Did you know that, according to the Cato Institute, corporate raiders like Mitt Romney cost the US Taxpayer about a hundred billion bucks a year? It’s like his management of the SLC Olympics. He did okay, but was not the great heroic manager we are told he was.
“...As if this weren’t galling enough, taxpayers are left on the hook. Interest payments on all that debt are tax-deductible; when pensions are dumped, a federal agency called the Pension Benefit Guaranty Corporation picks up the tab; and the money that the dealmakers earn is taxed at a much lower rate than normal income would be, thanks to the so-called “carried interest” loophole. The money that Mitt Romney made when he was at Bain Capital was compensation for his (apparently excellent) work, but, instead of being taxed as income, it was taxed as a capital gain. It’s a very cozy arrangement.
If private-equity firms are as good at remaking companies as they claim, they don’t need tax loopholes to make money. If we capped the deductibility of corporate debt, and closed the carried-interest loophole, it would not prevent private-equity firms from buying companies or improving corporate performance. But it would reduce the incentives for financial gimmickry and save taxpayers billions every year….”
John Keating said that Mitt Romney is not like Ronald Reagan. Instead, he is more like Vladimir Putin.
“…Romney has professed his admiration for Ronald Reagan. But judging by his business history, the president he most resembles is Vladimir Putin. Romney has devoted his life to ensuring that every last possible penny rises to a few hands at the top. And, like Putin, he’s never shown much concern for the countrymen he tramples along the way.
“The word ‘oligarchy’ comes to mind,” says Michael Keating, when asked to envision a Romney presidency….”
Idiots who don’t learn from the past are doomed to repeat it. That’s The Pink Flamingo’s take on the world. Or, to but in cliches, leopards can’t change their spots, it is difficult to teach an old dog new tricks, and what you see is what you get.
“…”I think they’re one of the worst, at least during Romney’s time,” Kosman says. “They were very aggressive about dividends. They were very aggressive about borrowing the most money they could. He’s very driven to be the best he could be, and that was to be as cutthroat as he could be. But in the process, he hurt a lot of companies and cost a lot of jobs, maybe tens of thousands of jobs.”…”
Wisdom, which is sorely lacking in the 2012 GOP Campaign, would suggest that Mitt Romney should have a second look and be vetted. Wisdom would suggest that he is going to do, in office, what he did while Governor of Massachusettes and at Bain Capital. He was an utter failure as governor, unless you like your Republicans abjectly liberal, reeking of Obama. As the CEO of Bain, he was an utter failure. Sure, he made millions, but when you look at the way he did it and his management style, when he says he wants to do away with HUD, be afraid, be very afraid.
It’s not that HUD is not an abject mess, it’s what we know from his history at Bain. Case in point is Georgetown Steel in Georgetown, SC.
“…The result was that previously profitable companies were now burdened with debt. But much like the Enron boys, Romney’s battery of MBAs fancied themselves the smartest guys in the room. It didn’t matter if a company manufactured bicycles or contact lenses; they were certain they could run it better than anyone else.
Bain would slash costs, jettison workers, reposition product lines, and merge its new companies with other firms. With luck, they’d be able to dump a firm in a few years for millions more than they’d paid for it.
But the beauty of Romney’s thesis was that it really didn’t matter whether the company succeeded. Since he was yanking out cash early and often, he would profit even if his targets collapsed. This was the fate awaiting Georgetown Steel.
When Bain purchased the mill, Sanderson says, change was immediate. Equipment upgrades stopped. Maintenance became an afterthought. Managers were replaced by people who knew nothing of steel. The union’s profit-sharing plan was sliced twice in the first year — then whacked altogether.
“When Bain Capital took over, it seemed like everything was neglected in our plant,” says Sanderson. “They had people here [who] didn’t know what they were doing. It was like they were taking money from us and putting it somewhere else.”
History would prove him correct. While Georgetown was beginning its descent to bankruptcy, Romney was helping himself to the company’s treasury….”
Sorry, but that is not management. It is not building a business, it is destroying. There is a difference. Oh, yes, Mitt Romney is the perfect example of Ayn Rand in action – selfish (self centered) capitalism. You do for yourself and screw everyone else. He is even a textbook example of how her heroes should look, handsome, thin, and well dressed.
Is this how he is going to run things if he is POTUS? Sure, it’s raw capitalism, but it’s also foolish. His management style was pure Rand. All that mattered was selfish short-term profit. Sorry, but this is not want made America great. It is what is bringing us down.
“…”They were getting rid of old managers and hiring new managers [who] didn’t have any steel experience,” says Morrow. “Some of the guys were nice guys and everything, but they didn’t have a clue what was going on.”
