Romney Adding Value and Creating Success

Chrissy and I owned a house in New Hampshire a few years back. We bought it for around $230,000 and sold it less than a year later for $270,000. We were lucky, but also smart and hard working. We chose a good house that needed lots of work. We fixed the place up, replacing tile, fixing the furnace and generally making the place worth more. This is a way to add value and make money. This is almost exactly what Mitt Romney did at Bain Capital.

You can see Chrissy working in the picture. We made money on that house with a combination of a market play and sweat equity. The people we bought the house from might have complained that we paid them too little. The people we sold it to might complain that we charged them too much. Neither did, because they were smart and honest people, as were we.

Romney's firm did what Chrissy & I did - and what all successful business people do - but at a more sophisticated level. They bought firms that they thought were fundamentally sound, but poorly managed or in some other trouble. They then fixed them up and sold them for a profit. It was a risky business. Some of the firms they bought turned out to be unsalvageable. But under Romney's leadership, Bain made more good choices than poor ones. In the process, they created efficiencies and wealth - the only real way to create jobs.
In a free market, we move resources from places they are failing and being wasted to places where they can be best used. This is the basis of the great creation of wealth that has made even the poor in Western market democracies many times better off than the kings and princes of ages past. It has been so completely successful that we sometimes overlook it and think that we can somehow do better letting politicians and bureaucrats make investment decisions (can we say Solyndra or Fannie May?)

Bain in the Romney era bought lots of young and riskier companies. They probably would not have been dumb enough to buy into a firm like Solyndra, but some of the firms they bought didn't make it. This is the risky part of the business. Nobody can be certain in advance which firms will prosper.

There is a test in the market. It is whether or not you make mostly good choices so that you attract more investors. Romney's firm attracted investments from college endowments and public pension funds that wanted to get better returns and they were not disappointed. Romney delivered for them and his firm is still delivering. It was and is a sustainable creator of wealth for the people.

The Obama folks believe in what Romney did. When Obama talks about investing in the future, he is actually trying to copy the kinds of things Romney did. Obama and his people just are not very good at picking good firms or managing success.
Some ideas don't make sense until they are tried. One of the Romney era investments involved an an entrepreneur called Tom Stemberg. This guy was convinced he could get small-business owners to shop at a store instead of taking deliveries. Today, the Staples chain of business-supply stores employs 90,000 people. Bain also backed a start-up called Bright Horizons that now manages child-care centers for more than 700 corporate clients around the world. Some other ventures, but that's capitalism, which is supposed to be a profit and loss system. refereence

Chrissy & I could have lost money on that house in New Hampshire. Many people told us that we were stupid not to just rent, since we would be there only a year. They told us that it would be a lot of work finding the right house, fixing it up and then selling it and they were right. But in doing what we did, we saved money on rent, made a profit and left the neighborhood better than we found it. Some people evidently think that this kind of "capitalist" behavior is shameful. They are pinheads.

Those of us who believe in the free market really should stand up to these clowns more often. We (me included) often play their game, emphasizing the superior virtue (in form of charity etc.) of free market proponents. We really have a stronger case. We are wealth creators. We take a profit for ourselves, but our also society benefits. The people who bought the house were happy to have a nice clean place that didn't require them to do a lot of work around the house. Our neighborhood is New Hampshire is better because we were motivated by the free market. I am glad we made a fair profit. I would have probably settled for less, but certainly would also have taken more. That is a healthy attitude.

Romney made a profit at his firm. He acted according to the laws and ethically. He created wealth for himself and others. Great. I favor free enterprise. I think the market economy and market democracies are the engines of human prosperity and advancement. So somebody like Romney, who shares my faith in such things, is naturally a man I support.

Posted by Christine & John at January 11, 2012 7:08 PM
Comments
Comment #334366

Why to hear you say it C&J one would think Romney was creating value for shareholders of the company they were consulting with. From my understanding of what they did that is quite a stretch C&J. As well as quite a bit different from your real instate speculating.

Didn’t Bain, with Romney at the helm, borrow money from banks to buy up public companies and take them private using the companies they bought as collateral? Then cut jobs and sell off divisions of these companies before selling them as public companies once again only loaded with the debt from the initial transaction? SO it seems they made money for Bain and the banks but not for the companies they took private.

In your case you bought a property, lived in it a bit fixed it up and then resold for a small, almost to small if you did any type of real fix up IMHO, profit based upon the work you did and the rising real estate prices. This is part of free enterprise it seems to me C&J.

What Romney did is not.

Posted by: j2t2 at January 11, 2012 7:44 PM
Comment #334368

j2t2

Romney’s firm mostly did much as we did with the house. As you say, perhaps Romney was smarter than we were because we took too low a return.

Bain bought firms that were in trouble. Of course, many of those firms were risky. But the idea was to build them up (as in fix them up) until they could be sold. As we did with the house.

Re the house - now I feel bad. Actually, it is true that I earned less per hour working in that house than I do working in general, but the alternative would have been sitting around watching TV. So - as often in the free market - our sacrifice and work produced some profit for us, but much more for the society around us.

Posted by: C&J at January 11, 2012 8:00 PM
Comment #334370

Agreed, j2.
Jack, in championing Romney and trying desperately to compare his parasitic vulture capitalism to his own honest, fairly small return on a piece of property, is dead wrong. Not to mention willfully dishonest — because I think he fully understands that what Romney made a fortune doing is the complete opposite of what he and his wife did.

So in reality, what he’s doing here is much like trying to compare an organic turkey and havarti sandwich with fresh-picked lettuce and garlic aioli on homemade foccacia, to a steaming sh*t sandwich.

Posted by: Adrienne at January 11, 2012 8:13 PM
Comment #334371

Adrienne

I am wounded by you and J2t2 talking about our SMALL profit. We were very proud of our initiative. Look at poor Chrissy with that hammer.

Re your food reference - I am growing tomatoes, corn, beans, lettuce and bananas in my yard. I don’t think we can call them organic. I use the grass clippings and kitchen waste to fertilize them, but wastes are not organic. I dropped rotten eggs into the holes where I planted tomato seeds and the plants are doing really well.

But you mentioned the steaming Sh*t sandwich and I would extend your metaphor. Nobody likes shit, but it is what makes the plants grow. All those other things you like depend on it. The free market produces growth and prosperity, but it also requires the destruction of change. You cannot grow tomatoes w/o fertilizers and you cannot grow prosperity unless you permit change.

Posted by: C&J at January 11, 2012 8:24 PM
Comment #334373
But the idea was to build them up (as in fix them up) until they could be sold. As we did with the house.

C&J, did you sell off the garage, borrow $200k on a second, sell the water rights and downsize the house? Or did you update the electric and furnace, paint and install energy efficient windows? Did you leave the next owners with around $500k in debt? That’s what Romney did. Not the same, my friend.

Re the house - now I feel bad. Actually, it is true that I earned less per hour working in that house than I do working in general, but the alternative would have been sitting around watching TV.

C&J Your doing a different job so the wages are different. The work keeps you active and in shape, physically and mentally, as well.

I am wounded by you and J2t2 talking about our SMALL profit. We were very proud of our initiative. Look at poor Chrissy with that hammer.

Sorry, C&J I didn’t intend to offend. I was thinking out of $40k with closing costs on both ends, materials and equipment and such costs for remodeling, permits etc. the 40k goes fast. If it was mainly labor intensive fix’s then $30k profit or so sure isn’t bad at all. Lot better than a money market account.

Posted by: j2t2 at January 11, 2012 8:47 PM
Comment #334374

Some sh*t is fertilizer Jack, and some sh*t is totally toxic. What you and your wife did can be viewed as fertilizer, while what Romney did is toxic sh*t. The kind that most people shouldn’t be willing to take a bite of, lest they give themselves a bad case of e coli.

