In an otherwise silent world, Big Ed flounders again: Just a guess: Mitt Romney will get to walk on the Bain Capital story.
Last night, Ed Schultz whiffed again with this topic. Once again, he tried to explain what Romney did wrong in the matter explored by Reuters on January 6.
Alas! Schultz did something he often does. He brought on a local labor official to explain what happened. Schultz’ intentions may be good when he takes this approach—but the results are often bad. Here’s how things started last night:
SCHULTZ (1/16/12): Welcome back to the Ed Show. Mitt Romney, trying to convince South Carolina voters that he knows all about creating jobs. But in reality, all he knows how to do is make the wealthy a little bit richer.That was as far as it went. From there, Schultz and Sanderson drifted off into highly ancillary questions and topics. In all honesty, viewers didn’t learn a lot about what happened at Georgetown Steel. To watch the full segment, click this.
As head of Bain Capital, Mitt Romney was focused on making money for his investors, even if it meant destroying companies and eliminating jobs. One of Romney’s targets was the Georgetown steel mill in South Carolina. Bain Capital bought mill’s parent company, GS Industries, for $24.5 million. Its investors ultimately walked away with $58.4 million, doubling their investment, better than that. But Bain left the company in massive debt. GS Industries ended up cutting 1,750 jobs and filing for bankruptcy, count them, twice.
The Georgetown steel mill was eventually bought by another company and is in operation today, but with fewer employees. Romney’s campaign explained his involvement with the South Carolina plant in the following statement:
“Bain Capital invested in many businesses. While not every business was successful, the firm had an excellent overall track record. These experiences give Mr. Romney the unique skills and capabilities to do what President Obama has failed to do—focus on job creation and turn around our nation’s faltering economy.”
I’m joined tonight by Dr. James Sanderson, president of the United Steel Workers Local Union 7898 in Georgetown, South Carolina.
Mr. Sanderson, good to have you with us tonight. We keep hearing these stories about Bain and Mitt Romney’s involvement. What can you tell us about this? What happened here? What is the public, in your opinion, need to know?
SANDERSON: Good evening, Ed Schultz. The first thing I’d like to say is good evening to everybody in the labor movement, the brothers and sisters that also understand the dilemma that we face here in South Carolina.
South Carolina has over 10 percent unemployment right now, and we are very much in need of jobs. And to hear Mitt Romney running around this state, talking about that he’s a job creator is very disturbing and is not true. He does, indeed, like to fire people, like you already said.
We go back to 1997, whenever Bain Capital became very much involved with our plant at Georgetown Steel, and he basically just took a lot of profits, assets away from our company, and forced it into bankruptcy.
Prepare to learn Sanderson's thoughts about the conspiracy behind the operation of South Carolina's public schools. Also, prepare to learn about Governor Haley's approval ratings! In part thanks to Big Ed's wandering questions, Sanderson never discussed that steel mill again.
To his credit, Schultz has been trying to develop this information since the time of the Reuters report. That said, he and his staff simply don’t seem to be up to the task. Meanwhile, others on The One True Liberal Channel have completely ignored this topic. Have you seen major players anywhere else trying to develop this information in a way the public can grasp?
Many folk are sticking to the safer part of this story: How many jobs did Romney produce? We see no one going inside the problems described by Reuters.
Reuters opened a door two Fridays ago. “Liberals” have not walked in. Just a guess:
The story of Bain will soon be old news. Thanks to the fecklessness of our “liberal intellectual leaders,” the problem with Romney’s behavior will not have been explored or explained.
Question number one is, Why is "Dr. James Sanderson" president of a Steel Workers Union local? When I was a member of the IBEW, the president of the local had to be employed as an electrician.ReplyDelete
Question number two, is the doctor "president of the United Steel Workers Local Union 7898," or is he president of the United Steel Workers Union Local 7898? To the best of my knowledge there is no "United Steel Workers Local" which has subdivisions called "Unions," but there is a "United Steel Workers Union" which has subdivisions called "Locals." You'd think that someone who is as big of a supporter of unions as Big Ed purports to be would be familiar with that terminology.
I recall back when I was watching Keith Olbermann (shudder) he had a union guy on to talk about some subject or other, and he had one hell of a time getting the guy to say anything at all on the subject in question, no matter how "leading" he made the questions. I recall wondering at the time if they did any screening of the interviewees prior to air time, and if so, why in heaven's name they would put this guy on.
IMHO the reason some people are having trouble explaining Bain Capital is that they're trying to find a scandal when there isn't one. What Bain Capital did isn't that complicated.ReplyDelete
-- They worked with companies in danger of failing and tried to save them.
-- They invested money in these companies and also in new companies.
-- In trying to save a company, they often closed entire units or downsized some areas. Either action resulted in people losing their jobs.
-- They sometimes failed to save a troubled company, so all the employees lost their jobs.