Many of the new supervisors were ex-military, people who believed that adults are best motivated by punishment. Before Bain, says Morrow, “everybody got along.”
Afterward? “They wanted to discipline people for getting hurt on the job. They wanted to put us in an environment like a war, where we were always fighting with them.”
Romney was charging GSI $900,000 a year in management fees to run the company. The Kansas City mill received $900,000 worth of ineptitude in return.
Although Bain borrowed $97 million to retool the plant so it could also produce wire rods, it left the rest of the facility to rot….”Like a lot of private equity firms, Bain managed the company for financial results, not production results,” Foster says. “It didn’t invest in maintenance or immediate customer needs. All that came second to meeting monthly financial goals.”
It would take a few more years of bleeding, but GSI eventually fell to bankruptcy.
The Kansas City mill closed for good; 750 people lost their jobs. Worse, Romney had shorted their pension fund by $44 million. The feds were forced to cover the difference, while workers saw their benefits slashed in bankruptcy court….”
“...Even Kaplan admits that private-equity firms rarely create jobs. Workers are seen as costs, and costs are the enemy. According to Kosman, Romney was, in truth, among the most heinous job-killers of them all.
For his book, Kosman conducted an interview with a Bain managing partner. The man told him that when Bain was about to buy a company, its partners would hold a meeting. “He said that about half the time, [they] would talk about cutting workers,” Kosman says. “They would never talk about adding workers. He said job growth was never part of the plan.”
That claim was buttressed by the Associated Press, which studied 45 companies bought by Bain during Romney’s first decade. It found that 4,000 workers lost their jobs. The real figure probably is thousands higher, since the analysis didn’t account for bankruptcies or factory or store closings….”
One of the things that bothers The Pink Flamingo most about Romney is his less than candid approach to reality. Case in point – Bain Capital:
“…Romney in 2007 told the New York Times he had nothing to do with taking dividends from two companies that later went bankrupt, and that one should not take a distribution from a business that put the company at risk.
Yet Geoffrey Rehnert, who helped start Bain Capital and is now co-CEO of the private equity firm The Audax Group, told me for my Penguin book, “The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy,” that Romney owned a controlling stake in Bain Capital between approximately 1992 and 2001. The firm under his watch took such risks, time and time again.
Bain and Goldman Sachs, for example, put $85 million down in a $415 million 1994 leveraged buyout of Baxter International’s medical testing division (renamed Dade Behring), which sold machines and reagents to labs.
Former Dade CEO Scott Garrett, who managed the business for the first few years after the takeover, said Romney “was far more in tune with what was going on throughout his firm, and even the portfolio companies, than you might expect….”
It wasn’t all bad. Bain made a tremendous amount of money for investors. The problem is the fact that Romney hasn’t been truthful about Bain. If he had come out and said it was all about making lots of money for himself and his investors, fine. But, he’s trying to say he was creating jobs and helping people. That’s a pile of do-do. This is going to come back and seriously hurt him when Obama gets started. The problem is, as The Pink Flamingo has stated, of late, that conservatives are unfamiliar with wealth and how it is made. The way Romney made his wealth is through venture capital. It is legal. It is Randian. Vulture venture capitalism may have also helped crash our economy in 2008.
It is also about taxes and gaming the tax system.
“…Bain declined to comment. But individuals familiar with Bain’s strategy said that the firm had a long-term interest in GSI. They said more than $100 million was invested in improving manufacturing facilities and that the company went bankrupt at a time when more than 40 other steel companies went under, between 1994 and 2004.
A former chief executive of GSI, Roger Regelbrugge, said he admired Bain overall and had high regard for Romney. But he criticized Bain for being too slow to change management priorities and personnel, and he recalled complaining that Bain was extracting annual management fees as the company faltered. About $900,000 in annual fees were paid to Bain through 1999, Romney’s last year at Bain Capital, according to Regelbrugge and filings to the Securities and Exchange Commission.
Romney declined to comment for this story, but in public forums he has brushed aside criticism of Bain’s deals, noting that there were winners and losers in the investment portfolio.
“We didn’t take things apart and cut them off and sell them off,” Romney said in a GOP debate this fall. “We, instead, helped start businesses…. Sometimes we acquired businesses and tried to turn them around, typically effectively. And that created tens of thousands of new jobs.”
But in 2007, during his first run for the presidency, he said he regretted extracting payments from companies that were failing: “It is one thing that if I had a chance to go back I would be more sensitive to,” he told the New York Times.
Romney and his former partners have repeatedly pointed to another, smaller investment in steel that they say offset the GSI case and showed Bain’s overall acumen in backing companies that create jobs.
