How Mitt Romney "created jobs"

Gazillionaire financier Mitt Romney is the latest "CEO President" offered up by the GOP, on a platform of "job creation." When Romney oversaw Bain capital, he supervised the takeover of American Pad and Paper. When the deal was complete, the 258 employees were marched out of the Marion, Indiana factory, told they were fired, and told they could re-apply for their jobs at lower salaries and with fewer benefits. They were warned that some of them would not be re-hired. A long piece in the Christian Science Monitor, Ron Scherer and Leigh Montgomery consider the record of his imperial corporateness:

“We were told they bought the assets, not the union or the [labor] contract,” recalls Randy Johnson, who at the time worked as a machine operator and was a union shop steward. The workers – some the third generation in their families to have jobs there – eventually went on strike, and Bain closed the factory 5-1/2 months after acquiring it...
In an analysis of Bain Capital under Romney, the Journal estimated that Bain made $2.5 billion in profits on $1.1 billion invested in 77 separate deals. Of those 77 transactions, 22 percent ended with the firms in bankruptcy after the eighth year of the Bain investment. Bain disputes the Journal’s account as inaccurate.

Is Mitt Romney really a job creator? What his Bain Capital record shows. (via Reddit)

I write books. My latest is a YA science fiction novel called Homeland (it's the sequel to Little Brother). More books: Rapture of the Nerds (a novel, with Charlie Stross); With a Little Help (short stories); and The Great Big Beautiful Tomorrow (novella and nonfic). I speak all over the place and I tweet and tumble, too.

MORE: Business • class war • economics • gop • labor • politics

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Brainspore

So, kind of like how taking a big piece of cake and cutting up the rest into smaller pieces is technically “creating more servings.”
BookGuy

Much like Romney wouldn’t have used the word “slut,” he wouldn’t use the word “firing.” It’s more of an “employee liberation.”
- digi_owl
  
  Newspeak improving on oldspeak…
  
  It’s the kind of word games one find in pro-life vs pro-choice. Whoever came up with that way of wording issues should be taken out back and beaten.
Tommy Timefishblue

Target is doing the same thing in Canada right now.
- penguinchris
  
  Yeah but Target is moving into Canada by buying all of the Zeller’s stores. I’d say that’s doing a valuable service to Canada because those stores are awful (like K-Mart in the US, possibly even worse).
  
  I suspect that Zeller’s were on their way to having most locations close, just like K-Mart, and while a Target restructuring might also result in many locations closed I think in the long run it’ll be a net positive.
  
  Can’t believe I’m defending corporate takeovers in a thread about Romney’s despicable actions, but these things do require context.
  
  (by the way if Target is actually doing Romney-esque slimy stuff I’ll retract my comment, but I still think Zeller’s was on their way out regardless)
  - http://burntheflag.ca Jardine
    
    Last I heard, any Zellers store that was unionized is gone. Anyone who was there long enough to be paid a decent wage and get full-time hours is gone.
    
    The Zellers I remember as a kid was fairly clean and not run-down. They were decent places to go to. Then Walmart bought Woolco and proceeded to crush them.
    - http://twitter.com/ryandobiewatt Ryan Dobie-Watt
      
      Yeah, all the Zellers I’ve been to in the last decade or so have tended towards being run-down hellholes where your best case scenario is not being able to find what you want and the employees trying as hard as they can to avoid you (or making the messes worse; the only difference in the teenage delinquents hanging out there and the ones working there that I saw was uniform shirts).
  - http://twitter.com/fossilfuels Funk Daddy
    
    Target will assure jobs at or below subsistence, whereas Zeller’s has comparably a good record with employment.
    
    You may subscribe to the erosion of social cohesion if it means more cheap goods or if “the markets demand it”, but I’ll pick the firm that pays a decent wage and provides full time employment every time.
    
    I don’t know, or care, if it was an ingrained culture at Zeller’s, the policy of it’s management, the nation it is in, or the strength of it’s unions that caused it’s comparably good employment record, but Target will definitely be a downgrade for the typical Canadian in the long run no matter how cheap the goods or how clean the floors.
http://mordicai.livejournal.com Mordicai

Wait, aren’t they even blatantly saying that is his platform? Austerity measures for the middle class, less taxes for the rich, & prison for the poor? I mean they aren’t even like, slyly winking any more.
- http://imcravingpresidency.tumblr.com/ SedanChair
  
  Yeah, we love it too.
  
  “I guess the trouble was that we didn’t have any self-admitted proletarians. Everyone was a temporarily embarrassed capitalist.” -John Steinbeck
Eark_the_Bunny

I think this is what is known as “VULTURE CAPITALISM”. Buy a company, pick the bones clean and then move on to the next victim, giggling all the way to the bank.
- http://twitter.com/fossilfuels Funk Daddy
  
  Sort of, vulture capitalism I thought referred to venture capitalists who make relatively small investment in start-ups for a relatively large piece of the pie, then demand that the people who began the start-up work themselves to the bone to protect the investment of the vulture capitalist, who themselves make no other contribution to that effort.
  
