Mitt Romney’s Bad Biography

One more thought on Mitt Romney’s loss last night: Could his private equity background be more harmful than helpful?

I’ll stipulate that Romney’s private equity earnings are what got him a seat at the table, but money alone can only take you part of the way. Voters make initial judgments based on candidate biography, and there just aren’t too many people who have a whole lot of respect for private equity. The industry continues to be viewed – usually unfairly – as one that makes its fortunes at the expense of workers, whom it deems disposable.

As Mike Huckabee put it on Leno the other night: “People are looking for a presidential candidate who reminds them more of the guy they work with than the guy who laid them off.”

If the election were happening last year, this might not matter. But we’re in 2008, and private equity is undoubtedly going to generate lots of negative headlines. Leverage-laden portfolio companies are going to be forced to cut costs (which often translates to headcount), and some firms are bound to panic when revenues don’t gel with inflated projections.

For example, a smart GOP candidate will use the Chrysler layoffs as a noose around Romney’s neck in rust-belt states like Michigan (where Romney should otherwise be strong, given that his father was a popular governor there). He hasn’t done private equity for more than a decade, but his biography is steeped in it.

Some voters will want to assign blame for economic misfortune, and Romney could be their unwitting scapegoat.