-- OTOH most of the companies they helped were successful. Some were wildly successful.
-- They made a humongous amount of money because the companies they chose to invest in were enormously successful. Also, they charged a lot for their services and arranged to get paid whether they saved a company or not.
-- They were very good at what they did.
You may not like what private equity firms do, but IMHO that kind of expertise would be useful in the White House. An administration that knew how to evaluate private companies wouldn't waste billions of dollars investing in eleven Solyndras. A President who knew how to improve efficiency might make the government run better and thus lower its cost.
This is not strictly aimed at DinC, but he might learn from it.ReplyDelete
As a goof, I Googled various major corporation's mission statements, then Bain Venture Capitol's.
It was educational.
DinC says "They worked with companies in danger of failing and tried to save them".
That isn't in Bain Capitol Venture's mission statement, and DinC provides no source for such a claim.
I highly recommend the link below, and the links it provides, for those who want information that our media and political candidates will not provide. Bear in mind that all comments are self-serving.
The simple fact is we must do our own research if we want to know things.
I know that the Fourth Estate is supposed to do research, is paid to do research, boasts about their sacred duty of informing the public, BUT. It ain't gonna happen.
Most of us have the most powerful research tool ever devised on our desks, or on our laps, or in our hands. Use them.
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The information is not posting properly.ReplyDelete
David in Cal makes a compelling argument for electing a candidate with a really strong, if not ruthless, business acumen to run the US Government.ReplyDelete
Now if he can just present to me a candidate who offers this skill while NOT also promising away any potential revenue gains to pay for military operations in the middle east (as evidenced by the wild success of the previous war Romney supported), instituting regressive tax policies historically shown to widen the income gap and raise the deficit, and infringe on the basic civil liberties of his constituents (as it pertains to SOPA, planned parenthood, Patriot Act, etc.) while deregulating the financial industries we depend on not to screw said constituents over, then he may actually convince me to cross party lines with my vote.
However, if the worst he can come up with is that Obama was imprudent in trying to kickstart some (heaven forbid) Green Industry businesses during his first months in office with an investment absolutely dwarfed by the spending of Bush/Cheney in search of yellowcake uranium in Iraq (with full support of Romney), then I guess I remain resolute with my support of whoever the Democrats run in any election for the forseeable future.
Gravymeister - Evidence that Bain worked with companies in danger of failing and tried to save them is easily found, e.g., in yesterday's USA Today:ReplyDelete
At their best, investment companies such as Bain facilitate economic growth, providing crucial seed money and expertise that allow fledgling or troubled companies to flourish.
Wikipedia explains how to differentiate between absence of evidence and evidence of absence at http://en.wikipedia.org/wiki/Argument_from_ignorance
"At their best...."ReplyDelete
I would expect a fair assessment to tell us what happens when investment companies like Bain are "at their worst", also.
I might even expect a fair assessment to tell us how often Bain was "at their best" and how often Bain was "at their worst."
However, this data is very hard to come by since Bain is privately held.
So what we really have here is another propaganda war.
The solution is really very simple:ReplyDelete
If Mr. Romney wants us to believe his claim he created 100,000 jobs or so then Bain needs to open their books.
Until then it's just a matter of faith, just like so many of the other claims made during this Republican primary season, and we're arguing about air.
You are supporting a specific claim with a general statement.
Mitt Romney made the specific claim in his book "Turnaround" that "At Bain Capital, we aspired to have a firm that put our investors' interests first, even before our own,"
I read that as saying if they could make more money for their clients by dumping the company, that's what they would do. Saving the company was simply a financial option, not an imperative.
There is nothing morally wrong with closing a company if it gains more profit, or incurs fewer losses to do so.
By the same token, we cannot claim the moral high ground for rescuing a company if the decision is based solely on creating profit for the owners.
I take no moral position about venture capitalism, except when money is extracted from a company and results in taxpayers having to pay compensation for the human costs.
I personally believe that a company's promises to it's employees and customers are just as binding as it's promises to it's shareholders and lenders.
The law sees it otherwise. There lies the rub.
Companies' promises to employess are binding. They are part of a contract. E.g., if a company manual specifies a certain procedure for terminating an employee the company cannot terminate an employee without following that procedure. Otherwise the terminated employee will sue the company and win.ReplyDelete
The problem is when employees think that the company will retain them as long as they're doing their work properly. I think loyalty may be programmed into human beings. Whether or not that's the case, we've all known many people who were outstandingly loyal employees. It's particularly unfair when such employees get fired for something that's not their fault. However, the reality is that the organization didn't actually promise them that their loyalty would always be rewarded.
"However, the reality is that the organization didn't actually promise them that their loyalty would always be rewarded."ReplyDelete
Companies believe the American dream of work hard, play by the rules and you and your succeeding generations will get ahead is for suckers. They'll take the dream away any time it suits their bottom line.
