The New American Industry
August 29, 2012 10:40 AM Subscribe
If you haven't heard much about how takeover deals like Dunkin' and KB Toys work, that's because Mitt Romney and his private equity brethren don't want you to. The new owners of American industry are the polar opposites of the Milton Hersheys and Andrew Carnegies who built this country, commercial titans who longed to leave visible legacies of their accomplishments, erecting hospitals and schools and libraries, sometimes leaving behind thriving towns that bore their names. The men of the private equity generation want no such thing.Greed and Debt: The True Story of Mitt Romney and Bain Capital
And Reagan's.
posted by DU at 10:50 AM on August 29, 2012 [6 favorites]
posted by DU at 10:50 AM on August 29, 2012 [6 favorites]
The mood has changed. I remember in 2008, before the bank crash, when I was helping a magazine research a hit piece on Mitt Romney. I found a bunch of the Bain Capital stuff and said it sounded like he was a "corporate raider"!
The editors were like eh, that's a little harsh, and didn't see a good reason to go with that angle. Instead, unfortunately, the piece ended up being about how weird Mormonism is.
posted by steinsaltz at 10:51 AM on August 29, 2012 [2 favorites]
The editors were like eh, that's a little harsh, and didn't see a good reason to go with that angle. Instead, unfortunately, the piece ended up being about how weird Mormonism is.
posted by steinsaltz at 10:51 AM on August 29, 2012 [2 favorites]
I thought it was pretty well known how such deals work: take control of the board, sell off the unprofitable parts of the business, lever up the company's balance sheet with debt and then dump your equity, all the while why paying your firm management fees and fund principals high salaries as key executives.
I recommend Gods at War by Steven Davidoff for those interested in technicalities.
posted by gagglezoomer at 11:00 AM on August 29, 2012 [7 favorites]
I recommend Gods at War by Steven Davidoff for those interested in technicalities.
posted by gagglezoomer at 11:00 AM on August 29, 2012 [7 favorites]
I honestly always have a terrible time trying to wade through Taibbi's gratingly overwrought and purple prose writing style - makes it difficult to absorb and assess his investigative journalism claims are. anyone want to summarize his main original points?
I'm sorry did you saying something after 'terrible time'?
posted by srboisvert at 11:08 AM on August 29, 2012 [21 favorites]
I'm sorry did you saying something after 'terrible time'?
posted by srboisvert at 11:08 AM on August 29, 2012 [21 favorites]
If the average reader of the Blue is lucky the GOP will get the BAIN treatment. There already tales of a bus driver not getting delegates to the big GOP show this week because the driver got lost.
posted by rough ashlar at 11:09 AM on August 29, 2012 [3 favorites]
posted by rough ashlar at 11:09 AM on August 29, 2012 [3 favorites]
So...we're longing for the days of the Robber Barons now? We are so hosed...
posted by JoanArkham at 11:17 AM on August 29, 2012 [10 favorites]
posted by JoanArkham at 11:17 AM on August 29, 2012 [10 favorites]
The truly, truly, truly sad thing is that there aren't a thousand Matt Taibbis doing reports like this. Purple prose or not, his stories are absolutely important and relevant.
posted by Benny Andajetz at 11:20 AM on August 29, 2012 [18 favorites]
posted by Benny Andajetz at 11:20 AM on August 29, 2012 [18 favorites]
The truly, truly, truly sad thing is that there aren't a thousand Matt Taibbis doing reports like this. Purple prose or not, his stories are absolutely important and relevant.
The problem with people like Taibbi is that after they've finished off the bad guys, they get bored and go after the good guys.
posted by goethean at 11:26 AM on August 29, 2012 [3 favorites]
The problem with people like Taibbi is that after they've finished off the bad guys, they get bored and go after the good guys.
posted by goethean at 11:26 AM on August 29, 2012 [3 favorites]
anyone want to summarize his main original points?
While I'm sure any summary might miss some of the finer points and open up the doors for arguments over missing minutae, Taibbi basically calls Mitt Romney a hypocrite for running a campaign with a plank railing against government debt given that his fortune was amassed by loading up private companies with massive debt and skimming cash off the top, occasionally leading to those companies' bankruptcy.
posted by hwyengr at 11:28 AM on August 29, 2012 [2 favorites]
While I'm sure any summary might miss some of the finer points and open up the doors for arguments over missing minutae, Taibbi basically calls Mitt Romney a hypocrite for running a campaign with a plank railing against government debt given that his fortune was amassed by loading up private companies with massive debt and skimming cash off the top, occasionally leading to those companies' bankruptcy.
posted by hwyengr at 11:28 AM on August 29, 2012 [2 favorites]
So...we're longing for the days of the Robber Barons now?
The OP's pull quote emphasizes how different people like Romney and Feinberg are from Gilded Age robber barons - they are, for the most part, faceless, stateless, and utterly, unapologetically nihilistic:
Romney, on the other hand, is a perfect representative of one side of the ominous cultural divide that will define the next generation, not just here in America but all over the world . . .
That conflict will be between people who live somewhere, and people who live nowhere. It will be between people who consider themselves citizens of actual countries, to which they have patriotic allegiance, and people to whom nations are meaningless, who live in a stateless global archipelago of privilege – a collection of private schools, tax havens and gated residential communities with little or no connection to the outside world.
posted by ryanshepard at 11:28 AM on August 29, 2012 [3 favorites]
The OP's pull quote emphasizes how different people like Romney and Feinberg are from Gilded Age robber barons - they are, for the most part, faceless, stateless, and utterly, unapologetically nihilistic:
Romney, on the other hand, is a perfect representative of one side of the ominous cultural divide that will define the next generation, not just here in America but all over the world . . .
That conflict will be between people who live somewhere, and people who live nowhere. It will be between people who consider themselves citizens of actual countries, to which they have patriotic allegiance, and people to whom nations are meaningless, who live in a stateless global archipelago of privilege – a collection of private schools, tax havens and gated residential communities with little or no connection to the outside world.
posted by ryanshepard at 11:28 AM on August 29, 2012 [3 favorites]
To tack onto hwyengr's summation, it also points out that the "small" amount of mortgage interest you don't pay taxes on is the same bit of the tax code that allows these leveraged buy and burn strategies be financially sustainable.
They buy a company with 5% down, saddle the company with debt, pay themselves bonuses and management fees out of the debt, write off the interest payments that Bain may have accrued, and watch it all burn to the ground.
..........
The men of the private equity generation
That sounds like a photoshoot calendar fundraiser. Or dartboard.
posted by tilde at 11:32 AM on August 29, 2012 [2 favorites]
They buy a company with 5% down, saddle the company with debt, pay themselves bonuses and management fees out of the debt, write off the interest payments that Bain may have accrued, and watch it all burn to the ground.
..........
The men of the private equity generation
That sounds like a photoshoot calendar fundraiser. Or dartboard.
posted by tilde at 11:32 AM on August 29, 2012 [2 favorites]
So think of this the next time you go to Dunkin' Donuts for a cup of coffee: A small cup of joe costs about $1.69 in most outlets, which means that for years to come, Dunkin' Donuts will have to sell about 2,011,834 small coffees every month – about $3.4 million – just to meet the interest payments on the loan it took out to pay Bain and Carlyle their little one-time dividend. And that doesn't include the principal on the loan, or the additional millions in debt that Dunkin' has to pay every year to get out from under the $2.4 billion in debt it's now saddled with after having the privilege of being taken over – with borrowed money – by the firm that Romney built.
posted by T.D. Strange at 11:35 AM on August 29, 2012 [12 favorites]
posted by T.D. Strange at 11:35 AM on August 29, 2012 [12 favorites]
Here's what I took as synecdoche for the jist of the piece. Bain Capital finances a take-over or KB Toys, extracts value in the form of bonuses ("dividend recapitalization") paid to itself for being involved in the transaction. Eventually, KB Toys files for bankruptcy protection. From the article:
I ask Slavkin Corzo what Bain's justification was for the giant dividend recapitalization in the KB Toys acquisition. The question throws her, as though she's surprised anyone would ask for a reason a company like Bain would loot a firm like KB Toys. "It wasn't like, 'Yay, we did a good job, we get a dividend,'" she says with a laugh. "It was like, 'We can do this, so we will.' "
posted by Wash Jones at 11:36 AM on August 29, 2012 [5 favorites]
I ask Slavkin Corzo what Bain's justification was for the giant dividend recapitalization in the KB Toys acquisition. The question throws her, as though she's surprised anyone would ask for a reason a company like Bain would loot a firm like KB Toys. "It wasn't like, 'Yay, we did a good job, we get a dividend,'" she says with a laugh. "It was like, 'We can do this, so we will.' "
posted by Wash Jones at 11:36 AM on August 29, 2012 [5 favorites]
anyone want to summarize his main original points?
Look up the term "Bust Out", its a mob strategy for taking control of company, paying yourself huge amounts of money from the company coffers, then leaving when the company consequently tanks.
So Bain Capital ran on Mafia tactics.
posted by Chekhovian at 11:36 AM on August 29, 2012 [14 favorites]
Look up the term "Bust Out", its a mob strategy for taking control of company, paying yourself huge amounts of money from the company coffers, then leaving when the company consequently tanks.
So Bain Capital ran on Mafia tactics.
posted by Chekhovian at 11:36 AM on August 29, 2012 [14 favorites]
Presumably as President, Romney will balance the budget by selling all our national parks and monuments to foreign investors, our highway system to various billionaire investors, Hawaii to China and Alaska to whichever TV Network ran Ice Road Truckers or that Palin reality show. He will then reward his cabinet members and staff with generous bonuses and then move his whole family to Norway (for example) so they can start dismantling that country, too. It will be interesting to see what happens when Vice President Ryan announces that President Romney regrets it very much, but everyone has to move because the country's been sold to a wealthier nation - perhaps Chad.
posted by Joey Michaels at 11:42 AM on August 29, 2012 [1 favorite]
posted by Joey Michaels at 11:42 AM on August 29, 2012 [1 favorite]
I worked for a company for a few years that sought to go private/be bought out -- Bain provided the biggest chunk of the buy out. What makes me smirk is that it all flows under the same game plan; said company took out a huge amount of debt in order to finance itself going private, it has little hope of ever going back into the black, and before I left they were busily trying to figure out what pieces of the company could be spun out so they could save more money.
