Skip to comments.Mitt Romney and the Hypocrisy of Bain Capital
Posted on 01/11/2012 10:21:31 AM PST by SeekAndFind
Mitt Romney was NOT primarily a venture capitalist. A venture capitalist invests in early-stage businesses with the hope that they grow and prosper. These early-stage businesses are often risky investments. Though most ultimately fail, some succeed spectacularly making the risks worthwhile. Apple Computer and Google are two such examples. This is what Mitt Romney means when he says some investments succeed and some fail.
By contrast, Mitt Romney was primarily what is affectionately known as a vulture investor. Bain Capital invested in failing companies with the intention of either restructuring their business or stripping the business and selling its assets. This business model often adversely affects a company's employees. To be fair, if the company had gone bankrupt on its own, that would have adversely affected the company's employees too. The question Republican primary voters need to ask themselves is not whether Mitt Romney did anything illegal or immoral. In a climate of near 10% unemployment, do Republicans want a vulture investor to be the face of their party?
The two core arguments for Mitt Romney's candidacy are (1) that he knows how to create jobs and (2) that he stands a better chance of defeating Barack Obama than his competitors. Is it true that a slash and burn vulture investor is the best advocate for job creation? If you were a factory worker in Ohio or Pennsylvania or the upper Midwest and Mitt Romney killed your job because there was a more efficient use of the capital employed in your factory, are you really going to listen to what Mitt Romney has to say even if you believe in hard work and free market capitalism?
No one is suggesting that Mitt Romney was evil or immoral or corrupt or criminal.
(Excerpt) Read more at americanthinker.com ...
“No one is suggesting that Mitt Romney was evil or immoral or corrupt or criminal. “
Let me be an exception to that rule.
This was posted by cincinatus’wife earlier today.
It has 71 comments on it.
Mitt Romney and the Hypocrisy of Bain Capital
Goldenberg’s first paragraph explains it all. Limbaugh just played an audio clip where Romney ( who refused to call Obama a “Socialist” during one of the “debates” ) equated what he did at Baines with what Obama did with GM...
This brief article reads like a DNC press release. The word “vulture capital” is the left’s term. Bain Capital is an important part of private enterprise. Criticize Romney for his voting record but do not destroy the public’s perception of private enterprise in the process. Romney is the likely nominee so these kinds of attacks are really helful to the left by trashing both Romeny and free enterprise.
So are you part of the Occupy crowd? If you believe in the Free Market your going down the wrong road. This company did a service for other companies. Some companies made it some didn’t!
Forget it Professor, the statist flu has hit FR in epic proportions and any defense of capitalism labels you a “Romneybot”.
Romney comes across as sleazy. Good points made. I certainly don’t want Bain capital to become the face of Capitalism or our party, especially in the current environment.
Eguating Bain to capitalism, like equating a shady bounty hunter to law enforcement.
I could not agree with you more! I don't understand the thinking here. A company's demise is eminent. Everyone will be terminated. The company will move out of it's facilities leaving either a landlord or the bank holding vacant space. Someone comes in and structures the company at it's expense. They terminate nonproductive employees, eliminate benefits, downsize some of the operations and eliminate unprofitable ones. Exactly what is wrong with that?
The hypocrisy is that conservatives are becoming socialists to promote or banish a candidate. As a business person I am dumb founded! I was hoping that a venture capitalist would come and restructure DC, but the way some folks look at it we would just keep all the deadwood.
BTW, there is a difference between a bailout and a restructuring. One is done with taxpayer's money and the other is done with private capital.
Rush Wind Bag Limbaugh is never going to admit he’s wrong about anything. He went off half cocked on Newt yesterday without bothering to listen to the argument as put forth in this posted article. I’m hoping that Rush corrected his disdain for Newt’s attack on Romney, but on the other side the rest of the field is asking Romney to come forth also.
For example, where is the guy’s tax returns? Might be interesting to see how much he donates to charities and what kind...his deductions etc.
It might be a real eye opener.
I guess "vulture" is the new "racist".
Vultures serve a very good & necessary purpose.
There's plenty of legitimate reasons to critique Romney.
It is leftist perversion to manufacture illegitimate ones.
I disagree. Bain Capital is free market capitalism. Show me where it isn’t.
The world is upside down when conservatives are describing the reallocation of free market resources as vulture capitalism.
Everybody knows there is a purpose for vulture capitalism...but it can get out of hand, as it did in the 1980s, when these firms were buying up companies that were not actually dying and were stripping their assets (such as their pension funds, thus leaving the employees with no pension) and then dumping the carcasses. That’s precisely the stuff that gave “Wall Street” a bad name and has given the anti-capitalist forces a narrative, even though firms like this represent only a small portion of the financial industry, and those who commit abuses are a smaller percentage still.
Also, Romney should explain why it is up to the government to guarantee the losses of firms like this. Bain was “bailed out” on at least one large bad investment they made and Romney benefitted by several million dollars.
Criticising crony capitalism and even rapacious vulture capitalism is not criticizing capitalism. But you entirely miss the point of the criticisms of Romney: it’s simply that he was never honest about what he or his firm did, and has tried to give the impression that his background is something entirely different (more like that of his father, George Romney, once head of GM).
Bain Capital had both a venture capital affiliate (Bain Capital Ventures) and a private equity division. The private equity division was the majority of Bain’s business.
VC invests in companies in the early stages, while the are private, with the expectation they will either go public or be sold. PE invests in companies (public or private) usually with the intention of completely taking over the company and (in the case of a public company) taking it private. Often the company is then restructured for eventual return to public ownership, is sold to another company, or a combination of both.
Both VC and PE play important roles in building and maintaining companies. It is certainly possible for a PE company to buy a failing company with the intention of liquidating it for a profit. In most of these cases, such a company is facing Chapter 7 liquidation bankruptcy anyway. It would be very rare for a PE firm to be able to buy healthy company and liquidate it for a profit.
Another thing PE firms occasionally do is Private Investment in Public Equity (PIPE). Think of this as a half-way version of a PE firm buying a company completely completely and taking it private.
“This was posted by cincinatuswife earlier today.”
That’s all right. It bears repeating.
The company I work for used to be owned by Bain Capital. Our parent corporation sold us to Bain in the mid-1990’s. There were some layoffs, but nothing drastic. And I got the impression that we were a farm team for up-and-coming CEO’s. But during Bain’s ownership, we merged with another company in our industry and made a major acquisition, which became the core of our business and allowed us to become a world leader in our industry. We had better on-site executive leadership after Bain set us free but, overall, I don’t see Bain’s owning us as a bad thing.
I’m claiming that this was true in every case, but it was true in ours.
Yikes! Wake up America.
this issue of Bain is revealing just how little difference there is between an awful lot of Republicans and the Dems. Depressing, and showing up right here on “Free” Republic all too often. I guess since Paul is for the free market, and Romney participated in it, it must be a bad thing. Is that about where we are now?
“This business model often adversely affects a company’s employees.”
What is the alternative “business model” please?