One of Mitt Romney’s key selling points as a presidential candidate in sluggish economic times is his expertise in private-sector wealth creation. Fortune columnist Dan Primack wonders why Romney seems to have forgotten key lessons learned from his days as a private equity bigwig.
Romney comes from the world of private equity, where investors are expected to develop investment theses — easily digestible explanations for why a target company is underperforming, the specific steps required to turn it around, and why this particular group of investors is best qualified to do it.
It’s messaging that would work well for a political campaign, but Romney has not yet articulated an investment thesis for America. His stump speech is full of reheated Republican boilerplate — not the sort of “value-add” that helps win deals or board votes — while his written economic plan is a 160-page odyssey with dozens of charts and footnotes.
Romney also seems to have forgotten his private equity training elsewhere. When criticized for having shut down factories while at Bain Capital, he often shrugs his shoulders and says that “creative destruction” can be a painful process. And then that’s it. No redirection about how the bloated federal bureaucracy would be more efficient without departments X, Y, and Z, and how he, Romney, has a long track record of making difficult consolidation decisions that benefit the broader enterprise.
When asked about his wealth, Romney rarely points out that most of Bain’s investment profits go to institutions like university endowments and public pension funds. In fact the only thing Romney regularly hypes about his professional past is a job creation “record” that his former Bain Capital colleagues say is impossible to verify.
What’s really amazing about Romney, however, isn’t only that he’s eschewed the business lessons that could help him defeat political rivals. It’s that he’s fully embraced the one private equity attribute that is viewed by voters as an unforgivable liability: excessive flexibility.
