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American Parasite: Romney's Bain Represents Capitalism's Worst 

Wednesday, Apr 18 2012
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Page 4 of 4

But that plant soon closed as well. Though Romney was gobbling up millions, Bain still wanted those laid-off employees to repay their moving costs.

"They were treated horribly," Hewitt told The New York Times. "There was absolutely no concern for the employees. It was truly and completely profit-focused."

Yet Bain's abuse wasn't complete. It was trying to sell Dade, but didn't like the offers it received on the open market. So it created an artificial market of its own.

In 1999 it forced Dade to borrow $242 million, which was used to buy back company stock from Bain, Dade executives and their banker, Goldman Sachs.

Bain was again extracting profits with borrowed money. It had pushed Dade's debt to a bracing $2 billion. To help pay for the deal, the company laid off another 367 workers.

But that debt proved too much for Dade to carry. Three years later, the company was bankrupt.

Kosman calls it standard Romney operating procedure. To pump short-term earnings, he would essentially "starve a company," whacking not just employees, but customer service and research-and-development funding — the very ingredients of long-term prosperity.

"I think they're one of the worst, at least during Romney's time," Kosman says. "They were very aggressive about dividends. They were very aggressive about borrowing the most money they could. He's very driven to be the best he could be, and that was to be as cutthroat as he could be. But in the process, he hurt a lot of companies and cost a lot of jobs, maybe tens of thousands of jobs."

Kosman says it's telling that Romney never cites companies he actually managed as evidence of his job-building skills.

"If Romney had some stories to tell, he'd use those stories," he says. "I think it's very interesting that he's not telling those stories, because I think they don't exist."


The Welfare Queen

Romney's economic views were on stark parade during this year's Michigan primary. He ripped President Obama for bailing out the auto industry, arguing that it should have been dealt with in his favorite resting place: bankruptcy court.

He was particularly incensed that the president rescued workers' pension funds before covering Wall Street's bad loans.

But his faith in the free market wobbles when his friends need rescuing. Romney just as vigorously defends the $10 billion government bailout of Goldman Sachs, his investment partner at Bain.

After all, Romney frequently assumed the role of welfare queen himself.

In 1988, he bought South Carolina photo-album maker Holson Burnes. In exchange for the firm's promise to build a new factory, the people of Gaffney, S.C., gave Bain $5 million in bonds and $200,000 in utility upgrades.

The plant closed just four years later. The 100 jobs there were later shipped to Mexico.

At GSI, he dumped $44 million in pension shortfalls on the federal government. And when he bought mattress-maker Sealy in 1997, he took $600,000 in welfare to move the firm from Ohio to North Carolina.

Even a company Romney cites as one of his greatest achievements — Steel Dynamics, where he was a minority investor — was practically launched by corporate welfare. Indiana taxpayers gave the firm $77 million to open a plant. Residents of DeKalb County actually had their income taxes raised solely to help Romney and his friends.

Tad DeHaven calls it "theft and redistribution."

He's no yammering Trotskyite; DeHaven is a former budget advisor to Republican U.S. Sens. Jeff Sessions of Alabama and Tom Coburn of Oklahoma. Yet he notes that firms like Bain often get governments to subsidize their raiding parties.

The feds take $100 billion a year from everyday taxpayers and send it straight to companies like Romney's, says DeHaven, who now works for the Cato Institute, a conservative think tank.

But like most good Republicans, he's reticent to single out the candidate for criticism. "It depends on what he knew and Bain's involvement in obtaining subsidies," DeHaven says. "I don't know if it makes him a hypocrite or not, but he should answer questions about it."


The President of Russia

Those answers won't be forthcoming. Romney refuses to discuss most of the companies he purchased at Bain, nor will he release his tax records from those years. As a result, voters are left to make their own call on his catalogue of creative destruction — and what he might be like as president.

Romney has professed his admiration for Ronald Reagan. But judging by his business history, the president he most resembles is Vladimir Putin. Romney has devoted his life to ensuring that every last penny rises to a few hands at the top. And like Putin, he's never shown much concern for the countrymen he tramples along the way.

"The word 'oligarchy' comes to mind," says Michael Keating, when asked to envision a Romney presidency.

Keating is a former business consultant and executive at Bertelsmann, a multi-national investment firm that operates in 63 countries. He asserts that men like Romney "hide their antisocial actions behind a rhetoric of free-market capitalist platitudes. But in the end, it's all about the bottom line — and only their own bottom line....

"I don't think Romney is so much dangerous as he is unimaginative," Keating adds. "And in the world we live in, that amounts to the same thing."

About The Author

Pete Kotz

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