My disdain for Mitt Romney was made clear a few months ago – I was bashing Mitt before Mitt-bashing was cool. I am compelled to do it again if for no reason other than the fact that his supporters have the unmitigated gall to sneer at anyone who opposes him as anti-capitalism. There is no one on the planet more committed to capitalism and free enterprise than me, unless it is the legions of lean proponents who follow Evolving Excellence. Creating value for shareholders by creating the maximum value for customers, and fully engaging the rest of the stakeholders – employees, suppliers and communities – is capitalism and free enterprise at its finest. What Romney and Bain did all too often was the sort of thing that has a lot of Americans looking at the Occupy Wall Street crowd and thinking, 'they are a bunch of economically clueless, off the wall nut jobs, but that doesn't mean they don't have a point'.
You see, even the most scorned robber barons in our history – guys like Andrew Carnegie, Cornelius Vanderbilt and John D. Rockefeller – created wealth by creating value. The criticism of them is that they kept it all for themselves, sending labor into a probably well deserved conniption fit. But there is no questioning the fact that they left oceans of oil, miles of railroads and mountains of steel behind making the country as a whole much better off for their efforts. Romney, however, merits all of the criticism these guys deserve with none of the redeeming qualities. In fact, many of his ventures destroyed value. The robber barons began with a legitimate, value creating business proposition, then found every legal way (and some not so legal ways) to exploit that business to their maximum personal benefit. Romney and Bain began more often than not by finding value others had created, then finding every legal way to grab it for their own, often destroying it in the process.
Case in point: GS Steel. Romney and Bain put $8 million into the company along with a big chunk of bank loans – enough to take control. They promptly paid themselves a $36 million dollar dividend out of money they had the company borrow against its assets. Now playing with house money, they plowed $16 million back in before they saw it was a goner, crushed under the weight of the loans Bain had it take out, and let it go bankrupt. Their net profit on the deal – $12 million … and I almost forgot, they paid themselves another $4.5 million in 'consulting fees' from the money they had the company borrow. So Bain walked away with $16.5 million and GS Steel went belly up. Every other stakeholder got screwed. 750 employees unemployed. Suppliers and lenders up the creek, communities devastated, and the steel from GS Steel was to be had no more. And the icing on the cake, while Mitt was sending his share of the $16.5 million to the Cayman Islands, the US taxpayers – you and me – got stuck with the tab for GS' $44 million in unfunded pensions.
If you are reading this, odds are you work for someone who actually creates a product or provides a service of legitimate value. For the Romney supporters to suggest that not your company's owner, but Mitt, is the job creator and paragon of capitalism is beyond absurd. It is an insult to all of the people who have risked their fortunes and careers on the prospect that they had an idea for a product of value, and stood ready to reap the gains if they were right, and suffer the loss if they were wrong. Romney and Bain too often created nothing and risked nothing. Instead they took advantage of companies that had value – earned from long hard work – but were either so desperate or so naive they got into bed with the likes of Bain.
To be sure, at some level Bain hoped the company succeeded, much the same as the pawn shop owners, payday lenders and buy-here-pay-here used car guys hope the loan works out for their customer. In the end, however, it doesn't really matter. Bain and these guys come out ahead no matter what and the fact that most of their business deals end up in disaster for the other party has little or no bearing on their profits. Like the afore-mentioned 'capitalists' Romney did nothing illegal, but just because the loan sharks are legal doesn't mean you want your kids to be one of them, and you certainly don't want one of these legal leeches in the White House.
Oh, to be fair and honest, Romney's claims to have created lots of jobs are true. The bulk of the jobs he created are barely above minimum wage retail jobs at the Sports Authority, Staples and Dominos, while the jobs he destroyed were manufacturing jobs that were taking people to the middle class, but technically he did create jobs. Of course, in light of the fact that the shelves at Staples and Sports Authority are sagging with goods from China he probably created a half dozen jobs in the People's Republic for evey one minimum wage job he created here, but, again, he did create jobs.
Obama with all of his convoluted wealth redistribution schemes, passion for bringing back the glory days of the AFL-CIO, and his tunnel vision on creating economically unsustainable alternative environmental boondoggles is killing the manufacturing economy the slow way. Romney and his bottom feeding buddies in the investment banking world will kill it off quickly. Not sure there is much difference in the end.
In the meantime, I think I will take a harder look at Rick Santorum and Newt Gingrich. Both are a bit on the nutty side, but neither leaves the trail of slime behind them Romney does.