Right now in my garden I’ve got winter crops growing: some hardy lettuces, swiss chard, brocoli, and cauliflower. And amazingly, some of my summer crops are still surviving and doing fine — I’ve got red manzanita and small orange grape tomatoes still ripening, and some of the herbs like chives, oregano, parsley, and oregano are doing okay too.

Posted by: Adrienne at January 11, 2012 8:49 PM
Comment #334375

Oops, too many oreganos — one of those should be spearmint. Oh, and my rosemary bush is looking really great too — although that herb grows year round in California.

Posted by: Adrienne at January 11, 2012 9:13 PM
Comment #334377

J2t2,

There is nothing wrong with “parasitic vulture capitalism.” Vultures play a role in our eco-system. Junk dealers play a role in extracting final value from otherwise useless items.

The problem is when the vultures are elevated to the status as creators of value.

Posted by: Rich at January 11, 2012 10:04 PM
Comment #334379


The picture gives me an idea for a political add.

A giant Romney with Bain, sp. Bane, written on his back, ripping apart businesses, flinging workers aside, stuffing parts in a bag labled, To Sell. There would be a bubble above his head with a dollar sign and a counter counting the profits almost to fast for the eye, while leaving a trail of smoking ruins behind him and vultures picking over the remains.

Posted by: jlw at January 11, 2012 10:34 PM
Comment #334380

How could Romney have been “Adding Value and Creating Success” if Bain needed a 10 million dollar federal bailout and the company was “at risk of collapse”?

Posted by: Adrienne at January 12, 2012 12:55 AM
Comment #334382


John,

You just don’t have a good idea of what has happened to capitalism these art 30+ years. You assume all profits are good. The fact is since the early 80’s we have set up our markets such that you can get far more rich far quicker via speculation and now via rent seeking from the government then you can actually making and doing things that our productive.

Again John Bogle in his books and writings explains in detail how managerial capital sucks value out of the productive economy and from the actual owners of businesses and stocks via looking to short term gains with out concern for longterm productivity.

It appears that Mitt Romney did indeed buy companies and inflate their assets artificially so he could sell off his shares and run with all the profit leaving a bankrupt company behind for others to deal with and indeed destroying livelihoods and lives.

You seem content believing what you want to and not bothering to look at the facts. Again John Bogle is a Republican… as I once was. If you don’t have time to read his book I’d suggest you watch an old interview Bill Moyers did with him.

http://www.pbs.org/moyers/journal/09282007/watch.html

Posted by: muirgeo at January 12, 2012 1:45 AM
Comment #334388
The problem is when the vultures are elevated to the status as creators of value.

Rich, While there is little difference between Romney and Vultures there is a bit if my understanding of his work is right. Do vultures attack their prey while they are still upright and walking, compound the illness/injury and then hold off the medics from fixing the injured like Romney did.

You insult vultures my friend when you compare Romney to them ;)

Posted by: j2t2 at January 12, 2012 9:08 AM
Comment #334391

No, C&J. Romney is not doing the same as you “on a more sophisticated level.” Not at all.

Take K B Toys.

“Romney and Bain bought the 80-year-old company in 2000, loaded KB Toys with millions in debt, then used the money to re-purchase Bain’s stock. The debt was too staggering. By 2004, 365 stores had closed. Romney called it ‘creative destruction.’ Romney and other top executives’ take: $120 million dollars. By 2009 the debt accumulated under Romney was too great. KB Toys was no more. Mitt Romney and Bain saw a 900% return on their investment. Romney and Bain’s profits at the expense of 15,000 jobs was described by the Boston Herald as ‘disgusting.’”

Here is a good, short synopsis.

http://www.salon.com/2012/01/12/newts_killer_attack_ad/singleton/

Even Sarah Palin, of all people, thinks Romney needs to explain himself and his claims about being a job creator. Here is what she said to Hannity last night:

“Gov. Romney has claimed to have created a 100,000 jobs at Bain, and people are wanting to know, is there proof of that claim and was it U.S. jobs created for United States citizens? … And that’s fair. That’s not negative campaigning — that’s fair to get a candidate to be held accountable to what’s being claimed. Nobody should be surprised that things about Bain Capital and maybe tax returns not being released yet and maybe some record not being as transparently provided to the public as voters deserve to see right now — don’t be surprised that that’s’ all coming out today.”

Posted by: phx8 at January 12, 2012 12:29 PM
Comment #334393

Posted this link in the Blue column, but think it might be good to share this here, too:
When Mitt Romney Came To Town — Full, complete version

After watching that I truly find it amazing that C&J would choose to insult themselves by attempting to compare themselves with Romney in any way, shape, or form!

Posted by: Adrienne at January 12, 2012 1:13 PM
Comment #334394

phx8, you are being disingenuous; I watched Sarah Palin last night. What she said was in answer to the question being brought up and her answer was “since Bain was brought up by Newt, and would most certainly also be brought up by the Obama team”, then he might as well explain the account. You try to make it sound like Palin was demanding an explanation from Romney; since she as well as other conservatives were upset with Romney and wanted answers.

How many jobs did Solyndra lose after Obama’s involvement in the production of government run energy?

How many jobs will the workers at government motors lose as a result of the Volt fiasco collapsing?

How many military and civilian jobs will be lost as a result of Obama’s military cuts?

This country has always been successful because of free enterprise and capitalism. When the government gets involved with their socialist plans, people lose. Even the Chinese have discovered that free enterprise and capitalism create wealth. I am totally amazed at the ignorance of the left when it comes to the free market. This is the reason conservatives refer to the left as socialist/communists; I can’t really think of another word to describe the left’s absolute hatred of the free market.

Tell me, those of you on the left; do you consider the European countries as a success story in a socialist economy?

Posted by: Frank at January 12, 2012 1:41 PM
Comment #334395

“Posted this link in the Blue column, but think it might be good to share this here, too:

When Mitt Romney Came To Town — Full, complete version

After watching that I truly find it amazing that C&J would choose to insult themselves by attempting to compare themselves with Romney in any way, shape, or form!”

Posted by: Adrienne at January 12, 2012 1:13 PM

Adrienne, are you completely ignorant of how business works? I spent almost 40 years working for corporations and there are people called “Head Hunters”. They are hired by all businesses for the purpose of cutting costs and making a profit.

When Obama took over GM; he forced GM to shut down 2059 dealerships, according to Huff Post:

http://www.huffingtonpost.com/2009/06/11/gm-dealerships-saved-from_n_214387.html

Do you support the closing of the dealerships and the unemployment of thousands of employees? Why do you think they were shut down? Chrysler, also under Obama control, shut down 789 dealerships, with an additional furlough of thousands of employees. Why were they shut down?

It is only government that keeps hiring, when they should be cutting; because the government sees an unending supply of tax dollars to pay for government jobs.

Posted by: Frank at January 12, 2012 2:00 PM
Comment #334396

Adrienne: “When Mitt Romney Came To Town — Full, complete version”

Nice, and that’s just the opening shot. Clearly the right is freaking out over this because that video sounds more like left wing propaganda than right wing. Now we see Frank repeating the idea that Romney just did what Obama did which has Limbaugh and others in a lather already. It’s going to be rough this year for Romney and he may not have a win to make up for it when it’s all said and done.

Posted by: Adam Ducker at January 12, 2012 2:22 PM
Comment #334397

Frank is being disingenuous. phx8 quoted Palin directly — and here is a link to a webpage that contains the video in question as proof that he is quoting her directly:
Palin slams Romney’s jobs record: ‘Is there proof?’

This country has always been successful because of free enterprise and capitalism.

This country has been brought to it’s knees under Vulture/Global Capitalism. Every American with half a brain in their head knows that this is the case.

When the government gets involved with their socialist plans, people lose.

