The ad does a good job of selling Steel Dynamics as a success story, but it glosses over at least three important points:
- Bain Capital sold its stake in Steel Dynamics 13 years ago, in 1999. It helped get the company off the ground, but can't take credit for turning it into the company that it is today.
- Bain isn't the only reason Steel Dynamics got off the ground: The company sought and received $37 million in subsidies from state and local officials in Indiana.
- Steel Dynamics is in the same industry as GST Steel ... but the two companies have nothing to do with each other.
The bottom-line is that Bain made more than $80 million on the Steel Dynamics deal more than a decade ago. Yes, it got $37 million in public subsidies, but there are still people on the job. That's a good thing, but it has nothing to do with the central question raised by the Obama campaign's ad, which is this: Why did Mitt Romney make millions even when his investments failed?
GST Steel, the company at the center of the first Obama campaign ad on Romney's Bain record, is just one example of such an investment, but it goes straight to the heart of the Bain criticism—criticism that Romney has not addressed, and probably will not address.
The issue isn't that GST collapsed or that its workers lost their jobs. It's that Romney and Bain Capital made enormous profits on the deal despite the failure of the company. They loaded it up with debt, bankrupting the company and destroying its pension fund, walking away with millions—leaving employees out of work and taxpayers on the hook for the pension fund guarantees.
Nobody expects every single business to be a success, but how is Mitt Romney's business motto—tails I win, heads you lose—compatible with free enterprise? If a company he invests in fails, shouldn't he share in that failure? Isn't that one of the most basic rules of our economic system? Yet with Mitt Romney's business model, that rule did not apply to him, and he's never explained why. And changing the topic by talking about Steel Dynamics doesn't put the question to rest.