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Posted on 01/13/2012 2:53:31 PM PST by upchuck
During the Great Depression, my father toiled in a box factory. The workers were all flat broke, he recalled, and desperate for every nickel. But when overtime hours appeared, the men made sure they went to a guy with kids. The laborers were obeying the unwritten and unenforceable "humanity clause," whereby one gives up some personal gain in deference to another's screaming need.
My father later built a prosperous small business and became a reliable Republican (until the Bill Clinton impeachment). But he never saw working people as nobodies. Profits, while important, were not all.
A lack of similar empathy is what many find most disquieting about Mitt Romney, whose private-equity firm pumped his fortune to perhaps $250 million. It's more than just the nature of the business. It was a certain inhumanity of the Bostonians running Bain Capital, namely Mitt.
Private equity executives argue that by wringing costs out of the companies they buy, the firms emerge stronger. They often save ailing businesses for the good of the workers, as well as the investors.
Critics say such investors often loot companies. They slash workforces, pile on debt and enrich the partners, leaving the weakened patient to die. Bain excelled at these leveraged buyouts. A steel mill in Kansas City serves as a vivid example, as Reuters reports.
Under Romney's leadership, Bain bought majority control of Worldwide Grinding Systems in 1993. It put up $8 million of the $75 million purchase price and borrowed $125 million by issuing bonds. In business since 1888, the mill was renamed GS Technologies. Bain immediately sent investors $36 million in dividend checks.
"Paying distributions with debt is not uncommon," Duke University finance professor Campbell Harvey told Reuters. "The only thing that strikes me as a bit unusual is the size of the dividend. There would be logic in them saving some cash for a downturn."
A steel business is capital-intensive and sensitive to economic conditions. That's why it needs to conserve money for the lean years. When the economy did go south, so did GS Technologies. Its bean-counters reportedly started skimping on everything from earplugs to basic maintenance of equipment.
GS Technologies went bankrupt in 2001, the plant closed, and 750 workers lost their jobs. Bain skipped out on a previous agreement to provide severance pay and health coverage if that happened. The workers saw their pensions slashed by up to $400 a month.
But Bain walked away from the smoking ruins $12 million richer, not including $4.5 million in consulting fees. And it had tapped government, as well. The company had extracted $3 million in tax savings from Kansas City and partook of a federal program putting taxpayer guarantees on loans to troubled steel companies. The federal Pension Benefits Guarantee Corp. bailed out the company's underfunded pension plan to the tune of $44 million.
Bain blamed the company's failure on an economic downturn and cheaper steel imports. The company's former CEO Roger Regelbrugge blamed burdensome debt and new managers from outside the steel industry. "I have no question that the company would have survived under different management," he said.
The moral here is that there was no morality. In normal business, companies do fail, and layoffs sometimes must happen. But after feasting off the company, Bain had the means to keep its word to the workers. That should have been a matter of honor.
I don't think Romney took sadistic pleasure in firing the machinists and pipefitters. Possibly worse, he never saw them as human beings -- but as potential subtraction to his personal bottom line. They never registered with him one way or another.
Myth isn’t human - he’s a god
I f valid, it seems that a commercial of that story playing through the election cycle would be a killer for Romney.
Speaking of Mitt’s missing humanity, I just saw this ad LOL: http://www.youtube.com/watch?feature=player_embedded&v=x-4bm5NxqPY
They are attacking the TWO THINGS that are Romney's biggest assets:
1. Inevitability
2. Electability
Without those two things Romney HAS NOTHING and the Bain Capital narrative cuts right through both of them.
Republicans, Democrats and Independents alike...even the GOP ESTABLISHMENT will eventually have to concede that Romney is neither inevitable nor electable.
The GOP establishment took an arrow through the heart is is now bleeding to death.
He also needs to stand up tall and explain himself on global warming and his previous support for Cap and Trade.
Unfortunately very few seem to have his standard of right and wrong. Hopefully it will all pay off some day.
Where in the hell have you been?
>>If Newt would temper his negative rhetoric and focus on where America could go he would gain a lot of support, I think.
This whole Newt vs Mitt thing has become surreal. These same issues would have surfaced once Romney becomes the nominee. They (the leftist media) will use them to destroy Romney and ensure an Obama victory. This is probalby why the GOP Elite selected Mitt as “their” candidate. He can lose the election because (they will say) “the American people don’t understand capitalism and free markets”. This will allow the GOP-E to move even further to the Left as the party of Crony Socialism, which happens to be the same territory presently occupied by the Democrats. So, I guess that will free them up to move firmly into Communist territory.
Newt is the modern Paul Revere except that the Reds aren’t coming...they’re already here and have us surrounded.
Great read. This needs to be tweeted and posted everywhere. Mitt, aka Mr. Capitalism, will hurt capitalism and will make the case for socialism and unions. The GOP messed up BIG TIME.
Thanks for the ping.
Newt Gingrich is right on.
Ping for Newt’s list, plus Newt is right.
Willard (Ebeneezer Scrooge) Romney.
Newt in 2012!
One should remember that the fictional Dickens character, Ebeneezer Scrooge, also operated wholly within the law.
Just because it’s legal does not mean it’s good.
The golden rule of “Do unto others as you would have them do unto you” seems to find small favor among some business people. It is replaced in their hearts by “Business is Business!”
Socialism is evil, capitalism is good. I firmly believe this.
We don't need an Ebeneezer Romney as president to prove we love capitalism.
That was hilarious, I loved it.
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Excellent read. Capitalism only works when morals or ethics play a role. Newt’s shut down the OWS argument if he can gain the nomination......please God.
When you elect a douche bag to the Presidency...
Does that mean the White House becomes a toilet?...
Romney is merely anti-vaginal itch medication...
What America needs is a couple of brass balls......
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