They have a different raison d'etre and that's a big part of the problem.
When is Romney going to open the Bain books so we can see if he's telling the truth or does he believe he should be held to a different standard than other politicians?
AFAIK Romney is no longer a part of Bain, so he cannot open their books.ReplyDelete
David in Cal,ReplyDelete
Even accepting your absurd claim -- which Bain itself has never made to its shareholders or to the press -- that the company is in the business of "saving" failing enterprises (this, after previously insisting that objects of hostile Bain take-overs had "engaged" Bain's services) you forget that this activity is heavily subsidized by the taxpayer.
Interest payments on the huge loans the company takes and saddles the take-over firm with are tax deductible. In other words, Bain's activities wouldn't be profitable if not subsidized by the American public. So much for conservative virtue.
On the other hand, if you're correct about Bain's charter, the company need only register as a charitable enterprise. That way it wouldn't have to pay any taxes at all.
Finally, "companies' promises to employees" are moot if if the company no longer has the funds to satisfy them. Workers can sue all they want, but if there's nothing there to collect, it's a futile exercise. This is of course the prime rationale for incorporating -- workers can't sue Bain management or its shareholders, even if Bain walked away with hundreds of millions, because Bain isn't legally responsible for the debts. Pretty good, huh?
"AFAIK Romney is no longer a part of Bain, so he cannot open their books."ReplyDelete
You must really think we're stupid!!
If Romney can't get a company he founded to open their books so he can back up the claims he's asking us to take on faith I certainly wouldn't trust him to negotiate anything in the name of the American people.
I'm sure Bain COULD do so, but only as a favor. Seeing as Romney is no longer an officer of company he can't FORCE Bain to do anything.Delete
George Bush used to be President. Does that mean he can wander into the Oval Office any time he pleases and start going through the drawers of the Resolute Desk? Can he jump on Air Force One and fly off to some foreign land whenever he pleases? I'll await your informed answer.
At the time this particular steel mill failed, weren't MOST steel mills in serious trouble, due to cheap steel flooding the market from overseas? Wait, Google IS my friend! A quote from the following press release:ReplyDelete
"Illegal steel dumping by foreign nations has led 31 domestic steel companies to declare bankruptcy since 1997."
I'm thinking that unless Bain Capital had access to Harry Potter's magic wand they were fighting a battle that was nigh impossible to win.
"I'm thinking that unless Bain Capital had access to Harry Potter's magic wand they were fighting a battle that was nigh impossible to win."
That's because, like David in Cal, you either don't understand Bain's business model, or are pretending not to.
Bain can and did profit from some of the bankruptcies of the companies it took over -- Bain's objectives are not the same as the companies it takes over. The two interests can be mutually exclusive and frequently are. Which would be obvious to you if you understood the leveraged buyout business. Or weren't pretending not to understand it.
I'm not pretending not to understand the leveraged buyout business, I REALLY DON'T understand all the intricacies of high finance. Whether Bain Capital profited "unfairly" I'll leave to others to decide. I DO think they would have had even greater profits if the mill had been successful. I rather doubt they WANTED the mill to fail. Then again, I can't read the minds of people in past, or even in the present, for that matter.Delete
What I WAS trying to point out was that blaming Bain entirely for the bankruptcy of this particular steel mill when steel mills were failing left and right during this period IS a bit unfair. If those workers had been employed at any number of other steel mills at the time, they would have been just as unemployed, with no Bain to blame. At least in this case some workers still have a job.
"I'm not pretending not to understand the leveraged buyout business, I REALLY DON'T understand all the intricacies of high finance."Delete
Your post proves you REALLY DON'T understand Bain's taxpayer subsidized business model.
As matter of fact you really ought to refrain from posting about this until you somehow educate yourself about the topic you're so ready to have an opinion about.
Somehow a private company profiting from a bankruptcy and leaving taxpayers holding the bag doesn't mean a thing to you.
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Funny, looking over my posts, I fail to see where I offered ANY opinion on "Bain's taxpayer subsidized business model" either pro or con. And when you criticize me for not understanding it after I already admitted I didn't understand it only shows me you're rocking a little too hard on that hobby horse of yours. At this point in time I could NOT care less about "Bain's taxpayer subsidized business model". 99.999% of the people in America could NOT care less about "Bain's taxpayer subsidized business model". But since YOU care so much about "Bain's taxpayer subsidized business model", you keep rocking away, you're some sort of financial guru, with special insight into "Bain's taxpayer subsidized business model". So it's OK that your concern over "Bain's taxpayer subsidized business model" keeps you up all night and that "Bain's taxpayer subsidized business model" constantly gnaws away at you. But don't let thoughts of "Bain's taxpayer subsidized business model" totally consume you. 'Tis the path to madness!Delete
As far as "a private company profiting from a bankruptcy and leaving taxpayers holding the bag", there's not one damn thing I can do about it. But perhaps you, with your special understanding of "Bain's taxpayer subsidized business model", can right this wrong! Mount up your mighty steed and give "Bain's taxpayer subsidized business model" a proper thrashing! Few will notice, but "Bain's taxpayer subsidized business model" deserves the punishment only you can deal it, for "Bain's taxpayer subsidized business model" truly is a pox upon this land. I will spread the word far and wide when you finally beat "Bain's taxpayer subsidized business model" to death. Angels will descend from Heaven and gaze upon you with awe when "Bain's taxpayer subsidized business model" finally is no more.
