By Chris Joseph
By Chris Joseph
By Allie Conti
By Chuck Strouse
By Chris Joseph
By Chris Joseph
By Allie Conti
By Kyle Swenson
"Romney is not a vulture capitalist, as Rick Perry says, since vultures eat dead carcasses," notes Josh Kosman, who's written about the private equity business for 15 years. He's "more of a parasitic capitalist, since he destroys profitable businesses."
The game works like this: Big-money investors write checks to people like Romney, who pool that money to buy or invest in other companies. Internal company documents show that a year before Romney left Bain in 1999, one of his funds had reached a massive $10 billion.
Though Bain requires a $1 million minimum for a seat at the table, its investors don't come just from the wealthiest 1 percent. They also include college endowments and teachers' pension funds.
There's no question that Romney had a gift for minting money. In 1986, he bought medical-equipment manufacturer Calumet Coach for just $1 million, later flipping it for $34 million. He made 16 times his initial investment in the Gartner Group, a technology research firm.
In what was perhaps his crowning achievement, he bought a money-losing Wesley Jessen Vision Care for $6 million in 1994. Seven years later, it was sold for a dazzling $300 million.
Critics rarely mention Romney's triumphs, but defenders are equally swift to rationalize his catastrophes. They'll note that for all Romney's bankruptcies, most were rescued by new companies and survive today. It's the final dollar tally that matters.
Yet they seem strangely incurious about the ruin he's delivered across the country. Take Kansas City, for example.
The Armco plant closing involved more than the torching of 750 jobs. Contractors and suppliers collapsed. Workers' children and widows lost health-care and pension benefits. And while Bain received millions in tax breaks — paid for by the very people left holding the bag — Romney walked away millions richer.
So one might forgive everyday Americans for feeling they're on the wrong end of a rigged game, one in which the wealthy always win — no matter how inept — and the little guy is left to hack through the debris.
Bain is a private company, meaning it has no obligation to reveal its practices. It's never made public a list of companies it has purchased. Nor would Bain or the Romney campaign comment for this article.
So in January, the Wall Street Journal did its best to piece together Romney's track record, reviewing 77 investments made under his direction. It turned out that nearly one in three of the companies experienced severe financial trouble. One in five wound up in bankruptcy.
The more telling figure: Of Romney's ten biggest moneymakers, he ultimately destroyed four of them, leaving bankruptcy judges to clean up the mess.
As Foster sees it, Romney was a pioneer of gaming the system. It would take another decade before large banks used many of the same principles to detonate the mortgage industry.
"The great irony is that his entire management experience at Bain Capital is buying companies and loading them up with debt and then looting the balance sheet," Foster says. "It's the very model that drove the American economy off the cliff, then left other people to manage the wreckage."
Renee Fry doesn't recognize the tin man she sees on TV, the candidate so congenitally wooden that he makes Al Gore seem like Flavor Flav. She was Romney's deputy chief of staff when he was governor of Massachusetts. The guy she served was warm and considerate, quick to distill data and seize the big picture.
"I'm lucky because I know him from the day-to-day Mitt," Fry says. "He liked going out and talking to people and learning from people. The Mitt I know had a real appreciation for people."
But if Romney played the friendly politician, kindness wasn't his specialty at Bain. He was generous to ranking executives, rewarding CEOs with huge bonuses. Yet he tended to treat those below his pay grade as little more than machinery.
Romney has repeatedly claimed to have created 100,000 jobs at Bain and says that providing work for Americans was a primary company goal. He makes his case by citing Domino's, Sports Authority, and Staples, companies that added jobs after Bain bought in.
But Bain bought Domino's just months before Romney left to run the Salt Lake City Olympics, meaning that someone else created those jobs. And he didn't manage Staples or Sports Authority; Bain was a minority investor in both.
By Romney's logic, any large investor — say, the Texas teachers' pension fund — also creates hundreds of thousands of jobs. The boast is so outlandish that his campaign has since backed away from it.
While writing his book, Kosman conducted an interview with a Bain managing partner. The man told him that when Bain was about to buy a company, its partners would hold a meeting. "He said that about half the time, [they] would talk about cutting workers," says Kosman. "They would never talk about adding workers. He said that job growth was never part of the plan."
That claim was buttressed by the Associated Press, which studied 45 companies bought by Bain during Romney's first decade. It found that 4,000 workers lost their jobs. The real figure is likely thousands higher, since the analysis didn't account for bankruptcies or factory or store closings.
I don't have to imagine what will happen if Barak the Fool is re-elected.
More tax cash to his union buddies.More regulations and less freedom.More taxes.More ass kissing of foreign socialists.Higher oil prices.Crappier medical care.A weaker military.Fewer jobs for us and more bureaucrats.
Any Democrap who says this will not be so is either a fool or a liar. ANYBODY but Barak the fool.
