MR. MITT AND WEIRD MONEY

In The Wall Street Journal of November 2 was an article on Mr. Mitt's financial holdings and how difficult disclosure or divestment of them would be if he were elected. The article contained selected assets valued at $1 million or more, divided into two groups: Bain-related and not Bain-related.

The Bain-related group contained two private-equity funds, a public-equities fund, an employee IRA co-investment fund, and a distressed-debt fund. The not Bain-related group contained two hedge funds, a private-equity fund, and a Tagg Romney private-equity fund. (Alert to Josh, Matt, Ben, and Craig Romney: Brother Tagg might be number one on the runway as far as disposition of Dad's estate is concerned.)

Just this selected portion of Mr. Mitt's holdings would provide all the material needed for a full semester investment portfolio class in an MBA program. How many folks in the ninety-nine percent can even attempt a definition of a private-equity fund, a hedge fund, or a public-equities fund? The only term that might be somewhat familiar to ordinary Americans is IRA fund, but even here the addition of "co-investment" likely adds confusion.

The content of the WSJ's listing of selected Mr. Mitt assets highlights two points. First, despite his forced folksiness, Mr. Mitt ain't like most of us. He is one rich dude. Second, despite his claims of being a successful businessman, Mr. Mitt is really both more and less than that. He is successful at money, but he is not a businessman who made and sold a tangible product or provided a service recognizable by most of his fellow citizens. He is someone who tore businesses apart, repackaged them, and sold the results to others.

And he did this in a time of seismic change in the world of finance, a time when the computer put money-creating power into hands of many beyond the traditional banking structure, a time when such exotic things as derivatives, credit default swaps, hedging, and electronic trading appeared and laid the foundations for the financial collapse that occurred in 2007-2009. In short, Mr. Mitt came on the scene in a time of weird money.

Mr. Mitt was a very special type of successful businessman at the dawn of the Information Age. But he doesn't appear to understand the world in which he achieved success. He speaks and appears to think in the platitudes of the fading Industrial Age. He professes to be forward looking, but in realty he is blindly rushing into the uncertain future with the intellectual tools of the fast-fading past.