As Mitt Romney defends Bain Capital from attacks by the president, one argument I haven't heard him use is one of the most powerful: If private equity is so destructive for workers, how come pension funds invest so much in it?
Bain has launched another $6 billion fund for investments. It's working hard to lure pension funds. Funds are putting more, not less into private equity -- about 11 percent of their total assets. That's up from about 1 percent a decade ago.
The reason is obvious, of course. Private equity can offer a solid return on investment and it lends diversification to a portfolio.
If Romney were wise, he'd cite all the cop and firefighter and teacher funds that fueled Bain's rise and his. He'd say we're all in it together.
But no aspirant in today's Republican party can bring themselves to say anything nice about unions -- even if it's in their own self-defense. In the age of Wisconsin Gov. Scott Walker, public employee unions are greedy budget busters that are using their political leverage to extort taxpayers. Conceding that their pension funds are driving the GOP nominee's claim on the White House undermines that narrative.
Since Republicans are still enthralled with Ronald Reagan, it's worth remembering that he never shied away from touting union membership--even though his firing of the air traffic controllers union during its 1981 strike set the stage for today's GOP criticism of public employee unions. As head of the Screen Actors Guild, Reagan fought for and won the right to residual payments. He even led a strike for health insurance. All of this can be found here in The Atlantic.
It's not that Reagan didn't have a quarrel with public employee unions. Romney could continue his quarrel with them while acknowledging their intimate role in private equity.