In 1994 Bain invested $18.2 million in the start-up of a new steel manufacturing company in Fort Wayne, Ind., called Steel Dynamics that is one of the industry leaders in revenue growth. Today that firm reports $6.3 billion in revenue, nearly 25 times the $252.6 million reported when the company went public in 1996, according to Fred Warner, its the company’s investor relations manager. The company now employs more than 6,000 workers, and its sales growth has made it an industry star.
Bain commonly held on to companies for five to seven years, according to interviews with partners and a review of available records. Sometimes, however, Bain invested in a quick flip. It joined another private equity firm in 1996 to purchase Experian, the California-based consumer credit reporting firm. Bain sold the company two months later, reaping $252 million on its initial investment of $88 million, according to the prospectus….”
It is about not being quite honest about what Romney did. If he were, we would see how pathetic his management skills are. He used company men, regardless of their qualifications. It was not about finding the best person for the job, but the one who could make the most short term cuts. All in all, this will please the Randians out there who want to slash the size of the government. As we have seen from his record, there’s a good 40% chance that he will turn what is now a serious debt problem into an absolute disaster.
“...In fact, Romney and Paul are the vulture capitalist twins. Romney made his fortune that way. The man with the Swiss bank account and the elevator for his cars who rides with his dog on his roof was responsible for big layoffs in pursuit of vulture profits. The man who put his name on corrupted newsletters that included talk of race wars and proudly champions his admiration for the atheist Ayn Rand would decimate and destroy programs that help women and workers while advocating his brand of vulture capitalism.
Neither Romney nor Paul takes responsibility for the consequences of their actions. They oppose pay equity proposals for women, a major component of their war against women. They oppose new programs to create jobs, a major component of their war against workers. Their party champions firing teachers, police, librarians and firefighters, which is another attack on workers. Meanwhile, Romney and Paul both champion the crony capitalist abuse of earmarks….”
I noticed something in a blog post that I’ve thought, during this primary season. Romney has spent a fortune. He is a very big spender. He also doesn’t have a grasp on management. Sorry, but it’s true.
“...This is one repeating failure of Mitt Romney: he doesn’t budget very well and there exists a pattern of this flaw in his resume for President. Although, Romney cites his running the Olympics as a success story when it was the federal government that came to the rescue with taxpayers dollars by injecting 600 million into the Olympic purse strings….”
A long-time Republican operative, exclusively, told The Pink Flamingo:
“…He is doing the same thing to the Republican Party so he can consolidate all power in his office and he doesn’t care who he takes out along the way…”
It’s called Vulture Capitalism:
“...The fundamental principles of vulture capitalism, whatever the respective business arenas or prey, are inviolate: Anything and anyone is expendable in pursuit of a profit, starting with the powerless, and any brushes with the law along the way, not to mention civil or criminal financial penalties, are simply the price of doing nasty business. … Precisely because they are lone wolves responsible to no one but themselves—not independent shareholders, let alone the communities they plunder—they can be “more ruthless than Wall Street,” as the Newt Gingrich super-PAC put it in its ad attacking Romney’s Bain career. Vulture capitalists are throwbacks not so much to the relatively modern bankers and industrialists whom FDR set out to police in the Great Depression as to the more primitive titans and robber barons of the Gilded Age that Teddy Roosevelt took on a generation earlier….
…Mitt’s own coterie of Wall Street vulture capitalists is second to none in rapaciousness—starting with the hedge-fund gambler John Paulson, who collaborated with Goldman Sachs on his megabet against the entire American housing industry before the crash. Another Romney hedge-fund patron, Paul Singer, is notorious for slick trafficking in Third World debt, with results that leave the destitute masses of countries like the Congo in a far sadder state than the hapless Goldman clients (those “muppets” we’ve been hearing about) on the losing end of Paulson’s big score. Romney also has an affinity for fellow Mormons who’ve made sugar-daddy fortunes by peddling dubious “health products” sold by “multilevel marketing” schemes (a.k.a. pyramid selling) in which retail sales are secondary to the commissions tied to roping more suckers into the sales force. In addition to Lund of Nu Skin, there’s Frank VanderSloot, the Professor Marvel behind Melaleuca, an Idaho-based company that promises to help “moms be moms” and “earn a corporate income from home,” even if they don’t have the financial cushion of, say, Ann Romney. Though a promotional video on its website features women who claim to have earned as much as $500,000 selling goods like dietary supplements (which purport to remedy clogged arteries and arthritis), the average Melaleuca peddler makes just $87 per year. An industry critic, Robert L. FitzPatrick, elucidated for Mother Jones how companies like Melaleuca and Nu Skin are perfect examples of the vulture-capitalist business model: They set “the average person upon his neighbor to get at his assets, savings, and investments.” Romney, meanwhile, has applauded VanderSloot for having “vision and sense of social responsibility” that are “second to none.”….”