Tuesday, July 05, 2011

Romney the Job Killer

From Politico, a condensed description of how Mitt Romney made his half billion dollar fortune. First he inherited many millions. That's important. Then he founded Bain Capital and went into the business of buying up undervalued or struggling American manufacturers, in some cases for the purpose of stripping their assets, laying off thousands of workers, and pocketing millions, leaving the companies in bankruptcy. In these cases Romney's investment firm got very rich and left workers and creditors holding the bag.

The story about Romney was told most fully in the Boston Globe in 2007. If you don't have the $5 to read the full Boston Globe article, you can find key parts of it online, as in this blog. There's also a link to the archived piece.

You have to wonder why this story, published once in the Globe, hasn't been read since by anyone covering Romney's campaign. You don't hear questions asked about it. To hear him talk, Romney created jobs. Do you hear reporters clearing their throats and challenging him? No. At best his record is mixed. He created profits for Bain Capital and its clients, but even the successes have a significant downside. The millions investors gained, others lost.

Romney's job appears to have been to hunt the quarry and stand aside while his company took the quarry apart. Another Boston Globe piece described the Romney method for keeping his hands clean.

The Massachusetts AFLCIO has kept tabs on Romney's record.

Workers who lost their jobs told their stories in a series of ads. It's a shame reporters haven't been interested. But workers' stories are never as interesting as stories told by people with money.

Romney's main success story involves Staples, which Bain Capital bought and grew. It's successful today, but how many Main Streets have been destroyed by this model of big box retail? How many small local retailers were ground out of business? It's a zero-sum story in which big wins and small loses. Why should small businesspeople see Romney as a hero or any kind of ally?

The key to the Romney Republican business model is low prices and low wages, using volume and dominant size to kill competition. Dominance not only helps them suppress wages but also the suppliers' prices. All the money gained is paid out to the people at the top of the company, the owners, the equity partners, the moneymen.

Romney has a cute line he repeats, deploring “lifetime politicians” who “have never run a corner store, let alone the largest enterprise in the world.” But Romney inherited millions and made more by depressing wages, closing down companies and running mom and pop stores out of business. In a nutshell, that is the Republican model and we shouldn't be voting for it.

This neat summary comes from a Republican rival:

"And I would also suggest one needs to look very carefully at what exactly the business record is," Huckabee said. "If it's taking companies who are in serious trouble, buying them when they are in pain, selling off their assets, and then making a huge profit off of it, that's not something a lot of Americans can relate to, except those who have lost their jobs because of those kinds of transactions. If that's the turnaround, there are a lot of Americans who would really not like to see their own lives turned around quite like that."

The New York Times wrote about Romney's career in 2007. The damning material is there, but simply stated rather than analyzed.

Meanwhile Romney the businessman who made his bones by laying off workers jokes about being unemployed.

Left and progressive bloggers find this provocative enough to comment on. Sadly the mainstream media won't touch it. They're too afraid of being called "liberal".

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