Mitt Romney used to work for a company called Bain Capital.
Mitt Romney and Bain Capital are not job creators, but job destroyers. In the process of investing in these companies, once they went public, acquired new investors and hired new employees, Bain sell off their ownership and receive a large profit.
Bain Capital would walk away with a pretty penny and the workers of these companies they invested in would now be under new management. Some of the companies went bankrupt due to many reasons: the new management had a bad business model, less demand etc. But after the bankruptcy, many workers lost their jobs, which coined Mitt Romney’s “job destroyer” label.
In his 2009 book The Buyout of America: How Private Equity Is Destroying Jobs and Killing the American Economy, Josh Kosman described Bain Capital as “notorious for its failure to plow profits back into its businesses,” being the first large private-equity firm to derive a large fraction of its revenues from corporate dividends and other distributions. The revenue potential of this strategy, which may “starve” a company of capital, was increased by a 1970s court ruling that allowed companies to consider the entire fair-market value of the company, instead of only their “hard assets”, in determining how much money was available to pay dividends. In at least some instances, companies acquired by Bain borrowed money in order to increase their dividend payments, ultimately leading to the collapse of what had been financially stable businesses.
Vulture capitalists do not simply initiate hostile corporate takeovers with conjured assets. They don’t even pretend to have a turnaround business model. Instead, vulture capitalists are about equity extraction, mass layoffs, and new debt.
The resulting company, if it survives, does so as a shell, or a carcass, of its former self, as a barely-living debt slave.
Matt Taibbi explains the mindset in a series of rather savage quotes:
“Four years ago, the Mitt Romneys of the world nearly destroyed the global economy with their greed, shortsightedness and – most notably – wildly irresponsible use of debt in pursuit of personal profit. The sight was so disgusting that people everywhere were ready to drop an H-bomb on Lower Manhattan and bayonet the survivors. But today that same insane greed ethos, that same belief in the lunatic pursuit of instant borrowed millions – it’s dusted itself off, it’s had a shave and a shoeshine, and it’s back out there running for president.”
“A takeover artist all his life, Romney is now trying to take over America itself.”
- Bain Capital Wants a Piece of Gawker [Bain Capital] (gawker.com)
- Mitt Romney’s Life Story: Lying, Stealing, Destroying Jobs (talkleft.com)
- Mitt Romney Bain Attacks: Obama-Backing Super PAC Goes Back To The Well (huffingtonpost.com)
- Bain bus protestors blast Mitt Romney’s outsourcing record (bostonherald.com)
- Why You Should Worry That Romney Associates Bought Company That Controls Ohio’s Election Voting (seeingtheforest.com)
- Romney: The Great Deformer (dailycapitalist.com)
- All Roads to Victory Lead Through Ohio’s Roadblocks (crooksandliars.com)
- Romney Ignores Bainport While Trying to Take Back 47% Comments (politicususa.com)
- Stop Tagg Romney Now – Doj, Homeland Security Department and Federal Government (bonjupatten.com)
- Mitt Romney, Non-Job-Creator (washingtonmonthly.com)