Greed is good. Right?
posted by cavalier at 11:44 AM on August 29, 2012 [1 favorite]
Greed is good. Right?
posted by cavalier at 11:44 AM on August 29, 2012 [1 favorite]
Seems like a person who wanted to beat Romney in this election would do well to go over every transaction Bain Capital has made in the past few decades and count up all the people who got laid off because of them. And then just keep bringing it up over and over again.
"Over the past XX years, Bain Capital has been responsible for the loss of XXXXXXXX jobs. Meanwhile Mitt Romney has profited to the tune of $XXXXXXXXX. How many will lose their jobs after he becomes President?"
posted by wabbittwax at 11:49 AM on August 29, 2012 [32 favorites]
"Over the past XX years, Bain Capital has been responsible for the loss of XXXXXXXX jobs. Meanwhile Mitt Romney has profited to the tune of $XXXXXXXXX. How many will lose their jobs after he becomes President?"
posted by wabbittwax at 11:49 AM on August 29, 2012 [32 favorites]
goethean- I really don't think it's gonna be a problem anytime soon.
posted by whm at 11:50 AM on August 29, 2012
posted by whm at 11:50 AM on August 29, 2012
Corporations are people, and they do this to corporations, so I can do this to people, right? I can find a person who has decent credit and low debt, but also just lost their job, and offer to handle their finances (with power of attorney, of course.) Then I can borrow a huge pile of money under their name, more than they could ever pay back, take a portion of that money for myself (in lieu of financial planning fees), then bail -- and they'll be okay for a few months until the borrowed money runs out, after which they are broke and have to file for bankruptcy?
Sounds like a plan! Any volunteers?
posted by davejay at 11:52 AM on August 29, 2012 [10 favorites]
Sounds like a plan! Any volunteers?
posted by davejay at 11:52 AM on August 29, 2012 [10 favorites]
I guess I'm not surprised that there are companies that make their money this way, but really, we have to consider one of those guys for president? I wouldn't even have a guy like that over for dinner.
posted by davejay at 11:53 AM on August 29, 2012 [21 favorites]
posted by davejay at 11:53 AM on August 29, 2012 [21 favorites]
Seems like a person who wanted to beat Romney in this election would do well to go over every transaction Bain Capital has made in the past few decades and count up all the people who got laid off because of them. And then just keep bringing it up over and over again.
The thing about Taibbi and co. is that they cut their teeth in the fantasy utopia of the Mitt Romneys of the world: post-Soviet Russia.
But the problem is that the whole question gets sucked into the world-is-flat-opinions-disagree political campaign coverage when you focus just on Romney. What happens to that analysis when you extend it to what Wall Street has been doing for the last 30 years? Do you become a communist?
posted by ennui.bz at 11:55 AM on August 29, 2012 [1 favorite]
The thing about Taibbi and co. is that they cut their teeth in the fantasy utopia of the Mitt Romneys of the world: post-Soviet Russia.
But the problem is that the whole question gets sucked into the world-is-flat-opinions-disagree political campaign coverage when you focus just on Romney. What happens to that analysis when you extend it to what Wall Street has been doing for the last 30 years? Do you become a communist?
posted by ennui.bz at 11:55 AM on August 29, 2012 [1 favorite]
Why do banks continue to loan out ~80% of the money needed for an LBO? I assume the successes must be greater than the losses incurred at bankruptcy?
posted by PenDevil at 11:55 AM on August 29, 2012
posted by PenDevil at 11:55 AM on August 29, 2012
Romney Invested In Company That Is Outsourcing Jobs, Forcing Workers To Train Their Chinese Replacements
Workers at Bain-Owned Illinois Factory Bring Fight to Save Their Outsourced Jobs to Romney and RNC
posted by homunculus at 11:56 AM on August 29, 2012 [3 favorites]
Workers at Bain-Owned Illinois Factory Bring Fight to Save Their Outsourced Jobs to Romney and RNC
posted by homunculus at 11:56 AM on August 29, 2012 [3 favorites]
Mitt Romney is the New Yorker cartoon of candidates. Everything he does and says can be handily summed up with "Christ, what an asshole."
posted by wabbittwax at 11:57 AM on August 29, 2012 [8 favorites]
posted by wabbittwax at 11:57 AM on August 29, 2012 [8 favorites]
Donors Invest Millions in Romney for Billions in Returns
posted by homunculus at 11:57 AM on August 29, 2012 [2 favorites]
posted by homunculus at 11:57 AM on August 29, 2012 [2 favorites]
Donors Invest Millions in Romney for Billions in Returns
Finally Romney delivers some alpha to his investors.
posted by atrazine at 11:59 AM on August 29, 2012 [1 favorite]
Finally Romney delivers some alpha to his investors.
posted by atrazine at 11:59 AM on August 29, 2012 [1 favorite]
Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome.
posted by RedShrek at 12:02 PM on August 29, 2012 [1 favorite]
posted by RedShrek at 12:02 PM on August 29, 2012 [1 favorite]
And the news is covering how Romney is starting to look like "a nice guy." The more he talks, the less robotic he seems, which is enough to make a news story. The whole "history of Bain's tactics" is complex and detailed, and would end up making a lot of major companies look like the robber-barons they are. I seriously doubt Bain is some evil outcast in terms of how they managing take-overs. Instead, the news looks at how he and his wife met, how they have 5 boys, and are not at all made of robotic parts. They're totally human, just like you and me!
When did it become that The President of the United States of America should be a guy you could talk to, one-on-one, over beer? Was it really as recent as Bush II, or was it earlier?
posted by filthy light thief at 12:04 PM on August 29, 2012 [2 favorites]
When did it become that The President of the United States of America should be a guy you could talk to, one-on-one, over beer? Was it really as recent as Bush II, or was it earlier?
posted by filthy light thief at 12:04 PM on August 29, 2012 [2 favorites]
"Over the past XX years, Bain Capital has been responsible for the loss of XXXXXXXX jobs. Meanwhile Mitt Romney has profited to the tune of $XXXXXXXXX. How many will lose their jobs after he becomes President?"
Don't you think that if Bain Capital had been a net job-destroyer, we'd have heard about that by now?
The problem with this argument is that on a net-basis, Bain Capital has created many more jobs than it has eliminated. If you stack up Staples, Sports Authority, Bright Horizons and Dominos against steel companies that would most likely have failed regardless of whether Bain invested in them or not, you end up with a pretty big number.
posted by BobbyVan at 12:04 PM on August 29, 2012 [1 favorite]
Don't you think that if Bain Capital had been a net job-destroyer, we'd have heard about that by now?
The problem with this argument is that on a net-basis, Bain Capital has created many more jobs than it has eliminated. If you stack up Staples, Sports Authority, Bright Horizons and Dominos against steel companies that would most likely have failed regardless of whether Bain invested in them or not, you end up with a pretty big number.
posted by BobbyVan at 12:04 PM on August 29, 2012 [1 favorite]
Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome.
This is not a bet I would want to make. I win, I'm happy enough with Romney NOT being president. I lose, I fear for the future of the country, AND I lose $100.
posted by filthy light thief at 12:05 PM on August 29, 2012 [13 favorites]
This is not a bet I would want to make. I win, I'm happy enough with Romney NOT being president. I lose, I fear for the future of the country, AND I lose $100.
posted by filthy light thief at 12:05 PM on August 29, 2012 [13 favorites]
Why do banks continue to loan out ~80% of the money needed for an LBO? I assume the successes must be greater than the losses
Exactly. Private equity may indeed be bad, but this piece is written in a hysterical propagandist tone and does not explain where the money to repay the banks comes from. Does it not come from selling the company to someone else or offering it on the public markets? If the company is in such shitty condition - why would anybody buy it? And if the company goes into bankruptcy - doesn't that pose a chance that the banks will not be repaid?
posted by shivohum at 12:09 PM on August 29, 2012
Exactly. Private equity may indeed be bad, but this piece is written in a hysterical propagandist tone and does not explain where the money to repay the banks comes from. Does it not come from selling the company to someone else or offering it on the public markets? If the company is in such shitty condition - why would anybody buy it? And if the company goes into bankruptcy - doesn't that pose a chance that the banks will not be repaid?
posted by shivohum at 12:09 PM on August 29, 2012
How much do jobs at Staples, Sports Authority, and Dominos pay? Are those the jobs that Americans want or need?
posted by GregorWill at 12:10 PM on August 29, 2012 [7 favorites]
posted by GregorWill at 12:10 PM on August 29, 2012 [7 favorites]
If I own a business aren't I allowed to do what ever I want to do to it? Bain owns these businesses. Like bought them in agreed transaction fair and square.
Why do banks continue to loan out ~80% of the money needed for an LBO? I assume the successes must be greater than the losses incurred at bankruptcy?
Because it doesn't really work like that. One group of banks might lend out 60% of the money, and those guys are pretty safe so they charge a low rate for it then a second set of guys might give you the next 10% but charge you 2% more per year because they figure that compensates them for the risk and they might have some restrictions on what the company can do in certain situations, and then a third set of people will finance the finally 10%, and they might charge you 10% more a year, because in a bankruptcy they are probably screwed. So really the question isn't "who loans the 80%" its who loans the 10% - and the answer is those guys have done OK over time, and some of those guys are just second wings of Private Equity firms anyway. And in a bankruptcy those guys end up with the equity and get to play this game all over again.
Remember if you are a lender one of your loans going bad usually does not mean you lose 100% of your money. Its not like owning the equity of a business that goes bankrupt.
posted by JPD at 12:12 PM on August 29, 2012 [1 favorite]
Why do banks continue to loan out ~80% of the money needed for an LBO? I assume the successes must be greater than the losses incurred at bankruptcy?
