Oh Bain...

[erfalf]

David Stockman has an interesting article in Newsweek:

http://www.thedailybeast.com/newsweek/2012/10/14/david-stockman-mitt-romney-and-the-bain-drain.html

Yes erfalf, you know how it works, but a lot of people don't. They assume that his excellent financial performance means he rarely had a deal go south on him.

Yes, in a normal portfolio of investments about 20% you loose your shirt, 50% you get your money back. 25% you may double your money, and 5% is the home run. That formula has somehow outperformed the S&P for decades now.

PE is what it is. It is financing. Stockman wants to go after Romney for not being a job creator, but I would say, if Romney isn't, who is. The proprietor/business owner is in it to make money too, therefore he/she isn't a job creator if said business hires people? Where does it end?

[guido911]

Once again you are wrong.

He was a lawyer in private practice for eleven years. He was a published and successful author. He founded and served as president of the board of a public education non-profit.

You act as if he went from community organizer to President of the United States.

Are you freakin kidding me? I am a lawyer and I do not run around claiming to have business experience. Writing a book?  Being a member of a non-profit board? Are you seriously making the case that those are qualifications akin to business experience? Wow. Of course, that would explain why you will vote for the guy..

[Townsend]

Below is the start of a fairly long article.  I have been unable to finish it yet.



Mitt Romney: The Great Deformer

Is Romney really a job creator? Ronald Reagan's budget director, David Stockman, takes a scalpel to the claims.

http://www.thedailybeast.com/newsweek/2012/10/14/david-stockman-mitt-romney-and-the-bain-drain.html

Bain Capital is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain's billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise.

Nevertheless, Mitt Romney claims that his essential qualification to be president is grounded in his 15 years as head of Bain Capital, from 1984 through early 1999. According to the campaign's narrative, it was then that he became immersed in the toils of business enterprise, learning along the way the true secrets of how to grow the economy and create jobs. The fact that Bain's returns reputedly averaged more than 50 percent annually during this period is purportedly proof of the case—real-world validation that Romney not only was a striking business success but also has been uniquely trained and seasoned for the task of restarting the nation's sputtering engines of capitalism.

Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way—out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn "roll-ups," and then deliver them back to Wall Street for resale—the faster the better.

That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn't be much scope for it because it creates little of economic value. But we have a rigged system—a regime of crony capitalism—where the tax code heavily favors debt and capital gains, and the central bank purposefully enables rampant speculation by propping up the price of financial assets and battering down the cost of leveraged finance.

So the vast outpouring of LBOs in recent decades has been the consequence of bad policy, not the product of capitalist enterprise. I know this from 17 years of experience doing leveraged buyouts at one of the pioneering private-equity houses, Blackstone, and then my own firm. I know the pitfalls of private equity. The whole business was about maximizing debt, extracting cash, cutting head counts, skimping on capital spending, outsourcing production, and dressing up the deal for the earliest, highest-profit exit possible. Occasionally, we did invest in genuine growth companies, but without cheap debt and deep tax subsidies, most deals would not make economic sense.

In truth, LBOs are capitalism's natural undertakers—vulture investors who feed on failing businesses. Due to bad policy, however, they have now become monsters of the financial midway that strip-mine cash from healthy businesses and recycle it mostly to the top 1 percent.

The waxing and waning of the artificially swollen LBO business has been perfectly correlated with the bubbles and busts emanating from the Fed—so timing is the heart of the business. In that respect, Romney's tenure says it all: it was almost exactly coterminous with the first great Greenspan bubble, which crested at the turn of the century and ended in the thundering stock-market crash of 2000-02. The credentials that Romney proffers as evidence of his business acumen, in fact, mainly show that he hung around the basket during the greatest bull market in recorded history.

Needless to say, having a trader's facility for knowing when to hold 'em and when to fold 'em has virtually nothing to do with rectifying the massive fiscal hemorrhage and debt-burdened private economy that are the real issues before the American electorate. Indeed, the next president's overriding task is restoring national solvency—an undertaking that will involve immense societywide pain, sacrifice, and denial and that will therefore require "fairness" as a defining principle. And that's why heralding Romney's record at Bain is so completely perverse. The record is actually all about the utter unfairness of windfall riches obtained under our anti-free market regime of bubble finance.

[RecycleMichael]

This is what you wrote...

"Obama had ZERO experience in any business enterprise prior to election"

Lawyering ain't a business enterprise? Writing a book ain't a business? Even the non-profit is call a "non-profit" business.

Maybe the word ZERO is where you got confused. Maybe numbers are not your strength.

[Teatownclown]

There are tons of lawyers who make millions knowing the business law and paying little mind to the actual making of widgets.

Some lawyers are well disciplined....

   The United Way realized that it had never received
a donation from the city's most successful lawyer. So a
United Way volunteer paid the lawyer a visit in his lavish
office.

   The volunteer opened the meeting by saying,
'Our research shows that even though your annual income
is over two million dollars, you don't give a penny to
charity. Wouldn't you like to give something back to
your community through the United Way?'

   The lawyer thinks for a minute and says,
'First, did your research also show you that my mother
is dying after a long, painful illness and she has huge
medical bills that are far beyond her ability to pay?'

   Embarrassed, the United Way rep mumbles, 'Uh...
no, I didn't know that.'