Mitt Romney is a Job Annihilator.
It's dangerous how blatantly Mitt Romney will fabricate his record. It's appalling and reckless and the American ppl deserve a person of high caliber for our President. Wake-up independents, undecideds & Obama republicans! Yes, Obama republican…I know u are out there because I’ve met some of you.
To Mitt we will all be mere overhead. We will continue to be marginalized; we will be slashed and cut. We will be expected to do even more with even less. In the end we will have less and the Mitt's of the world will have even more. It is time to take a stand! Pick the team that is fighting for you and not against you. It’s a non-decision decision that should not be fuel by a single issue let alone hate, race or religion. Obama2012 is the only choice for our future prosperity.
What has changed the most in the last several years is companies shipping jobs overseas and manufacturing overseas. That is the biggest challenge we face as a country in the coming years - getting Americans to get it - we all have to be willing to pay a little more and buy American - we should buy stocks only in Companies who keep jobs here in America and only demand that they give us a dividend in return for our investment - not expect that each quarter has to be better then the quarter before - the only way to keep doing that is to have less workers doing more for less money.
Capitalism built and made this country great. Good bad or indifferent. You can all thank the fact you have or had a job on capitalism.
Insanity: Doing the same thing over and over and expecting different results. People keep voting for him. I am seriously wondering what is it going to take for people to see what is going on right in front of them?
Just think, Mitt Romney wants to help the U.S. workers just like he did all those he "helped" right out of their jobs via takeovers by Bain. This is just the type of help that nobody needs or wants. He made his millions on the backs of those workers who he cheated out of their pensions and their jobs. Worst of all, the fed gov't bailed out the pension funds for him. He's been telling us all alone who he is when he speaks of letting the housing market drop even further, let everything go into foreclosure so investors can buy up those homes and rent them out. He did the same when he spoke about the auto industry. What really ticked him off the most was the fact that the pension funds were taken care of before the big investors on Wall St. which proves he doesn't give a damn about the people, just the $$$ he can make off their misfortune and misery. God help us if he ends up in the White House! He doesn't care about anyone but his wealthy friends and he'd ignore them if they ever lost their money.
I think the best term for Mitt is Business Pirate, he and Bain just looted these companies and the workers pensions for everything they had.
Very well done story, BTW. You can still see When Mitt Came to Town here: http://youtu.be/2wGZRJG4ZJE Neuton's PAC owns the rights so who know how long it will stay up before it is deep sixed.
Great depiction of Rmoney as parasite. Maybe the Reich Wing can market him using (cough) science.
Summary: Scientists have discovered that parasites are surprisingly important in food webs. According to a new study in the Proceedings of the National Academy of Sciences, parasites may be the thread that holds the structure of ecological communities together.
Going to Bain Capital's website reveals that not even Bain has any jobs available. So much for creating jobs!
We barely survived one MBA President. We can't afford another.
Especially not from the same B-school.
Typical union operatives. The union leaders try to take all the money. And right know we need Romney to save our country from the tyranny that this president is bringing to us. Next issue why dont you air Obamas dirty laundry to be fair. I bet you wont because you are a left wing liberal. Go ahead i dare you.
Guys like Romney are obsessed with trimming surplus expenditures and capturing surplus value. The problem in the real world is that what is surplus on a balance sheet might be someone's livelihood. We didn't do business like this a generation ago.
If your companies were doing so well, why were they able to be purchased? If an owner sees tons of money coming in on their already established business, why would he sell the business? This was coming from a workers perspective. They knew nothing of what was on the books. If your manufacturing facility is constantly upgrading machinery and giving profit sharing checks then that means they were living off credit and were close to bankrupting anyways.
I believe in Americans .. but NOT the campaign slogan of Mitt Romney .. 'Believe in (creative destruction of) America' ..Every American should read this well written, very informative article ! Don't miss it ..
If you're in certain industries, this is all too familiar a story. I've been through this a few times. People learn to recognize that when one company buys another, it's a kiss of death and it's time to start job hunting. Of course, the new company will promise the sun moon and stars to get everyone to stay. The smart ones go and get promotions at other firms. This is why there's no loyalty between worker and employer anymore. Once you've been through this you understand, you are only a dollar in someone's pocket. And if you don't watch out for yourself, you will get trashed as soon as they get their money out of you. I'm lucky in that there is enough business here I've always been able to move sideways with a pay upgrade. Small towns with only one shop, not so lucky. But a smart worker can't afford to be loyal to a company anymore.
I am going with the only honest, decent, and intelligent man that has predicted everything going wrong with the US for the past fifteen years. I probably don't even have to say his name and you already know who I am talking about. Ron Paul is the only brilliant man running. I would walk through hot coals to elect this great man. You people need to wake up and actually research his ideas if you don't agree with them because it will make a lot of sense when you know the history and facts.