Because it doesn't really work like that. One group of banks might lend out 60% of the money, and those guys are pretty safe so they charge a low rate for it then a second set of guys might give you the next 10% but charge you 2% more per year because they figure that compensates them for the risk and they might have some restrictions on what the company can do in certain situations, and then a third set of people will finance the finally 10%, and they might charge you 10% more a year, because in a bankruptcy they are probably screwed. So really the question isn't "who loans the 80%" its who loans the 10% - and the answer is those guys have done OK over time, and some of those guys are just second wings of Private Equity firms anyway. And in a bankruptcy those guys end up with the equity and get to play this game all over again.
Remember if you are a lender one of your loans going bad usually does not mean you lose 100% of your money. Its not like owning the equity of a business that goes bankrupt.
posted by JPD at 12:12 PM on August 29, 2012 [1 favorite]
Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome.
No bet. There are too many wealthy interests vested in Romney winning and completing the privatization of everything, and far too many in the middle class cheering them on despite what it will mean to them down the road.
posted by Thorzdad at 12:13 PM on August 29, 2012
No bet. There are too many wealthy interests vested in Romney winning and completing the privatization of everything, and far too many in the middle class cheering them on despite what it will mean to them down the road.
posted by Thorzdad at 12:13 PM on August 29, 2012
How much do jobs at Staples, Sports Authority, and Dominos pay? Are those the jobs that Americans want or need?
Is that you Cousin Eddie?
posted by BobbyVan at 12:14 PM on August 29, 2012 [2 favorites]
Is that you Cousin Eddie?
posted by BobbyVan at 12:14 PM on August 29, 2012 [2 favorites]
I'm sure the companies are worth what the banks loan out to pay for them, its just that they have to be liquidated to get the money back at the end.
posted by hwyengr at 12:14 PM on August 29, 2012
posted by hwyengr at 12:14 PM on August 29, 2012
Taibbi is an entertaining writer but as usual he tends to oversimplify things. When someone like Bain takes over a company and performs a dividend recap, the transaction brings in a lot of money from external investors. Those are the people who are, in essence, paying Bain for the takeover. And they are, almost always, pretty savvy institutional investors, very similar to the sort of people who work for Bain-esque companies in the first place. If they get looted, it's their own damn fault.
People at Dunkin or KB Toys may have ended up getting laid off, but they were probably doomed from the moment that those companies got into trouble, since Bain's (or any of of the many similar companies) ability to get their hooks in is premised on the companies being near-death anyway. They don't, because they can't, take control of sustainable, well-managed businesses. In some cases, there are probably people who avoided losing their jobs by virtue of being kept on by the reanimated corpse that resulted from the consultants' financial necromancy. (Though I'm sure that a company under a top-down, 'decapitation reorganization' is far from a pleasant place to work.)
The way these deals typically work is that they exploit the market's willingness to loan companies a lot more money when they're being run by the likes of Bain, then under the prior management. The market knows exactly what Bain and its ilk do, and there's no premium for their 'services' in the case of a healthy company. In fact quite the opposite; basically everyone understands that the bright young things from the Boston and New York consultancies are only good at finance (and at getting themselves paid), and not so much at actual operations. In other words, nobody hires a reanimationist to work their magic on someone who's still alive; you only do it when the alternative is a corpse.
None of this helps Romney's case for President, and most of the people I've ever met from Bain have been consummate assholes, but that's neither here nor there. (I happen to suspect that most people who can survive in politics are assholes, so it might even be a qualification.) But PE dividend-recap deals aren't quite the pillaging of Main Street that Taibbi makes them out to be. It's more like one side of Wall Street borrowing money from the other side, using some zombies they pulled out of the local morgue to carry the cash across.
posted by Kadin2048 at 12:16 PM on August 29, 2012 [16 favorites]
People at Dunkin or KB Toys may have ended up getting laid off, but they were probably doomed from the moment that those companies got into trouble, since Bain's (or any of of the many similar companies) ability to get their hooks in is premised on the companies being near-death anyway. They don't, because they can't, take control of sustainable, well-managed businesses. In some cases, there are probably people who avoided losing their jobs by virtue of being kept on by the reanimated corpse that resulted from the consultants' financial necromancy. (Though I'm sure that a company under a top-down, 'decapitation reorganization' is far from a pleasant place to work.)
The way these deals typically work is that they exploit the market's willingness to loan companies a lot more money when they're being run by the likes of Bain, then under the prior management. The market knows exactly what Bain and its ilk do, and there's no premium for their 'services' in the case of a healthy company. In fact quite the opposite; basically everyone understands that the bright young things from the Boston and New York consultancies are only good at finance (and at getting themselves paid), and not so much at actual operations. In other words, nobody hires a reanimationist to work their magic on someone who's still alive; you only do it when the alternative is a corpse.
None of this helps Romney's case for President, and most of the people I've ever met from Bain have been consummate assholes, but that's neither here nor there. (I happen to suspect that most people who can survive in politics are assholes, so it might even be a qualification.) But PE dividend-recap deals aren't quite the pillaging of Main Street that Taibbi makes them out to be. It's more like one side of Wall Street borrowing money from the other side, using some zombies they pulled out of the local morgue to carry the cash across.
posted by Kadin2048 at 12:16 PM on August 29, 2012 [16 favorites]
"Greed is Good" would make a nice campaign poster slogan for Mittens.
posted by caddis at 12:17 PM on August 29, 2012 [1 favorite]
posted by caddis at 12:17 PM on August 29, 2012 [1 favorite]
BobbyVan: If you stack up Staples, Sports Authority, Bright Horizons and Dominos against steel companies that would most likely have failed regardless...The alternate history game has to cut both ways; the companies Bain "built" may have gone on to success without Bain's involvement, too.
This is basically the "if I don't give in to the temptation to steal this thing, it's a cinch someone else will" argument, anyway. It's a negation of the very idea of responsibility.
posted by Western Infidels at 12:23 PM on August 29, 2012 [5 favorites]
The alternate history game has to cut both ways; the companies Bain "built" may have gone on to success without Bain's involvement, too.
Agreed. But you can't blame Bain for jobs lost at companies that were on their last legs to begin with and not credit Bain for jobs created at companies that were turned around. If we're going to commit attribution errors, let's at least do so consistently.
posted by BobbyVan at 12:26 PM on August 29, 2012
Agreed. But you can't blame Bain for jobs lost at companies that were on their last legs to begin with and not credit Bain for jobs created at companies that were turned around. If we're going to commit attribution errors, let's at least do so consistently.
posted by BobbyVan at 12:26 PM on August 29, 2012
I'm sure the companies are worth what the banks loan out to pay for them, its just that they have to be liquidated to get the money back at the end.
You don't liquidate them, and the lenders and the equity holders tend to be pretty pragmatic about it because they do business together all the time. A quick bunch of legal fees and the most junior debtholders swap their debt for equity and now they own the business and life goes on.
posted by JPD at 12:32 PM on August 29, 2012
You don't liquidate them, and the lenders and the equity holders tend to be pretty pragmatic about it because they do business together all the time. A quick bunch of legal fees and the most junior debtholders swap their debt for equity and now they own the business and life goes on.
posted by JPD at 12:32 PM on August 29, 2012
But PE dividend-recap deals aren't quite the pillaging of Main Street that Taibbi makes them out to be.
Not to mention that the dividend recaps only became the new hotness from 06-08 - so arguably even by the most cyncial time frame Romney was out of the picture.
posted by JPD at 12:34 PM on August 29, 2012
Not to mention that the dividend recaps only became the new hotness from 06-08 - so arguably even by the most cyncial time frame Romney was out of the picture.
posted by JPD at 12:34 PM on August 29, 2012
So...we're longing for the days of the Robber Barons now?
At least we got some nice parks and libraries out of the deal last time. A lot of the current crop of ultra-rich folks don't seem care what their legacy is.
posted by octothorpe at 12:45 PM on August 29, 2012 [10 favorites]
At least we got some nice parks and libraries out of the deal last time. A lot of the current crop of ultra-rich folks don't seem care what their legacy is.
posted by octothorpe at 12:45 PM on August 29, 2012 [10 favorites]
wait until they get closer to death.
or walk around a big fancy hospital. Columbia-Presbyterian here in NYC reads like a who's who of wall street.
posted by JPD at 12:48 PM on August 29, 2012 [1 favorite]
or walk around a big fancy hospital. Columbia-Presbyterian here in NYC reads like a who's who of wall street.
posted by JPD at 12:48 PM on August 29, 2012 [1 favorite]
Bain Capital At GOP Convention Goes Unnamed On Day One.
posted by ericb at 1:03 PM on August 29, 2012
posted by ericb at 1:03 PM on August 29, 2012
Mitt Romney Touts Bain Capital Experience In Wall Street Journal Op-Ed.
posted by ericb at 1:05 PM on August 29, 2012
posted by ericb at 1:05 PM on August 29, 2012
Relevant (and what I'd consider a bigger story):
posted by General Malaise at 1:06 PM on August 29, 2012 [9 favorites]
“The federal records, obtained under the Freedom of Information Act, reveal that Romney’s initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had “no value as a going concern.” Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.”-- The Federal Bailout that Saved Mitt Romney
posted by General Malaise at 1:06 PM on August 29, 2012 [9 favorites]
At least we got some nice parks and libraries out of the deal last time.
Oh, I agree. I've been to some beautiful Carnegie libraries.
I'm wondering what the endgame is. What the country would like if the corporations got everything they wanted, and followed it to the logical conclusion. No minimum wage, no unions, no social services. Are we heading toward feudalism?
I mean, I'm being somewhat hyperbolic, but not really...I don't see how else it ends, and I want someone from that side of the fence to explain it to me.
posted by JoanArkham at 1:08 PM on August 29, 2012 [8 favorites]
Oh, I agree. I've been to some beautiful Carnegie libraries.
I'm wondering what the endgame is. What the country would like if the corporations got everything they wanted, and followed it to the logical conclusion. No minimum wage, no unions, no social services. Are we heading toward feudalism?