   'Secondly,' says the lawyer, ' did it
show that my brother, a disabled veteran, is blind and
confined to a wheelchair and is unable to support his wife
and six children?

   The stricken United Way rep begins to stammer an
apology, but is cut off again.

   'Thirdly, did your research also show you that
my sister's husband died in dreadful car accident,
leaving her penniless with a mortgage and three children,
one of whom is disabled and another that has learning
disabilities requiring an array of private tutors?'

   The humiliated United Way rep, completely beaten,
says, 'I'm so sorry, I had no idea.'

   And the lawyer says, 'So... if I didn't
give any  money to them, what makes you think I'd give
any to you?

[Conan71]

Below is the start of a fairly long article.  I have been unable to finish it yet.



Mitt Romney: The Great Deformer

Is Romney really a job creator? Ronald Reagan's budget director, David Stockman, takes a scalpel to the claims.

http://www.thedailybeast.com/newsweek/2012/10/14/david-stockman-mitt-romney-and-the-bain-drain.html

JMO, someone who invests in businesses and risks millions upon millions of dollars on a business you think would have a darn good grasp on how business works as well as getting to know the business model of those he invests in or purchases.  I'd think it would also require a pretty good understanding of how government regs and issues in the economy would impact said businesses.

I find it seriously hilarious that there is so little to tout as a success in Obama's record as president that they need to keep picking away at Bain.

It's even a stretch to claim Obama's shining moment as a success: Obamacare.  The mid-term election in 2010 and the rise of the Tea Party was every bit a referendum on Americans being PO'd at the way Obamacare was shoved down their throats.

Not blasting back at you so much as this seemed like a logical place to interject.

Obama is a successful author though.  Hopefully, he will have plenty of time to start working on his memoirs and presidential library starting in late January.

[Hoss]

JMO, someone who invests in businesses and risks millions upon millions of dollars on a business you think would have a darn good grasp on how business works as well as getting to know the business model of those he invests in or purchases.  I'd think it would also require a pretty good understanding of how government regs and issues in the economy would impact said businesses.

I find it seriously hilarious that there is so little to tout as a success in Obama's record as president that they need to keep picking away at Bain.

It's even a stretch to claim Obama's shining moment as a success: Obamacare.  The mid-term election in 2010 and the rise of the Tea Party was every bit a referendum on Americans being PO'd at the way Obamacare was shoved down their throats.

Not blasting back at you so much as this seemed like a logical place to interject.

Obama is a successful author though.  Hopefully, he will have plenty of time to start working on his memoirs and presidential library starting in late January 2017.

FIFY.

[nathanm]

JMO, someone who invests in businesses and risks millions upon millions of dollars on a business you think would have a darn good grasp on how business works as well as getting to know the business model of those he invests in or purchases.  I'd think it would also require a pretty good understanding of how government regs and issues in the economy would impact said businesses.

That may be true, but he clearly has no grasp on how government works. One only need to look at his approval ratings in Massachusetts to see that.

[erfalf]

That may be true, but he clearly has no grasp on how government works. One only need to look at his approval ratings in Massachusetts to see that.

The guy had a 56% approval rating the day he took office. Something tells me he wasn't going to get a fair shake from the get go.

However if we are going to use approval ratings as a borometer, here goes:

                                                         Obama          Romney
Approval/Disapprove Day 1:            65%/15%        56%/23%
Approval/Disapprove Year 1:           49%/44%        58%/40%
Approval/Disapprove End:               48%/47%        39%/59%

% Change
Approval/Disapprove Year 1:         (25%)/193%       4%/74%
Approval/Disapprove End:             (26%)/213%  (30%)/157%

Looks like it's neck and neck, it that is your gauge. Obama just seemed to piss them off faster.

[nathanm]

The guy had a 56% approval rating the day he took office. Something tells me he wasn't going to get a fair shake from the get go.

Perhaps not, but his ending approval ratings are dismal compared to Obama's basically 50-50 at this point. To some degree, Obama's approval ratings are irrelevant on a personal level when making a decision as to who to vote for. Obama has been President for the last four years, so you have your own sense of him and your own approval/disapproval to use to make the decision. Romney, on the other hand, has not been President, so it is instructive to take that into account. How much weight you give it is a matter of personal preference, of course.

[guido911]

I like these:

[heironymouspasparagus]

Want to talk about job loss? 500,000 government workers have lost their jobs since Obama took office.  Might as well call him "Chainsaw Barry"

State and local governments - many of them teachers! 

Actual Federal government jobs that actually has some small relevance to Obama's administration - increase of 149,000.  Which is probably gonna be your next complaint....

[nathanm]

70% success rate? That's significantly overstated.

[cannon_fodder]

The article posted on Bain is a terrific piece on leveraged buyouts.  Romney made money in business, that is for damn sure.  But arguing it created jobs is a losing argument.  He was essentially the guy from pretty woman.

Not blaming Romney, he just exploited the system and used his connections to cash in.  But most of the "big winners" Bain handled saw job losses or went bankrupt after Bain used them for whatever purpose.  The model that makes this behavior the norm is the problem (artificial cheap capital, preference for cap gains over work, privatizing gains wile socializing losses).

[Townsend]

The article posted on Bain is a terrific piece on leveraged buyouts.  Romney made money in business, that is for damn sure.  But arguing it created jobs is a losing argument.  He was essentially the guy from pretty woman.

Are you saying he's Jason Alexander's character or that he married a hooker?