Video: Gingrich offers Mitt a deal

posted at 11:40 am on December 13, 2011 by Ed Morrissey

We didn’t get to this yesterday, but it’s not too late to discuss Newt Gingrich’s pushback to Mitt Romney’s demand that he return over a million dollars from Freddie Mac for consultant services over the past decade. Ron Paul made the same demand, but the media is obviously more interested in Newt-Mitt attacks, and Gingrich didn’t disappoint reporters with his response — even if he did disappoint free-market conservatives:

If Gov. Romney would like to give back all of the money he’s earned from bankrupting companies and laying off employees over his years at Bain, then I would be glad to listen to him.

Romney’s shot at Gingrich might have been a little ill-advised, but Gingrich managed to make things worse with his response — although his follow-up “bet” with reporters was a bit more humorous.  Regardless of whether one thinks that Gingrich’s work for Freddie Mac was legitimate, and I’m inclined to believe so, there’s no comparison between that and Romney’s work at Bain Capital.  Romney didn’t make millions of dollars bankrupting companies and laying off workers for the sake of doing either or both.  Free-market capitalism requires some “creative destruction” to rescue capital that is being used inefficiently and/or badly and putting it to more productive use.

Anyone who doesn’t understand that really doesn’t understand free-market capitalism, and that’s not merely an academic exercise, nor is it a coincidence that this clip got posted to YouTube by anti-capitalist Think Progress.  For instance, the argument against the auto bailouts from both George Bush and Barack Obama was that it interfered with this process, locking assets into inefficient uses and subsidizing failure with billions in public money for private enterprises.  That’s what companies like Bain do, and while the short-term effects are harsh (and some firms act in overly predatory behavior), the process is a necessity to ensure that the long-term use of capital remains efficient and productive.  If Gingrich doesn’t understand that, then how can he argue against the automaker bailout?

Jonah Goldberg, who also wrote about why a “Newtzilla” might be necessary in this cycle, thinks that Gingrich understands it perfectly, but couldn’t resist taking a cheap shot — and should apologize:

Not only is it petulant, leftwing, bunk, there’s no way Gingrich actually believes it (as Ramesh noted on Twitter). I understand that Gingrich doesn’t want to admit his payments from Freddie are, at best, tacky. But there’s no equivalence between Gingrich’s business model and Romney’s. If Romney should return the money he’s earned, if there’s a immoral taint to it, then Gingrich really doesn’t believe in capitalism at all. That’s obviously not the case and so he should explain himself. Lord knows he has the verbal skills to do it. If he can apologize for sitting next to Nancy Pelosi, he can “clarify” his way out of this hole.

That probably won’t happen, although it might explain Gingrich’s new commitment to staying positive:

Newt Gingrich called on his supporters and staff Tuesday to “stay positive” and avoid attacking fellow Republican presidential candidates, the day after he engaged in a verbal back-and-forth with Mitt Romney.

In an email, the former House speaker said he would refrain from attacking other candidates so the GOP nominee emerges from the primary season “un-bloodied,” and encouraged his backers and other Republican contenders to do the same.

“I am instructing all members of my campaign staff and respectfully urge anyone acting as a surrogate for our campaign to avoid initiating attacks on other Republican candidates,” Gingrich wrote. “It is my hope that my Republican opponents will join me in this commitment.”

That is a good policy for Republicans to follow, but in the end it might help Gingrich more — not just because he will be seen as a more positive force, but because it will keep him from taking backfire on his own attacks.

Update (Allahpundit): Via Breitbart TV, here’s Krauthammer dropping the S-bomb on Gingrich on last night’s “Special Report.”


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pannw on December 13, 2011 at 3:08 PM

Thank you for your reply. IMO, what we are discussing isn’t capitalism. It’s pure avarice, which I believe is one of the seven deadliest sins. Not only that, but these banks have not only been known to skirt the law when dealing with smaller companies, but have also been known to break the law in order to get the “right circumstances” for the bank.