I mean, I'm being somewhat hyperbolic, but not really...I don't see how else it ends, and I want someone from that side of the fence to explain it to me.
posted by JoanArkham at 1:08 PM on August 29, 2012 [8 favorites]
Business and Political Experiences Pull Romney 2 Ways on Economy.
posted by ericb at 1:09 PM on August 29, 2012
posted by ericb at 1:09 PM on August 29, 2012
But the problem with them using "It's the debt, stupid" its that so much of it is Bush's debt.
And how's George W. 'playing' at the convention -- George W. Bush: The President Who Must Not Be Named At Republican Convention.
posted by ericb at 1:12 PM on August 29, 2012 [1 favorite]
And how's George W. 'playing' at the convention -- George W. Bush: The President Who Must Not Be Named At Republican Convention.
posted by ericb at 1:12 PM on August 29, 2012 [1 favorite]
Are we heading toward feudalism?
There is a strain of Libertarianism that believes in Monarchy...seriously. Burdensome government regulations prevent you from establishing your own Kingdom, and that is really an unacceptable loss of freedom.
posted by Chekhovian at 1:13 PM on August 29, 2012
There is a strain of Libertarianism that believes in Monarchy...seriously. Burdensome government regulations prevent you from establishing your own Kingdom, and that is really an unacceptable loss of freedom.
posted by Chekhovian at 1:13 PM on August 29, 2012
Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome.
Yeah, I'll take that bet. US$100 it is.
posted by jaduncan at 1:14 PM on August 29, 2012
Yeah, I'll take that bet. US$100 it is.
posted by jaduncan at 1:14 PM on August 29, 2012
If you could comment to indicate your acceptance I'd appreciate that, RedShrek.
posted by jaduncan at 1:16 PM on August 29, 2012
posted by jaduncan at 1:16 PM on August 29, 2012
If you could comment to indicate your acceptance I'd appreciate that, RedShrek.
Give him time for the loan to come through! Sheesh!
posted by srboisvert at 1:17 PM on August 29, 2012 [4 favorites]
Give him time for the loan to come through! Sheesh!
posted by srboisvert at 1:17 PM on August 29, 2012 [4 favorites]
So Bain Capital ran on Mafia tactics.
Bain Capital Explained By Tony Soprano (VIDEO).
posted by ericb at 1:17 PM on August 29, 2012 [1 favorite]
Bain Capital Explained By Tony Soprano (VIDEO).
posted by ericb at 1:17 PM on August 29, 2012 [1 favorite]
Vanity Fair: Where the Money Lives -- "For all Mitt Romney’s touting of his business record, when it comes to his own money the Republican nominee is remarkably shy about disclosing numbers and investments. Nicholas Shaxson delves into the murky world of offshore finance, revealing loopholes that allow the very wealthy to skirt tax laws, and investigating just how much of Romney’s fortune (with $30 million in Bain Capital funds in the Cayman Islands alone?) looks pretty strange for a presidential candidate."
posted by ericb at 1:25 PM on August 29, 2012
posted by ericb at 1:25 PM on August 29, 2012
Romney Party Yacht ‘Cracker Bay’ Flies Cayman Islands Flag In Tampa (via zombieflanders).
posted by ericb at 1:27 PM on August 29, 2012 [1 favorite]
posted by ericb at 1:27 PM on August 29, 2012 [1 favorite]
So he's got a yacht named "Cracker Bay"? Does he have a summer getaway called "Honky Chateau" as well?
posted by wabbittwax at 1:33 PM on August 29, 2012 [4 favorites]
posted by wabbittwax at 1:33 PM on August 29, 2012 [4 favorites]
Don't you think that if Bain Capital had been a net job-destroyer, we'd have heard about that by now?
From who? It's certainly profitable for Bain, but it's harder to gauge the effect of financialization on the economy as a whole. As Krugman asks, was greed good? and he finds that no, it isn't; the economy isn't performing any better than it was 30 years ago, it's just a whole lot more unequal.
posted by mek at 1:34 PM on August 29, 2012 [1 favorite]
From who? It's certainly profitable for Bain, but it's harder to gauge the effect of financialization on the economy as a whole. As Krugman asks, was greed good? and he finds that no, it isn't; the economy isn't performing any better than it was 30 years ago, it's just a whole lot more unequal.
posted by mek at 1:34 PM on August 29, 2012 [1 favorite]
wabbittwax: "So he's got a yacht named "Cracker Bay"? Does he have a summer getaway called "Honky Chateau" as well?"
No, but "Honky Tonk Chateau" is a band.
posted by notsnot at 1:38 PM on August 29, 2012
No, but "Honky Tonk Chateau" is a band.
posted by notsnot at 1:38 PM on August 29, 2012
another sociopath. just what we need. thanks, two party system.
posted by quonsar II: smock fishpants and the temple of foon at 1:44 PM on August 29, 2012
posted by quonsar II: smock fishpants and the temple of foon at 1:44 PM on August 29, 2012
Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome.
Most people who are putting their money where their mouth is disagree. Right now, it's looking like 43% Romney / 56% Obama. If you really think that Romney is going to somehow manage it, you could make more than $100 pretty easily.
Interestingly, the only time Obama's odds slipped below 50% was back during October of 2011, and I think that was mostly due to all the attention being focused on the Republican primary. His approval numbers have pretty consistently been under 50%, at least since late 2009 (with the exception of a small bump after Bin Laden got whacked), but that doesn't necessarily translate into his reelection odds.
Even if Romney did everything perfectly for the rest of his campaign, Obama would have to really screw something up -- there would have to be a reverse October Surprise, basically -- to lose.
My prediction: Obama will get reelected, but probably not by a huge margin. People will continue complaining from both sides and his approval rating will be about the same, after a slight post-election bump. He'll continue to be a compromise President who will make nobody happy. The Republicans will take Romney out behind the woodshed by blaming him for the loss, and in 2016 they'll run someone less creepy and more appealing to younger voters, maybe a conservative Hispanic if they can find one. The Mormons will have gotten their chance and blown it, taking them off the radar for a while. Nothing particularly huge will change, and in four years we'll all be having basically the same discussion, over the same issues, with slightly different faces.
posted by Kadin2048 at 1:52 PM on August 29, 2012 [4 favorites]
Most people who are putting their money where their mouth is disagree. Right now, it's looking like 43% Romney / 56% Obama. If you really think that Romney is going to somehow manage it, you could make more than $100 pretty easily.
Interestingly, the only time Obama's odds slipped below 50% was back during October of 2011, and I think that was mostly due to all the attention being focused on the Republican primary. His approval numbers have pretty consistently been under 50%, at least since late 2009 (with the exception of a small bump after Bin Laden got whacked), but that doesn't necessarily translate into his reelection odds.
Even if Romney did everything perfectly for the rest of his campaign, Obama would have to really screw something up -- there would have to be a reverse October Surprise, basically -- to lose.
My prediction: Obama will get reelected, but probably not by a huge margin. People will continue complaining from both sides and his approval rating will be about the same, after a slight post-election bump. He'll continue to be a compromise President who will make nobody happy. The Republicans will take Romney out behind the woodshed by blaming him for the loss, and in 2016 they'll run someone less creepy and more appealing to younger voters, maybe a conservative Hispanic if they can find one. The Mormons will have gotten their chance and blown it, taking them off the radar for a while. Nothing particularly huge will change, and in four years we'll all be having basically the same discussion, over the same issues, with slightly different faces.
posted by Kadin2048 at 1:52 PM on August 29, 2012 [4 favorites]
BobbyVan:...you can't blame Bain for jobs lost at companies that were on their last legs to begin with and not credit Bain for jobs created at companies that were turned around.The jury decided that the deranged OB/GYN, accused of murdering a string of retirees, hadn't really done anything morally wrong, because he killed fewer people than the number of babies he'd "created."
posted by Western Infidels at 2:00 PM on August 29, 2012 [8 favorites]
"Is that you Cousin Eddie?"
Many management positions at those firms pay less than 30,000 a year. Are those really the jobs that Americans want or need?
posted by GregorWill at 2:11 PM on August 29, 2012
Many management positions at those firms pay less than 30,000 a year. Are those really the jobs that Americans want or need?
posted by GregorWill at 2:11 PM on August 29, 2012
Seems like a person who wanted to beat Romney in this election would do well to go over every transaction Bain Capital has made in the past few decades and count up all the people who got laid off because of them.
Yeah, but Americans have to take their country back!
Romney will win - after lots of recounts. Start sucking it up now. It's good for the human spirit eventually.
posted by colie at 2:12 PM on August 29, 2012
Yeah, but Americans have to take their country back!
Romney will win - after lots of recounts. Start sucking it up now. It's good for the human spirit eventually.
posted by colie at 2:12 PM on August 29, 2012
The jury decided that the deranged OB/GYN, accused of murdering a string of retirees, hadn't really done anything morally wrong, because he killed fewer people than the number of babies he'd "created."
Wow, that analogy is seriously unhinged.
posted by BobbyVan at 2:17 PM on August 29, 2012
Wow, that analogy is seriously unhinged.
posted by BobbyVan at 2:17 PM on August 29, 2012
Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome.
Don't you Republicans usually bet $10,000? You sir, are not a true Republican.
posted by futz at 2:29 PM on August 29, 2012 [1 favorite]
Don't you Republicans usually bet $10,000? You sir, are not a true Republican.
posted by futz at 2:29 PM on August 29, 2012 [1 favorite]
BobbyVan: "The problem with this argument is that on a net-basis, Bain Capital has created many more jobs than it has eliminated. If you stack up Staples, Sports Authority, Bright Horizons and Dominos against steel companies that would most likely have failed regardless of whether Bain invested in them or not, you end up with a pretty big number."
If this is true, which I'm not sure about, but I'll assume for the sake of argument, let's keep in mind that they only managed to do it with massive subsidies from the rest of us. When they get to deduct the cost of capital from their tax bill, we're paying for it.
posted by wierdo at 2:34 PM on August 29, 2012
If this is true, which I'm not sure about, but I'll assume for the sake of argument, let's keep in mind that they only managed to do it with massive subsidies from the rest of us. When they get to deduct the cost of capital from their tax bill, we're paying for it.
posted by wierdo at 2:34 PM on August 29, 2012
I'm wondering what the endgame is. What the country would like if the corporations got everything they wanted, and followed it to the logical conclusion.