When our government began abandoning the needs of the people and started deregulating everything having to do with capitalism and the so-called “free market” and somehow stupidly expected private enterprise and Wall Street’s 1% to police themselves, this entire country began to lose — big time. And now look at where we are — we are living in a looted nation with high unemployment as a result.

Even the Chinese have discovered that free enterprise and capitalism create wealth.

Disgusting. China has State Capitalism and there is nothing “free” about it. That means the vast majority of the people work and live like slaves, while all the party leaders collect all the money and live like kings. It is complete insanity (or total ignorance) to even raise China up for any kind of admiration.

I am totally amazed at the ignorance of the left when it comes to the free market.

We’re not at all ignorant, despite the fact that this claim is leveled over and over by people on the right.

This is the reason conservatives refer to the left as socialist/communists; I can’t really think of another word to describe the left’s absolute hatred of the free market.

These types of comments display nothing but ignorance.

Tell me, those of you on the left; do you consider the European countries as a success story in a socialist economy?

Europe is not socialist, and yes, they are a success in many ways. Europe has been kicking our asses on education for years, while America’s scores sink ever farther down. Their people live longer than we do, and they do not live in total dread of getting sick, or of having a member of their family become sick and thus become economically wiped out as we do in America. They do not have as much widespread poverty and homelessness as we do. And they do not start wars by indebting themselves to China all over the world at the drop of the hat as we do.

PS. to Adam — I think if enough Americans get to see that video, Romney will be history.

Posted by: Adrienne at January 12, 2012 2:31 PM
Comment #334399

Frank,
What happened with the federal government and GM is not the same as what a firm like Bain did. In short, the Obama Administration took over GM and turned it around, and even made a profit for the taxpayer. The alternative was letting GM fail, an alternative Romney favored, which would have cost an additional 3 million jobs lost.

Capitalism 101:

There are two basic aspects to capitalism and free enterprise: 1) the production of goods and services, and 2) the efficient distribution of capital.

Let’s take your example of being a headhunter. If you ran for president and claimed you created 100 jobs, that would not be true, would it? That’s because you engaged in the efficient distribution of capital, with human resources being the capital in this example.

Romney and Bain also engaged in the ‘efficient distribution of capital’ side of the free enterprise equation. There is nothing wrong with that in and of itself. However, it is NOT the same as creating jobs. Romney wants to be president of the United States. An important part of his claim rests on his business experience. He claims to have created 100,000 jobs. He needs to prove it.

In addition, when it comes to Bain, there is a little more to what they did than ‘efficient distribution of capital.’ Bain preyed on companies. It’s not illegal. Perry compares what Bain did to vultures, but that’s not exactly accurate. Vultures and other scavengers play an important role in any ecosystem; but while vultures play an important role, Romney and Bain did NOT play that role in the cases of K B Toys, DDi, AmPad and elsewhere. In those cases, Romney and Bain destroyed businesses and left devastation in their wake in order to take away company assets for themselves. Romney and Bain won. Those companies and all of their employees lost.

It’s not illegal. In the case of K B Toys, Romney and Bain loaded the company with debt and used the money to buy Bain stock. It bankrupted K B Toys and caused 15,000 people to lose their jobs. Romney and friends made a huge profit. Perhaps you believe that it is ok to do that because it involves the exercise of free enterprise. Personally, I do not want to see a person who does that, who thinks it’s ok to enrich themselves by intentionally hurting others, become President of the United States.

Posted by: phx8 at January 12, 2012 3:43 PM
Comment #334400


I just watched the film and I agree that if the American people watch it, Obama will beat Romney by the largest margin in history.

And to think, the Citizens United decision is responsible for it. Unexpected consequences for it’s supporters. Somehow I don’t think the Republican Party thought the decision would be used to castrate it’s primary candidate; not by another Republican candidate.

Romney said he didn’t even want to run for president. He would rather be making more money. He is only doing it because his wife wants to be the First Lady.

But, Republicans have recognized that he is the best candidate among the field of Republicans.

Posted by: jlw at January 12, 2012 4:38 PM
Comment #334401

Adrienne: more ignorant statements;

“Europe is not socialist, and yes, they are a success in many ways. Europe has been kicking our asses on education for years, while America’s scores sink ever farther down. Their people live longer than we do, and they do not live in total dread of getting sick, or of having a member of their family become sick and thus become economically wiped out as we do in America. They do not have as much widespread poverty and homelessness as we do. And they do not start wars by indebting themselves to China all over the world at the drop of the hat as we do.”

1. what America are you talking about; the one veatd by Obama in the past 3 years

2. Why do Europeans come to America for college?

3. They have no military to start wars because they spend all their money on socialist programs.

4. The last 2 World Wars were started in Europe, by Europeans.

5. Obama is the one borrowing money from China to re-distribute to unions, union pensions, failing democratic states and cities, failed green jobs, and bailouts of the banks and Wall Sreet in trade for campaign funds.
Your denial of Europe being socialists shows your complete ignorance of the subject.

Posted by: Frank at January 12, 2012 4:49 PM
Comment #334402

phx8, well said. Although I don’t think Frank really cares too much about accuracy. Lots of people who post here from the right just seem to enjoy responding in order to leave a few insults and take a few pot shots.

On another note, I’m wondering if we really have to go here?:

Perry compares what Bain did to vultures, but that’s not exactly accurate. Vultures and other scavengers play an important role in any ecosystem;

Why over-intellectualize this and ruin a perfectly good (not to mention, downright catchy) metaphor by entering National Geographic territory? The mental image of a vulture swooping down on a weak but still-living creature in order to coldly and remorselessly rip it to shreds and greedily feed on it’s still quivering body is a very vivid description. And that can be applied to what Romney, Bain and Vulture Capitalism in general does to vast numbers of Americans as it destroys their lives — and all just to make yet another windfall profit for disgustingly rich people who don’t even really need the money.

Posted by: Adrienne at January 12, 2012 4:51 PM
Comment #334403

jlw,

LOL! I couldn’t agree more!

Posted by: Adrienne at January 12, 2012 4:53 PM
Comment #334404

It amazes me how someone can pull out four to five examples of bad results, and jump to the conclusion that the company operating for over twenty years is entirely “Vulture Capitalism”, parasitic, and disgusting.

While I know you don’t really want to know the truth, but here are a few more pieces to the larger story…a middle of the road piece by the Washington Post, and one espousing the overall benefit of Bain.

One highlight for the least editorial of the two:

But these private-equity deals also resulted in some of the most high-profile bankruptcies and job losses that Romney’s political opponents have seized upon. Four of the 10 companies that made Bain the most money under Romney went bankrupt, the Wall Street Journal points out. In 1992, for example, Bain invested about $5.1 million in American Pad and Paper and reaped an estimated $102 million four years later when the company went public. Ultimately, however, AmPad would go bankrupt in 2000—and the Democratic National Committee has highlighted the workers that lost their jobs in the aftermath.

So 4 out of 10 failed. That means that 6 out of 10 were either unaffected or helped by their dealings with Bain. Additionally, of those that failed, the highest publicized failure didn’t come when Bain pulled out, it came over six years after Bain (and their management strategies) had long since been gone…

Posted by: adam at January 12, 2012 5:25 PM
Comment #334406

Almost forgot, specifically on your favorite new movie:

not so accurate after all…

Posted by: adam at January 12, 2012 5:31 PM
Comment #334407

apparently missed the second link. here is the article actively defending Bain

Posted by: adam at January 12, 2012 5:40 PM
Comment #334408

Some people win by playing by the rules, some win by getting cute with the rules and playing games that ought to be considered illegal, if people weren’t so busy apologizing for the economic equivalent of chop-shop owners.

