During his CEO days at Bain Capital, Mitt Romney engaged in vulture capitalism (not to be confused with venture capitalism). Vulture capitalism, or private equity as it is otherwise known is nothing more than legalized corporate raiding. The Bain approach is to seek out healthy companies with sizeable pension plans for their employees, and lure them in with false promises of ‘strengthening’ these companies while hiding their true intentions of ripping them apart. Under the guise of expanding revenues and cutting costs, the Bain approach is sold to investors, management, and employees of companies they prey upon as a means of promoting growth and making them more efficient.
Despite this rosy sounding language that’s sure to resonate with companies that seek to expand their business, the Bain approach of increasing revenues and cutting costs has a more sinister meaning. The Bain approach only involves increasing revenues for shareholders of Bain Capital, at the expense of shareholders of the companies they seek to devour. The costs they are cutting come in the form of employee layoffs, reduced benefits, lower wages, and out-right theft of worker funded pension plans. For a better understanding of how the Bain approach works, Ampad provides all the evidence needed to understand the true intentions of vulture capitalists like Mitt Romney.
While CEO of Bain Capital, Mitt Romney bought American Pad & Paper Co. (Ampad) for $5 million in 1992. The Bain approach of bleeding this company dry was very successful. Revenues in the form of dividend checks (ie, un-earned income) were substantially increased for shareholders of Bain Capital, while investors of Ampad lost millions, along with employees who lost their livelihood and life savings. In fact, Mitt Romney continues to live large off of the un-earned income he stole from people during his Bain days.
When Mitt Romney and other vulture capitalists claim that they are in favor of rebuilding companies by expanding revenues and cutting costs to make them more efficient, this is what they mean. The costs they are cutting are people’s jobs, wages, and pensions, which make up the expanding revenues (un-earned income) for the super-wealthy shareholders of this vulture capitalist firm. This siphoning of wealth to a tiny group of super-wealthy people is a result of adopting the Bain approach. This Bain approach is what has led to the Great depression, the savings and loan crisis, the housing crisis, and the near financial global meltdown and big bank bailouts witnessed recently that amounted to the largest transfer of wealth in the history of the United States.
Mitt Romney made himself, along with his privileged wealthy investors huge fortunes at the expense of workers losing their jobs and life savings. This is what Mitt Romney and the rest of the GOP mean when they say capitalism produces winners and losers. This is also why Frank “The Liar” Luntz alerted a room full of GOP politicians not to use the word capitalism any longer. The reason for this advice is because many people are starting to figure out that capitalism no longer works as intended. The Bain approach has taken over and turned capitalism into a Wall Street Casino, where only the house wins! The house, of course, represents the vulture capitalists that are destroying our democracy, and preying upon us to feed their addiction for more wealth and power.
The Bain approach involves racking up enormous debt so a select few privileged shareholders can reap mind-boggling profits. Why does this sound eerily familiar to the problems facing American today? The unfortunate reality is that we have been following the Bain approach ever since Ronald Reagan was elected into office. It’s safe to say that this approach to governing our nation has failed miserably and represents the source of the political and social divide currently taking place on important issues affecting our lives.
This new breed of capitalism is seeping its way into our daily lives by influencing our most valued and precious institutions, including our health care and education system, our social safety net, and the vital public protections that exist to ensure we all have safe food to eat, clean water to drink, and non-polluted air to breathe.
- The Bain approach seeks to profitize our healthcare system by denying care to those in need in order to maximize profits for insurance companies at the expense of our health.
- The Bain approach seeks to profitize our education system by using taxpayer dollars to fund the education of rich kids.
- The Bain approach seeks to profitize the water we drink by reducing our reliance on public sources of drinking water.
- The Bain approach seeks to profitize the food we eat by eliminating safety inspections in order add unsafe chemicals and by-products.
- The Bain approach seeks to profitize our energy policy by eliminating public protections and preventing the development of clean, safe, fuels of the future, while advocating for a continued reliance on dirty, unsafe fuels of the past that will run out and are polluting our lungs and the environment, not to mention jeopardizing our national security.
In essence, Mitt Romney’s Bain approach to governing our nation, if elected president, will seek to profitize America! Romney’s recent claim that 80% of the Bain Capital deals grew their revenues may actually be a true statement. The part he left out is how this occurred and at whose expense.