This article is worth a bookmark for those who ever need to respond to the assertion that Mitt is a financial genius.
Posted on 01/10/2012 9:26:42 AM PST by Zakeet
Lately, Bain founder and GOP presidential candidate Mitt Romney has found himself in a spirited defense of the private equity industry, doing all he can to spin decades of data which confirm, without failure, that PE Leveraged Buy Outs are nothing but "efficiency maximizing" transactions whose only goal is the "maximization" of EBITDA in the pursuit of dividend recap deals, IPOs or outright sales, while loading up the company with untenable amounts of leverage. All this with a 3-5 year investment horizon, which ignores the long-term viability of a company and seeks to streamline (read fire as many as possible) operations as quickly as possible in the goal of maximizing short-term returns. We wish him luck in his endeavor. As for the other side of the equation, we recreate a post we penned back in November 2009 which analyzes just how effective the mega-LBOs have been for the economy, and the workers involved. In other words - the facts. In a nutshell, here they are: "The Disastrous Performance Of Private Equity: Of The Top 10 LBOs, 6 Are In Distress, 4 Have Defaulted." Read on for the full details.
(Excerpt) Read more at zerohedge.com ...
This article is worth a bookmark for those who ever need to respond to the assertion that Mitt is a financial genius.
Marked for later.
In October 1993, Bain Capital, co-founded by Mitt Romney, became majority shareholder in a steel mill that had been operating since 1888.
Less than a decade later, the mill was padlocked and some 750 people lost their jobs.
Workers were denied the severance pay and health insurance they’d been promised, and their pension benefits were cut by as much as $400 a month.
What’s more, a federal government insurance agency had to pony up $44 million to bail out the company’s underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.
http://legalinsurrection.com/2012/01/bain-drip-drip-drip/
Governor “47th in Jobs” Willard, what a sleazebag full of baloney about his “experience”.
I’m not opposed to Bain Capital and what they do. Somebody needs to put capital into companies and businesses. When they company starts to default you go in and liquidate!
The “Smoke and Mirrors” Myth that Myth Romney is some type of Business GURU is shredded by one simple paragraph.
Those settling for this lying, liberal, pretender, should be ashamed of themselves.
Conservatives are supposed to fight for their principles, not compromise out of fear.
In our current economic environment coupled with a hostile MSM, there is no way a person with this baggage will get the votes to be president.
I don’t think 0bama will attack mitt on theology. He will attack him because Mormon theology is weak on racial equality however.
Not only private equity deals are in trouble today, but many, many other businesses too. The only wonder is that any businesses are surviving the Obama depression.
Durden’s piece is completely irrelevant to the performance of Bain during Romney’s reign. It is also irrelevant to the performance of PE funds before 2008. The fact is that Bain was very successful from 1984 to 1999. Romney did a good job. Unfortunately, his brains must have fallen out when he entered politics.
The Bain attack is dishonest and stupidly short-sighted. Romney needs to be stopped, but adopting criticisms worthy of Michael Moore is destructive.
Once this gets legs, this guy may be the next “Cain”. Man, I hope so.
Assuming this article presents the correct impression of what was going on, of course.
Romney is entitled to claim that he started a business that created jobs. The assertion that Bain created or destroyed jobs is irrelevant in large part, because the company engages in completely legal activities under US law, as to all it’s peers in the private equity business. The companies they buy are NOT “too big to fail”, and are sometimes bloated, mismanaged, and underperforming. Fixing broken companies and operating and/or reselling them for a profit is a totally capitalistic enterprise and nothing any conservative should be whining about. That’s what liberals do.
And so what? It's just part of business. I'm no fan of Mitt, but this isn't one of the reasons I won't be voting for him.
—because the company engages in completely legal activities under US law—
So do most pr0n companies and abortion mills.
Workers were denied the severance pay and health insurance they’d been promised, and their pension benefits were cut..
What’s more, a federal government insurance agency had to pony up $44 million to bail out the company’s underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.
http://legalinsurrection.com/2012/01/bain-drip-drip-drip/
So why should American taxpayers have to be forced to pay for Willard’s business incompetence and greed?
MMMmm...pardon me, but destructive to WHOM? The left will pound this at him if he is the nominee...see my tagline!
What is short-sighted is that Romney supporters can't see that all of his baggage will be aired out if he is nominated. He can never win the general! The independents will run from him and the conservatives don't trust him, while the Evangelicals will stay home.
Exactly. Which is why the attacks on Romney based on Bain are so disgusting. I don't want Romney as the nominee. I think he's a flip-flopper who can't be trusted to promote a conservative agenda.
But what Bain did is market capitalism at its best. People who criticize what Bain did are not conservative. They are economic populists or so blinded by their dislike of Romney that they will use any like of attack against him.
The companies in which Bain invested were not thriving companies that could have operated as they had in the past. Anyone who thinks that doesn't understand the market. Most were start ups that were starved for cash or companies on the verge of bankruptcy that didn't have access to traditional capital sources. Bain provided capital to help companies grow and, where necessary, turn around. If payrolls were cut, it was because the company could not sustain the payroll.
"Corporate raider" is a loaded, Liberal term that no conservative should be using. Its like calling Christian conservatives Jesus freaks. Its offensive.
This article helps lift up to Conservatives a truth about “capitalism”.
The morality of Capitalism is in its correct affection for property rights, private or corporate, market economics and limited government monkeying with those things (not the absence of government).
Conservatives must understand that the morality of an economic theory does not in and of itself substantiate an equal morality to every action by every player operating on that theory.
No I am not talking about the need for more law, or even more laws to better define moral and not-so-moral actions taken under the rubric of “Capitalism”.
I much prefer our Liberty and “social” activism to weigh in on such questions, and for Conservatives to admit that it is O.K. to do so without rejecting Capitalism. Anywhere there could be a moral concern in a free society it is less an issue of what one is allowed to do than it is what one “ought” or “ought not” do, regardless of what the law allows.
It is no different than personal behaviors we do not lock people in jail for, out of our high respect for personal rights and our Liberty, but which many of us do not support morally, and we say so.
To reject, morally, the type of LBOs that Bain was noted for is not a rejection of Capitalism, but may be a rejection, on moral as opposed to legal terms, of what one may chose to do with Capitalism.
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