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Posted on 01/11/2012 10:21:31 AM PST by SeekAndFind
SNIP
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. Bain Capital invested in failing companies with the intention of either restructuring their business or stripping the business and selling its assets. This business model often adversely affects a company's employees. To be fair, if the company had gone bankrupt on its own, that would have adversely affected the company's employees too. The question Republican primary voters need to ask themselves is not whether Mitt Romney did anything illegal or immoral. In a climate of near 10% unemployment, do Republicans want a vulture investor to be the face of their party?
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.
SNIP
(Excerpt) Read more at americanthinker.com ...
This won’t give the MSM any ammunition it doesn’t already have on Romney. Hmm, it seems to be popular here at FR today to defend Mitt and if you don’t agree you’re a *bot. Something smells about this uproar over criticism of Romney. If he can’t take the hits and defend himself let him fall to the wayside.
There is a reason why eco-fascists don’t use carrion fowl as the face of their appeals, but instead chose the sort of animals that people find appealing, cute baby animals, sleek gazelles, lions in poses of noble bearing.
Like it or not, especially in electoral politics, the face of capitalism needs to be its appealing face — successful small businesses built by people who believed in a dream, technological innovators, venture capitalists who backed such folks. There is nothing immoral about corporate raiding and asset stripping, so long as they are not done in such a way as to harm others investors’ legitimate claims on the equity in the corporation taken over or dissolved. (Much though I love free market capitalism, I have nothing but contempt for professional managers who act out of their own interests, rather than as fiduciaries for the shareholders.)
Just as any actual ecologist (as distinct from “environmentalist”) will tell you, without carrion fowl (and molds and wood-boring insects) the natural world would be a wasteland of dead carcasses (and plants), so as a business professor you are aware that without the analog “vulture capitalists”, Schumpeter’s “creative destruction” would not work efficiently. Nonetheless, to defend capitalism, putting the clean-up crew front-and-center is a bad idea in part for the same aesthetic reason that the Sierra Club’s calendars don’t feature full-grown vultures feeding on their covers, in part because the dissolution of inefficient enterprises is actually just a necessary evil not a positive good, and in part because it feeds into the left’s delusion that all capitalism, even the capitalism of Apple and Google, is the work of “vultures”.
Nice to see the truth is coming out about Willard. Is it too late?
Vultures are an essential part of the environment, but I wouldn’t want one for a pet.
From Forbes today:
I can give you several gritty reasons why former Bain private equity czar Mitt Romney is not the person to become President of the U.S. in November.
First, is just one tale of a Bain deal under Romney. Bain invested just $30 million to take over a company. It then arranged for this company to pay Bain and its investors a special dividend of $180 million– or six times the amount of equity capital Bain invested to take control. This technique of forcing your prey to pay back your original investment or more, as in this case, is to ensure that the Private Equity Firm is assured of a profit. It is an exploitative way to strip the company of its spare cash and is indefensible corporate rape.
Know that Warren Buffett, CEO of Berkshire Hathaway has sworn in every annual shareholder letter that he will never, ever buy a division or a company from the private equity jugglers who buy and then sell on the company they have leveraged up with professional managers in it just for the soils of the deal– and certainly not the family or long term management devoted to the company’s historic role. Think the farce of RJR Nabisco or EMI or Texas Utilities.
I can assure you no private equity CEO has ever made money for his public shareholders. I have the tawdry lesson of Blackstone in mind. Issued to the public at $31 a share, it bumped up to $35 a share when Private Equity was all the rage and young dudes were all hot and bothered in 2007 to get in and get rich quick. Remember that; quick. But, from the fantasy times of 2007 BK shares were roiled all the way down to $5.00 a share in 2009– a sweet paper loss of 85%, and are still 50% below their original offering price at $15, well below supposed book value. KKR and Carlyle are drolling at the expectation liquidate insider and founder positions– and the public be damned.
You make a good point about Romney defending himself. Newt’s attacks are a small preview of the left’s vicious campaign. Still, I find it disgusting that Gingrich stoops to this level. I also think that his criticisms will legitimize the left’s attacks. I think it is terrible politics to eat our own. I will support the Republican nominee. I will not engage in any leftist attacks on our candidates.
Romney campaign spokeswoman Andrea Saul said in a statement that Bain Capital “invested in many businesses” and “while not every business was successful, the firm had an excellent overall track record and created jobs with well-known companies like Staples, Dominos, and Sports Authority.”
I will support the Republican nominee. ( i did not vote for Rommney in the Fl primary)
Thank you for such a clear explanation.
I have been trying to get thses points across with my posts, but you are doing a much better job. Even friends who are strong in their following of politics are having a hard time understanding the difference.
Thank you again.
I find it frightening that the Romney attack machine is so big. Who considers that? Newt comes out publicly and criticizes while Romney and his cohorts do their dirty campaign tricks in the dark. It’s askew.
“Mitt Romney was primarily what is affectionately known as a vulture investor.”
Has anyone noted that Vultures feed on the ALREADY DEAD, and dying?
This morning on Good Morning America, Mitt Romney said what he did at Bain Capitol WAS NO DIFFERENT THAN WHAT OBAMA DID FOR GM.”””
The other GOP candidates need to turn this statement into an ad against Romney!!!
How much money did the GM/Chrysler takeover cost America?
Ask the stockholders how much money THEY lost!!
Ask the suppliers who had monies owed on Accounts Payable how much money thei lost!!!
Ask how many small suppliers went out of business over these amounts never being paid!!
Ask yourself how the Union—which owns the majority of the current issuance of GM stock can possibly negoiate with THEMSELVES over any union contract?????!!!!! That is a complete joke.
Seems we are told in dribs & drabs over time that much of that ‘stimulus’ money will never be paid back to the USA taxpayers.
RE: Mitt Romney said what he did at Bain Capitol WAS NO DIFFERENT THAN WHAT OBAMA DID FOR GM.
1) Did the companies he restructured screw the bond holders and debt holder?
2) Did the companies he restructured give significant equity to unions?
Hey, I made an analogy. Bounty Hunters are a part of our Law Enforcement system, but they are not the whole system.
Bain is a part of our capital system, but they are not the whole system. I never said Bain wasn’t a type of capitalism.
created jobs with well-known companies like Staples, Dominos, and Sports Authority.”””””
Thses examples are from the very early days of Bain when they were indeed a Venture Capital company.
Then they changed their format & became Vulture Corporate Raiders.
I believe in the first entity.
I hate the 2nd entity.
How many of these companies would be in existance if the Death Tax were abolished?
According to something Rush said late in today's show, Newt is now backing away from and even apologizing for his attacks on Romney and Bain Capital.
Whatever Newt is now saying will probably be in news stories this afternoon.
RE: Whatever Newt is now saying will probably be in news stories this afternoon.
The Obama campaign will USE Newt’s ad and replay it if Romney becomes the GOP nominee. You can count on it.
I am not for Mittens for president. I am against bashing Bain Capital! That to me is anti American! I am a free market guy! i don’t care who was CEO of Bain. I am not going to bash a company because of their leader except maybe Jeffery Immelt who is anti American!
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