Gingrich retreats from attacks on Romney in South Carolina

Mitt Romney is struggling to sell his experience at Bain Capital as something it was never meant to be — a jobs generator.
Private equity firms like Bain fundamentally exist to produce market-beating profits for their investors, a goal that seldom fits neatly with the image the Republican frontrunner hopes to burnish in the campaign. Profits may eventually bolster employment, but the chief priority remains the bottom line.


They’re not conventional investment houses like Goldman Sachs or Morgan Stanley. Private equity firms pool huge sums – from pension funds, endowments, wealthy individuals and banks – and put them to work in leveraged buyouts and similar high-risk, high-reward investments.
The work is not for the faint of heart. For every multi-million dollar triumph, there can be deals that hemorrhage cash.
Whether jobs are created or lost – or how many, or what kind – isn’t the key part of the equation. In the money game, Bain successes like Domino’s Pizza and Staples aren’t celebrated because they put tens of thousands of people to work. They count as successes because they reaped jaw-dropping profits.
“The first investment we made in private equity was a joint deal with Mitt Romney at Bain,” Steve Schwarzman, the co-founder and chairman of the Blackstone Group, told Bloomberg Television in November. “We made about 16 times profit. The second deal we did, Mitt led that one - we did that deal at Blackstone and we invited him to be the minority partner and we made 24 times our money. In finance, that’s a way to make friends.”
For the presidential election, said one executive in the private equity industry, “It doesn’t make for a quick and easy soundbite.”
This executive defended the former Massachusetts governor, saying that jobs can be the byproduct of successful investing yet the pathway is often complicated to explain on the campaign trail.


Newt Gingrich called the criticism “absurd” and said his questions had been misconstrued as an attack on capitalism.


A pro-Gingrich political action committee also has railed against Romney’s tenure at the helm of Bain Capital with the release this week of a 28-minute film assailing Romney for “reaping massive rewards” as head of the firm.


Gingrich is grasping for a campaign lifeline in South Carolina, which holds its primary Jan. 21, after a pair of disappointing fourth-place finishes in the contests in Iowa and New Hampshire.


During two campaign appearances in South Carolina’s capital earlier Thursday, Gingrich stuck to a largely subdued campaign, focusing on his plans for saving Social Security, creating jobs and boosting domestic energy production.


He made no references to Romney, nor did he repeat his criticism of Romney’s record as a venture capitalist. Instead, he tried to broaden his message with a call for auditing the federal bailout of the financial industry to see who got the money and why.


“When you have crony-capitalism and politicians taking care of their friends that’s not free-enterprise. That’s back-door socialism,” Gingrich said during remarks to older voters at a senior citizen’s expo.


The former House speaker predicted that a win in the first-in-the-South primary would pave a path to the presidency.


“If I win South Carolina, I think I will become the Republican nominee,” he said.


Last month, Gingrich made a similarly bold declaration about winning the nomination. At the time he was ahead in the polls and Romney’s allies had not yet blooded Gingrich with a barrage of negative attack ads in Iowa.