Why Wall Street Loves Mitt Romney: Q&A With THL Partners' Scott Sperling

NEW YORK ( TheStreet) - Scott Sperling, a vocal Obama-to-Romney switcher and co-president of buyout giant THL Partners says Mitt Romney's principles of lowering tax rates and his experience as a private equity executive are reason for a party switch.

Sperling has given governor Romney nearly $60,000.00 through contributions to the Republican National Committee and to the Restore Our Future political action committee, according to Opensecrets.

In the 2008 election cycle, Sperling was a donor to Democratic causes, the data reveals.

Instead of dwelling on the assumptions and calculations in Romney's budget -- which have received criticism as lacking detail from Democrats and even some respected Republicans -- Sperling is in strong support of Romney's growth oriented values and skills and believes they are key to a budget balance.

Growth, Sperling says, will allow Romney to lower overall tax rates without forcing tax cuts on the middle class, an accusation leveled by Democrats and many budget experts on Romney's fiscal plan. In fact, Sperling is skeptical that candidates can be scored on their budget proposals in an accurate, non-partisan manner.

See Scott Sperling speak about how THL Partners, Bain Capital and The Carlyle Group drove a top and bottom line earnings recovery at Dunkin' Brands (DNKN), the parent of Dunkin' Donuts.

Sperling's focus the stabilizing impact of economic growth differs from a narrative more tilted towards deficits and debt that's taken hold on the campaign trail and will likely be a centerpiece of presidential debates, which start in early October. It is Romney's experience of reigniting growth at companies in distress that Sperling also sees as another key selling point.

Below are some answers from TheStreet's interview with Sperling.

TheStreet: How do you see the Romney campaign with under 50 days to election day?

Scott Sperling: I think the debates are going to be very important because I don't think the true picture of Mitt Romney has gotten out to the public in many ways, which is pretty astounding. The Obama campaign is run by some really effective professionals and they've done an amazing job trying to define Mitt early on and it's hard to break through that.

TheStreet: What do you see as the strongest economic points of the Romney campaign?

Sperling: I think the most important thing for this country right now is jobs, which is largely dependent on economic growth and the ability to get out of this really horrible cycle that we've been in with approximately 15% unemployment and 47 million people on food stamps. That's bad for people, and that's bad for psychology because it exacerbates the problem we have with budget deficits and government's ability to help the people who need the most help.

If we want to deal with those issues, we need to have economic growth. A 100 basis point swing in GDP growth is a three to four billion dollar impact on the projected budget deficit over the course of 10 years, which is more than anything president Obama's campaign is talking about. If we end up at this 1.5%-to-2% growth rut that we've been in, then we are going to have real significant problems.

TheStreet: You are a numbers guy, how you reconcile Romney's budget?

Sperling: I think there are certain assumptions candidate Romney makes about the ability of his actions to stimulate economic growth and that is one of the key assumptions he utilizes in order for him to get to the numbers that he is projecting. If you look at what Ronald Reagan did in the 1980s, he inherited a worse economic situation where the misery index was higher than it was even in 2009. The actions Mitt is talking about are the same ones that led to 8% GDP growth under Reagan.

With Bill Clinton, the growth came when he cut capital gains taxes, when he started to reach across the aisle on things like 'Welfare to Work,' and when he and his cabinet worked on various deregulations that actually allowed companies to have lower costs and achieve higher rates of growth. That prescription led to the growth rates, in fact higher growth rates than are assumed in Mitt's budget.

If all we look at are tax cuts and the fact that Mitt has promised not to increase taxes on the middle class, the assumption that some skeptics are making is that I'm going to have to increase taxes by $2,000, which Mitt is just not going to do. Then they say, 'well if you don't do that then how do you achieve the budget deficit objectives you say you are going to achieve?' The way you get there is through economic growth. But that's easy to pick on.

TheStreet: How does Mitt Romney's experience running Bain Capital support his economic agenda?

Sperling: The thing that Mitt has done well is really identify ways to drive growth and work in highly complicated, often troubled situations and really turn these companies around, instead of being stuck in a problem. The result is you end up being in a higher growth situation. In the case of private equity, it meant very strong rates of return for Bain and its investors. He took that same skill set and applied it to the Salt Lake City Olympics and turned it into a great success.

TheStreet: Mitt Romney's recently been plagued by public relations 'gaffes,' what's your take?

Sperling:The fact is that Mitt is not a lifetime politician, which means he is not going to be glib in the way that the press might like a politician's glib. So what the press thinks of as a gaffe is not so much a gaffe as it is Mitt Romney stating the truth. Look, Mitt did not articulate the hard truths probably as well as he would like, as he said... the fact is he was really talking about why you have so many people dependent on the government and we just can't have that because those people don't want to be dependent on the government. It's not the way Americans want their lives to go and we have to return to a set of policies that will allow for the kind of growth that will put people back to work.

For on private equity investments, see Scott Sperling speak about how THL Partners, Bain Capital and The Carlyle Group helped to drive a top and bottom line earnings recovery at Dunkin' Brands ( DNKN), the parent of Dunkin' Donuts.

For more on private equity, see why Goldman Sachs is cutting its private equity future by half. Also see why a dividend is key to Carlyle Group's stock strength.

-- Written by Antoine Gara in New York

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