BAIN CAPITAL: VENTURE OR RAPTOR

Why is it that the President’s team and even President Obama seem not to understand the Bain Capital problem? Capital is vital to a private entrepreneur. A big company that is making millions already does not have to worry about where the developmental dollars are coming from. There is no way a backyard inventor can compete with the industrial giants with out access to capital even if it is costly—it is a risky business. That is why honest venture capital can be so profitable but also why capital is so important to the American way of life. That was not Bain. What is wrong with Bain Capital under Romney’s leadership is that he used private capital to take over ailing companies. If his objectives were to build the company up and put it on the road to success would have been one thing; it would have been admirable. If he failed, he could say at least he tried.  However, what he did was use his knowledge of business to evaluate the company in terms of what he could do to make money any way he could—ethically or unethically, which is not the same thing as legally verses illegally; this is tied directly Romney’s stance on government regulation deregulation. He often, but not invariably, chose an unethical and solution, which in my mind means to hell with people; his bank account was what counted. If he couldn’t make money honestly ethically, he did it his way. This is called predatory capital and not venture capital.

He would investigate a company and determine if he could borrow money against the assets. If that was not possible, he would not invest his stockholders money the company. If successful, he would use that money to carry out the rest of his plan. If it meant bankrupting the company and using the recently passed bankruptcy laws to destroy the unions, he would do it. Once the union was gone, they could fire people with impunity especially if they were at the high end of the pay scale or near retirement. The destruction of the unions freed up pension funds to fold back into the company. In addition, a prime objective was to find out if he would be able to gain government subsidies and if so, how could he maximize the subsidies. If he could not operate the company in a way that increase cash flow, he would fire the remaining employees, close and sell the company, and then cash in by selling the assets. Bain Capital was a strong-arm company that had nothing little or nothing to do with venture capital; it was a predator.