Posts Tagged ‘Bain Capital’

Some Entitlements in Need of Reform

Wednesday, January 30th, 2013

By Michael Kaufman

I am always amazed when I hear some millionaire or billionaire (or their spokespeople in Congress or Fox News or talk radio) proclaim, “We’re broke!” According to them, our government no longer has the means to continue safety net programs such as Social Security, Medicare and Medicaid.

They themselves are not broke, of course. They’re doing just fine. And if you ask them, everyone in this country is pretty well off too, so we don’t really need the safety net anymore. They’re just symptoms of the “nanny state” anyway and that’s what’s wrong with this country by golly: all those people looking for handouts (you know, like retirees, veterans and disabled folks). You’ve probably heard statements of this sort (either on Fox News or on The Daily Show when Jon Stewart shows clips of the dumb things they say on Fox News):  “Poor people never had it so good as they have it now in the U.S. They have refrigerators, air conditioners and television sets. How bad off can they be?”

The Wall Street Journal published an article recently that even tried to make the case that the “middle class” in this country has not been harmed by the fact that real wages (adjusted for cost of living changes) have not gone up in decades as wealth has ballooned for a small percentage of people at the top of the economic ladder. According to the writer, wages aren’t a good measure anymore because of all the advances that have taken place that make life better for us all, as in healthcare, for example. (I’m not making this up.)

Another article in the WSJ a while back suggested that income disparity is good for everybody. The writer used Michael Jordan as an example. See, when Jordan was leading the Chicago Bulls to championships, his mediocre teammates got paid better, the arena was packed, which meant more people were hired to prepare and serve food and show people to their seats. Talk about a win-win. But a two-hour drive from Chicago would have taken the author to Freeport, Ill., and the shut down Sensata plant. Sensata, which manufactures sensor parts for the auto industry, is owned by Bain Capital, the private equity company founded by Mitt Romney. Despite a profitable 2011 Sensata laid off all the workers in Freeport last year and moved manufacturing to China—but not before forcing the American workers to train their replacements. Ironically, the plant was shut down the day before Election Day.

As described by Dave Johnson of the Campaign for America’s Future, “Bain’s business model is to purchase companies using ‘leveraged buyouts’ that borrow huge sums using the purchased company’s own assets as collateral, uses the borrowed money to immediately pay itself, then cuts costs by doing things like sending jobs to China, cutting wages and manipulating tax rules to cut taxes owed, along with standard big-business practices like consolidating business units, taking advantage of economies of scale not available to smaller competitors, squeezing distribution channels for price cuts, and other practices that bring competitive advantages.”

Bain is “entitled” to do this under the current laws of the United State of America. I think it’s about time we had some entitlement reform to stop this kind of thing from happening. If a U.S.-based company making good profits in this country wants to move to China, it should be allowed to do so only after providing extended health benefits and severance packages to each and every person who will lose a job as a reult of the move–or not be permitted to move at all.

Another entitlement in need of reform is the one that permits the underachieving or none-too-bright sons and daughters of wealthy people to attend great colleges and universities simply because a relative went there before. These “legacy students” are taking up space that might otherwise be given to hard-working students who have earned admission but whose families cannot afford the steep cost of sending them to a place like Yale or Harvard, for example. A worthy reform might be to require those who can readily afford it to pay for the education of one of those deserving people in addition to that of their own family member. The deserving individual would be selected at random from a pool of worthy candidates regardless of their race, creed or color. All they would have in common is that their families can’t afford to send them to the school. This would avoid the usual complaints about “reverse discrimination” that accompany affirmative action measures, while still advancing the goals because a disproportionate percentage of minority community members will be represented.

Why is someone who inherits a large piece of land “entitled” to sell it to developers for commercial use? Why is the concept of “private property” more important than preservation of the earth and the health of its inhabitants? Now there is some fertile ground for entitlement reform. Feel free to add your own. And for goodness sakes, let’s not allow them to take away the safety net:  Hands off Social Security, Medicare and Medicaid!

Michael can be reached at


The Cory Booker Contretemps

Sunday, May 20th, 2012

By Emily Theroux

So I go out of town for one blissful three-day weekend with my baby granddaughter and return home to discover that all hell has broken loose on the Sunday morning bobblehead front.

Newark Mayor Cory Booker apparently sold out President Obama on Meet the Press while I was out of cable TV and RSS-feed range, and I had little occasion (between shape-sorting brightly colored blocks, spooning mashed zucchini into Dulcinea’s Kewpie-doll mouth, and taking roughly a gazillion photos) to surf my cell phone. By the time I returned to electronic “civilization,” Booker had already backtracked twice – once after the Obama campaign had very likely chewed him out for his shocking transgression (in a YouTube clarification that MSNBC’s Morning Joe dubbed “the hostage video”), and then more vehemently the following day, after the RNC put up an online petition asking voters to step up to the plate and pledge, in raging capitals, “I STAND WITH CORY.”

“Don’t Let The Obama Campaign Silence Support For Job Creation,” the petition lead-in began.

“Yesterday New Jersey Mayor Cory Booker, a surrogate spokesman for the Obama campaign called the president’s attacks on the free market ‘ridiculous’. That’s right Mr. President, we aren’t going to let you destroy free enterprise. Stand up for America. Stand up for job creators.” (That’s verbatim; no courtesy corrections, not even for making Booker mayor of a state. I don’t think they deserve any.)

