The 4 years Newt balanced the budget were the only 4 years in I think the last 80 years or so that it was balanced. So I think he can be trusted to manage federal spending.
When Hannity asked Morris who won, Morris said “Newt Newt Newt.” Morris said it was a “classic vintage Newt Gingrich performance” and that Newt was “absolutely terrific.” He said Newt was one great debate away from getting back into the race and he had it tonight. He only criticized Newt for the first 20 minutes when he was still talking about Bain Capital. He said his “hunch” is that Newt could win the primary on Saturday, but he expressed concern that the evangelical endorsement could keep Santorum and Newt tied for 2nd place, which means Romney will win it.
I think it’s a shame the “conservative” media carried Romney’s water and bought into his line that the criticisms of him at Bain were “an attack on capitalism.” The question by the WSJ questioner was right on point in terms of getting to the heart of Romney’s predatory practices at Bain, although it was phrased in an incredibly soft way. I wish Newt or Perry had been able to express exactly what Romney did as clearly as how the WSJ said, but in a much tougher accusatory tone. Newt went on and on about “raising questions” but he didn’t take the time to cite those specific questions again.
The fact of the matter is Romney used questionable, abusive, predatory financial tactics at Bain such that even when the companies Bain acquired went bankrupt, Bain would not lose any money on them. Bain took out large loans in the names of the acquired companies and paid that money back to themselves as “dividends” and “fees.” This drove these firms, many of them already in a weak position, deeper into debt. Many of them did then go bankrupt, and couldn’t pay back those loans. But since Bain had already taken the bulk of the money borrowed on those loans as consulting fees, they got to keep all the money.
In at least one public case the creditor who was taking the loss on the bankruptcy threatened to sue Bain for “unjust enrichment” and Bain settled with them to some degree. But this was a pattern, the status quo of how Bain handled its acquisitions. Their business model was split between two things, turning troubled companies around to sell them later, which is good, but secondarily to borrow big money on all of these companies and then transfer it to themselves free and clear, knowing that the creditors could no longer make any legal claim to that borrowed money since it was essentially accounted for as a “fee” paid to Bain and therefore no longer an asset of the acquired bankrupt company.
3 of the 10 biggest firms Bain acquired went bankrupt, yet Bain themselves walked away with net profits on them anyway. That’s something that doesn’t happen to normal people in the real world. Normal people don’t get to take out a loan for a million dollars, declare bankruptcy and then keep the million dollars. But that is essentially what Bain did over and over again due to the tricky loopholes within the legal relationship between a parent company and its subsidiary.
I thought it interesting also that Romney is more than willing to take credit for the companies that continued to be a success after he left, but willing to toss others under the bus for the ones that went south following his departure.
He is not a very intellectually honest individual.
Wow! Thanks for the detailed analysis!
Romney is used to “turning companies around,” but if he is planning to do the same to the US Federal Government, then what has he said or written that he will cut baseline, year to year, Federal spending?
Thank you for making this point so strongly. Most of the discussion on this Bain issue puts the focus on the loss of jobs and, unfortunately, in many conservative circles there is a hostility to workers, especially if they are unionized or well compensated. Romney was thus the sympathetic character. There likely would have been a different public reaction if the focus had been placed, as you did, on the bond holders, creditors, and other investors who lost while Bain and Romney profited greatly on their loss.
Go Newt!
Last balanced (surplus, actually) budget was in 1956. Hasn't been once since then.
Those four years of so-called balanced budget were on the backs of adding federal payroll tax revenues (Social Security, Medicare etc.) to the general budget.
As much as I have liked Newt for his ability to belt the ball out of the political park, and as much as I have come to pray that Newt takes down Romney, Newt is shrewd enough in politics to take credit for a mirage the same as Romney.
The fact is that while the GOP Congress of Newt’s tenure was ‘balancing’ the budget, the telltale sign of a mirage was in watching the National Debt increase.
Other factors that led to balanced budgets were Clinton’s reckless refinancing of the 30 year debt to the lower interest 5 year debt and the internet revolution spurring the stock market to new heights adding considerable capital gain tax revenues to the federal coffers.
So although you may be off in praising Newt on balancing a budget, you have done a yeoman’s job at bringing to light the true nature of Bain Capital and their standard bearer Romney.
The way I would characterize Romney’s bellowing his accomplishment at Bain Capital is to say that it is no different than a ‘vulture standing tall with belly full”.
Capitalism is a good thing for people but Vulturism is not one of its prime attributes. In fact Newt would do well to educate (and he is a superb educator) that Capitalism is distinct from its evil twin of Vulturism, and that Bain Capital should change its name to what it truly represents, Bain Vulturism.