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?
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.”