Mitt Romney claims to be the presidential candidate with business experience, but what kind of business experience does he have? Perhaps it is easy to pose as the "business candidate" with the broadest catholicity when you are running against Barack "you didn't build that" Obama. However, Mitt Romney's business experience is not the kind that you might be imagining: inventing some business idea in his basement, following a business plan, and intersecting with the free market at every turn. Actually he was a "master financial speculator," says Ronald Reagan's Budget Director David Stockman. One who "bought, sold, flipped, and stripped businesses."
Romney's venture capital investment in the highly successful office retailer Staples is truly impressive. He invested $5 million to fund the business in 1986 and it took off as a solid business, earning legitimate profits by providing efficiency in the office retail industry under the genius of CEO Tom Stemberg. Bain Capital sold out for $15 million after a short time, amounting to a successful investment. But the Staples investment does not account for Bain's extraordinary success. Unfortunately, it does not represent Bain and Romney's strategy for success.
Bain Capital did extremely well during Romney's tenure: $2.5 billion in returns, $1.1 billion invested. But out of the 77 major deals made from 1984 to 1999, ten of them account 75 percent of investor profits. The other 67 investments did nothing even remotely impressive. So what happened with these ten magical deals that cost only $250 million and returned a bounteous $1.8 billion? Stockman explained Romney's strategy: "He spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and cast-offs of corporate America, leverage them to the hilt, gussy them up as reborn 'roll-ups,' and then deliver them back to Wall Street for resale—the faster the better."
Stockman noted that Romney's 15 years as head of Bain Capital from 1984 to 1999 correspond with "the first great Greenspan bubble." He observed, "The credentials that Romney proffers as evidence of his business acumen, in fact, mainly show that he hung around the basket during the greatest bull market in recorded history." Mr. Romney's record with Bain was not filled with building businesses. "The record is actually all about the utter unfairness of windfall riches obtained under our anti-free market regime of bubble finance."
One of Bain Capital's most magical investments of the big ten, Wesley-Jessen provides an illustration of Mitt Romney's business experience and strategy. He invested $6 million in the company in 1995 and made fifty times on the investment, selling off for a profit of $300 million in 1999. During this four-year period, the company doubled in income. Doubling is nice, but how did he get a fifty times return? Stockman writes, "The rest of the gain was due to massive leverage, the Greenspan bubble, and accounting moves that can fairly be called myopic." Romney made a lot of money at the top of that bubble in the late 1990s. But how great were these ten winning businesses if you look at them as profit-making enterprises, disregarding contemporaneous financial markets? Apparently they were not all great businesses; four out of these ten firms ended up in bankruptcy during the 2000-2002 downturn. Mitt Romney's business experience does not represent the ability to build a business from the bottom up. Rather his success required this peculiar practice of "leveraged gambling" which took advantage of Greenspan's banking bubble.
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Comments: 6
He is squarely against the American worker, and apparently thinks we should all become hedge fund managers, or work in Walmart...
If you want to be owned by a corporation, Vote for Romney
If you want the country to be a democracy vote for Obama
Sounds like a simple statement, but there actually is proof you can use to see and decide... About a month ago, a particular jobs bill came up in the senate. It was backed by Obama, and it had two simple functions:
1. Give a 20% tax break to businesses that insourse jobs to the US
2. Close loopholes that give tax breaks to those same companies to outsource jobs.
http://www.cnn.com/2012/07/19/politics/senate-bring-jobs-home-bill-blocked/index.html
It wouldn't cost a dime, and it would bring jobs to America that are currently being shipped to China and India. Jobs just like these that BAIN is doing and Romney is STILL profiting from.
http://www.journalstandard.com/news/x2102586729/Sensata-workers-protest-layoffs
Great idea right? Well two lobbies that cover multinational corporate interests, declared that they would "score" the vote, and threatened any senator that voted for the bill with funding a "primary challenger" in their next election...
The democrats, and independents vote for it. Even the few retiring republicans voted for it. The problem is that the current republican leadership has a policy to filibuster everything they are against, so everything in the senate needs 60 votes (a super majority) to get to a vote. The bill died a quiet death.
The silver lining in this whole affair is that this really is a litmus test to see who is for America and who is for foreign interests. It isn't enough to say you are "Pro Business" anymore. The question is: Who's business? Multinational manufacturers and vulture capitalists like to buy US companies, sell off the buildings and equipment (take that money) and ship the manufacturing to China. then sell the company... I know this FIRST HAND!!
The people that were behind and voted for this bill are Pro American Business, Pro American workers, and are Pro America. The people that were against this bill (much including Mitt Romney) and who voted against it in the senate are Anti American and are in the pocket of foreign lobbyists.
Sincerely... Mitt Romney was dead set against this bill. I know, I know, what people are saying... socialism and all that.. I am telling you, these folks are against US businesses, US workers, and MUST be voted out (and not allowed in) to keep the US engine running. Without manufacturing, we are sunk.
Read the article, and you can see what sitting senators voted for and against it. You may be be surprised that your senator that you thought was Pro US may not be I sure was. Find out how your congressman came down on this bill (for or against)
We need to vote these people out, AND get people working for US in the house and senate!!!
What plan has President Obama request of each of his Cabinet members, what metrics for each government department has been deeveloped, who is being held accountable for the performance of the governement programs?
It seems Cabinet memebers can even break the laws and will not be held accountable (Giethner and his taxes, Sebelious and the Hatch act), the sloppy handling of the security in Libya, the Sec of Energy and the sloppy selection of companies to commit billions of dollars to, what improvements/what effective changes has the team President Obama has assembled developed and implemented.
Business leadership is not about telling evryone everyday what to do, it is about selecting the right people and giving them the support to do the best for the company's sustainablity/profitability.
I would like to see some of that business discipline to come into government and start holding programs and the people who run them accountable for achieving what they were tauted to do. If the education dept is to raise the learning level of our kids then there should be changes made since the performance of the schools are not improving.