Saturday, November 19, 2011

Mitt Romney: blood-sucking maggot

The words perhaps strike harsh upon chaste ears.  Yet gentler terms would fail to meet the case.

No top-hatted, moustache-twirling, portly moneybags of the buccanneer period of expanding capitalism  was so inspissatedly foul as the carrion-eaters of this period of capitalist decline.   For those old guys at least got the railroads built, got the factories humming, even came up with some good ideas.  Yeh, they killed workers, but in those days  workers weren’t afraid to fight back.  Karl Marx himself gave them an ironic tip of the cap  in tribute.
But now capitalism has entered an autophagous period.   The old-style robber-barons were like mules with a nasty kick;  their present-day undertakers, in red suspenders and tasseled loafers, are like nothing so much as parasitic bowel-worms.

[Update, 9 July 2012:  Nobel economist Paul Krugman compares industrialist papa George Romney  favorably with his swivvely financier son:
Funds stashed in the Cayman Islands.  That is a very red flag indeed.]

The typical Wall Street trader, the emblematic target of the Occupy movement, is a non-virulent parasite.  Like the bowel-worm, it persistently sucks off nutrients from the host organism, but to actually kill that organism  would not be in its own tiny self-interest.   More deadly and more venomous than these are the corporate raiders and private-equity pirates, who destroy what they infest, leaving devastation behind.

Check out this:

What Romney rarely brings up, however, is that the corner of the “real economy” where he excelled is a specialized, little-understood world known as private equity. With funds they have raised from big investors, private-equity firms go looking for companies to buy — usually by borrowing more money, which the firm itself is then on the hook to repay. The goal is to unload them a few years later at a big profit.

And this:

By the green-hued yardsticks of Wall Street, the 1990s buyout of an Illinois medical company by Mitt Romney’s private equity firm was a spectacular success.
Mr. Romney’s company, Bain Capital, sent in a team of 10 turnaround experts from Boston to ferret out waste, motivate executives and study untapped markets.
By the time the Harvard M.B.A.’s from Bain were finished, sales at the medical company, Dade International, had more than doubled. The business acquired two of its rivals. And Mr. Romney’s firm collected $242 million, a return eight times its investment.
But an examination of the Dade deal, which Mr. Romney approved and presided over, shows the unintended human costs and messy financial consequences behind the brand of capitalism that he practiced for 15 years.
 At Bain Capital’s direction, Dade quadrupled the money it owed creditors and vendors. It took steps that propelled the business toward bankruptcy. And in waves of layoffs, it cut loose 1,700 workers in the United States.

~     ~     ~

Economists refer to this scheme for shedding labor  being "romneyized".   This term deserves wider currency.

[Flash update !   From the lexical laboratories of WDJ Worldwide Enterprises comes this New Improved term for it:
         to downromney ! ]

A wise observer of the U.S. financial scene  commented not long ego:   What’s amazing is not the amount of fraud -- the scary part is what things are actually legal.

[A humorous version of the mindset this implies  is afforded by  P.G. Wodehouse, Money for Nothing (1928), describing a squire who has just been pitched with a scam and a scheme:
"He was not shocked.  A youth and middle age  spent on the London Stock Exchange  had left [him] singularly broad-minded.  He had  to a remarkable degree  that spacious charity  which allows a man to look indulgently on any financial project, however fishy, provided he can see a bit in it for himself."
-- PGW is often accounted a shallow humorist; but here, as elsewhere, he is pulling his punches.]

It is more than likely that Mitt Romney, like his predecessors in the annals of financial predation, Chainsaw Al and Gordon Gekko, never actually committed an indictable crime.  He didn’t need to.  The “laws” that govern such ploys as the leveraged buyout  spare him the inconvenience of needing to personally knock over a liquor store to earn his green-fees.

In an LBO, a person with no expertise in anything but deal-making  perpetrates a hostile takeover of an actual productive business (in whose product he has no expertise at all), using massive wads of cash.   Well, fair enough, a man’s entitled to spend his hard-earned bread however he chooses;  a fool and his farthings are soon parted.  Only… it’s not his own cash he spends;  he borrows it all.  We-ll, this is more troubling, but if he can demonstrate that he can pay it back … No, you see, he has no intention of ever paying back any of it.  He takes his own massive cut of the loot in “fee for services”, and… somehow… (can the law really work this way?  really?)  it is not the LBO artists, but the kidnapped company itself that is left holding the debt-bag!
Now for a some simple arithmetic.
The raiders have made out like (precisely) bandits;  the bankers likewise collect their fees, and, if the raided company somehow manages to pay back its debts, the bank itself benefits.  Yet notice that, so far, no useful work has been performed.  Not a single widget has been produced by these activities.   So where, ultimately are the funds to come, in this (at best) zero-sum game?  You guessed it:  from workers and taxpayers -- principally the workers of the raped companies themselves.

~     ~     ~

Who was it who once said -- Mother Theresa, if memory serves --

Le monde ne sera guéri
que lorsque le dernier capitaliste
aura été pendu avec les tripes
du dernier spéculateur


[Update 23 November 2011]
Inspired by these developments, I borrowed a copy of the classic film “Wall Street”, starring Michael Douglas as the buyout artist Gordon “Greed is Good” Gecko.  Douglas even looks rather like Mitt Romney -- ruggedly handsome and utterly American -- and is truly a treat to watch.  Apparently some major actors were approached for this role and turned it down;  bet they’re sorry now.
Douglas is … magnificent, mesmerizing.  At the stockholders’ meeting, he rises to new heights.  And though he is playing a minion of Satan, he -- like the Dark Prince himself -- is not without his insidious, mind-dazzling attractions.   The excellent Wiki article on the film reveals that many who later flocked to Wall Street  were inspired by this very film.  -- This recalls the acute and profound observation of Anthony Swofford, in his splendid memoir Jarhead, that, to a Marine -- a pumped-up Marine -- all war films, whatever their supposed antiwar message, are experienced as pro-war.
For a kindred glimpse at the astonishing repulsion-attraction dialectic of Wall Street raiders, consult the engrossing -- and hugely funny -- Liar’s Poker, by Michael Lewis.

[Update 27 Nov 2011]
Just watched Frontline's "The Warning", re the derivatives mess.  First aired 2009. Worth watching.   Neither at that time, nor since then, have the Republicans managed to learn anything.

[Update 23 Dec 2011]
Romney and Post-Truth Politics

[Update 31 Dec 2011]  More on what you can do without breaking the rules:

[Update 25 Jan 2012]  A concise and enlightening summary of how the private-equity sharks work their scams  is provided by the ever-incisive essayist James Surowiecki in this week's New Yorker:
Hang Them by their Own Entrails
(I have, mm, taken a certain liberty in the wording of this link.)

[Update 28 May 2012]  En quoi Brad Pitt et Mitt Romney se resemblent-ils?

No comments:

Post a Comment