Mitt Romney’s days at and after Bain have been largely unexamined in the primaries. None of the other candidates has the resources and organization to do the research, but others are and it will hurt Romney’s come the general election if he is the nominee because people will hear the details for the first time in September and October 2012.
For starters, no one has focused on the fact that Romney left Bain in 1999. “How many jobs have you created lately” comes to mind.
More important, as The NY Times reveals today, Romney has been living off the largess of his Bain investments, including participating in post-retirement deal profits since then including on some deals which enriched Bain and Romney while driving the company bankrupt:
The 2000 purchase of KB Toys, then one of the country’s largest toy retailers, became one of the most contentious.
As in most Bain deals, the partnership put up a small fraction of the money — in this case $18 million — and borrowed the rest of the $302 million purchase price. Just 16 months later, the toy company borrowed more to pay Bain and its investors an $85 million dividend.
That gave Mr. Romney and the other partners a quick 370 percent return on their money. But it also left the toy company with a heavy debt burden. Before long, the company began closing stores around the country and laid off 3,400 workers. It filed for bankruptcy protection in 2004.
I don’t consider Bain a disqualifier for Romney at all. But what is amazing is that no one is vetting the potential downside to his general election prospects, other than an occasional story in the mainstream media. Instead, the conservative media is running magazine covers with Romney’s lead challenger depicted as a martian and demonizing anyone who brings up Bain as a socialist.
We are on the cusp of nominating a known unknown.
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Whoa…Romney is outspending Newt 34 to 1 in Iowa ad buys.
Restore Our Future PAC (pro-Romney) $713,000, Rick Perry $456,000, Mitt Romney, $258,000, Make Us Great Again (pro-Perry) $186,000, Red White and Blue Fund (pro-Santorum) $100,000, Ron Paul $63,000, and Newt Gingrich $21,000.
“…demonizing anyone who brings up Bain as a socialist.”
Mr. Jacobson, you have lost your objectivity, and are now losing your credibility with stuff like this. The reason why people went after Gingrich was because of HOW he criticized Bain – he criticized Romney in a manner worthy of Obama and Pelosi.
Even Newt has now admitted that he spoke in a way that wasn’t consistent with his values. Newt blew it on his counterattack. Own it and move on.
If you bothered to read the posts to which Prof. Jacobson linked, you would know that Krauthammer said that Gingrich’s statement is what you “would expect from a socialist.” Do you seriously contend that comment does not demonize Gingrich as a socialist?
#1. I DID read the linked post when it first came out, thank you very much.
#2. Krauthammer didn’t call Newt a socialist, he said Newt’s attack is the kind of attack one would expect from a socialist, but not from someone among the right wing.
And Krauthammer was exactly right. When you demonize a businessman as a fat cat preying upon the little guys, like what Newt did, that is socialist class warfare type rhetoric.
And what you fail to acknowledge is that Newt HIMSELF admitted that he responded poorly, and in a way that isn’t consistent his values.
But you keep buying the hoopla that Mr. Jacobson is selling in complete disregard of the facts and common sense.
Yours is just the type of comment I would expect from a fool.
See my comment below, https://legalinsurrection.com/2011/12/bain-drip-drip/comment-page-1/#comment-295813
That is a dodge, Mr. Jacobson. I am responding directly to your line: “Instead, the conservative media is running magazine covers with Romney’s lead challenger depicted as a martian and demonizing anyone who brings up Bain as a socialist.”
That is NOT what happened and it is a false characterization that has been refuted, but you keep repeating it anyway.
Yesterday on Fox News Sunday Chris Wallace showed a picture of Romney with other investors waving wads of cash after they had earned several million dollars on some transaction. Wallace’s point was that Romney should be ready to react when the Democrats use that picture against him.
Suggestion: how about a side-by-side? The photo of Romney earning money next to the picture of Obama, pie-eyed, smoking the doobie?
