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The Re-Tooling Of An American Corporate Shark.

Editor’s Note: Michael Wilcox is a Massachusett’s resident with a slightly different take on the Romney candidacy versus our last post. 

As the Republican primary season unfolds the theme, to the extent that there has been one, it seems that Republicans have managed to dispose of the Tea Party candidates and have all but settled on Mitt Romney. This has occurred because the Tea Party has struggled to produce a single candidate who can deliver the Tea Party message with a straight face to the nation. It seems to me that the Republican merry-go-round of “front runners” has somehow managed to work to eliminate the Perry, Bachman and Cain candidacies….We can disagree about the degree of government spending but people are not going to vote for someone as uninformed as Bachman or Perry, and the allegations made against Herman Cain were just too much for anyone to ignore. It should soon become clear that Rick Santorum is so desperately out of step with American voters on “social” issues that the Republicans cannot nominate him either.

What’s that? Why am I ignoring Newt and the crazy old fella from Texas? Oh that’s easy, they’re both nuttier than squirrel crap and would be a dream come true for Obama. So the race looks to be all but won by Mitt Romney, and let me be clear….as a Democrat I am least offended by Mr. Romney as a prospective President because he is not who he plays on TV.

Like it or not my Republican friends, Mr. Romney is a big government moderate who championed universal health care when he was the Governor of Massachusetts. Yes my good Republicans, Mitt Romney was ahead of the Democratic curve and actually implemented a system where people are ordered to obtain health insurance or they are penalized come tax time. Big BIG government stuff.  Mitt, the man who convinced Massachusetts voters that he was “Pro-Choice” is much closer politically to Bill Clinton than he is to Ronald Reagan. Perhaps the most interesting aspect of “Romney the candidate” is that he has flourished in the primary lead-up,  where the best that can be said about the guy is:

  1. He doesn’t debate as well as Gingrich.
  2. He’s not your grandaddy’s conservative.
  3. His “jobs” record as Mass. Governor was abysmal.
  4. He’s a notorious flip flopper on big ticket issues like abortion and health care.
  5. He’s a Mormon.

Then there’s his past at Bain Capital, and this is where Mr. Romney has encountered trouble in the past. We need to be clear, Mr. Romney was an enormously successful businessman who did nothing illegal in the manner in which he directed Bain Capital. That is not the question here. The real issue is how Bain Capital’s business record under Romney will play with an American public which is desperate for jobs. For those of you who do not know, Bain Capital was a private equity firm that invested in underperforming companies and in most cases they managed to improve performance. A great story,  no? Well, the story goes that companies such as office supplier Ampad was acquired by Bain and then used as a platform to acquire other companies, borrowing to make the acquisitions to such a degree that Ampad ended up with $400 million in short term debt. Eventually, Ampad was bankrupted, its stockholders were left with worthless shares and its employees were left without jobs while Bain pocketed millions in fees for the acquisitions and management of the company. A great bit of news if you were invested in Bain or worked there….not such a glad time for Ampad, its employees or shareholdershowever.

The Ampad story is not news, as it was first published in the Boston Globe back in 1992. Mitt challenged the late Ted Kennedy in a 1994 senate run and that story devastated Romney’s election bid. Will it pose problems this time around? In the current economic climate Romney cannot shed the story and will likely respond with some of Bain’s many successes as his remaining Republican opponents seek to use the Kennedy tactic against him. No matter how many jobs Bain actually created, and let’s be clear Bain Capital did create jobs, the fact remains that Bain made money in some cases from the systematic destruction of once viable, albeit underperforming, companies.

Romney, during at least his private equity career, believed in “creative destruction” as a means of keeping companies efficient. The idea that companies should be prepared to take steps, including layoffs and overseas expansion, to remain competitive and profitable is clearly good for stockholders and in a broader sense the economy itself. The question which voters will need to answer is whether the “creative destruction” model is “good business” or is it business that is anti-American job. The issue this year is, after all, jobs, jobs and oh yeah…jobs. Labeling oneself as a jobs creator when the cold hard fact of the matter is that “creative destruction” is about maximizing share value often at the expense of jobs is risky business. Mitt Romney is a shrewd politician as evidenced by his remarkable ability to convince primary voters that he is a conservative. I suspect he may have a harder time explaining away the Bain Capital years….but who would ever have thought that the pro-choice, universal health care champion, liberal governor would get a single vote in Iowa. It should be fun to watch either way.

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7 Responses to The Re-Tooling Of An American Corporate Shark.

  1. Rickie T. Weiner, Esq. says:

    Nicely written and well thought out but the question really is at present who would be better for this country. Obama who had done nothing prior to becoming president and has continued that trend as president, or Mitt Romney who has done much more whether you like what he has done or not?

  2. Mike Wilcox says:

    Rickie: The truth is that Romney has done a great deal in business, there can be no questioning of his business chops….my concern with him arises from the lack of any core belief that he’s been able to stick with for any period of time. As I said, though, he would not be as harmful as President because he is a moderate.

  3. Dave Petkauskos says:

    I guess that being a Capitalist in the ‘ole US of A and understanding how to manipulate the system without abusing it like many of the Wall Street and Washington cronies have done is pretty much what the game is all about, isn’t it? At least a sophisticated Investor and successful Business mogul knows how to make things happen, and in this Economy would probably be a welcome sight for many.
    (see Daniel Henninger’s Wall Street Journal Article today entitled: Bain Capital Saved America)

    Wandering aimlessly like this Administration does on Economic, Social and International issues with a Greenhorn at the helm for four more years will be a catastrophic end to our Nation as we know it.

    Meanwhile, don’t forget that many of the 100’s of Businesses Bain pumped money into like Staples, Burlington Coat Factory, Dunkin’ Brands, Toys R Us and The Weather Channel to name just a few, have been extremely successful and were sound investments for Bain and it’s Client (see USA Today Robert Robb’s Romney was no “Vulture Capitalist” January 18, 2012 from the Political Notebook)

    Romney’s Fifteen percent Income Tax, predominantly based on
    his income derived from Capital gains on his extensive investment portfolio, again is perfectly legal and not unlike many, if not all of our Political Leaders, Republican and Democrat alike. So, as for his peers in the Political Arena where greed and corruption prevail, I guess 15% sounds like “no harm, no foul” to me. My math shows that 15% of what he earns is better than 35% of what he hides…
    Doesn’t Warren Buffet pay less in taxes by his own admission?

    There’s not a CPA on the Planet that will not try to minimize the client’s tax liability “legally” wink, wink….

    I’ll take the Businessman over the Politician in 2012.

  4. Mike Wilcox says:

    Good reply Dave, thanks for checking out the BizzyLife.

  5. Scott says:

    Mitt is the coice of the media. I find it strange that 2 states and roughly 128K people have decided the GOP nomination. The real test would be to divide the US into 4 areas and then have an area vote. Start this in February and give about 4 weeks between elections. Cycle the areas every election so that your area gets to be 1st every 4th election cycle. It might spread the candidates, but keeps them in the same geographic location. As for me, I would rather have a businessman in the WH.

  6. Mike Wilcox says:

    I think Mitt has also done a pretty fair job of convincing main stream Republicans (eg McCain and Christie) to support him. I think Mitt is more substantial than people give him credit for. I also agree that Mitt’s business acumen is needed now, but the question is, and has been, which Mitt will we get on the social policy side of the ledger. I like the idea but would be concerned that regionalized voting would only serve to further compartamentalize the nation….
    Thanks for the insightful response either way Scott.

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