This is the weirdest meme to me: Republicans and Libertarians bashing the private equity and leveraged buy out business model. Unless someone can cite some specific examples with Bain, most successful PE firms are practically models of "creative destruction" most free market-types espouse.
Read a quote that reminded me of you this morning:
Private equity critics claim that leveraged buyouts bring huge job losses. To investigate this claim, we construct and analyze a new dataset that covers U.S. private equity transactions from 1980 to 2005. We track 3,200 target firms and their 150,000 establishments before and after acquisition, comparing outcomes to controls similar in terms of industry, size, age, and prior growth. Relative to controls, employment at target establishments declines 3 percent over two years post buyout and 6 percent over five years. The job losses are concentrated among public-to-private buyouts, and transactions involving firms in the service and retail sectors. But target firms also create more new jobs at new establishments, and they acquire and divest establishments more rapidly. When we consider these additional adjustment margins, net relative job losses at target firms are less than 1 percent of initial employment. In contrast, the sum of gross job creation and destruction at target firms exceeds that of controls by 13 percent of employment over two years. In short, private equity buyouts catalyze the creative destruction process in the labor market, with only a modest net impact on employment. The creative destruction response mainly involves a more rapid reallocation of jobs across establishments within target firms.
I think I actually linked to that research report somewhere on the board.
I don't read research, I read stuff like this:
Mitt Romney has spent more than 20 years in private enterprise, making thousands of business decisions affecting hundreds of companies that led to more than 100,000 new jobs and billions of dollars for employees and investors. So you can see why the left despises him.
Among Romney's thousands of business decisions, the one I gather his opponents consider his absolute worst was the decision to close a paper plant in Marion, Ind. Which wasn't his decision at all.
It was labor trouble at the Marion plant of a Bain-acquired company, Ampad, that formed the basis of Teddy Kennedy's desperate 11th-hour attack on Romney in their 1994 Senate competition. Plant worker Randy Johnson was featured in Kennedy campaign commercials against Romney and disgruntled workers were lavished with Dickensian lachrymosity in The Boston Globe.
In the current presidential campaign, Democrats -- and some Republicans -- have returned to Ampad and the Marion plant as their case in chief against Romney.
The "King of Bain" movie that a pro-Newt Gingrich super-pac just bought with money donated by a gambling magnate (with money acquired honestly in the open market from people driven by their gambling addictions) cites only one company closed by Bain when Romney was even there.
Guess which one? That's right: Ampad.
The Democratic National Committee has retained Johnson to go on tour in order to more fulsomely describe the horrors perpetrated by Bain Capital on workers at that plant. As salt-of-the-earth Johnson explains, he lost his job at Ampad because Romney "didn't care about the worker."
It is beyond journalistic malpractice for media outlets showcasing the bitter and lying Johnson to neglect to mention that he was the union president who led the strike that forced Ampad to close the plant.
And yet The New York Times, MSNBC and others who have publicized Johnson's sob story regularly refuse to convey that crucial fact. This would be as if a judge excluded the fact that the defense's principal witness is the defendant's mother.
By 1994, the unionized Marion plant was becoming a losing operation to every company that owned it. It was a paper plant, and in the early 1990s, the paper business was beginning to go the way of the buggy whip, as the world became computerized.
(Randy Johnson suffered? Paper magnate Peter Brant nearly lost Stephanie Seymour over the collapse of the paper market.)
Bain Capital specialized in rescuing troubled companies, so in 1992, it bought the faltering paper-based office products business, Ampad, from the Mead paper company. Far from shutting down Ampad, Bain started buying up more firms in the industry to add to Ampad's portfolio, hoping to create efficiencies and synergies.
In July 1994, Bain-controlled Ampad bought Smith-Corona's struggling paper business -- home to the famed Marion plant.
(Despite shedding its paper business, Smith-Corona went bankrupt the next year. Nobody uses typewriters anymore. Ironically, a century earlier, people said Smith-Corona typewriters would never replace the pen. They probably railed against Smith-Corona as "vulture capitalists" destroying the pen industry.)
Seeking to succeed where Smith-Corona had failed, Bain's Ampad sought to renegotiate a suicide pact-union contract at the Marion plant. But instead of renegotiating, union president Randy Johnson thought it would be a great idea to immediately go on strike.
