Mitt Romney has positioned himself as a defender of the hardworking job creators who have been rightfully well-rewarded for their efforts -- wealthy people that lefties deride as undeserving nepotism cases who think they're better than you. "I started new businesses and turned around broken ones -- and I am not ashamed to say that I was very successful at it," Romney said at CPAC in February, to huge cheers. But two people close to Romney make the case so easy for those lefties and their "envy economics." One is Edward Conard, who worked for Romney at Bain Capital, set up a mysterious entity so he could donate $1 million to Romney's superPAC, and has written a book arguing that income inequality is a good thing, and should be wider, so more people are encouraged to take big risks. The other is Romney's son Tagg, whose Solamere Capital private equity firm is very successful in part because he was able to pull so many investors from the donor list of his dad's 2008 campaign.
Edward Conard has spent the last four years writing a book "he hopes will forever change the way we view the superrich’s role in our society," Adam Davidson writes for next Sunday's New York Times Magazine. In Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong, Conard argues that the gap between the superrich and the rest is a sign of a healthy economy, but if we had a healthier one, it would be bigger. That would provide more incentives for "art-history majors," as he derisively calls them, to stop fooling around with pointless pursuits and get to innovating. Conard told Davidson, "When I look around, I see a world of unrealized opportunities for improvements, an abundance of talented people able to take the risks necessary to make improvements but a shortage of people and investors willing to take those risks. That doesn’t indicate to me that risk takers, as a whole, are overpaid. Quite the opposite."
On most issues, Conard "offers deep and well-argued analyses," Davidson says, except when it comes to the idea that the superwealthy can use their influence to get favorable treatment from the government, which discourages innovation. Davidson writes, "on this one he resorted to anecdotes and gut feelings." He never felt excluded from opportunity, Conard says. One of Romney's economic advisers, Glenn Hubbard, told Davidson, "Ed ought to be more concerned about crony capitalism."
Which is why another story in the Times is so interesting: Michael Luo and Julie Creswell explain how Romney's eldest son, Tagg, broke into the private equity business in February 2008, just after his dad quit running for president the first time. Tagg started Solamere Capitol with Spencer Zwick, the top fundraiser for Romney '08. The ties between Tagg's business and Romney's fundraising are extensive. There are the investors: John Miller (an early investor in the firm and national finance co-chair for Romney '08), Scott Frantz (Solamere investor who raised money for Romney '08 and Romney '12), Mark Chapin Johnson (Solamere investor who donated $73,000 to pro-Romney PACs in 2006), Meg Whitman (Solamere investor and national finance co-chair of Romney '08), Matt Blunt (Solamere senior adviser and a former Missouri governor who supported Romney '08). There are the employees: Zwick and Tagg Romney, plus Mason Fink (Zwick's deputy on the campaign who joined Solamre and then left for Romney's 2012 campaign), Laura Coleman (director of donations for Romney '08, then worked for Solamere), Kaitlin O'Reilly (coordinated finance events for a Romney PAC and researched investors for Solamere).
Tagg Romney told The Times, "We don’t want to get the campaign mixed up with other things… We’ve done our best to separate the two, because they’re separate." SEC filings show the firm will get $16.8 million in fees over its first six years, which is pretty impressive, The Times reports:
Yet, several private equity executives said that what the Solamere partners accomplished — given the tough economy and their limited experience — would have been nearly impossible without their connections. Antoine Dréan, founder of Triago, which raises money for private equity firms, said that given Mitt Romney’s success at Bain, “even without the politics attached to it, the name opens doors.”
A couple weeks ago, New York's Jonathan Chait wrote that Romney had subtly given away a core conservative message: that they want equality of opportunity, just not equality of outcome. When President Obama said he hadn't been born with a silver spoon in his mouth, Romney said, "I’m certainly not going to apologize for my dad and his success in life." Usually, as noted above, Romney just refuses to apologize for his own success -- inequality of outcome. But by defending his privileged upbringing, he was defending inequality of opportunity, too. Romney's son's success is inextricably linked to his father's. Tagg would probably argue that he's been handsomely rewarded for all his hard work, and Conard would probably argue that Tagg's success doesn't prevent an art history major from competing for that money. But it makes it awkward for Romney to make the case that he's in favor of equality of opportunity.