Is Mitt Romney Bad for Wall Street?

Ever since Mitt Romney announced his candidacy for a second presidential campaign, Wall Street has been concerned about the impact of his decision. Not because the former Massachusetts governor is a poor choice for the financial sector, but rather because he has suddenly attracted the attention of the media and its [the financial sectors’] competitors in the financial world, specifically the private equity sector: private firms that buy underperforming companies and then resell them to make a large profit.

It happens. Suddenly, the financial world is in the spotlight because of the campaign, and this light is much more brutal than newspapers’ business pages.

His competitors have also focused a great deal on Romney’s career as head of Bain Capital, with the curious result that the financial world is fast becoming the subject of the campaign. Newt Gingrich, through a super PAC, has authorized the release in the coming days of a 30-minute film devoted entirely to the career of the Republican front-runner, after his victory in New Hampshire, and the destruction of jobs caused by his business buyouts. And Rick Perry, the governor of Texas, has called private equity firms “vultures.”

Meanwhile, Barack Obama quietly waits for the Republicans to nominate Romney, who will at that point be in tatters, shredded by six months of primaries during which his opponents and the press would have put him under an electron microscope. When Romney is formally designated as his opponent, the 44th will have a field day presenting him as the one responsible for the loss of tens of thousands of jobs. Romney’s competitors have already done the work for Obama. It will be difficult for Romney to present himself as one who will put America to work when his past as the head of Bain Capital indicates that he was instead one who put people out of work.

Private Equity Growth Capital Council, the lobbying organization for private equity firms, is preparing an underground campaign to counter the negative image that is forming about their industry. In particular, the private equity firms fear the loss of their favorable tax status; they can make billions yet pay only a 15 percent tax.

Even back in 1994, when he tried to take Ted Kennedy’s Senate seat, old Teddy played a trick by focusing on the company Ampad, which had been bought in Massachusetts by Romney, who reduced wages and laid off a number of employees. After that, Romney was largely out of the game.

This campaign should be exciting.