Calling them vultures is flattery. They’re vampires. Why vampires? Because vampires are charming predators who feed on the living and drain their blood. Worse yet, they often relied on loopholes that basically had taxpayers, insurance companies and other spreaders of risk paying for the financially trickery they were doing.

nearly a quarter of the businesses they invested in collapsed. This often happened after they dumped boatloads of debt on them, and sold them for scrap.

They call this creative destruction, but that’s a bit of self-flattery from those who never really intended to run businesses with an eye to profiting from doing what we would consider actual business. This is better termed speculative destruction, and the state of the current economy is a symptom of Wall Street’s long term addiction to it.

Posted by: Stephen Daugherty at January 12, 2012 6:03 PM
Comment #334409

Re Free market - It is the worst possible system … except for all the others.

Romney’s firm bought firms that were in trouble. It should be no surprise that some didn’t make it. Better that more were cleaned up and put right.

I recall reading about statistics on heart doctors. The best doctors had the HIGHEST death rates. What explain that is that the best doctors tended to take on the worst cases.

Frank makes a good point about the closing of dealerships at GM under government leadership.

My leftist friends often see the world in fairy tale moralistic terms rather than practical ones. I have seen this before and let me explain.

I spent many years in former communist Poland. Lots of the state owned firms were a mess. Some were actually worth LESS than the price of the land they were sitting on and many were worth less as running firms than as parts.

Of course, this is hard to understand. We think in terms of buildings and workers. It seems like their productive ability should be worth more than nothing. But this is not true.

I would talk to local officials. They would tell me that they wanted “investment”. When I asked them what they meant and how they would change, the answer was often that the “investment” would save jobs. They really wanted someone to come in with a pile of money and give it to them. The factory would keep on producing inferior products, at higher cost while make much more pollution.

It didn’t work that way. What usually happened is the old factories just shuttered. Sometimes there was a part that could be salvaged. If things were done right, new firms grew up around them and in time employed more workers and created more wealth.

That meant that the Lenin steel mill, the pride of the old communist government and one of the biggest single source of pollution in the world, mostly shut down. AI much smaller and more productive factory took its place and the air in Krakow got a lot cleaner. The original jobs could not be saved. But once the filthy old factory was down, other jobs could grow.

The most successful societies are not those that try to freeze jobs, like a fly in amber. The most successful societies are those that can embrace sustainable change.

It is always easier to see - and mourn - the lost jobs. It is much harder to see the new ones, which are often created indirectly.

We have been using garden metaphors, so let me add one. What if we have an old fruit tree. It produces some apples still, but they are few and not high quality. If I cut down the old tree and plant new ones of better quality, it is easy to see the loss of the old tree and the apples it produced. But in a few years time, we will have something much more productive. Of course, by then many people would have forgotten the controversy, but if asked they would remember the old tree with exaggerated fondness, while enjoying the fruits of the new.

Posted by: C&J at January 12, 2012 6:04 PM
Comment #334410

adam-
40% is an awful big failure rate, and it’s a good question of whether these companies would have been in the shape they were in, if not for Bain’s influence. By contrast, the Republicans make a big deal out of the Solyndra Collapse, when 97% of the companies in that program are still paying back the loans in good faith.

Posted by: Stephen Daugherty at January 12, 2012 6:07 PM
Comment #334411

Adam,
If you can read the WaPo article and still feel like Romney would be a good choice for President, by all means.

And remember, Romney claims to have created 100,000 jobs. Romney claims to be a job creator. If, as a result of Bain’s involvement, four companies fail and six survive, while Romney and Bain reap enormous profits, that’s not exactly cause for celebration for anyone other than Romney or Bain. If Romney wants to make his case that his business experience makes him highly qualified to lead the country, then he should go for it, and provide specific examples.

Ultimately, it comes down to a moral problem. If a person can legally do something to make millions dollars, even though 15,000 people will lose their jobs as a result, well, should the person do it?

And is it ok to do it once, to take the money and see those people lose their jobs, then do good things nine other times?

Posted by: phx8 at January 12, 2012 6:13 PM
Comment #334412

Stephen

Bain bought firms in trouble. They were high risk. Solyndra was just the wrong technology. It was not capable of being turned around. To use your metaphor, it was like a vampire,sucking the resources of the taxpayer.

Posted by: C&J at January 12, 2012 6:15 PM
Comment #334413

C&J,
Funny how Bain bought firms in trouble, and some firms failed, yet Romney and Bain still made millions and millions of dollars.

Posted by: phx8 at January 12, 2012 6:36 PM
Comment #334414

phx8

It is not strange at all. It is how all venture capital and most of life work.

Most things fail. If you try ten things and nine fail but one is a spectacular success, you can still be successful.

Imagine the investor who backed ten firms. What if nine of them failed but #10 was a Google?

Let me use my garden metaphor again. I planted dozens of seeds. Many did not come up at all. Others didn’t thrive. Out of my bag of dozens of seeds, I have ended up with four big tomato plants. But they are currently producing so many tomatoes that I am satisfying all my needs and able to give lots of them away.

Of course, I am sure you would see my methods as very cruel. For every successful tomato plant, dozens have failed. I am profiting from their demise.

Posted by: C&J at January 12, 2012 7:16 PM
Comment #334421

What if nine firms failed, and one was Google, and you made money all ten times? What if making money came at the direct expense of those firms, and they failed because of what you did?

You know, C&J, you don’t owe this guy Romney anything whatsoever. He wants you and others to vote for him. Fine. He needs to make his case. He says he’s a job creator. Ok. Then he needs to do better than just make up claims about creating 100,000 jobs.

Posted by: phx8 at January 12, 2012 9:39 PM
Comment #334423

The Matt Lauer interview with Mitt Romney is amazing. Basically , Romney has the gall to call it envy when people even question the Wall Street finance system which brought this country and the world to crisis. Romney shows an incredible disconnect from reality. He is either incomprehensibly arrogant, ignorant or some dangerous combination there of. I believe the republicans may be in for a throttling… that’s what you get for joining up with the plutocrats.

http://blogs.chicagotribune.com/news_columnists_ezorn/2012/01/shhhhh.html

Posted by: muirgeo at January 13, 2012 12:31 AM
Comment #334426

And Solyndra is getting ready to pay bonuses.

When the manure hits the fan shortly all you southpaws will moan and groan about how could this happen and why did it happen.

Just put a handkerchief over your beer to catch those funny tears.

The road ahead is rocky and there are no street signs to help you down that road.

The next few months are going to have many a person wondering what happened to their pepsodent.

Maranatha

Posted by: tom humes at January 13, 2012 8:21 AM
Comment #334428

muirgeo, and you are saying Obama has a connect with reality? Polls consistantly still show 50-60% who want obamacare repealed; 69% believe America is heading the wrong direction; people have no faith in the economy; 89% believe gas prices will go up; 2/3 thirds of American expect to be making less money in the next year; and the list goes on. Point is, Obama has a complete disconnect with the country.

phx8 said:

“Ultimately, it comes down to a moral problem. If a person can legally do something to make millions dollars, even though 15,000 people will lose their jobs as a result, well, should the person do it?”

And here is the crux of the problem; everything to the liberal is based upon morality and feelings. Business is business and has no more to do with morality than does a brick wall. People who start businesses, build businesses, or invest their money or other people’s money, have nothing to do with morality. Since when does a person who starts a business have to be concerned with hiring or enriching someone else? C&J owns a tree farm, from what I have gathered; when he planted the trees, was he doing it for the purpose of making a profit for himself, or was he thinking of the people who would eventually cut and process the wood? I would assume he planted the trees for the purpose of providing himself a retirement, ect. The left is concerned about the fairness of everyone, except the taxpayer.

Perhaps phx8 could provide some real proof that Romney broke the law or violated the rules? Something other than a liberal touchy-feely moral cause.

