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Romney’s Bain Yielded Private Gains, Socialized Losses | Bloomberg

By Anthony Luzzatto Gardner, Bloomberg


Mitt Romney touts his business acumen and job-creation record as a key qualification for being the next U.S. president.


What’s clear from a review of the public record during his management of the private-equity firm Bain Capital from 1985 to 1999 is that Romney was fabulously successful in generating high returns for its investors. He did so, in large part, through heavy use of tax-deductible debt, usually to finance outsized dividends for the firm’s partners and investors. When some of the investments went bad, workers and creditors felt most of the pain. Romney privatized the gains and socialized the losses.


What’s less clear is how his skills are relevant to the job of overseeing the U.S. economy, strengthening competitiveness and looking out for the welfare of the general public, especially the middle class.


Thanks to leverage, 10 of roughly 67 major deals by Bain Capital during Romney’s watch produced about 70 percent of the firm’s profits. Four of those 10 deals, as well as others, later wound up in bankruptcy. It’s worth examining some of them to understand Romney’s investment style at Bain Capital.


In 1986, in one of its earliest deals, Bain Capital acquired Accuride Corp., a manufacturer of aluminum truck wheels. The purchase was 97.5 percent financed by debt, a high level of leverage under any circumstances. It was especially burdensome for a company that was exposed to aluminum-price volatility and cyclical automotive production.


Casino Capitalism

...


In 1992, Bain Capital bought American Pad & Paper by financing 87 percent of the purchase price. In the next three years, Ampad borrowed to make acquisitions, repay existing debt and pay Bain Capital and its investors $60 million in dividends.


As a result, the company’s debt swelled from $11 million in 1993 to $444 million by 1995. The $14 million in annual interest expense on this debt dwarfed the company’s $4.7 million operating cash flow. The proceeds of an initial public offering in July 1996 were used to pay Bain Capital $48 million for part of its stake and to reduce the company’s debt to $270 million.


From 1993 to 1999, Bain Capital charged Ampad about $18 million in various fees. By 1999, the company’s debt was back up to $400 million. Unable to pay the interest costs and drained of cash paid to Bain Capital in fees and dividends, Ampad filed for bankruptcy the following year. Senior secured lenders got less than 50 cents on the dollar, unsecured lenders received two- tenths of a cent on the dollar, and several hundred jobs were lost. Bain Capital had reaped capital gains of $107 million on its $5.1 million investment.


[Read more.]

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Greed and Debt: The True Story of Mitt Romney and Bain Capital

Greed and Debt: The True Story of Mitt Romney and Bain Capital | Coffee Party News | Scoop.it

by Matt Taibbi

 

The great criticism of Mitt Romney, from both sides of the aisle, has always been that he doesn't stand for anything. He's a flip-flopper, they say, a lightweight, a cardboard opportunist who'll say anything to get elected.

 

The critics couldn't be more wrong. Mitt Romney is no tissue-paper man. He's closer to being a revolutionary, a backward-world version of Che or Trotsky, with tweezed nostrils instead of a beard, a half-Windsor instead of a leather jerkin. His legendary flip-flops aren't the lies of a bumbling opportunist – they're the confident prevarications of a man untroubled by misleading the nonbeliever in pursuit of a single, all-consuming goal. Romney has a vision, and he's trying for something big: We've just been too slow to sort out what it is, just as we've been slow to grasp the roots of the radical economic changes that have swept the country in the last generation.

 

The incredible untold story of the 2012 election so far is that Romney's run has been a shimmering pearl of perfect political hypocrisy, which he's somehow managed to keep hidden, even with thousands of cameras following his every move. And the drama of this rhetorical high-wire act was ratcheted up even further when Romney chose his running mate, Rep. Paul Ryan of Wisconsin – like himself, a self-righteously anal, thin-lipped, Whitest Kids U Know penny pincher who'd be honored to tell Oliver Twist there's no more soup left. By selecting Ryan, Romney, the hard-charging, chameleonic champion of a disgraced-yet-defiant Wall Street, officially succeeded in moving the battle lines in the 2012 presidential race.

