(Bain Capital/The Boston Globe)
When Bain Capital bought the Worldwide Grinding steel mill in Kansas City in October 1993, it employed 750 people. They worked in a variety of skilled trades from machinists to pipefitters to electricians. Eight years later, the plant was closed permanently
resulting from bankruptcy. Pensions were cut, severance pay was cancelled, and healthcare and a steady wage were gone. The mill's suppliers had lost a customer that had been around since 1888, even weathering the Great Depression. Local government lost a reliable taxpayer in the mill, and much more in the costs of out of work employees. Debtholders took haircut. The federal government kicked in $44 million to bailout the mill's pension fund. Everyone lost money on the death of Worldwide Grinding. Everyone except Mitt Romney's Bain. It made out with a 100 percent profit on its initial $8 million investment, despite running the company into the ground.
Mitt Romney and his defenders dismiss stories like this as simply "capitalism." They posit that a free market encourages events like these. Therefore, it strikes me as curious that Romney doesn't take pride in what he did at the Grinding Mill in Kansas City. If the sort of business practices Romney engaged in here and other places are a good thing, why doesn't he tout Worldwide Grinding and the other companies he's destroyed as success? If what happened here was healthy capitalism, he should be eager to talk about it. He isn't. Here's why:
When people think of businesspersons and entrepreneurs, they think of people who take risks, invent things, innovate new ideas, et cetera. Sometimes they are successful and sometimes they are not. Sometimes, these folks start out with a little bit of money from family to get started, like Bill Gates. Sometimes, as in the case of Michael Dell, they run up their credit cards to the max. Sometimes, they get a little help from a bank loan or a venture capitalist. If they succeed, riches await. If they fail, they will go broke. Almost all of us believe this is perfectly fair. This is how the free market is supposed to work. Mitt Romney and Bain Capital, however, practice a different sort of business where they make money whether they succeed or fail. Inexplicably, they profit handsomely off of failure, sometimes with the aid of federal bailouts and tax giveaways. To most people, this isn't how the game is supposed to work. Romney and his defenders don't want people to talk about how he does business because he knows that people disapprove of his business practices. To the average person, his kind of business belongs in the same category as loansharking and racketeering rather than invention and innovation. Capitalism isn't on trial. Mitt Romney's business practices are on trial.
Mitt Romney represents the economy of the people who can't lose. We read about these people all the time. They get hired as CEOs of major corporations, drive those corporations into the ground, and still they walk away with multi-million dollar golden parachutes. They run scams and schemes that bring the American economy to the precipice of total collapse, and not only is nobody prosecuted, but they are bailed out with taxpayer's money dollar for dollar. The workers get cuts in salary and benefits, if not layoffs, while the CEOs simultaneously get huge bonuses. Wall Street firms like Bain can launch a hostile takeover of a steel mill, load the company up with debt, cash out, and leave the wreckage for a bankruptcy court to deal with. When you can't lose, you don't have free market capitalism. You have a rigged casino. We have a class of people running the economy in this country who, no matter what they do, can't lose.
Of course, Mitt Romney will tout the fact that after the huge mess he left in Kansas City after destroying the Grinding Mill, he did manage to open up a Staples. Of course, the Staples in Kansas City does not employ 750 people. Not even close. There aren't any machinists, pipefitters or electricians. Rather, Mitt Romney has created a much smaller team of cashiers, stockpersons, and sales managers at pay and benefits typical of retail work. I'm sure they're all decent people working hard selling rack after rack of products made overseas. But is this the kind of America we want? An America were we loot and close our factories, decimate our workers, and allow corporate raiders to make off like bandits? So we can pay for overpriced printer ink from China with wages from a part-time job in retail? Mitt Romney seems proud of a nation where people are sales clerks at The Sports Authority or pizza delivery guys at Domino's. That's what his "business experience" has accomplished. He destroys manufacturing and creates retail.
Bain Capital is now financing its chief, Mitt Romney, in his quest to be president. He makes it very clear that he will use his business experience as an executive with Bain to manage the economy of the United States. When you think about that, just think about what happened when Mitt Romney came to Kansas City. Whether Mitt Romney succeeds or fails in his quest, you can rest assured he will make out with a golden parachute.