Like It Or Not, Mitt's Good At What He Does
Gary Gerard,
dumbhoosier.com
I read an interesting article by Matt Taibi in Rolling Stone
magazine this week.
For the uninitiated, Taibi has made quite a name for himself
pointing out what he perceives as the sins of Wall Street. His
writings about the antics of Goldman-Sachs are legendary.
In his most recent effort, “Greed and Debt: The True Story of Mitt
Romney and Bain Capital,” Taibi paints Romney as a soulless, immoral
corporate raider.
Taibi says Romney is far beyond just a flip-flopper. He’s not some
bumbling opportunist who says what he thinks he needs to say to get
elected. You know the type. The
“I-was-for-it-before-I-was-against-it” politician. Not that there
aren’t plenty of those on both sides of the aisle.
No, no. Romney is a professional prevaricator on a mission.
Taibi:
The incredible untold story of the 2012 election so far is that
Romney’s run has been a shimmering pearl of perfect political
hypocrisy, which he’s somehow managed to keep hidden, even with
thousands of cameras following his every move.”
He then notes that Romney – as well as his pick for V.P., Paul
Ryan, and lots of others – have made a huge campaign issue out of
debt. And rightfully so, in my estimation. President Obama has
amassed $5 trillion of it in under four years.
So, of course, Romney, et. al., have been crisscrossing the country
campaigning against debt.
This brings Taibi to the point that is pretty much the gist of the
entire article:
Mitt Romney is one of the greatest and most irresponsible debt
creators of all time. In the past few decades, in fact, Romney has
piled more debt onto more unsuspecting companies, written more
gigantic checks that other people have to cover, than perhaps all
but a handful of people on planet Earth.”
Ah, the stunning hypocrisy.
But there’s one salient bit of information that eludes Taibi in his
line of reasoning here. We’re talking about two very different types
of debt.
The debt he’s writing about – Romney debt – is private. It falls on
banks, companies, investors, management and workers.
The kind of debt he’s not writing about – Obama debt – is public. It
falls on the taxpayers. I think that’s a distinction worth noting.
A good deal of what follows in the article seeks to explain how
things like private equity firms and leveraged buyouts work. And to
be sure there are some aspects of these types of endeavors that are
unsettling. There is a lot to dislike in the world of private
equity.
There are plenty of passages like this: (Romney) makes a $250
million fortune loading up companies with debt and then extracting
million-dollar fees from those same companies, in exchange for the
generous service of telling them who needs to be fired in order to
finance the debt payments he saddled them with in the first place.
The article makes private equity firms sound criminal, which, of
course, they aren’t. And it paints Romney as pure evil, which, of
course, he isn’t.
The overarching theme is that this makes Mitt Romney a bad choice
for president.
Frankly, when I finished the article, I came away with the notion
that Romney is pretty good at what he does.
Now, you may think – as I do – that the laws that allow firms like
Bain to operate the way they do are broken. Why are leveraged
buyouts (aka hostile takeovers) allowed? Why are equity firms able
to load debt onto an acquisition target? Why are dividend
recapitalizations legal?
But those are questions for a different column.
No one is suggesting Romney broke the rules. They just don’t like
the rules. And Romney played by those rules – really well.
He helped found a private equity firm and got deals done and he was
apparently just a little too good at it.
It’s the same with Romney’s income taxes. He only pays at a rate of
13 or 14 percent for a reason. He’s really good at playing by the
rules.
Romney’s accused of extracting huge sums of money out of the
government during his tenure as head of the Salt Lake City Olympics.
Under Romney, his critics say, per-athlete government expenditures
skyrocketed in constant dollars over the previous U.S. Olympic
campaign.
I don’t necessarily like the idea of tons of tax dollars being spent
on the Olympics, either
But once again – agree or disagree, like it or not – Romney
appears to be really good at wringing every ounce of advantage out
of the hand he is dealt.
President Barack Obama was a community organizer on the south side
of Chicago and later, a state senator for that area. This qualified
him to be a U.S. senator and a U.S. president, his supporters say.
These same people say being a successful private equity guy
disqualifies Romney.
This doesn’t make a lot of sense to me.
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