Thursday, January 12, 2012

More On Romney the Vulture

From Andrew Sullivan, more Bain adventures:

Here's the New York Post, for Pete's sake, making the case last year against the shifty Wall Street games of Bain:

Romney's private equity firm, Bain Capital, bought companies and often increased short-term earnings so those businesses could then borrow enormous amounts of money. That borrowed money was used to pay Bain dividends. Then those businesses needed to maintain that high level of earnings to pay their debts...

* Bain in 1988 put $5 million down to buy Stage Stores, and in the mid-'90s took it public, collecting $100 million from stock offerings. Stage filed for bankruptcy in 2000.

* Bain in 1992 bought American Pad & Paper (AMPAD), investing $5 million, and collected $100 million from dividends. The business filed for bankruptcy in 2000.

* Bain in 1993 invested $60 million when buying GS Industries, and received $65 million from dividends. GS filed for bankruptcy in 2001.

* Bain in 1997 invested $46 million when buying Details, and made $93 million from stock offerings. The company filed for bankruptcy in 2003.

Romney's Bain invested 22 percent of the money it raised from 1987-95 in these five businesses, making a $578 million profit.

A capitalist Hayek could love, I guess. Romney and Bain's genius, it seems, was finding suckers to stick with the bill when they drove these companies to bankruptcy. No coincidence, I guess, that these suckers prominently included workers who lost jobs and pensions. It seems plausible that he might operate the same way in the White House.

Republicans have been declaring class war for half a decade - maybe they will finally get it.