Posted by: Frank at January 13, 2012 8:44 AM
Comment #334429

“Perhaps phx8 could provide some real proof that Romney broke the law or violated the rules?”

Frank, where did phx8 say that Romney broke any laws, rules or regulations?

Posted by: Rich at January 13, 2012 9:07 AM
Comment #334430

tom humes-
Those bonuses aren’t for the executives, they’re for the employees, who have to help take apart the company that was giving them their job. The executive bonuses were already paid out beforehand. Funny how those on the right don’t acknowledge their party in encouraging this culture. Funny how they only complain about bonuses when it’s somebody lower on the chain getting the money.

C&J-
From where I’m looking, they employed means of taking over these companies, such as taking out huge debts on the company’s collateral, that were fundamentally incompatible with the future financial health of the company.

This wasn’t an accident, this was the way these deals were supposed to come off, and if the company failed as a consequence, Bain had already made its money, so that was fine.

That should give you pause, because that is a pretty perverse incentive, if you ask me. Creating failure to take advantage of it, like I said, is less a vulture coming in to pick apart the company and sell off assets to make a profit, and more a vampire coming to parasitize the victim, and kill it where it might have actually survived and a lived a healthy life.

I mean, you do talk about these firms being in trouble, but were they, actually? Or is that just the excuse that Romney gives, because if a patient was healthy before they died, it looks more suspicious than if they were ailing from the beginning?

Whether they were ailing or not, though, the methods bain used seemed tailored less to job creation and reinvigorating the business, than creating speculative profits through what ought to be considered embezzlement schemes, if we weren’t so apt to warp policy to suit Wall Street’s aims.

Posted by: Stephen Daugherty at January 13, 2012 9:12 AM
Comment #334431

Frank-
Touchy-Feely?

In your world, it seems, feelings don’t enter into it. We just simply do whatever we want to do in the pursuit of gain. Only, that’s not the way the real world can or should work.

You see, the problem is, there’s more than one way to make a profit, to increase one’s prosperity. You can do honest things, make honest bucks, but you can also cheat, traffic in dangeous or disreputable goods, con people out of their money, promise products you never deliver, services you never carry out. Fact of the matter is, the cheapest, and therefore most profitable thing you can sell anybody is a bill of goods.

That is why laws are necessary, and I’ll tell you this: there ought to be a law against what Romney and others do.

You ought to read Michael Lewis’ Liars’ Poker.. There’s a lot of illusions out there about what was done on Wall Street. For one thing, the idea that investment banks encouraged mergers and acquisitions in order to make companies better financially.

Nope. They did it so that briefly, a big, profitable company would see it’s bonds get downgraded, and the rates increased on those bonds. See, you build up a whole lot of debt, and there’s a lot of chaos and irregularity as companies merge. So, you can now sell that debt, now that you’ve made it into junk bonds, at a much higher premium.

The health of the company isn’t important, just making money off the financial mess they get themselves into.

The evolutionary benefit of feelings is that they are actually distillations of our experience. They allow us to make better decisions more quickly than if we had to consciously rationalize everything out. A person who looks at their job being lost, their company being sunk to its eyeballs in debt, then broken up and sold off is not being rational about what’s being done, nor should they.

It is a basic survival trait not to feel fine and dandy about people pulling this kind of crap. It motivates you to prevent it, to protect your own livelihood, the ability of you and yours to survive. It’s not maudlin sentiment we’re talking about here, it’s common fricking sense for people to dislike people like Mitt Romney, who screw up things for their own profit, whose actions don’t benefit anybody else.

Without basic rules, the system of exchanges that makes capitalism make sense breaks down. I think there are a lot of people out there, beyond Bain’s investors, who would be hard-pressed to figure out who else benefited from this exchange.

Why people should ignore that is beyond me. You want people to be absolute cowards about standing up for their own interests. You want them to turn around, and walk on to whatever fate, and not stand up for their own needs? What kind of simpering wimps do you want Americans to be?

I see no reason for Mitt Romney not to take heat for what his company does. If we are to, as a nation, take this man to be our leader, we ought to think long and hard, as to whether that benefits us, whether his policies will do us good. This isn’t touchy-feely, this is the kind of calculation the framers expected from us when they founded our nation. They didn’t create this country so folks could once again starve to feed a callous aristocracy.

We’ve rationalized this kind of parasitic economic behavior for too long. It almost killed our economy. It’s time to put an end to such BS in our own self defense.

Posted by: Stephen Daugherty at January 13, 2012 9:48 AM
Comment #334432

Having worked in a venture capital firm for about 4 years during the 1990’s, and having suffered through Newt’s video for 28min, all I can say is that it’s all a bunch of crap…

Venture capital is a very difficult business. We were small and tried to stay away from the “dot.com” rage of the time by focusing on low tech. Our success rate was very low, but the money we made on one deal paid the bills and provided a good return for our investors.

It sounds like Bain got in to LBO’s (KB Toys) which are even riskier. The Newt film says that the debt load was too much causing the company to go under but there are all sorts of rules and DE ratios applied by the financial institution (not the VC) that the deal would have had to meet when it was cut. The video doesn’t mention the impact Amazon.com or ToysRUs might have had on KB; two big players in the toy business that were growing during at that time.

You have look at those deals in the context of the market at the time. VC was exploding in the ’90s because of all the speculation on technology. Companies were closing in the early 2000’s because of the market downturn after 9/11 and in retail because of the growth of Internet sales. If you look at those deals in terms of the market at the time, and the film tries to mask that from you, you will see the real forces that created the jobs or lost the jobs.

The thing I would criticize Romney on here is trying to tout his role in Bain as making him a “job creator.” That’s just wrong as no one in VC would measure their success in terms of jobs created. Just like Kerry in 2004 when he used his 4 months in Viet Nam as qualifications for President, Mitt opened a door to this line of attack that I’ll bet he will eventually regret. You measure VC success in terms of return to your investors, and on that record it looks like he did a pretty good job( but during the ’90s so did most every other VC firm).

Posted by: George at January 13, 2012 10:05 AM
Comment #334434

“Frank, where did phx8 say that Romney broke any laws, rules or regulations?”

Posted by: Rich at January 13, 2012 9:07 AM

Rich, perhaps you could provide proof of Romney’s breaking of laws, since you speak for phx8. The left always implies breaking of the rules.

SD, even Juan Williams (liberal by his own admission), could not defend Solyndra’s wanting of another ½ million to pay bonuses “as an incentive for them to properly handle the bankruptcy”. You guys have no limit to your protection of evil. Perhaps you could tell us what the taxpayers should get out of the bankruptcy?

“In your world, it seems, feelings don’t enter into it. We just simply do whatever we want to do in the pursuit of gain. Only, that’s not the way the real world can or should work.”

Stephen, has anyone ever told you, you like to hear yourself talk. I can answer your reams of typing with just a couple of words: FEELINGS DON”T MATTER WHEN IT COMES TO BUSINESS”. “Touchy-Feely” is a great word for the left’s attitude about life in general. Shit happens, companies succeed and companies fail, people lose their jobs and look for new ones, and it’s not the left’s right to decide who succeeds and who fails, get over it.

These whole complaints of the left about Romney or corporations don’t mean crap; it is only in the mind of a liberal that is some kind of injustice. The American worker (except for the pampered union workers and the very small % of OWS) knows the reality of working in a competitive society.

Good points George; but you fail to understand the mind of a liberal. If you can understand the concept of “WAH, IT”S NOT FAIR, BOO-HOO, WHINE and CRY”. SD seems to dislike the term “Touchy-Feely”, but isn’t every argument from the left based on morality and fairness. I believe the old term “Dog eat Dog” applies to business. This is why liberals are socialists; they believe, if the government takes over business, then the tax dollars can guarantee that not injustice will occur and people will continue to draw a paycheck, and profit does not enter the picture.