There is no "logical conclusion," because 'the corporations' aren't a monolithic entity and don't have a single set of logical, or even cohesive, goals. Though it might be better if they did.
What they'd probably do, left to their own devices, is destroy themselves. I.e., they'd destroy the environment that allows them to exist. Either by undermining the regulatory environment so thoroughly that the cost of doing business would become prohibitively high, or by causing key infrastructure that they depend on to collapse, or by just collapsing the demand side of the economy under spiraling costs externalized by the corporations themselves, until there wasn't any demand for products.
Their behavior is arguably not rational in the long term. But it's rational in the very short term, as part of a zero-sum game with their competitors. Most publicly-held corporations act in a way that demonstrates total carelessness about the long-term sustainability of anything, including themselves. Their "investors" are mostly speculators looking for speculative gains (i.e. stock price increases) and are willing to sacrifice the long term health of the firm to get there. There are exceptions, of course, but they're dwarfed by market-driven short-term thinking. And that thinking is mostly driven by an attitude that the future, beyond perhaps the next year or two, is so unpredictable that it's not worth thinking about or planning for.
If there's a difference between corporations and their leaders today and in previous generations, it's that foreshortened horizon. I don't really believe the rhetoric that there has been any significant change in personal character in America's financial or industrial elite; that's just declinism mixed with a desire to imagine that people you know are more horrible than anyone in the past. There were lots of really shitty people in positions of power in the past, and there are lots today. But there were people and firms in the past with really long planning horizons.
In the early 20th century you saw companies making investments that they thought would take 50 or 100 years (or more) to pay off. But they assumed that the world would basically exist as it was, or at least on the same trajectory that it was on, and that such investments would make sense. In large part they were wrong. When the railroad scions of the 19th and 20th century spent millions (the equivalent of billions or trillions today) on heavy infrastructure, they did it expecting that it was going to pay off over centuries. They doubtless did not expect that much of it would be torn up and abandoned within the lifetime of their children and grandchildren, their carefully-crafted thousand-year corporate reichs bankrupt, yet that is precisely what happened.
In part because of the dynamism of the 20th century, modern corporations have a very short planning horizon and an extremely high discount rate. They assume that if they don't fight tooth and nail, taking every possible opportunity -- including regulatory capture and political influence-peddling -- then their competitors will, and they'll be out of business. And this has led to a classic arms race, where everyone might agree that the money they're spending on political contributions is a deadweight loss, better spent elsewhere (e.g. on R&D or opening new markets), but nobody is going to unilaterally disarm and let themselves be gutted.
And so the corporations, like the Easter Islanders cutting down trees, drive themselves slowly towards extinction (or at least unsustainability at their current margins) by dismantling and weaponizing the market landscape that let them arise in the first place.
posted by Kadin2048 at 2:37 PM on August 29, 2012 [45 favorites]
There is no "logical conclusion," because 'the corporations' aren't a monolithic entity and don't have a single set of logical, or even cohesive, goals. Though it might be better if they did.
What they'd probably do, left to their own devices, is destroy themselves. I.e., they'd destroy the environment that allows them to exist. Either by undermining the regulatory environment so thoroughly that the cost of doing business would become prohibitively high, or by causing key infrastructure that they depend on to collapse, or by just collapsing the demand side of the economy under spiraling costs externalized by the corporations themselves, until there wasn't any demand for products.
Their behavior is arguably not rational in the long term. But it's rational in the very short term, as part of a zero-sum game with their competitors. Most publicly-held corporations act in a way that demonstrates total carelessness about the long-term sustainability of anything, including themselves. Their "investors" are mostly speculators looking for speculative gains (i.e. stock price increases) and are willing to sacrifice the long term health of the firm to get there. There are exceptions, of course, but they're dwarfed by market-driven short-term thinking. And that thinking is mostly driven by an attitude that the future, beyond perhaps the next year or two, is so unpredictable that it's not worth thinking about or planning for.
If there's a difference between corporations and their leaders today and in previous generations, it's that foreshortened horizon. I don't really believe the rhetoric that there has been any significant change in personal character in America's financial or industrial elite; that's just declinism mixed with a desire to imagine that people you know are more horrible than anyone in the past. There were lots of really shitty people in positions of power in the past, and there are lots today. But there were people and firms in the past with really long planning horizons.
In the early 20th century you saw companies making investments that they thought would take 50 or 100 years (or more) to pay off. But they assumed that the world would basically exist as it was, or at least on the same trajectory that it was on, and that such investments would make sense. In large part they were wrong. When the railroad scions of the 19th and 20th century spent millions (the equivalent of billions or trillions today) on heavy infrastructure, they did it expecting that it was going to pay off over centuries. They doubtless did not expect that much of it would be torn up and abandoned within the lifetime of their children and grandchildren, their carefully-crafted thousand-year corporate reichs bankrupt, yet that is precisely what happened.
In part because of the dynamism of the 20th century, modern corporations have a very short planning horizon and an extremely high discount rate. They assume that if they don't fight tooth and nail, taking every possible opportunity -- including regulatory capture and political influence-peddling -- then their competitors will, and they'll be out of business. And this has led to a classic arms race, where everyone might agree that the money they're spending on political contributions is a deadweight loss, better spent elsewhere (e.g. on R&D or opening new markets), but nobody is going to unilaterally disarm and let themselves be gutted.
And so the corporations, like the Easter Islanders cutting down trees, drive themselves slowly towards extinction (or at least unsustainability at their current margins) by dismantling and weaponizing the market landscape that let them arise in the first place.
posted by Kadin2048 at 2:37 PM on August 29, 2012 [45 favorites]
b1tr0t: The whole article could have been shortened to a one-liner: ...a missionary term in which he spent two and a half years trying (as he said) to persuade the French to "give up your wine,"
That's the sort of foreign policy that makes a land war in Asia look brilliant by comparison.
I watched a news-type show on Romney and Mormons in business, and one Mormon said that after 2 years of trying to convert people who might not be that open to such conversation was a great transition from youth to adulthood, especially in the setting of the business world where conversations are not always pleasant or in your favor.
I don't think his Mormon values regarding consumption of alcohol or caffeine are part of his foreign policy. It's a cute joke, but reduces Romney to a cartoon of himself. He hasn't been clear on his foreign policy ideas, but I don't think he'll try to stop production or importation of wine and coffee.
posted by filthy light thief at 2:43 PM on August 29, 2012
That's the sort of foreign policy that makes a land war in Asia look brilliant by comparison.
I watched a news-type show on Romney and Mormons in business, and one Mormon said that after 2 years of trying to convert people who might not be that open to such conversation was a great transition from youth to adulthood, especially in the setting of the business world where conversations are not always pleasant or in your favor.
I don't think his Mormon values regarding consumption of alcohol or caffeine are part of his foreign policy. It's a cute joke, but reduces Romney to a cartoon of himself. He hasn't been clear on his foreign policy ideas, but I don't think he'll try to stop production or importation of wine and coffee.
posted by filthy light thief at 2:43 PM on August 29, 2012
Not to mention that the dividend recaps only became the new hotness from 06-08 - so arguably even by the most cyncial time frame Romney was out of the picture.
According the article, Romney oversaw one of those deals, with KB Toys, before he left Bain.
posted by mek at 2:50 PM on August 29, 2012
According the article, Romney oversaw one of those deals, with KB Toys, before he left Bain.
posted by mek at 2:50 PM on August 29, 2012
Kadin2048: In part because of the dynamism of the 20th century, modern corporations have a very short planning horizon and an extremely high discount rate. They assume that if they don't fight tooth and nail, taking every possible opportunity -- including regulatory capture and political influence-peddling -- then their competitors will, and they'll be out of business.
There's also the intense focus on micro-shifts in markets. Watching day-time coverage of stocks and companies is maddening. So much speculation about The Fed, The Investors, The Competition. Charts displaying peaks and troughs for a stock in the course of the past day, week and month.
The Long Game means possibly pissing off, or frightening away, investors in the short run.
Regarding regulations, the PBS coverage of the GOP convention last night touched on that. There was a Republican representative from Wyoming who talked about the ranchers and such who have Made It Work in Wyoming for over a hundred years, before the days of government regulations. One of the commentators brought up the ugly days before the EPA and related acts, when rivers burned. The Republican representative was good enough to say that the first 40 or so years of the EPA were beneficial, but since then it's been more regulations for fewer gains and more costs. I was happy to see someone bring up the benefits of regulations, when the general discussion from the GOP are about "job-killing regulations."
posted by filthy light thief at 2:55 PM on August 29, 2012 [1 favorite]
There's also the intense focus on micro-shifts in markets. Watching day-time coverage of stocks and companies is maddening. So much speculation about The Fed, The Investors, The Competition. Charts displaying peaks and troughs for a stock in the course of the past day, week and month.
The Long Game means possibly pissing off, or frightening away, investors in the short run.
Regarding regulations, the PBS coverage of the GOP convention last night touched on that. There was a Republican representative from Wyoming who talked about the ranchers and such who have Made It Work in Wyoming for over a hundred years, before the days of government regulations. One of the commentators brought up the ugly days before the EPA and related acts, when rivers burned. The Republican representative was good enough to say that the first 40 or so years of the EPA were beneficial, but since then it's been more regulations for fewer gains and more costs. I was happy to see someone bring up the benefits of regulations, when the general discussion from the GOP are about "job-killing regulations."
posted by filthy light thief at 2:55 PM on August 29, 2012 [1 favorite]
The cover with a cartoon of Romney as Rich Uncle Pennybags is not the greatest journalism tone. The guy has a ~ .4 - .45 chance of being the next president.
Please do not misunderestimate him.
posted by bukvich at 3:03 PM on August 29, 2012
Please do not misunderestimate him.
posted by bukvich at 3:03 PM on August 29, 2012
The Republicans will take Romney out behind the woodshed by blaming him for the loss, and in 2016 they'll run someone less creepy and more appealing to younger voters, maybe a conservative Hispanic if they can find one.