  But the same sort of evil doubtless.
- digi_owl
  
  And has been going on since the 70s/80s, fueled by way of junk bonds and loans.
http://twitter.com/fossilfuels Funk Daddy

Think of all the spin-off jobs created!

More clerks needed at unemployment queues!

More workers needed at food banks! (volunteers, but still!)

More police to lock up these ne’r-do-well union shills picketing outside the factory they pensioned into oblivion and lock up the ones that will clearly turn to crime (brown).

More guards at the jails!

More bank employees to see after the foreclosures and more constables to evict these deadbeats from the bank’s property.

More grief counsellors to see after the people left behind by the suicides.

More liquor store clerks.

More More More Jobs.

Romney and his Bain compatriots are clearly genius, of the evil variety*

*evil geniuses do not exist
http://www.lightning-rose.com/ LightningRose

”Let me tell you an amusing story about the time my dad closed a factory and put over 4000 people out of work…”
-Mittens

*) Not meant to be a factual quote. He didn’t mention the part about people being put out of work.
Daniel Smith

The part of this whole sad drama that really bewilders me is the number of working folks who have been directly and systematically damaged by people behaving exactly like Romney who will vote for this guy and the blatant “lets make rich people richer and everyone else poorer” policies of his party. It boggles the mind.
- bcsizemo
  
  So if this makes Mittens so bad, what makes Obama so right? Just curious, cause I’m pretty sure the same story can easily be spun to show that Bain Capital wasn’t doing much more than showing the company how to continue on, even if it means eliminating its workforce and basically starting over. (As appose to shutting its doors permanently.)
  
  Where as someone like Michael Dell simply moves the factory to Mexico because they can build a system for rough 7$ cheaper per box…
  
  Not to play devils advocate, but the media rarely tells all sides of any story equally or fairly.
  - Antinous / Moderator
    
    So if this makes Mittens so bad, what makes Obama so right?
    
    Obama’s a venture capitalist? He’s been involved in buying, selling, liquidating companies? Do tell. You’d think that would be much more well known.
    - bcsizemo
      
      No he’s not a venture capitalist, but everyone keeps implying he is the reason the economy is recovering and we have all these jobs that I can’t find…
      
      You know my question really isn’t about good or bad, it’s about some basic logical thinking. But considering you/BB removed the single post on here where someone actually pointed out the fact that sometimes situations like this are about making the best out of a bad situation. Yes these people might have lost their jobs, but at least the company and any new employees are still local and not in a foreign country.
      - Richard
        
        Well it’s getting harder to see that we are still living in the USA with a good democrat at the helm. Especially when we note employment graphs like this one posted over on the calculatedriskblog.com:
        
        http://1.bp.blogspot.com/-GMf_-8slDMo/T6PN5UHSCSI/AAAAAAAANK4/1gErxQQ-HJ4/s1600/EmployRecApril2012.jpg
        
        No doubt any good Republican will soon right that ship of state.
      - Antinous / Moderator
        
        A quarter of the comments on this post so far have been Google-able astroturf, from both sides of the political spectrum.
    - VicqRuiz
      
      The painful truth that no career politician, Democrat or Republican, will admit is that the road to job creation has nothing to do with them or their programs.
      
      Romney’s disadvantage, in this context, is that he actually did something once in his life other than be a politician.
      
      Obama by comparison can brag about having clean hands. If he really thought about it, he’d realize that’s not a compliment.
  - realityhater
    
    Right …..so all those people did not actually lose their jobs due to the dismemberment of the companies bought by Bain Capital- dont try the “these are not the droids you are looking for ” switcheroo here :)
  - Oceanconcepts
    
    Vultures do important work in an ecosystem. The vampire metaphor is more apt, because what we are talking about is sucking the life out of viable companies to further enrich the already wealthy.
    
    It’s a tried and true strategy. Locate a company that, while fundamentally solid, is undervalued by the market. Buy up a controlling interest, then slash overhead- cut R&D, planning, and anything else that looks to the long term viability of the company if it costs money now. Fire the well paid and competent managers who know the business, and replace them with aggressive bean counters. Lay off staff, cut everything that doesn’t contribute to short term profits, because short term profits are all that matter with this strategy. When short term returns increase, leverage the company to the max, and use the debt to pay off your fat consulting fees and your investors. At that point the company is left to “fail” under the crushing burden of debt their masters have left them with. There may even be some pieces left after the bankruptcy.
    
    Let’s be clear, this is not “creative destruction” of inefficient businesses, it isn’t even market forces at work. Romney’s version of business is the triumph of short term exploitation over long term growth. It’s extractive mining of the long term future of businesses (and employees, by the way), and it’s one of the most destructive things wrong with our current business environment.
    
