Monday, July 2, 2012

Romney’s Bain

I am an uncompromising history fanatic and some call me an expert, but I prefer to say I am one who seeks the truth. While we live in an era when so much history is being made we should be excited for the time in which we live. Last week, for example, we witnessed the Supreme Court’s affirmation of the president’s signature legislation the health-care law the Good Ol’ Boys call Obamacare. This was the most profound piece of legislation since the “New Deal”.

So let's talk about Romney and his past. He started and built the venture capital and asset-management firm which was nothing more than a money-making machine. So what’s wrong with that? Well Bain Capital is a company that doesn’t and has never made anything; it invests. It spots trends, looks at promising companies tapping into those trends and then stakes its capital on improving a company, using Bain's sector and financial experts to, as they say, help company’s get over a capital shortage or help it expand.

The companies that Bain identified and invested in, and not in a small way, while Romney was at the helm, were Microsoft, Stream Global Services, ModusLink, and StatsChipPac. These companies are now among the biggest outsourcing companies in the world, with call centers, factories and facilities, mostly in Asia, but also across the globe, that support U.S. high-tech companies. The mission of these companies was to help big U.S. companies outsource and offshore. And let me add that this strategy was and is designed to support a low wage business model.

Even his own Republican cohorts like Newt Gingrich said: “The Bain model is to go in at a very low price, borrow an immense amount of money, pay Bain an immense amount of money and leave. I’ll let you decide if that’s really good capitalism. I think that’s exploitation.” Then slick Rick of Texas said: “There is something inherently wrong when getting rich off failure and sticking it to someone else is how you do your business. I happen to think that that is indefensible.”

So if he can be eaten by his own, who by the way does not appear to think much of his thinking, raise the issue - then why can’t President Obama raise the issue? Frankly, the president should have done so during the debate on financial regulatory reform. I should say there’s nothing inherently wrong with private equity, which plays an important role in the economy. Let me add that there’s nothing wrong with wealth and those who risk their capital in private-equity ventures should be rewarded when those deals pay off.

Romney himself acknowledges that the free markets need rules and regulations in order to function and we know certain dealings are prohibited and should be criminal like insider trading. So it is reasonable to ask whether some highly leveraged buyout deals, of the kind that Bain and other private-equity firms often conduct, should fall into the same thumb-on-the-scale category as insider trading.

Suppose a company is failing and appears beyond rescue. Suppose a private-equity firm buys the company with borrowed money, burdens it with more debt, and then spends the next few years firing workers, selling assets, eliminating pension plans — all while collecting handsome “management fees.” If you can recall losses at the nation’s largest and supposedly best-run bank, JPMorgan Chase — at least $2 billion and perhaps much more.
This is what Rick Santorum said in March: “I heard Governor Romney here called me an economic lightweight because I wasn’t a Wall Street financier like he was. Do you really believe this country wants to elect a Wall Street financier as the president of the United States? Do you think that’s the kind of experience we need? Someone who’s going to take and look after, as he did, his friends on Wall Street and bail them out at the expense of Main Street America?”

If you read my thoughts and words you know I don’t think much of the GOP or their henchmen but I agree with Santorum in this instance where I have to ask the question is this the guy we want to be president. I will go further and say Romney’s personality traits remind me of the “Robber Barons” of old. I would suggest that this so-called “Job Creator” needs to go offshore where he and his buddy’s send jobs.

Would he do this to the American Treasury and the American people if he were to become president? I say, yes! And that’s my Thought Provoking Perspective…  

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