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...This is exactly the kind of shenanigans that give Wall Street a bad name. I don't see any job creation in this - I just see the conscious looting and destruction of companies for the sole purpose of building shareholder wealth.
Romney's Bain invested 22 percent of the money it raised from 1987-95 in these five businesses, making a $578 million profit.
- 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.
Hat Tip: The Daily Dish
2 comments:
the most surprising aspect to all this criticism of Romney's Bain record is that it is being sparked by his conservative republican running mates. using a 99% argument when you're part of the 1% is something i call foul on way more than being an unapologetic captialist.
also, i don't get the position from a republican standpoint... is it a problem for conservatives that their "leader" is a filthy rich businessman? erm... i think not. no one from the GOP attacked GWB for being such...
The fact that the GOP field is attacking Romney for his job at Bain is just one of many bizarre occurrences in this year's Republican primary contest. Too many to list here, but they really do seem to be taking a scorched earth approach to taking down Romney while giving Obama his attack lines for the general.
Of course, these valid tactical points obscures the message of my original post, which was really that I don't see this "creative destruction" as creative at all - it looks to me like Bain was looting these companies of their wealth and leaving bankruptcy and office closings in their wake.
Post a Comment