    I am an entrepreneurial capitalist. I have built a company that develops technology products that are manufactured in the USA. I have created jobs- in the real sense. I did it putting my own money- all I had and more- on the line and by working 7 days a week without pay for many years. I last took a paycheck from someone else in 1985. So spare me any lectures about not knowing what it is to meet payrolls or lazy liberals.
    
    But I’m very conscious that everything that makes my business even possible- the microprocessor, the internet, the GPS system, the sensor technologies, the Universities that educated me and our engineers, and on and on, is the direct result of federal investment in research, infrastructure, and education made by earlier generations. The sort of investment that has been cut and cut again so speculators in the zero-sum financial sector like Mitt Romney (most of whom do not create anything or “grow the pie” by a single slice) can keep more of their winnings.
    
    The current Republican party does not stand for free enterprise, and it certainly doesn’t stand for the public good- it exists to protect the winners in the current system from competition. Obama is far from perfect, but he differs from the Republicans in that he has been willing to support long term public investment in the public good, much of which will not pay off until long after he is out of office.
    
    Rather than complain about Dell or others doing low wage final assembly in other countries, ask why there is next to no viable ecosystem for electronics component manufacturing left in the US. And why high wage countries with a strong middle class, full health care, strong environmental protections and unions- like Germany, Switzerland, Japan, and Korea (all of which supply components to our products) have kept and grown their manufacturing.
    - IronEdithKidd
      
      You know, it would be great to hear with more frequency the perspective of small business owners not suffering from pipe-dream delusions of Koch-level wealth.
      
      Thank you for your reasoned, spot-on comment.
- realityhater
  
  They all subscribe to the “one day I might be as rich as them syndrome” unlike trickle down economics this method of republican brain washing seems to actually work on quite a large number of folks- oh and of course there is the “we need to get the BLACK guy out of office crowd that will vote on anything that removes or stymies OBAMA !”- funny how they forget it was the republican leadership that brought this county to its knees
koko szanel

Y U hate profit?
atimoshenko

Presidents don’t create jobs. Indeed, given the budgetary and legislative power of Congress, the independence of the Fed, and the constitutional oversight of the Supreme Court, the biggest powers of the Presidency are in foreign policy.
- unclemike
  
  Presidents don’t create jobs. But presidential policies can and do.
http://www.facebook.com/profile.php?id=100000444450214 Genre Slur

You Americans are odd. I like that ‘jazz’ music you invented, but the whole ‘ignorance-plus-certainty-and-proud-of-it’ thing is REALLY wearing thin…
- bcsizemo
  
  Well as we like to say, “You ain’t seen nothing yet.”
- mikedt
  
  Never question “the gut.” The gut knows all and doesn’t need facts to make up its mind.
- philllies
  
  Sorry, mittns didn’t invent the jazz. Find some other genre to slur from your lofty perch in wxyzstan. And what exactly happens when the thin thing wears all the way through?
http://twitter.com/Black_Robert Robert Austin

Like with most articles like this, the comments are hella partisan. Since this particular set of comments seems to be mostly anti-mittens, I’ll take the rebuttal.

There is an argument to be made for vulture capitalism. Vultures are a real thing. In nature, vultures do a job. Economic vultures do a job too. They extract value from the dead and dying. There is a place for them in a healthy economy. And although vulturism is certainly a niche in the economic ecosystem, I would imagine that someone with expertise in this niche would be uniquely suited to making unpleasant decisions when times are dark and these decisions must be made.

Mittens probably isn’t capable of making this argument. Danny DeVito did a pretty good job of it though in “Other People’s Money”. I think this is the right scene, can’t watch it right now to be sure….

http://www.youtube.com/watch?v=MfL7STmWZ1c

Mittens should have taken some acting lessons in the last 4 years.
- http://www.nathanhornby.com/ Nathan Hornby
  
  Spoken like a true accountant.
- VicqRuiz
  
  Case in point:
  
  If Bain Capital took over an RIAA member company, downsized all the middle managers and other non-productive suits, leaving only the employees who were involved in the core product of producing recorded music, would that be a good or a bad thing??
- Richard
  
  As Oceanconcepts points out earlier what Mitt does is actually Vampire Capitalism, he’s not growing or morphing anything but his own pockets.
  
  However using your logic makes practical timely sense here, since we know that Mitt just comes in for the kill, and mops up the mess for a large fee. As President he will solve all our problems when he rids us of the USA for good.
  
  It’s the least a member of The Church of Jesus Christ of the Latter Day Saint’s can do for their native country. In fact it’s inevitable that he should.
Preston Sturges

But if Mitt had not started Staples there would be no office supplies available in the US Many of us old timers remember creating a purchase order from birch bark and elderberry juice and trying to stuff it into the fax machine. When Staples invented the familiar ream of 20# bond paper, we wept with joy. God bless you Willard Romney!
angryhippo

Your second paragraph is exactly how the mob commandeered a business for “protection” in “Goodfellas”. And I don’t mean that as a critique of your explanation, more of a “holy crap, that crystallized it in a horrifying way”…