Romney for President Inc. has had a rough couple of months. A late July overseas trip to the London Olympics and the Middle East was an insert-foot-in-mouth disaster.
The big marketing push — the Republican National Convention in Tampa — hit several sour notes. A hurricane in the Gulf of Mexico delayed the convention’s start by a day. New Jersey Gov. Chris Christie, one of the keynote speakers, seemed to have forgotten that the name at the top of the ticket is the star of the show. The campaign let an aging actor take center stage with a chair and no script, upstaging Romney on what should have been his big night.
Two weeks ago, Mother Jones magazine released a video of Romney secretly recorded during a visit with generous campaign contributors. In it, Romney wrote off 47 percent of the country as lazy, government-dependent zeros not worth his campaign’s time.
The polling looks bad, particularly in the crucial swing states where Brand Romney must succeed.
All is not lost for the campaign and Romney can still win in November, but the time for a turnaround is now. His next opportunity comes Wednesday night at the first presidential debate.
Thus, it would seem perfect that Romney is the author of a book titled, Turnaround, which chronicles his time leading Bain Capital.
The official line from Romney and his campaign is that Bain Capital was a strong ally of capitalism, an angel nurturing businesses to great heights. The company would identify worthwhile enterprises, purchase them and provide the necessary management and funding to rocket them to great success. That’s accurate in some high-profile cases such as the office-supply chain Staples.
In others, however, Bain and Romney played a more sinister role.
A recent Matt Taibbi article in Rolling Stone examines Romney’s track record at Bain. He writes that Romney was “on the front lines of the financialization revolution, a decades-long campaign in which the old, simple, let’s-make-stuff-and-sell-it manufacturing economy was replaced with a new, highly complex, let’s-take-stuff-and-trash-it financial economy. Instead of cars and airplanes, we built swaps, CDOs and other toxic financial products. Instead of building new companies from the ground up, we took out massive bank loans and used them to acquire existing firms, liquidating every asset in sight and leaving the target companies holding the note.”
That Bain method frequently followed a pattern: (a.) purchase a company, generally with agreement of management; (b.) put very little cash up front and borrow the rest; (c.) saddle the company with millions of dollars in debt and at the same time force it to pay management fees to the new owners; (d.) slash the workforce in order to repay the debt; (e.) either sell off the stripped-down company at a handsome profit or declare bankruptcy and shut it down.
“Either way, Bain wins,” Taibbi writes. “By power-sucking cash value from even the most rapidly dying firms, private-equity raiders like Bain almost always get their cash out before a target goes belly up.”
Back in the Republican primary season, candidate Newt Gingrich summed up the operation as “rich people figuring out clever legal ways to loot a company.”
That cut-throat model would be the last thing Romney Inc. needs right now.