Bain’s ‘Creative Destruction’ Destroys Lives

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http://www.bloomberg.com/news/2012-08-12/bain-s-creative-destruction-destroys-lives.html

Is there any fairness in a system where a group of people can borrow a bunch of money to buy a company and pay themselves millions of dollars in dividends and fees, while the company itself ends up bankrupt and its employees lose their jobs, health insurance and pensions?

Can you imagine the owners then being celebrated in fancy society while the unfortunate workers are left to fend for themselves as the collateral damage of the system?

Welcome to Mitt Romney’s America. This is the true story of how in October 1993 buyout firm Bain Capital LLC, which Romney founded and ran from 1984 to (roughly) 1999, and its partners bought a steel mill in Kansas City, Missouri, from Armco Steel Corp. (AKS) for $75 million, merged it with other steel companies, loaded it with too much debt, paid themselves big dividends and ran the company into the ground. Bain’s behavior was all perfectly legal, of course, and many argue that this is an essential part of the creative destruction that is capitalism (except when there are huge bailouts, of course).

Lucky Few

In many ZIP codes around Boston, Chicago, Los Angeles, New York and San Francisco, Bain and its partners are celebrated and admired. Many graduates of our finest colleges, universities and graduate schools would almost kill to get a job at Bain, with its elegant offices and promise of great wealth for the lucky few. And now one of them may well end up in the White House.