Romney “Left” Bain Capital? Do Leopards Change Their Spots?
Posted by Phoenix Woman on January 14, 2012
So far, the most explosive opposition-research attack of the 2012 Republican presidential primary has been this video, “When Mitt Romney Came to Town”, done by former 2008 Romney campaign member Jason Killian Meath, depicting — complete with interviews of the persons affected — the devastation wrought on a South Carolina town by the firm Romney founded, Bain Capital:
The folks at FactCheck.org don’t like the video very much, and their main beef concerns the KY Toys angle:
As we mentioned above, the former Massachusetts governor left Bain in February 1999, almost two years before the firm bought KB Toys in December 2000. (Romney still may have benefited from the transaction. In a retirement agreement he negotiated with his former partners, Romney has continued to profit from Bain’s deals.)
Even FactCheck.org feels obligated to mention that Romney still is profiting from what Bain is doing.
Furthermore, there’s not much evidence to show that the stories of KB and of the residents of Gaffney would have had happier endings had Mitt Romney stayed with the firm. Bain and Romney are still quite simpatico; as this Politico piece points out, Bain is Romney’s biggest backer. William D. Cohan, who had extensive dealings with Bain and with Romney at Bain, closes his Washington Post piece on Romney and Bain with these words:
The real Bain way may be nothing more than a clever tactic to eliminate competition from a heated auction in order to buy a business at an attractive price. After all, Bain Capital is seeking the highest returns for its investors. But Bain’s behavior also reveals something about the values it brings to bear in a process that requires honor and character to work properly. If a firm’s word is not worth the paper it is printed on, then its reputation for bad behavior will impair its ability to function in an honorable and productive way.
I don’t know if Bain Capital still uses the bait-and-switch technique when it competes in auctions these days (I’m told that it doesn’t). But that was the way the firm’s partners competed when Romney ran the place. This win-at-any-cost approach makes me wonder how a President Romney would negotiate with Congress, or with China, or with anyone else — and what a promise, pledge or endorsement from him would actually mean.
[…]
I have no idea how Romney might behave in office. I do believe, however, that when he was running Bain Capital, his word was not his bond.
It begins to look like Romney “left” Bain like Cheney “left” Halliburton and Jack Welch “left” NBC: There’s not much discernible difference in the “before” and “after” shots.
10 Responses to “Romney “Left” Bain Capital? Do Leopards Change Their Spots?”
Sorry, the comment form is closed at this time.
Mercury Rising 鳯女 
Charles II said
Thom Hartmann thinks this is an attempt to immunize Mitt for the general election.
That’s a billiards shot one bank too many for me to follow.
BTW, Atrios linked a NYT article that says that the SC town doesn’t remember the factory closure. Pretty strange if you ask me. Evidently the people in the film don’t exist. Or something.
Phoenix Woman said
Newt doesn’t do “immunizations”. Neither do the other not-Mitts in the race. This isn’t immunization; it’s a full-on attack designed to resonate in a state (South Carolina) that’s suffered more than most from the bubble burst of September 2008.
Whether it was intended or not to immunize him, I’m pointing out that there is plenty of evidence that a) Bain and Romney are still closely connected, if not joined at the hip; b) Romney’s practices while at Bain were pretty dodgy; and c) Bain hasn’t changed its practices all that much, for the worse or for the better, since 1999.
Charles II said
Well, I hope the attacks aren’t too effective. The GOP still has time to decide that it needs a Great White Savior, someone like Petraeus.
Wege said
NYTimes ran a rebuttal to this today, claiming that their reporter could hardly find anyone in that South Carolina town who even remembered what this was about.
I find that hard to believe, but I don’t find it at all hard to believe that the NYTimes couldn’t find any blue collar folks to talk to.
Charles II said
Obviously it never happened. If it had, the NYT could have tracked down the ^%$#ing people who appeared in the film to talk to.
Karki Meade said
KY Toys? Odd little Freudian slip of the tongue there.
As for Bain, I just heard about a study that pretty much said that venture capital funds sometimes save jobs, sometimes cut jobs, and generally don’t do much to affect the overall number of jobs in companies they buy. What the study didn’t say is what happens to all the profits. Seems the number of jobs isn’t as important as the pay given to the workers. It all comes to the squeezing of lower classes to give money to the upper classes, not that they’re necessarily made jobless by the process of hypercapitalism.
Mark Gisleson said
Do you have a link to that study? Because vulture capitalism does put people out of work more than not, and I’d be very curious to read anything that said otherwise.
Charles II said
I don’t know precisely what study Karki is referring to Mark, but there are different kinds of venture capital. While all of them aim to extract outsized profits from businesses, there are different models. One is to take companies, strip them of their assets, and close them down. A particularly egregious example was Wisconsin Steel, described by Thomas Geoghegan in his book, Which Side are You On. Vultures basically used the company’s own pension fund to buy it out, close it down, and cheat the workers of their pensions. In that case, jobs are destroyed.
But another is to accelerate the development of high tech companies by lending them money at exorbitant rates, often 100% or 200% per year. When the tech company’s ideas are good, that can be a good deal (especially when the alternative is going out of business) because if they can get to the point of going public, they can access funds at a much lower rate. In the latter case, jobs are created.
There really ought to be less parasitic sources of capital, but there are a lot of good ideas and not many of them are going to make it to the big time. VC serves as a sifting mechanism.
Bain did both kinds of VC.
This link discusses some of the issues.
Karki Meade said
Sadly, I don’t have a link to the study. It was something I heard about on a left-wing radio show (either Thom Hartman or Mark Levine) which pretty much said that the companies that venture capital targeted had pretty much no overall change in the number of jobs when added up. Some gained, some lost, some stayed the same. I tried to find the study, looking for a link, as I wanted to find it as well. But I couldn’t. I did find a lot of studies from venture capitalist trade groups that (SHOCK!) found their industry to be just the spur our economic horse needed then and needs now. What I didn’t see was what the effect of venture capital management was on worker raises, pensions, and benefits. I’m sure that’s just because such data is too complex. Or the charts aren’t finished. Or something like that. Probably too much data for people to analyze properly outside of quiet rooms.
Karki Meade said
And of course, sometimes the companies don’t fully take over. They just add money to the company, hold it, and slowly skim at the profits. Whether that creates job, destroys jobs, or makes the jobs suck is something that the investor money is hard to factor when all the other variables are put in. And while there’s no secret that vulture capitalism truly sucks in the way it makes the lives of workers mere expenditures on a spreadsheet, the value put in the overall economy by such investors is not to be completely condemned even as it isn’t to be celebrated as entirely beneficial either.
It sure has sucked for the last four decades, however. Something has to change. I’d say raising the capital gains tax is about the most obvious solution to much of this nonsense. The parasites of capitalism are a hell of a lot less sustainable (and unnecessary) than the parasites of the socialist state (especially since they paid taxes for their upkeep, and vote in person rather than with money.)