Tag: bain capital

WHO’s fooling WHO? Have Presidential Attack Ads Gone Too Far?

Many, if not all, of this summer’s presidential campaign ads are vehemently negative, highly critical, and somewhat sensationalistic. But are they misleading? And do viewers believe what they hear?

Interestingly enough, one of the blondes at Fox News (also known as Megyn Kelly) — a network often chided for its questionable fact-checking – recently accused both Obama and Romney of telling tales in their attack ads, screaming, “When [Obama and Romney] go to the ad campaigns, they’re completely negative! And and they lie! They lie!… Does truth matter?!”

One example of the ad-mud-slinging included Romney’s heavy-handed editing to make it look as if Obama insulted business owners by telling them they did not build their businesses on their own. Romney ‘s “you didn’t build that”attack is especially misleading, even in the midst of a markedly negative campaign. The Romney folks basically took an Obama speech in which he explained that infrastructure such as roads and bridges are necessary to build businesses, and cut out the part about the roads so that Obama’s message was changed to, “you didn’t build that business yourself.” Romney then put a salty business owner in one of his ads, who asked Obama why he was demonizing small business owners like himself.

In a Friday interview with WCTV-TV in Tallahassee, Obama explained: “What I said was together we build roads and we build bridges.” He added, “That’s the point I’ve made millions of times, and by the way, that’s a point Mr. Romney has made as well, so this is just a bogus issue.”

Taking quick action, the Obama camp cleverly shot back with an internet ad of their own: “Mitt will say anything.” The ad shows clips of his speech where he made the purported diss against business owners, refutes Romney’s mischaracterization, and then shows clips of a Romney speech containing a familiar refrain: you can’t really build businesses without roads and bridges (click here to view the ad).

The other, more widely known campaign ad controversy, is Obama’s attack on Romney’s reign at Bain Capital from 1992-2002. In spite of documentary evidence to the contrary, Romney maintains that Obama is all wrong about his status at Bain during the years in question, when the company conspicuously closed down U.S. businesses (e.g. GST Steel in Kansas City) in favor of jobs oversees. Romney has long claimed that he departed Bain in 1999, and therefore has nothing to do with Bain’s questionable behavior. He wants an apology from Obama. But Obama won’t apologize. The President maintains that Romney was at Bain from 1999 to 2002, relying in part on SEC filings for those years, which list Romney as sole shareholder, director, chief executive officer, and president (there is also a state disclosure firm showing that he earned $100,000 as a Bain executive during 2001 and 2002, in addition to his investment earnings).

Despite the controversy over this style of ads, sometimes it’s necessary. It’s time to ferret out some answers about the amorphous Mormon, his Bain exploits, his riches, and how much he pays in taxes. As long as Obama doesn’t frankenbite Romney’s speeches, I’d say it’s fine.

What is Bain Capital? Should a Business Executive be President?

Written By: Rik Sault, Contributing Editor

As the Obama campaign presses its attack on Mitt Romney’s career at Bain Capital, the one-term governor continues to defend, and even tout, his business credentials (you know, because he doesn’t really like to talk about his time as governor of Massachusetts). “Right now we have an economy in trouble, and someone who spent their career in the economy is more suited to help fix the economy than someone who spent his life in politics and as a community organizer,” Romney told Time magazine

So what is Bain Capital? Bain Capital is a Boston-based private equity firm that Mitt, a co-founder, helped grow into a $66 billion company. While he was at the helm, Bain invested in Staples, which grew from 1 store in 1986 to 1,100 stores in 1996 (in 2011, there were 2000 Staples stores). Other notable investments and acquisitions during Mitt’s time include Sports Authority, Domino’s Pizza, and Sealy (the mattress company). After he left Bain for good in 1999, Mitt got a sweet retirement package; he negotiated an agreement that allowed him to receive something called a “passive profit share” in certain Bain entities, and this deal brought him millions in annual income.

And what is a private equity firm? I don’t really know, but I think it works like this…. A private equity firm like Bain takes money from investors – ranging from pension funds to wealthy individuals – and pools all that money into a private equity fund (think Scrooge McDuck’s Vault). Then the firm invests that money and acquires companies. The goal of the firm is to turn a profit on the acquired companies by improving them, selling them, merging them, and so on. Those profits go back to the investors and the firm keeps a fee for managing the funds.

Romney has said that he created jobs while at Bain. It appears that he did make some jobs, by helping some companies grow, but he eliminated other jobs by dismantling or merging certain failing companies. Bain generally keeps a secret of how many jobs it creates as opposed to how many it eliminates. Its goal, of course, is to make money for its investors, not to create jobs.

Jack Welch, the former CEO of General Electric, recently appeared on Piers Morgan to support Romney and blast Obama’s economic record. Welch, who resembles a particularly scary leprechaun, was adamant that running a private equity company is great experience for a presidential candidate. He went on to explain that private equity saves broken companies which would otherwise go under, by investing in and reinvigorating them. Even Welch, however, admitted that Mitt may have went too far when he said that he created jobs. Welch explained that, generally, private equity does not create a lot of jobs, but instead it preserves good-paying, sustainable jobs by making failing companies profitable again.

So, because of his time at Bain Capital, Mitt claims to be a far more qualified steward of the economy than President Obama – who is seeing an economic recovery, but a very slow one.

Does Mitt’s business experience give him a better perspective on how to approach national economic policy? Or does Obama’s career in politics and government give him the right tools? I just don’t know. But I do know this, the Republicans’ unfailing icon – Ronald Reagan – had a pretty good run at boosting the economy – through tax cuts and Cold War spending, among other things. And he was no business executive. Actor, president of the Screen Actor’s Guild, ideal grandfather-face – this experience was all Ronnie needed.