Normally, one can use a candidate’s position and policy statements to predict – at least somewhat – their probable performance if they win their election. However, on almost every significant position and policy he had taken, Willard [Mitt] Romney and his official spokespeople have issued totally contradictory statements. (Except about his ignoring his father’s well-justified policy of disclosing many years of tax returns, rather than keeping their secrets hidden from the voters he asks to trust him.)
Sometimes his contradicting positions were even stated only hours apart. Numerous experienced political observers have said they have never-before seen a presidential candidate who has blithely done anything like it, especially not with such consistency.
Since we are thus unable to have any idea of what he would really do or where he stands, we must look at the portion of his track record about which we do have any useful information.
He constantly claims that he knows how to fix our economy and produce jobs. What of his experience could make those claims believable?
Unquestionably, his greatest success and longest experience was as the co-founder and CEO (Chief Executive Officer) of Bain Capital, a so-called private equity corporation. So how did he run it?
“Private equity” is money wealthy private investors provide to a company not listed on any stock exchange and thus not required to publicly disclose much about its activities. Romney’s Bain Capital, in particular, apparently specialized in LBO’s – leveraged buyouts. (LBO’s didn’t even exist prior to the mid-1950’s, and didn’t become widespread until the 1980’s.)
The general LBO process is to find some corporation that is momentarily undervalued compared to its assets – preferably one that has, as part of those assets, large reserves of cash. It might be undervalued because it is out of vogue in the notoriously fickled stock market. Or perhaps it had a momentary setback in its market area or productivity. Sometimes, especially with older companies, some or much of their cash reserves are in their pension fund, originally intended to provide financial security to the corporation’s loyal, long-time employees, when they finally retire.
It is not unusual for LBO operations to use just enough of their investors’ money to buy a controlling interest in such a corporation; then promptly hire themselves – as a separate “management” company – to run the company, typically charging handsomely for the management services that they are providing to the company they have captured. This allows the investors to quickly reap a return, irregardless of how the “managers” run the company.
An easy way to pay those handsome “management” fees and other returns to investors, is to borrow as much as possible against all of the captive company’s assets. One of the easiest sources for such borrowing is the company’s own pension fund! LBO “managers” of the captive company can “borrow” all of what had been “secure” funds intended to become retirement benefits for its employees – borrowing every penny, irregardless of whether they can ever be repaid.
(Think of it as a private-sector variation on the federal government borrowing from the Social Security Trust Fund. Except that companies don’t have the taxation power needed to raise the money necessary to repay such federal debts.)
Another alternative is to break-up the company and sell its parts– when they are worth more separately than the company is currently worth as an integrated whole. Since the only goal of the private-equity investors is to maximize their own profits, they can do this without hesitancy. It satisfies the investors’ goal, regardless of its impact on the company and its employees (much less its retirees).
The key point here is that it is NOT the well-being of the company that is of concern, and certainly not of its employees (and retirees). The ONLY goal is maximizing the profits of the wealthy private-equity investors, preferably as soon as possible!
Okay – so what might Romney’s longest experience and greatest success predict as to how he would run the USA as its CEO?
Note that, once again, Romney has an elite cadre of investors – including but certainly limited to Adelson, the Koch brothers and numerous similarly wealthy individuals with whom he spends so much of his time. And with whom he has been so much more candid about his views than he has been with the voters.
(Note that even now – the final week before the election – rather than sending his partner, Paul Ryan, to speak to large groups of would-be voters, instead, Romney has Ryan holding most of his meetings hidden away with small groups of potential investors.)
So – based on Romney’s greatest success and most extensive experience, we should thus assume that the following would be features of his management of the USA:
• First and foremost, he will have the “company” he now “manages” deliver the maximum possible return on investment to his investors. This will be done by various means:
- tax-funded (that is, debt-funded) contracts to their companies (like the Cheney-Bush operation’s billion-dollar no-bid contracts to Cheney’s Haliburton and its subsidiaries; high-profit contracts to Blackwater which was owned by a major Bush contributor, etc.);
- tax/debt-funded subsidies to the corporations and conglomerates in which his investors have major holdings;
- below-value leases and outright sales of the “company’s” land and underground assets;
- granting of monopoly licenses (e.g. FCC licenses), etc.
• Second, he will channel hefty chunks of his “company’s” tax/debt-based funds to his fellow “managers”, whom he will hire and place in the highest-paying positions possible. (Think of Bush’s FEMA director, Michael Brown – hurricane Katrina’s “helluva job, Brownie” – a major Bush fund-raiser, whose most notable previous management experience that “qualified” him for that position had been as the Judges and Stewards Commissioner for the International Arabian Horse Association.)
• Third – noting his extensive experience in hiding his income from taxation – Romney and Ryan and their congressional Republicans will do as much as they can to make it even easier for them and their investors, to hide even more of their wealth from being taxed to support the nation from which they have so magnificently benefited.
• He can also use his management experience in exporting Americans’ jobs to send government jobs offshore. Especially when those offshore service-providers are owned by his investors. Note that investor Adelson already has significant foreign holdings.
Why … just think of the many other ways that Romney can use his position as CEO of the USA, to further-benefit and pay-off his investors! No matter what long-term damage it might do to that asset and to the rank-and-file citizens who depend on it (where he would only be CEO for 4-8 years, anyway).
– Jim Warren