Mitt Romney and the Hypocrisy of Bain Capital

American Thinker ^ | January 11, 2012 | Aaron Goldenberg

[Cincinatus' Wife]

Many have suggested that attacks on Mitt Romney's service at Bain Capital are attacks on capitalism itself. That is hyperbole at its finest from those who do not understand the business Bain Capital was involved in.

Mitt Romney was NOT primarily a venture capitalist. A venture capitalist invests in early-stage businesses with the hope that they grow and prosper. These early-stage businesses are often risky investments. Though most ultimately fail, some succeed spectacularly making the risks worthwhile. Apple Computer and Google are two such examples. This is what Mitt Romney means when he says some investments succeed and some fail.

By contrast, Mitt Romney was primarily what is affectionately known as a vulture investor........

The two core arguments for Mitt Romney's candidacy are (1) that he knows how to create jobs and (2) that he stands a better chance of defeating Barack Obama than his competitors. Is it true that a slash and burn vulture investor is the best advocate for job creation? If you were a factory worker in Ohio or Pennsylvania or the upper Midwest and Mitt Romney killed your job because there was a more efficient use of the capital employed in your factory, are you really going to listen to what Mitt Romney has to say even if you believe in hard work and free market capitalism?

No one is suggesting that Mitt Romney was evil or immoral or corrupt or criminal. If Mitt Romney had founded a business that did not rely on firing thousands of people as part of its business model, this issue would never have come up. Given that the focus of this election needs to be squarely on Barack Obama and his Marxist rhetoric and policies, it is paramount that Republicans not nominate a candidate that detracts from that.

[VanDeKoik]

The fact that you brought this up means you hate capitalism.
Obama would certainly not know of this if it wasn’t for people bringing it up now, let alone use it!

/s

[muawiyah]

Every business in America relies to some degree on the ability to fire people.

We are currently very deep into the Great Obama Recession ~ by now everybody has had to lay off somebody, or shift costs to the retirement plan (popular with government BTW).

Now, the big one ~ whether it's Bain or Henry Ford or the US Federal government, if as a regular practice you don't hire new people coming out of college or highschool you can end up with FOUR YEARS WORTH of young people who have never had a full time job, or a job anywhere near the trade or profession they were trained for.

They become a "wasted resource" for society and themselves, and in the starkest terms possible, turn into a generation of young people with a barely Third World level of employment.

This Bain thing is trivial compared to NOT HIRING.

I am prepared to sell them the RED ARMBANDS so they can look good on the day they march on us!

[edpc]

If Mitt Romney had founded a business that did not rely on firing thousands of people as part of its business model......

This in no way is a defense of Romney, but give me a break. Perhaps we should have the GM govt bailout model, where taxpayers prop up failing businesses to keep people working and making products nobody wants (see the Volt)....?

These businesses suffered from internal problems and inefficiencies....hence the changes. In one instance, a purchased company was a union shop. They offered to renegotiate the union contract to keep people working, but they said NO. The shop was closed and everyone lost.

Who was the real problem?

[Diogenesis]

Romney's VULTURE CAPITALIST thinking was what happened
when he was a bad gov. in Massachusetts.

"As U.S. real output grew 13 percent between 2002 and 2006, Massachusetts trailed at 9 percent.
* Manufacturing employment fell 7 percent nationwide those years, but sank 14 percent under Romney, placing Massachusetts 48th among the states.
* Between fall 2003 and autumn 2006, U.S. job growth averaged 5.4 percent, nearly three times Massachusetts' anemic 1.9 percent pace.
* While 8 million Americans over age 16 found work between 2002 and 2006, the number of employed Massachusetts residents actually declined by 8,500 during those years.
"Massachusetts was the only state to have failed to post any gain in its pool of employed residents," professors Sum and McLaughlin concluded.
In an April 2003 meeting with the Massachusetts congressional delegation in Washington, Romney failed to endorse President Bush's $726 billion tax-cut proposal."
[Cato Institute annual Fiscal Policy Report Card - America's Governors, 2004.]

[txrangerette]

Oh yeah, how dare you post a piece about Vulture Capitalism becoming the face of the GOP in the person of Mitt Romney?

That is so wrong...attacking CAPITALISM that way!

Sheesh.

You’d think Rush and Sean can’t walk and chew gum at the same time.

(Attacking Rick Perry...and in Rush’s case, Newt as well, for supposedly attacking Capitalism)

And if you did think that...

Apparently you’d be right.

