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Romney’s Bain Yielded Private Gains, Socialized Losses
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Candidate
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Contributor | RP |
Last Edited | RP Jul 16, 2012 07:25am |
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Category | Analysis |
Author | Anthony Luzzatto Gardner |
News Date | Sunday, July 15, 2012 11:30:00 PM UTC0:0 |
Description | 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.
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. |
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