Most people don’t behave the people with these banks do, so most smaller business owners don’t think to document every dealing with the bank. After all, there are laws on the books to protect both parties. Not only did my husband have D & O insurance, but he had the goods on the bankers. In my state, it’s legal to tape record conversations without the other party’s knowledge (the tapes proved criminal behavior by those he was dealing with). He, also, saved every voice mail, and documented every conversation. The last time he had a problem, it took three years and nine attorneys to get to a settlement on the Federal courthouse steps where he would buy them out at a reasonable price. Before that, they wanted twice what they deserved and they knew that the company couldn’t pay it.

None of that would have happened if these bankers were honest individuals, and if these banks were honest entities using normal business practices.

IMO, the answer is that those who behave as these bankers do should be called to account, put on trial and thrown in jail if need be. I don’t see any other way to get them to stop other than to make examples out of a few. We’ll see what happens to Corzine. If nothing happens to him, or he gets a simple slap on the wrist, the woe is us because criminal behavior by those with power and money is going to be tolerated.

One more thing…not all banks and bankers are dishonest, or greedy. In fact, I will say that most of them aren’t. However, I wouldn’t trust a Wall Street bank even with my worst enemy. I will, however, always be happy to do business with a small bank. They are more like small businesses.

kakypat on December 13, 2011 at 7:34 PM

You have fun with that. I assume 90%+ of the GOP electorate will be going to hell for not voting for her, but alas.

alwaysfiredup on December 13, 2011 at 1:49 PM

I have never once said if you do not vote for Bachmann you will end up in the FURNACE OF FIRE, but I wonder if your username isn’t a prelude to your future. I certainly hope not.

apocalypse on December 13, 2011 at 7:41 PM

Jailbreak on December 13, 2011 at 4:23 PM

It is my understanding that Bain is also a venture capitalist firm. They are no better.

No, I don’t get my understanding of the financial world from a movie. I get it from experiences that my husband’s company has had, as well as experiences from friends, and years spent in Federal court trying to right a terrible wrong…..which was successful.

Read my above post.

One more thing…perhaps you should know more before you insult someone?

kakypat on December 13, 2011 at 7:41 PM

It is my understanding that Bain is also a venture capitalist firm. They are no better.

kakypat on December 13, 2011 at 7:41 PM

Yeah, um, venture capital firms are private equity firms. They call themselves venture capital firms because they come in early before the company can get bank financing and therefore can negotiate a lot of the equity. Bain did both venture capital (early stage companies) as well as growth companies (typically more of the standard variety private equity firms). Either way, the private equity firm gets equity in the company.

If a company is failing and is therefore worth more broken up than together, a rare event, then the private equity firm will unleash the value of the firm by selling off the parts that are holding down the value of the firm as a whole.

So, no, Wall Street with Gordon Gekko nor your movie with Richard Gere are anything close to a true approximation of private equity businesses.

Private equity companies are good things. Well, unless your a communist/socialist or unless you have a chip on your shoulder because your husband worked for a firm that required layoffs. Most grown ups have been through layoffs…its part of life, unless you work for the government…again, notice the socialism in your world.

Jailbreak on December 13, 2011 at 7:49 PM

So you’re saying God wants us to elect Michele Bachmann?

alwaysfiredup on December 13, 2011 at 2:08 PM

Your joke isn’t funny and you’ll have to give an account for that on judgment day when you stand before God (Matthew 12:36). Following what God says is more important than majority opinion or what the so-called political pundits say who never get it right. The Bible is right. What GOD says is what’s right. I support Michele Bachmann because I think she’s sincere. I think she really supports Israel. I think that Congresswoman Bachmann says what she believes and I think she’d be a good President.

And Jesus answering said unto them, Render to Caesar the things that are Caesar’s, and to God the things that are God’s. –Mark 12:17

You have used this out of context. Politics is not an excuse to lie, cheat and steal. You don’t put politics first and the Lord second.

apocalypse on December 13, 2011 at 8:09 PM

I love you …

MadisonConservative on December 13, 2011 at 2:18 PM

What a lovely thing to say.. even after all this time. What a sweetheart you are! I love you too Maddie (no homo).

apocalypse on December 13, 2011 at 8:23 PM

You are saying that those who don’t vote for Bachmann are sinners? Bwahahahahaha!!!

csdeven on December 13, 2011 at 2:47 PM

Yeah, that’s what I’m saying (rolls eyes).

apocalypse on December 13, 2011 at 9:12 PM

I thought you got banned a couple of years ago.

kingsjester on December 13, 2011 at 2:52 PM

They did, under the same name, yet misspelled. I don’t expect they’ll last long with the way they’re charging out of the gate.

MadisonConservative on December 13, 2011 at 2:55 PM

I’m a little late answering these posts, but I’ve never been banned. I’ve written a how-to guide though and await my Badge of Honour. Thanks.

apocalypse on December 13, 2011 at 9:32 PM

Yeah, only 68% of the people in Massachussetts likes RomneyCare.

Totally. 68% of people demanding that 32% give up their rights (which is, of course, not to be forced by government to do things against their will) is what this country was founded upon. You go with that.

lorien1973 on December 13, 2011 at 12:53 PM

But RomneyCare was not actually unconstitutional, so it’s perfectly fine for the government to force people not just to buy a product they may not have wanted, but at a government-approved price and policy.

Or so goes the argument.

Of course, it would be a stronger argument if you could explain exactly how regulation by a state government could violate the federal Constitution.

Saying, “it didn’t violate the Constitution” is not exactly saying a lot when you’re talking about state governments which don’t come directly under the Constitution..

tom on December 13, 2011 at 9:50 PM

Newt Gingrich can have his deal when his home state’s government incentivizes the return of various large companies to their home states. This would include companies that have left many jobless in states like Ohio; one incentivized move of a certain large cash register company removed more than just jobs – it destabilized a city that grew with said company for 125 years.

If one is to criticize Romney’s experience in the private sector, one would do well to look at the near-equivalent in the state of Georgia. When Newt is willing to ask his home state to not cause similar losses in other states, then he will have room to ask Romney about his conduct at Bain Capital.

Being a brainy poltician might be nice, but Gingrich has a bit too much hubris about him. Book smarts are quite different than business smarts.

sethstorm on December 13, 2011 at 10:05 PM

If a company is failing and is therefore worth more broken up than together, a rare event, then the private equity firm will unleash the value of the firm by selling off the parts that are holding down the value of the firm as a whole.

You must have a problem with reading comprehension.

The companies I spoke of were not failing, and in fact were doing well. With my husband’s company, they tried to force a sale. That was unsuccessful so they went full bore towards a hostile takeover.

My husband’s company is just that…his. He was in the thick of the lawsuits, and was personally sued by these people. I lived, ate and breathed these hostile takeover attempts…the first for two years, and the second for three. Thankfully, my husband is now in a position to never be threatened by them again.

My husband’s company never required layoffs, and in fact, has increased profits and added locations every year.

Bottom line…they wanted control of the company BECAUSE it was a money maker.

One more thing…the reference to “Pretty Woman” was simply an illustration for those who have no concept of what these people are capable of doing, and nothing more.

Since you don’t seem to be able to post to me without insulting me, I will bid you adieu.

kakypat on December 13, 2011 at 10:12 PM

The companies I spoke of were not failing, and in fact were doing well. With my husband’s company, they tried to force a sale. That was unsuccessful so they went full bore towards a hostile takeover.

My husband’s company is just that…his. He was in the thick of the lawsuits, and was personally sued by these people. I lived, ate and breathed these hostile takeover attempts…the first for two years, and the second for three. Thankfully, my husband is now in a position to never be threatened by them again.

My husband’s company never required layoffs, and in fact, has increased profits and added locations every year.

Bottom line…they wanted control of the company BECAUSE it was a money maker.

One more thing…the reference to “Pretty Woman” was simply an illustration for those who have no concept of what these people are capable of doing, and nothing more.

