By now, unless you’ve been living under a rock (or, if you are among the more affluent, inside a cave), you’ve heard some kind of story about how Mitt Romney turned a private equity firm around and saved lots of jobs. But what you probably haven’t heard so much about is how he did it, and how he lied about it later. If you knew, you wouldn’t be so quick to want him to run our country the way he ran Bain. You see, Mitt didn’t really “save” the company by building revenue and new sources of income. No. In fact, his attempt to save Bain & Company was a disaster, and the only way Mitt “saved” the company and made himself the quarter-billionaire he is today is “by borrowing vast sums of money that other people were forced to pay back.” And if that wasn’t bad enough, his oft-told story about how he rescued Bain & Company has been proven, thanks to Rolling Stone reporters Tim Dickinson and Matt Taibbi, to be a lie. And just before his big speech at the RNC
self-love-fest convention, Romney’s campaign told another lie about how he saved Bain & Company and made it profitable in a year.
It’s a fascinating, if long, story that sheds some light on how the world of high finance works, or doesn’t, depending on your perspective, by which I mean whether or not you are the one making the money or paying it. Romney’s basic strategy was to buy a struggling company, borrow hugely against the company’s assets, pay himself and his partners millions of dollars in consulting fees, then leave the company to twist in the wind under a mountain of debt, with many of them declaring bankruptcy, but not after Romney and his friends made a profit. Some people applaud this kind of Capitalism, but I feel there ought to be laws against it and protections for the people whose company is being bought. Perhaps the biggest lie Romney and his backers tell is that he was some kind of job creator who turned struggling companies around. But creating jobs was never the goal of taking over those companies. It was to make money for himself and his partners. As Matt Taibbi explains, “If you invest in a Bain or a Carlyle or a KKR takeover deal, you’re not betting on the future success of whatever company they took over. You’re betting on the ability of those firms to make money on the deal, which may – or, just as importantly, may not – involve turning the target company around.”
We do not need to have people like this in charge of the whole system, and choosing who will regulate the banks and financial institutions of our country. We need people we can trust to do the right thing, which is what Public Service is supposed to be about. It’s not about having a chance to change the rules to benefit you and your friends, though many have gone to Washington with just that goal in mind. It’s about serving your country, which includes all of its citizens, not just the top one percent in income. I would take the job, but an atheist like me could never get elected in this God-loving country. Maybe you or your children can do better (assuming the country is still around when your children are old enough to become president.)
This is our open thread. Feel free to discuss any topic you want.
[Cross-posted at Pick Wayne’s Brain.]