Posted by: Frank at January 13, 2012 11:07 AM
Comment #334435

Stephen,

Here is the article your opinion piece cited. It paints a much more balanced picture than what your link tries to make it seem.

On Bain’s performance specifically:

1. Basically, the 22% number only comes into play when you look at companies Bain had dealings, eight years after Bain completely exited the picture. The number is much smaller (12%) when you limit Bain’s responsibility down to five years after their exit. Even lower when you only consider the businesses that Bain still controlled up to (and including) their bankruptcy.

Do you really contend that Bain’s involvement (averaging around 5 years in duration) is still responsible for the success and or failure eight years later? Was Clinton responsible for the recession?

2. Additionally, a higher bankruptcy rate was expected from Bain’s investments. Their investment strategy aimed at smaller, riskier investments. Theses investments intrinsically have a higher rate of failure than larger, healthier, mature companies.

3. You claim that his failure rate was an ‘awful big failure rate’, but the article actually cites the only other study to look at companies eight years after the private-equity partner left, and it estimates a 15%-20% failure rate for these companies. I don’t necessarily think 22% compared with 15%-20% is that much of an outlier.

On to Solyndra, we do make a big deal out of it. But all this time I thought the government was their to protect my personal liberties and enforce the rule of law…now I’m supposed to accept that it has started taking my money to work as a venture-capital firm? I won’t invest in venture-capital with my own disposable income, why would I want the government in this business at all…

Lastly, on your comment to Frank…

You can do honest things, make honest bucks, but you can also cheat, traffic in dangerous or disreputable goods, con people out of their money, promise products you never deliver, services you never carry out. Fact of the matter is, the cheapest, and therefore most profitable thing you can sell anybody is a bill of goods.

Where did Romney (or Bain) cheat again? Or What were they selling the was dangerous or disreputable? Or the con they were running? What product did they not deliver?

See, you make they bold claims to justify the rest of your rant, but none of the premises you base it on are accurate.

Bain’s deal with the companies involved was capital in exchange for some share of control (sometime majority, sometimes not). They delivered the capital. Every time, without fail… They then stood to make more money (every time without fail) if the company could succeed and make a profit. Unfortunately, this didn’t always work out. So they hedge their bets with exit strategies to make sure that whether the company uses the capital the Bain provided to succeed or just to postpone their demise, Bain (and their investors) are protected.

Yet another prime example where you writing is eloquent (if not a little long winded), but all stems from faulty premises that you don’t even bother to articulate or support.


phx8,

Your making a jump in logic.

Ultimately, it comes down to a moral problem. If a person can legally do something to make millions dollars, even though 15,000 people will lose their jobs as a result, well, should the person do it?

It only becomes a moral problem if what you are doing to make millions of dollars is the cause of the lost jobs. If your goal to make money is independent of job creation or job loss, you have completely avoid the “morality” of it. Also, see the Bain support above for Stephen. No evidence supports the idea that Bain caused job losses that would not have naturally occurred in these risky/struggling companies anyways.

What if nine firms failed, and one was Google, and you made money all ten times? What if making money came at the direct expense of those firms, and they failed because of what you did?

This is exactly what I was saying. If the money came at a direct expense of the firm, or the failed because of what you did, it would be a different story. But no one has shown anything to illustrate that any of the companies that ended in bankruptcy would have survived (even as long as they did) without Bain’s involvement.

Posted by: adam at January 13, 2012 11:52 AM
Comment #334436
But no one has shown anything to illustrate that any of the companies that ended in bankruptcy would have survived (even as long as they did) without Bain’s involvement.

Adam this to is illogical. We cannot prove nor disprove this because Bain did get involved.

To suppose Bain and therefore Romney were actually saving these companies by buying them out, selling off assets and saddling them with debt kinda makes it sound like the process of selling off assets and leaving debts behind helps the company in question.

Posted by: j2t2 at January 13, 2012 12:47 PM
Comment #334437

“If this is really the best that Think Progress, Barack Obama, Newt Gingrich, the Daily Kos, Rick Perry and the rest of the country’s know-nothings can come up with to smear Mitt Romney’s business career, they had better give it up before they make complete fools of themselves.”

http://www.powerlineblog.com/archives/2012/01/what-really-happened-in-gaffney.php

Posted by: Kathy at January 13, 2012 1:16 PM
Comment #334438

“Rich, perhaps you could provide proof of Romney’s breaking of laws, since you speak for phx8. The left always implies breaking of the rules.”

Frank,

Lets be clear. I never stated nor implied that Romney broke any laws or regulations. I don’t speak for phx8. However, I have read his/her comments and cannot find one instance where such was overtly or implicitly stated.

Lets also be clear about the source of the current Romney Bain criticisms. They are coming from two conservative opponents.

Posted by: Rich at January 13, 2012 2:09 PM
Comment #334439

Kathy,
I have great news for you! These attacks were launched by Gingrich and Perry because they apply to South Carolina, but Bain has done the same thing in almost every state in the union. Isn’t that wonderful! Because when the Democratic Party gets involved, it won’t be just a $5 million dollar campaign like the one by Newt- it will be have hundreds of millions of dollars behind it, and it will be nationwide, it will be researched and documented, it will be relentless, and there will be lines of people available for videotaped interviews describing what happened to them when Mitt Romney Came to Town.

You and Powerline and other Romney supporters will be absolutely thrilled this summer and fall. Because it’s just envy, right? And what Romney did- well, that was just business. Why, he was actually doing those people a favor! That’s right, a favor! Yeah, that’s the ticket.

George,
You’re right. What Dain did was a lot more complicated than some people might realize. It involved a lot of money, complex calculations, and for Romney, it all must have seemed very abstract. However, the results in some of these cases were not abstract. Bain profited, and people lost their jobs.

Frank,
You might want to rethink your approach to this topic. First, justifying heartless actions with a ‘business is business’ line of reasoning might be correct insofar as it’s legal, but the idea here is that Rommey wants to be President, and to do that, he needs people to vote for him. Dismissing concerns and dismissing ideas like caring and compassion before the almighty altar of money works for some people, but I doubt it will win an election. Same goes for accusing critics of envy. Bad argument. Remember, Romney’s trying to convince people to vote for him. Phil Gramm, McCain’s economic advisor during the 2008 campaign, dismissed concerns about the sinking economy by saying Americans were just whiners. He was unemployed shortly afterwards.

Posted by: phx8 at January 13, 2012 2:10 PM
Comment #334440


I thought the whole point of the tea party was to wrestle control of the Republican Party from compromising RINO’s like Romney in order to promote an end to compassionate conservatism in favor of their small government, small tax policies.

The fact is that more than half the Republicans don’t want Romney and Bain Capital reinforces them.

Divide and conquer, Romney wins the nomination.

Gingrich wanted Romney to play fair. Romney refused, so Gingrich hammered him.

The majority of voters aren’t all that well informed on the issues so perceptions play a big part in their decision making process. This film on Romney will resonate negatively among everyday working class people.

Romney and his company will serve well as an example of Wall Street at the expense of Main Street.

Posted by: jlw at January 13, 2012 3:10 PM
Comment #334441


I can think of no better motto for the Romney election campaign that: FEELINGS DON’T MATTER WHEN IT COMES TO BUSINESS add to that AND MORALS DON’T EITHER.

def. Big Business: an amoral anti feelings machine devoted to profits at the expense of all else. The results are on display on Main Streets across America.

Posted by: jlw at January 13, 2012 3:26 PM
Comment #334442

“CNBC Retracts Story on GM, Obama, Bain”

January 13, 2012

http://www.rushlimbaugh.com/daily/2012/01/13/cnbc_retracts_story_on_gm_obama_bain

“A previous story incorrectly reported that Mitt Romney’s former firm, Bain & Co., was part of a team of consulting companies that advised President Barack Obama on a decision to shutter car dealerships during the auto bailout.

