Conservative Book Watch: Bain Capital Edition!

(First, if you haven’t checked out my memoir of the first incarnation of OWS, what are you waiting for? All the cool kids are doing it!)

There is something about piling up money that makes people want to write books. I’m not sure why. What reputation these books have is mostly determined by how well liked the person was as a public figure. In terms of genre, they should, for the most part, be lumped in with Self-Help books. The idea is that the person with money, whatever insane or illogical points are laying around in their head, now condescends to share them with a presumed audience ready to eat them up. These points have, of course, become immediately valid and wise because they’re around money.

Not that I’m complaining. I’m a fan of a godawful book cover as much as anyone, and with no checks on ego in these projects, you get some of the absolute worst.

"Sleep is...so...finger lickin'...good..."

“Sleep is…so…finger lickin’…good…”

“I never actually wore that sombrero.”

The all time master of the awful book cover though is homophobic founder of Chick Fil-A S. Truett Cathy. These are only a sampling.

You apparently don't need to know the size of a chicken sandwich to become an incredibly wealthy owner of a chain of restaurants that serve chicken sandwiches.

Sometimes the money doesn’t even have to be yours to capture you in its aura and feel like you’re above graphic design.

Incidentally, that book happens to have perhaps my favorite sentence ever to be put in an Amazon review: “Why so much of the back pages are filled with her thoughts on European living, I don’t know.”

Anyhow, this is all a set-up to the latest book to receive attention from the NY Times Magazine that doesn’t deserve the attention of anyone who lived through Ronald Reagan or caught up with him through Wikipedia. Mitt Romney’s former partner at Bain Capital Edward Conard has written a Reaganomics book about 25 years late, and the NY Times doesn’t even recognize the similarity enough to even once in 6 pages mention the dreaded r-word. Why is this book, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong of any interest to the informed reader? Outside the Mitt Romney connection, the NY Times doesn’t really say.

Conard’s thesis, according to The Times is this:

Conard understands that many believe that the U.S. economy currently serves the rich at the expense of everyone else. He contends that this is largely because most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone. “Most citizens are consumers, not investors,” he told me during one of our long, occasionally contentious conversations. “They don’t recognize the benefits to consumers that come from investment.”

Umm…what?? Besides the obvious flaws in logic, what Conard made his fortune on wasn’t even investment in consumers. The Village Voice writes:

His formula was simple: Bain would purchase a firm with little money down, then begin extracting huge management fees and paying Romney and his investors enormous dividends.

Conard makes his case much differently, and tellingly, entirely in the abstract:

Take computers, for example. A small number of innovators and investors may have earned disproportionate billions as the I.T. industry grew, but they got that money by competing to constantly improve their products and simultaneously lower prices. Their work has helped everyone get a lot more value. Cheap, improved computing helps us do our jobs more effectively and, often, earn more money. Countless other industries (travel, telecom, entertainment) use that computing power to lower their prices and enhance their products. This generally makes life more efficient and helps the economy grow.

First note that his argument here, and the emphases, say essentially “big business is good since it allows for more big business.” I’ll let Marshall McLuhan field that one. “But maybe the chicken is just the egg’s way of making more eggs…”

And of course the Times never mentions that the bulk of development on the computer came from government funding, thereby furthering the false notion that the great forward strides in technology were the product of some Ayn Rand-style adversity. And besides this, what Conard made his money on had nothing to do with this sort of narrative, whether it’s true or false.

In support of Conard, the Times brings up economist Dean Baker, who trots out the questionable assertion that “for every dollar an investor earns, the public receives the equivalent of $5 of value.” Where did he pull this number from? Can anyone tell me?

This iffy number isn’t good enough for Conard, who figures if he’s going to stick his foot in his mouth he might as well deep throat it. On the strength of an argument about agribusiness (the world outside the United States and the various issues surrounding Monsanto of course don’t figure in here), Conard claims that the return to the consumer is actually $20 to every $1 of investor capital. His book, unavailable for me to parse at the moment, is going to need 1) way more than one example to prove that point, and 2) some sort of explanation how being able to buy cheap crap helps anyone who’s long-term unemployed. Somehow I doubt these things are there.

The revisionist history goes on with little comment or correction from the Times.

The financial crisis, he writes, was not the result of corrupt bankers selling dodgy financial products. It was a simple, old-fashioned run on the banks, which, he says, were just doing their job.

Wait…what? Then how do you explain the knowingly misleading ratings given to all these derivatives and securities by ratings firms like Standard and Poor? That the products were literal definitions of fraud?

It should be pointed out now the great editorial strength of The New York Review of Books over The NY Times Magazine or the daily NY Times. If the NYRB thought Conard’s book was worth commenting on, they would find an expert in economics who would then parse the arguments and their counters. The NY Times meanwhile, thinks the best way to verify the validity of a book or product they’re covering is to send someone out and tell the reader how the author eats his lunch. (“Over lunch…(Conard) looks like a benign middle-aged guy until he starts making an argument. At which point, Conard stares into your eyes and talks with intense force, punctuated by the occasional profanity, in full paragraphs.”)

The worth of ideas presented to them, as in most TV news programs, is their potential as PR coups. For example:

As I read “Unintended Consequences,” though, I wondered if the book would have the opposite effect. Even staunch Republicans and many members of the Tea Party might bristle at a worldview that celebrates the coastal elite and says many talented people in the middle class aren’t pulling their weight. Was Conard saddling his old boss with another example of how out of touch those with car elevators and multiple Cadillacs can be?

Meanwhile, criteria of critical engagement seem to be largely satisfied for the Times writer (in this instance and plenty others), by saying they also had lunch with those opposing the ideas presented by the subject of the article.

I first met Conard last fall, around the same period in which I was spending a lot of time in Zuccotti Park, interviewing anti-Wall Street protesters who argued that people like him were destroying our democracy.

Arguments against Conard are left in the article’s last two pages, and aren’t given much space to stretch out. Author Adam Davidson seems eager to break free of the Times’ lunch based aesthetic, but the biggest flaw he’s able to point out is that “crony capitalism” exists in the United States, something Conard outright denies. But there are so many other gaps that seem much more interesting than expending several hundred words giving us a cleaned up and inaccurate biography of Conard.

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2 Responses to Conservative Book Watch: Bain Capital Edition!

  1. Paul H says:

    Dan,

    I think Conrad is trying (albeit wrongly) to reference the money multiplier — a concept that neither works through investment in the way he is describing or necessarily (a) occurs (b) helps any consumer as a result. The entire book is diehard supply-sider* nonsense.

    http://en.wikipedia.org/wiki/Money_multiplier

    *Though those people (see: Mont Pelerin Society) actually read the material they are pretending to have an intellectual stake in

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