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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsBloomberg news does not seem to be a fan of Romney
Whats clear from a review of the public record during his management of the private-equity firm Bain Capital from 1985 to 1999 is that Romney was fabulously successful in generating high returns for its investors. He did so, in large part, through heavy use of tax-deductible debt, usually to finance outsized dividends for the firms partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses.
http://www.bloomberg.com/news/2012-07-15/romney-s-bain-yielded-private-gains-socialized-losses.html
BumRushDaShow
(128,979 posts)but managed to survive a bit longer thanks to deregulation and Graham-Bliley-Leach.
ProSense
(116,464 posts)<...>
Success, entrepreneurship, risk taking and wealth creation deserve to be celebrated when they are the result of fair play and hard work. President Barack Obama is correct in distinguishing the patient creation of value for the benefit of investors through genuine operational improvements and growth -- the true mission of private equity -- from the form of rigged capitalism that was practiced by some in the industry in the past when debt was cheap and plentiful.
While Bain Capital wasnt alone in using financial engineering to turbo-charge its returns, it was among the most aggressive under Romneys leadership. Enriching investors by taking leveraged bets isnt a qualification for a job requiring long-term vision and concern for public welfare. It is appropriate to point that out to voters.
Nailed Mitt!
bluesbassman
(19,373 posts)Succinctly states what healty private equity is and the problem with Bain Capital and it's peers.
reformist2
(9,841 posts)high density
(13,397 posts)Which is the reason why most "news" organizations are ignoring the facts.
KeepItReal
(7,769 posts)I'm not gonna even mention that thing called "Fox Business"
Ruby the Liberal
(26,219 posts)At the bottom:
Wounded Bear
(58,656 posts)and probably paid the author, too.
They wouldn't do that if they were supporting the RW agenda like Faux News does.
I think there is significance in the fact that this OpEd saw print in Bloomberg.
Laurian
(2,593 posts)"privatized the gains and SOCIALIZED the losses". The campaign should use it, and turn their favorite term (socialized) against them.
Wounded Bear
(58,656 posts)as well as in other progressive sites.
Nice to see it get some mainstream exposure.
riverbendviewgal
(4,252 posts)It should be a bumper sticker or on a shirt or sign..... Bain raped the companies and the workers in them and the taxpayers were left paying for their EI and welfare. That is vulture capitalism. Not very American.
alcibiades_mystery
(36,437 posts)It was quite a popular (front) accusation against the capitalists in the 1930's: the Depression was because the capitalists engaged in the "socialization of losses."
Laurian
(2,593 posts)Depression and our recent economic woes, it seems an appropriate time for a comeback. The refusal to learn from history doomed us to repeat it. Some phrases are amazingly accurate!
Honeycombe8
(37,648 posts)ProgressiveEconomist
(5,818 posts)Romney shucks responsibility for what happened after 1999, even though HIS decisions years before 1999 made bankruptcy inevitable:
These are four of the 10 of 67 Bain deals 1985-1999 that account for 70 percent of Bain profits:
(1) Acquired 1988-- Bankruptcy 2000-- Stage Stores-- jobs lost-- $184-million Bain capital gain on sale in 1997, PLUS millions in fees and dividends
(2) Acquired 1992-- Bankruptcy 2000-- American Pad & Paper-- several hundred jobs lost-- 25-fold Bain capital gains, PLUS millions in fees and dividends
(3) Acquired 1993-- Bankruptcy 2001-- GS Industries-- 750 jobs lost-- more than 4-fold Bain profits, PLUS millions in fees and dividends, and $44 million in stolen pensions shifted onto the US Pension Benefit Guaranty Corp.
(4) Acquired 1994-- Bankruptcy 2002-- Dade International-- 1700 jobs lost-- 8-fold Bain capital gains, PLUS millions in fees and dividends
The author of this op-ed is a private equity executive in London.
Spazito
(50,338 posts)The Secret Behind Romneys Magical IRA
The most mysterious of the unexplained mysteries about Mitt Romneys considerable wealth is how he was able to amass between $21 million and $102 million in his individual retirement account during the 15 years he was at Bain Capital LLC.
How did he do it, given the relatively small amounts that the law permits to be contributed to such a plan on an annual basis? Romney has not explained this conundrum, and seeing as he wants to become president, he would be wise to start talking -- if for no other reason than there might be many Americans who would like to emulate what he did.
snip
This great mystery seems to have troubled others, as well. On July 3, Current TV host Jennifer Granholm, a former Democratic governor of Michigan, invited Edward Kleinbard, a law professor at the University of Southern California, on her show to discuss how Romney could have accomplished this remarkable feat. There were only two possibilities, Kleinbard told Granholm. Either from a little acorn, a mighty oak grew very, very quickly, extraordinarily so, Kleinbard explained, causing Granholm to interject, What little acorn could grow to be $101 million? I want to get some of that acorn!
The other possibility, Kleinbard suggested, was not dissimilar to what Maremont theorized: that Romney contributed limited-partnership interests in Bains buyouts to his IRA. What was quite troubling to Kleinbard is that he suspected Romney may have contributed these interests to his IRA at a fraction of their market value -- pennies on the dollar -- and well below what he might have charged you or me. When the buyouts became successful, Kleinbard proposed, the pennies on the dollar were suddenly worth real dollars.
more
http://www.bloomberg.com/news/2012-07-15/the-secret-behind-romney-s-magical-ira.html
The article speculates on a couple of scenarios but even at their best case ones, they still result in much less than Romney accumulated.
A very interesting read.
bluesbassman
(19,373 posts)Sure, you could figure out some small scam that might make you 6 or 7 figures, but if you got caught you'd spend time behind bars.
The real reason you can't emulate them though, is that their success is a combination of nepotism and inside information (who you know), a team of attorneys and CPAs, being at the right place at the right time, and having a pretty good stash to begin with.
Romney doesn't impress me as being all that bright. Sure he's educated, but if he hadn't been born with a platinum spoon in his mouth he would have never made it to the executive washroom. His name did that (along with some serious lack of moral compass).
Spazito
(50,338 posts)as more of a shot at him and his vanity than a genuine statement.
riverbendviewgal
(4,252 posts)Hardheaded Socialism Makes Canada Richer Than U.S.
he truth is that both sides are right. Since the 1990s, Canada has pursued a hardheaded (even ruthless), fiscally conservative form of socialism. Its originator was Paul Martin, who was finance minister for most of the 90s, and served a stint as prime minister from 2003 to 2006. Alone among finance ministers in the Group of Eight nations, he resisted the siren call of deregulation, in his words, and insisted that the banks tighten their loan-loss and reserve requirements. He also made a courageous decision not to allow Canadian banks to merge, even though their chief executives claimed they would never be globally competitive unless they did. The stability of Canadian banks and the concomitant stability in the housing market provide the clearest explanation for why Canadians are richer than Americans today.
http://www.bloomberg.com/news/2012-07-15/hardheaded-socialism-makes-canada-richer-than-u-s-.html?cmpid=BVrelated
salin
(48,955 posts)Interesting...