Defending Bain, attacking Harrop, praising Romney
By now, careful readers are aware that columnist Froma Harrop plays fast and loose with the facts. For example, on Oct. 27, this newspaper featured a column by Ms. Harrop in which she wrote, “Why do so many Americans think the government rescue of the auto industry was a bad — nay, an evil — thing? The bailout has been a rousing success. …
“At the last count, the bailout’s actual cost to taxpayers has fallen to $17 billion. …”
That same day Yahoo Finance reported, “Second, there’s the $81 billion invested in the automobile sector, most of it in General Motors and related entities. Of that, $67 billion remains outstanding, and GM’s upcoming initial public offering is likely to make only a small dent.”
The following week The Wall Street Journal reported that GM had received a $45.4 billion tax exemption on future profits (a large chunk of which comes directly out of taxpayers’ pockets).
As of February 2011, GM still owed taxpayers $26.4 billion (not counting the sweetheart tax deal). But that didn’t prevent GM from handing out $400 million in “worker bonuses.” Perhaps the auto bailout was a “rousing success” for the UAW, but not for the rest of U.S. taxpayers who got fleeced.
Recently, we were treated to another Harrop whopper when she delivered a hit piece on Mitt Romney. Harrop: “Under Romney’s leadership, Bain bought majority control of Worldwide Grinding Systems in 1993. It put up $8 million of the $75 million purchase price and borrowed $125 million by issuing bonds. In business since 1888, the mill was renamed GS Technologies. Bain immediately sent investors $36 million in dividend checks. …
“GS Technologies went bankrupt in 2001, the plant closed, and 750 workers lost their jobs. …
“I don’t think Romney took sadistic pleasure in firing the machinists and pipefitters. Possibly worse, he never saw them as human beings. …”
So Froma gives Mitt the benefit of the doubt when it comes to sadism (sort of), but questions his humanity. Lovely.
Character assassination aside, if one is going to criticize Mitt’s performance at Bain Capital, then job creation is the wrong metric to use. The goal of private equity firms is to maximize profits for their investors, not create jobs. Yes, Mitt was very adept at making money for his clients (many of whom were middle-class pensioners). But the last time I checked, there was no law against that.
Political consultant Dick Morris notes that most people, especially Republicans and Independents, understand the difference between capitalism and safety-net socialism. They are familiar with Schumpeter’s doctrine of the “gales of creative destruction” that blow through our economy.
They understand that if we remain “bail-out nation” and save (everyone’s) job and (everyone’s) pension, we will become so bloated with debt that we will resemble Greece.
They understand that to attract capital to turn around failing companies, either you need to have cunning lobbyists who make mega campaign contributions or a robust return on capital to attract private investors. President Obama is a champion of the first approach; Romney chose the second path.
Informed voters realize that Romney is not the predator Harrop paints him as. Harrop focuses on GS Technologies, a steel company that, like dozens of others, went bankrupt in the early years of this century. True, Bain Capital put up only $8 million and leveraged the rest to acquire GS. But Harrop fails to mention that Bain then upped its investment to $16 million and merged the company with a stronger one in an effort to make it more competitive in a highly competitive marketplace.
Moreover, Harrop implies that GS Technologies bankruptcy (in 2001) occurred on Romney’s watch. But Mitt had left Bain in 1999. The decision to deny the GS workers their pensions and health benefits wasn’t his. Romney was busy saving the Utah Winter Olympics by then. Yet another fact that Harrop neglects to mention.
And what of the thousands of middle-class folks who have jobs and pensions and health insurance (today) because of Romney’s leadership at Bain Capital? It’s telling that Harrop doesn’t mention them, either. Harrop’s glaring omissions and intellectual dishonesty have no place in professional journalism.
A former private equity manager, Steven Rattner, was lead auto adviser in the Obama administration. Rattner writes, “When it comes to Bain Capital, I feel equipped to parse fact from fiction. … Bain Capital is not now, nor has it ever been, some kind of Gordon Gekko-like, fire-breathing corporate raider that slashed and burned companies, immolating jobs wherever they appear in its path.
“Overall, Bain Capital’s record was extraordinary, among the best in the business … Bain Capital more than fulfilled its responsibility to a gaggle of investors, who were mostly foundations, endowments, pension funds and the like.”
Poor Froma, she embodies the late Christopher Hitchens’ observation that all politics is yokel.
— Reggie McConnell
Terre Haute
Break a CFL? No reason to panic
I don’t understand why we have to call in anyone in order to clean up after a broken CFL. CFLs are the same as conventional fluorescent lamps, which also contain some mercury.
Despite careful handling, I have broken a few of them over the years. A thorough cleanup with broom and shop-vac ensued and, viola, problem solved.
Actually, incandescent lamps contain solder which contains lead.
Should we call in the EPA when we break one?
— Mark Burns
Terre Haute
GOP’s timing not so super
Hard to believe that Republicans would wait until the Super Bowl comes to town to pull a stunt like this and embarrass us in front of the entire nation and the world.
I’ve a good mind to send them to bed without any supper.
— Clay Wilkinson
Terre Haute
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