Bain & Co. said it has no connection to the “Bain Consulting” firm referenced in government documents.”

http://www.cnbc.com/id/45979278

Posted by: Kathy at January 13, 2012 3:35 PM
Comment #334443

“I thought the whole point of the tea party”

That’s your first mistake jlw, trying to think. Liberals think with emotion and not logic, hence…Touchy/Feely.

jlw, that’s the nature of politics. Survival of the fittest, and we vote for whoever is left standing.

By the way, why are you talking to me about the Tea Party? Did I say I cared about the TP or their candidate?

You lefties need to get a grip, you’re sounding shrill.

Posted by: Frank at January 13, 2012 3:42 PM
Comment #334444

A rare congratulations to P. Obama and congress. From the NY Times comes this quote…

“The Obama administration said its campaign to choke off Iran’s oil exports was making headway, amid signs that Japan, South Korea and even China were seeking alternatives to Iran, in order to comply with American sanctions on Iran’s central bank, through which most purchases are made.”

http://www.nytimes.com/2012/01/13/world/asia/asia-buyers-of-iran-crude-get-assurances-of-alternate-supply.html?nl=todaysheadlines&emc=tha22

In another column I wrote of the very real possibility of WWIII. Many were amused by my thoughts and consider the world to be safe from such an event.

In light of the article linked above, I also quote this article from the NY Times. It should give even those amused by my fears some reason to wipe the smile from their collective faces.

“The administration has warned Iran’s supreme leader, Ayatollah Ali Khamenei, that closing the Strait of Hormuz is a “red line” that would provoke a response, officials said.”

Posted by: Royal Flush at January 13, 2012 4:32 PM
Comment #334445

jlw-

You are almost completely right. I would fall into your definition of a tea party member, and I am most definately not Romney’s biggest supporter (I most closely resemble a libertarian), but that doesn’t stop me from thinking that these attacks on Romney about his days at Bain are silly, poorly disguised ways to elicit support from the anti-wall street movement that has recently popped up.

That being said, while I won’t be voting for Romney in the primaries, you can rest assured that even a RINO is better than President Obama. So, if my choice doesn’t win the primary, I will still be voting against Obama…

Posted by: adam at January 13, 2012 4:33 PM
Comment #334448

After lots of reading, I STILL think Romney’s business was very much like what Chrissy & I did when we bought a house, fixed it up and sold it at a profit.

The private equity firm’s goal is to sell the company at a profit. Unless we assume that all buyers are really stupid, they cannot sell unless the buyer figures it is worth it and they cannot make a profit unless a buyer is willing to pay more.

A similar rule applies to debt. These are not small mortgages guaranteed by Fannie or Freddie. The lenders put up a lot of money at one time. They want to be paid back.

When the firms go bankrupt, Romney’s firm doesn’t make money. It is in their best interest to maintain the firm and improve it.

It is like my house example. If we didn’t improve the house, we could not sell it for a profit. If we took out big debt to buy the house, we still have to pay the debt back when we sell.

The only way we could “make money” by taking on more debt than the asset is worth is we default.

So if I buy a firm and then load it with debt, I still own the firm AND the debt. If I want to sell the firm, presumably the buyer will not figure in the debt. So it is not possible for anybody to buy a firm, load it with debt and then somehow avoid paying. The debt is in the price.

Romney’s firm made its money honestly and within the law. There is no indication of anything else and many of the accusations just don’t make sense.

Posted by: C&J at January 13, 2012 5:33 PM
Comment #334451

For the life of me C&J, I can’t understand why so many on WB have trouble understanding a fairly common business practice. Does being a successful business person somehow disqualify one for high office?

If these same folks would look into the business practices of some of their most admired demo leaders would they be horrified or simply hail them as successful? I suppose it depends on the political label attached to their name.

Posted by: Royal Flush at January 13, 2012 5:46 PM
Comment #334454
It is like my house example. If we didn’t improve the house, we could not sell it for a profit. If we took out big debt to buy the house, we still have to pay the debt back when we sell.

Hence the difference C&J you assumed responsibility for the debt at the time of the sale. In the public offering as Bain did the debt remained with the company.

I can’t understand why so many on WB have trouble understanding a fairly common business practice.
Common only the past 30 years Royal. I don’t get where you think people don’t understand, assuming you are referring to the liberals here on WB, as it seems everyone understands perfectly fine that Romney’s claim of creating 100.000 jobs is bogus. Lets put it this way Royal for those defending Bain and Romney. Would you want them coming in and buying the company you worked for?
Does being a successful business person somehow disqualify one for high office?

No but it certainly doesn’t make you better qualified if GWB is any example.

Posted by: j2t2 at January 13, 2012 7:50 PM
Comment #334455

“Lets put it this way Royal for those defending Bain and Romney. Would you want them coming in and buying the company you worked for?”

Tell me more about this imaginary company and I will answer your question.

Posted by: Royal Flush at January 13, 2012 8:04 PM
Comment #334456

j2t2

The debt remained with the company. But Bain still had to sell the company, WITH the debt. If someone bought it, they must have thought it worth it WITH the debt.

My house example again - I could sell the house WITH the loan, i.e. the buyer could assume the mortgage. I sold the house for $270. If the buyer had to assume a loan of $270 - or more - would he have paid me $270. If so, I would like to meet this guy.

There is no way around this. Unless buyers were abysmally stupid, in which case the fool and his money are soon parted, Bain could not have sold the firms at a profit unless they added value.

Royal and J2t2

Bain bought companies in trouble. I would not want to work for a company like the BEFORE it was acquired. Being acquired improved the chances of survival, so if my choice was to continue with the old owner or get a new one, I would choose the latter.

As I said, statistically the best doctors often have the worst rates of success BECAUSE they take on the hard cases.

Royal

I find that our liberal friends tend to apply a modified type of medieval Christian morality to business. Perhaps it is BECAUSE many are not religious. They have transferred their faith but not their beliefs. As in the Middle Ages, they distrust profits and assume that profits must be made at the expense of someone else. As in the Middle Ages, they love victims and thing that suffering is holy, but now in the secular sense. They think of themselves as children of the enlightenment, but their basic view of the economy has not even reached the reformation.

Posted by: C&J at January 13, 2012 8:23 PM
Comment #334460
If someone bought it, they must have thought it worth it WITH the debt.

C&J. your comparing apples and oranges here. Bain took the companies public, an IPO, a stock offering with the number of shares and the initial offering price pretty much set. Nothing close to a real estate transaction.


Bain bought companies in trouble. I would not want to work for a company like the BEFORE it was acquired. Being acquired improved the chances of survival, so if my choice was to continue with the old owner or get a new one, I would choose the latter.

Revisionist history C&J, so much easier to defend the likes of Bain and Romney that way. If all these companies were in such bad shape perhaps it was because they took “poison pills” to ward off the corporate raiders like Bain.

Posted by: j2t2 at January 13, 2012 9:00 PM
Comment #334461

j2t2

The price of the IPO is “set” but investors do not need to buy at that price. Some IPOs fail because there are no buyers.

It is almost exactly the same as a real estate transaction except with the stock offering the seller needs to convince lots of buyers that it is a good deal.

The history of Bain is that they bought companies in trouble. Most of these were not hostile takeovers. They were not raids. Bain improved the firms in most cases. Some were beyond help.

Too many people watch Oliver Stone movies and get their ideas from them. I would point out that even in those movies, the crooked business people are doing things that are illegal.

As with my house deal, it can be illegal or legal. If I misrepresent my house to buyers, it could be illegal. If I hide the fact that the furnace is broken, I am being dishonest. If the buyer knows the furnace is broken but still thinks it is a good deal, everybody gets what he is bargaining for.

