Plunder watch: Ed Schultz almost gets it right!

FRIDAY, JANUARY 13, 2012

Third time is almost the charm: Here’s the way the workload has gone at The One True Liberal Channel this week:

All week, the rest of the children have gamboled and played, riding their favorite hobbyhorses. All by his lonesome, Ed Schultz has tried to explain the way Mitt Romney looted those steel workers.

We refer to the detailed report published by Reuters last week (click here). Last night, Schultz tried to explain this incident for the third time. This time, we’d say he came pretty darn close. To watch the full segment, click this:
SCHULTZ (1/12/12): McCain says Romney’s tenure at Bain Capital is the essence of what the Republican Party is all about?

Here’s the essence John McCain is defending: Robbing hard-working Americans of their pensions and putting the excess debt on the back of the United States taxpayer.

In 1993, Bain Capital became the majority shareholder of a Kansas City steel mill. Now according to Reuters, less than a decade later, the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health care insurance that they had been promised. And their pension benefits were cut by as much as $400 a month.

How’s that for treating the workers good?

The remaining benefits, by the way, were paid by the Pension Benefit Guarantee Corporation, a pension protection agency in the United States government. Because Bain left the government on the hook for the pension benefits, the cost to the taxpayers was a $44 million bailout.

Mitt Romney’s candidacy may be the best thing that could have happened to the American worker because it’s a wakeup call for everybody. Now, we know income inequality has gotten worse in the last three decades. Now the American people are learning about the vultures who have helped make it worse.
Key point: The American people won’t learn about this unless public figures tell them. (Public figures they can trust. Public figures who strike them as serious.)

This was Schultz’ third attempt at telling this remarkable story. This time, he came pretty close to getting it right. He should have included the basic facts about the massive payments Bain extracted from this steel mill. The money it extracted was remarkably close to the $44 million by which it underfunded those pensions, forcing the federal government to come in and clean up its mess.

Still and all, Schultz finally gave most of the basic facts about this remarkable episode. Moments later, he spoke with David Cay Johnston, the rare type of cable guest who knows what he’s talking about.

Johnston didn’t waste your time, or insult your intelligence, with stupid shoeshine tales. He had the following exchange with Schultz. The public should hear about this:
JOHNSTON: The record on Romney is somewhat mixed. There are companies that they essentially bought, sucked all the cash out of them, and then left behind. And I think the pension guarantee issue is one that will cause him a lot of problems, and a lot of explaining is necessary about why the government had to step in in this area.

[...]

SCHULTZ: Did Bain profit from reducing pensions?

JOHNSTON: Oh, there’s no question that they were able, in the particular case that was mentioned involving the steel mill, to take money out of this company, it didn’t have a properly funded pension, and fob it off on the Pension Benefit Guarantee Program, is clearly an important part of this story.
All week long, Schultz has tried to explain this matter. We'll make a wild guess:

American voters would not be amused by the conduct Johnston describes. American voters would not be amused to learn that they had to clean up after Romney. They would not be amused to learn about the large sums he looted from this company—large sums the federal government had to restore.

They wouldn’t like the way he left those workers without their full pensions, without the insurance they had contracted for. Gail Collins thinks those people are amusing. Many voters would think something different.

Or what the heck? We can just tell the voters all about Seamus, as Rachel did last night. Once he began to leak those brown fluids, Mitt Romney should have let him get into the car!

We napped for decades; now we play. People are dead in Iraq thanks to us.

These are the ways of our tribe. As Romney tore some companies down, we tear down the culture.

26 comments:

  1. The PBGC's sources of funding are:

    - Insurance premiums paid by sponsors of defined benefit pension plans
    - Assets held by the pension plans it takes over
    - Recoveries of unfunded pension liabilities from plan sponsors' bankruptcy estates
    - Investment income

    (i.e., not taxes)

    ReplyDelete
  2. For what it's worth, Ed Schultz gave the full quote of Romney firing his insurance company on his XM Sirius show on Tuesday (1/10). He even predicted there would be blowback on those who continue to take it out of context.
    Perhaps he is becoming less tribal and more reliable.

    ReplyDelete
  3. I'm waiting for the Anti-Romneys to buy the rights to this scene from Pretty Woman and start airing it:

    Vivian: You don't actually have a billion dollars, huh?
    Edward: No. I get some of it from banks, investors… it's not an easy thing to do.
    Vivian: And you don't make anything…
    Edward: No.
    Vivian: … and you don't build anything.
    Edward: No.
    Vivian: So whadda ya do with the companies once you buy 'em?
    Edward: I sell them.
    [Viv reaches for his tie.]
    Vivian: Here, let me do that. You sell them.
    Edward: Well, I… don't sell the whole company, I break it up into pieces, and then I sell that off, it's worth more than the whole.
    Vivian: So, it's sort of like, um… stealing cars and selling 'em for parts, right?
    Edward: [sighs exasperatedly] Yeah, sort of. But legal.

    ReplyDelete
  4. The Bain GS story has less, much less to it than appears. First, the time line is important. Purchase of company is 1994. Per Reuters story, additional debt added to modernize the plant in 1995 (?). Big dividend to Bain also in 1995. Management fees of almost $1 mill. Per yr.
    Bankrupt 2001 pension shortfall 2002.
    Remember anything stock market related between 1995 and 2001? Pension values depend on a number of factors including period costs, future costs, reinvestment rate and plan assets. The plan could have been closer to even or in the black in 96, 97,98 but if it had a lot of stock, especially NASDAQ companies, it might be good to remember that the NASDAQ fell from over 6000 to less than 2000 after 1998.

    ReplyDelete
  5. Bain Capitol made more money on selling short the very companies they were hyping as being great companies.More money than any other part of their scheme. They hyped the companies they bought while wrecking the companies with the plan on selling short the company while selling stock knowing full well the company would tank.

    It is the same model as the banks used to sell mortgage backed securities to the rest of the world all the while betting against the very same investments that caused the great recession of 2008 which is still going on today.

    Mitt Romney is a vulture capitalist and saying so does not make me a class warfare conspiracy theorist. It makes me a truth teller as everything I have stated is true.

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