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East of Charlotte, black voters illustrate Barack Obama's challenge

East of Charlotte, black voters illustrate Barack Obama's challenge | Coffee Party News | Scoop.it

by Alex Leary, Tampa Bay Times


At a bus stop near an abandoned shopping mall 15 minutes east of this city's attractive and buzzing downtown, President Barack Obama's hope and fear sit 20 feet apart.


"You can't expect Obama to get in there and change everything in four years. I'll vote for him again," said Valhalla Davis, 40.


She has been unemployed as long as Obama has been in office but holds faith, even as she scrapes by on twice-a-week trips to donate plasma. "There's a job out there," Davis said. "It's coming; I've just got to be patient." [MORE]

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Bad week for voter ID laws. Will Supreme Court weigh in before election?

Bad week for voter ID laws. Will Supreme Court weigh in before election? | Coffee Party News | Scoop.it
In case after case, federal judges are siding with the Department of Justice’s claims that tougher state voting rules discriminate against the poor and minorities.
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Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It's Barack Obama? - Forbes

Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It's Barack Obama? - Forbes | Coffee Party News | Scoop.it

From Forbes:  It’s enough to make even the most ardent Obama cynic scratch his head in confusion.


Amidst all the cries of Barack Obama being the most prolific big government spender the nation has ever suffered, Marketwatch is reporting that our president has actually been tighter with a buck than any United States president since Dwight D. Eisenhower.

Who knew?

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Four Reasons Everyone Should Thank Unions On Labor Day

Four Reasons Everyone Should Thank Unions On Labor Day | Coffee Party News | Scoop.it
Labor day is a welcome, and well-deserved, day off for millions of Americans. But it’s worth remembering that Labor day is more than just a three-day weekend.
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Labor Day '12: Little progress for workers or US economy

from the Jackson sun.


It has been three years since our nation’s economy crashed into the Great Recession. The greatest burden from the economic meltdown has fallen on the shoulders of American workers and their families. Wages are down, jobs have been lost, unemployment benefits and savings are nearly exhausted. Sadly, this Labor Day finds American politics little focused on jobs and economic recovery. Instead, the November election is dominated by finger pointing, fringe issues, candidate attack ads and deception. American workers need and deserve solid leadership and specific plans from the White House and Congress dedicated to fixing the economy and strengthening the job market.


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Romney's evolution on campaign finance

Romney's evolution on campaign finance | Coffee Party News | Scoop.it
In earlier campaigns, he decried the influence of big donors in elections.
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Proof Obamacare Seeks To Put Control Of Healthcare In The Hands Of The Consumer - Forbes

Proof Obamacare Seeks To Put Control Of Healthcare In The Hands Of The Consumer - Forbes | Coffee Party News | Scoop.it

by Rick Ungar

 

One of the key talking points consistently mouthed by opponents of the Affordable Care Act is their declaration that the law wrests control of healthcare out from the hands of the consumer and places it squarely under the control of the federal government.

 

And yet, the meme—like so many others employed by dedicated Obamacare bashers— is simply not true.

 

Now, we can prove it.

 

You have likely never heard about the section of the ACA that provides federal loans to help launch consumer owned and controlled health insurance plans. The money is available for insurance plans showing a reasonable chance for success, are owned by the membership (people like you and I) and operated by a board of directors where members comprise the majority -not passive investors looking to make a buck.

 

It is health insurance by the people and for the people.

