Willard Mitt Romney left Bain Capital some 13 years ago but Romney is still raking in millions from Bain today thanks to a sweet exit deal negotiated with his fellow vulture capitalists when he left the corporation. He’s keeping the details a secret but it seems likely he’s paying a capital gains rate on those multi-millions that keep pouring in, an option not available to us ordinary working class folks who pay the full boat income tax rate.
These would be the same sort of tax breaks Romney has declared indispensible to the financial health of our economy, even while the loss of revenue from those tax breaks for the super-wealthy increase the deficit by trillions of dollars. That being the same deficit that Romney and his fellow Republicans tearfully tell us can only be solved by brutal cuts in everything from Social Security, Medicare and other social safety net programs like fuel assistance for the poor and elderly.
And when I say “vulture capitialists,” I mean it’s useful to examine how Bain Capital made so much money. While it’s true they had some success stories, like Staples, it’s also true that many of their corporate takeovers looked more like KayBee Toys.
As in most Bain deals, the partnership put up a small fraction of the money — in this case $18 million — and borrowed the rest of the $302 million purchase price. Just 16 months later, the toy company borrowed more to pay Bain and its investors an $85 million dividend.
That gave Mr. Romney and the other partners a quick 370 percent return on their money. But it also left the toy company with a heavy debt burden. Before long, the company began closing stores around the country and laid off 3,400 workers. It filed for bankruptcy protection in 2004.
Similarly, their takeover of Clear Channel resulted in saddling that corporation with $20 billion in debt and the loss of 2,500 jobs. But hey, Rush Limbaugh still got his $400 million contract so you won’t hear him complaining about vulture capitalism any time soon. He’ll be defending those alleged “job creators,” and their mutual tax breaks, to the bitter end. [Photo Credit]