[DJ MacWoW]

These businesses suffered from internal problems and inefficiencies

Not from the articles that I read. One article stated that Bain stripped a company of all assets and the government stepped in and funded retirement etc to the tune of $44 million but Bain MADE money. And walked away with it. You REALLY want someone like that as President? I think he needs to answer some questions.

[txrangerette]

Changing the subject to Unions, eh?

Cherry picking a type of case.

The issue is bigger than Unions, by far. It doesn’t matter if it’s unionized or not, the same issue applies that the writer is addressing.

And the writer merely made the point...was actually kind to Mitt...that this isn’t the face of who should lead the Republican Ticket and the Republican Party.

On Unions, Perry is for Right to Work.

But in this instance, that issue serves only to divert from a valid point.

[Reagan69]

And to add salt to the vulture wounds, Mitt shipped the profits OFF SHORE so he wouldn’t have to PAY TAXES on them.

What a guy !

[DJ MacWoW]

I don’t see any difference between him and Obama. Lack of ethics and morality and lots of greed.

[Cincinatus' Wife]

Mitt's Masquerade

This election is going to be won on JOBS, JOBS, JOBS!

[RetSignman]

[No one is suggesting that Mitt Romney was evil or immoral or corrupt or criminal]

That may be true but when obama gets done with Romney, that is exactly the image that will foisted on the American public.

Videos of devastated families, pictures of abandoned businesses, tying far right wing talk show host to evil Bain Capital, cherry picking videos of sobbing women and children forced to go on welfare, people who lost their homes and if they are ‘lucky’ enough maybe even a suicide because of Bain.

On and on and on.

[Lakeshark]

This guy lays it out well: http://www.riehlworldview.com/carnivorous_conservative/2012/01/conservatives-are-being-played-perry-and-gingrich-are-right.html

[edpc]

You REALLY want someone like that as President?

No, I don't want him as President at all, which is why I said what I did in my opening sentence.

Not from the articles that I read.

Read some others to get the entire picture. The KC shop to which you are referring was rife with problems....pension gaps, union shop, dire need of upgrades. It was much like the auto companies which overreached and overpromised with back end deals like pensions. Hard to be competitive and in for the long haul when you're paying a lot of people who aren't working and making product anymore.

Bain made a profit after the failure, mostly due to a merger of that company with another steel mill in SC. The media makes it sound like the company was bought, pillaged, then closed. It was purchased in 1993 and finally went under in 2001. Why bother dealing with it for 8 years if you're a "slash and burn" entity?

Oddly enough, Bain was a part-owner of an Indiana steel mill. It was quite profitable, mostly because it was a non-union shop able to compete.

Incidentally, Romney had left Bain Capital in '91 to reorganize Bain & Co. It's like trying to tie everything Haliburton ever did with Dick Cheney.

[USS Alaska]

Is it true that a slash and burn vulture investor is the best advocate for job creation?

I am not a mitten wearer and until Newt went socialist with his recent bullshit rants, I was a Newt supporter.

I'm switching to Santorum, but if anyone defines an investment company as a "slash and burn" investor, they have defined their own biased view of capitalism.

There is only one reason to create a company, for profit, not to create jobs, not to promote the general welfare, not to provide health insurance for workers, just for profit.

In all the businesses that I was involved in both as an owner as well as an employee, never once did I think there was any reason other than profit for the owners and/or shareholders.

The ussr claimed to be superior to the US capitalist pigs because they had no unemployment.

When the proletariat bitched about low wages or bad service or no choice of food stuffs, they were sent to the gulags.

100% employment, such a deal.

[DJ MacWoW]

Oh please. Romney is as dirty and unethical in business as he is politics. What honest businessman gets a $180 million loan on a $30 million dollar company, against the company’s assets, strips it and walks away to let it file bankruptcy? Romney.

[edpc]

Pointing out something directly related to the issue at hand is not changing the subject. It’s hardly “cherry picking” when you cover something that was the core problem and main obstruction to long-term success. See the bailed out automakers as a prime example.

[Cincinatus' Wife]

Check out Santorum’s history of “right to work.”

[DJ MacWoW]

Questioning Romney's ethics in business isn't "socialist". We already have a liar in office. Claiming this is about capitalism and socialism is a misdirection. It's about ROMNEY.

Newt on Morning Joe explains

Scroll down for the video. Btw, Newt defends Romney's "I like firing people" comment.

[edpc]

You can be critical of the parent company's competence and Romney's qualifications to actually run a company, but ethics had nothing to do with the problems in this case. Here's a link to a Reuters article, giving a fairly good account of the many problems with the company.

It's a bit sappy on the personal stories of workers, but gives some information on the multiple reasons for the eventual failure.

GS Industries