These are the same Republicans that heckled a Puerto Rican speaker with "U-S-A!" chants? I wouldn't count on it.
posted by Ghostride The Whip at 3:26 PM on August 29, 2012
These are the same Republicans that heckled a Puerto Rican speaker with "U-S-A!" chants? I wouldn't count on it.
posted by Ghostride The Whip at 3:26 PM on August 29, 2012
Mitt Romney Holds Mormon Faith Close Through Political Rise
Mitt Romney has largely shied away from discussing his Mormon faith on the campaign trail, choosing instead to make his record as a businessman the central focus of his bid for president. That may change Thursday, as Romney accepts his party's nomination at the Republican National Convention in Tampa, Fla.posted by ericb at 4:48 PM on August 29, 2012
... By highlighting his religion, however, Romney also risks alienating voters. A Gallup poll this summer found that 18 percent of Americans would not vote for a Mormon for president, and more than 40 percent of Americans did not know Romney was a Mormon.
Romney wouldn't let his kids marry into the families of those he is begging to vote for him, and if they did somehow, they wouldn't even be allowed to attend the wedding ceremony. America deserves better what they vote for.
posted by Brian B. at 4:59 PM on August 29, 2012
posted by Brian B. at 4:59 PM on August 29, 2012
Thanks, Kadin. That's as good an explanation as I've seen, It just seems...odd to me that people with kids and grandkids don't take the long view for their sake. I mean, I'm childfree and don't believe in an afterlife...I should be less invested in the continuing future of the country than Kindly Old Grandpa Romney, right?
posted by JoanArkham at 5:09 PM on August 29, 2012 [1 favorite]
posted by JoanArkham at 5:09 PM on August 29, 2012 [1 favorite]
Chekhovian: "Are we heading toward feudalism?
There is a strain of Libertarianism that believes in Monarchy...seriously. Burdensome government regulations prevent you from establishing your own Kingdom, and that is really an unacceptable loss of freedom."
Well it's really stuck in the vestiges of feudalism and the Magna Carta, I suppose considering so many Libertarians have a hard on for the the US Constitution (and thus via its historical lineage to the time of the lords of the manors and estates and fiefdoms and all that, and the revolution against the monarchy for their "individual rights")... The problem is they're in the same position, or see themselves in that position, as a bunch of property owning white males who shan't dare let the plebes underneath them rise up to take a bit of that action (in the same manner that they rose up against the kings).
So yeah, they want the nobility all to themselves... Fuck you I got mine, indeed.
posted by symbioid at 5:18 PM on August 29, 2012
There is a strain of Libertarianism that believes in Monarchy...seriously. Burdensome government regulations prevent you from establishing your own Kingdom, and that is really an unacceptable loss of freedom."
Well it's really stuck in the vestiges of feudalism and the Magna Carta, I suppose considering so many Libertarians have a hard on for the the US Constitution (and thus via its historical lineage to the time of the lords of the manors and estates and fiefdoms and all that, and the revolution against the monarchy for their "individual rights")... The problem is they're in the same position, or see themselves in that position, as a bunch of property owning white males who shan't dare let the plebes underneath them rise up to take a bit of that action (in the same manner that they rose up against the kings).
So yeah, they want the nobility all to themselves... Fuck you I got mine, indeed.
posted by symbioid at 5:18 PM on August 29, 2012
On RNC Opening Night, Republicans Dare to Build a Lie
posted by homunculus at 5:24 PM on August 29, 2012 [2 favorites]
posted by homunculus at 5:24 PM on August 29, 2012 [2 favorites]
Great piece—and it explains something that I'd long wondered about: What the hell happened to KB Toys? When I was a kid, it was the best toy store in my area, albeit sometimes a bit pricey; as is explained in the article, it was run by people who actually gave a shit about selling toys that kids would actually want. But when I started going back there in college (ponies!), I remember being frustrated with the poor selection and general decline of the store. This explains so much.
posted by limeonaire at 5:37 PM on August 29, 2012 [5 favorites]
posted by limeonaire at 5:37 PM on August 29, 2012 [5 favorites]
"Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome."
I'll take that bet too. You wanna set up some escrow? I think I have a better than even chance, so it makes sense to take an even bet.
posted by klangklangston at 5:44 PM on August 29, 2012
I'll take that bet too. You wanna set up some escrow? I think I have a better than even chance, so it makes sense to take an even bet.
posted by klangklangston at 5:44 PM on August 29, 2012
Regardless, I think it is very difficult to predict what sort of president Romney would actually be. I don't think anyone expected that the constitutional scholar would use his deep experience in constitutional law to justify extrajudicial killing by drones.
You have a point, but I don't think anyone who is being genuine can watch the President and think that he just simply does not care. But Mitt, you know he would not give a shit. He is a rich man and acts like a rich man. Some people have wealth but you can tell by how they behave, that there is some humility, some care. If you don't have money, you do not exist for almost all intents and purposes to Mitt Romney. I'm not demonizing him because he isn't a demon - he is a rich person who acts like one.
I can live with a president who I ultimately feel will bend things in the right direction where he can. I can't deal with a president who most would agree does not seem to care about anything that doesn't involve power, money or prestige.
posted by cashman at 5:50 PM on August 29, 2012 [2 favorites]
You have a point, but I don't think anyone who is being genuine can watch the President and think that he just simply does not care. But Mitt, you know he would not give a shit. He is a rich man and acts like a rich man. Some people have wealth but you can tell by how they behave, that there is some humility, some care. If you don't have money, you do not exist for almost all intents and purposes to Mitt Romney. I'm not demonizing him because he isn't a demon - he is a rich person who acts like one.
I can live with a president who I ultimately feel will bend things in the right direction where he can. I can't deal with a president who most would agree does not seem to care about anything that doesn't involve power, money or prestige.
posted by cashman at 5:50 PM on August 29, 2012 [2 favorites]
I will also accept the bet. I agree with Klang, escrow would be best. I would be willing to escrow with a "trusted" (ie, long-term, "recognizable", not betting on this wager) member here via paypal, or use escrow.com.
posted by maxwelton at 6:09 PM on August 29, 2012
posted by maxwelton at 6:09 PM on August 29, 2012
"Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome."
Nope, I'm betting it's gonna be Obama and its going to be settled on election night.
Loser poses nude in a MeFi calendar. You in?
posted by Brandon Blatcher at 6:19 PM on August 29, 2012 [9 favorites]
Nope, I'm betting it's gonna be Obama and its going to be settled on election night.
Loser poses nude in a MeFi calendar. You in?
posted by Brandon Blatcher at 6:19 PM on August 29, 2012 [9 favorites]
I will also take that bet.
posted by You Should See the Other Guy at 7:12 PM on August 29, 2012
posted by You Should See the Other Guy at 7:12 PM on August 29, 2012
The cover with a cartoon of Romney as Rich Uncle Pennybags is not the greatest journalism tone.
I presume you weren't referring to this.
posted by goethean at 7:27 PM on August 29, 2012
I presume you weren't referring to this.
posted by goethean at 7:27 PM on August 29, 2012
I'm really interested to see what the convention bounce will be, Romney's team was predicting some delusional number a few weeks ago.
And, lot of Paul supporters have been saying they won't vote for Romney, wonder if that is sour grapes that will translate to actual action, or if they will suck it up. Paul certainly does not seem all that happy.
posted by edgeways at 7:43 PM on August 29, 2012
And, lot of Paul supporters have been saying they won't vote for Romney, wonder if that is sour grapes that will translate to actual action, or if they will suck it up. Paul certainly does not seem all that happy.
posted by edgeways at 7:43 PM on August 29, 2012
Princeton Election Consortium puts the likelihood of an Obama win today at 88% currently. Unlike FiveThirtyEight's numbers, I understand that this isn't a prediction, as much as it is a snapshot of the race at this point. They also put the likelihood of a Dem majority (not necessarily a super-majority) at 57%.
Basically, I think the period between now and the elections is a great test-case of observing how elections will be influenced in the post-Citizens United era. If Romney ends up winning with these odds, I think we can determine that the cost of renting the White House for four years at about $700 million.
posted by the cydonian at 8:15 PM on August 29, 2012 [1 favorite]
Basically, I think the period between now and the elections is a great test-case of observing how elections will be influenced in the post-Citizens United era. If Romney ends up winning with these odds, I think we can determine that the cost of renting the White House for four years at about $700 million.
posted by the cydonian at 8:15 PM on August 29, 2012 [1 favorite]
they get bored and go after the good guys.
And who are "the good guys"?
posted by rough ashlar at 8:25 PM on August 29, 2012 [2 favorites]
And who are "the good guys"?
posted by rough ashlar at 8:25 PM on August 29, 2012 [2 favorites]
Paul certainly does not seem all that happy.
Considering the rule changes and other shenannigans - not to mention the TSA 8 person tag team in Clearwater - why should Paul "be happy"?
posted by rough ashlar at 8:31 PM on August 29, 2012
Considering the rule changes and other shenannigans - not to mention the TSA 8 person tag team in Clearwater - why should Paul "be happy"?
posted by rough ashlar at 8:31 PM on August 29, 2012
Never said he "should", but often times the primary loser at least makes a show of at least not holding a grudge. Now, I think Paul is an insidious, disingenuous politician of the first order, I would say as fucking odious as Santorum is he probably was the most "principled" of the GOP field, including Paul, in that Santorum absolutly believes what he says as frightening as it is. Paul, is not quite to the level of flat out lying every time he opens his mouth as Romney and (now) Ryan are, but he supporters are more than a touch naive if they think he is anything but a wanker extraordinaire.
Paul's supporters played a nasty game in the conventions, post primary voting, and they got pretty burned by it. Yes, absolutely they where playing by the rules, but realistically the RNC was not going to let them do it again and was going to squash it hard. I completely understand the turmoil and anger of his supporters, but there was no way the RNC a group of authoritarian jackasses hard-noses was going to do anything but what they did. I'm not sure what Ron Paul thought was going to happen at the convention, except what did happen, so in a way it is all just a staged show, albeit with real emotion on the behalf of the supporters.
