Mitt Romney, American Parasite
His years at Bain represent everything you hate about capitalism
A
Village Voice article on Mitt Romney at Bain Capital retelling how Bain bought Armco Steel. When purchased, Armco was a profitable and productive steel plant. Bain threw out management who had run the plant well, and brought in their own consultants who had never run a steel plant. Bain borrowed millions on Armco's credit and collateral, and sucked out money from the plant--paying themselves millions and leaving it in bankruptcy. Workers lost millions in benefits and pensions, and the government had to cover the losses to workers, who ended up with much less than they had earned.
Not only that, contractors and other related industries that served Armco were affected.
If you think Romney is a white knight job creator, I doubt you will after reading this article. Bain bought profitable companies with very little down, not distressed ones, for the sole purpose of loading them up with debt and paying themselves first, before driving the company into bankruptcy.
The Kansas City story starts on page 2 of the article.
Private equity companies like Bain rarely buy anything but profitable firms for one compelling reason: The patient must be healthy enough to be force-fed all that debt. So it's something of a misnomer for Republican opponents to slur him as a "vulture capitalist."
"Romney is not a vulture capitalist, as Rick Perry says, since vultures eat dead carcasses," notes Josh Kosman, who has written about the private equity business for 15 years. He's "more of a parasitic capitalist, since he destroys profitable businesses."
Yet they seem strangely incurious about the ruin he has delivered across the country. Take Kansas City, for example.
The Armco plant closing involved more than the torching of 750 jobs, Morrow says. 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 where the wealthy always win—no matter how inept—and the little guy is left to hack through the debris.
"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."
Even Kaplan admits that private equity firms rarely create jobs. Workers are seen as costs, and costs are the enemy. According to Kosman, Romney was in truth among the most heinous job-killers of them all.
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," Kosman says. "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 and factory and store closings.
Even a company Romney cites as one of his greatest achievements—Steel Dynamics, where he was a minority investor—was practically launched by corporate welfare. Indiana taxpayers gave the firm $77 million to open a plant. Residents of DeKalb County actually had their income taxes raised solely to help Romney and his friends.
Tad DeHaven calls it "theft and redistribution."
He's no yammering Trotskyite; DeHaven is a former budget adviser to Republican U.S. senators Jeff Sessions of Alabama and Tom Coburn of Oklahoma. Yet he notes that firms like Bain often get governments to subsidize their raiding parties.
The feds take $100 billion a year from everyday taxpayers and send it straight to companies like Romney's, says DeHaven, who now works for the Cato Institute, a conservative think tank.
But judging by his business history, the president he most resembles is Vladimir Putin. Romney has devoted his life to ensuring that every last penny rises to a few hands at the top. And like Putin, he has never shown much concern for the countrymen he tramples along the way.
"The word 'oligarchy' comes to mind," says Michael Keating when asked to envision a Romney presidency.
http://www.villagevoice.com/2012-04-18/ ... -parasite/
