Monday, May 14, 2012

And Let Me Tell You Why....

< rant >

Capitalism Defined: An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision and by prices, production, and the distribution of goods that are determined mainly by competition in a free market. 

 Full disclosure: I was not an economics major in college. I took some accounting courses, but that's not the same. 

First, JP Morgan CEO Jamie Dimon's interview on Meet the Press in which he responds to David Gregory's question about why Dimon is now a "barely Democrat,"

"I’ve gotten disturbed at some of the Democrats’ behavior, anti-business behavior, the sentiment, the attacks on work ethic and on successful people, I think it’s very counterproductive. So, it doesn’t mean I don’t have their values. I want jobs. I want a more equitable society. I don’t mind paying higher taxes. I don’t mind lifting up our…I do think we are our brothers' keeper, but I don’t think attacking that which creates all things[emphasis mine] is not the right way to go about it." 
....that which creates all things???? I'm seething at the arrogance.

Then I was watching Morning Joe this morning. The program began with a discussion about the new Obama campaign ad which features former employees of a steel company purchased by Bain Capital then gutted. And I'm just plain pissed off. Joe Scarborough was offended by the ad and sniffed at the suggestion that Bain Capital's management of the company was predatory.

While the Republicans dismiss their predatory business strategies, Mitt Romney and Republican party operatives tout Bain Capital's successes, i. e. Staples and Domino's Pizza. Oh. Puleeze!

The success of Domino's Pizza has absolutely nothing to do with Bain Capital. The company enjoyed 38 years of success and was the second largest pizza chain in the U.S. until the founder Tom Monaghan announced his retirement and in 1998 sold 93 percent of the thriving company to Bain Capital. In just three short years, Domino's debt surged to $1.5 billion under Bain Capital's ownership, leaving the chain with a higher debt ratio than most of its rivals, which necessitated Monaghan's return to Domino's in 2001 to help the company recover.

Staples was non-existent when Bain Capital invested an initial $650,000 to open its first store in 1989. Staples' growth was very modest at best. During the next 12 years with Romney as an active board member, Staples opened 24 stores and employed 1,100 full- and part-time people. During the 10 years following Romney's resignation from the board to run for governor, Staples added 2,176 stores and 87,900 employees.

It should be noted that employees of both of those businesses make up a percentage of our working poor, earning little more than minimum wage and most with no benefits, except for those employed full time in management. Surprise, surprise, surprise.

The one thing that Romney and Bain Capital is really good at is securing loans against struggling companies in order to reimburse themselves for their initial investments, plus a nice profit of course, and pay dividends to their shareholders until the company is so far in debt that bankruptcy is the only alternative.

I'm sick of Republicans calling what Mitt Romney and Bain Capital do as simply "capitalism." What Bain does is financial debauchery. They don't engage in production. They lay off or fire those who indisputably produce any real product, therefore also do not engage in distribution of any goods because there are no goods to distribute. Competition in the free market? They don't compete for anything except a potential buyer for the shell of a bankrupt company they created.

< /rant >

1 comment:

altadenahiker said...

If you don't watch out, you might become my favorite political columnist.