-romneys-for-his-time-at-bain/

From the Daily Caller article, Donahue is cited as saying, “I was very disappointed with the intramural carrying on within the Republican party attacking one of the candidates, Romney, who has an extraordinary business experience that in anybody’s look at private equity would have to say he formed a great firm, and he had a pretty good track record,” said Donohue at a press conference after the Chamber’s Annual State of Business Address. “Nobody in that track record has 100 percent, because in the private equity business, it’s all about risk, people risk their money. But this economy is about money, so if you don’t take a risk you can’t have a success.”

At the end of the day, very few Americans understand private equity. It's not an attack on them; it's merely a fact that not many people know about it, nor do they get involved in this highly complicated field. To use this issue to play on the emotions of a difficult situation, to sway people with misleading information to believe something about a person that's not true is not only sleazy, but it's dangerous. I worry this video that does nothing more than misrepresent a viable GOP candidate will cause more harm as the campaign goes on. In the earlier debates, I said that Newt was going to be a martyr and a hero in the GOP for continually taking on and repudiating the press on live T.V. It was bold, but someone had to do it. He went from potentially being a hero with in that regard to a Benedict Arnold in the GOP.

What do you think?