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GOP-Backed Voter Fraud Laws Aim To Disenfranchise Students - Daily Beast

GOP-Backed Voter Fraud Laws Aim To Disenfranchise Students - Daily Beast | Coffee Party News | Scoop.it
Daily BeastGOP-Backed Voter Fraud Laws Aim To Disenfranchise StudentsDaily BeastLast September, the University of Maine senior received a letter (see below) from Maine's Secretary of State, Republican Charles Summers, questioning her right to vote...
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The Tea Party is the real Republican candidate for president. Romney is just their puppet

The Tea Party is the real Republican candidate for president. Romney is just their puppet | Coffee Party News | Scoop.it

If Romney wins, he'll govern according to the whims of the radical right.


by SALLY KOHN, Salon


If you had not paid any attention to the presidential election until Mitt Romney’s convention speech, you might be left with the impression that he is a thoughtful and friendly guy who sure looks presidential and is a reasonable, moderate alternative to President Obama. And my hunch is that, in fact, this might not be far from the truth. In a vacuum, it is distinctly possible that Mitt Romney would prefer to run as a moderate Republican in a campaign focused on honest and substantive disagreements and not nasty attacks and lies. But unfortunately for Mitt Romney and our country, he is running in a Republican Party hijacked and controlled by right-wing extremists. The Tea Party is the real Republican candidate for president of the United States. Mitt Romney is just their puppet.


It wasn’t supposed to be this way for Republicans. The vast majority of the conservative rank and file desperately wanted a strong social conservative to win the nomination. But given President Obama’s strong favorability and the slow but steady economic recovery, the conservative clowns who threw their hats in the ring were weak candidates at best even before being shot to pieces by the circular firing squad of the campaign. Mitt Romney was no one’s first choice. He was just the last one standing. [MORE]

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Obama comes to bat - Roger Simon

Obama comes to bat - Roger Simon | Coffee Party News | Scoop.it

by Roger Simon, Politico


Mistakes were made. Hopes dashed. Change crushed. We were all so eager for Barack Obama to succeed. Especially the Republicans. Yes, it is true. They say so.


McManus quotes Samuel L. Popkin, a political scientist at the University of California San Diego, as saying: “From 1984 until now, a plurality on almost every survey — and sometimes a majority — has said the next generation would have it worse than this generation.”


Popkin, who devised the “worse off” question for the CBS/New York Times poll, noted that, “In October 1984, during the recession of the first Ronald Reagan administration, a whopping 63 percent said they thought the next generation would be worse off. [MORE]

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ALEC's Own US Senator?

ALEC's Own US Senator? | Coffee Party News | Scoop.it
GOP veteran Tommy Thompson, now running for Senate, has deep ties to the powerful group behind "Stand Your Ground" and voter ID laws.
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Mayor Castro, 1st Latino To Give DNC Keynote Speech

Mayor Castro, 1st Latino To Give DNC Keynote Speech | Coffee Party News | Scoop.it
At the Democratic National Convention Tuesday night, Julian Castro, 37, will deliver the keynote address. The mayor of San Antonio, Texas, has been referred to as the new face of the Democratic Party.
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Mitt Romney's Pork Barrel Olympics

Mitt Romney's Pork Barrel Olympics | Coffee Party News | Scoop.it
The GOP candidate pried $1.5 billion out of the federal government to bankroll his Olympic turnaround. Millions went to questionable projects that benefited well-connected Utahns.


By Tim Murphy, Mother Jones


GOP presidential nominee Mitt Romney is in London for the opening ceremonies of the 2012 summer games—part of a three-country world tour designed to build his foreign policy resume and shake down overseas donors. The Romney campaign will run television ads during the games touting the candidate's experience as CEO of the 2002 Salt Lake City Olympics, where he was widely credited with turning around the scandal-plagued organizing effort.


What Romney doesn't talk about is how he succeeded in Utah with government help—lots of it—and how millions in assistance that he pried out of the feds ended up bankrolling subsidies, sweetheart deals, and giveaways for land developers and other well-connected Utahns.


