During the 2008 election, this blog focused on Barack Obama's shady links to Tony Rezko and the shadowlands of Chi-town politics. If you read those posts, you weren't surprised when Obama turned out to be a sellout.
This year, we must pay close attention to the dark history of Mitt Romney. There's no better starting point than "Mitt Romney: American Parasite,"
a terrific new article by Peter Kotz, published in the Village Voice.
His formula was simple: Bain would purchase a firm with little money down, then begin extracting huge management fees and paying Romney and his investors enormous dividends.
The result was that previously profitable companies were now burdened with debt.
In the midst of that 1994 campaign, one of Romney's companies, American Pad & Paper, bought a plant in Marion, Indiana. At the time, it was prosperous enough to be running three shifts.
Bain's first move was to fire all 258 workers, then invite them to reapply for their jobs at lower wages and a 50 percent cut in health care benefits.
"They came in and said, 'You're all fired,'" employee Randy Johnson told the Los Angeles Times. "'If you want to work for us, here's an application.' We had insurance until the end of the week. That was it. It was brutal."
This is how the world really works:
The move was classic Bain. Before buying Georgetown, Romney had purchased the Armco steel mill in Kansas City, Missouri, which had been in business for more than 100 years.
"We were setting a lot of records for production at that time," says employee Steve Morrow. "We were making a lot of money because we were getting profit sharing."
Bain combined Armco with the mill in Georgetown and foundries in Tempe, Arizona, and Duluth, Minnesota, to form the newly christened GS Industries.
Romney purchased Armco with just $8 million down and borrowed the rest of the $75 million price tag. Then he issued bonds—basically IOUs—to borrow even more to pay himself and his investors $36 million.
Within a year, he'd already made four times his initial investment while barely lifting a finger. But he'd also run up a staggering $378 million in debt on GSI's tab.
Romney fired the experienced (and profitable) management team, replacing them with bombastic hard-asses from the military who knew nothing about the industry.
Romney was charging GSI $900,000 a year in management fees to run the company. The Kansas City mill received $900,000 worth of ineptitude in return.
Although Bain borrowed $97 million to retool the plant so it could also produce wire rods, it left the rest of the facility to rot.
To save costs, Bain went miserly on everything from maintenance to spare parts and earplugs. Equipment deteriorated. Because the new managers didn't know how to repair it, "they'd want to rent a new piece of equipment out instead of maintaining what we had," Morrow says. The waste and inefficiency was breathtaking.
Bottom line: Romney ruined the place.
"Like a lot of private equity firms, Bain managed the company for financial results, not production results," Foster says. "It didn't invest in maintenance or immediate customer needs. All that came second to meeting monthly financial goals."
It would take a few more years of bleeding, but GSI eventually fell to bankruptcy.
That's not even the worst of the Bain stories.
Right-wingers often say that the government should be run like a business. God help us if the U.S. is run like a Bain-bought business. Mitt Romney runs a company only one way: Into the ground.
Calling him a financial vulture is an insult to vultures: Carrion birds perform a useful function, and they eat only the dead. People like Romney kill healthy
Calling him a capitalist is an insult to capitalism. Capitalists, real capitalists, run risks. Capitalists, real capitalists, make things. Bain ran no risks because it operated on borrowed cash. Bain profited by stealing everything of value from its murder victims.
I've long suspected that a libertarian cabal plans to do the United States what Romney did to GSI: Suck out the life force and toss aside the corpse. This is not industry. It's vampirism.
Almost needless to say, Romney stashes his ill-gotten loot in a bank in the Cayman Islands
“His personal finances are a poster child of what’s wrong with the American tax system,” said Jack Blum, a Washington lawyer who is an authority on tax enforcement and offshore banking. . . .
If you follow that last link, you'll encounter a comment left by someone who has personal experience of the Bain business model:
I work for a corporation half owned by Bain Capital Partners. I understand Mitt left in 1999 but I believe he still takes dividend checks. And even though Mitt has moved on (not really), the crummy business and labor practices continue in his wake. It employs over 45,000 people, 75% of which are part time with no benefits. Most can barely get the hours they need to live. If sales are down, even on a weekly basis, then you can expect your hours to be cut. Even in a business subject to the fluctuations of consumer spending (what a way to make a living) this is degrading treatment and unnecessary unless you’re looking to nickel-and-dime every possible labor cost—which is the cost of people, nuisances that they are. Sometimes it feels more like a wage lottery than a job.
That's your future.
When you, too, are reduced to part-time status, when you are forced to take yet another pay cut, when you are left without health insurance, when you are unable to pay either your student loans or your house note, and when you read that our national parks and museums are being sold off to pay our debts, the powers-that-be will tell you (via their well-paid propaganda-spewers) to blame anyone and everyone except guys like Mitt Romney. Blame immigrants, blame Muslims, blame Israel, blame unions, blame blacks, blame China, blame liberals, blame feminists, blame freemasons, blame France, blame Marxists, blame atheists, blame Obama, blame Keith Olbermann, blame Saul Alinski, blame the Bohemian Grove, blame the United Nations, blame the Trilateral Commission, blame the non-existent NWO conspiracy, blame the Illuminati, blame David Icke's imaginary lizard people from outer space, blame those awful Jesus-haters who are waging the war on Christmas. Hell, you can even blame Dubya and Cheney.
You'll be told to blame anyone and everyone except libertarians, Goldman Sachs, and blood-suckers like Mitt Romney.