Mitt Romney: The Bain Conspiracy

A recently released video from the superPAC Winning Our Future, which supports Newt Gingrich, claimed that Mitt Romney spent his time at Bain Capital tearing down companies and firing workers for his own personal gain.

A few points on the issue:

• The film discusses a company called UniMac, a maker of laundry equipment based in Florida.  They claim Bain dismantled their company and put them out of work.  Bain bought a division of Raytheon that included UniMac, along with other investors.  They sold the division for a profit of nearly $100 million dollars.  They did not destroy the company.  They actually did the opposite and grew its value by well over 25%.  It was not until after Bain was no longer involved, that the company went bad.

 

• Next is KB toys.  Bain did not purchase KB toys until Romney no longer was involved in the management of Bain.  Also, when it restructured under bankruptcy protection in 2005, according to bloomberg.com, it was taken over by Prentiss Capital Management, which said that it was market forces and weakness that caused the bankruptcy, not debt.

 

• Then there is DDi.  A victim of the Dot-Com crash of the early 2000s.  It has since recovered to over 75% of the jobs it had before the crash.  Again, Bain grew the value of this company by $85 milion before selling their share.  It was not until 2 years later that the company filed for bankruptcy.

 

• AmPad is similar.  Bain grew the value of the company until its IPO.  Even after selling a large portion of their stake, the value grew.  It was not until later that the company turned bad.

 

• Venture Capitalists do not make money by destroying the value of companies.  Their money is earned by growing companies.

 

• The companies discussed in the film are a small portion of the companies Bain invested in.  Nobody is successful at investing 100% of the time.  There will be times when companies go bad.  Venture Capital, and Bain, clearly have had a positive net effect, or they would not be in business.

 

• Some examples of Bain success: Sports Authority, Domino's Pizza, Staples.

 

• This attack is a bad political move.  It will not play well among republicans in the nomination process.  It is attacking so-called vulture capitalism, and this will only hurt the people supporting such attacks.

 

• In the general election, the Democratic Party will use it to further their idea of class warfare.  Americans will see beyond that argument.  Americans understand that businesses, small and large, drive our economy along with the people they employ.  Companies and employees work together, support each other, and need each other, and people will not want to see this way of thriving diminished.

• Ironically, the people in this video are being used as pawns by politicians whose goal is to tear down another for their own gain.

Much of this film purports that Bain Capital, and by extension, Mitt Romney destroyed these companies, and made a handy sum doing it.  This is not a logical claim.  For an investor to make money investing in a company, that company has to grow in value.  All of these companies grew in value under the ownership of Bain Capital.  This is why they made such large profits.  They created wealth.

To put this issue in terms of the Presidency, the leaders of America have a duty to promote the general welfare.  Right now, promoting the general welfare means creating an environment for growing the value of our American economy.  Mitt Romney was involved in growing the value of companies in which Bain Capital invested, and growing the wealth its stakeholders.  In America, the workers, entrepreneurs, students and children and all who call America home are the stakeholders.  His work at Bain Capital, if anything, shows he is capable of growing the value of the American economy.