Mitt Romney touts his 25 years at consulting powerhouse Bain & Co. and its private-equity offshoot, Bain Capital, as proof that he understands the private sector and job creation. But his record steering Bain Capital is not entirely campaign-friendly, as outlined Sunday in a long New York Times article detailing Bain's 1994 leveraged buyout of Illinois medical company Dade International. Bain doubled Dade's business, earning a $242 million profit, but it also laid off 1,700 U.S. workers and sunk the company into massive debt that eventually sent it through bankruptcy court. The big question for candidate Romney, says Greg Sargent at The Washington Post, is: Will his "turnaround kid" act wow a government-weary electorate, or tar him as "the personification of the sort of Wall Street heartlessness that enriched the '1 percent' at the expense of the 99 percent"?
Bain is a big problem for Romney: The Republican frontrunner got rich by forcing solvent companies to borrow themselves into bankruptcy and gut their workforces so they could pay Bain handsomely, says Steve Benen at Washington Monthly. Does he really think bragging about being "a cross between Gordon Gekko and Jack Kevorkian" will impress voters worried about their jobs? In the 2008 campaign, Mike Huckabee nailed it by saying Romney reminds you of "the guy who laid you off." That's still true today, and it's still devastating.
"'The guy who laid you off'"
But Romney's "brand of capitalism" actually works: The Times is trying to "make political hay" out of Romney's time at Bain, says Larry Ribstein at Truth on the Market. But the newspaper's case study doesn't prove much. Dade is just one of 150 companies Bain tackled during Romney's tenure. And though Romney's team did make some painful cuts, Dade ended up thriving after bankruptcy. Even "if every deal was like Dade, it's not clear society as a whole, including the working class, came out worse."
"The NYT on Romney @ Bain"
The Dade case tells us little about how Romney would govern: We "can argue about whether Mitt Romney really knows how to create jobs," says Megan McArdle at The Atlantic. But "you can't dispute that he knows how to turn around a dysfunctional organization and create economic value," even if some jobs are lost. Still, being a PowerPoint-whiz consultant and micromanaging Wall Street CEO isn't much preparation for being president. After all, Herbert Hoover had a brilliant business mind, but it was FDR who had the goods to end the Great Depression.