Progressives! Say good-bye to Bain!


Katrina lets Romney walk: What allows people like Romney to walk? Consider Katrina vanden Heuvel’s column for the Washington Post.

The column has appeared on-line, though not in the hard-copy Post. To peruse the opus, click here.

Vanden Heuvel writes about Romney’s work at Bain. She does so quite ineffectively. It has now been almost two weeks since Reuters presented a detailed report about one of Romney’s operations at Bain.

We have no idea why they bothered.

Reuters described the way Bain handled two steel mills—one in Kansas City, one in South Carolina. Here are some of the things Bain and Romney did, as described by Reuters:

Bain purchased the steel mill in Kansas City. Immediately, Bain borrowed a vast amount of money, then extracted a very large payment for itself.

In the next few years, Bain failed to fund the new company’s pension fund to its required level.

Eventually, the company went under. Because Bain had failed in its obligations, the federal government had to step in to replenish the underfunded pensions.

Despite this federal bailout, workers still got short-changed on their pensions, due to the fact that Bain had taken large sums for itself and left the pension underfunded. The completely lost the health insurance they were due in their contract.

This is very unattractive behavior. On last Thursday’s Ed Show, David Cay Johnston discussed these events. Johnston is one of those rare cable guests. He knows what he's talking about.

“I think the pension guarantee issue is one that will cause [Romney] a lot of problems,” Johnston said, “and a lot of explaining is necessary about why the government had to step in in this area.”

(Johnston is right on the merits, of course. On the politics, we’ll just say, Dream on!)

“Did Bain profit from reducing pensions?” Schultz asked as the conversation continued. Johnston stressed the way Bain was able “to take money out of this company that didn’t have a properly funded pension and fob it off on the [federal] Pension Benefit Guarantee Program.” And uh-oh! “There are other parts of it that have not come out yet with other companies, where they made changes to the benefit programs for workers,” Johnston said.

Just a guess: Many voters wouldn’t like the way Bain extracted big sacks of cash for itself, while underfunding that pension program by a similar amount. They wouldn’t like the idea that workers got shortchanged in the end—even as Bain carted off those big sacks of cash. They wouldn’t like the idea that the federal government had to come in and clean up behind glorious Romney, cleaning up part of the mess he and Bain had made.

But voters will never hear about this! Your side doesn't play the game that way! Just read vanden Heuvel’s wandering mess, in which she rattles standard buzz-words and cant, without describing conduct by Bain in the granular ways the average reader could grasp.

Vanden Heuvel pimps the kinds of familiar buzz-words voters learn to tune out in a flash. She never gets around to describing this company’s looting in any particular instance.

Reuters did a detailed report. No one but Schultz has tried to explain it, and he has persistently failed. (His preparation tends to be very poor.) Meanwhile, people like vanden Heuvel keep hacking along, producing columns which will convince those whose are pre-convinced.

Why did Reuters bother with this? We have no idea.

But why will Romney get to walk? Your side's “intellectual leaders” are highly inept, have been for many years.


  1. Terrific, terrific summary. I finally understand and am very grateful to your repeated efforts to allow people who really want to to understand. I am quite educated but I have had trouble with this matter till now, even trouble after reading the Reuters report though that was fine as well. I needed your summary however.

  2. Bob Somerby, just a note to let you know that Gail Collins again lied about Governor Romney and the dog strapping trip to Canada in the column of January 15. Collins will just not stop till she has personally destroyed Romney.

  3. Collins will just not stop till she has personally destroyed Romney.

    I mean politically, and I mean destroying Romney by lying about "character" rather than looking at policy proposals.

    1. Collins' attacks are akin to 'being ravaged by a lamb...on Valium'. Who the hell pays any attention to Collins? ESPECIALLY when it comes to 'character' attacks. She has zero credibility..

    2. Given that she's on the op-ed page of the New York Times, I think it's a safe bet that more people are reached by Gail Collins than by, for example, your scratchings here, jonst. Your assurance that the lady has no influence is worth approximately zero.

      Just sayin'.

      If you feel the need to reply, please let us know why the "being ravaged" line is in quotes. I'm sure we'd love to know.

  4. Because Bain had failed in its obligations, the federal government had to step in to replenish the underfunded pensions.

    That statement is false. The Pension Benefit Guaranty Corporation does not receive funding from the federal government.

    The PBGC webnsite states:

    PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.

    1. As has already been pointed out, the taxpayer is still on the hook when the fund can't cover the losses, in the same way the taxpayer is on the hook with the FDIC, when bank contributions don't cover bank losses.

      In addition, workers suffered losses -- for example, losing contractually required health care coverage -- which weren't covered by the pension guaranty system.

    2. Unlike the FDIC, the PBGC does not have a guarantee from the federal government. If you wish to take the position that the federal government would step in if the PBGC were unable to meet its obligations, that's fine. We can all speculate about the future.

      I am adressing the specific assertion of Somerby when he wrote that "the federal government had to step in to replenish the underfunded pensions." That is a false statement.

      Since its creation in 1974, the PBGC has not received any funds from the federal government.

    3. During fiscal year 2010, the PBGC paid $5.6 billion in benefits to participants of failed pension plans. That year, 147 pension plans failed, and the PBGC's deficit increased 4.5 percent to $23 billion. The PBGC has a total of $102.5 billion in obligations and $79.5 billion in assets.[3](WIKIPEDIA)
      So who do you think keeps a federal agency with a $23 billion dollar deficit afloat?

  5. but she's kinda hot though right?