Bain Capital: Judging how Romney got rich

Romney's record at the private-equity firm he founded and ran from 1984 to 1999 has come under attack from Republican rivals.

Mitt Romney looks very likely to be the Republican candidate for president, said Matt Bai in “But in this thing about Bain Capital and the factories it closed, Mr. Romney’s rivals might just have found something he needs to worry about, now and in November.” Bain was the private-equity firm Romney founded and ran from 1984 to 1999, and his GOP rivals have made it the subject of some surprisingly aggressive and potent attacks. Rick Perry has denounced Bain as the epitome of “vulture capitalism,” and Newt Gingrich’s Super PAC released a blistering half-hour piece of propaganda titled “When Mitt Romney Came to Town,” full of heartbreaking interviews with workers laid off after Bain Capital either “restructured” their companies or drove them into bankruptcy. Romney has challenged the accuracy of some of the details in the film, but “the attack could prove sticky,’’ because it goes to the heart of his main strength as a candidate—that he’s a skilled turnaround artist whom Americans should hire as “our CEO.”

The Bain revelations may not stop Romney’s nomination by Republicans, said Andrew Sullivan in, but they could fatally wound him in the general election. The “Bain Brahmin’’ not only fired thousands of people in restructuring their companies—he helped make Bain a $578 million profit, and put more than $200 million in his own pocket. That kind of “Wall Street maneuvering” hasn’t been very popular since the 2008 financial crisis. “I simply cannot imagine a worse narrative for a candidate in this climate.” It sure didn’t help when Mitt defensively said last week that income inequality is a delicate topic that should be discussed “in quiet rooms,” and that critics of his Bain success are suffering from “envy.” When middle-class voters come to understand how Bain made its fortune, said Gary Weiss in, they’ll be feeling disgust, not envy. The firm’s modus operandi was to buy a struggling business, reduce the workforce to the absolute minimum, increase its short-term earnings enough to borrow money in the firm’s name, and then pay out huge dividends to the business’s new shareholders—Bain’s wealthy investors. While some companies went on to thrive, Bain left a “trail of destruction” in which 22 percent of the businesses it restructured closed or declared bankruptcy.

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