Truly funny stuff.Delete
All that verbiage from someone who admits they REALLY DON"T understand the subject but claims to know 99.999% of the people in America could NOT care less about it.
Fox and Friends asked their audience today if anybody cares about Romney's tax returns.
I have to ask....
is that you posting here, Brian?
One doesn't need to understand a subject to realize that there is a decided lack of interest IN that subject. The only people getting worked up about Bain's business model are a couple of failing presidential candidates, various lefty pundits/journalists/bloggers and the poor demented souls who follow them. Seeing as this group of people obviously comprises a very miniscule fraction of our Great Nation's population, I gladly stand by my claim that 99.999% of said population cares not a whit about what Bain Capital may or may not have done back in the 90's.Delete
The only people likely to be upset about Romney's tax returns are the Class Warfare/Social Justice types intent on spreading divisiveness among the citizenry with their devilish views that "The Rich" are inherently EEEEVIL. They point at the 15% rate that investment income is taxed and scream "UNFAIR". They fail to realize that people like my saintly Mother and many, many others who are dependent on their (decidedly smaller) investments to support themselves in their declining years find this reduced rate an unalloyed boon. They have no qualms about trying to increase this rate to punish the "EEEVIL Rich" (who probably would be only be marginally inconvenienced) to the great detriment of many others.Delete
I must make amends. I now realize I mistakenly confused a "Rocking Horse" with a "Hobby Horse". Imagine my chagrin.Delete
President Obama doesn't seem to think there's anything wrong with someone with a background at Bain. See:ReplyDelete
New Obama OMB director a Bain alum
Which only goes to prove, once again, that David in Cal is not interested in truth, or the arguments made here: he's sole concern is seeking partisan rhetorical advantage and he'll say anything to get it.Delete
So, despite the fact that he apparently hates Obama, he'll cite the man when convenient. It's hard to believe a private citizen, even an idle retiree, would go to all this trouble, and routinely get himself into the knots you manage for yourself. Or is that the definition of "troll"?
In any case, this "liberal" despises Obama, so the fact that Obama hires a Bainee is perhaps best seen as further proof of the depravity of that organization.
But let's give credit where credit is due: you and TobyTucker and MikeSojo -- if you're not all the same person -- are real case studies.
As far as Americans not giving a damn about the shenanigans of high finance, there is a great deal of truth to that.ReplyDelete
It’s not that they didn’t care; it’s that they didn’t have the time or energy to learn about such arcane subjects.
Most brokers and investors admit they really didn’t know the value of CDO’s, but they had cash laying around, and the price of CDO’s kept going up, so why not buy them?
If they were ignorant, how was the poor schlub working two jobs supposed to understand what was going on?
Most Americans were too busy trying to make ends meet, and too tired when they got off work to study the reasons they had to work so hard for so little.
As the AMWAY recruiters said, they were trading hours for dollars. When they ran out of hours, they also ran out of dollars.
Six months ago, to most Americans, “class warfare” was a phrase from a Karl Marx polemic.
Not any more.
The POTUS is comfortable using the phrase, as are many other politicians.
The phrase is tossed around daily by the media. People are beginning to realize there is class warfare, and, as liberals have stated, the rich are winning and the politicians the people elected to serve them have sold them out.
Corporate heads and their lickspittle lackeys in Congress have ignored unemployment, and forgotten the lessons of history.
The people never learned history from their textbooks, because the textbooks made capitalists into kings, and anyone that questioned that premise into villains. (But that’s another story.)
People without jobs have a lot more free time on their hands, and they are using it to reflect on why they can’t seem to get ahead, or even catch up.
Now, they are beginning see the rich and the ultra rich as the true cause of their misery, just as Marx, (and most other economists) predicted so long ago.
Now the billionaires ask for our pity. They say they don’t deserve to be maligned. They don’t deserve to be attacked. They didn’t break any laws. (Not very many, anyway.)
As Bob Dylan said o so many years ago,
Come senators, congressmen
Please heed the call
Don't stand in the doorway
Don't block up the hall
For he that gets hurt
Will be he who has stalled
There's a battle outside ragin'.
It'll soon shake your windows
And rattle your walls
For the times they are a-changin'.
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