The Obama Diary

Mitt Romney and Bill Bain in 1990

I see Romney’s campaign released a poster today (copied from a 1970’s campaign by Margaret friggin’ Thatcher) attacking the President’s jobs record …. oh Mitt, do you really want to go there?

New York Post (February 2011): ….Mitt Romney has been saying he is the man to get Americans back to work … However, the former private equity firm chief’s fortune - which has funded his political ambitions - was made on the backs of companies that ultimately collapsed, putting thousands of ordinary Americans out on the street.

That truth, if it becomes widely known, could become costly to Romney who told CNN’s Piers Morgan that “People in America want to know who can get 15 million people back to work,” implying he was that person.

Romney’s private equity firm, Bain Capital, bought companies and often increased short-term earnings so those businesses could then borrow enormous amounts of money. That borrowed money was used to pay Bain dividends. Then those businesses needed to maintain that high level of earnings to pay their debts.

….Bain and Goldman Sachs, for example, put $85 million down in a $415 million 1994 leveraged buyout of Baxter International’s medical testing division (renamed Dade Behring), which sold machines and reagents to labs … In August 2002, Dade filed for bankruptcy.

This was not an isolated case.

* Bain in 1988 put $5 million down to buy Stage Stores, and in the mid-’90s took it public, collecting $100 million from stock offerings. Stage filed for bankruptcy in 2000.

* Bain in 1992 bought American Pad & Paper (AMPAD), investing $5 million, and collected $100 million from dividends. The business filed for bankruptcy in 2000.

* Bain in 1993 invested $60 million when buying GS Industries, and received $65 million from dividends. GS filed for bankruptcy in 2001.

* Bain in 1997 invested $46 million when buying Details, and made $93 million from stock offerings. The company filed for bankruptcy in 2003.

Romney’s Bain invested 22 percent of the money it raised from 1987-95 in these five businesses, making a $578 million profit.

While I have not investigated all of Romney’s Bain investments and there may be cases where he made money and improved businesses, there’s little question he made a fortune from businesses he helped destroy.

Full article here

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Marketwatch: …. Romney was the governor of Massachusetts from January 2003 to January 2007. And during that time, according to the U.S. Labor Department, the state ranked 47th in the entire country in jobs growth. Fourth from last.

The only ones that did worse? Ohio, Michigan and Louisiana. In other words, two rustbelt states and another that lost its biggest city to a hurricane.

The Massachusetts jobs growth over that period, a pitiful 0.9%, badly lagged other high-skill, high-wage, knowledge economy states like New York (2.7%), California (4.7%) and North Carolina (7.6%). The national average: More than 5%.

….In Romney’s first year in charge, Massachusetts ranked dead last in America in jobs growth. What makes this worse for Romney is that he actually ran on a jobs platform …. he promised the voters of Massachusetts that as governor he’d use his business savvy and connections to bring new jobs to the state.

Net result: 50th out of 50 after one year, 47th after four.