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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Sunday, November 13, 2011

He is the 1 percent

It reads like a classic American horror story: buy on borrowed money, wring out the profit by tossing workers and borrowing even more. And when there's nothing left to squeeze, toss it away, damn the consequences.

The New York Time account of the corporate rape of Dade International should have a familiar ring to it: it parallels the fate of Ampad, the paper company that also fell victim to Mitt Romney's slash-and-burn venture capital tactics.

Here's the nut graf of the Times account:
Bain and a small group of investors bought Dade in 1994 with mostly borrowed money, limiting their risk. They extracted cash from the company at almost every turn — paying themselves nearly $100 million in fees, first for buying the company and then for helping to run it. Later, just after Mr. Romney stepped down from his role, Bain took $242 million out of the business in a transaction that, according to bankruptcy documents and several former Dade officials, weakened the company.
Romney stepped down from Bain in midstream -- to challenge Ted Kennedy for the US Senate seat. But the story was similar several years earlier at Ampad, a Marion, IN company.

As MIT professor Howard Anderson told the Globe in 2008, the business philosophy was also similar:
"It's not that employment grows, it's that their investment grows. Sometimes its expansion, and sometimes it's shutting things down."
To listen to Romney on the stump and to read the tweets of his staff, you would think Our Man Myth is the best friend of the working man and woman, possessing the right tools to get America working again. Why? Because he's a businessman whop knows how to create jobs.

The Romney team is always ready to point to his role in creating Staples, the office supply giant But for every Staples, where jobs are created, there appears to be at least one Dade or Ampad, where jobs and companies are destroyed while the folks who used borrowed money to invest walk away with tidy profits.

Sounds like the 1 percent to me. Maybe we should Occupy Mitt. Of course that would require figuring out whether he's at his home in Massachusetts. Or New Hampshire. Or Utah. Or California.

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