Trumpeting Capitalism

Under the headline, The Speech That Mitt Romney Should Give, Kyle Smith makes a great case for capitalism, profits, the private-equity business, and jobs:

A private-equity shop is a little like a trauma surgeon in the ER. You don’t want to meet us. Chances are, you’re having a near-death experience. You don’t go to the ER with a headache. A lot of the companies we dealt with were falling apart. Close to bankruptcy. We did our best to save them. Sometimes we didn’t succeed. But I’m happy to report that we had more success than not. Other companies we did business with were like newborn babies—weak, and desperately in need of support. We provided startup capital for them.

Surgeons, if they’re good at what they do, are handsomely rewarded. So are private-equity shops, if they know what they’re doing. But I think if you talked to the average surgeon, he or she’d say they’re not in it for the compensation. They’re in it for the challenge. They’re in it because they’re good at solving problems, and they’re willing to go to work in a high-stress environment every day because they think they’re up to some of the most hair-raising challenges imaginable. They do society a lot of good. Ultimately the people whose lives they save go on to have children of their own, and those children go on to have children of their own. Ultimately a lot of people are alive because of what ER doctors do.

The immediate challenge is to restore the patient to life. The patient may go out and get hit by a bus tomorrow, but the doctor’s focus is on the health of the patient today. They restore life and health. In private equity, that life and health we try to restore is called profitability. Profitability has to come first. Ultimately no business can survive if it’s not making a profit. Unless it’s the government, in which case it just raises your taxes or borrows money from China that your grandchildren will have to figure out a way to pay.

Profit is not a dirty word. Profit means the health of American business. And when American business is healthy, that’s when it can get on with growth. With creating jobs. ...

Using Apple (Steve Jobs), Facebook (Mark Zuckerberg) and Staples, Smith illustrates the free-market system's positive ripple effect on society, what he calls the "blessings of American capitalism."  Worth a full read.