Posted on 01/12/2012 1:24:19 PM PST by Qbert
On her radio show today, Laura Ingraham grilled Gov. Rick Perry about his criticism of Mitt Romney’s career as a “vulture capitalist” at Bain Capital. Especially unhelpful to Perry’s case against Romney was the fact that he received donations from private-equity firms in previous campaigns, as Ingraham pointed out. Here’s a partial transcript (the exchange occurs about 4:16 minutes in) and audio below.
Ingraham: You know I am going to raise the issue of Texans for Public Justice. Their analysis of your campaign contributions since 2000 [indicates] you have received more than $7 million from private-equity firms and private investment firms. Are any of those “vulture” firms?
Perry: Listen, I didn’t paint with a broad brush and say that every private equity firm out there is . . .
Ingraham: Only Romney’s are vultures? None of your guys, only Romney’s?
Perry: Look, Romney is running for president.
Ingraham: Yeah, you are running for president too, and you have benefitted from these firms.
Perry: Correct, and I don’t have a problem with that.
[*Embedded audio at link*]
OUCH!
But.. But .. Butt-t!
And it’s not just private equity firms or corporate raiders that acquire companies and shut down or sell off some units, while keeping others with more potential going. All sorts of corporations make acquisitions and follow the same practices.
The large number of mergers and acquisitions of the past few decades have involved the same approaches carried out by many different types of firms that have contributed to most every politician in state or federal government.
There have been numerous mergers of banks and oil companies and firms in other industries that have resulted in many operating units being closed, many redundant offices closed, and in thousands of layoffs.
It’s not all good, but it has been very common and not limited to firms such as Bain. And every politician in DC could be tied to any of those firms.
I’ve said all along and continue to say that this was the stupidest argument they could have possibly picked, and will blow back hard on those who pursued it. Gingrich especially, who himself was paid to be a member of an advisory board for 2 years for private equity firm Forstmann Little & Co.
Dumb dumb dumb.
All Romney needs to do is explain in sufficient detail why the firms went bankrupt even though he did all the right things to try and save them. If there were mistakes in judgment he needs to fess up and tell what he learned from it. If he can't do that, he probably won't be able to win the general election.
Kennedy used this issue to help defeat him in the senate race a long time ago. Romney has had lots of time to prepare his defense, I would like to hear it before he becomes the nominee.
I am glad that other candidates are bringing it up, even though I really dislike the term Vulture Capitalism.
I wish Perry would STFU, drop out, and go away. He splits the conservative vote and helps Romney.
Yes; and he needs to do it soon. Before SC. Then endorse Gingrich or Santorum — preferably Santorum.
Perry has never condemned private equity firms. He has questioned Romney’s practice of using LBO’s to personally profit from this “creative destruction”. Perry also didn’t support the $787 billion TARP Wall St. bailout (unlike Romney) which saved these Wall St investment banks when they were about to suffer the same free market fate.
Too bad GST Steel didn’t have friends like Hank Paulson to pony up a huge chunk of taxpayer change.
It’s not all good, but it has been very common and not limited to firms such as Bain. And every politician in DC could be tied to any of those firms.”
Well you are correct about these actions. I was employed by a large company that acquired rivals and did what they needed to to eliminate redundancies, consolidate operations, and close unprofitable lines of business. I also survived several takeovers when the shoe was on the other foot so to speak.
There is a difference between that and a leveraged buyout. With what you are talking about, the management team itself has a vested interest in maintaining the long term viability of the company. The LBO team often only needs to have success for 3 to 5 years.
The danger with a leveraged buyout is that the LBO management decisions can prove beneficial in the short term(temporary improvement in stock price for example), but in the long term saddle the company with so much debt, and take out so much operating capital that the firm simply can not survive in the long term.
Sometimes the proforma accounting can be so Rosy, that the business model has no way of working long term, and/or the amount of debts and debt repayment and management fees are so burdensome that even the slightest slow down in the economy leads to bankruptcy. Or maybe there was some unforeseen happening(9/11 or change in laws & regulatory costs).
Since the LBO participants have usually departed with cash in their pockets before the SHTF, the normal self interest of ensuring the long term existence of the firm, is just not as strong as it is in a simple merger.
In cases, where the companies fail and the long term shareholders loose, if the LBO participants walk off with zero losses, questions naturally arise because the management and the board of such companies, have a fiduciary duty to the shareholders(owners) to prevent dubious actions that could bankrupt the company.
Romney just needs to be able to explain what happened to the companies the newspapers are writing about and demonstrate how he made the correct management decisions. If mistakes were made, or there was something in retrospect he would have done differently, just explain it.
He has made his experience in this area the central theme of why he's the person to elect. Some people would like to have more details, in order to fight the smears we all know will be coming. If he can't provide them, then he's not electable.
Laura, you lack discernment. You can’t seem to see the difference between the guy down the street who is in business, even in the investment business, and George Sorors. It’s because of people like you that this country is in such trouble.
There is nothing wrong with private equity firms and nothing inherently immoral about the practice of buying and restructuring a failing company.
Romney is being asked about irregularities in the establishment of the Bain company, a particular set of what seem like predatory operations that involve stripping of pension funds, and the fact that taxpayers had to cover losses caused by the activities of Bain.
So far he has skillfully managed to avoid answering any of these questions.
Yeah because his 5% is going to make such a difference. Why doesn’t Santorum get out and back Newt?
I’m no fan of Perry (to say the least) or Romney, but I have a problem with this entire concept.
To me, a private equity firm is a vulture-firm willing to come in, grab a weak company, and then either attempt to turn it around, or liquidate it. If these firms didn’t exist, the weak company would fail unless they could turn themselves around. This usually isn’t possible, mainly due to unions, and/or to having useless people on the workforce...so the companies would fail anyway.
Put another way, you don’t find vulture firms buying YouTube or Facebook, as those companies make BIG BUCKS and will not sell out cheap.
Sure, it’s tough on the workers, but, other than maybe a few more months, their futures were doomed anyway.
I could be wrong, but that’s my take on it...
I actually think he might be helping. His attacks on Romney could lead some conservatives to rethink the meme of Romney being most electable and drive them to Newt or Santorum.
"The smartest man in the room" thinks we're all dumb hicks who fall for "populist" notions of robber barons. I think he's truly surprised this has blown up like this. He thought we'd eat it up.
Of course, it's hard for him to go after Romney on anything else. They agree on it all.
“Gingrich and Romney”. I meant Gingrich and Perry.
“Romney is being asked about irregularities in the establishment of the Bain company, a particular set of what seem like predatory operations that involve stripping of pension funds, and the fact that taxpayers had to cover losses caused by the activities of Bain.”
Now you’re into something ENTIRELY DIFFERENT. Once taxpayers are forced to cover pensions...then that is definitely a problem well beyond people losing their jobs.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.