It now appears, after the withdrawal of Rick Santorum from the race (and we KNOW how much Santorum hates to withdraw), that Mitt Romney will be the Republican nominee for President and on the ballot as such come November 2012.

One of the prime entries on Romney’s resume is his tenure at Bain Capital. During that tenure, Bain acquired an interest in a number of businesses with the aim of securing a profit for its slate of investors.

Romney’s tenure at Bain lasted from its inception in 1984 until he left in 1999 to manage the 2002 Winter Olympics in Salt lake City, with about a 2 year hiatus to return to Bain & Co. to conduct a turnaround of its fortunes, Bain Capital being a spinoff of that firm.

Bain Capital’s initial focus was on investments in startup companies. Its first success came from its 1986 investment in Staples, Inc. the office supplies company. But it then began investing in leveraged buyouts of established companies rather than startups.

Leveraged buyouts are a method of acquiring either a controlling interest in or outright ownership of an existing business by putting up little or no cash and using the business’s own assets to gain financing for the deal.

Bain avoided hostile takeovers, the acquisition of companies though management opposed the deal. Instead, it worked with current management to do these buyouts.

The end goal, in either case, was to make money for the investors attracted to Bain Capital.

Staples, Inc. has become a star in the office supplies field with over 2000 stores in 26 countries and, of course, many thousands of employees. Bain Capital takes due credit for its part in this business success as does Romney himself.

On the other hand, once Bain switched its emphasis to leveraged buyouts, many of its projects resulted in the eventual bankruptcy of some firms and not rarely in the loss of jobs in these companies due immediately to the buyout or following Bain’s exit after it did what it intended to do.

Along the way Bain often made money for its investors regardless of the success or failure of its acquired properties.

Nothing about Bain Capital’s actions in these matters is necessarily notably praiseworthy. Its actions are what capital investment firms do, and its methods may or may not comport to what like firms do.

Neither are its failures and the job losses instigated entirely deserving of condemnation. These results are common outcomes of many business practices entailing similar transactions. Bain might have been better at some aspects of the “industry” than most investment firms. Its failures stand out in contrast to others mainly because Mitt Romney is running for President.

The economy and job creation will undoubtedly be key issues in the fall campaign. They almost always are.

Romney will brag about the number of jobs created by him at Bain. Ignore him.

In turn, President Obama will cite the layoffs or plant closings that resulted from Bain’s actions to prove that Romney is a job destroyer. Ignore him, too.

The principal fact to keep in mind when Romney’s time at Bain Capital becomes a topic of debate is that Bain Capital, thus Romney, did not enter into these deals with the intent to create or eliminate jobs. Their intent was to provide a healthy return for the investors they served. If jobs were created or lost was only secondary to this intent, if that high on the list of priorities.

Its methods were utilized to meet this profits goal, no other. The same methods were not employed at each of the more than 100 deals Bain entered into while Romney was in charge. The goal was profit for Bain and its investors, pure and simple.

Thus, I’m not certain that Romney as head of Bain is any more relevant and indicative of his ability to lead the country than is Obama’s being president of the Harvard Law Review.

I am certain that much rhetoric will be expended by both sides in order to make Romney’s leadership of Bain regarding job creation or destruction seem relevant, or at least more important to voters than other factors affecting that issue.

Rhetoric be damned. As David Gates of Bread once sang, “It don’t matter to me.”

Post a comment or leave a trackback: Trackback URL.

Please give me your thoughts.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: