I know what Romney’s organization did.
Romney’s Bain Capital Made Billions While Bankrupting Nearly One-Quarter Of The Companies It Invested In
By Pat Garofalo on Jan 9, 2012 at 9:25 am
2012 GOP presidential frontrunner Mitt Romney, who has a large lead in the polls heading into the New Hampshire primary tomorrow, has been taking heat from both Democrats and his Republican challengers for his time at Bain Capital, the private equity firm that he headed. Bain’s modus operandi was to invest in companies, leverage them up with debt, and then sell them off for scrap, allowing Bain’s investors to walk away with huge profits while the companies in which Bain invested wound up in bankruptcy, laying off workers and reneging on benefits.
Last week, Reuters profiled one company, Worldwide Grinding Systems, that went belly up after Bain invested in it. The company not only lost 750 jobs, but the federal government had to come in to bail out its pension fund, while Bain walked away with millions in profits.
And according to an analysis by the Wall Street Journal, this was far from an isolated incident. In fact, 22 percent of the companies in which Bain invested wound up either in bankruptcy or shutting their doors entirely, while Bain itself has made billions of dollars for its investors:
The Wall Street Journal, aiming for a comprehensive assessment, examined 77 businesses Bain invested in while Mr. Romney led the firm from its 1984 start until early 1999, to see how they fared during Bain’s involvement and shortly afterward.
Among the findings: 22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses. An additional 8% ran into so much trouble that all of the money Bain invested was lost. [...]
The Journal analysis shows that in total, Bain produced about $2.5 billion in gains for its investors in the 77 deals, on about $1.1 billion invested. Overall, Bain recorded roughly 50% to 80% annual gains in this period, which experts said was among the best track records for buyout firms in that era.
Adding insult to injury, Bain would hide its profits in tax havens, not even paying the rate it was supposed to on the profits it made laying off workers.
Federal Aid
The US Pension Benefit Guaranty Corp, which insures company retirement plans, determined in 2002 that GS (Steel) had underfunded its pension by $US44 million. The federal agency, funded by corporate levies, stepped in to cover the basic pension payments, but not the supplement the union had negotiated as a hedge against the plant’s closure.
For Joe Soptic, who worked at the plant for 28 years, that meant a loss of $US283 per month, about 22 per cent of his pension. Others lost up to $US400 per month, according to documents supplied by the union.
Comparatively, the GS bailout was one of the pension guarantor’s smaller hits. The federal fund swung from a $US7.7 billion surplus to a $US3.6 billion deficit that year as it struggled to cover bankruptcies in the steel and transportation industries. The failure of LTV Steel, for example, cost the agency $US1.9 billion.
The agency’s woes prompted Congress in 2006 to require companies to contribute more toward their pensions. Press accounts said this change accelerated the shift away from pension plans toward 401(k)s and other defined-contribution retirement plans that offer less security for workers.
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The description “Robber Baron” comes to mind. To make matters worse, the man is a fascist who believes in national socialism.
Do you honestly think this is better than the following record of Newt Gingrich?
Newt Gingrich allied himself with Ronald Reagan to build the Reagan Coalition, the Religious Right, and the Republican majority (together the Reagan Revolution) which directly led the downfall of the Soviet Union, the Contract with America, government reforms, less government, tax cuts, a balanced budget, and the great, long-standing Reagan economy.
Under a Republican president, they [the Republican Congress, including Rick Santorum] added over $3 trillion to the federal deficit, shunned conservative policy in favor of Beltway influence-peddling, and so damaged the GOP brand that we lost the majority Gingrich had worked years to forge.
How much should I really care that Newt’s fabulous colleagues think his reemergence would be a disaster for Republicans? Lest these characters forget - 2010 was not a merit promotion. They, the Republicans, were the only alternative in town.
Gingrich has been my choice from the beginning, but I am a realist and it is not in the cards for him to be nominated. Romney is the only alternative to Obama at this time.