On Sunday, Mitt Romney called on Newt Gingrich to return the $1.6 million he received from the government-sponsored Freddie Mac, the housing agency whose calamitous lending policies were a core cause of the 2008 financial crisis.As Podhoretz points out, these are attacks aimed at their core weaknesses. Newt Gingrich's work for Freddie Mac hurts two ways - making Gingrich seem like a typical Washington insider who made money after leaving Congress by becoming a lobbyist/spokesman/historian for hire. And for Freddie Mac of all groups? That links him up with the housing debacle. And his too-clever-by-half defense that they were just asking him for his historical wisdom doesn't pass the laugh test. This is an attack that resonates with many people and would give conservatives pause. It is a legitimate criticism.
Gingrich responded yesterday by bringing up Romney’s years at the head of private-equity firm Bain Capital: “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.”
But Gingrich's attack on Romney comes from the left and sounds just like the sort of attack the Obama campaign would make against Romney. Yes, Bain capital took over businesses and people lost their jobs as they remade those businesses to shed unprofitable practices and build on the strengths of those companies. As a result many more people gained jobs when, without that investment of money and expertise, perhaps everyone employed by those companies might have lost their jobs if the companies went down the tubes. This is business works. As Podhoretz writes, Gingrich used to understand this concept.
In doing so, though, Romney and his team made decisions that over the years put thousands out of work.Contrast what happened when Romney's company took over and rebuilt failing businesses to how Freddie Mac contributed to the housing bubble and our Great Recession. Is that how Gingrich, the world-transformer, envisions how to approach our nation's economic problems: bad-mouthing businessmen rebuilding failing businesses and supporting public subsidies of housing for those who can't afford such houses?
Their argument, and it is the right argument, is that those workers would have lost their jobs anyway, along with everyone else at those failing businesses. Over time, by turning those businesses productive, they created better jobs and enduring employment opportunities.
That’s one key dynamic of capitalism, what Joseph Schumpeter called “creative destruction.” Someone once described it thus: “One observer said to me recently that in America every week 300,000 people are laid off but 350,000 are hired. It is that turmoil and turbulence of the marketplace, Schumpeter’s ‘creative destruction,’ that allows us to continue to grow and evolve and that in recent years has given us one of the longest periods of prosperity in American history.”
The person who wrote that sentence was . . . Newt Gingrich, in a 1998 Inc. magazine article.
As Brit Hume observed, Gingrich "starts swinging" when he "feels upstaged or threatened....Just ask Paul Ryan."
There are plenty of legitimate ways to attack Mitt Romney's record as governor; it's telling that Gingrich chose this method of attack.