3rd party candidacy? Probably not, but with fully 20% of Republicans wishing they had a different candidate, and Paul not paying lip service to Romney it does tickle the back of my mind that it is not out of the realm of possibility.
posted by edgeways at 10:20 PM on August 29, 2012 [1 favorite]
Paul's supporters played a nasty game in the conventions, post primary voting, and they got pretty burned by it. Yes, absolutely they where playing by the rules, but realistically the RNC was not going to let them do it again and was going to squash it hard. I completely understand the turmoil and anger of his supporters, but there was no way the RNC a group of authoritarian jackasses hard-noses was going to do anything but what they did. I'm not sure what Ron Paul thought was going to happen at the convention, except what did happen, so in a way it is all just a staged show, albeit with real emotion on the behalf of the supporters.
3rd party candidacy? Probably not, but with fully 20% of Republicans wishing they had a different candidate, and Paul not paying lip service to Romney it does tickle the back of my mind that it is not out of the realm of possibility.
posted by edgeways at 10:20 PM on August 29, 2012 [1 favorite]
Please do not misunderestimate him.
Good advice beyond the election. A company flipper like Romney, who targets undervalued companies, is a nice indicator of where we're heading if we don't get it right. Romney will permanently subjugate the government to financial interests more than any other candidate. This is why Reagan's image still has such financial backing today, because his job of enslaving us to debt, not just borrowing the money, was historically unfinished. We have no idea what the stakes are, most people would just assume Romney has their interests in mind however misguided, not realizing what's in his briefcase. Even corporate managers dread people like Romney when they come calling.
posted by Brian B. at 6:05 AM on August 30, 2012
Good advice beyond the election. A company flipper like Romney, who targets undervalued companies, is a nice indicator of where we're heading if we don't get it right. Romney will permanently subjugate the government to financial interests more than any other candidate. This is why Reagan's image still has such financial backing today, because his job of enslaving us to debt, not just borrowing the money, was historically unfinished. We have no idea what the stakes are, most people would just assume Romney has their interests in mind however misguided, not realizing what's in his briefcase. Even corporate managers dread people like Romney when they come calling.
posted by Brian B. at 6:05 AM on August 30, 2012
He built screwed it!: The Federal Bailout that Saved Mitt Romney
"Mitt Romney helped secure a federal bailout to keep Bain & Company from collapsing, according to government documents obtained by Rolling Stone. ‘Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC - the bank insurance system backed by taxpayers - out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds."posted by octobersurprise at 7:46 AM on August 30, 2012 [1 favorite]
Romney/Ryan win this election. I am willing to bet a $100 with anyone on that outcome.
I will take that.
posted by spaltavian at 8:36 AM on August 30, 2012
I will take that.
posted by spaltavian at 8:36 AM on August 30, 2012
The Daily Show: The Republican National Convention theme "We Built It" resonates with those ignoring government's hand in helping to create the stable conditions aiding entrepreneurship.
posted by homunculus at 9:16 AM on August 30, 2012
posted by homunculus at 9:16 AM on August 30, 2012
Taibbi on Democracy Now: The Secret to Mitt Romney’s Fortune? Greed, Debt and Forcing Others to Foot the Bill
posted by homunculus at 9:27 AM on August 30, 2012 [1 favorite]
posted by homunculus at 9:27 AM on August 30, 2012 [1 favorite]
"Mitt Romney helped secure a federal bailout to keep Bain & Company from collapsing, according to government documents obtained by Rolling Stone. ‘Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC - the bank insurance system backed by taxpayers - out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds."
Wow! This should be all over the news. Talk about corporate welfare!
posted by Golden Eternity at 10:50 AM on August 30, 2012
Wow! This should be all over the news. Talk about corporate welfare!
posted by Golden Eternity at 10:50 AM on August 30, 2012
It isn't all over the news because its a pretty preposterous mischaracterization of what happened.
The FDIC was only involved because the bank that gave Bain the loan was seized because of a lack of capital unrelated to Bain, and beyond that its a pretty common thing to have happen in a workout of a bad loan that isn't secured by any assets.
Romney was only able to pull that because, as Taibbi notes the value of the assets the loan was secured on didn't come close to the value of the loan, or the recovery he promised as part of his restructuring. Had those assets been worth more he would have been told to walk away. The ability to pay bonuses was 1) shitty banking covenants 2) permitted by the indenture because the assets you were betting on performing was the dudes who got the bonuses.
posted by JPD at 11:41 AM on August 30, 2012
The FDIC was only involved because the bank that gave Bain the loan was seized because of a lack of capital unrelated to Bain, and beyond that its a pretty common thing to have happen in a workout of a bad loan that isn't secured by any assets.
Romney was only able to pull that because, as Taibbi notes the value of the assets the loan was secured on didn't come close to the value of the loan, or the recovery he promised as part of his restructuring. Had those assets been worth more he would have been told to walk away. The ability to pay bonuses was 1) shitty banking covenants 2) permitted by the indenture because the assets you were betting on performing was the dudes who got the bonuses.
posted by JPD at 11:41 AM on August 30, 2012
Not quite. The bonus loophole was leverage they used to force the FDIC to renegotiate the $30 million owed downwards:
In March 1992, according to the FDIC documents, Romney approached the banks and played the bonus card. Allow Bain to pay off its debt at a deep discount, he demanded – just 35 cents on the dollar. Otherwise, the "majority" of the firm's "excess cash" would "be available for the bonus pool to its officers at a vice president level and above."
posted by mek at 12:27 PM on August 30, 2012
In March 1992, according to the FDIC documents, Romney approached the banks and played the bonus card. Allow Bain to pay off its debt at a deep discount, he demanded – just 35 cents on the dollar. Otherwise, the "majority" of the firm's "excess cash" would "be available for the bonus pool to its officers at a vice president level and above."
posted by mek at 12:27 PM on August 30, 2012
I mean, the details are absolutely incredible. It's basically a hostage situation - give Romney taxpayer money, or the firm gets it. And either way, Romney and friends get paid and the taxpayer gets screwed.
posted by mek at 12:30 PM on August 30, 2012
posted by mek at 12:30 PM on August 30, 2012
No the details aren't incredible. That's how out of court restructurings work for businesses with no assets. What was incredible was that some muppet loan office gave them that size of a loan in the first place.
If the excess cash + assets was =35% of the outstanding debt then the banks would have told him no and filed the business and clawed back the bonuses. Their choice basically was cash + assets or 35% of the face value of loan repaid over time. The math said Bain had more value to them as a going concern than in liquidation. Hence the bit about the FDIC being so focused on what the photocopiers were worth. That's what they were trying to figure out.
The fact the FDIC was involved is basically meaningless. A rational debtor would have behaved exactly the same way with any lender.
posted by JPD at 12:40 PM on August 30, 2012
If the excess cash + assets was =35% of the outstanding debt then the banks would have told him no and filed the business and clawed back the bonuses. Their choice basically was cash + assets or 35% of the face value of loan repaid over time. The math said Bain had more value to them as a going concern than in liquidation. Hence the bit about the FDIC being so focused on what the photocopiers were worth. That's what they were trying to figure out.
The fact the FDIC was involved is basically meaningless. A rational debtor would have behaved exactly the same way with any lender.
posted by JPD at 12:40 PM on August 30, 2012
and it wasn't a "bonus loophole" - a bank loan agreement generally has a set of covenants that limits what the company can do given different financial covenants, if bonuses were not mentioned (And usually they are not) then its perfectly fine to give them, assuming they don't bankrupt the business.
What Romney's real threat was is that he was going to pay out the cash which was not going to be enough to render the firm insolvent, and then all of the Bain guys were going to walk out the door the day the checks cleared and start "NewBain" with the money, leaving a shell with just the debt and the employees they didn't want.
posted by JPD at 12:45 PM on August 30, 2012
What Romney's real threat was is that he was going to pay out the cash which was not going to be enough to render the firm insolvent, and then all of the Bain guys were going to walk out the door the day the checks cleared and start "NewBain" with the money, leaving a shell with just the debt and the employees they didn't want.
posted by JPD at 12:45 PM on August 30, 2012
And that's the kind of business know-how he'll bring to the job of President!
posted by mek at 12:48 PM on August 30, 2012
posted by mek at 12:48 PM on August 30, 2012
sweet snark when it turns out you don't know what you are talking about.
Do you think the FDIC (And the other banks) wouldn't have sued for fraudulent conveyance if what Taibbi is claiming was actually true?
posted by JPD at 12:54 PM on August 30, 2012 [1 favorite]
Do you think the FDIC (And the other banks) wouldn't have sued for fraudulent conveyance if what Taibbi is claiming was actually true?
posted by JPD at 12:54 PM on August 30, 2012 [1 favorite]
The is not that the FDIC or Romney acted wrongfully, it's that a career in finance at a firm whose very existence apparently hinged upon government intervention is the exact antithesis of Romney's self-depiction.
posted by mek at 1:00 PM on August 30, 2012
posted by mek at 1:00 PM on August 30, 2012
Michael Moore Predicts Romney Victory
Well! I guess that's it. Shows over, people! Might as well sleep in on the 6th.
posted by octobersurprise at 1:03 PM on August 30, 2012
Well! I guess that's it. Shows over, people! Might as well sleep in on the 6th.
posted by octobersurprise at 1:03 PM on August 30, 2012
Look, I am not a Romney supporter, and I think the fact that the Repubs claim Bain Cap as some argument for his suitability for the white house is really really dumb and just wrong.
That said, the Bain & Co. restructuring had absolutely nothing to do with government intervention.
The government intervention was that the Bank of New England failed, the FDIC sold the good parts to Fleet, and then the FDIC worked to maximize the value of the existing bad loans. The FDIC was the bankruptcy trustee for BoNE, and as such tried to find a way to maximize the value of the loan to Bain. The FDIC had no leverage over Bain, but neither did the BoNE before it was taken over. So Romney played hardball with a bankruptcy trustee - that happened to be a government entity. Had it not failed, Romney would have negotiated the deal with BoNE and ended up with substantially the same outcome.