Posted by: C&J at January 13, 2012 9:20 PM
Comment #334464

Frank-
Feelings shouldn’t matter, the logic goes. Everybody’s a rational agent of their own interest, the logic goes. Folks don’t overreach or overstep because they get the competitive bug or get greedy. Right?

Do you know what you get when you create a person lacking in emotional response? You get a person who doesn’t care about the consequences of their actions, who takes excessive risks, who often fails to do the wise thing because they’re so egocentric in their concerns.

In other words, the classic sociopathic personality disorder patient. What most of us call a sociopath. Emotions matter in real life. The theories that say that turning people into emotionless drones make them rational are actually wrong. People who have their frontal lobes damaged in the areas that mediate emotional responses become undependable. Why? Because an important backbone of decision making is caring about outcomes, and having a literal feel for the consequences of your actions.

People naturally abhor those who lack that empathy, who lack the ability to feel remorse for the wrongs they do to others. This isn’t a partisan thing; note how the other candidates are looking at Bain Capital as a weakness for Romney, despite the fact that picking on capitalists is politically incorrect for Republicans. Why do they do that? Because they know that people out there are fresh out of patience for a business community that behaves with such little remorse. Hell, even you, in your way, are trying to use that by exploiting the Solyndra Scandal, trying to tap into the outrage at unfair and immoral bonuses given to those on Wall Street who nearly crashed the whole economy.

Funny how that works. We’re not supposed to talk about what crooks Romney and his pals at Bain are, but you’re only happy to exploit the same outrage, with a straight face, when it’s aimed towards Democratic Party opponents, and the rivals of your special interests. Funny how we can’t let go of that 90 billion dollar subsidy for fossil fuels, but when it come to a company like Solyndra, a 500 million dollar lose for tax payers is such a crime.

The Republicans are willing to use resentment against the bank bailout in order to make the Obama administration look bad, but hey, ask them to actually make such a future bailout less likely by regulating and legislating the bad practices out of existence, and of course that’s going to kill the economy, so we can’t do it.

Long story short, you’re willing to use public sentiment, but you’re unwilling to answer the need that creates that sentiment. Bait and switch politics, basically.

Posted by: Stephen Daugherty at January 14, 2012 12:15 AM
Comment #334468


I may take a while, but I’m sure that Fox News and the Wall Street Journal, owned by Rupert Murdoch, and Rush Limbaugh, Shawn Hannity and Glen Beck who’s syndicated conservative radio shows are owned by BAIN CAPITAL will be able to turn this around for Romney.

If you are going to run for president as a conservative, it sure would be helpful if you owned conservative talk radio and had an ally that owned the WSJ and Fox News.

Posted by: jlw at January 14, 2012 2:08 AM
Comment #334471

jlw

You guys will need to change your characterizations and innuendo. A few weeks ago you all were saying that Fox and the “right wing” were against Romney and that he was too moderate to be nominated.

Posted by: C&J at January 14, 2012 9:25 AM
Comment #334473

C&J, the left don’t really know what they believe; they simply epeat the latest talking points of the liberal media and Obama admin. In other words, throw crap at the wall and see what sticks. They accuse all republicans of being TP supporters and therefore all TP supporters being against Romney. But as adam said; in the end, all Republicans (including TP and conservatives) will vote for Romney; because even a RINO is better than a socialist.

Posted by: Frank at January 14, 2012 10:43 AM
Comment #334483

adam-
What I’d say is that nobody trying to make an honest profit basically raids the pension fund. You can go this way or that on the severity, but when folks are doing that, they’re tending more towards the short term end of the speculative market. Romney’s already on the record of having sought a great deal of government bailout money both for a steel company and for Bain Capital itself.

For my part, I look at this and I find the Republican problem being that their favorite candidates are neither good politicians nor mainstream. They bought ideological conformity at the expense of making their party unfriendly to the mainstream. Romney’s impurities, ironically, make him both the perfect candidate and the worst candidate for the Republicans. He’s theoretically able to appeal outside of the party, but in order to get the nomination and keep his base in the general, he’s got to go alot further right than otherwise. If he doesn’t, he has to risk losing the rest of the party with a pull to the center.

As for Solyndra? I do want my Government doing things that work to the good of my nation. Previously, it was the space program. Giving us a good start on solar is not a bad thing to work for. Government has long served to provide funding for research and commericalization of the same, when it’s in the nation’s interests. I don’t find arguments that ideology should rule out these particular behaviors that persuasive.

As for Bain, and how they delivered their capital? What it sound like to me is that they were borrowing heavily on the company’s account in order to fund their rather profitable takeovers, while at the same time sticking the businesses with the bill. There are other ways to raise capital They chose one that left a lot of the debt on the books of the companies they sold off, while insulating themselves. They’re making very big returns, but are they actually leaving better businesses than they started out with? There’s not much point to speaking glowingly of an investment firm whose targets are worse off or dismembered for their troubles.

Profit is an ambiguous measure of things, since the market rewards both good behavior and bad. Folks don’t want to admit that the market doesn’t replace good old fashion human judgment for what is right and wrong, as it would bring into stark relief the negligence at the heart of the laissez faire model.

Venture capitalism can be good, but it’s got to be aimed at actually creating profit for more than just the firm itself. Investment firms used to be about helping other firms to make money, and come out of whatever situation they’re in better.

Frank-
And that’s why they call us socialists, because right wing voters have been very well trained by that dogwhistle. It’s like the n-word was among southern Democrats before the seventies, and communism was before the fall of the Soviet Union made that term quaint.

So much of right wing politics is about running people around with those kinds of words, and with the generic rhetoric that highly partisan groups always use against their opponents. Fact of the matter is, you barely know Democrats at all. You are dependent on a caricature built out of previous rhetoric, taken at face value and given credibility it doesn’t deserve. Really, if you looked at the average Republican and made just a few changes, you’d get the average Democrat.

The problem for your side at this point is that you’re too used to panicking and stampeding people these days, but your stereotypical claims have become so tired and cliched as to have lost their strength.

Democrats will win because we can outmanuever the GOP, who have, in the course of nailing themselves down ideologically, deprived themselves of the ability to get out of the way of any number of attacks.

Posted by: Stephen Daugherty at January 14, 2012 12:24 PM
Comment #334485

Stephen

“I do want my Government doing things that work to the good of my nation.”

That is what everybody wants. The problem is that government bureaucracies are not well suited to investing and picking winners. It leads to corruption.

Beyond that, as government expands into areas it is not well suited to do, it gets worse at other things. When government was smaller, it did greater things. Government was much smaller when the space program was created or when we built the Interstate system.

We used to be able to do things. Today the bureaucracies get in the way. Could government build the Interstate system today? probably not and not because it doesn’t have the money. We are spending more than ever.

“Government has long served to provide funding for research and commercialization of the same” - government has supported basic research and should do. The difference with SOlyndra is that government was backing a particular firm and a particular outdated technology. It was doing the wrong thing by privatizing profit and making the taxpayers take the risk.

Posted by: C&J at January 14, 2012 12:54 PM
Comment #334495

“Democrats will win because we can outmanuever the GOP, who have, in the course of nailing themselves down ideologically, deprived themselves of the ability to get out of the way of any number of attacks.”

Posted by: Stephen Daugherty at January 14, 2012 12:24 PM

Yes Stephen, you’ve got me there; I saw a bunch of those outmanuevering OWS protestors trying to shit on cop’s car and pissing on the sidewalks. Kind of hard to get one’s ass over the hood of a cop’s car, but he did it. It takes real intelligence and manuevering.

“but your stereotypical claims have become so tired and cliched as to have lost their strength.”

I guess that’s the reason the left get’s so upset when called socialists: the word has lost it’s strength….sure it has….

Posted by: Frank at January 14, 2012 4:32 PM
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