Since you don’t seem to be able to post to me without insulting me, I will bid you adieu.

kakypat on December 13, 2011 at 10:12 PM

Im sorry but your story makes no sense. If it was HIS company, he would have the equity and he wouldnt have to sell the equity. A hostile takeover is when people buy stock in a publicly held company and buy enough to control the company and can do things like replace poor management. Your story has a few holes in it.

And with that, I bid you adieu.

Jailbreak on December 13, 2011 at 11:11 PM

You don’t know as much as you think you do.

The shares held by another entity was old. The first bank, when it couldn’t fulfill the hostile takeover without exposing themselves to our justice system, sold their equity to a venture capitalist firm. The company doesn’t have to be publicly held for a hostile takeover attempt. There were several shareholders involved, with my husband holding the largest block of shares.

In order for them to file suit, and attempt a takeover, do you really believe they had to have true charges? Or, could they possibly make up stuff? That’s what they did…they made up stuff. And, that’s why the judge issued a summary judgement against the plaintiffs on all the charges brought against the company. The only other charge levied was against my husband, personally. The judge let that go forward.

They didn’t know he had D & O insurance, and thought they would outlast him, and his resources. It’s not uncommon for them to operate this way. The insurance company was with him all of the way because, given the evidence, they knew the charge to be false.

BTW, this suit, and all of these charges (especially the charge against him) was nothing more than an effort to intimidate my husband into agreeing with their demands to give them control of the company so that they could sell it. They, also, offered him a sweet buyout deal, one for which most people would kill. However, he loves the people who work there (especially those who had been there a long time and were close to retirement) and knew what would happen to a great number of them. Usually, this tactic works, though.

So, on the night before the trial was to begin, the venture capitalist firm blinked, and accepted a reasonable offer for their shares, which was far less than half of what they had been demanding.

Even after all of the aggravation and the many sleepless nights, there is a bright side. They wasted over a million dollars of their firm’s money for a pittance. I bet someone was called on the carpet for that.

End of story…good bye.

kakypat on December 13, 2011 at 11:51 PM

Jailbreak, I forgot to mention the counter suit.

There were many allegations, but the big one was fraud.

Chew on that…

kakypat on December 14, 2011 at 3:04 AM

Newt is the Manchurian Candidate if I’ve ever seen one. Romney is a Progressive. Perry is just a bit dingy. The GOP has given us Larry, Moe & Curly

Ron M on December 14, 2011 at 4:23 AM

I think that a lot of you, including Ed, are missing the point of the whole exchange. Mitt made a semi-absurd comment about Newt and Newt said that two could play that game and made a fully absurd comment back. Both made ill chosen comments and were childish on an adult topic. You guys do not honor either Mitt or Newt by going off in left field about this. Don’t you know that the barbarians in the press hang on and magnify every comment without your help?

By the way, there is an English language term for this. Can anybody remind me what it is? May be a form of hyperbole?

Old Country Boy on December 14, 2011 at 9:28 AM

I think it’s much more honest making money in the private equity business than helping Freddy Mac maximizing their taxpayer bailout funds.

The first I would call capitalism, the second stealing from the taxpayer.

ProtectDefend on December 14, 2011 at 1:05 PM

The first I would call capitalism, the second stealing from the taxpayer.

ProtectDefend on December 14, 2011 at 1:05 PM

I spent some of my adult life working for a company that had government defense service contracts. We took money for consulting with the DoD and in return we assembled systems from COTS sources or developed components or sources ourselves. Our systems enabled repair of battle damage, corrosion and fatigue on aircraft. We also developed a new, now widely used, system for evacuation of battlefield wounded. I don’t think I stole money from the taxpayer. How elite and judgemental of you to accuse Mr. Gingrich of stealing from the taxpayers if his company provided services in good faith, that were needed by Fanny and Freddie. To make a statement like you just did, you have to demonstrate that 1> Mr. Gingrich did not provide the advice and services, and he knowingly provided them to get the money, though he “knew” they were not needed. You have just described 5000 college professors (better known as contract whores.)

Old Country Boy on December 14, 2011 at 3:33 PM

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