Tag Archives: Mitt Romney

The honorable, stalwart Willard Romney

I’m late to the story, but Scott Lemieux wrote the sharpest squib about the announcement that Willard Romney, Scion of the Binder and Emperor of Bain and Father of Tagg, may run for the departing Orrin Hatch’s Senate seat in Utah:

A Republican senator who is a lockstep vote for Trump’s agenda and appointments and a lockstep vote against any attempt to investigate him will be replaced by a Republican senator who is a lockstep vote for Trump’s agenda and appointments and a lockstep vote against any attempt to investigate him but occasionally gives quotes to the media suggesting that he finds Trump vaguely distasteful.

Having returned to work, I couldn’t watch the phalanx of homeless conservative Trump victims who consume MSNBC air time. Do they consider Romney a man of principle or a vulture capitalist with handsome coif who governed Massachusetts as you might expect a Republican to do with a Democratic legislature? It’s called a rhetorical question.

The archipelago man

Butterflies in the stomach time:

Here’s how Romney would go about “liberating” a company: A private equity firm like Bain typically seeks out floundering businesses with good cash flows. It then puts down a relatively small amount of its own money and runs to a big bank like Goldman Sachs or Citigroup for the rest of the financing. (Most leveraged buyouts are financed with 60 to 90 percent borrowed cash.) The takeover firm then uses that borrowed money to buy a controlling stake in the target company, either with or without its consent. When an LBO is done without the consent of the target, it’s called a hostile takeover; such thrilling acts of corporate piracy were made legend in the Eighties, most notably the 1988 attack by notorious corporate raiders Kohlberg Kravis Roberts against RJR Nabisco, a deal memorialized in the book Barbarians at the Gate.

Romney and Bain avoided the hostile approach, preferring to secure the cooperation of their takeover targets by buying off a company’s management with lucrative bonuses. Once management is on board, the rest is just math. So if the target company is worth $500 million, Bain might put down $20 million of its own cash, then borrow $350 million from an investment bank to take over a controlling stake.

But here’s the catch. When Bain borrows all of that money from the bank, it’s the target company that ends up on the hook for all of the debt.

Now your troubled firm – let’s say you make tricycles in Alabama – has been taken over by a bunch of slick Wall Street dudes who kicked in as little as five percent as a down payment. So in addition to whatever problems you had before, Tricycle Inc. now owes Goldman or Citigroup $350 million. With all that new debt service to pay, the company’s bottom line is suddenly untenable: You almost have to start firing people immediately just to get your costs down to a manageable level.

“That interest,” says Lynn Turner, former chief accountant of the Securities and Exchange Commission, “just sucks the profit out of the company.”

For all their redundant profanity and reliance on spoilers (e.g. sentences or paragraphs that are essentially “Now here’s what makes this guy an asshole…”), Matt Taibbi’s Rolling Stone stories read like H.P. Lovecraft or J.G. Ballard: a condo balcony with a pleasant couple drinking wine and eating a dog. This latest, about what Bain Capital did to KB Toys and other small fries, is his best in months.

Where have you gone, Ayn Rand? The GOP turns its lonely eyes to you

I haven’t posted much about campaign season because the Olympics are on and I don’t like to encourage our sports-crazed culture any more than necessary. But I suppose one of the reasons why the GOP’s enthusiasm for turning banal examples of indiscretion into apocalyptic battles between Gog and Magog smothers Democrats is the latter’s shame over its liberal history. If the Democrats weren’t ashamed of it, then how couldn’t they frame arguments like Stanley Kurtz does?

How did we get here, and what does it mean for our future? Above all, now that our internal battle is well-and-truly out in the electoral open, will 2012 decide whether red America or blue America wins for good?
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A Romney victory won’t quiet our national conflicts either. Although a Romney victory would be taken by conservatives as proof that we are still a center-right nation, the fact is that the mainstream media and our key cultural institutions are now in the hands of an increasingly ambitious left. The media barely hides its bias now, and they will come at a President Romney with everything they’ve got…

I won’t link to his National Review Online post; you can find it. The Increasingly Ambitious Left whose ambition is to beg Obama not to “reform” Social Security! You get the idea. Democrats are incapable of this kind of imbecility. They take pride in empirical thinking. That’s why they lose. Maybe not this time though. I was stunned when Harry Reid suddenly proved himself an agile purveyor of unfounded accusations — the kind of game in which Karl Rove has excelled. And still centrist types complained.

So let’s hope Paul Ryan proves as irresistable a target as he looks. Everybody gets what he wants: Ryan the patina of intellect that the Beltway pundit class confuses for the real thing, Romney the millions of dollars from the wealthy donors who are the only legitimate Ryan acolytes, and Stanley Kurtz gets his blue vs red playground brawl. But don’t listen to cable news sirens. Michael Grunwald:

I should probably just shut up about Paul Ryan, because I believe there’s a federal statute requiring pundits to marvel at his “seriousness” and “courage.” I think there’s also a constitutional mandate enshrining him as a “deficit hawk,” even though he voted for the Bush tax cuts, the Bush military and security spending binge, the Medicare prescription drug benefit, the bank bailout and the auto bailout, and against the Bowles-Simpson deficit reduction plan.

Charles Pierce goes further:

Paul Ryan is an authentically dangerous zealot. He does not want to reform entitlements. He wants to eliminate them. He wants to eliminate them because he doesn’t believe they are a legitimate function of government. He is a smiling, aw-shucks murderer of opportunity, a creator of dystopias in which he never will have to live. This now is an argument not over what kind of political commonwealth we will have, but rather whether or not we will have one at all, because Paul Ryan does not believe in the most primary institution of that commonwealth: our government. The first three words of the Preamble to the Constitution make a lie out of every speech he’s ever given. He looks at the country and sees its government as something alien that is holding down the individual entrepreneurial genius of 200 million people, and not as their creation, and the vehicle through which that genius can be channelled for the general welfare

So, Dems, there’s a fight worth winning — if you want to fight it.