The question to ask isn't about the haircut that was taken, but rather how and why Bain was able to get such a large loan from BoNE in the first place.
posted by JPD at 1:23 PM on August 30, 2012 [2 favorites]
That said, the Bain & Co. restructuring had absolutely nothing to do with government intervention.
The government intervention was that the Bank of New England failed, the FDIC sold the good parts to Fleet, and then the FDIC worked to maximize the value of the existing bad loans. The FDIC was the bankruptcy trustee for BoNE, and as such tried to find a way to maximize the value of the loan to Bain. The FDIC had no leverage over Bain, but neither did the BoNE before it was taken over. So Romney played hardball with a bankruptcy trustee - that happened to be a government entity. Had it not failed, Romney would have negotiated the deal with BoNE and ended up with substantially the same outcome.
The question to ask isn't about the haircut that was taken, but rather how and why Bain was able to get such a large loan from BoNE in the first place.
posted by JPD at 1:23 PM on August 30, 2012 [2 favorites]
The question to ask isn't about the haircut that was taken, but rather how and why Bain was able to get such a large loan from BoNE in the first place.
Maybe it is arguable that this loan could not have been made with out FDIC (aka the taxpayers - a group that does not include Mitt Romney himself who basically doesn't pay taxes) protecting the BoNE deposits. As long as everyone gets their bonuses who cares if the FDIC (the taxpayer) is left holding the bag?
Do you think the FDIC (And the other banks) wouldn't have sued for fraudulent conveyance if what Taibbi is claiming was actually true?
Just because something is technically legal that doesn't mean it is not obscene, especially considering how much the bank lobby is able to influence the financial laws. The fact that Romney pays less than 13% taxes while benefiting from taxpayer funded bailouts and an average school teacher probably pays at least 30% is as obscene as it can get.
posted by Golden Eternity at 2:15 PM on August 30, 2012
Maybe it is arguable that this loan could not have been made with out FDIC (aka the taxpayers - a group that does not include Mitt Romney himself who basically doesn't pay taxes) protecting the BoNE deposits. As long as everyone gets their bonuses who cares if the FDIC (the taxpayer) is left holding the bag?
Do you think the FDIC (And the other banks) wouldn't have sued for fraudulent conveyance if what Taibbi is claiming was actually true?
Just because something is technically legal that doesn't mean it is not obscene, especially considering how much the bank lobby is able to influence the financial laws. The fact that Romney pays less than 13% taxes while benefiting from taxpayer funded bailouts and an average school teacher probably pays at least 30% is as obscene as it can get.
posted by Golden Eternity at 2:15 PM on August 30, 2012
the bank lobby has nothing to do with fraudulent conveyance. Taibbi is trying to claim that the sword Romney was dangling over the FDIC was that paying out the bonuses would have bankrupted the firm - that's pretty much the definition of fraudulent conveyance, which is very much illegal.
FDIC (in theory) is funded by a levy on bank deposits, not taxpayers (granted, pretty similar cohorts). During '08 tho the taxpayers injected capital. Of course without deposit insurance there all other sorts of bad things that happen. But if the existence of the FDIC allow a group to get paid that shouldn't have, it is the BoNE folks, not the Bain folks.
posted by JPD at 2:32 PM on August 30, 2012 [1 favorite]
FDIC (in theory) is funded by a levy on bank deposits, not taxpayers (granted, pretty similar cohorts). During '08 tho the taxpayers injected capital. Of course without deposit insurance there all other sorts of bad things that happen. But if the existence of the FDIC allow a group to get paid that shouldn't have, it is the BoNE folks, not the Bain folks.
posted by JPD at 2:32 PM on August 30, 2012 [1 favorite]
The FDIC is, basically, an insurance company like any other. It is funded by premiums paid by banks, and pays out in the event of covered losses. As a Federally chartered corporation it has the backing of the Treasury, but IIRC the last time this has become an issue was during the S&L crisis, when you had a near-systemic failure. (A situation that was anticipated when the FDIC was created in the 30s, and the whole reason why it has the ability to draw on the Treasury, so that its solvency is never an issue, i.e. Full Faith and Credit.) I think it was paid back afterwards, from premiums.
Much as I'm a non-fan of Bain, I can't really blame them from offering BoNE a bad deal, even if there was some sharp practice involved -- as long as it didn't cross the line into outright illegal behavior, which it apparently didn't. That's just business. The fault is entirely BoNE's for literally bankrolling such a high-risk maneuver, and the FDIC should have slaughtered them for it. (Specifically: should have taken control of the bank, carried out the management, installed new ones. Pour encourager les autres, if nothing else.)
That the FDIC didn't do that shows the toothlessness of banking regulators during that period, something which I suspect comes as a surprise to absolutely nobody given what happened in the last few years. But that's a direct result of the way that banking regulation has been funded, and the too-cozy relationship they've traditionally had with industry. While I don't think the FDIC was ever quite that bad, consider the OTS: they literally marketed themselves to banks during the 90s, because they were funded by the institutions under regulation. That funding is a political issue and ultimately the responsibility of Congress, not a bunch of overpaid Boston consultants.
And banking isn't the only regulatory activity that suffers from a too-cozy relationship as a result of being self-funding; that problem exists elsewhere as well.
posted by Kadin2048 at 5:45 AM on August 31, 2012 [3 favorites]
Much as I'm a non-fan of Bain, I can't really blame them from offering BoNE a bad deal, even if there was some sharp practice involved -- as long as it didn't cross the line into outright illegal behavior, which it apparently didn't. That's just business. The fault is entirely BoNE's for literally bankrolling such a high-risk maneuver, and the FDIC should have slaughtered them for it. (Specifically: should have taken control of the bank, carried out the management, installed new ones. Pour encourager les autres, if nothing else.)
That the FDIC didn't do that shows the toothlessness of banking regulators during that period, something which I suspect comes as a surprise to absolutely nobody given what happened in the last few years. But that's a direct result of the way that banking regulation has been funded, and the too-cozy relationship they've traditionally had with industry. While I don't think the FDIC was ever quite that bad, consider the OTS: they literally marketed themselves to banks during the 90s, because they were funded by the institutions under regulation. That funding is a political issue and ultimately the responsibility of Congress, not a bunch of overpaid Boston consultants.
And banking isn't the only regulatory activity that suffers from a too-cozy relationship as a result of being self-funding; that problem exists elsewhere as well.
posted by Kadin2048 at 5:45 AM on August 31, 2012 [3 favorites]
The FDIC did slaughter them. They seized the bank, sold the good assets to fleet and this particular work out occured when the FDIC was serving as the receiver.
posted by JPD at 8:09 AM on August 31, 2012 [1 favorite]
posted by JPD at 8:09 AM on August 31, 2012 [1 favorite]
Godammit. I'm exhausted. Just had to walk away from my favorite chair/ottaman in which the three of us were arguing with the sofa/couch that he's not really considered a 'chair!'
posted by ericb at 3:52 PM on August 31, 2012
posted by ericb at 3:52 PM on August 31, 2012
Joseph Stiglitz: Mitt Romney's tax avoidance weakens bonds of American society. If politicians and those around them do not pay their fair share of taxes, how can we expect that anyone else will?
posted by homunculus at 6:07 PM on September 3, 2012 [1 favorite]
posted by homunculus at 6:07 PM on September 3, 2012 [1 favorite]
They seized the bank, sold the good assets to fleet and this particular work out occured when the FDIC was serving as the receiver.
Ah, good catch. I thought the FDIC was just arm-twisting them due to low capitalization, and didn't actually take them into receivership. (Mostly because there's a bank around today called Bank of New England, which is apparently the old Bank of New Hampshire operating under a new name; not sure that's an auspicious choice, but whatever.) Anyway, good on the FDIC in that case; that's what should have happened. The greater point about over-coziness between banks and regulators stands, I think, but at least they didn't drop the ball there as badly as I assumed they did.
You make a bad deal (or bunch of bad deals, in the case of BoNE), your capital reserves drop, the FDIC steps in and saves the depositors while the equity gets bayoneted by the bankruptcy courts. Looks like the system worked as designed.
That seems to move the fault even further away from Bain. They're now two steps away from the failure of responsibility, one more than the single step that they would have been if the FDIC had failed to act appropriately. So, again, their actions seem like sharp practice but definitely not illegal and certainly within the realm of what you'd expect with that much at stake.
posted by Kadin2048 at 1:37 PM on September 4, 2012
Ah, good catch. I thought the FDIC was just arm-twisting them due to low capitalization, and didn't actually take them into receivership. (Mostly because there's a bank around today called Bank of New England, which is apparently the old Bank of New Hampshire operating under a new name; not sure that's an auspicious choice, but whatever.) Anyway, good on the FDIC in that case; that's what should have happened. The greater point about over-coziness between banks and regulators stands, I think, but at least they didn't drop the ball there as badly as I assumed they did.
You make a bad deal (or bunch of bad deals, in the case of BoNE), your capital reserves drop, the FDIC steps in and saves the depositors while the equity gets bayoneted by the bankruptcy courts. Looks like the system worked as designed.
That seems to move the fault even further away from Bain. They're now two steps away from the failure of responsibility, one more than the single step that they would have been if the FDIC had failed to act appropriately. So, again, their actions seem like sharp practice but definitely not illegal and certainly within the realm of what you'd expect with that much at stake.
posted by Kadin2048 at 1:37 PM on September 4, 2012
Bain and Mitt Romney: What’s Fact and What’s Opinion
posted by homunculus at 11:05 AM on September 6, 2012
posted by homunculus at 11:05 AM on September 6, 2012
More on Romney in Rolling Stone:
Mitt Romney's Disastrous Energy Plan: The Republicans are offering up a blueprint for environmental ruin - more drilling, less wildlife and a climate gone crazy
posted by homunculus at 12:13 PM on September 17, 2012
Mitt Romney's Disastrous Energy Plan: The Republicans are offering up a blueprint for environmental ruin - more drilling, less wildlife and a climate gone crazy
posted by homunculus at 12:13 PM on September 17, 2012
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But the problem with them using "It's the debt, stupid" its that so much of it is Bush's debt.
posted by tilde at 10:45 AM on August 29, 2012 [1 favorite]