First of all, what a crock of crap! Can somber scenes of laid-off steelworkers recounting what Romney’s private-equity firm did to them really be viewed as “nauseating”? The ad shone a floodlight on how aptly Bain Capital’s notorious 1980s “money shot” (a spoof photo of Mitt and his colleagues brandishing $10 and $20 bills) depicted what the firm was doing when it shifted its focus from venture-capital investments in promising start-ups to leveraged private-equity buyouts of mature companies, which were designed to maximize Bain’s profits, not to either create or save jobs.

Secondly, what gives with Cory Booker and Harold Ford, Jr. (who said he wouldn’t have backed away from Booker’s original position)? Has Booker secretly signed on as a right-wing tool? Did RNC chair Reince Priebus co-opt Ford? Are both of them in the back pockets of Wall Street campaign donors with a big ax to grind against Obama for “scapegoating” Wall Street bankers over the recession and “demonizing” capitalism?

As it turns out, the award-winning blog ThinkProgress reported in 2002 that Booker and his slate of candidates received a total of $565,000 in donations from venture capitalists, investors, and Wall Street bankers during his first mayoral race – including $36,000 from Bain Capital. Ford, a former Tennessee congressman, worked for Merrill Lynch, Bank of America, and Morgan Stanley after leaving public office. Other Democrats who rushed to Bain’s defense after Booker spoke out on Meet the Press included former Obama economic adviser and “car czar” Steve Rattner, who spent his career working at Lehman Brothers and other Wall Street firms, and Virginia Sen. Mark Warner, a wealthy and successful venture capitalist before serving in public office. The Romney campaign has since turned the criticisms of Obama’s ad by Booker, Ford, and Rattner into a campaign ad.)

From all the cable TV chatter, you would think that this enormous gift to Mitt Romney from Cory Booker, et. al., was bought and paid for by the Koch Brothers, Karl Rove, or any number of GOP Super PACs. It appears, however, that Booker – described in The Washington Post as “more crazy like a fox” than merely crazy – may have done something that made progressives “livid” in order to please financial-sector donors and put some political distance between himself and Obama, to whom he is constantly compared.

But the truth about this huge brouhaha over campaign tactics may end up being that nothing really substantive has changed in the presidential race since last week, when Mitt responded to a reporter’s question about a nasty remark he had made weeks earlier to Sean Hannity on the topic of the Rev. Jeremiah Wright: “I’m not familiar precisely with exactly what I said, but I stand by what I said, whatever it was.” Them’s not fightin’ words; them’s weasel words – classic Romney equivocation, deliberate ambiguity. Dancing on the head of a pin so no one can pin him down.

Pretending to “stand by” positions or “stand with” fellow politicians definitely has its downside for the Romney campaign, whose staffers have their hands full trying to stifle any off-the-cuff remarks and make sure he’s routinely “teleprompted.” The ludicrous “I STAND WITH CORY” contretemps is merely a smokescreen for the likelihood that Romney himself lacks an effective means of disputing what the Obama ad campaign reveals about him and the “business expertise” he touts as evidence that he’s a “job creator” – at least no means other than crying “character assassination” or taking advantage of Democratic gaffes.

Nevertheless, the bobbleheads persist in believing that this lapse in party unity spells doom for the president; it helps ward off any possible insinuation that they harbor the dreaded “liberal media bias” of which they are so often accused by the right wing. “The last time I saw the mainstream media this unified in their certainty that Obama had made a political blunder was the beginning of the ‘war on women’,” read a comment posted on a progressive blog. While the Democrats worry about damage to the president’s campaign, Mitt is floundering about trying to defend himself against both the ongoing Obama campaign to hold him accountable for his business practices and a new Priorities USA ad that consists of a running critique of Romney’s “vulture capitalism” by his former Republican rivals, who pulled no punches while each of them, in turn, tried like hell to overtake Mitt’s fairly steady 25 percent share of the primary vote.

“If Mitt Romney wants to talk about what a few Democrats have said about Bain, fine. We are going to talk about what prominent Republicans and ultraconservative superstars have said about Mitt Romney and Bain Capital,” proclaimed the progressive blog The People’s View. “Did the Republicans really think that exactly this wouldn’t be the response to their singing and dancing around Booker’s comments?” wrote the anonymous blogger. “This is the big leagues, Mr. Romney. This ain’t your Republican primary.”

Has public opinion changed since Cory Booker’s temporary defection gave Republicans a big fat bull’s-eye to pin to Obama’s back? It’s too early to tell, but The Star-Ledger’s website slyly predicts that “Cory Booker’s defense of Wall Street may hurt his status with liberals, but it won’t hurt his bank account.” And why does the paper think Booker may have stepped so far out on a limb in defiance of Obama in the first place? “The Newark mayor has taken at least $491,000 in political contributions from the financial services industry in the last nine months … according to campaign filings with the New Jersey Election Law Enforcement Commission and the Federal Election Commission.” For that matter, says a Princeton political history professor, Obama’s campaign coffers are also brimming with financial-sector loot – unless it’s true that, as the pundits claim, the president has recently been coming home from Wall Street fundraising forays with empty pockets.

From the lunatic fringe, Glenn Beck’s website The Blaze posed a fascinating query: “But is the pubic [sic] behind the Obama team taking the campaign in this direction?”

Sorry, answer inscrutable. (You have to subscribe to “GBTV,” Beck’s live video network, if you want to actually watch his worthless video. I would sooner ingest the extruded pink sludge that an online “10-most-disgusting” list said chicken nuggets and hot dogs are made from than give a single dime to that revolting rodeo clown.) Warning: Whatever you do, don’t Google “really disgusting substances” – unless you’d like to experiment with bulimia.

There are worse things, of course, and Glenn Beck is one of them.