As long as the nation is still in the fifth stage of grief over Steve Jobs' death, with gushing tributes to his contributions to our wonderful new world of computerized books, letters, memos, newspapers, CDs and classified ads, ask yourselves: Would the mid-1990s have been a good time for workers in an industry made vulnerable by the new, paperless information age to stage a long, acrimonious strike?
Union president Randy Johnson thought it was. The Democrats (and some Republicans) apparently do, too.
Romney wasn't even at Bain during Ampad's acquisition of the Smith-Corona business, much less for the strike at the Marion plant. He was on a leave of absence from Bain to run against Sen. Ted Kennedy. Nonetheless, a dozen workers fired from Ampad's Marion plant showed up in Massachusetts to bird-dog Romney in the final months of his campaign.
It worked. Romney's lead disappeared and, after celebrating with a few cocktails, Kennedy returned to the Senate to continue wrecking the country.
About six months later, Ampad closed the Marion plant for good. As Ampad's president, Charles Hanson, explained at the time, the company had "sustained severe economic damage as a result of our inability to manufacture products at our Marion plant." Apparently, the only thing this ruthless capitalist lackey cared about was that the factory actually produce product!
In any event, it's highly unlikely that Bain would have anything to do with a day-to-day management decision to close a plant, anyway.
Bain led Ampad to thrive over the next few years, buying up more companies in 1995, hiring more workers and making investors nearly $100 million. By 1996, Ampad was being described in Chief Executive magazine as "a stronger, profitable competitor in a consolidating -- and reviving -- domestic industry."
Alas, people kept using those damn computers and shopping for discount paper at Staples and similar stores, and in 1999, Ampad had to file for bankruptcy protection.
Contrary to every single news report on Bain's involvement with Ampad, Bain did not drive the company to bankruptcy by looting it. To the contrary, Bain built up the company, added other companies to it, turned it into a "profitable competitor" that paid handsome dividends for a few years. (And by the way, the company would have gone bankrupt a lot sooner if it hadn't closed down the non-producing Marion plant.)
But in the end, that wasn't enough.
If years of furious acquisition, followed by bankruptcy nearly a decade later had been Bain's secret plan all along, Bain would be the most ham-fisted looter in history.
Politicians' morbid fear of technological advances in the free market has real-world consequences. You will recall that the mainstream media-adored FBI agent Colleen Rowley's main indictment of the bureau after 9/11 was that the FBI had really old computers, preventing it from anticipating the greatest terrorist attack in world history.
In response to Rowley's charges, for example, the Times' Maureen Dowd denounced federal law enforcement agencies for being "antiquated," "inept" and "bloated." (She also said: "I want to see some agents lose their jobs." Maureen Dowd: Inadvertent Romney Supporter.)
Of course, if the Democrats, Newt Gingrich and Rick Perry were running things, the FBI would still be using paper and pens -- maybe quill pens -- all in order to save Randy Johnson's union job! Instead of a Xerox machine, they'd have a monk in the back room creating copies of documents by hand so as not to be accused of "vulture capitalism" for eliminating the monk's job.
I don't know how Mitt Romney is supposed to explain free market capitalism to career politicians, much less describe the intricacies of a thousand business decisions in two minutes during a debate.
But we know that Bain's acquisition of Ampad is the left's best shot against Romney's business career. We may presume they don't have anything better, or we'd be hearing about it.
The anti-Romney hysterics don't get to come back later with another company allegedly looted by Bain that I'll have to spend another week researching. Henceforth, I shall refer you back to the Ampad example -- their smoking gun -- which, as we have seen, is not even a water pistol.
That's not true, he didnt get ******** because "is" doesn't mean what you think "is" means, and he never paid a fine.
i don't even know exactly what you are trying to say with this "is" thing
all i know is i was very young at the time
i remember my dad telling me that clinton said that he did not perjure himself by saying he did not have sexual relations with monica because he did not feel a ******* qualified as a sexaul relationship
It will be interesting to see how much validity to it there is - or if it just dies out like a conspiracy theory. It sounds like a typical conspiracy theory, but the details are just right enough to make it maybe, just possibly, plausible.