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Aaron Regunberg: Bain’s Democratic Defenders are Nauseating

Friday, May 25, 2012

 

For those following the presidential horserace, there have been two noteworthy developments this week. First, the Obama campaign began a major offensive against Romney's tenure at Bain Capital, releasing several videos featuring one-on-one footage and dialogue with workers whose jobs were suddenly and unexpectedly terminated following Bain's takeover and subsequent closing of their profitable factories. And second, a small number of prominent Democrats have come out against this line of criticism, complaining that Obama’s “attack on private equity” is the wrong way to go (Newark Mayor Cory Booker led the way, going so far as to call the Bain videos “nauseating”).

I am fine with Democrats criticizing Democrats—I do it all the time. But I think there are two important points to make regarding these pro-Bain Democrats’ attacks on the President. The first has to do with the motives of these particular intra-party condemnations. As Alexander Burns points out in a recent Politico article, each pro-Bain Dem has significant conflicts of interest on the issue of private equity. Cory Booker has raised major, major cash from private equity companies, and some of his biggest backers hail from the financial services industry. Former Pennsylvania Gov. Ed Rendell, who called Obama’s Bain messaging “disappointing,” currently works for a law firm, Ballard Spahr, that specializes in private equity mergers-and-acquisitions practice. Former Congressman Harold Ford has worked for Bank of America and Morgan Stanley since leaving office, and ex-auto czar Steven Rattner founded his own private equity firm (which, coincidentally, has had legal violations of its own). So it’s clear that these politicians all have their own reasons to criticize the President on this issue, none of which has anything to do with the validity or relevancy of the Obama camp’s strategy.

My second point is it’s important to remember that the Obama campaign is not attacking private equity in general, or the abstract “free enterprise system,” as Republicans like Romney and Democrats like Booker are claiming. What the Bain videos focus on is a specific kind of private equity scheme, the same approach that folks as radically left-wing as Rick Perry, Newt Gingrich, and Rick Santorum have labeled “vulture capitalism” and “un-America.” It’s a strategy that uses gimmicks and loopholes to simultaneously make a quick profit for the private equity firm while driving the business itself into bankruptcy. The most heart-wrenching thing about the stories documented in Obama’s Bain videos is that these factories did not need to be closed down. In each case, the factories in question were absolutely competitive. They were making substantial profits by creating quality American products, and they were providing solid middle-class jobs to Americans—jobs that not only helped individuals and families, but anchored the economic vitality of entire communities.

Romney’s firm, Bain Capital, took over these businesses in order to dismantle them, sending them into bankruptcy and destroying an untold number of jobs. In the process, Bain made hundreds of millions of dollars, sacrificing the livelihoods and dignity of countless hardworking Americans at the altar of its own bottom line.

So don’t tell us, Cory Booker, that Obama’s critique is off base. Don’t tell us it’s not relevant that the candidate arguing he can turn our nation’s economy around has not only engaged in these practices, but actually profited from them—has actually used some of the dollars stained in these deals to purchase his third mansion or install a car elevator in one of his beach houses. Because that information tells us the priorities a President Romney would have. It gives us a window into what he means when he talks about economic growth. It shows us just how scary that vision is; or, in Mayor Booker’s words, how nauseating.
 

 

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Comments:

Odd Job

Nobody OWES anybody a living!
Work for yourself if you don't like it.

william Fooks

Half truths always find a way of seeming like the whole story. US government, Under direction of Obama closed down (1)Car Dealers, and many people lost there jobs. Shrunk the size of GM and thousand of people lost there jobs. No company the government has touched has grown on their own with out continued tax-payer funding. Two examples; our local bus company, and the post office. Romney has shrunk three companies and grown about 75 other that have gone on to create tousand of jobs. Do your home work and write a complete story, with all the facts, not just some of them you favor. Ask the people who have their jobs if they like what Romney has done.

Common Sense RI

This writer is a partisan hack.

Mike Govern

Agreed. Aaron has his blinders firmly in place.

Joseph Bernstein

Aaron never answers when he can't employ his progressive talking points.He's just another lemming of the Chris Hayes/Alex Wagner/Melissa Harris-Perry stripe-probably hoping for a spot on MSNBC.

Aaron Regunberg

Hey Joseph--I usually only "answer" when there seems to be real points to debate, and these comments have mostly just been about me personally and not the piece. I will say to Mr. Fooks that it does seem that the jobs Bain was in some way involved in "creating" (he often cites Staples, which by the way Bain only invested 2 million into and whose success Romney had very little to do with) were all of a single variety--low wage service jobs, the kind that give absolutely no options for entry into the middle class. While the jobs he's destroyed have been the kind of middle-class employment that built this country up.

Captain Blacksocks

Aaron,

Can you provide any solid data to support this claim in you story?

" In each case, the factories in question were absolutely competitive. They were making substantial profits by creating quality American products, and they were providing solid middle-class jobs to Americans—jobs that not only helped individuals and families, but anchored the economic vitality of entire communities."

It would be very unusual for a company like Bain to get involved in a healthy, profitable company and then just dismantle it. Sounds like bad business...dumb...and Romney may be many things, but he's not a dumb business man. The truth is more likely that the factory in question was a real money loser and on the fast track to bankrupcy when Bain got involved. I believe the company was not trashed, but was restructured and came out of it as a successful, competitive company that exists today, possibly under another name. Bain saved jobs if you really look at it. Just like they did at Staples, Sports Authority and a lot of others. Don't buy into all the leftist propaganda that private equity firms only exist to rip down and sell off part of companies. That only occurs in the worst cases, when the company is already a disaster and has some assets worth recovering. Maybe like 38 Studios?

Captain Blacksocks

Aaron,

Staples only creates low wage service jobs? Huh??? Have you seen what their managers, senior leaders, IT engineers and marketing execs are earning? Come on. There are thousands of very high paying jobs at Staples that would not exist today with those 'vulture capitalist' that you so revile. Maybe you like the system in Greece better. It's working so well for them.

Captain Blacksocks

And don't forget about the thousands of companies that are suppliers to Staples. That's many more thousands of middle-class jobs SAVED because Staples was re-organized and made competitive with the help of Bain. When a company is saved by equity capital firms it has a very big positive multiplier effect on the economy. You only choose to look at the dark side of it, because that's what Obama told you to look at.

Joseph Bernstein

Aaron-you're a liar.I have challenged you on facts previously,particularly with regard to immigration,where I have some experience,and you've ducked.So don't give me that crap.The three people I mentioned all try to emulate Rachel Maddow in every nuance-it's weird beyond belief.Plus Hayes seems like he's just huffed a serious bag of crank prior to coming on.You white liberals are the worst sort of racist trash-you patronize non whites and get all annoyed when they don't do "as expected".It's due to the kind of homes that turn you people out-liberal phony backgrounds.

Michael Trenn

Mr. Regunberg, you are entitled to your point of view. it is interesting to note, however, that President Obama has accepted campaign contributions from Bain Capital executives, ans has stated that he has no intentions of returning them. Now, THAT is nauseating.




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