Professor,
Are you really criticizing Romney for a deal that occurred at least one year, and the questionable part about 3 years, AFTER Gov. Romney left Bain? And borrowing to pay dividends seems like only part of the story, no? Using purchased entities as ways to get payments knowing that the entity will discharge the debt used to finance those payments through bankruptcy sounds like a criminal action, not normal business. Defrauding the lender. Are you accusing Romeny of being a criminal? Or pos-Romney Bain of being engaged in crime?
No claim that he did anything wrong, I’m talking about electability and a fortune build on highly leveraging companies, sucking out the cash, and leaving a bankrupt entity. I undetstand the creative destruction argument, I’m just saying it all should be laid out so voters can judge whether — as so many tell us — he really is the most electable against Obama.
I think some commenters need to re-read the professor’s post, especially the last paragraph. He’s clearly pointing out what will happen in the general election if Romney is the nominee.
I think the “Gekko-ization” of Romney will be effective when Axelrod has close to a billion bucks to throw at him. Obama will be portrayed as noble, using his Harvard Law degree to work for next to nothing advocating for the poor on the streets of Chicago, while Romney is greedy, using his Harvard Law degree to learn how to engage in financial engineering to enrich himself while laying off hard working Americans.
But since the NYT is already playing up the Gekko-ization angle, and since the “conservative” media has anointed him our nominee, then why isn’t the conservative media pushing the story of who has benefited from Bain Capital?
Not just the jobs that have been created, but highlighting all of the Democratic constituencies that have benefited from the huge returns generated by Bain Capital?
For example, the limited partners in private equity funds are often union pension funds and college endowments – both big Democratic constituents. Why aren’t we seeing stories that when Mitt Gekko was at Bain, he was working to enhance the retirement savings of those Democrat union pensioners? And helping increase the value of college endowments so college professors can continue to indoctrinate students about the virtuousness of liberalism and the evils of capitalism and free markets?
“[KB borrowed the money to pay a dividend that] gave Mr. Romney and the other partners a quick 370 percent return on their money. But it also left the toy company with a heavy debt burden. Before long, the company began closing stores around the country and laid off 3,400 workers. It filed for bankruptcy protection in 2004.”
Nothing new there; from watching “The Sopranos” I remember that’s basically how Tony and his friends did it when they “busted out” a business.
Turning a quick buck via Bain is as capitalist as turning a quick buck at Freddie Mac. Neither was illegal and both are what “smart” moneymakers do in leveraging their assets.
It’s also why I don’t have a problem with Perry’s retirement and leveraging his funds.
Understanding how to leverage assets for financial gain seems to me to be crucial to getting the U.S. out of its current debt and overspending problem.
I will never vote for this joker.
There used to be a name for people like what Romney was. I believe the term was corporate raider. It represents the dark side of capitalism. Krauthammer is anti Gingrich because Gingrich is anti-establishment and he is smarter than Krauthammer.
The Devil is in the details … did Mitt build “a fortune on highly leveraging companies, sucking out the cash, and leaving a bankrupt entity.” (as the professor said)? Or was it mostly Staples success stories … solid structural improvements to make efficient profits?
The bad scenario is that he ravaged smaller companies, with a few survivors like Staples somehow reaching critical mass, where they could afford lobbyists and lawyers to sue competition out of existence, if they couldn’t buy them out. Or to extract favors from municipalities and franchisees.
I think there were some 110 companies Bain was involved in during Mitt Reign … I wonder how many small companies emerged whole and more profitable, that weren’t already heading in that direction. I bet team Obama knows.
And I still think it’s significant Mitt did this in a huge bull market, with easy money, and a release from the gold standard. The whole world was leveraging up with paper money, and Mitt left when bubbles started popping.
But Mitt still has a good feel for business, if he can just be handcuffed to some conservative positions, before waffling off to the general.
Just wait until the attack ads come out with the Bain money photo:
http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/romney-defends-raining-money-bain-capital-photo/264611