As Romney chastises the president for pointing out that successful business ventures benefit from a larger social compact and accuses critics of pining for "free stuff," Romney is simultaneously touting an Olympic effort that, more than any other in American history, succeeded thanks to public investment—some of it sunk into questionable projects of marginal value to the Salt Lake games. "The $1.5 billion in taxpayer dollars that Congress is pouring into Utah is 1.5 times the amount spent by lawmakers to support all seven Olympic Games held in the U.S. since 1904—combined," Donald Barlett and James Steele reported for Sports Illustrated in 2001. Those numbers were adjusted for inflation.


How the Salt Lake Games came to receive more money than any games in American history isn't much of a mystery. The organizers, including Romney, asked for it. In his 2004 book, Turnaround, Romney acknowledges the central role of the federal government in making the Olympics possible. "No matter how well we did cutting costs and raising revenue, we couldn't have Games without the support of the federal government," he wrote.


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Protesters Gather in Charlotte for Democratic Convention

Protesters Gather in Charlotte for Democratic Convention | Coffee Party News | Scoop.it
The list of grievances Sunday included the crackdown on illegal immigrants and foreclosures across the country, but there were fewer protesters than some had anticipated.


By VIV BERNSTEIN, The New York Times


CHARLOTTE, N.C. -  Protesters from scores of groups around the country filled the streets of Charlotte on Sunday afternoon to push their agenda as Democrats gathered in the city for their convention.


The list of grievances was long, and it included issues like the crackdown on illegal immigrants, foreclosures across the country, the environment, gay rights, jobs and labor. But the number of protesters who came to Charlotte might not have been what some anticipated.


Police estimates for the crowd were from 800 to 1,000, although an organizer for the coalition of groups marching put the total at 3,000. Either way, it was more than the number who showed up in Tampa, Fla., last week for the Republican National Convention, when a few hundred participated in protests. Organizers had anticipated anywhere from 2,000 to 10,000 protesters in Charlotte, a major banking city.


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Workers Feel the Pain of Bain

Workers Feel the Pain of Bain | Coffee Party News | Scoop.it
Four hardy souls from rural Illinois joined tens of thousands of people undeterred by threats of Hurricane Isaac during this week’s Republican National Convention.
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Obama facing mounting questions over ‘you didn’t build that’ remark

Obama facing mounting questions over ‘you didn’t build that’ remark | Coffee Party News | Scoop.it

by Amy Garner, Washington Post


After being pummeled for days at the Republican National Convention for his remark that business owners “didn’t build that,” President Obama heads to the Democratic National Convention in North Carolina this week facing mounting questions about how he will respond to charges that he is hostile to free enterprise.


On Sunday, senior Obama advisers suggested that they will not address the anti-business allegations directly but will instead try to turn the tables on their GOP rivals by accusing them of being dishonest about what Obama meant. David Plouffe, a senior White House adviser, said in an interview Sunday on ABC News that Republican Mitt Romney’s campaign is engaged in a broader pattern of dishonesty and is “built on a tripod of lies.” Plouffe cited accusations that Obama has gutted the work requirement for welfare and “raided” Medicare to pay for the nation’s new health-care law as other examples of untruths coming from the GOP.


The Obama team thinks that it has effectively dealt with the “build that” attacks and that the issue is overblown — the “drill, baby, drill” of 2012, a rallying cry for the right but ultimately one with limited appeal in the broader electorate.


Nevertheless, there are signs that they see a vulnerability. Obama has not repeated the words that sparked the controversy, and he has toned down the broader argument — that government help is essential to business success — in the six weeks since he ad-libbed the line near the end of a long campaign swing. His speeches have been shorter, with fewer references to wealthy Americans. He is more cautious about portraying the choice that he quite forcefully described that night between Romney’s worldview and his own... [MORE]

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Labor Day Without Jobs: Exposing the “Job Creator” Fraud

Labor Day Without Jobs: Exposing the “Job Creator” Fraud | Coffee Party News | Scoop.it
With cunning, contempt, and catechismal fervor, the super-rich have argued on behalf of supply-side economics: the economic philosophy that contends  that money should move to the top, where it will...