Rasmussen Poll: "Adults under 30 are essentially evenly divided: 37% prefer capitalism, 33% socialism, and 30% are undecided."
spending to get out of debt..... how can that work?
why is Greece, Portugal, Spain, and Italy, being forced to cut govenment spending? (by the EU), rather than increase spending to get out of its debt?
Why should it work here and not in Europe?
can someone explain that?
<----- socialism is that way.
where has socialism succeeded?
-don't forget, as bad as this country seems, its still the best in the world, and where everyone else want to be.
Capitalism is making money for owners of businesses.
what is the alternative to Capitalism? Socialism? Communism?
or something else? What is it that you favor and works better than Capitalism?
everyone has the same opportunity to make money in this country (still). - look at the owner of 5 hour energy drinks. he is now a multi millionaire. - you can be too.
just create a business, and succeed.
I don't get attacking someone that makes money for himself and shareholders.
(respond quick before this post is deleted!)
Capitalism relies on resources to process and sell and thus create wealth. What made America great was its untapped resources that were exploited for a century or two. But, as these resources are diminished, capitalism resorts to concentrating existing wealth in fewer hands. This is the difference between a true entrepreneur like Bill Gates, and a vulture capitalist like Mitt.
Except, George W. Bush failed his original investors as well. He not only single-handedly destroyed the company but left his pals high and dry. But, his pals didn't care, they treated him like a wayward child. They probably said, "You'll get 'em next time, tiger."
maybe you should try airing obama's dirty laundry and explain why it is dirty. everyone have a opinion, just don't jump on someone else's band wagon and started blaming obama for the state the economy is in, if so blame him for U.K. sliding back into a recession that was fueled by the former president. remove the veil from your eyes, obama has already done a whole lot more good for this country, than what george did in both terms. As for Rommey, any level headed person can reason as to why he is not forth coming with his tax statement. you think the unemployment rate was bad, make Rommey president and you may realize how good you had it.
Not quite! Ask some of the suppliers for GSI how they felt about Romney raiding that company. It effects more than just the rank and file workers. A large company not only employs people directly but creates jobs at its suppliers too. It sounds like you are parroting back what the politicians are saying rather than thinking for yourself.
Very well said! Surplus on a balance sheet might also be someone's health benefits being used to care for a sick family member.
That is where the big payday is for the owners ... punch out when the going is good. Then Romney comes in, fills it with debt, runs with the cash, and leaves the workers on government aid and the company torn apart in BK court for the vultures to pick apart. Not the American model I believe in.
Yes, one sided, well written by a left wing, anti capitalist, pro union, member of the lame stream media.
Austerity isn't working. Anywhere. It is physically impossible to cut gov't deficits during a recession.
Also, you are off topic.
If you value your labor, this model of capitalism, as practiced by BAIN should offend you. Perfectly healthy companies, providing liveable wage jobs to middle class skilled workers, bought up with borrowed money and all the value possible extracted from those companies, and then the pieces are sold off for pennies on the dollar.
BAIN's profits were, literally, taken out of these skilled employees wallets.
Even though they're not remotely close to the invisible bogeyman you're looking for... the fact is that the social democracies of Scandinavia have long since passed us in nearly every measurable facet of "best". Your blind faith isn't helping.
You obviously haven't ever been in places like, say, Scandinavia. More probably never left good ol' US of A...
LMAO - interesting that you talk to people that know him so well personally, and not just know him, but are privy to what he has and hasn't done. If they know so well, and if this truly isn't so, then why doesn't he himself prove it and release all the information that would be necessary to support that statement? Makes no sense whatsoever that random people know what goes on behind his closed doors...
why are you making this about capitalism vs everything else? this article is about how romney is using his experience as a private equity executive as good experience for economic management, whereas his track record says that whilst he was good at extracting short term profits but these actions would be incredibly destructive in the long term.
seeing as he is a candidate for the most powerful office in your country, and where long term prosperity should be a primary concern, his track record should be of interest.
also, equality of opportunity is a complete and utter myth... do you really think everyone has equal access to education or capital for instance? infact, i think its lower in the USA than in other comparable countries!
At least five large studies in recent years have found that vertical inter-generational mobility is lower in America than in comparable nations, belief in America as a land of opportunity not withstanding:
so is that how you characterize any article you don't like? Instead of petty, tired attacks, care to dispute anything that was written in the article? We're waiting...
Please cite just ONE inaccuracy in this article. As someone who lives near Gaffney, SC, and as a child would drive by Georgetown Steel on the way to the beach, this article hits close to home for me. It's a shame that folks see Romney as some sort of hero because he's able to strip money from companies and siphon it to select investors. I'd be more impressed if he was a true job creating venture capitalist, like Ross Perot or Ted Turner, Bill Gates or the late Sam Walton (fuck his children, bloodsucking leeches.) Even Ayn Rand hated so called "capitalists" like Romney.