Looting, Layoffs, and the Legacy of Bain
Mitt Romney better be prepared for headlines like this:
Special Report: Romney’s Steel Skeleton in the Bain Closet (Reuters)
Bain Capital Tied to Bankruptcy, Closing of KC Steel Plant (KC Star)
Another Romney Layoff Victim, this one a Conservative, Speaks Out (Washington Post)
Paul Krugman, ahead of the curve (as usual), parsed Romney’s comments on job creation and the lack thereof. After noting that Romney wants to take credit for every job created by a company Bain took over but denies responsibility for any losses, Krugman sums up the basic problem with Romney’s record at Bain:
When the dust settled after the companies that Bain restructured were downsized — or, as happened all too often, went bankrupt — total U.S. employment was probably about the same as it would have been in any case. But the jobs that were lost paid more and had better benefits than the jobs that replaced them. Mr. Romney and those like him didn’t destroy jobs, but they did enrich themselves while helping to destroy the American middle class.
That’s the macro picture. For the micro, check out the Reuters piece about Bain’s purchase of a Kansas City steel mill. Do go read the whole piece, but these two paragraphs give you the bottom line at the end of the day:
. . . the mill was padlocked and some 750 people lost their jobs. Workers were denied the severance pay and health insurance they’d been promised, and their pension benefits were cut by as much as $400 a month.
What’s more, a federal government insurance agency had to pony up $44 million to bail out the company’s underfunded pension plan. Nevertheless, Bain profited on the deal, receiving $12 million on its $8 million initial investment and at least $4.5 million in consulting fees.
That’s what Krugman is talking about. Bain — under Romney’s direction — bought Armco, loaded it up with debt, paid itself some handsome dividends, and charged some hefty consulting fees. They played bookkeeping games, while not adequately managing the company itself, and ultimately Armco went belly up in 2001. That was two years after Romney stepped down from Bain, but it was what Bain did to Armco from the time they bought it in 1993 that put it in this position.
But that’s still a pretty abstract picture. To see what “destroying the middle class” looks like on the personal level, Greg Sargent introduces us to one of the Armco workers affected by the looting and layoffs. Glen Patrick Wells worked at Armco for 34 years, and describes himself as a staunch conservative. Says Sargent:
Wells says he’s so furious with Romney that he says he’s open to appearing in TV spots against him in order to make the case he makes in the above video — even if it would mean helping Obama.
“Right now, if Romney gets in, I am so disgusted that I will probably vote for Obama and I detest him,” Wells says. “Anyone who is willing to put a predatory capitalist in office deserves to get Obama.”
Coming from someone who says he voted for George W. Bush twice and McCain once, that’s harsh. That’s the video up above, and it’s very well done. “They [Bain] walked out of here with millions. They left us with nothing.”
Looting and layoffs may look good to Wall Street, but not so good to Main Street. With a record like that, good luck reaching the conservatives in the middle class, Mitt.