The Wall Street Journal noted in 2009 that the Bush tax cuts led to the "worst track record for jobs in recorded history." 25 million people remain unemployed or underemployed, with 30 to 50 percent of recent college graduates in one of those categories. Among unemployed workers, nearly 43 percent have been without a job for six months or longer.

For the jobs that remain, most are low-paying, with the only real employment growth occurring in retail sales and food preparation.


Perhaps, instead, they're building businesses on their own? No. Only 3 percent of the CEOs, upper management, and financial professionals were entrepreneurs in 2005, even though they made up about 60 percent of the richest .1% of Americans. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds. They come from the middle class.

That deserves repeating. Entrepreneurs come from the middle class.



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Romney's bounce from convention looks short-lived: Reuters/Ipsos poll

Romney's bounce from convention looks short-lived: Reuters/Ipsos poll | Coffee Party News | Scoop.it
(Reuters) - A modest bump in popularity for U.S. presidential hopeful Mitt Romney from this week's Republican Party convention looks to be short-lived, according to a Reuters/Ipsos poll.


Democratic President Barack Obama regained a narrow lead on Saturday by 44 percent to 43 percent over his Republican challenger, former Massachusetts Governor Romney, in the latest daily installment of the four-day rolling poll.

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Fears About Shariah Law Take Hold In Tennessee

Fears About Shariah Law Take Hold In Tennessee | Coffee Party News | Scoop.it
It's getting tougher to be a Republican in some parts of the country while also fully accepting the practice of Islam. In Tennessee, an incumbent in the U.S.
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Does it Matter if Paul Ryan Misstated his Marathon Time?

Does it Matter if Paul Ryan Misstated his Marathon Time? | Coffee Party News | Scoop.it

BY NICHOLAS THOMPSON, The New Yorker


It has no bearing at all on the republic how fast Paul Ryan runs a marathon. But in another way it is important: Is the potential Vice President the sort of person who lies congenitally? In that sense it matters.


Here’s the transcript of what Ryan said to Hewitt:
H. H.: Are you still running?
P. R.: Yeah, I hurt a disc in my back, so I don’t run marathons anymore. I just run ten miles or [less].
H. H.: But you did run marathons at some point?
P. R.: Yeah, but I can’t do it anymore, because my back is just not that great.
H. H.: I’ve just gotta ask, what’s your personal best?
P. R.: Under three, high twos. I had a two hour and fifty-something.
H. H.: Holy smokes. All right, now you go down to Miami University...
P. R.: I was fast when I was younger, yeah.


What's striking about the exchange is how he responds to Hewitt's “Holy smokes.” A four-hour marathon, for a twenty-year-old, is not something that elicits a “holy smokes.” It’s entirely average; in fact, for the race that Ryan ran, it was below average. In the marathon in question, he finished in nineteen hundred and ninetieth place, out of just thirty-two hundred and seventy-seven male runners. (A 2:55 would have had him at a hundred and thirtieth.) But Hewitt’s reaction didn’t set off any alarm. Instead, Ryan could tell that he had just impressed his host, and he reinforced it, saying “I was fast when I was younger, yeah.”

...


Runners - and Ryan says he continues to be one - also just don't forget race times. They talk about them with their friends; they think about them when running. If they’ve just missed breaking four hours, it probably bothers them a little bit. It probably bothers them particularly if their brothers run faster. People also ask about marathon times often. Note the ease with which Hewitt queried Ryan’s time. The congressman, who talks frequently about fitness, has surely been asked the same question dozens, or hundreds, of times. When did he stop answering “four hours” and start saying “a two hour and fifty-something”?


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Are Entitlements Corrupting Us? Yes

Are Entitlements Corrupting Us? Yes | Coffee Party News | Scoop.it
With a treasure chest of government-supplied benefits readily available, a taker mentality has become part of our way of life, writes Nicholas Eberstadt.
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